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CONFIDENTIALITY AGREEMENT
DATED AS OF JANUARY 31, 1997
In connection with the consideration of a possible transaction (the
"Transaction") between CIGNA CORPORATION ("CIGNA") and HEALTHSOURCE, INC.
("Healthsource"), Healthsource has or will furnish certain financial and other
information (the "Evaluation Material") to CIGNA. In consideration of the
receipt of the Evaluation Material from Healthsource and for CIGNA's agreement
to the terms of this Confidentiality Agreement, CIGNA agrees, as set forth
below, to keep the Evaluation Material and analyses derived from the Evaluation
Material ("Analysis") confidential, and both parties agree to the other matters
contained herein.
CIGNA agrees that the Evaluation Material will be used solely for
purposes of determining whether and under what terms and conditions it may have
an interest in negotiating or concluding a Transaction with Healthsource. CIGNA
further agrees to keep the Evaluation Material and Analysis confidential and not
to disclose the Evaluation Material and Analysis to any person except as
otherwise provided in this Confidentiality Agreement. For purposes of this
Confidentiality Agreement, the term "person" includes, without limitation, any
corporation, company, partnership, limited liability company, individual or
other entity. CIGNA may disclose the Evaluation Material and Analysis to its
directors, officers, employees, agents, and consultants (collectively
"Representatives") who, CIGNA determines, in the exercise of reasonable
judgment, need to know such information for the purpose of considering whether
to negotiate or conclude a Transaction with Healthsource, provided that such
persons are made aware of the confidentiality of the information, and the
limitations on its use. CIGNA shall assume responsibility for the breach of this
Agreement by its Representatives.
For purposes of this Confidentiality Agreement, "Evaluation Material"
means documents and information furnished by Healthsource to CIGNA or its
Representatives, orally, in writing, or by inspection of documents and all
analyses, compilations, forecasts, studies, summaries, notes, data and other
documents and materials in whatever form maintained, whether prepared by CIGNA,
its Representatives or others, to the extent such documents or materials contain
or reflect, any such information. The term "Evaluation Material" does not apply
to information which (a) is or becomes generally available to the public other
than as a result of disclosure by CIGNA (or its Representatives) in violation of
this Confidentiality Agreement, (b) was available to CIGNA on a non-confidential
basis from a source other than Healthsource or its employees, agents or
consultants
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prior to receipt in accordance with this agreement, or (c) becomes available to
CIGNA on a non-confidential basis from a source other than Healthsource or its
employees, agents or consultants provided that CIGNA does not know that such
source is prohibited from disclosing such information to CIGNA by a contractual
or legal obligation.
CIGNA agrees not to disclose to any person, other than its
Representatives, any Evaluation Material, the fact that Evaluation Material has
been made available to CIGNA, the fact that either party is discussing a
possible transaction with the other or with any other person, or any fact
concerning the discussions or negotiations (including the existence or status
thereof), except pursuant to a subpoena (after immediate prior notice to the
other party so that the other party may seek an appropriate protective order)
and then only after using such disclosing party's best efforts to maintain the
continuing confidentiality of all such information required to be so disclosed.
Upon request, CIGNA will promptly deliver to Healthsource, or destroy,
all Evaluation Material furnished by Healthsource, without retaining any copies.
Upon request, CIGNA will also instruct all Representatives to deliver to
Healthsource or destroy, all Evaluation Material furnished by CIGNA to such
Representatives. Upon request, CIGNA will furnish Healthsource a letter stating
that the Evaluation Material has been returned or destroyed.
CIGNA acknowledges that neither Healthsource nor its Representatives,
agents or controlling persons makes any express or implied representation or
warranty as to the accuracy or completeness of the Evaluation Material or any
other information provided to CIGNA by Healthsource. CIGNA and its
Representatives agree that no such person will have any liability to CIGNA or
any of its Representatives with respect to the Evaluation Material on any basis
(including, without limitation, in contract, tort, under federal or state
securities laws or otherwise), except pursuant to the final, executed
Transaction documents, if any, and neither CIGNA nor its Representatives will
make any claims whatsoever against such persons, with respect to or arising out
of the Transaction, whether as a result of this Agreement, any other written or
oral expression with respect to the Transaction, CIGNA's participation in
evaluating the possible Transaction or any procedures therefor, CIGNA's review
of Healthsource, the use of the Evaluation Material by CIGNA or its
Representatives, any errors therein or omissions from the Evaluation Material,
or otherwise, except pursuant to the final, executed Transaction documents, if
any. CIGNA and its Representatives further agree that they are not entitled to
rely on the accuracy or completeness of the Evaluation Material and that only
such representations or warranties, if any, contained in the final, executed,
transaction documents, if any, shall have any binding effect. CIGNA further
acknowledges that nothing in this Confidentiality
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Agreement precludes Healthsource from furnishing Evaluation Material to other
persons or parties.
CIGNA agrees that, for a period of eighteen (18) months from the date
of this Agreement, unless specifically invited in writing by Healthsource,
neither CIGNA nor any of CIGNA's affiliates, will in any manner, directly or
indirectly, effect or seek, offer, propose (whether publicly or otherwise) or
take any other action to effect, or cause or participate in, or in any way
assist, advise or encourage any other person to effect, seek, or offer or
propose (whether publicly or otherwise) to effect or participate in, (i) any
acquisition of the securities (or beneficial ownership thereof as such term is
used in the Securities Exchange Act of 1934) or assets of Healthsource, or
rights or options to acquire the same (except that the foregoing shall not
prohibit CIGNA, in the ordinary course of its investment activities for
third-party or fiduciary accounts, from trading or beneficially owning
securities of Healthsource; provided neither CIGNA nor its Affiliates shall
exercise any voting control over such third-party shares in a manner intended to
influence the management or operations of Healthsource); (ii) any tender or
exchange offer, merger or other business combination involving Healthsource
(including with a third-party); (iii) any recapitalization, restructuring,
liquidation, dissolution, purchase or sale of a substantial portion of the
assets of, or other extraordinary transaction with respect to Healthsource; (iv)
any "solicitation" of "proxies" (as such terms are used in the rules of the
Securities and Exchange Commission) to vote, or seek to advise or influence any
person or entity with respect to the voting of, any voting securities of
Healthsource or any action to elect or remove directors of, or to influence the
management, policy or conduct of the business affairs of Healthsource, or (v)
any action which would likely cause Healthsource to be required to make a public
announcement regarding any of the types of matters set forth in (i) - (iv)
above, nor will CIGNA enter into any arrangement or understanding with any
third-party to accomplish any of the foregoing. During such period, unless
specifically invited as provided above, CIGNA further agrees not to approach or
request Healthsource (or its directors, officer, employees or agents), directly
or indirectly, to amend or waive any provision of this paragraph (including this
sentence). If at any time during such period, CIGNA is approached by a
third-party concerning its or such third-party's participation in a transaction
or activity described in (i) - (iv) above, CIGNA will promptly inform
Healthsource of the nature of each contact and the identities of the
third-parties involved. CIGNA will not take any action during such period,
unless specifically invited as provided above, to communicate (either publicly
or privately) with Healthsource shareholders.
CIGNA agrees that neither CIGNA nor any of its Affiliates will, for a
period of eighteen (18) months from the date of this Confidentiality Agreement,
without the prior written consent of the Healthsource, (i) employ or solicit the
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employment of any executive officer of Healthsource (as defined under the 1934
Act), or the CEO of any HMO or insurance subsidiary of Healthsource, nor (ii)
employ or solicit the employment of any other management employee of
Healthsource or any of its Affiliates with whom CIGNA or its Representatives had
contact during the negotiations and investigations of the Transaction, provided
that this clause (ii) shall not prevent CIGNA from hiring any such other
management employee who approaches CIGNA on his own initiative without direct or
indirect solicitation by CIGNA other than through an advertisement in a
newspaper or magazine.
CIGNA agrees that all of its communications with Healthsource with
respect to the Evaluation Material and any potential Transaction, will be
conducted solely with Xxxxxx X. Xxxxxx, M.D. or his designees.
The parties agree that a breach of any material provision of this
Agreement by either of them would result in irreparable harm to the
non-breaching party, that any remedy at law is inadequate because damages are
not fully ascertainable, and accordingly, in the event of any breach or
threatened breach of any material provision of this Agreement by a party (or its
Representative), the non-breaching party shall have the right to seek immediate
injunctive relief to prevent the breach in addition to any other remedies
available at law or in equity.
CIGNA agrees to advise its Representatives who receive the Evaluation
Material, that the Untied States securities laws prohibit any person who has
material, non-public information concerning the matters which are the subject of
this Agreement from purchasing or selling securities of Healthsource (and
options, warrants and rights relating thereto) or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities.
You acknowledge that if Healthsource determines to pursue a
Transaction, it may establish procedures and guidelines ("Procedures") for the
submission of proposals with respect to any Transaction with or involving
Healthcare. If CIGNA determines to submit a proposal, CIGNA and its
Representatives agree to act in accordance with the Procedures and to be bound
by the terms and conditions that may be established pursuant to the Procedures.
The Parties agree that unless and until a definitive transaction
agreement is executed by the parties, no contract or agreement providing for a
Transaction with the parties shall be deemed to exist. The parties agree that
neither party will be under any legal obligation of any kind whatsoever with
respect to any such Transaction by virtue of this Confidentiality Agreement or
by virtue of any oral or written expression with respect to such a Transaction
made by any of its
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officers or Representatives. CIGNA agrees that Healthsource will have the right
in its sole discretion, without giving any reason therefor, at any time to
terminate the discussions with CIGNA concerning a possible Transaction, to elect
not to pursue any such Transaction, or to pursue the Transaction without your
involvement. This paragraph may only be modified by a written instrument signed
by both parties and referencing this paragraph specifically.
If it is found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) that any term or provision hereof is invalid or
unenforceable, (i) the remaining terms and provision hereof shall be unimpaired
and shall remain in full force and effect and (ii) the invalid or unenforceable
provision or term shall be replaced by a term or provision that is valid,
enforceable and that comes closest to expressing the intention of such invalid
or unenforceable term or provision.
This Agreement embodies the entire agreement and understanding of the
parties hereto and supersedes any and all prior agreements, arrangements and
understandings relating to the matters provided for herein. No alteration,
waiver, amendment, change or supplement hereto shall be binding or effective
unless the same is set forth in a written instrument signed by a duly authorized
representative of each party and expressly so altering or waiving such
Agreement.
All notices required or permitted to be given under this Agreement
shall be given by personal delivery or by overnight courier service (signature
required) as follows, or to such other address as may be subsequently provided:
If to the Company: CIGNA Corporation
One Liberty Place
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxx
Vice-President - Strategic Growth and Development
FAX No.: (000) 000-0000
With a copy to: CIGNA Corporation
One Liberty Place
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
General Counsel
FAX No.: (000) 000-0000
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If to Healthsource: Healthsource, Inc.
Xxx Xxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, M.D.
President & CEO
Fax No.: (000) 000-0000
With a copy to: Healthsource, Inc.
Xxx Xxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxx X. Xxxxxxxxxx
Special Counsel to the President
Fax No.: (000) 000-0000
This Agreement shall be governed by the internal substantive law of the State of
New Hampshire without regard to choice of law principles.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in
duplicate original copies as of the date stated above.
HEALTHSOURCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
Chief Financial Officer
CIGNA CORPORATION
By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
Vice President
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