SUPPLEMENTAL AGREEMENT
This Supplemental Agreement is made as of December 15, 2000 among
Seagull Merger Corporation, a Massachusetts corporation ("Seagull"), Genzyme
Corporation, a Massachusetts corporation ("Genzyme"), and UBS Warburg LLC
("Warburg"), a Delaware limited liability company.
RECITALS
A. Biomatrix, Inc. ("Biomatrix") has issued a 6.9% Convertible
Subordinated Note due May 14, 2003 (the "Convertible Note") in favor of
Warburg.
B. Biomatrix has executed an Agreement and Plan of Merger
dated as of March 6, 2000 (as amended, the "Merger Agreement") with Genzyme
and Seagull pursuant to which Biomatrix will merge with and into Seagull, and
Seagull shall continue as the surviving entity (the "Merger").
C. In connection with the Merger, and in accordance with the
terms of the Convertible Note, Seagull has agreed to assume the obligations
under the Convertible Note.
AGREEMENT
1. ASSUMPTION OF CONVERTIBLE NOTE.
As provided in Section 5 of the Convertible Note, effective as of
the effective time of the Merger, Seagull, as the entity surviving the
Merger, hereby assumes the due and punctual payment of the principal of (and
premium, if any) and interest on the Convertible Note and the performance or
observance of every covenant of the Convertible Note on the part of the
Company (as defined in the Convertible Note) to be performed or observed,
except as follows:
(a) In Section 1, the words "Company Stock" shall be deleted
and replaced with the words "Common Stock";
(b) The first paragraph of Section 2(a) of the Convertible Note
shall be deleted and replaced in its entirety with the following:
"2. CONVERSION. (a) The holder of this Security is entitled at
any time on or after May 14, 1999 and before the close of business on
May 14, 2003 (or, in case this Security or a portion hereof is called
for redemption or the holder hereof has exercised his right to require
the Company to repurchase this Security or a portion hereof, then in
respect of this Security or such portion hereof, as the case may be,
until and including, but (unless the Company defaults in making the
payment due upon redemption or repurchase, as the case may be) not
after, the close of business on the redemption date or the Repurchase
Date, as the case may be) to convert this Security (or any portion of
the principal amount hereof that is an integral multiple of $1,000),
into (1) fully paid and nonassesable shares (calculated as to each
conversion to the nearest 1/100 of a share) of
Common Stock at the rate of 35.81 shares of Common Stock (the
"Conversion Rate") for each $1,000 principal amount of Security (or
at the current adjusted rate if an adjustment has been made as
provided below) and (2) cash at the rate of $525.03 (the "Cash Rate")
for each $1,000 principal amount of Security by surrender of this
Security, duly endorsed or assigned to the Company or in blank to the
Company at the Designated Office, accompanied by written notice to
the Company that the holder hereof elects to convert this Security
(or if less than the entire principal amount hereof is to be
converted, specifying the portion hereof to be converted). Upon
surrender of this Security for conversion, the holder will be
entitled to receive the interest accruing on the principal amount of
this Security then being converted from the interest payment date
next preceding the date of such conversion to such date of
conversion. No payment or adjustment is to be made on conversion for
dividends on the Common Stock issued on conversion hereof. No
fractions of shares or scrip representing fractions of shares will be
issued on conversion, but instead of any fractional interest, the
Company shall pay a cash adjustment, computed on the basis of the
Closing Price of the Common Stock on the date of conversion, or, at
its option, the Company shall round up to the next higher whole
share."
The Conversion Rate and Cash Rate specified in the replacement
paragraph above are based upon the standard consideration that non-electing
common stockholders of Biomatrix are entitled to receive in connection with
the Merger, as set forth in the Merger Agreement. If the standard
consideration is adjusted in connection with the closing of the Merger, then
(1) an appropriate and proportionate adjustment shall be made to the
Conversion Rate and Cash Rate and (2) the Conversion Rate and Cash Rate
specified in the replacement paragraph above shall mean the Conversion Rate
and Cash Rate as so adjusted;
(c) In Sections 2(b) through (j), 3(b)(5), 3(g), 3(i) and 3(j)(2),
each instance of the term "the Company" shall be replaced with "Genzyme
Corporation";
(d) In Section 2(i), the parenthetical clause, "(it being understood
that the Company shall not be required to register the Common Stock issuable
on conversion hereof under the Securities Act, except pursuant to the
Registration Rights Agreement between the Company and the initial holder of
this Security)" shall be deleted and replaced in its entirety with the
following:
"(it being understood that the Company shall not be required to
register the Common Stock issuable on conversion hereof under the
Securities Act, except pursuant to the Supplemental Agreement among the
Company, the initial holder of this Security and the other parties
thereto)."
(e) In Section 2(j), the definition of "Common Stock" shall be deleted
and replaced in its entirety with the following:
" "Common Stock" means the Genzyme Biosurgery Division Common
Stock, par value $0.01 per share, of Genzyme Corporation together with
the associated GBS Stock Purchase Rights. Subject to the provisions of
Section 2(h), shares issuable on conversion or repurchase of this
Security shall include only shares of Genzyme Biosurgery Division
Common Stock and the associated GBS Stock Purchase Rights or shares of
any class or
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classes of common stock resulting from any reclassification or
reclassifications thereof; PROVIDED, HOWEVER, that if at any time
there shall be more than one such resulting class, the shares so
issuable on conversion of this Security shall include shares of all
such classes, and the shares of each such class then so issuable
shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all
such reclassifications.";
(f) In Section 2(j), the definition of "Conversion Price" shall
be deleted and replaced in its entirety with the following:
" "Conversion Price" on any day means an amount equal to the
quotient determined by dividing (1) the difference obtained by
subtracting the Cash Rate from $1,000 by (2) the Conversion Rate in
effect on such day.";
(g) To add the following subsection after Section 2(j):
"(k) In case Genzyme Corporation shall redeem or exchange
shares of its Common Stock pursuant to the provisions governing
redemption or exchange of its Common Stock as set forth in its Amended
and Restated Articles of Organization, as amended, the holder of this
Security shall have the right thereafter, during the period this
Security shall be convertible as specified in Section 2(a), to convert
this Security only into the kind and amount of securities, cash and
other property receivable upon such redemption or exchange by a holder
of the number of shares of Common Stock into which this Security might
have been converted immediately prior to such redemption or exchange.";
(h) In Section 3(j)(2), each instance of the defined term
"Common Stock" shall be replaced with "capital stock of the Company";
(i) Section 4(a)(2) shall be deleted and replaced in its
entirety with the following:
"(2) default by the Company or Genzyme Corporation in the
performance of their respective obligations in respect of any
conversion of this Security (or any portion hereof) in accordance with
Section 2; or".
2. ASSUMPTION OF REGISTRATION RIGHTS AGREEMENT.
Effective as of the effective time of the Merger, (1) Warburg
releases Seagull from any and all obligations under the Registration Rights
Agreement dated as of May 14, 1998 by and between Biomatrix and Warburg (the
"Registration Rights Agreement"), (2) Warburg agrees not to sell any
securities pursuant to the prospectus which forms a part of the Registration
Statement on Form S-3 (Registration No. 333-77367) previously filed by
Biomatrix and (3), except for the following modifications, Genzyme assumes
the obligations and is entitled to the rights under the Registration Rights
Agreement:
(a) The defined term "the Company" shall mean Genzyme
Corporation, except in those instances where the term "the Company" refers to
the issuer of or the obligor on the
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Convertible Note, in which instance the term "the Company" shall mean Seagull;
(b) The defined term "Common Stock" shall mean the Genzyme
Biosurgery Division Common Stock, par value $0.01 per share, of Genzyme
Corporation;
(c) The second sentence of Section 2(a) shall be deleted and
replaced in its entirety with the following:
"The Company agrees to use its reasonable best efforts (1) to cause the
Shelf Registration to become or be declared effective as soon as
practicable following the Company's filing with the SEC of the
financial statements, pro forma financial information and exhibits
required by Item 7 of Current Report on Form 8-K promulgated under the
Securities Exchange Act of 1934, as amended, with respect to the
Company's acquisitions of GelTex Pharmaceuticals, Inc. and Biomatrix
and (2) to keep such Shelf Registration continuously effective for a
period ending on the earliest to occur of (i) the 181st day following
conversion of the Convertible Note into shares of Common Stock, (ii)
notification to the Company by the Purchaser that it has sold all
Shares issuable upon conversion of the Convertible Note so owned by it,
(iii) such time as the Purchaser may sell all of such shares pursuant
to Rule 144(k) (or any successor provision) under the Securities Act or
(iv) the close of business on May 14, 2003, unless the Purchaser
properly converts the Convertible Note into shares of Common Stock on
May 14, 2003, in which case this subclause (iv) shall be deemed to
refer to the close of business on November 10, 2003.";
(d) The text of Sections 3(a)(iii), (xii) and (xiv) shall be
deleted and replaced in their entirety with the following:
"[Removed and Reserved.]";
(e) Any reference in the Registration Rights Agreement to the
parties referred to in Section 3(a)(iii) shall mean the Purchaser and counsel
for the Purchaser;
(f) In Section 7(c), the notice information shall be deleted
and replaced in its entirety with the following:
"If to the Company, to:
Genzyme Corporation
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Xx.
Telephone Number: (000) 000-0000
Facsimile Transmission Number: (000) 000-0000
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with a copy to:
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone Number: (000) 000-0000
Facsimile Transmission Number: (000) 000-0000
If to UBS Warburg LLC to:
UBS Warburg LLC
000 Xxxxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attention: Convertible Trading
Telephone Number: (000) 000-0000
Facsimile Transmission Number: (000) 000-0000
Attention: Operations - Corporate Action Department
Telephone Number: (000) 000-0000
Facsimile Transmission Number: (000) 000-0000
Attention: Legal Affairs (Equities Group)
Telephone Number: (000) 000-0000
Facsimile Transmission Number: (000) 000-0000"; and
(g) Notwithstanding anything to the contrary in the Registration
Rights Agreement, Genzyme shall not be required to enter into any underwriting
agreements, engagement letters, agency agreements or similar agreements in
connection with Warburg's disposition of the Shares (as defined in the
Registration Rights Agreement).
3. PAYMENT ON THE NOTE.
Notwithstanding anything to the contrary in this Supplemental
Agreement, the Convertible Note or the Registration Rights Agreement, Genzyme
shall not be liable to pay any amounts owed under the Convertible Note,
including without limitation principal of, premium on or interest on the
Convertible Note, and Warburg shall look only to Seagull for payment of
amounts owed under the Convertible Note.
4. MISCELLANEOUS.
This Supplemental Agreement shall be governed by and construed in
accordance with the laws of the State of New York, United States of America.
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IN WITNESS WHEREOF, the undersigned has caused this Supplemental
Agreement to be executed as of the date set forth above.
SEAGULL MERGER CORPORATION
By: /s/ Xxxx X. Xxxxxxx, Xx.
--------------------------------------------
Xxxx X. Xxxxxxx, Xx.
President
GENZYME CORPORATION
By: /s/ Xxxx X. Xxxxxxx, Xx.
--------------------------------------------
Xxxx X. Xxxxxxx, Xx.
Executive Vice President
UBS WARBURG LLC
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Director, Convertibles
By: /s/ Xxxx Xxxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Director, Equities
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