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EXHIBIT 12
[LETTERHEAD OF XXXXXXX MEDICAL]
July 23, 1997
Xx. Xxxx Xxxxxxxxx
Chief Operating Officer - Western Region
MedPartners, Inc.
0000 Xxxxxxx Xxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Dear Xx. Xxxxxxxxx:
In connection with your and our consideration of a possible transaction
(the "Transaction") between us and/or our shareholders and you and/or your
shareholders, you have requested information concerning us and we have requested
information concerning you. For the purposes of this letter agreement
("Agreement"), you or we may each sometimes hereinafter be referred to as the
"Receiving Party" when the recipient of information, or the "Providing Party"
when the provider of information, as the context may require. As a condition to
the Receiving Party being furnished information from the Providing Party, the
Receiving Party agrees to treat any information which is furnished by, or on
behalf of the Providing Party before or after the date of this letter, and all
notes, analyses, compilations, studies or other documents, whether prepared by
the Providing Party or others, which contain or otherwise reflect such
information (collectively, the "Evaluation Material") in accordance with the
provisions of this Agreement and to take or to abstain from taking certain other
actions set forth in this Agreement.
The term Evaluation Material does not include information which (i) is
already in the possession of the Receiving Party, provided that such information
was not supplied to the Receiving Party by, or on behalf of, the Providing
Party, and provided further that such information is not known to the Receiving
Party to be subject to another confidentiality agreement with or other
obligation of secrecy or a fiduciary obligation to the Providing Party or to
another party, or (ii) is or becomes generally available to the public other
than directly or indirectly as a result of disclosure by the Receiving Party or
any of the directors, officers, employees, agents, advisers or representatives
(collectively, "Representatives") of the Receiving Party in violation of this
Agreement.
1. Confidentiality. The Receiving Party agrees that the
Evaluation Material will be used solely for the purpose of evaluating the
possible Transaction, and that such
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information will be kept strictly confidential by the Receiving Party, provided
that any of such information may be disclosed by the Receiving Party to its
Representatives who need to know such information for the purpose of evaluating
the possible Transaction (it being understood that such Representatives will be
informed by the Receiving Party of the confidential nature of such information
and will agree, and be directed by the Receiving Party, to keep such
information strictly confidential and that the Receiving Party will be
responsible if they should fail to comply with the terms of this Agreement).
2. Confidentiality of Discussions. In addition, you and we agree
not to disclose, and will cause our respective Representatives not to disclose
to any person, without the prior written consent of the other party, either the
fact that you and we are considering any possible Transaction or that
information has been provided to you or us, or that discussions or negotiations
are taking place concerning any possible Transaction, or any of the terms,
conditions or other facts with respect to any possible Transaction, including
the status thereof. The term "person" as used in this Agreement means without
limitation any corporation, company, group, partnership, individual or other
entity. The foregoing does not prohibit disclosures of the status of any
discussions between you and us required (in the written opinion of counsel
independent of the disclosing party and acceptable to the other party
("Independent Counsel")) by federal or state securities laws, but in such event
each of us will consult with the other party and its counsel in advance of such
disclosure about the need for, and the exact text of, any such disclosure.
3. Requests for Disclosure. If either of us is requested or
required by applicable law (by interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any Evaluation Material, such party will provide the other party with immediate
notice of the existence, terms and circumstances surrounding such request or
requirement so that the other party may consider seeking a protective order or
other appropriate relief (and will provide such cooperation in connection
therewith as may be reasonably requested by the other party) and/or waive
compliance with this Agreement. If in absence of a protective order or the
receipt of a waiver hereunder either of us is nonetheless, in the written
opinion of Independent Counsel, compelled to disclose any Evaluation Material
to any tribunal or any other person or else stand liable for contempt or suffer
other material censure or penalty, such party may disclose such information to
such tribunal or other party without liability hereunder, provided that such
party agrees to furnish only that portion of the Evaluation Material which it
is advised by written opinion of Independent Counsel is legally required and
that it will use its best efforts to obtain assurance that confidential
treatment will be accorded to any Evaluation Material that is disclosed.
4. Xxxxxxx Xxxxxxx Laws. You and we hereby acknowledge that you
and we are aware, and that you and we will advise our respective
Representatives who are informed as to the matters which are the subject of
this letter, that federal and many state
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securities laws prohibit any person who has received from an issuer material,
non-public information concerning the matters which are the subject of this
letter from purchasing or selling securities of such issuer 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.
5. No Improper Use of Evaluation Material. For a period
commencing on the date hereof and ending two years from the date hereof, each
of us and our respective affiliates (as defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), will not (and
we and they will not assist or encourage others to or request permission to),
directly or indirectly, unless specifically requested in writing in advance by
the other party's Board of Directors:
(i) acquire or agree, offer, seek or propose to acquire (or request
permission to do so), ownership (as defined in Rule 13d-3 under the Exchange
Act) of any of the other party's assets or businesses or any securities issued
by the other party, or any rights or options to acquire such ownership
(including from a third party); or
(ii) seek or propose to influence or control the management or policies of
the other party; or
(iii) enter into any discussions, negotiations, arrangements or understanding
with any third party with respect to any of the foregoing.
If at any time during such period either of us is approached by any
third party concerning participation in a transaction involving the assets or
businesses or securities issued by the other party, such party will promptly
inform the other party of the nature of such contract and the parties thereto.
6. No Representation. Although each of us will endeavor to
include in the Evaluation Material information which we believe to be relevant
for the purpose of investigation of the other party, each of us acknowledges
that neither of us nor any or our respective Representatives or advisers has
made or makes any representation or warranty as to the accuracy or
completeness of the Evaluation Material. Subject to the terms of this Agreement
and of any definitive agreement we may reach, each of us agrees that neither
party nor our respective directors, officers, employees, agents,
representatives or advisers will have any liability to the other party or any
of its representatives or advisers resulting from the use of the Evaluation
Material.
7. Return of Materials. If we do not proceed with a Transaction
in a reasonable time or if either of us so requests, the Receiving Party will
promptly redeliver to the Providing Party all copies of extracts or other
reproductions of Evaluation Material
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delivered to the Receiving Party and will destroy all memoranda, notes,
analyses, compilations and other materials (whether written, electronic or
otherwise) prepared by the Receiving Party or its Representatives based on or
reflecting the information in the Evaluation Material. The Receiving Party and
its Representatives will not retain any such material in any form whatsoever.
Following such redelivery or destruction, the Receiving Party will deliver to
the Providing Party, upon request, a certification in writing by an officer of
the Receiving Party who has supervised such redelivery or destruction.
8. No Solicitation. Until the earliest to occur of (a) the execution
by you and us of a definitive agreement with respect to the Transaction; (b) an
acquisition of either of us by a third party; or (c) one year from the date of
this Agreement, each of us agrees not to initiate or maintain contact (except
for those contacts made in the ordinary course of business) with any
Representative of the other party regarding its business, operations, prospects
or finances, except with the express permission of such party. Each of us
further agrees that until the earlier of (i) an acquisition of either of us by a
third party or (ii) one year from the date of this agreement, neither of us
will solicit for hire any person employed by the other party at the time of
such solicitation with whom it has had contact during the period of
investigation except for solicitations by general advertisement.
9. Definitive Agreement. Each of us agrees that unless and until a
definitive agreement regarding the Transaction has been executed and delivered,
neither we nor you will be under any legal obligation of any kind with respect
to any Transaction by virtue of this Agreement except for such matters that are
specifically set forth herein, notwithstanding any statements made by either of
us or our respective Representatives. Neither party has any obligation to
authorize or pursue with the other party, its Representatives, or any other
party any transaction, and is not prohibited from seeking to effect any of the
transactions contemplated herein with any third party. This Agreement may be
expressly modified or waived only by a separate writing executed by both
parties.
10. Injunctive Relief. Each of us agrees that money damages would not
be sufficient remedy for any breach of this Agreement by either of us or our
Representatives because of the difficulty in ascertaining the amount of damages
suffered by the aggrieved party in the event of such breach. Therefore, each of
us agrees that the aggrieved party will be entitled to injunctive relief,
specific performance and/or any other appropriate equitable remedies for any
such breach, without having to post any bond or any other form of security,
without having to show any likelihood of irreparable harm, and without having
to prove that money damages would be an inadequate remedy. Such remedies will
not be deemed to be exclusive, but will be in addition to all other remedies
available at law or in equity, including without limitation the recovery of
damages for the period preceding such relief.
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11. Indemnification. Each of us agrees to indemnify and to save and
hold harmless the other for any and all damages, claims, liabilities and
expenses (without duplication of the expenses referred to in the following
paragraph) arising out of any breach or failure to comply with any term of this
Agreement by any of our respective Representatives.
12. Attorney's Fees. In the event that either party should
institute proceedings to enforce any provision of this Agreement, the party
that substantially prevails in such proceedings will be entitled to recover all
expenses relating to the enforcement of this Agreement, including reasonable
attorney's fees and costs in addition to any other remedies.
13. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement will remain in full force and effect and will in
no way be affected, impaired or in any way invalidated by such court action.
14. Law to Govern; Jurisdiction. This Agreement will be governed by
and construed in accordance with the internal laws of the State of California
without regard to the rules of conflict of laws of such state. Each of us
hereby agrees to submit to the exclusive jurisdiction of any court of the State
of California for the purpose of any suit, action or other proceeding arising
out of this Agreement, or of the Transaction contemplated hereby.
15. No Waiver. No failure or delay by either of us in exercising
any right, power or privilege will operate as a waiver thereof nor will any
single or partial exercise preclude any other or further exercise of any right,
power or privilege.
If you are in agreement with the foregoing, please so indicate by
signing and returning one copy of this Agreement, whereupon it will become a
binding agreement. This Agreement may be executed by telecopy with original to
follow.
Very truly yours,
By: /s/ XXXX X. XXXXXXXXX
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Xxxx X. Xxxxxxxxx
President and Chief Executive Officer
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Xxxxxxxxx and agreed to as
of the date of this letter:
MEDPARTNERS, INC.
By: /s/ XXXX XXXXXXXXX
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Xxxx Xxxxxxxxx
Chief Operating Officer -- Western Region
