EXHIBIT (d)(3)
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Endoscopy Division
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Smith & Nephew, Inc.
160 Dascomb Road, Andover, MA 01810 U.S.A.
Telephone: 978-749-1000
Telefax: 978-749-1599
Smith & Nephew
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November 13, 2001
ORATEC Interventions, Inc.
3700 Haven Court
Menlo Park, CA 94025
Gentlemen:
In order to evaluate a possible acquisition of ORATEC Interventions,
Inc. ("Orchid") by Smith & Nephew, Inc ("S&N"), or any related transactions as
may be mutually agreed-upon by the parties hereto, (the "Proposed Transaction"),
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each of Orchid and S&N may disclose and deliver to the other party, upon
execution and delivery by Orchid and S&N of this letter agreement, certain
information about its properties, employees, finances, businesses and operations
(such party when disclosing such information being the "Disclosing Party" and
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such party when receiving such information being the "Receiving Party"). All
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such information furnished directly or indirectly by the Disclosing Party or its
Representatives (as defined below), whether furnished before or after the date
hereof, whether oral or written, and regardless of the manner in which it is
furnished, is referred to in this letter agreement as "Proprietary Information".
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Proprietary Information does not include, however, information which the
Receiving Party demonstrates (a) is or becomes generally available to the public
other than as a result of a disclosure directly or indirectly by the Receiving
Party or its Representatives, (b) was available to the Receiving Party on a
nonconfidential basis prior to its disclosure by the Disclosing Party or its
Representatives, as substantiated by written documentation, or (c) becomes
available to the Receiving Party on a nonconfidential basis from a person other
than the Disclosing Party or its Representatives who is not otherwise bound by a
confidentiality agreement with the Disclosing Party or any of its
Representatives, and is otherwise not under an obligation to the Disclosing
Party or any of its Representatives not to transmit the information to the
Receiving Party, as substantiated by written documentation. As used in this
letter agreement, the term "Representative" means, as to any person, such
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person's affiliates and its and their directors, officers, employees, agents,
advisors (including, without limitation, financial advisors, counsel and
accountants), potential financing sources and controlling persons and the term
"person" shall be broadly interpreted to include, without limitation, any
corporation, company, partnership, limited liability company, joint venture,
trust, other entity or individual.
Subject to the immediately succeeding paragraph, unless otherwise
agreed to in writing by the Disclosing Party, the Receiving Party agrees (a)
except as required by law, to keep all Proprietary Information confidential and
not to disclose or reveal any Proprietary Information
ORATEC Interventions, Inc.
November 13, 2001
Page 2
to any person other than its Representatives who are actively and directly
participating in the evaluation of the Proposed Transaction or who otherwise
need to know the Proprietary Information for the purpose of evaluating the
Proposed Transaction (all of whom shall be specifically informed of the
confidential nature of such Proprietary Information and that by receiving such
information they are agreeing to be bound by the terms of this letter agreement
relating to the confidential treatment of such Proprietary Information) and to
cause those persons to observe the terms of this letter agreement, (b) not to
use Proprietary Information for any purpose other than in connection with its
evaluation of the Proposed Transaction or the consummation of the Proposed
Transaction and (c) except as required by applicable law or regulation or
pursuant to a listing agreement with any securities exchange or the National
Association of Securities Dealers, Inc., not to disclose to any person (other
than its Representatives who are actively and directly participating in the
evaluation of the Proposed Transaction or who otherwise need to know for the
purpose of evaluating the Proposed Transaction and, in any such case, whom it
will cause to observe the terms of this letter agreement) the fact that the
Proprietary Information exists or has been made available, the fact that the
Receiving Party is considering the Proposed Transaction or any other transaction
involving the Disclosing Party, the fact that the Receiving Party is subject to
any of the restrictions set forth in this letter agreement, or that discussions
or negotiations are taking or have taken place concerning the Proposed
Transaction or involving the Disclosing Party or any term, condition or other
fact relating to the Proposed Transaction or such discussions or negotiations,
including, without limitation, the status thereof. The Receiving Party will be
responsible for any breach of the terms of this letter agreement by the
Receiving Party or any of its Representatives.
If the Receiving Party is requested pursuant to, or required by,
applicable law, regulation or stock exchange rule or by legal process to
disclose any Proprietary Information or any other information concerning the
Disclosing Party or the Proposed Transaction, the Receiving Party agrees that it
will provide the Disclosing Party with prompt notice of such request or
requirement in order to enable the Disclosing Party to seek an appropriate
protective order or other remedy, to consult with the Receiving Party with
respect to the Disclosing Party taking steps to resist or narrow the scope of
such request or legal process, or to waive compliance, in whole or in part, with
the terms of this letter agreement. If no such protective order or remedy is
obtained, or if the Disclosing Party waives compliance with the terms of this
letter agreement, the Receiving Party will furnish only that portion of any
Proprietary Information which the Receiving Party is advised by counsel is
legally required and will exercise all reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded any Proprietary
Information.
Each of Orchid and S&N is aware, and each of Orchid and S&N will
advise their respective Representatives who are informed of the matters that are
the subject of this agreement, of the restrictions imposed by the United States
securities laws on the purchase or sale of securities by any person who has
received material, non-public information from the issuer of such securities and
on the communication of such information to any other person when it is
reasonably foreseeable that such other person is likely to purchase or sell such
securities in reliance upon such information.
ORATEC Interventions, Inc.
November 13, 2001
Page 3
The Receiving Party acknowledges that neither the Disclosing Party nor
any of its Representatives make any express or implied representation or
warranty as to the accuracy or completeness of any Proprietary Information, and
the Receiving Party agrees that none of such persons shall have any liability to
the Receiving Party or any of its Representatives relating to or arising from
the use of any Proprietary Information by the Receiving Party or its
Representatives or for any errors therein or omissions therefrom. The Receiving
Party also agrees that it is not entitled to rely on the accuracy or
completeness of any Proprietary Information and that it shall be entitled to
rely solely on such representations and warranties regarding Proprietary
Information as may be made to it in any final agreement relating to the Proposed
Transaction, subject to the terms and conditions of any such agreement.
If either party hereto determines that it does not wish to proceed
with the Proposed Transaction, it will promptly advise the other party of that
decision. In such case, or if the Proposed Transaction is not consummated by
Orchid and S&N, each party will promptly return to the other party all copies of
Proprietary Information in its possession or in the possession of any of its
Representatives and will not retain any copies or other reproductions in whole
or in part of such material. All other documents, memoranda, notes, summaries,
analyses, extracts, compilations, studies or other material whatsoever prepared
by each party or any of its Representatives based on the Proprietary Information
will be destroyed. Any oral Proprietary Information will continue to be subject
to the terms of this agreement.
For a period of one year following the date hereof, neither party
will, directly or indirectly, solicit for employment or hire any officer,
director, or employee of the other with whom such party has had contact or who
became known to such party in connection with its consideration of the Proposed
Transaction, except that such party shall not be precluded from hiring any such
employee who (a) initiates discussions regarding such employment without any
direct or indirect solicitation by such party, (b) responds to any public
advertisement placed by such party, or (c) has been terminated by the other
party prior to commencement of employment discussions between such party and
such officer, director, or employee.
Without prejudice to the rights and remedies otherwise
available to each of the parties hereto, each such party shall be entitled to
equitable relief by way of specific performance, injunction or otherwise if the
other party or any of its Representatives breach or threaten to breach any of
the provisions of this agreement.
It is further understood and agreed that no failure or delay by either
party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder.
If any term or provision of this agreement or any application hereof
shall be invalid or unenforceable, the remainder of this agreement and any other
application of such term or provision shall not be affected thereby.
ORATEC Interventions, Inc.
November 13, 2001
Page 4
This agreement shall not be assigned by either party, by operation of
law or otherwise, without the prior written consent of the other party.
This agreement contains the entire agreement between Orchid and S&N
with respect to the matters covered hereby, and no modification of this
agreement or waiver of the terms and conditions hereof shall be binding upon
Orchid and S&N, unless approved in writing by each of the parties hereto or, in
the case of waiver, by the party against whom such waiver is sought to be
enforced.
Except as otherwise provided herein, this agreement shall expire on
the date which is five years from the date first written above. Orchid and S&N
also agree that unless and until a definitive agreement with respect to a
Proposed Transaction has been executed and delivered, neither party has any
legal obligation of any kind whatsoever with respect to any Proposed Transaction
by virtue of this agreement or any other written or oral communication with
respect to such Proposed Transaction.
This agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts executed in and to be
performed in that state.
Please confirm your agreement with the foregoing by signing and
returning to the undersigned the duplicate copy of this agreement enclosed
herewith.
ORATEC Interventions, Inc.
By: /s/ Nancy V. Westcott
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Name: Nancy V. Westcott
Title: Chief Financial Officer and
Vice President
Administration
Accepted and Agreed
as of the date
first written above:
Smith & Nephew, Inc.
By: /s/Ron Sparks
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Name: Ron Sparks
Title: President