Document:

Exhibit

Exhibit 4.2

Description of Registrant’s Common Stock

General

Under the Restated Certificate of Incorporation, as amended (the “Charter”) of R1 RCM Inc. (the “Company” or “R1”), R1 is authorized to issue 500 million of shares of common stock, par value $0.01 per share (the “Common Stock”), and 5 million shares of preferred stock, par value $0.01 per share. Of its authorized preferred stock, R1 has previously designated 370,000 shares as its 8.00% Series A Convertible Preferred Stock (the “Series A Preferred Stock”). 

Common Stock

Voting Rights

The holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of the stockholders and do not have any cumulative voting rights. Additionally, the holders of the Series A Preferred Stock are entitled to vote with the holders of the Common Stock on an as-converted basis and have certain special consent rights so long as shares of the Series A Preferred Stock remain outstanding.

Dividend Rights

Subject to the rights of holders of Series A Preferred Stock, holders of Common Stock are entitled to receive dividends when, as and if declared by the Company’s board of directors out of funds legally available for this purpose.

The Company does not currently pay quarterly cash dividends on shares of Common Stock. The payment of dividends in the future, if any, will be at the discretion of the Company’s board of directors, will be subject to the approval of holders of the Series A Preferred Stock and will depend upon general business conditions, legal and contractual restrictions on the payment of dividends and other factors that the Company’s board of directors may deem to be relevant.

Liquidation Rights

Subject to the rights of holders of the Series A Preferred Stock which ranks senior to the Common Stock, in the event of a liquidation, dissolution or winding up of R1, the holders of Common Stock will be entitled to receive, after payment or provision for payment of all of its debts and liabilities (including the payment of the liquidation preference and all accrued but unpaid dividends on the Series A Preferred Stock), all of the assets of the Company legally available for distribution to stockholders.

Other Rights

Holders of Common Stock are not entitled to preemptive rights with respect to any shares which may be issued, and there are no conversion rights or redemption, purchase, retirement or sinking fund provisions with respect to Common Stock.

Anti-Takeover Effects of Delaware Law and the Company’s Charter and Bylaws

Delaware law, the Charter and the Company’s Amended and Restated Bylaws contain provisions that could have the effect of delaying, deferring or discouraging another party from acquiring control of the Company. These provisions, which are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of the Company to first negotiate with the Company’s board of directors.

Board of Directors; Removal of Directors

The Charter and Amended and Restated Bylaws provide that a director may be removed with or without cause and only by the affirmative vote of the holders of at least two-thirds of the votes that all the stockholders would be entitled to cast in an election of directors. Any vacancy on the Company’s board of directors, including a vacancy resulting from an enlargement of the board of directors, may be filled only by vote of a majority of the directors then in office, although less than a quorum. At each annual meeting, the entire board will stand for election for a one-year term. The limitations on the removal of directors and filling of vacancies could make it more difficult for a third party to acquire, or discourage a third party from seeking to acquire, control of the Company.

Stockholder Action by Written Consent; Special Meetings

The Charter provides that any action required or permitted to be taken by the Company’s stockholders must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders. The Charter and Amended and Restated Bylaws also provide that, except as otherwise required by law, special meetings of the Company’s stockholders can only be called by the Company’s chairman of the board, chief executive officer or board of directors.

Advance Notice Requirements for Stockholder Proposals

     The Amended and Restated Bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of persons for election to the board of directors. Stockholders at an annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered timely written notice in proper form to the Company’s secretary of the stockholder’s intention to bring such business before the meeting. This written notice must contain certain information specified in the Amended and Restated Bylaws. These provisions could have the effect of delaying until the next stockholder meeting stockholder actions that are favored by the holders of a majority of the Company’s outstanding voting securities.

Delaware Business Combination Statute

     The Company is subject to Section 203 of the Delaware General Corporation Law. Subject to certain exceptions, Section 203 prevents a publicly-held Delaware corporation from engaging in a “business combination” with any “interested stockholder” for three years following the date that the person became an interested stockholder, unless the interested stockholder attained such status with the approval of the Company’s board of directors or unless the business combination is approved in a prescribed manner. A “business combination” includes, among other things, a merger or consolidation involving the Company and the “interested stockholder” and the sale of more than 10% of the Company’s assets. In general, an “interested stockholder” is any entity or person beneficially owning 15% or more of the Company’s outstanding voting stock and any entity or person affiliated with or controlling or controlled by such entity or person.

Amendment of Certificate of Incorporation and Bylaws

The Delaware General Corporation Law provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s certificate of incorporation or bylaws, 

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unless a corporation’s certificate of incorporation or bylaws, as the case may be, requires a greater percentage. The Amended and Restated Bylaws may be amended or repealed by a majority vote of the Company’s board of directors or by the affirmative vote of the holders of at least two-thirds of the votes which all the Company’s stockholders would be entitled to cast in any election of directors. In addition, the affirmative vote of the holders of at least two-thirds of the votes which all the Company’s stockholders would be entitled to cast in any election of directors is required to amend or repeal or to adopt any provisions inconsistent with any of the provisions of the Charter described above under “—Board of Directors; Removal of Directors” and “— Stockholder Action by Written Consent; Special Meetings”.

Transfer Agent and Registrar
The transfer agent and registrar for the Common Stock is American Stock Transfer and Trust Company, LLC.

Exchange Listing

The Common Stock is listed on the Nasdaq Capital Market under the symbol “RCM.”

     3Exhibit

Exhibit 10.61 

AMENDMENT NO. 4 TO 
AMENDED AND RESTATED MASTER PROFESSIONAL SERVICES AGREEMENT 
BY AND BETWEEN 
ASCENSION HEALTH AND R1 RCM INC.

This Amendment No. 4 to the Master Professional Services Agreement  (this “Amendment”) by and between Ascension Health (“Ascension Health”) and R1 RCM Inc. (formerly known as Accretive Health, Inc.) (“R1”) is entered into effective this 20th day of December, 2019 (the “Amendment Effective Date”). Ascension Health and R1 are sometimes referred to in herein as a “Party” or collectively as the “Parties”. All capitalized terms used and not otherwise defined herein shall have the meaning ascribed to them in the MPSA (as defined below).
WHEREAS, Ascension Health and R1 entered into that certain Amended and Restated Master Professional Services Agreement dated February 16, 2016, as amended (the “MPSA”); and
WHEREAS, Ascension Health and Supplier desire to provide for new terms for determining the Base Fees and Incentive Fees for Dependent Services for certain hospitals that are acquired by or built by Ascension Health or an Eligible Recipient. 
NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Amendment, and of other good and valid consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: 
		
	I.
	Base Fee for Dependent Services. Effective as of January 1, 2019, Exhibit 4-A to the MPSA is hereby amended as follows:

		
	a.
	The following definitions are hereby added to Section 1.3 of Exhibit 4-A:

“(x)    “Add-On Hospital” means any New ABM having annual Cash Collections less than $1 billion. An Add-On Hospital may be either (i) an Existing Add-On Hospital or (ii) a Start-Up Add-On Hospital. 
(xi)    “Existing Add-On Hospital” means any Add-On Hospital that has been in operation for at least two (2) years or is otherwise designated as such by the Parties.
(xii)    “Start-Up ABM Baseline Period” means, with respect to any Start-Up Add-On Hospital, the period commencing with the date that R1 starts to provide Dependent Services to the Start-Up Add-On Hospital through the later of: (1) the one year anniversary of such start date; and (2) the date that patient volumes stabilize at such Start-Up Add-On Hospital, as mutually agreed by the Parties, acting reasonably. 
(xiii)     “Start-Up Add-On Hospital” means any Add-On Hospital that has been in operation for less than two (2) years or is otherwise designated as such by the Parties.

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[*****] Text omitted for confidential treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

		
	b.
	Section 5 of Exhibit 4-A is hereby deleted in its entirety and replaced with the following:

“5.    Implementation Fees.  Each Eligible Recipient shall pay Supplier implementation fees in the following amounts (each, an “Implementation Fee”): (i) each Additional Book Eligible Recipient shall pay Supplier an amount equal to [*****] of annual Cash Collections (measured as of the Baseline Year) of such Additional Book Eligible Recipient; and (ii) in addition (but without duplication) to the amount resulting from the foregoing clause (i), with respect to the implementation of Dependent Services at any New ABM (including, for the avoidance of doubt, any new hospitals), such Eligible Recipient shall pay Supplier an amount equal to: (a) with respect to any New ABM other than a Start-Up Add-On Hospital, [*****] of the annual Cash Collections (measured as of the last completed fiscal year of such Eligible Recipient) of such New ABM; and (b) with respect to any Start-Up Add-On Hospital, [*****] of the annual Cash Collections during the first consecutive twelve-month period following the Start-Up ABM Baseline Period. The applicable Eligible Recipients shall pay the Implementation Fees set forth herein in [*****] equal [*****] installments beginning on the Employment Effective Date for the first of the Transitioned Employees with respect to such Eligible Recipient or, if there are no Transitioned Employees, then on the first day following the Start-Up ABM Baseline Period.” 
		
	c.
	Section 9 of Exhibit 4-A is hereby deleted in its entirety and replaced with the following:

“9.  Base Fee for New ABMs.  
9.1    With respect to any New ABM other than an Add-On Hospital, (i) the Parties shall conduct an assessment of such New ABM that is consistent  in scope with the Original Assessment, (ii) such assessment will identify any areas that may require investments in technology, employees, and other infrastructure that may improve the operational performance of the Services with respect to such New ABM, consistent with the process used for Additional Book Eligible Recipients, (iii) the results of any such assessment shall be submitted to the Cost Board, and (iv) the Cost Board shall determine the methodology for calculating the Base Fee for such New ABM in accordance with guidelines and principles that are consistent with those set forth in this Exhibit 4-A that are applicable to Additional Book Eligible Recipients. 
9.2    With respect to any Existing Add-On Hospital, the Parties will not conduct an assessment of such Existing Add-On Hospital for purposes of determining the Base Fee. Upon execution of a new Supplement or addition to an existing Supplement with respect to any such Existing Add-On Hospital, the Additional Book Cost to Collect Factor applicable to such Existing Add-On Hospital shall be equal to the AB Floor and the I&I Factor shall be equal to [*****].
9.3    With respect to any Start-Up Add-On Hospital, the Parties will not conduct an assessment of such New ABM for purposes of determining the Base Fee. Upon execution of a new Supplement or addition to an existing Supplement, the Base Fees during the Start-Up ABM Baseline Period shall be equal to: [*****], plus (c) fees for Supplier’s provision of Shared Services for such New ABM as agreed to by the Parties in good faith [*****]. Following the Start-Up ABM Baseline Period, the Additional Book Cost to Collect Factor applicable to such New ABM shall be equal to the AB Floor and the I&I Factor shall be equal to [*****].

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[*****] Text omitted for confidential treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

9.4    Following the addition of the [*****] New ABM having annual Cash Collections of [*****] million or less (calculated since January 1, 2019), the Parties agree to evaluate in good faith whether to adjust the Base Fees as described in Section 9.2 or 9.3 with respect to such New ABMs, as necessary to ensure that the Base Fees are fair and equitable to both Parties, taking into account the principles and methodology contained in Exhibit 4-A. Any adjustment to the Base Fees shall apply prospectively only.

		
	II.
	Incentive Fees. Effective as of January 1, 2019, Exhibit 4-B is hereby amended as follows:

Section 3.3 of Exhibit 4-B is hereby deleted in its entirety and replaced with the following:

“Eligible Recipient Performance Targets will be calculated for each of the 7 Operating Metrics at the site level (e.g., for each Facility) in accordance with this Exhibit 4-B. Performance Targets will be calculated for each Additional Book Eligible Recipient and New ABM prior to the applicable Supplement Commencement Date, except as otherwise provided in this Section 3.3, and will remain in effect unchanged (other than the payer mix adjustments described in Section 3.2 above) unless modified in accordance with the process set forth in Section 3.4 below. The Performance Targets for each Operating Metric for the Current Book Eligible Recipients will be calculated in accordance with Sections 3.1 and 3.2 above using such Eligible Recipient’s average [*****] during the applicable portion (i.e., quarterly periods or annual, in accordance with Sections 3.1 and 3.2 above) of such Eligible Recipient’s [*****]. For Additional Book Eligible Recipients and New ABMs, except as otherwise provided in this Section 3.3, the Performance Targets will be calculated in accordance with Sections 3.1 and 3.2 above using such Eligible Recipient’s average [*****] during the applicable portion (i.e., quarterly periods or annual, in accordance with Sections 3.1 and 3.2 above) of such Eligible Recipient’s [*****]. The calculation of Operating Metrics will utilize the same definitions, data sources, and systems during the period(ds) utilized to set Performance Targets and all Measurement Periods for the Supplement Term. Any changes to the calculation or source data, definitions, or systems which the Supplier and Eligible Recipient agree are necessary to assure that the Performance Targets and the method of calculating the Performance Targets and actual Operating Metric performance fairly reflect operating performance during the Term of the Supplement will be incorporated into the Operating Metrics Scorecard on a timely basis, with such changes having effect for all subsequent Measurement Periods. Notwithstanding anything to the contrary in this Section 3.3, with respect to any Start-Up Add-On Hospital, the Parties shall determine the baseline period for calculation of Performance Targets for each Operating Metric for each such Start-Up Add-On Hospital. [*****].”

		
	III.
	Counterparts. This Amendment may be executed in several counterparts, all of which taken together will constitute one single agreement between the Parties.

[signature page follows]

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[*****] Text omitted for confidential treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

IN WITNESS WHEREOF, the Parties have executed and delivered this Amendment effective as of the Amendment Effective Date, first indicated above. 

	
		
	Ascension Health
	R1 RCM Inc.

	

By: /s/ Rhonda C. Anderson

Name: Rhonda C. Anderson 

Title: SVP, Operational Finance

	

By: /s/ John Sparby 
   
Name: John Sparby 

Title: EVP Customer Operations, R1

[Signature Page to Amendment No. 4]

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