Exhibit 2
CONFIDENTIAL
September 25, 1997
Sulzer Medica
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxx
Group Vice President of Business Development
CONFIDENTIALITY AGREEMENT
Ladies and Gentlemen:
In connection with your possible interest in a business transaction
involving Spine-Tech, Inc. (the "Company"), the Company and you may provide
each other with certain information which is either non-public, confidential
or proprietary in nature. For purposes of this Agreement, the party
disclosing such information in any given instance is sometimes referred to as
the "Disclosing Party" and the Party receiving such information is
sometimes referred to as the "Recipient Party." All information furnished or
to be furnished to the Recipient party by the Disclosing Party, or by its
representatives with respect to the Disclosing Party (including without
limitation any information in the Disclosing Party's possession that has been
supplied to the Disclosing Party by customers or other third parties and that
is furnished to the Recipient Party, if any), in whole or in part, together
with analyses, compilations, studies or other documents prepared by the
Recipient Party, any of the Recipient Party's affiliates, the Recipient
Party's partners, directors, officers, employees, agents or advisers, or
those of any of the Recipient Party's affiliates, which contain or otherwise
reflect such information, is hereinafter referred to as "Information". In
addition, the fact that such information will be, or has been, delivered to
the Recipient Party itself constitutes Information for purposes of this
Agreement. If the Company and you shall hereafter determine to enter into
discussions or negotiations concerning a possible transaction involving the
Company and
you or an affiliate of yours, the existence and nature of such discussions
and negotiations will also constitute Information for purposes of this
Agreement. In consideration of the foregoing and good and valuable other
consideration, the receipt of which is hereby acknowledged, you and the
Company agree as follows:
1. All Information will be kept confidential and will not, without the
prior written consent of the Disclosing Party, be disclosed by the Recipient
Party, any of the Recipient Party's affiliates, the Recipient Party's
partners, directors, officers, employees, agents or advisers, or those of any
of the Recipient Party's affiliates, in any manner whatsoever, in whole or in
part, and will not be used by any of the foregoing other than in connection
with considering your possible interest in a transaction with the Company.
Moreover, the Recipient Party agrees to transmit Information only to the
Recipient Party's partners, directors, officers, employees, agents and
advisers, or those of the Recipient Party's affiliates who need to know
Information for the purpose of considering the Recipient Party's possible
interest in a transaction with the Disclosing Party and who are informed by
the Recipient Party of the confidential nature of Information, and who agree
to be bound by this Agreement. The Recipient Party will be responsible for
any breach of any provision of this Agreement by the Recipient Party's
affiliates, partners, directors, officers, employees, agents and advisers and
those of the Recipient Party's affiliates.
2. In no event shall Information be used by the Recipient Party, the
Recipient Party's affiliates, or any of the Recipient Party's partners,
directors, officers, employees, agents or advisers, or those of the Recipient
Party's affiliates, in connection with purchases or sales of, or trading in,
any securities of the Disclosing Party, including but not limited to direct
or indirect purchases or sales, offers or agreements to purchase or sell, or
rights or options to purchase or sell any such securities. You hereby
acknowledge that neither you nor any of your subsidiaries own any capital
stock of the Company.
3. You agree that, except as otherwise provided in the last sentence of
this paragraph 3, for a period of eighteen months from the date hereof, you
and your affiliates and associates (as such terms are defined in Rule 12b-2
under the Securities Exchange Act of 1934, as amended (the "Exchange Act'))
will not (and you and they will not assist or encourage others to), directly
or indirectly, without the prior written consent of the Company.
(a) acquire or agree (except with the Company) or publicly offer, seek
or propose to acquire, or cause to be acquired (by merger, tender
offer, purchase, statutory share exchange or otherwise), ownership
(including, but not limited to, beneficial ownership as defined in
Rule 13d-3 under the Exchange Act) of any of the Company's assets
(other than acquisitions of inventory in the ordinary course of
business) or businesses or any voting stock that would result in
beneficial ownership by you and your affiliates and associates of
voting stock of the Company in excess of 1% of the total voting
power of the outstanding shares of stock of the Company in the
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aggregate, for which purpose any rights or options (including
without limitation convertible securities) to acquire such ownership
of voting stock shall constitute beneficial ownership of such voting
stock, regardless of when they are exercisable, provided that
nothing herein stated shall limit your right to make a proposal to
the Board of Directors of the Company on a confidential basis as
long as such proposal is not made public by you (or any of your
affiliates or associates or any person acting in concert with you or
any of your affiliates or associates) by press release or other
public communication or filing unless you are legally compelled to
make such disclosure; or
(b) seek or propose to influence or control the management or policies
of the Company or to obtain representation on the Company's Board of
Directors, or solicit, or participate in the solicitation of,
proxies or consents with respect to any securities of the Company in
connection with the election of directors or any other matter or
disclose to the public by press release or other communication its
or their position concerning the election of directors or any other
matter to be considered by the shareholders of the Company, or
request permission to do any of the foregoing; or
(c) make any other public announcement with respect to any of the
foregoing; or
(d) publicly request the Company, direct or indirectly, to waive or
amend any provision of this paragraph 3.
Notwithstanding anything stated above in this paragraph 3, this paragraph 3
(except this sentence) shall be of no force or effect following (i) the
publication by the Company or a proposing person, in a newspaper or
periodical of general circulation or by press release, of an offer or
proposal for, or the execution of an agreement in principle or definitive
acquisition agreement for, a business transaction involving the sale of the
Company, any merger or other business combination involving the Company or
the sale of any substantial portion of the stock or assets of the Company
(other than sales of inventory in the ordinary course of business) sufficient
to substantially preclude the benefits that would otherwise be obtained by
you from a transaction with you (other than the publication by you or any of
your affiliates or associates or any person acting in concert with you or any
of your affiliates or associates of such an offer or proposal) or (ii) the
making (including a public announcement of an intention to make) by any
person (other than the Company or you or any of your affiliates or associates
or any person acting in concert with you or any of your affiliates or
associates) of any tender offer or exchange offer to purchase outstanding
shares of the Company's voting stock representing 10% or more of the total
voting power of the Company's voting stock.
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4. All information, and all copies thereof, except for that portion of
Information which consists of analyses, compilations, studies or other
documents prepared by the Recipient Party, the Recipient Party's partners,
directors, officers, employees, agents or advisors, or those of the Recipient
Party's affiliates, will be returned to the Disclosing Party without
retaining any copies thereof immediately upon request of the Disclosing
Party. That portion of Information which consists of analyses, compilations,
studies or other documents prepared by the Recipient Party's affiliates, the
Recipient Party's partners, directors, officers, employees, agents or
advisers, or those of the Recipient Party's affiliates, will be held by the
Recipient Party or them and kept confidential and subject to the terms of
this Agreement or, at the request of the Disclosing Party, destroyed. Such
destruction will be confirmed in writing upon request of the Disclosing
Party. Notwithstanding any contrary foregoing provisions, the Recipient Party
may, if it so elects, retain one copy only of Information in a secure
location with appropriate restricted access for evidentiary purposes.
5. Nothing stated herein shall preclude the Recipient Party, the
Recipient Party's affiliates, the Recipient Party's partners, directors,
officers, employees, agents or advisers, or those of the Recipient Party's
affiliates, from disclosing Information that the Recipient Party is legally
compelled to disclose, provided that the procedures referred to in this
paragraph 5 are satisfied. In the event that the Recipient Party or any
persons to whom the Recipient Party transmits Information pursuant to this
Agreement become legally compelled to disclose any Information, the Recipient
Party will provide the Disclosing Party with prompt notice thereof and
cooperate with the Disclosing Party so that the Disclosing Party may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Agreement. In the event that such protective order or
other remedy is not obtained, or that the Disclosing Party waives compliance
with the provisions of this Agreement, the Recipient Party or such person
will furnish only that portion of such Information that the Recipient Party
or such person is advised by written opinion of counsel, reasonably
satisfactory to the Disclosing Party, is legally required and the Recipient
Party or such person will exercise the Recipient Party's or such person's
best efforts to obtain a protective order or other reasonable assurance that
confidential treatment will be accorded such Information.
6. Although each party hereto understands that the Disclosing Party has
included, or may include, certain data in the Information which it believes
to be relevant for the purpose of the Recipient Party's evaluation, neither
such party nor its advisers makes any representation or warranty as to the
accuracy or completeness of Information or of any other written or oral
communication transmitted or made available to the Recipient Party, and each
such party expressly disclaims any and all liability based on such
information or communications or on omissions therefrom.
7. The term "Information" does not include information that (a) becomes
generally available to the public other than as a result of a disclosure by
the Recipient Party or anyone to whom the Recipient Party transmits
Information, (b) was known or available to the
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Recipient Party or in the Recipient Party's possession on a non-confidential
basis prior to its disclosure to the Recipient Party by the Disclosing Party,
(c) is developed by the Recipient Party following disclosure by the
Disclosing Party, but independently and without reference to such disclosure,
or (d) becomes available to the Recipient Party on a non-confidential basis
from a source other than the Disclosing Party who is not bound by a
confidentiality agreement or other obligation of secrecy with respect to such
information.
8. It is understood and agreed that nothing stated herein shall entitle
either party to receive any Information from the other party other than
Information that the other party determines to provide or obligate either
party in any manner to enter into discussions or negotiations with the other
party or accept any proposals from the other party or to continue any
discussions or negotiations with the other party if it does enter into any
discussions or negotiations with the other party or to enter into any
definitive agreements with the other party and that neither party shall be
obligated to the other party in any respect except to the extent expressly
set forth in any definitive written agreement, if any, hereafter entered into
by the Company and you. Each party acknowledges that it has been advised by
the other party that the other party has not made any determination to enter
into a business transaction with such party or anyone else of the nature of
the business transaction in which you have expressed an interest.
9. It is further understood and agreed that no failure or delay by
either party in exercising any right, power or privilege under this Agreement
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise of any right, power or
privilege hereunder.
10. Each party recognizes that irreparable injury may result to the
non-breaching party and its business and property if the other party breaches
any provision of this Agreement and that money damages would not be a
sufficient remedy for any such breach. Each party therefore agrees that if it
should engage, or cause or permit any other person or entity to engage, in
any act in violation of any provision hereof, the other party shall be
entitled, in addition to such other remedies, damages and relief as may be
available under applicable law, to an injunction prohibiting the breaching
party from engaging in any such act or specifically enforcing this Agreement,
as the case may be.
11. This Agreement shall be governed by and construed in accordance with
the laws of the State of Minnesota, without giving effect to the principles
of conflict of laws thereof.
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If you are in agreement with the foregoing, please sign below and return
one or more fully executed copies of this Agreement to the undersigned.
Very truly yours,
SPINE-TECH, INC.
By /s/ Xxxxxx X. Xxxxxxxxxx
---------------------------------
Its Managing Director
-----------------------------
as agent for the Company.
Accepted and agreed as of
the date first above written.
SULZER MEDICA
By /s/ Xxxxxx Xxxxx
-----------------------------
Its Group Vice President
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