EXHIBIT 99.2
FOCAL, INC.
0 XXXXXXX XXXX
XXXXXXXXX, XX 00000
Xxxxx 00, 0000
Xxxxxxx Corporation
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Xx.
Dear Xxxx:
This letter agreement sets forth our understanding with respect to
certain matters relating to (x) the obligation of Genzyme Corporation
("Genzyme") to purchase from Focal, Inc. ("Focal"), at Focal's option, up to
$5.0 million of Focal's Common Stock, $0.01 par value per share, pursuant to the
terms of Section 1.2(a)(iii) of the Stock Purchase Agreement dated October 21,
1999 by and between Focal and Genzyme (the "Stock Purchase Agreement"), and (y)
the Distribution and Marketing Collaboration Agreement dated October 21, 1999
between Genzyme and Focal (the "Distribution and Marketing Agreement").
Capitalized terms used herein which are not otherwise defined are used with the
meanings ascribed thereto in the Stock Purchase Agreement.
Now therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Focal and Genzyme hereby agree as
follows:
1. Notwithstanding anything to the contrary contained in Section 1.2(a)(iii) of
the Stock Purchase Agreement, subject to the following sentence, the Third
Option Purchase Price on any Purchase Date (as defined below) shall mean (i)
$0.70 per share, or (ii) if the Common Stock ceases to be listed on the
Nasdaq National Market prior to such Purchase Date, $0.40 per share. If the
Agreement and Plan of Merger by and among Genzyme, Focal and a wholly-owned
subsidiary of Genzyme dated as of date hereof (the "Merger Agreement") is
terminated prior to June 15, 2001, the Third Option Purchase Price shall
mean the average of the per share regular 4:00 p.m. eastern time closing
prices of the Common Stock as reported by the Nasdaq National Market (or if
the Common Stock is not then listed on the Nasdaq National Market, on the
principal trading market for the Common Stock at that time, or, if there is
no principal trading market, the fair market value per share of Common Stock
as determined in good faith by the Board of Directors of the Company) for
the five consecutive trading days immediately preceding the applicable
Purchase Date.
2. None of (1) the execution and delivery of the Merger Agreement, and
consummation of the transactions contemplated thereby prior to the Effective
Time (as defined in Merger Agreement), (2) the modification of the Marketing
and Distribution Agreement as discussed below, (3) any termination of the
Merger Agreement, (4) the Nasdaq National
Genzyme Corporation
April 25, 2001
Page 2
Market ceasing to list the Common Stock and (5) any public announcement
relating to the foregoing, shall be deemed to constitute a cause to
terminate the Stock Purchase Agreement pursuant to Section 1.2(e) or a
failure of a condition to closing of the Third Option, or otherwise affect
Genzyme's obligation to purchase the Shares upon Focal's exercise of the
Third Option.
3. All information contained in the Merger Agreement, this letter, and the
Company Disclosure Schedule (as defined in the Merger Agreement) and any
actions taken by the parties in accordance with the Merger Agreement shall
be deemed to constitute exceptions to the representations and warranties and
other provisions in the Stock Purchase Agreement for purposes of determining
whether the conditions to the exercise of the Third Option have been
satisfied.
4. Notwithstanding the terms of the Stock Purchase Agreement, (i) the Exercise
Notice for the Third Option may be delivered by Focal at any time during the
period beginning on June 15, 2001 and ending on July 12, 2001, and (ii) the
Third Option Closing and the transfer of Shares pursuant to the exercise of
the Third Option shall occur as follows (with no potential delay due to the
occurrence of a Material Event):
(i) on July16, 0000, Xxxxxxx shall purchase the number of Third Option
Shares determined by dividing (x) 25% of the aggregate exercise
amount by (y) the purchase price applicable on such purchase date,
rounded to the nearest whole share;
(ii) on July 31, 2001, Genzyme shall purchase the number of Third Option
Shares determined by dividing (x) 25% of the aggregate exercise
amount by (y) the purchase price applicable on such purchase date,
rounded to the nearest whole share;
(iii) on August 15, 2001, Genzyme shall purchase the number of Third
Option Shares determined by dividing (x) 25% of the aggregate
exercise amount by (y) the purchase price applicable on such
purchase date, rounded to the nearest whole share; and
(iv) on August 31, 2001, Genzyme shall purchase the balance of the Third
Option Shares.
July 16, July 31, August 15 and August 31, 2001 are referred to herein
individually as a "Purchase Date" and collectively, as the "Purchase
Dates."
5. Notwithstanding the foregoing and anything to the contrary in the Stock
Purchase Agreement, Genzyme's obligation to purchase the Third Option Shares
shall be determined as of June 15, 2001. If the conditions (other than
deliveries of notices and other documents) to Genzyme's obligation to
purchase the Third Option Shares, as modified by
Genzyme Corporation
April 25, 2001
Page 3
this letter agreement, are satisfied as of June 15, 2001, thereafter all
conditions to Genzyme's obligation to purchase the Third Option Shares shall
be waived except (i) the conditions in Section 5.2(a)(iii)(3) and (4) of the
Stock Purchase Agreement and (ii) the receipt of the documents specified in
Article VI of the Stock Purchase Agreement (which, to the extent such
document refers to matters other than the conditions specified in (i), may
refer to the status of circumstances known as of June 15, 2001 and may
expressly disclaim any reference to any circumstance arising after such
date).
6. The second bullet point in Exhibit B of the Distribution and Marketing
Agreement is hereby deleted in its entirety and a new bullet point is
inserted in lieu thereof which reads as follows:
"o GSP will employ a cardiac sales group of at least twenty (20)
individuals in the US market that will sell FocalSeal(R)-L product as
one of its primary products. Focal will employ a dedicated thoracic
promotional group of at least two (2) individuals to co-promote the same
product within a reasonable time after System Launch."
7. The amendment to the Distribution and Marketing Agreement set forth in
paragraph 6 above shall not constitute a Material Event, and shall in no way
affect Genzyme's obligation to purchase the Shares upon Focal's exercise of
the Third Option.
8. From the date of this Agreement through the earliest of (x) September 1,
2001, (y) the date the Merger Agreement becomes terminable by Genzyme
pursuant to Section 8.1(c) of the Merger Agreement, or (z) the termination
of the Merger Agreement in accordance with its terms, Genzyme agrees that
(i) Genzyme will not sell, transfer or otherwise dispose of beneficial
ownership of shares of Common Stock, (ii) in no event will Genzyme acquire
beneficial ownership or voting rights with respect to shares of the Common
Stock other than pursuant to (1) exercise of the Third Option under the
Stock Purchase Agreement, (2) exercise of Genzyme's rights under Section 7.1
the Stock Purchase Agreement or (3) the terms of the Merger Agreement and
the Voting Agreements (as defined in the Merger Agreement), and (iii) at any
meeting of Focal's stockholders, unless otherwise requested by Focal,
Genzyme shall ensure that no votes are cast nor proxies given with respect
to the Excess Number (as defined below) of shares of Focal's Common Stock as
to which Genzyme has beneficial ownership or voting rights. In the event
Genzyme acquires beneficial ownership or voting rights with respect to an
aggregate number of shares of Focal's Common Stock representing 40% or more
of the number of outstanding shares of Focal's Common Stock as of the record
date for any meeting of Focal's stockholders, the number of shares exceeding
40% of such number of outstanding shares of Focal's Common Stock shall be
referred to as the Excess Number.
9. While the Merger Agreement is in effect, sections 4.1(b)(iv) and 4.10 of the
Merger Agreement shall govern in lieu of Sections 7.1 and 8.4 of the Stock
Purchase Agreement.
Genzyme Corporation
April 25, 2001
Page 4
10. Except as specifically set forth herein, the Stock Purchase Agreement and
Distribution and Marketing Agreement shall each remain in full force and
effect and are hereby ratified and confirmed in all respects.
Genzyme Corporation
April 25, 2001
Page 5
Please countersign this letter in the space provided below to indicate
your agreement with the foregoing.
Very truly yours,
FOCAL, INC.
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Xxxxxx Xxxxxxxx, President
AGREED:
GENZYME CORPORATION
By: /s/ Xxxx X. Xxxxxxx, Xx.
---------------------------------
Xxxx X. Xxxxxxx, Xx.,
Executive Vice President
