LICENSE AND ASSET PURCHASE AGREEMENT DATED AS OF MARCH 30, 2009 BETWEEN GENZYME CORPORATION, AND BAYER SCHERING PHARMA AG

Exhibit 2.1

LICENSE AND ASSET PURCHASE AGREEMENT

DATED AS OF MARCH 30, 2009

BETWEEN

GENZYME CORPORATION,

AND

BAYER SCHERING PHARMA AG

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

TABLE OF CONTENTS, Continued

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

ii

TABLE OF CONTENTS, Continued

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

iii

TABLE OF CONTENTS, Continued

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

iv

TABLE OF CONTENTS, Continued

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

v

LICENSE AND ASSET PURCHASE AGREEMENT

This License and Asset Purchase Agreement, dated as of March 30, 2009 (the “Execution Date”), (as amended or otherwise modified, the “Agreement”), is between Genzyme Corporation (“Genzyme”) and Bayer Schering Pharma AG (“Bayer”).

RECITALS

WHEREAS, Bayer wishes to license certain assets of the Bayer Business (as defined herein) and to sell certain other assets of the Bayer Business to Genzyme, and Genzyme wishes to license certain assets and purchase other assets from Bayer, as specified herein, which relate to the Bayer Business, all on the terms and conditions set forth in this Agreement; and

WHEREAS, the parties also intend to execute and deliver other agreements contemporaneously with the Closing which will further the intent of the parties that Bayer shall license certain assets and sell certain assets and Genzyme shall license certain assets and purchase certain assets, principally, the Distribution and Development Agreement, the Purchase and Sale Agreement, the Fludara Supply Agreement, the Leukine Tolling Agreement, the Transition Services Agreement, the Pharmacovigilance Agreement, the Marketing Authorization Agency Agreement and the Distribution Agreement(s).

AGREEMENT

NOW THEREFORE, in consideration of the premises and mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained, Genzyme and Bayer hereby agree as follows:

1.          DEFINITIONS.

As used herein, the following terms will have the following meanings:

“2008 Financial Statements” is defined in Section 8.13.2.

“AAA Rules” is defined in Section 15.11.1.

“Acquired Assets” means all of the right, title and interest of Bayer and its Affiliates in and to all the business, properties and assets of whatever kind and nature, real or personal, tangible or intangible, owned, leased, licensed, used or held for use or license by or on behalf of Bayer and/or its Affiliates that are exclusively used in or exclusively used for the conduct of the Bayer Business, including:

(a)   all rights under Contractual Obligations, including those listed on Schedule 6.15(a) (collectively, but excluding any Contractual Obligation which is a Retained Asset, the “Transferred Contracts”);

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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(b)   all Inventory;

(c)   the Business Domain Names;

(d)   all Permits that are capable of being transferred from Bayer or its Affiliate to Genzyme or its Affiliate under applicable Legal Requirements, and all rights of Bayer or any of its Affiliates under such Permits and any and all pending applications relating to any such Permits (the “Transferred Permits”);

(e)   all claims, causes of action, choses in action and rights of recovery arising from the operation of the Bayer Business or in respect of the Licensed Products;

(f)   all customer, distributor, supplier and mailing lists, drawings, notebooks, specifications and creative materials, whether written or electronically stored or however otherwise recorded, maintained or stored, including research and development reports and records, pre-clinical studies, manufacturing documents (including drug master files, batch records, Master Batch Records, deviations, OOS investigations, CAPA, material specifications, and product-specific standard operating procedures), clinical protocols, clinical studies, pre-clinical and clinical data, results and analyses used in or resulting from any pre-clinical study or clinical trial of any Licensed Product, all regulatory files (together with all correspondence associated with such regulatory files), copies of the approved label components to the extent available, all labeling decision documents, and each Licensed Product’s safety database, marketing materials, customer master files, sales records for each product by account, written and electronic training manuals and modules, speaker slide kits, sales/demand forecasts, and all files and written correspondence exclusively related to the Business-Specific Licensed IP and the Business Domain Names, in each case, exclusively related to any Licensed Products; and

(g)   to the extent they are assignable under applicable Legal Requirements, all Actions and rights to ▇▇▇ at law or in equity against any Person relating to any Business Domain Name or Business-Specific Licensed IP, including the right to recover for past infringement and the right to seek equitable and legal relief and receive all proceeds and damages therefrom arising prior to, on, or after the Closing Date.

Notwithstanding the above, the Acquired Assets do not include any assets listed in clause (b) of the definition of Retained Assets that are exclusively used in or exclusively used for the conduct of the Bayer Business.

In addition to the foregoing, the “Acquired Assets” include all of the right, title and interest of Bayer and its Affiliates in and to the cellular phone numbers of Hired Employees.

“Action” means any claim, action, cause of action, chose in action or suit (whether in contract or tort or otherwise), litigation (whether at law or in equity, whether civil or criminal), controversy, assessment, arbitration, examination, audit, investigation, hearing, charge,

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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complaint, demand, notice or proceeding to, from, by or before any Governmental Authority or arbitrator(s).

“Adjusted Expiration Date” is defined in Section 8.16.5(a).

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries controls, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or general partnership or managing member interests, by contract or otherwise.  Without limiting the generality of the foregoing, a Person shall be deemed to control any other Person in which it owns, directly or indirectly, a majority of the ownership interests.  NewCo shall be deemed to be an Affiliate of Bayer.

“Agreement” is defined in the Preamble.

“Alemtuzumab MS” means Campath intended for use in multiple sclerosis.

“Alemtuzumab MS Business” means any research, development, manufacturing, marketing, distribution and selling of Alemtuzumab MS and its Improvements.

“Alemtuzumab MS Milestone Payments” is defined in Section 4.2.2.

“Alemtuzumab MS Royalty Payments” is defined in Section 4.2.1.

“Ancillary Agreements” means (a) the Distribution and Development Agreement, (b) the Purchase and Sale Agreement, (c) the Fludara Supply Agreement, (d) the Leukine Tolling Agreement, (e) the Transition Services Agreement, (f) the Pharmacovigilance Agreement, (g) the Marketing Authorization Agency Agreement, (h) the Quality Assurance Agreement, (i) the NewCo Agreement(s) and (j) IT Services Agreement and any other Contractual Obligation by and between Bayer or its Affiliates on the one hand and Genzyme or its Affiliates on the other hand related to or in furtherance of the transactions contemplated by this Agreement.

“Apportioned Taxes” is defined in Section 14.5.1.

“Approved Alemtuzumab MS” means Alemtuzumab MS after approval by a Governmental Authority for use in multiple sclerosis.

“Arbitration Notice” is defined in Section 4.1.3(e).

“Assumed Liabilities” means the following Liabilities of Bayer or any of its Affiliates (to the extent such Liabilities would have been the Liabilities of Bayer or any of its Affiliates if the Contemplated Transactions were not consummated):

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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(a)           all Liabilities arising after the Closing under the Transferred Contracts, other than Liabilities arising out of or directly or indirectly relating to any breach, default or action or omission of Bayer or any of its Affiliates occurring prior to the Closing;

(b)           all Liabilities under any purchase order that constitutes a Transferred Contract for the purchase of any products or services ordered thereby which have not been delivered or performed on or prior to the Closing Date;

(c)           all Liabilities arising after the Closing for the payment of royalties under any In-License Agreement pursuant to Section 4.1.4;

(d)           all Liabilities with respect to Business Employees and their beneficiaries which are or become Genzyme’s responsibility pursuant to Section 8.11 hereof.

(e)           all obligations to provide replacement Licensed Products under any warranties applicable to Licensed Products sold by the Bayer Business prior to the Closing; and

(f)            all Liabilities arising after Closing with respect to Acquired Assets (except with regard to the sale, distribution, or use of Licensed Product or Inventory by any Person) (other than (i) as set forth in clause (a) above or (ii) arising out of or directly or indirectly relating to any breach, default or action or omission of Bayer or any of its Affiliates occurring prior to the Closing); and

(g)           all Liabilities exclusively related to the Business arising after the Closing out of Joint Contracts as specified in Section 8.21, other than Liabilities arising out of or directly or indirectly relating to any breach, default or action or omission of Bayer or any of its Affiliates.

“Audit Opinion” is defined in Section 8.13.3.

“Audited Financial Statements” is defined in Section 8.13.3.

“Auditor Consents” is defined in Section 8.13.3.

“Average Age” is defined in Section 8.16.5(a).

“Bayer” is defined in the Preamble.

“Bayer Business” means the Business to the extent conducted by Bayer and its Affiliates prior to or as of the Closing Date, either directly or indirectly through an extension of rights that Bayer Controls to contractors (including distributors) or licensees.

“Bayer Parent” is defined in the Preamble.

“Bayer Employee Plan” is defined in Section 6.13.1.

“Bayer Improvements” means any of the following:

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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(a) with respect to Fludara, any [**] prior to the Closing Date;

(b) with respect to Leukine, any [**] with the corresponding [**], that (i) was [**] or (ii) [**] and the Closing Date; and

(c) with respect to Campath, any [**] prior to the Closing Date [**], that (i) has [**], (ii) has [**],  (iii) has [**], and (iv) that [**].

“Bayer Indemnified Person” is defined in Section 13.2.1.

“Bayer Rebate Liability” is defined in Section 8.16.1.

“Bayer Welfare Plan” is defined in Section 8.11.3.

“Bayer’s Knowledge” means the actual knowledge of any of the individuals holding the positions set forth on Schedule 1A.

“Business” means the Campath Business, the Fludara Business, the Leukine Business and the Alemtuzumab MS Business.

“Business Day” means any weekday other than a weekday on which banks in New York, New York or Frankfurt, Germany are authorized or required to be closed.

“Business Domain Names” means the internet domain names exclusively relating to the Bayer Business, including those listed on Schedule 1B.

“Business Employee” means each regular employee of Bayer or any of its Affiliates who devotes [**] or more of his or her work time to the sale and/or marketing of Fludara, Leukine and/or Campath or devoted [**] or more of his or her work time to the sale and/or marketing of Fludara, Leukine and/or Campath on [**] and remains employed by Bayer or any of its Affiliates.  The term “Business Employee” does not include any Leukine Employee.

“Business-Specific Licensed Copyrights” means all works of authorship (including advertising, marketing and promotional materials, artwork, labeling, and other works of authorship), and all copyrights, moral rights and other rights and interests thereto throughout the Territory, whether or not registered, that are Controlled by Bayer or any of its Affiliates, that are exclusively related to the Licensed Products and that are used exclusively in, had been used exclusively in and are currently exclusive to, or were developed exclusively for and are currently exclusive to, the Bayer Business.

“Business-Specific Licensed IP” means the Business-Specific Licensed Copyrights, Business-Specific Licensed Know-How, Business-Specific Licensed Patents and Business-Specific Licensed Trademarks.

“Business-Specific Licensed Know-How” means Know-How Controlled by Bayer or any of its Affiliates that (a) is exclusively related to the inventions claimed in the Business-Specific

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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Licensed Patents, or (b) is exclusively related to the Licensed Products and is used exclusively in, had been used exclusively in and is currently exclusive to, or was developed exclusively for and are currently exclusive to, the Bayer Business, or (c) was developed exclusively for the Licensed Products in the course of performance of the development plan under the DDA.  For clarity purposes any [**] as defined in the [**] is included in the Business-Specific Licensed Know-How.

“Business-Specific Licensed Patents” means any Patent Rights Controlled by Bayer or its Affiliates that are exclusively related to the Licensed Products and (a) claim inventions that are used exclusively in, had been used exclusively in and are currently exclusive to, or were developed exclusively for and are currently exclusive to, the Bayer Business or (b) claim inventions developed in the course of performance of the development plan under the DDA.  The Business-Specific Licensed Patents include those Patent Rights set forth on Schedule 1C and any Patent Rights that directly or indirectly claim priority to such Patent Rights (including continuations-in-part, but only to the extent the claims in the continuations-in-part claim inventions to subject matter that is exclusively related to the Licensed Products and used exclusively in, had been used exclusively in and is as of the Closing Date exclusive to, or was developed exclusively for and is currently exclusive to, the Bayer Business and to the extent such inventions either (a) were disclosed and described in the Patent Rights filed prior to the Closing Date or (b) are included in Business-Specific Licensed Know-How as such Know-How existed on the Closing Date).

“Business-Specific Licensed Trademarks” means the United States or foreign trademarks and service marks, the goodwill associated therewith, and all registrations and applications relating thereto, that are Controlled by Bayer or any of its Affiliates, that are exclusively related to the Licensed Products and that are used exclusively in, had been used exclusively in and are currently exclusive to, or were developed exclusively for and are currently exclusive to, the Bayer Business.  The Business-Specific Licensed Trademarks include those trademarks set forth on Schedule 1D.

“Campath” means the humanized antibody directed against CD-52 known as Campath 1H, and any product containing such antibody as an active ingredient.

“Campath Business” means the research, development, manufacturing, marketing, distribution and selling of Campath and its Improvements for all fields of use except for the field of treatment of multiple sclerosis.

“Campath Oncology” means Campath excluding Approved Alemtuzumab MS.

“Chargeback Liability Shift Date” is defined in Section 8.16.2.

“Claim” is defined in Section 15.10.1.

“Closing” is defined in Section 5.1.

“Closing Date” means the date on which the Closing actually occurs.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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“Closing Domestic Inventory Schedule” is defined in Section 4.1.3(b).

“Closing Foreign Inventory Schedule” is defined in Section 4.1.3(c).

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Combination Product” means any product that comprises a Licensed Product and at least one of the following, either packaged together or in the same formulation:  a drug delivery device or a clinically active therapeutic, prophylactic or diagnostic ingredient or component that is not a Licensed Product.

“Combination Sale” is defined in the definition of “Net Sales”.

“Compensation” means, with respect to any Person, all salaries, wages, compensation, remuneration (cash or in-kind), bonuses and benefits of any kind or character whatever (including issuances or grants of equity interests), made directly or indirectly by Bayer or an Affiliate to such Person or Affiliates of such Person.

“Confidential Disclosure Agreement” means that certain Confidential Disclosure Agreement entered into as of April 14, 2008 by and between Bayer Healthcare Pharmaceuticals Inc. including its Affiliates and Genzyme Corporation including its Subsidiaries, as amended on May 14, 2008.

“Confidential Information” is defined in Section 8.8.3.

“Confidentiality Date” is defined in Section 8.8.1.

“Contemplated Transactions” means, collectively, the transactions contemplated by this Agreement, including (a) the licenses of the Licensed IP, the sale of the Acquired Assets, and the assignment and assumption of the Assumed Liabilities and (b) the execution, delivery and performance of the Ancillary Agreements.

“Contractual Obligation” means, with respect to any Person, any contract, agreement, plan, mortgage, lease, license, commitment, promise, undertaking, arrangement or understanding, whether written or oral and whether express or implied, or other document or instrument to which or by which such Person is a party or otherwise subject or bound or to which or by which any property, business, operation or right of such Person is subject or bound.

“Control” or “Controlled” means, with respect to any Intellectual Property right, possession by a party (including its Affiliates) of the right (whether by ownership, license or otherwise) to grant to another party a license or a sublicense under such Intellectual Property right without violating the terms of any agreement or other arrangement with any third party.

“Days of Channel Inventory” is defined in Section 8.16.1.

“DDA” means that certain Distribution and Development Agreement entered into as of

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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August 23, 1999 by and between Genzyme and Bayer, as amended, including those amendments dated as of December 19, 2000, January 20, 2003 and November 23, 2004.

“Direct Employment Costs” shall mean [**] inclusive of any [**] or any other [**].

“Disclosed Contract” is defined in Section 6.15.2.

“Dispute Escalation Notice” is defined in Section 15.10.2.

“Dispute Notice” is defined in Section 4.1.3(d).

“Disputed Item” is defined in Section 4.1.3(d).

“Distribution and Development Agreement” is defined in Section 5.2(g)(i).

“Domain Name Assignment Documentation” is defined in Section 5.2(c).

“Domestic Count” is defined in Section 4.1.3(b).

“Drug Laws” means the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, the United States anti-kickback statute, or the regulations and regulatory guidance promulgated thereunder or similar Legal Requirements of any foreign jurisdiction, including those relating to good laboratory practices, good clinical practices, adverse event reporting, good manufacturing practices, advertising and promotion, recordkeeping, and filing of reports.

“EMEA” means the European Medicines Agency, or any successor agency with responsibilities comparable to those of the European Medicines Agency.

“Employee Benefit Plan” is defined in Section 6.13.1.

“Employment Offer” shall mean offers of employment on Equivalent Employment Terms to at least [**] of the Business Employees listed on Schedule 6.17.1 (as updated five (5) Business Days prior to the Closing Date).  For purposes of calculating the [**] test, all Business Employees who transfer by operation of non-U.S. Legal Requirement to Genzyme or any of its Affiliates (i) shall be included in the [**] and (ii) shall be included in the [**] only if [**].

“Encumbrance” means any charge, claim, condition, equitable interest, lien, license, option, pledge, security interest, mortgage, right of way, easement, encroachment, servitude, right of first offer or first refusal, buy/sell agreement and any other restriction or covenant with respect to, or condition governing the use, construction, voting (in the case of any security or equity interest), transfer, receipt of income or exercise of any other attribute of ownership.

“Enforceable” means, with respect to any Contractual Obligation stated to be “Enforceable” by or against any Person, that such Contractual Obligation is a legal, valid and binding obligation of such Person enforceable by or against such Person in accordance with its terms, except to the extent that enforcement of the rights and remedies created thereby is subject to bankruptcy,

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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insolvency, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors and to general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).

“Environmental Laws” means any Legal Requirement relating to (a) releases or threatened releases of Hazardous Substances, (b) pollution or protection of public health or the environment or worker safety or health or (c) the manufacture, handling, transport, use, treatment, storage, or disposal of Hazardous Substances.

“Equivalent Employment Terms” means (a) with respect to Business Employees other than Non-U.S. Business Employees, employment terms [**] to those received by such Business Employees from Bayer or any of its Affiliates immediately prior to the Execution Date, and (b) with respect to Non-U.S. Business Employees whose principal place of employment is in a particular country, employment terms [**] to (i) those received by such Non-U.S. Business Employees whose principal place of employment is in such country from Bayer or any of its Affiliates immediately prior to the Execution Date or, if applicable, (ii) those required to be provided by any Legal Requirement.

“Equivalent Offer Employees” shall mean Business Employees who receive an offer of employment on Equivalent Employment Terms from Genzyme or any of its Affiliates.

“ERISA” is defined in Section 6.13.1.

“ERISA Affiliate” is defined in Section 6.13.1.

“Excluded Bayer Liabilities” means (a) all Liabilities of Bayer or any of its Affiliates for Taxes for any taxable period and all Liabilities of Bayer or any of its Affiliates for Taxes relating to the Bayer Business, the Acquired Assets, the Business-Specific Licensed IP or the Shared Licensed IP (subject to Sections 14.2 and 14.5) for any taxable period or portion thereof ending on or before the Closing Date and (b) the following Liabilities of Bayer or any of its Affiliates that are not specifically included in the definition of Assumed Liabilities:

(i)    all Liabilities of Bayer or any of its Affiliates arising prior to the Closing that give rise to Permitted Encumbrances on the Acquired Assets;

(ii)   all Liabilities of Bayer or any of its Affiliates to or with respect to Business Employees and their beneficiaries to the extent provided in Section 8.11 hereof.

(iii)  all Liabilities of Bayer or any of its Affiliates in respect of all payables of the Bayer Business as of the Closing Date, including intercompany payables among Bayer and its Affiliates;

(iv)  all indebtedness of Bayer or any of its Affiliates;

(v)   all reasonable costs and expenses (other than time spent by Genzyme’s or its Affiliates’ personnel) incurred by Genzyme or any of its Affiliates in connection with

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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the obligations assumed by Genzyme pursuant to clause (e) of the definition of Assumed Liabilities;

(vi)  all Liabilities of Bayer or any of its Affiliates that are attributable to certain sales of products of the Bayer Business made by Bayer or any of its Affiliates prior to the Closing as calculated pursuant to Section 8.16;

(vii) all claims, Actions or Losses arising from products sold by Bayer or an Affiliate prior to the Closing;

(viii)   all Liabilities arising prior to the Closing with respect to Acquired Assets (other than those included within the definition of Assumed Liabilities) or with respect to Retained Assets except as otherwise specified in Section 8.20 with respect to Joint Contracts;

(ix)  all Liabilities arising from violations or alleged violations by Bayer or its Affiliates of applicable Legal Requirements relating to reimbursement, pricing, kickbacks or submissions of any false claims relating to the conduct of the Bayer Business prior to Closing; and

(x)   all Liabilities of Bayer or any of its Affiliates that arise prior to the Closing, including from operation of the Bayer Business, that are not (i) specifically included in the definition of Assumed Liabilities, (ii) described in clauses (i) through (ix) in this definition of Excluded Bayer Liabilities or (iii) described in clauses (a) through (i) in the definition of Excluded Genzyme Liabilities);

in each case, except to the extent Bayer is entitled to indemnification therefor (as limited by the monetary and other limitations set forth in Article 13) or such Liability is otherwise expressly allocated under this Agreement or an Ancillary Agreement.  Nothing in this Agreement shall be interpreted as imposing on Bayer any Liability for personal injury arising from the sale, distribution, or use of any Licensed Product or Inventory after the Closing Date except to the extent Genzyme is entitled to indemnification under this Agreement or an Ancillary Agreement or as expressly allocated to Bayer under this Agreement or an Ancillary Agreement.

“Excluded Genzyme Liabilities” means:

(a)           all Liabilities of Genzyme or any of its Affiliates for Taxes arising out of the operation of the Business for (i) any taxable period beginning after the Closing Date and (ii) with respect to any taxable period that begins on or before the Closing Date and ends after the Closing Date, the portion of such taxable period that begins after the Closing Date, subject to Sections 14.2 and 14.5;

(b)           all Liabilities of Genzyme or any of its Affiliates that give rise on or after the Closing to Permitted Encumbrances on the Acquired Assets;

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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(c)           all Liabilities of Genzyme or any of its Affiliates to or with respect to Business Employees and their beneficiaries to the extent provided in Section 8.11 hereof;

(d)           all Liabilities of Genzyme or any of its Affiliates in respect of all payables of the Business to the extent arising after Closing, including intercompany payables among Genzyme and its Affiliates;

(e)           all indebtedness of Genzyme or any of its Affiliates;

(f)            all Liabilities that are attributable to certain sales of Licensed Products made by Genzyme or any of its Affiliates after the Closing, including those that are labeled with an NDC number of Bayer or any of its Affiliates as calculated pursuant to Section 8.16; and

(g)           all claims, Actions or Losses arising from products sold by Genzyme or any of its Affiliates after the Closing; and

(h)           Liabilities arising from violations or alleged violations by Genzyme or its Affiliates of applicable Legal Requirements relating to reimbursement, pricing, kickbacks or submissions of any false claims relating to the conduct of the Business after Closing;

in each case, except to the extent Genzyme is entitled to indemnification therefor (as limited by the monetary and other limitations set forth in Article 13) or such Liability is otherwise expressly allocated under this Agreement or an Ancillary Agreement.

“Exclusive Period” means, for a product, that period for which Bayer has a non-competition obligation under Section 8.10.1 for such product.

“Execution Date” is defined in the Preamble.

“FDA” means the United States Food and Drug Administration, or any successor agency in the United States with responsibilities comparable to those of the United States Food and Drug Administration.

“First Oncology Milestone Threshold” is defined in Section 4.1.6.

“Fludara” means products containing fludarabine phosphate as an active ingredient.

“Fludara Business” means any research, development, manufacturing, marketing, distribution and selling of Fludara and its Improvements for all fields of use.

“Fludara Supply Agreement” is defined in Section 5.2(g)(iii).

“Foreign Count” is defined in Section 4.1.3(c).

“FTC” means the United States Federal Trade Commission, or any successor agency in the United States with responsibilities comparable to those of the United States Federal Trade Commission.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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“Fully Loaded Standard Cost” means, (a) with respect to the items set forth in Schedule 1E, the amounts set forth in such Schedule and (b) with respect to each other type of Inventory, (i) all direct costs actually accrued or incurred by Bayer to purchase or manufacture (including finishing processes such as packaging, labeling and other preparation, quality assurance, quality control and other testing, storage and shipping) Inventory including the costs of labor, employee benefits, raw materials, supplies, services and other resources directly consumed or used in the conduct of the applicable activity and any fees payable to any third party to the extent attributable to the purchase or manufacture of such Inventory and (ii) all indirect costs (including costs of facilities, utilities, insurance and facility and equipment depreciation and other overhead allocations) to the extent directly or indirectly related to the applicable activity, allocated based upon the proportion of such costs and time directly attributable to the support of the applicable activity (such allocation to be consistent with the allocation percentages historically applied by Bayer prior to the Execution Date to the extent consistent with applicable accounting standards).  All such cost determinations for raw materials and purchased goods shall be made in accordance with Bayer’s standard accounting practices under International Financial Reporting Standards as consistently practiced by Bayer and used in the accounting reports and shall be supported by appropriate documentation.  All such cost determinations for all other items of inventory shall be made in accordance with Bayer’s standard costs as consistently practiced by Bayer and shall be supported by appropriate documentation.  For the avoidance of doubt, the computation of Fully Loaded Standard Cost will exclude any and all costs and expenses relating to the manufacturing facility to be transferred to Genzyme under the Purchase and Sale Agreement.

“GAAP” means generally accepted accounting principles in the United States as in effect from time to time.

“GEIA” is defined in Section 6.10.9.

“Genzyme” is defined in the Preamble.

“Genzyme DC Plan” is defined in Section 8.11.6.

“Genzyme Employee Plan” is defined in Section 8.11.5.

“Genzyme Improvements” means any of the following made or acquired by or on behalf of Genzyme or its Affiliates:

(a) with respect to Fludara, any [**];

(b) with respect to Leukine, any [**] with the corresponding [**]; and

(c) with respect to Campath, any [**], that (i) has [**], (ii) has [**],  (iii) has [**], and (iv) that [**].

“Genzyme Indemnified Person” is defined in Section 13.1.1.

“Go Decision” means a decision by Bayer to initiate pre-clinical development of a drug

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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candidate and generate the data required for the first clinical trial of such drug candidate, which decision corresponds to the decision that is currently designated by Bayer as D3.

“Governmental Authority” means any government or any agency, bureau, board, commission, court, department, political subdivision, tribunal, or other instrumentality of any government (including any regulatory or administrative agency), whether federal, state or local, domestic or foreign, and including any multinational authority or non-governmental authority which licenses or authorizes or may license or authorize the manufacturing, distribution, marketing or sale of a Licensed Product.  The term, Governmental Authority, shall not include medical facilities or institutions of higher education including colleges or universities.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, ruling, determination or award entered by or with any Governmental Authority or arbitrator(s).

“Hazardous Substance” means any pollutant, crude oil distillate or any fraction thereof, any petroleum-based substance, contaminant or toxic or hazardous material (including toxic mold or any other hazardous biological contaminant), substance or waste.

“Hired Employees” is defined in Section 8.11.1(b).

“Hospira Agreement” means that certain Supply Agreement, dated May 12, 2001, between Berlex Laboratories (formerly Immunex Corporation) and Hospira Worldwide, Inc. (formerly ▇▇▇▇▇▇ Laboratories), as amended December 28, 2004 and December 8, 2005.

“HSR Act” means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976.

“IFRS” is defined in Section 8.13.2.

“Improvements” means Bayer Improvements and Genzyme Improvements.

“In-License Agreement” means any Contractual Obligation entered into prior to the Closing Date under which a third party has granted Bayer or its Affiliate any Intellectual Property rights related to the Licensed Products.

“In-Licensed IP” is defined in Section 2.1.4(b).

“Indemnified Party” means, with respect to any Indemnity Claim, the party or Person asserting such claim under Section 13.1 or 13.2, as the case may be.

“Indemnifying Party” means, with respect to any Indemnity Claim, the Genzyme Indemnified Person or the Bayer Indemnified Person under Section 13.1 or 13.2, as the case may be, against whom such claim is asserted.

“Indemnity Basket” is defined in Section 13.1.2.

“Indemnity Claim” means a claim for indemnity under Section 13.1 or 13.2, as the case may

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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be.

“Independent Auditor” is defined in Section 8.13.3.

“Infringement Claim” is defined in Section 9.3.1.

“Intellectual Property” means intellectual property rights of every kind and nature throughout the world, however denominated, including all rights and interests pertaining to or deriving from:

(a)           Patent Rights and Know-How;

(b)           trademarks, trade names, service marks, service names, brands, trade dress and logos, domain names, and the goodwill and activities associated therewith;

(c)           copyrights, works of authorship, rights of privacy and publicity, moral rights, and similar proprietary rights of any kind or nature, in all media now known or hereafter created; and

(d)           any and all registrations, applications, recordings, licenses, statutory rights, common-law rights and rights under Contractual Obligations relating to any of the foregoing.

“Invention and Confidentiality Agreements” is defined in Section 6.10.9.

“Inventory” means (a) all labeled or unlabeled vials of Campath, wherever located, (b) all finished goods inventory of Fludara and Leukine, wherever located, that has been Released by Bayer or its Affiliates and, (c) in the case of Leukine, all raw materials, work-in-process, packed/not released products, purchased goods, goods in transit (not including goods in transit to third parties), goods off premises (including materials subject to process and goods held in storage), goods on consignment and other materials and supplies used exclusively for Leukine, including packaging.

“Inventory Referee” is defined in Section 4.1.3(e).

“Inventory Schedule” and “Inventory Schedules” are defined in Section 4.1.3(d).

“Joint Contract” is defined in Section 8.20.

“Joint Permit” is defined in Section 8.14.1.

“Joint Transition Team” is defined in Section 8.17.

“Know-How” means inventions, business and technical information, know-how and materials, including technology, software, instrumentation, devices, data, compositions, formulas, biological materials, assays, reagents, constructs, compounds, discoveries, procedures, processes, practices, protocols, methods, techniques, results of experimentation or testing, knowledge, trade secrets, skill and experience, in each case whether or not patentable or copyrightable.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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“Legal Requirement” means any United States federal, state or local or foreign law, statute, standard, ordinance, code, rule, regulation, resolution or promulgation, or any Governmental Order, or any license, franchise, permit or similar right granted under any of the foregoing, or any similar provision having the force or effect of law.

“Leukine” means the product that contains the active ingredient generically known as Sargramostim (i.e., that contains modified human granulocyte macrophage-colony stimulating factor produced by recombinant DNA technology).

“Leukine Business” means any research, development, marketing, manufacturing, distribution and selling of Leukine and its Improvements for all fields of use.

“Leukine Employee” is defined in the Purchase and Sale Agreement.

“Leukine Plant” is defined in the Purchase and Sale Agreement.

“Leukine Tolling Agreement” is defined in Section 5.2(g)(iv).

“Liability” means, with respect to any Person, any liability or obligation of such Person whether known or unknown, whether asserted or unasserted, whether determined, determinable or otherwise, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether incurred or consequential, whether due or to become due and whether or not required under GAAP to be accrued on the financial statements of such Person.

“Licensed Copyrights” means the Business-Specific Licensed Copyrights and the Shared Licensed Copyrights.

“Licensed IP” means the Business-Specific Licensed IP and the Shared Licensed IP.

“Licensed Know-How” means the Business-Specific Licensed Know-How and the Shared Licensed Know-How.

“Licensed Patents” means the Business-Specific Licensed Patents and the Shared Licensed Patents.

“Licensed Products” means Fludara and any Improvements thereto; Leukine and any Improvements thereto; and Campath and any Improvements thereto.

“Licensed Trademarks” means the Business-Specific Licensed Trademarks and the Shared Licensed Trademarks.

“Losses” means any loss, cost, Liability or expense, Tax, settlement, damage of any kind, judgment, obligation, charge, fee, fine, penalty, interest, court cost and/or administrative and reasonable attorneys’ fees, reasonable expert fees, reasonable consulting fees, and reasonable disbursements (at all levels, including appellate), but excluding all indirect corporate and administrative overhead costs.  Losses shall be decreased to take into account any Tax benefit

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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actually received by the Indemnified Parties or their Affiliates arising from the incurrence or payment of the relevant indemnified item and increased by the amount of any Tax cost actually incurred by the Indemnified Parties or their Affiliates on account of the accrual and receipt of the related indemnification payment.

“Major Market Countries” means the United States, Germany, France, Italy, Spain and United Kingdom.

“Marketing Authorization Agency Agreement” is defined in Section 5.2(g)(vii).

“Material Adverse Effect” means any change, effect or circumstance that, individually or in the aggregate with all other changes, effects and circumstances is or would reasonably be expected to be, materially adverse to the Oncology Products Business or the Alemtuzumab MS Business as operated as of the Execution Date by Bayer or its Affiliates, (including the Acquired Assets, Business-Specific Licensed IP, and Assumed Liabilities), disregarding any changes, effects or circumstances to the extent they arise out of (a) a deterioration in the economy in general in the United States or any country in which such Oncology Products Business or Alemtuzumab MS Business is conducted, so long as any such deterioration does not have a disproportionate impact on such Oncology Products Business or Alemtuzumab MS Business (including the Acquired Assets, Business-Specific Licensed IP, and Assumed Liabilities), (b) an outbreak or escalation of hostilities involving the United States or any member state of the European Union, the declaration by the United States or any member state of the European Union of a national emergency or war, or the occurrence of any acts of terrorism, so long as any of the foregoing do not have a disproportionate impact on such Oncology Products Business or Alemtuzumab MS Business (including the Acquired Assets, Business-Specific Licensed IP, and Assumed Liabilities), (c) a change in Legal Requirements or (d) the announcement of the Contemplated Transactions (including a loss of customers, suppliers, distributors, service providers or employees to the extent attributable thereto).

“Material Default” is defined in Section 12.3.1.

“Material Country” means the Major Market Countries and Japan, China, Brazil, Poland, Canada, Romania, Hungary, Turkey, Czech Republic, Australia, Netherlands and Mexico.

“Maximum Indemnity Cap” is defined in Section 13.1.2.

“Milestone Buyout Payment” is defined in Section 4.2.3.

“Milestone Payments” means, collectively, the Alemtuzumab MS Milestone Payments and the Oncology Product Milestone Payments.

“NDC” means National Drug Code.

“Net Combination Sale Amount” is defined in the definition of “Net Sales.”

“Net Sales” means the gross invoiced sales amount of Licensed Products billed by Genzyme

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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or its Affiliates or Sublicensees, in each case to independent third parties, including to distributors and end-users, for the sale or other commercial disposition of Licensed Products in the Territory, plus the amounts of any royalties paid to Genzyme pursuant to any Out-License Agreement included in the Transferred Contracts, less the following items as applicable to such Licensed Products to the extent actually taken or incurred with respect to such sale (the “Permitted Deductions”) and all in accordance with standard allocation procedures, allowance methodologies and accounting methods consistently applied, in accordance with GAAP (except as otherwise provided below):

(a)   credits or allowances for returns, rejections or recalls (due to spoilage, damage, expiration of useful life or otherwise), retroactive price reductions or billing corrections;

(b)   separately itemized invoiced freight, postage, shipping and insurance, handling and other transportation costs;

(c)   sales, use, value added and other similar taxes (excluding income taxes), tariffs, customs duties, surcharges and other governmental charges levied on the production, sale, transportation, delivery or use of the Licensed Products in the Territory that are incurred at time of sale or are directly related to the sale;

(d)   any quantity, cash or other trade discounts, rebates, returns, refunds, charge backs, fees, credits or allowances (including amounts incurred in connection with government-mandated rebate and discount programs, third party rebates and charge backs, and hospital buying group/group purchasing organization administration fees and payor organizations), distribution fees, sales commissions paid to third parties, retroactive price reductions and billing corrections; and

(e)   deductions for bad debts.

In the case of deductions for bad debts, the adjustment amount will be based on actual bad debts incurred and written off as uncollectible by Genzyme in a quarter, net of any recoveries of previously written off bad debts from current or prior quarters.

Notwithstanding the foregoing, the following will not be included in Net Sales: (i) Genzyme’s transfer of Licensed Product to an Affiliate (unless such sale is a final sale), (ii) Licensed Product provided by Genzyme or its Affiliate for administration to patients enrolled in clinical trials or distributed through a not-for-profit foundation at no or nominal charge to eligible patients, (iii) commercially reasonable quantities of Licensed Product used as samples to promote additional Net Sales and (iv) Transplant Sales as defined in the Distribution and Development Agreement.

Notwithstanding the foregoing, in the event a Licensed Product is sold as a Combination Product or together with one or more products for a single invoiced amount (in each case, a “Combination Sale”), the Net Sales amount for the Licensed Product sold in such a Combination Sale shall be that portion of the gross amount invoiced for such Combination Sale (less all

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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Permitted Deductions) determined as follows:

Except as provided below, the Net Sales amount for a Combination Sale will equal the gross amount invoiced for the Combination Sale, reduced by the Permitted Deductions (the “Net Combination Sale Amount”), multiplied by the fraction A/(A+B), where A is the wholesale acquisition cost charged by Genzyme, its Affiliates or Sublicensees, as applicable, in the country where such Combination Sale occurs, of the Licensed Product contained in the Combination Product if sold as a separate product in such country by Genzyme, its Affiliates or Sublicensees, as applicable, and B is the aggregate of the wholesale acquisition cost charged by Genzyme, its Affiliates or Sublicensees, as applicable, in such country, of such other products or active ingredients/components, as the case may be, included in the Combination Product if sold separately in such country by Genzyme, its Affiliates or Sublicensees, as applicable.

In the event that Genzyme, its Affiliates or Sublicensees sell the Licensed Product included in a Combination Sale as a separate product in a country, but do not separately sell all of the other products or active ingredients/components, as the case may be, included in such Combination Sale in such country, the calculation of Net Sales resulting from such Combination Sale shall be determined by multiplying the Net Combination Sale Amount by the fraction A/C where A is the wholesale acquisition cost charged by Genzyme, its Affiliates or its Sublicensees, as applicable, in the country where such Combination Sale occurs, of the Licensed Product contained in the Combination Product if sold as a separate product in such country by Genzyme, its Affiliates or its Sublicensees, as applicable, and C is the wholesale acquisition cost charged by Genzyme, its Affiliates or its Sublicensees, as applicable, in such country for the entire Combination Sale.

In the event that Genzyme, its Affiliates or its Sublicensees do not sell the Licensed Product included in a Combination Sale as a separate product in the country where such Combination Sale occurs, but do separately sell all of the other products or active ingredients/components, as the case may be, included in the Combination Sale in such country, the calculation of Net Sales resulting from such Combination Sale shall be determined by multiplying the Net Combination Sale Amount by the fraction (C-D)/C, where C is the wholesale acquisition cost charged by Genzyme, its Affiliates or its Sublicensees, as applicable, in the country where such Combination Sale occurs, of the entire Combination Sale, and D is the aggregate of the wholesale acquisition cost charged by Genzyme, its Affiliates or Sublicensees, as applicable, in such country, of such other products or active ingredients/components, as the case may be, included in the Combination Product if sold separately in such country by Genzyme, its Affiliates or its Sublicensees, as applicable.

If the calculation of Net Sales resulting from a Combination Sale in a country cannot be determined by any of the foregoing methods, the calculation of Net Sales for such Combination Sale shall be determined between the parties in good faith negotiations.

“NewCo” is defined in Section 8.23.

“NewCo Agreements” is defined in Section 5.2(g)(ix).

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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“Nonassigned Asset” is defined in Section 3.2.2.

“Non-Exclusive Period” means, for a product, that period after which Bayer’s non-competition obligation under Section 8.10.1 for such product has expired.

“Non-Retained Employees” is defined in Section 8.11.1(c).

“Non-U.S. Business Employees” means all Business Employees based outside of the United States.

“Notice of Dispute” is defined in Section 15.10.2.

“Offer Employees” is defined in Section 8.11.1(a).

“Oncology Product” means each of (a) Fludara and any Improvements thereto, (b) Leukine and any Improvements thereto and (c) Campath Oncology and any Improvements thereto.

“Oncology Products Business” means the Campath Business, the Fludara Business and the Leukine Business taken as a whole.

“Oncology Product Milestone Payments” is defined in Section 4.1.6.

“Oncology Product Royalty Payments” is defined in Section 4.1.5.

“Oncology Year One” is defined in Section 4.1.6.

“Oncology Year Two” is defined in Section 4.1.6.

“Oncology Year Three” is defined in Section 4.1.6.

“Ordinary Course of Business” means an action taken by any Person in the ordinary course of such Person’s business which is consistent with the past customs and practices of such Person given the circumstances and which is taken in the ordinary course of the normal day-to-day operations of such Person given the circumstances, but in all cases, without taking into consideration the Contemplated Transactions.

“Organizational Documents” means, with respect to any Person (other than an individual), (a) the certificate or articles of incorporation or organization and any joint venture, limited liability company, operating or partnership agreement and other similar documents adopted or filed in connection with the creation, formation or organization of such Person and (b) all by-laws and similar instruments relating to the organization or governance of such Person, in each case, as amended or supplemented.

“Other Key Countries” means Russia, Japan, China, Brazil, Poland and Canada.

“Out-License Agreement” means any Contractual Obligation entered into prior to the Closing Date under which Bayer or its Affiliate has granted to any third party rights with respect

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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to the Bayer Business, including rights with respect to the Business-Specific Licensed IP, Business Domain Names or any Licensed Product.  The Out-License Agreements in existence as of the Closing Date are identified on Schedule 6.10.1 and Schedule 6.10.2

“Outside Date” is defined in Section 12.1(b).

“Overlap Period” is defined in Section 8.16.5(b).

“Patent Rights” means (a) all patents, patent applications and similar government-issued rights (e.g., utility models) protecting inventions in any country or jurisdiction however denominated, (b) all priority applications, international applications, divisionals, continuations, substitutions, continuations-in-part of and any applications claiming priority to any of the foregoing and (c) all patents and similar government-issued rights (e.g., utility models) protecting inventions issuing on any of the foregoing applications, together with all registrations, reissues, renewals, re-examinations, confirmations, supplementary protection certificates, and extensions of any of (a), (b) or (c).

“Payment Period” is defined in Section 4.3.1.

“Permits” means, with respect to any Person, any license, franchise, permit, consent, approval, right, privilege, certificate or other similar authorization issued by, or otherwise granted or required by, any Governmental Authority to which or by which such Person is subject or bound or to which or by which any property, business, operation or right of such Person is subject or bound, including all approvals, licenses or permits required by any Governmental Authority to market, offer, sell, distribute, import and export Licensed Products.

“Permitted Deductions” is defined in the definition of “Net Sales”.

“Permitted Encumbrance” means (a) statutory liens for current Taxes, special assessments or other governmental charges not yet due and payable, (b) mechanics’, materialmen’s, carriers’, workers’, repairers’ and similar statutory liens arising or incurred in the Ordinary Course of Business which liens are not yet due and payable, (c) deposits or pledges made in connection with, or to secure payment of, worker’s compensation, unemployment insurance, old age pension programs mandated under applicable Legal Requirements or other social security and (d) restrictions on the transfer of securities arising under federal and state securities laws.

“Person” means any individual or corporation, association, partnership, limited liability company, joint venture, joint stock or other company, business trust, trust, organization, university, college, Governmental Authority or other entity of any kind.

“Pharmacovigilance Agreement” is defined in Section 5.2(g)(vi).

“Prohibited Asset” is defined in the definition of “Retained Assets”.

“Purchase and Sale Agreement” is defined in Section 5.2(g)(ii).

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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“Qualifications” is defined in Section 15.11.2.

“Qualified Assignment” is defined in Section 15.2(e).

“Quality Assurance Agreement” is defined in Section 5.2(g)(viii).

“Rebate True Up Payment” is defined in Section 8.16.1.

“Regulatory Clearance Amendment” is defined in Section 8.3.4.

“Released” with respect to any product means the completion of the manufacturing of such product with the release by quality operations of such product from “quarantined product” to finished goods for sale, in accordance with Bayer’s standard quality assurance and quality control procedures.

“Representative” means, with respect to any Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.

“Retained Assets” means, except to the extent rights and/or licenses are specifically granted to Genzyme under this Agreement or any Ancillary Agreement, all right, title and interest of Bayer and its Affiliates of whatever kind and nature, real or personal, tangible or intangible, owned, leased, licensed, used or held for use or license in (a) all assets other than Acquired Assets and (b) all of the assets listed below even if they would otherwise be included in the definition of Acquired Assets:

(i)         all cash, cash equivalents, money market funds and mutual funds in the bank or other depository accounts of Bayer or any of its Affiliates, including all interest and dividends receivable with respect thereto;

(ii)        all accounts receivable;

(iii)       any assets which would be conveyed to Genzyme at the Closing under the Purchase and Sale Agreement were the closing under such agreement to occur on the Closing Date and any asset required by Bayer to perform its obligations under any Ancillary Agreements that, absent such Ancillary Agreements, would constitute Acquired Assets;

(iv)       the Licensed IP;

(v)        the Retained IP;

(vi)       the In-License Agreements;

(vii)      the Campath distribution rights granted to Bayer pursuant to the DDA or the Distribution and Development Agreement;

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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(viii)     the corporate names of Bayer or any of its Affiliates;

(ix)        all rights of Bayer under this Agreement or any Ancillary Agreement;

(x)         all rights in, under and with respect to the assets, any administrative service contracts or funding arrangements associated with any Employee Benefit Plan of Bayer and any of its Affiliates;

(xi)        all rights in and under insurance policies of Bayer and any of its Affiliates;

(xii)       all corporate seals, minute books, charter documents, corporate stock record books, registers of other securities, copies of original tax and financial records (the originals of which will be delivered to Genzyme as part of the Acquired Assets to the extent related to the Acquired Assets) of Bayer or any of its Affiliates, and such other books and records as pertain only to the organization, existence, share capitalization or debt financing of Bayer or any of its Affiliates;

(xiii)      all Contractual Obligations in respect of indebtedness for borrowed money or any guarantee of the Liabilities of another Person;

(xiv)     in each case, except for any item in this paragraph (xiv) that is also described in paragraph (g) of the definition of “Acquired Asset,” all prepayments, rights to refunds, rights of set off, defenses, affirmative defenses, rights of defense and rights of recoupment arising from the operation of the Bayer Business prior to the Closing or in respect of Licensed Products sold prior to the Closing; and all claims, causes of action, choses in action and rights of recovery pending or threatened in writing at or prior to the Closing Date;

(xv)      all land, equipment (movable and fixed), machinery, automobiles and other physical assets related to the manufacture or transportation of any Licensed Product, other than any Inventory;

(xvi)     the agreements identified in Schedule 1F;

(xvii)    All Inventory that is not included within the physical count of Inventory performed pursuant to Section 4.1.3 in accordance with the procedures set forth on Exhibit 4.1.3;

(xviii)   all Contractual Obligations, Inventory and other assets and/or rights which Genzyme is not permitted to acquire or license as part of the Contemplated Transactions, or further use or transfer of which in Genzyme’s hands would be prohibited following the Closing, in each case under applicable Legal Requirements without a valid Permit issued by a Governmental Authority, including the U.S. Treasury Department’s Office of Foreign Assets Control, unless Genzyme holds a Permit or other authorization permitting it to acquire

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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such assets at the time of the Closing or further use or transfer such asset after the Closing (any assets described in this clause (xviii), a “Prohibited Asset”);

(xix)      all Contractual Obligations solely between or among Bayer and any of its Affiliates or between or among Bayer’s Affiliates;

(xx)       all Contractual Obligations of Bayer or its Affiliates providing for the employment or consultancy with an individual on a full-time, part-time, consulting or other basis or otherwise providing any Compensation or other benefits to any Business Employee, other than any such Contractual Obligations assumed by or transferred to Genzyme or any of its Affiliates pursuant to Section 8.11 of this Agreement or pursuant to applicable Legal Requirements; and

(xxi)      Joint Contracts and Joint Permits.

“Retained IP” means all Intellectual Property Controlled by Bayer or its Affiliates prior to or after the Closing that is not Business Domain Names.

“Retained Marks” is defined in Section 2.1.5(e).

“Retained Names and Marks” is defined in Section 2.1.5(c).

“Retained Trade Dress” is defined in Section 2.1.5(f)

“Royalty Payments” is defined in Section 4.3.1.

“Scheduled Employees” means the Business Employees described on Schedule 1G.

“SEC” is defined in Section 8.13.2.

“SEC Financial Statements” is defined in Section 8.13.3.

“Second Oncology Milestone Threshold” is defined in Section 4.1.6.

“Severance Payments” shall mean [**] payments exclusive of any [**] or any other [**].

“Severed Employees” is defined in Section 8.11.2(b).

“Shared Licensed Copyrights” means all works of authorship (including advertising, marketing and promotional materials, artwork, labeling, and other works of authorship) and all copyrights, moral rights and other rights and interests thereto throughout the Territory, except for the Shared Licensed Trade Dress, whether or not registered, that are Controlled by Bayer or any of its Affiliates other than Business-Specific Licensed Copyrights that are related to the Licensed Products and that have been used in, or developed with the identified intent that it would be useful in, the Bayer Business.

“Shared Licensed IP” means the Shared Licensed Copyrights, Shared Licensed Know-How,

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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Shared Licensed Patents, Shared Licensed Trade Dress and Shared Licensed Trademarks.

“Shared Licensed Know-How” means Know-How Controlled by Bayer or any of its Affiliates, other than Business-Specific Licensed Know-How, that are related to the Licensed Products and that have been used in, or developed with the identified intent that it would be useful in, the Bayer Business.

“Shared Licensed Patents” means any Patent Rights Controlled by Bayer or its Affiliates, other than Business-Specific Licensed Patents that claim inventions that are related to the Licensed Products and that have been used in, or developed with the identified intent that it would be useful in, the Bayer Business.  The Shared Licensed Patents include those Patent Rights set forth on Schedule 1H and any Patent Rights that directly or indirectly claim priority to such Patent Rights (including continuations-in-part but only to the extent the claims in the continuations-in-part claim inventions to the subject matter that is related to the Licensed Products and that as of the Closing Date has been used in, or developed with the identified intent that it would be useful in, the Bayer Business and to the extent such inventions either (a) were disclosed and described in the Patent Rights filed prior to the Closing Date or (b) are included in Shared Licensed Know-How as such Know-How existed on the Closing Date).

“Shared Licensed Trade Dress” means the trade dress design that is Controlled by Bayer or its Affiliates, and that is used in the Bayer Business on the packaging as is shown in Schedule 1I.  The trade dress design is a gentle (flat) concave horizontal wave, said wave (i) begins on the edge of one side of the package and proceeds to the opposite edge of said side of the package, wherein the wave ends at the edges of the package; (ii) the end of the wave at one edge of the package is higher than at the other edge; (iii) said wave covers only the lower part of the package; (iv) the bottom of the wave is in a dark color and the upper part of the wave is in a lighter color; (v) the wave is crisscrossed horizontally with a white strip design; and wherein the trade dress can be of any color and does not include the wording or other symbols or marks on the package.  For clarity, color alone does not constitute Shared Licensed Trade Dress.

“Shared Licensed Trademarks” means all United States or foreign trademarks, and all registrations and applications relating thereto, that are Controlled by Bayer or any of its Affiliates, other than Business-Specific Licensed Trademarks, and that are used in the Bayer Business.  The Shared Licensed Trademarks include those trademarks set forth on Schedule 1J.

“Solvent” is defined in Section 15.2(g).

“SOT Order” is defined in Section 2.6.

“Sublicensee” means any third party to which Genzyme or its Affiliates grants, after the Closing Date, any or all of the rights licensed by Bayer to Genzyme under Section 2.1.1; provided, however, that distributors who purchase Licensed Products from Genzyme, its Affiliates or its Sublicensees in order to resell such Licensed Product shall not be considered Sublicensees.

“Subsidiary” means, with respect to any specified Person, any other Person of which such

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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specified Person will, at the time, directly or indirectly, (a) own at least fifty percent (50%) of the outstanding capital stock (or other shares of beneficial interest) entitled to vote generally, (b) hold at least fifty percent (50%) of the partnership, limited liability company, joint venture or similar interests or (c) be a general partner, managing member or joint venturer.

“Tax” or “Taxes” means (a) any and all federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar, including FICA), unemployment, disability, real property, personal property, sales, use, transfer, registration, escheat obligation, value added, alternative or add-on minimum, estimated, or other tax of any kind or any charge of any kind in the nature of (or similar to) taxes whatsoever, including any interest, penalty, or addition thereto, whether disputed or not and (b) any liability for the payment of any amounts of the type described in clause (a) of this definition as a result of being a member of an affiliated, consolidated, combined or unitary group for any period, as a result of any tax sharing, tax allocation indemnification agreement, arrangement or understanding, or as a result of being liable for another Person’s Taxes as a transferee or successor, by contract or otherwise.

“Tax Return” means any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“Term” means the period commencing on the Closing Date and continuing until Genzyme is no longer required to make any payments to Bayer in accordance with Section 4 hereof.

“Termination Date” is defined in Section 12.1.

“Territory” means all the countries of the world.

“Third Oncology Milestone Threshold” is defined in Section 4.1.6.

“Third Party Agreement” means any In-License Agreement or Out-License Agreement other than In-License Agreements and Out-License Agreements that are Transferred Contracts.

“Third Party Claim” is defined in Section 13.4.1.

“Transaction Expenses” is defined in Section 8.7.

“Transferred Contracts” is defined in the definition of “Acquired Assets.”

“Transferred Inventory” means Inventory included within the Acquired Assets.

“Transferred Permits” is defined in the definition of “Acquired Assets.”

“Transition Assets” is defined in Section 8.18.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

25

“Transition Services Agreement” is defined in Section 5.2(g)(v).

“Unassigned Confidentiality Agreement” is defined in Section 8.8.4.

“Unaudited Financial Statements” is defined in Section 8.13.3.

“Union” is defined in Section 6.17.3.

“VAT” is defined in Section 4.3.5(a).

“WARN Act” is defined in Section 8.11.7.

[**] means the [**], dated as of [**], between [**].

[**] means the [**], dated as of [**], between [**].

2.          LICENSE OF ASSETS

2.1.          Licenses and Related Provisions.

2.1.1             Licenses.  Subject to Section 2.1.2, 12.3 and 15.2, effective at the time of, and contingent upon the occurrence of, the Closing:

(a)        For the Business-Specific Licensed IP:  Bayer hereby grants to Genzyme an exclusive (even as to Bayer), perpetual, irrevocable (subject to Section 12.3 and, with respect to the Business-Specific Licensed Trademarks, Section 2.1.5), transferable (as specified in Section 15.2), license, with the right to sublicense through multiple tiers (except to the extent such sublicensing in prevented in any In-License Agreement, and as provided in Section 2.1.2(a)), under the Business-Specific Licensed IP, as it exists on the Closing Date, to research, develop, make, have made, use, sell, offer for sale, have sold, import and export Licensed Products and to otherwise practice and exploit the Business-Specific Licensed IP, as it exists on the Closing Date, in the Territory for all fields of use.  For clarity and without limitation, the foregoing license is granted only to the extent Bayer and its Affiliates have rights in the Business-Specific Licensed IP.

(b)        For the Shared Licensed IP:

(i)         Bayer hereby grants to Genzyme a perpetual, irrevocable (subject to Section 12.3), transferable (as specified in Section 15.2), license, with the right to sublicense (except to the extent such sublicensing is prevented in any In-License Agreement, and as provided in Section 2.1.2(b)), under the Shared Licensed Patents, Shared Licensed Know-How, and Shared Licensed Copyrights, as they all exist on the Closing Date, solely to research, develop, make, have made, use, sell, offer for sale, have sold, import and export Licensed Products in the Territory.  The license granted in this Section 2.1.1(b)(i) shall be exclusive for a

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

26

Licensed Product during the Exclusive Period for such Licensed Product, and such license shall convert, without any further action by any party, to a non-exclusive license during the Non-Exclusive Period for such Licensed Product.  For clarity and without limitation, the foregoing license is granted only to the extent Bayer and its Affiliates have rights in the Shared Licensed Patents, Shared Licensed Know-How, and Shared Licensed Copyrights.

(ii)        Subject to the terms and conditions of Section 2.1.5, Bayer hereby grants to Genzyme a limited, non-exclusive, non-transferable license, without the right to sublicense, under the Shared Licensed Trademarks and Shared Licensed Trade Dress solely to market, distribute and sell Licensed Products in the Territory for the time period specified and as further set forth in Section 2.1.5.  Notwithstanding any grant of a license to use the terms “Schering” or “▇▇▇▇▇” alone or in combination with another term, these terms cannot, by Genzyme be used in or imported into the United States or Canada under any conditions.

(c)        Notwithstanding paragraphs (a) and (b) above, no Prohibited Asset will be licensed to Genzyme hereunder, and to the extent a Prohibited Asset is excluded from the license to Genzyme pursuant to this paragraph (c), such asset shall be excluded from the definition of Licensed IP and the various individual definitions comprising the Licensed IP.

2.1.2             Sublicensee Obligation.

(a)        For the Business-Specific Licensed IP, Genzyme may grant sublicenses (including multiple tier sublicenses) without Bayer’s consent; provided, however, that (i) Genzyme will be fully responsible for the performance of such Sublicensees hereunder, (ii) each such sublicense shall permit Bayer to audit the Sublicensee on substantially the same terms as those set forth in Section 4.4 and (iii) each Sublicensee of any commercial rights shall agree to diligence requirements no less than those specified in Section 9.5 to the extent applicable to the activities to be undertaken by such Sublicensee.  Notwithstanding the foregoing, Genzyme shall not have the right to grant sublicenses through multiple tiers to the extent such sublicenses are limited pursuant to the In-License Agreements set forth on Schedule 2.1.2(a).

(b)        For the Shared Licensed Patents, Shared Licensed Know-How, and Shared Licensed Copyrights, Genzyme may grant sublicenses (i) with Bayer’s prior written consent, (ii) without Bayer’s consent to a Genzyme Affiliate, or (iii) without Bayer’s consent only if the Shared Licensed Patents, Shared Licensed Know-How, and Shared Licensed Copyrights is sublicensed with and to no greater scope than a sublicense of the Business-Specific Licensed IP through a [**]; provided, however, that in either case (A) Genzyme shall be fully responsible for the performance of such Sublicensees hereunder, (B) each such sublicense shall permit Bayer to audit the Sublicensee on substantially the same terms as those set forth in Section 4.4, (C) each

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

27

Sublicensee of any commercial rights shall agree to diligence requirements no less than those specified in Section 9.5 to the extent applicable to the activities to be undertaken by such Sublicensee and (D) Genzyme provides notice to Bayer of said sublicense, including the names and contact information of each Sublicensee and the scope and purpose of the sublicense.  Notwithstanding the foregoing, Genzyme shall not have the right to grant sublicenses through multiple tiers to the extent such sublicenses are limited pursuant to the In-License Agreements set forth on Schedule 2.1.2(b).

(c)        Notwithstanding Section 12.3.4, any sublicense granted by Genzyme to an Affiliate will automatically terminate upon termination of this Agreement.

2.1.3             Retained Rights.

(a)        Bayer retains the non-exclusive, non-transferable right under the Business-Specific Licensed IP only to the extent necessary for Bayer to perform its obligations under this Agreement and the Ancillary Agreements.  This retained right may be licensed by Bayer as reasonably necessary in Bayer’s sole discretion for Bayer to perform its obligations under the Ancillary Agreements, provided, however, that (i) Bayer will, or will cause its Affiliates to, be fully responsible for the performance of such sublicensees and (ii) Bayer promptly provides notice to Genzyme of each such sublicense, including the names and contact information of each sublicensee and the scope and purpose of the sublicense.

(b)        Bayer retains the non-exclusive, non-transferable right under the Business-Specific Licensed IP related to the manufacturing and supply of Fludara to the extent necessary for Bayer to perform its supply obligations and grant the rights granted by Bayer under the agreements entered into by Bayer prior to the Execution Date as set forth in Schedule 2.1.3(b).

(c)        For the purpose of clarity, subject to the [**], and notwithstanding anything else to the contrary in this Agreement, Bayer may use the inventions claimed in the Business-Specific Licensed Patents to the same extent as a non-licensed third party would be legally permitted to use such inventions.

(d)        Subject to the [**], Bayer retains all rights to use, license and commercially exploit the Shared Licensed IP for all purposes other than those exclusively licensed to Genzyme during the Exclusive Period, and for all purposes, without limitation, during the Non-Exclusive Period.

2.1.4             Third Party Agreements.

(a)        Generally.  Bayer covenants that it will not, and will cause its Affiliates not to, in each case, without Genzyme’s prior written consent (which consent, with regard to the Shared Licensed IP, shall not be unreasonably withheld) agree, consent or acquiesce to any amendment, supplement or other modification to or any termination

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

28

of any existing Third Party Agreement, or take any action under a Third Party Agreement with respect to: (i) the Business-Specific Licensed IP licensed thereunder and (ii) the Shared Licensed IP licensed thereunder (to the extent such actions affect Genzyme’s exclusive rights in the Shared Licensed IP).  Bayer will, and will cause its Affiliates, to exercise its rights relating to the Business-Specific Licensed IP and to the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent such actions affect Genzyme’s exclusive rights in the Shared Licensed IP) under any Third Party Agreement in consultation with Genzyme and in a manner that is consistent with the terms of this Agreement, and in consultation with Genzyme, take all commercially reasonable actions necessary to maintain and enforce such rights with respect to the Business-Specific Licensed IP and to the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent such actions affect Genzyme’s exclusive rights in the Shared Licensed IP) under Third Party Agreements.

(b)        In-Licenses.  Bayer agrees to keep Genzyme fully informed of the rights that Bayer or any of its Affiliates has with respect to the any Business-Specific Licensed IP and to the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent such rights affect Genzyme’s exclusive rights in the Shared Licensed IP) that has been licensed to Bayer or its Affiliates under an In-License Agreement that is not a Transferred Contract (the “In-Licensed IP”).  Bayer will, and will cause its Affiliates to, take all actions reasonably requested by Genzyme in respect of these rights, as well as provide to Genzyme all material information and copies of material correspondence and other material documents received from the other parties to such In-License Agreements.  Bayer will, and will cause its Affiliates to, immediately notify Genzyme of (i) any event of which Bayer is aware that affects in any material respect the rights granted to Bayer under an In-License Agreement that are, in turn, sublicensed to Genzyme pursuant to this Agreement or (ii) receipt by Bayer of any written notice received under any Third Party Agreement, including any of breach or termination of any Third Party Agreement.  Bayer will, and will cause its Affiliates to, promptly furnish Genzyme with copies of all reports and other communications that Bayer or any of its Affiliates furnishes to the other parties to the In-License Agreements that relate in any material respect to the Business or the rights granted to Genzyme under this Agreement, and to the extent any such reports or communication relate to the efforts of Genzyme under this Agreement, Bayer will, and will cause its Affiliates to, give Genzyme a reasonable opportunity to review and comment upon such reports or communications before they are transmitted to the other parties to the In-License Agreements.

2.1.5             Trademark and Trade Dress Control.

(a)        Quality Control.  The quality of the Licensed Products sold by Genzyme under or in connection with the Licensed Trademarks and Shared Licensed Trade Dress must be of a sufficiently high quality to be generally comparable to the quality of products sold by Bayer under the Licensed Trademarks and Shared Licensed Trade Dress prior to the Closing Date.  At the reasonable request of Bayer, not more

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

29

frequently than annually, Genzyme will send Bayer samples of the Licensed Products sold by Genzyme under the Licensed Trademarks and Shared Licensed Trade Dress.

(i)         In the event that Genzyme materially breaches this Section 2.1.5(a) with respect to a Business-Specific Licensed Trademark and fails to cure such breach within sixty (60) days after Bayer notifies Genzyme in writing of such breach, Bayer may terminate the license to such Business-Specific Licensed Trademark under Section 2.1.1 by delivery to Genzyme of a written notice of termination.  If Genzyme disputes in good faith the existence or materiality of an alleged breach specified in a notice provided by Bayer pursuant to this Section 2.1.5, and provides notice to Bayer of such dispute within the sixty (60) day period following the date that Bayer notified Genzyme of the breach, Bayer will not have the right to terminate the license to such Business-Specific Licensed Trademark unless and until the existence of such material breach has been finally determined in accordance with the dispute resolution provisions of Sections 15.10 and 15.13 and Genzyme fails to cure such breach within twenty (20) Business Days following such determination.  It is understood and acknowledged that during the pendency of such dispute, the license to such Business-Specific Licensed Trademark will remain in effect.  The foregoing termination right will be Bayer’s sole and exclusive remedy for a breach of this Section 2.1.5(a)(i) to the extent it relates to a Business-Specific Licensed Trademark.

(ii)        In the event that Genzyme materially breaches this Section 2.1.5 with respect to a Shared Licensed Trademark or Shared Licensed Trade Dress and fails to cure such breach within sixty (60) days after Bayer notifies Genzyme in writing of such breach, Bayer may terminate the license to such Shared Licensed Trademark and Shared Licensed Trade Dress under Section 2.1 by delivery to Genzyme of a written notice of termination.  In addition to the foregoing termination rights, Bayer shall retain any other rights and remedies it has in law and/or equity with respect to a breach related to a Shared Licensed Trademark and Shared Licensed Trade Dress.

(b)        Special Rights.  Genzyme’s license to use the Shared Licensed Trademarks and Shared Licensed Trade Dress that are the corporate names of Bayer or any of its Affiliates or any other name, logo, trade dress, abbreviation, word or combination thereof of corporate identification is subject to the terms, conditions, and limitations set forth below.  It is hereby agreed that Genzyme may utilize, at its sole option, the following items:

(i)         Without limitation of time, Genzyme may use manuals, technical specifications, descriptive literature and catalogs and similar materials related to the Bayer Business and bearing the name or marks or trade dress of Bayer or any of its Affiliates; provided, however, that the name, marks and trade dress shall be stamped or overprinted with one or more names or marks or trade dress of Genzyme not confusingly similar thereto as soon as practicable, and in any event,

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

30

no later than (A) [**] days after delivery by Bayer or its Affiliates of such materials to be used by Genzyme in the U.S., and (B) [**] days after delivery by Bayer or its Affiliates of such materials to be used by Genzyme outside the U.S.

(ii)        Genzyme shall, subject to applicable Legal Requirements, have a period of [**] months after the Closing Date within which to use the corporate names, trade dress and identification (including NDC numbers) of Bayer and its Affiliates pertaining to the Bayer Business.

(iii)       Notwithstanding the foregoing, Genzyme shall, subject to applicable Legal Requirements, have the right to sell any products of the Business in the [**] month period after the Closing Date that are in bags or other containers bearing any of the corporate names or trade dress or identification (including NDC numbers) of Bayer or any of its Affiliates, so long as such products are not outdated and so long as products sold by Genzyme after [**] months following the Closing Date are not packaged in bags or other containers that bear such names, marks, trade dress or codes; provided, however, that Genzyme may continue to use the corporate names or trade dress or identification (including NDC numbers) of Bayer or its Affiliates beyond such period to the extent required by applicable Legal Requirements as a result of Bayer (or its Affiliate) manufacturing a Licensed Product or holding a Permit relating to a Licensed Product.

(iv)       Notwithstanding the foregoing, Genzyme shall diligently pursue in good faith obtaining its own names, marks, trade dress and NDC numbers pertaining to the Business.

(c)        Use of Retained Names and Marks.  Notwithstanding any other provision of this Agreement to the contrary (except for the limited rights granted in Section 2.1.1(b)(ii) and the rights specified in Section 2.1.5(b)), no interest in or right to use the name “Bayer” or “▇▇▇▇▇” or any other corporate indication of Bayer or its Affiliates (including any logo, trademark, trade dress, trade name or domain name containing the component “Bayer” or “Bay” or “▇▇▇▇▇” or any derivation thereof, including but not limited to the wave line design and the logo “Bayer-Cross” consisting of the word Bayer written in the shape of a cross (with or without a circle)) and the representative samples of the trademarks, trademark applications and trade dress set forth on Schedule 2.1.5(c) hereto, as such Schedule shall be amended for additions as of the Closing Date consistent with the foregoing description (collectively, the “Retained Names and Marks”), is being transferred pursuant to the Contemplated Transactions and the use of any Retained Names and Marks shall cease as provided in Section 2.1.5, and Genzyme promptly thereafter will remove or obliterate and cease to use all the Retained Names and Marks from its signs and unused inventory of purchase orders, invoices, sales orders, labels, letterheads, shipping documents, and other items and materials of the Business and otherwise, and will not use or put into use after the Closing Date any such items and materials that

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

31

bear any Retained Names and Marks (or any name, ▇▇▇▇, trade dress or logo confusingly similar thereto), except as provided in Section 2.1.5.  Furthermore, except as contemplated by the Transition Services Agreement, Genzyme will not use the name “Bayer” as a domain or e-mail address component without undue delay after the Closing Date; provided, however, that incoming emails shall be forwarded by Bayer or its Affiliates to new email addresses for a period of ninety (90) days after the Closing Date.  The parties agree that Bayer shall have no responsibility for claims by third parties arising out of, or relating to, the use of any Retained Names and Marks by Genzyme after the Closing Date.  This Agreement shall not preclude Genzyme from making non-trademark use of the Retained Names and Marks for purposes of historical reference, or as required by Legal Requirements, or as reasonably necessary in connection with activities before Governmental Authorities.

(d)        Use of Retained Names and Marks.  Genzyme shall not change or modify the Retained Names and Marks or use the Retained Names and Marks in any modified form.  The authorization set forth in Section 2.1.5 in no way provides Genzyme any rights in or authorization to use any other confusingly similar trademarks, service marks, trade names, trade dress or other similar property or rights of Bayer.

(e)        Genzyme shall not at any time, (i) knowingly use any logo, trademark, trade name or domain name containing the component “Bayer” or “Bay” or “▇▇▇▇▇” or any derivation thereof, including but not limited to the logo “Bayer-Cross” consisting of the word Bayer written in the shape of a cross (with or without a circle) all as set forth on Schedule 2.1.5(e) (collectively the “Retained Marks”) in any way that would impair the validity of such Retained Marks as proprietary trademarks, service marks, trade names and/or trade dress in any jurisdiction, (ii) take any action which would impair Bayer’s ownership of any Retained Marks or their legality or enforceability, (iii) register, or cause to be registered, in Genzyme’s name or the name of another, any of the Retained Marks or any other trademarks, names, logos, symbols, trade dress or designs they know to be confusingly similar to the Retained Marks, (iv) use, display, advertise or promote any trademarks, names, logos, symbols, trade dress or designs they know to be confusingly similar to any of the Retained Marks in any jurisdiction, or (v) use any of the Retained Marks as part of a corporate or trade name of any business organization.  Genzyme shall not challenge the validity of the Retained Marks or Bayer’s ownership thereof in any form or manner.  All goodwill deriving from the use of the Retained Marks by Genzyme pursuant to the terms of Section 2.1.5 of this Agreement or arising out of the terms of Section 2.1.5 of this Agreement shall accrue solely and exclusively to Bayer and its Affiliates.

(f)         For a period of [**] years from the Closing Date, Genzyme shall not, (i) knowingly use any logo or trade dress containing the wave line design or any derivation thereof, as set forth in the definition of Shared Licensed Trade Dress and on Schedule 2.1.5(f) (collectively the “Retained Trade Dress”) in any way that would impair the validity of such Retained Trade Dress as proprietary trademarks, service

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

32

marks, trade names and/or trade dress in any jurisdiction, (ii) take any action which would impair Bayer’s ownership of any Retained Trade Dress or their legality or enforceability, (iii) register, or cause to be registered, in Genzyme’s name or the name of another, any of the Retained Trade Dress or any other trademarks, names, logos, symbols, trade dress or designs they know to be confusingly similar to the Retained Trade Dress, (iv) use, display, advertise or promote any trademarks, names, logos, symbols, trade dress or designs they know to be confusingly similar to any of the Retained Trade Dress in any jurisdiction, (v) use any of the Retained Trade Dress as part of a corporate or trade name of any business organization, or (vi) challenge the validity of the Retained Trade Dress or Bayer’s ownership thereof in any form or manner.  All goodwill deriving from the use of the Retained Trade Dress by Genzyme pursuant to the terms of Section 2.1.5 of this Agreement or arising out of the terms of Section 2.1.5 of this Agreement shall accrue solely and exclusively to Bayer and its Affiliates.  For avoidance of doubt, upon expiration of the [**] year period in this Section 2.1.5(f), Genzyme shall have no greater rights in the wave line design than any unrelated third party would have.

2.1.6             No Implied Rights; Future IP.  Genzyme acknowledges and agrees that:

(a)        No rights or licenses of Intellectual Property rights are conveyed to Genzyme other than those expressly provided in this Agreement and the Ancillary Agreements, and except as expressly provided in this Agreement and the Ancillary Agreements, no such conveyance or license of rights will be implied or deemed to have been made.

(b)        Except as provided in Section 2.5, no rights or licenses are conveyed to Genzyme with respect to any Intellectual Property rights owned or Controlled by any third party that is not an Affiliate of Bayer as of the Closing Date (regardless of whether such third party later becomes an Affiliate of Bayer).

(c)        For purposes of clarity:

(i)         The license granted in Section 2.1.1(a) under the Business-Specific Licensed IP is granted as the Business-Specific Licensed IP exists at the Closing Date, and does not grant any license to Genzyme with respect to a Patent Right claiming an invention made after the Closing Date, Know-How developed after the Closing Date, any copyright to a work created after the Closing Date, or any trademark adopted after the Closing Date.  For further clarity, (A) the license granted by Bayer under the Business-Specific Licensed Patents does include Patent Rights filed and issued after the Closing Date (1) if such Patent Rights directly or indirectly claim priority to a Business-Specific Licensed Patents that was filed prior to the Closing Date (including continuations-in-part but only to the extent the claims in the continuations-in-part claim inventions to subject matter that is exclusively related to the Licensed Products and used exclusively in, had been used exclusively in and are as of the Closing Date exclusive to, or was

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

33

developed exclusively for and is currently exclusive to, the Bayer Business and that was disclosed and described in a Business-Specific Licensed Patents that was filed prior to the Closing Date) or (2) to the extent such Patent Rights claim an invention that was contained within Business-Specific Licensed Know-How as the Business-Specific Licensed Know-How existed prior to the Closing Date; (B) the license granted under the Business-Specific Licensed Copyrights does include any registrations filed and issued after the Closing Date that relate to copyrightable works created prior to the Closing Date, and (C) the license granted under the Business-Specific Licensed Trademarks does include any applications and registrations filed and issued after the Closing Date that relate to Business—Specific Licensed Trademarks adopted prior to the Closing Date.

(ii)        The license granted in Section 2.1.1(b) under the Shared Licensed IP is granted as the Shared Licensed IP exists at the Closing Date, and does not grant any license with respect to a Patent Right claiming an invention made after the Closing Date, Know-How developed after the Closing Date, any copyright to a work created after the Closing Date, or any trademark adopted after the Closing Date.  For further clarity, (A) the license granted under the Shared Licensed Patents does include Patent Rights filed and issued after the Closing Date (1) if such Patent Rights directly or indirectly claim priority to a Shared Licensed Patents that was filed prior to the Closing Date (including continuations-in-part but only to the extent the claims in the continuations-in-part claim inventions to subject matter that is related to the Licensed Products and that as of the Closing Date has been used in, or disclosed with the identified intent that it would be useful in, the Bayer Business and that is disclosed and described in a Shared Licensed Patents that was filed prior to the Closing Date or (2) to the extent that such Patent Rights claim any inventions contained within Shared Licensed Know-How as the Shared Licensed Know-How existed prior to the Closing Date); and (B) the license granted under the Shared Licensed Copyrights does include any registrations filed and issued after the Closing Date that relate to copyrightable works created prior to the Closing Date.

2.2.          Know-How Transfer.  To enable Genzyme to exercise the rights granted under this Agreement, Bayer will promptly deliver or otherwise provide to Genzyme and its Representatives Licensed Know-How within the possession or Control of Bayer or any of its Affiliates.  Without limiting the generality of the foregoing, and without limiting the delivery and provision of Licensed Know-How pursuant to the Purchase and Sale Agreement, Leukine Tolling Agreement or Fludara Supply Agreement, as described in the Transition Services Agreement, Bayer will promptly deliver, make available or otherwise provide to Genzyme Licensed Know-How in accordance with the requirements and timelines determined by the Joint Transition Team.  Additionally, on a commercially reasonable schedule and in a commercially reasonable format to be agreed upon by the parties, Bayer will deliver to Genzyme copies of documents, files, diagrams, specifications, designs, schematics, reports, records, laboratory notebooks, data, materials, prototypes, test devices, models and simulations, or other written, graphic, biologic, or other tangible material in

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

34

Bayer’s or its Affiliates’ possession in any media, to the extent it discloses or embodies Licensed Know-How.  For a period of [**] months after the Closing Date, as requested by Genzyme from time to time, qualified personnel from Bayer familiar with the applicable Licensed Know-How, to the extent Bayer still employs such personnel, will meet or participate in telephone conference calls with personnel from Genzyme at such times, and in the case of in-person meetings, at such venues, to be agreed upon by the parties as reasonably necessary to exchange knowledge necessary to fully transfer all Licensed Know-How.

2.3.          Transfer of Licensed IP.  During the Term, neither Bayer nor any of its Affiliates will transfer or assign its right, title or interest in any Business-Specific Licensed IP to any third party, other than in connection with an assignment of this Agreement as a whole in accordance with Section 15.2.

2.4.          Covenant Not to ▇▇▇ and [**].

(a)        Bayer hereby covenants that it shall not, and shall cause its Affiliates not to, ▇▇▇ or commence or prosecute any Action against Genzyme or any of its Affiliates, or their successors, assigns or Sublicensees, for [**] on or after the Closing Date (other than [**]), or voluntarily assist any other Person in doing any of the foregoing, but such covenant shall only apply to the extent such [**] for Genzyme to [**] as of the Closing Date. [**] after Closing under which [**]; provided, however, if Genzyme has provided written notice to Bayer that [**], and if [**] then after the date of such written notice [**].

(b)        After the Closing Date, if Genzyme requests [**] that is [**] as of the Closing Date, and if Bayer [**] on the date of Genzyme’s written request, and if such [**], then Bayer and Genzyme will [**].  Such [**].

(c)        After the Closing Date, Genzyme may request from Bayer [**], and if Bayer [**] on the date of Genzyme’s written request, then Bayer and Genzyme will [**].  Such [**]; provided, however, at Bayer’s sole discretion, [**].

(d)        As used in this Section 2.4 the word “necessary” shall mean that there is at that time [**].

(e)        For clarity, except as expressly provided in this Section 2.4, Bayer shall be free to ▇▇▇ Genzyme for [**].

2.5.          Consents Under In-License Agreements.

2.5.1             Bayer will, and will cause its Affiliates to, use, both prior to and for a period of [**] days after the Closing, commercially reasonable efforts to obtain, and Genzyme will use commercially reasonable efforts to assist and cooperate with Bayer in connection therewith, the consent of the licensors under the In-License Agreements identified on Schedule 2.5 to sublicense to Genzyme the Intellectual Property rights licensed to Bayer or its Affiliates thereunder, it being understood that to the extent the

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

35

foregoing requires any action by Bayer or any of its Affiliates that would affect the Business after the Closing, such action will require the prior written consent of Genzyme, which consent will not be unreasonably withheld or delayed.  Upon obtaining each requisite consent (but not before then), such Intellectual Property licensed to Bayer or its Affiliates under the applicable In-License Agreement will become Licensed IP.

2.5.2             To the extent a third party requires consideration in exchange for a consent to be obtained by Bayer for the sublicense to Genzyme of Intellectual Property licensed to Bayer pursuant to an In-License Agreement identified on Schedule 2.5, the payment of such consideration will be [**], except:

(a)   if a third party requires a resolution of a dispute with Bayer prior to providing a consent, [**]; provided, however, Bayer shall have sole discretion in resolving such dispute;

(b)   if a third party requires a resolution of any dispute with Genzyme prior to providing a consent, [**]; provided, however, Genzyme shall have sole discretion in resolving such dispute.

(c)   if such agreement is a non-exclusive license to Shared Licensed IP and licensor requires a fee for the license, [**].  If Bayer can avoid obtaining a consent required pursuant to Section 2.5.1 by assigning the underlying In-License Agreement rather than granting a sublicense under such In-License Agreement, and Bayer elects to obtain such consent to assignment, then [**] for any consideration required to be paid for such consent.

2.6.          No Rights in SOT Assets.  Notwithstanding anything to the contrary in this Agreement, Genzyme is not acquiring any right, title or interest in the Campath SOT Assets (as such term is defined in the Decision and Order of the FTC relating to the resolution of the case known as In the Matter of Gorilla Corporation and ILEX Oncology, Inc. (FTC File No. 041-0083) (the “SOT Order”)) and Bayer is not licensing or transferring to Genzyme any of Bayer’s right, title or interest, if any, in the Campath SOT Assets (as such term is defined in the SOT Order), under this Agreement or any of the Ancillary Agreements.

3.          PURCHASE AND SALE OF ASSETS; ASSIGNMENT AND ASSUMPTION OF LIABILITIES.

3.1.          Purchase and Sale; Assignment and Assumption.

3.1.1             Purchase and Sale.  Upon the terms and subject to the conditions contained herein, at the Closing, Bayer will, and will cause its Affiliates, to sell, assign, transfer, convey and deliver to Genzyme, and Genzyme will purchase from Bayer and its Affiliates, the Acquired Assets, free and clear of any Encumbrances other than Permitted Encumbrances, in exchange for the payment of the consideration described in Section 4 and the assumption by Genzyme of the Assumed Liabilities.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

36

3.1.2             Assumed Liabilities.  Upon the terms and subject to the conditions contained herein, at the Closing, Bayer will, and will cause its Affiliates to, assign to Genzyme, and Genzyme will assume, the Assumed Liabilities.

3.2.          Consents.

3.2.1             This Agreement does not constitute an agreement to assign or transfer any Transferred Contract, Transferred Permit or other Acquired Asset that is not assignable or transferable without the consent of or action by another Person (other than Bayer or any of its Affiliates) or action by a Governmental Authority, to the extent that such consent has not been given or such action has not been taken prior to the Closing; provided, however, that Bayer will, and will cause its Affiliates to, use, both prior to and after the Closing, commercially reasonable efforts to obtain, and Genzyme will assist and cooperate with Bayer in connection therewith, all necessary consents to the assignment and transfer thereof, it being understood that to the extent the foregoing requires any action by Bayer or any of its Affiliates that would affect the Business after the Closing, such action will require the prior written consent of Genzyme.  Upon obtaining the requisite third party consents thereto, such Transferred Contract, Transferred Permit or other Acquired Asset will be transferred and assigned to Genzyme hereunder.

3.2.2             With respect to any Transferred Contract, Transferred Permit or other Acquired Asset that is not transferred or assigned to Genzyme at the Closing by reason of Section 3.2.1 (a “Nonassigned Asset”), after the Closing and until the requisite consent is obtained and the foregoing is transferred and assigned to Genzyme, Bayer will, and will cause its Affiliates to, take commercially reasonable efforts to provide to Genzyme the benefits thereof (or substantially comparable benefits) and will enforce, at the request of and for the account of Genzyme, any rights of Bayer or any of its Affiliates arising thereunder against any Person, including the right to elect to terminate in accordance with the terms thereof upon the advice of Genzyme.  If Genzyme is provided with benefits of any Nonassigned Asset, Genzyme will perform, at the direction of Bayer or its Affiliate, as applicable, the obligations of Bayer or its Affiliate thereunder.  Notwithstanding anything to the contrary set forth herein, to the extent that any Assumed Liability relates to any Nonassigned Asset, such Assumed Liability will not be deemed to be an Assumed Liability unless and until such Nonassigned Asset is transferred and assigned to Genzyme or Genzyme obtains the benefit of such Nonassigned Asset under this Section 3.2.2, at which point such Liability will become an Assumed Liability hereunder.  The provisions of this Section 3.2 will in no way be deemed to be a waiver on the part of Genzyme of the closing condition set forth in Section 10.7.

3.3.          Consent Costs.  To the extent a third party requires consideration in exchange for (a) a consent to be obtained by Bayer, as set forth on Schedule 6.4 or (b) a consent to be obtained by Genzyme, as set forth on Schedule 7.4, the payment of such consideration will be [**], except:

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

37

(i)         if such consideration to a third party was explicitly set forth as a requirement for a consent in the underlying Contractual Obligation with such third party or was known by the party to the Contractual Obligation as of the Execution Date, the cost of obtaining the consent will be [**];

(ii)        if a third party requires a resolution of a dispute with respect to the underlying Contractual Obligation prior to providing a consent, the party to the Contractual Obligation is [**] resolution of such dispute; and

(iii)       if Bayer can avoid obtaining a consent required in connection with the transfer of a Contractual Obligation by sublicensing to Genzyme the rights granted to Bayer under the underlying Contractual Obligation rather than assigning such Contractual Obligation, and Bayer elects to obtain such consent, then [**].

With regard to consideration paid to a third party in exchange for a consent that is to be [**], the party to the underlying Contractual Obligation that is required to use commercially reasonable efforts to obtain such consent pursuant to Section 8.3 will control the negotiations with such third party, but may only agree to an amount of consideration to be paid to such third party with the consent of the other party hereto, which consent will not be unreasonably withheld or delayed.

4.          CONSIDERATION

4.1.          Oncology Products.

4.1.1             Pre-Existing Payment Obligation.  Notwithstanding anything to the contrary in this Agreement or any Ancillary Agreement, the parties shall make payments due as of the Closing Date under the [**], except as set forth in Section 4.1.2.

4.1.2             Inventory Payment.  Subject to the terms and conditions of this Agreement, at the Closing, Genzyme will pay to Bayer an amount equal to [**] at the Closing (such amount determined in accordance with Section 4.1.3(a) and subject to true-up in accordance with that Section).

4.1.3             Estimated Inventory and True Up.

(a)   On the day that is five (5) Business Days prior to the Closing Date, Bayer shall prepare and deliver to Genzyme a schedule that sets forth by item, location, quantity, expiration date, lot number and [**] (i) Bayer’s estimate of the Inventory located in the United States and (ii) Bayer’s estimate of the Inventory located outside of the United States, in accordance with the procedures set forth in Exhibit 4.1.3.  These must be Bayer’s good faith estimates of the indicated items.

(b)   Bayer shall conduct a physical count of the Inventory located in the United States (the “Domestic Count”) on the Closing Date, and Genzyme and/or its

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

38

designee, which may be an independent accounting firm, shall have the right to observe such count, in accordance with the procedures set forth in Exhibit 4.1.3 in order to determine the quantity of all items of such Inventory. Based upon such physical count and documented Inventory in transit, Bayer shall prepare and deliver to Genzyme a schedule, by item, location, quantity, expiration date, lot number and [**], of the Inventory represented by the Domestic Count (the “Closing Domestic Inventory Schedule”) within thirty (30) days after Closing.  Leukine Inventory with an expiration date [**] months after the Closing Date and Campath and Fludara Inventory with an expiration date [**] months after the Closing Date will not be counted in the Domestic Count.

(c)   Bayer shall conduct a physical count of the Inventory located outside the United States (the “Foreign Count”) on the Closing Date, and Genzyme and/or its designee, which may be an independent accounting firm, shall have the right to observe such count, in accordance with the procedures set forth in Exhibit 4.1.3 in order to determine the quantity of all items of such Inventory.  Based upon such physical count and documented Inventory in transit, Bayer shall prepare and deliver to Genzyme a schedule, by item, location, quantity, expiration date, lot number and [**], of the Inventory represented by the Foreign Count (the “Closing Foreign Inventory Schedule”) within thirty (30) days after Closing.  Leukine Inventory with an expiration date [**] months after the Closing Date and Campath and Fludara Inventory with an expiration date [**] months after the Closing Date will not be counted in the Foreign Count.

(d)   The Closing Foreign Inventory Schedule and Closing Domestic Inventory Schedule (each, an “Inventory Schedule” and, together, the “Inventory Schedules”) will be final, conclusive and binding on the parties unless Genzyme provides a written notice (a “Dispute Notice”) to Bayer no later than [**] days after delivery of both Inventory Schedules setting forth in reasonable detail (a) any item on the Inventory Schedules which Genzyme believes has not been prepared in accordance with this Agreement (each, a “Disputed Item”), (b) the correct amount of each Disputed Item and (c) the correct amount of the applicable items of the Inventory based solely on the correct amount of each Disputed Item.  Any item or amount to which no dispute is raised in the Dispute Notice will be final, conclusive and binding on the parties.  Bayer shall provide Genzyme with full access to all records and work papers that form the basis for the information included in the Inventory Schedules.  Absent manifest error, Genzyme may not dispute the quantity of Inventory located at a location where Genzyme elected to not observe the count or arrange for a designee to observe the count unless (i) the [**] of the Inventory located at such location as set forth in the estimates described in Section 4.1.3(a) is [**] and (ii) the quantity of Inventory reported by Bayer to exist at such location varies by more than [**] or [**].

(e)   Bayer and Genzyme will attempt to resolve the matters raised in a Dispute Notice in good faith.  Fifteen (15) Business Days after delivery of the Dispute

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

39

Notice, either Bayer or Genzyme may provide written notice (an “Arbitration Notice”) to the other that it elects to submit the disputed items to an arbitrator (the “Inventory Referee”), who must be a certified public accountant at Ernst & Young, KPMG, Deloitte, PricewaterhouseCoopers or any other internationally-recognized auditing firm to which the parties mutually agree.  If Bayer and Genzyme cannot agree on an Inventory Referee within fifteen (15) Business Days after an Arbitration Notice is provided, Bayer and Genzyme will petition the American Arbitration Association to assign an Inventory Referee which meets the criteria described above as soon as practicable (but in any event no later than the twentieth (20th) Business Day after such Arbitration Notice is provided).  On the fifth (5th) Business Day following appointment of an Inventory Referee, Bayer will submit the Inventory Schedule to the Inventory Referee (if applicable, as amended following discussions with Genzyme) with a copy to Genzyme, and Genzyme will submit the Dispute Notice (if applicable, as amended following discussions with the Bayer) to the Inventory Referee with a copy to Bayer.  The Inventory Referee will resolve the dispute pursuant to such procedures that he establishes and deems fair and equitable, provided, however, that Bayer and Genzyme must each be afforded an opportunity to provide a written submission in support of its position and to advocate for its position personally before the Inventory Referee, in the presence of the other party.  If the Inventory Referee requires in-person presentations, such presentations will be made in the New York metropolitan area.

(f)    The Inventory Referee will promptly review only those items and amounts specifically set forth and objected to in the Dispute Notice submitted to him and resolve the dispute in accordance with this Agreement.  Each of the parties to this Agreement agrees to use its commercially reasonable efforts to cooperate with the Inventory Referee and to cause the Inventory Referee to resolve any dispute no later than thirty (30) Business Days after selection of the Inventory Referee.  The decision of the Inventory Referee with respect to any such dispute will be final, conclusive and binding on the parties.

(g)   The fees and expenses of the Inventory Referee will be borne by Genzyme if the aggregate [**] of the Inventory transferred at Closing as finally determined by the Inventory Referee is closer to the aggregate [**] of the Inventory transferred at Closing presented by Bayer to the Inventory Referee (i.e. assuming all Disputed Items are resolved in Bayer’s favor) than the aggregate [**] of the Inventory transferred at Closing presented by Genzyme to the Inventory Referee (i.e. assuming all Disputed Items are resolved in Genzyme’s favor).  The fees and expenses of the Inventory Referee will be borne by Bayer if the aggregate [**] of the Inventory transferred at Closing as finally determined by the Inventory Referee is closer to the aggregate [**] of the Inventory transferred at Closing presented by Genzyme to the Inventory Referee (i.e. assuming all Disputed Items are resolved in Genzyme’s favor) than the aggregate [**] of the Inventory transferred at Closing presented by Bayer to the Inventory Referee (i.e. assuming all Disputed Items are resolved in Bayer’s favor).  Notwithstanding the above, if the Inventory Referee

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

40

concludes that the fee allocation set forth in this paragraph (g) would be inequitable under the circumstances, the Inventory Referee may specify a percentage of fees and expenses to be borne by each party.

(h)   Once the Inventory Schedules are final, conclusive and binding and any items raised in a Dispute Notice have been resolved, if the finally determined aggregate [**] of the Inventory transferred at Closing is less than the amount paid to Bayer at Closing pursuant to Section 4.1.2, Bayer shall pay the difference to Genzyme by wire transfer within thirty (30) days.  If the finally determined aggregate [**] of the Inventory transferred at Closing was greater than the amount paid to Bayer at Closing pursuant to Section 4.1.2, Genzyme shall pay Bayer the difference by wire transfer within thirty (30) days.

(i)    If on the last day of the month which is at least [**] days following the Closing Date Genzyme has not sold Leukine Transferred Inventory with an expiration date of [**] months [**], Bayer will refund the aggregate [**] thereof to Genzyme, provided, however, that since the Closing Date Genzyme has, on a country-by-country basis, used its commercially reasonable efforts to sell Leukine Transferred Inventory prior to Leukine purchased under the Leukine Tolling Agreement.  If on the last day of the month which is at least [**] days following the Closing Date Genzyme has not sold Fludara Transferred Inventory with an expiration date of [**] months [**], Bayer will refund the aggregate [**] thereof to Genzyme, provided, however, that since the Closing Date Genzyme has, on a country-by-country basis, used its commercially reasonable efforts to sell Fludara Transferred Inventory prior to Fludara purchased under the Fludara Supply Agreement.  If on the last day of the month which is at least [**] days following the Closing Date Genzyme has not sold Campath Transferred Inventory with an expiration date of [**] months [**], Bayer will refund the aggregate [**] thereof to Genzyme, provided, however, that since the Closing Date, Genzyme has, on a country-by-country basis, used its commercially reasonable efforts to sell Campath Transferred Inventory prior to Campath manufactured by Genzyme after the Closing Date.  Any Transferred Inventory which is the subject of a refund shall be promptly destroyed [**], and a certificate of destruction shall be provided to Bayer.  Genzyme shall promptly return any refund to Bayer to the extent Genzyme sells any Transferred Inventory which was the subject of a refund prior to its destruction.

(j)    If Genzyme designates PricewaterhouseCoopers or a foreign affiliate of such firm to serve as its designee to observe an inventory count, and the performance of such service for Genzyme would, as determined by such firm, create a conflict of interest that cannot be resolved through creation of an ethical barrier between relevant client teams or other similar measures, Genzyme will observe, or select an alternate designee to observe, such inventory count.

4.1.4             Royalties under In-License Agreements.  From and after the Closing Date,

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

41

Genzyme or its Affiliate hereby agrees to make the monetary payments owed to third parties pursuant to the In-License Agreements (other than payments attributed to sales made or reimbursement of development activities performed prior to the Closing), by either making such payments directly to such third parties or reimbursing Bayer for making such payments.

4.1.5             Royalty Payments.  In accordance with the terms and conditions of this Agreement, Genzyme or its Affiliate will make royalty payments to Bayer by paying a percentage of Net Sales in the Territory of the Oncology Products as set forth below (collectively, the “Oncology Product Royalty Payments”):

Genzyme will make such Oncology Product Royalty Payments until the earlier of (a) the aggregate of all Oncology Product Royalty Payments equalling US $500 million or (b) eight (8) years from the Closing Date, at which time Genzyme’s obligation to make any such Oncology Product Royalty Payments will terminate.

4.1.6             Milestone Payments.  In accordance with the terms and conditions of this Agreement, within [**] days after the achievement of each of the following indicated events collectively by Genzyme, its Affiliate or Sublicensee, Genzyme will pay to Bayer the following milestone payments (the “Oncology Product Milestone Payments”):

Wherein for Section 4.1.6:

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

42

(a)   If the First Oncology Milestone Threshold is reached in any contiguous twelve (12) month period between [**] and [**], “Oncology Year One” will be the first twelve (12) month period between [**] and [**] in which the First Oncology Milestone Threshold is reached.  If the First Oncology Milestone Threshold is not met in any contiguous twelve (12) month period between [**] and [**], then Oncology Year One will be designated as calendar year [**].

(b)   If the First Oncology Milestone Threshold is reached in Oncology Year One, then “Oncology Year Two” will be the twelve (12) month period following Oncology Year One.  If the First Oncology Milestone Threshold is not reached in Oncology Year One, Oncology Year Two will be the first contiguous twelve (12) month period between [**] and [**] in which the Second Oncology Milestone Threshold is reached; provided, however, if the Second Oncology Milestone Threshold is not reached in any contiguous twelve (12) month period between [**] and [**], then Oncology Year Two will be designated as calendar year [**].

(c)   If the First Oncology Milestone Threshold is reached in Oncology Year One, then “Oncology Year Three” will be the contiguous twelve (12) month period following Oncology Year Two.  If the First Oncology Milestone Threshold is not reached in Oncology Year One and the Second Oncology Milestone Threshold is reached in Oncology Year Two, then Oncology Year Three will be the contiguous twelve (12) month period following Oncology Year Two.  If the First Oncology Milestone Threshold is not reached in Oncology Year One and the Second Oncology Milestone Threshold is not reached in Oncology Year Two, then Oncology Year Three will be the first contiguous twelve (12) month period between [**] and [**] in which the Second Oncology Milestone Threshold is reached.

(d)   Each of the three (3) Oncology Product Milestone Payments under this Section 4.1.6 will only be payable the first time such milestone is reached.

4.2.          Alemtuzumab MS.

4.2.1             Royalty Payments.  In accordance with the terms and conditions of this Agreement, Genzyme will make royalty payments to Bayer by paying a percentage of Net Sales in the Territory of Approved Alemtuzumab MS as set forth below (collectively, the “Alemtuzumab MS Royalty Payments”):

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

43

Genzyme will not be obligated to make any Alemtuzumab MS Royalty Payments or record any Net Sales in the Territory of Approved Alemtuzumab MS until the earlier of (i) FDA approval or (ii) marketing approval by the EMEA of Alemtuzumab MS.  Genzyme will make such Alemtuzumab MS Royalty Payments until the earlier of (a) the aggregate of all Alemtuzumab MS Royalty Payments equalling US $1.25 billion or (b) ten (10) years from the date of first commercial sale of Alemtuzumab MS after FDA approval or marketing approval by the EMEA, at which time Genzyme’s obligation to make such Alemtuzumab MS Royalty Payments will terminate.

4.2.2             Milestone Payments.  In accordance with the terms and conditions of this Agreement, including Section 4.2.3 below, within [**] days after the end of the calendar year in which the following indicated events are achieved collectively by Genzyme, its Affiliates or Sublicensees, Genzyme will pay to Bayer the following milestone payments (the “Alemtuzumab MS Milestone Payments”):

If any of the four (4) milestones in Section 4.2.2 is met in [**] during the [**] time period specified for such milestone, then the [**] where such milestone is reached shall be used to determine Net Sales with regard to the applicable Alemtuzumab MS Milestone Payment.  Each of the four (4) Alemtuzumab MS Milestone Payments under this Section 4.2.2 will only be payable the first time such milestone is reached.

4.2.3             Milestone Buyout Option.  In lieu of paying the Alemtuzumab MS Milestone Payments under Section 4.2.2, Genzyme has the option exercisable in its sole discretion within [**] days of the end of calendar year 2020, to make a one-time payment

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

44

to Bayer equal to [**] of the annual Net Sales in the Territory of Approved Alemtuzumab MS in calendar year 2020 (the “Milestone Buyout Payment”); provided, however, that the Milestone Buyout Payment will not be less than US $[**] nor greater than US $900 million, regardless of the actual annual Net Sales in the Territory of Approved Alemtuzumab MS in calendar year 2020.  Upon paying the Milestone Buyout Payment, Genzyme’s obligation to make any Alemtuzumab MS Milestone Payments under Section 4.2.2 will terminate.

4.3.          Payment Provisions.

4.3.1             Royalty Payment Reports and Payments.  For as long as Genzyme is obligated to make Oncology Product Royalty Payments pursuant to Section 4.1.5 or Alemtuzumab MS Royalty Payments pursuant to Section 4.2.1 (collectively, the “Royalty Payments”), within [**] days after the last day of each calendar quarter, Genzyme will deliver to Bayer a report of Net Sales of each respective Licensed Product by Genzyme, its Affiliates and Sublicensees during the preceding quarterly period (any such period, a “Payment Period”), with all Royalty Payments, if any, due for the Payment Period covered by such report being due no later than [**] days after the last day of such Payment Period.  Such reports shall be Genzyme’s Confidential Information and subject to Bayer’s non-disclosure and non-use obligations under Section 8.8.3.

4.3.2             Payment Method.

(a)   Royalty Payments under this Agreement will be made by Genzyme or its Affiliates in (i) U.S. Dollars for the portion of such Royalty Payment attributable to Net Sales invoiced by Genzyme or its Affiliates in a currency other than Euros and (ii) Euros for the portion of such Royalty Payment attributable to Net Sales invoiced by Genzyme or its Affiliates in Euros, by wire transfer to a bank account designated by Bayer.

(b)   Milestone Payments under this Agreement will be made by Genzyme or its Affiliates in (i) U.S. Dollars for the portion of the applicable milestone threshold attributable to Net Sales invoiced by Genzyme or its Affiliates in a currency other than Euros and (ii) Euros for the portion of the applicable milestone threshold attributable to Net Sales invoiced by Genzyme or its Affiliates in Euros, by wire transfer to a bank account designated by Bayer.

(c)   The Milestone Buyout Payment, if any, will be made by Genzyme or its Affiliates in (i) U.S. Dollars for the portion of the underlying Net Sales that are invoiced by Genzyme or its Affiliates in a currency other than Euros and (ii) Euros for the portion of the underlying Net Sales that are invoiced by Genzyme or its Affiliates in Euros, by wire transfer to a bank account designated by Bayer.

(d)   The payment for Transferred Inventory set forth in Section 4.1.2 will be made by Genzyme or its Affiliates in (i) U.S. Dollars for Leukine and Fludara

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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Inventory, wherever it is located, and for Campath Inventory located in the United States and (ii) Euros for Campath Inventory located outside of the United States, by wire transfer to a bank account designated by Bayer.

4.3.3             Exchange Rate.  Net Sales calculated under this Agreement will be computed for each calendar quarter with Net Sales invoiced in a currency other than Euro or U.S. Dollars converted into U.S. Dollars in accordance with GAAP, using the average of the relevant exchange rates for each month of such quarter based on the rates published by Bloomberg for such month.  In the event that Bloomberg does not publish an exchange rate for the conversion of any given currency into U.S. Dollars or Euros for any given month or longer period, or if Bloomberg ceases to publish such rate, then the rates published by the European Central Bank on its web site (▇▇▇▇://▇▇▇.▇▇▇.▇▇▇) shall be used for the purposes of calculating rates for the currency conversion.  For purposes of calculating (a) the U.S. Dollar-based payment limitations and thresholds for Royalty Payments, (b) the U.S. Dollar-based milestone thresholds and limitations and (c) the U.S. Dollar-based amount of the Milestone Buyout Payment, Net Sales invoiced in Euro will be converted into U.S. Dollars in the same manner as described for non-Euro currencies in the first sentence of this Section 4.3.3.  With each quarterly Royalty Payment, Genzyme will provide to Bayer a report detailing, with respect to the applicable quarter, the contribution of Net Sales invoiced (x) during such quarter and (y) during such quarter and all previous quarters to the Net Sales thresholds for determination of when Milestone Payments are payable pursuant to Sections 4.1.6, 4.2.2 or 4.2.3 and for determination of when royalties will no longer be payable pursuant to Section 4.1.5 or 4.2.1, in each case converted into U.S. Dollars in accordance with this Agreement.  The computation and determination of U.S. Dollar based payment limitations and thresholds, Milestone Payments, if any, and the Milestone Buyout Payment, if any, will be based on the exchange rates used in such reports and not at those of the day of payment.

4.3.4             Withholdings.  Any income Tax or other Tax which Genzyme is required by applicable Legal Requirements to withhold or pay to a Governmental Authority with respect to monies payable under this Agreement will be deducted from the amount of such payments and paid to the relevant Governmental Authority.  Any amounts actually deducted, withheld or paid pursuant to the foregoing sentence will be treated for all purposes of this Agreement as paid to the Person in respect of which such withholding, deduction or payment was made.  If Genzyme or any of its Affiliates is required to make any such payment, deduction or withholding, Genzyme will notify Bayer of such requirement thirty (30) days prior to the first time any particular type of payment requires such payment, deduction or withholding, and thereafter with respect to each subsequent payment of that type, indicate the details of the payment, deduction or withholding in its report to Bayer accompanying the payment with respect to which such payment, deduction or withholding has been made.  Upon written request from Bayer, Genzyme will promptly provide (or cause to be provided) to Bayer a certificate or other documentary evidence establishing the payment to the relevant Governmental Authority of any amount withheld or deducted by Genzyme or its Affiliates.  No deduction shall be made or a reduced amount shall be deducted if Genzyme or its paying Affiliate is timely

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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furnished with the necessary documents prescribed by applicable Legal Requirement in a form reasonably satisfactory to Genzyme identifying that the payment is exempt from Tax or subject to a reduced Tax rate.  Genzyme (and its Affiliates) and Bayer will reasonably cooperate in completing and filing documents required under the provisions of any applicable Tax treaty or under any other applicable Legal Requirement, in order to enable Genzyme to make such payments to Bayer without any deduction or withholding, or any reduced deduction or withholding, if possible.

4.3.5             VAT.

(a)   All agreed remunerations are considered to be net of value added tax (“VAT”).  Subject to the provisions of this Section 4.3.5, VAT applies additionally as legally owed, payable after receipt of a correct invoice, which meets all requirements according to the applicable VAT Legal Requirements.  If any documents or information are required to invoice the delivery of goods or services exempt from VAT and these documents or information can only be provided by Genzyme, Genzyme shall promptly provide these documents or information referring to provisions of the applicable law.  If any of these documents or information are not provided duly or are incomplete Bayer shall invoice plus VAT if required and owed by applicable VAT-law.  For the avoidance of doubt, Bayer and Genzyme’s current understanding of the Legal Requirements is that VAT does not apply under current Legal Requirements to transfers to Genzyme or a Luxembourg Affiliate of Genzyme (including a Swiss branch of a Luxembourg Affiliate) in connection with the Contemplated Transactions.

(b)   If permitted locally, at the request of Genzyme, Bayer and Genzyme shall take all reasonable steps to ensure that the transfer of the Acquired Assets shall be subject to specific local VAT legislation which permits not effectively taxing such transfers with VAT.  In that event, Bayer and Genzyme agree to cooperate as much as possible to ensure that non-taxation will apply locally.

(c)   In the event Section 4.3.5(b) is not applicable, Bayer and Genzyme agree to cooperate in finding and implementing acceptable solutions for both parties that mitigate or eliminate the burdens that are caused by charging VAT amounts, including cash flow losses, irrecoverable amounts of local VAT, interest and other financing costs, administrative costs and compliance costs.  Such solutions will extend to, but are not limited to, causing the Acquired Assets to be physically shipped to a different location.

4.4.          Records; Audit.  Genzyme will, and will cause its Affiliates to, keep and maintain for [**] years after the relevant calendar quarter complete and accurate books and records in sufficient detail so that Net Sales and payments made hereunder can be properly calculated.  No more frequently than once during each calendar year during the Term and once during the [**] year period thereafter, Genzyme will permit Bayer’s auditors from Ernst & Young, KPMG, Deloitte, PricewaterhouseCoopers or any other auditing firm to which Genzyme has

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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no reasonable objection, and with at least [**] days advance notice at any time during normal business hours, accompanied at all times, to inspect, audit and copy reasonable amounts of relevant accounts and records of Genzyme and its Affiliates and reports submitted to Genzyme and its Affiliates from Sublicensees, for the sole purpose of verifying the accuracy of the calculation of payments to Bayer pursuant to this Section 4.  The accounts, records and reports related to any particular period of time may only be audited one time under this Section 4.4.  Bayer will cause its auditors not to provide Bayer with any copies of such accounts, records or reports and not to disclose to Bayer any information other than information relating solely to the accuracy of the accounting and payments made by Genzyme pursuant to this Section 4.  Bayer will cause its auditors to promptly provide a copy of their report to Genzyme.  If such audit determines that payments are due to Bayer, Genzyme will pay to Bayer any such additional amounts within [**] days after the date on which such auditor’s written report is delivered to Genzyme and Bayer, unless such audit report is disputed by Genzyme, in which case the dispute will be resolved in accordance with Section 15.10.  If such audit determines that Genzyme has overpaid any amounts to Bayer, Bayer will refund any such overpaid amounts to Genzyme within [**] days after the date on which such auditor’s written report is delivered to Genzyme and Bayer.  Any such inspection of records will be at Bayer’s expense unless such audit discloses a deficiency in the payments made by Genzyme (whether for itself or on behalf of its Affiliates) of more than [**] of the aggregate amount payable for the relevant period, in which case Genzyme will bear the cost of such audit.  Each of the parties agrees that all information subject to review under this Section 4.4 is Genzyme’s Confidential Information that is subject to Bayer’s confidentiality and non-use obligations under Section 8.8.3, and Bayer agrees that it will cause its accounting firm to also retain all such information subject to the non-disclosure and non-use restrictions of Section 8.8.3 or similar (but no less stringent) obligations of confidentiality and non-use customary in the accounting industry.

5.          CLOSING

5.1.          The Closing.  The licenses granted in Section 2.1.1 will take effect, and the purchase and sale of the Acquired Assets and the assumption of the Assumed Liabilities (the “Closing”) will take place, at the offices of Fulbright & ▇▇▇▇▇▇▇▇ L.L.P. in Washington, D.C., within five (5) Business Days following the satisfaction or waiver of the conditions set forth in Sections 10 and 11 that may be satisfied or waived prior to Closing, or at such other place and on such other date as Genzyme and Bayer may agree in writing, in each case, subject to the satisfaction or waiver of the conditions set forth in Sections 10 and 11.  Except as otherwise provided in Section 12, the failure to consummate the purchase and sale provided for in this Agreement on the date and time and at the place specified herein will not relieve any party to this Agreement of any obligation under this Agreement.  For all purposes, the Closing shall be effective as of 11:59 pm on the Closing Date.

5.2.          Closing Deliveries.  The parties will take the actions set forth in this Section 5.2 at the Closing, in each case subject to satisfaction or waiver of the conditions set forth in Sections 10 and 11.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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(a)   Genzyme will deliver to Bayer the consideration described in Section 4.1.2 by wire transfer of immediately available federal funds to the account designated in writing to Genzyme, which account Bayer will designate not fewer than five (5) Business Days prior to the scheduled Closing Date.

(b)   Bayer will, and will cause its Affiliates who own or Control Acquired Assets to, execute one or more bills of sale, in a form reasonably acceptable to Genzyme, with respect to all tangible personal property included in the Acquired Assets.

(c)   Bayer will, and will cause its Affiliates who own or Control Acquired Assets to, execute one or more domain name assignments in substantially the form attached hereto as Exhibit 5.2(c) (collectively, the “Domain Name Assignment Documentation”).

(d)   Bayer will, and will cause its Affiliates to, execute one or more assignments to contribute the Business Specific Licensed IP and assign the Distribution and Development Agreement into the NewCo(s).

(e)   Genzyme and Bayer will execute and deliver letters to the FDA with regard to transferring any Transferred Permit granted or administered by the FDA.

(f)   Bayer will, and will cause its Affiliates who own or Control Acquired Assets to, and Genzyme will, execute a U.S. instrument of assignment and assumption in form and substance reasonably acceptable to the parties with respect to the Assumed Liabilities, Transferred Contracts, Transferred Permits, and other Acquired Assets that are not tangible personal property to be transferred under U.S. Legal Requirements, a German instrument of assignment and assumption in form and substance reasonably acceptable to the parties with respect to the Assumed Liabilities, Transferred Contracts, Transferred Permits, and other Acquired Assets that are not tangible personal property to be transferred under German Legal Requirements, and such other instruments as will be reasonably requested by Genzyme to vest in Genzyme title in and to the other Acquired Assets, in accordance with the provisions hereof.

(g)   Genzyme and Bayer will, or will cause their respective Affiliates to, as appropriate, execute and deliver to each other the following:

(i)          the Distribution and Development Agreement in substantially the form attached hereto as Exhibit 5.2(g)(i) (the “Distribution and Development Agreement”);

(ii)         the Purchase and Sale Agreement in substantially the form attached hereto as Exhibit 5.2(g)(ii) (the “Purchase and Sale Agreement”);

(iii)        the Fludara Commercial Supply Agreement in substantially the

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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form attached hereto as Exhibit 5.2(g)(iii) (the “Fludara Supply Agreement”);

(iv)       the Leukine Manufacturing Tolling Agreement in substantially the form attached hereto as Exhibit 5.2(g)(iv) (the “Leukine Tolling Agreement”);

(v)        the Transition Services Agreement in substantially the form attached hereto as Exhibit 5.2(g)(v) (the “Transition Services Agreement”);

(vi)       the Pharmacovigilance Agreement in a form to be mutually agreed by the Parties (the “Pharmacovigilance Agreement”);

(vii)      the Marketing Authorization Agency Agreement in a form to be mutually agreed by the Parties (the “Marketing Authorization Agency Agreement”);

(viii)     the Quality Assurance Agreement in a form to be mutually agreed by the Parties (the “Quality Assurance Agreement”); and

(ix)       one or more agreements as to each NewCo to be mutually agreed by the parties and substantially in accordance with the terms attached hereto at Schedule 8.23 (“NewCo Agreements”).

(h)   The parties will deliver the various certificates, instruments and documents required of each of them under Sections 10 and 11.

5.3.         Conveyance of Acquired Assets.  Bayer and Genzyme will negotiate in good faith prior to Closing and will establish a delivery schedule for the transfer and conveyance of the Acquired Assets to Genzyme on and after the Closing Date in light of their present condition and location and the operational needs of the Bayer Business and the most efficient method of transferring. Bayer will deliver the Acquired Assets as required by such schedule.

6.          REPRESENTATIONS AND WARRANTIES OF BAYER.

In order to induce Genzyme to enter into and perform this Agreement and to consummate the Contemplated Transactions, Bayer hereby represents and warrants to Genzyme, as of the date hereof and as of the Closing Date, as follows:

6.1.         Organization.  Bayer and any of its Affiliates that will be a party to any Ancillary Agreement is (a) duly organized, validly existing and to the extent such concept is applicable in a jurisdiction, is in good standing under the laws of the jurisdiction of its organization and (b) is duly qualified to do business and to the extent such concept is applicable in a jurisdiction, in good standing in each jurisdiction where the nature of the activities conducted by it or the character of the property owned by it make such qualification necessary, except for those jurisdictions where the failure to be so qualified does not constitute a Material Adverse Effect.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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6.2.         Power and Authorization.  The execution, delivery and performance by Bayer and its Affiliates of this Agreement and each Ancillary Agreement to which Bayer or such Affiliate is (or will be) a party and the consummation of the Contemplated Transactions are within the power and authority of Bayer and any such Affiliate and have been duly authorized by all necessary corporate, limited liability company or other applicable entity action on the part of Bayer and any such Affiliate.  This Agreement and each Ancillary Agreement to which Bayer or any of its Affiliates is (or will be) a party (a) has been (or, in the case of Ancillary Agreements to be entered into at, prior to or after the Closing, will be) duly executed and delivered by Bayer or any such Affiliate and (b) assuming the due execution and delivery by Genzyme is (or, in the case of Ancillary Agreements to be entered into at or prior to the Closing, will be) a legal, valid and binding obligation of Bayer and any such Affiliate, enforceable against Bayer and such Affiliates, as applicable, in accordance with its terms, except as that enforceability may be (i) limited by any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and (ii) subject to general principles of equity (regardless of whether that enforceability is considered in a proceeding in equity or at law).  Each of Bayer and any of its Affiliates that will be a party to any Ancillary Agreement has the full power and authority necessary to own and use its assets related to the Bayer Business and carry its relevant portion of the Bayer Business.

6.3.         Authorization of Governmental Authorities.  Except as disclosed on Schedule 6.3, and ignoring for this purpose the Permits and Section 3.2, no action by (including any authorization, consent or approval), or in respect of, or filing with, any Governmental Authority in any Material Country is required for, or in connection with (a) the authorization, execution, delivery and performance by Bayer or any of its Affiliates of this Agreement and each Ancillary Agreement to which Bayer or any of its Affiliates is (or will be) a party or (b) the consummation of the Contemplated Transactions by Bayer or any of its Affiliates.

6.4.         Noncontravention.  Except as disclosed on Schedule 6.4, and ignoring for this purpose Section 3.2, neither the execution, delivery and performance by Bayer or any of its Affiliates of this Agreement or any Ancillary Agreement to which it is (or will be) a party nor the consummation of the Contemplated Transactions will:

(a)        assuming the taking of any action by (including any authorization, consent or approval), or in respect of, or any filing with, any Governmental Authority, in each case, with respect to Permits or as disclosed on Schedule 6.3, violate any Legal Requirement applicable to Bayer or any of its Affiliates in any Material Country;

(b)        result in a breach or violation of, or default under, any Contractual Obligation of Bayer or any of its Affiliates;

(c)        require any action by (including any authorization, consent or approval) or in respect of (including notice to) any Person under any Contractual Obligation of Bayer or any of its Affiliates;

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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(d)        result in the creation or imposition of a material Encumbrance upon, or the forfeiture of, any Acquired Asset, any Business-Specific Licensed IP or Shared Licensed IP (with regard to the Shared Licensed IP, to the extent it would affect Genzyme’s rights to such Shared Licensed IP under this Agreement); or

(e)        result in a breach or violation of, or default under, the Organizational Documents of Bayer or any of its Affiliates.

6.5.         Financial Information.  The financial information disclosed on Schedule 6.5 (a) is complete and correct in all material respects and was derived from the books and records of the Business, (b) has been prepared in a manner designed to reflect International Financial Reporting Standards, consistently applied, using good faith allocations of overhead and other expense items applicable to both the indicated Licensed Product and products other than the indicated Licensed Product where applicable, and (c) fairly presents, in all material respects, the results of operations of the Licensed Products as a whole for the indicated periods.

6.6.         Inventory.  Schedule 6.6 sets forth the level of shipments of Licensed Products in each of the last two (2) calendar quarters of 2008 and 2007.  The Transferred Inventory is usable and saleable as of the Closing Date in the Ordinary Course of Business.

6.7.         Absence of Certain Developments.

6.7.1            Since September 30, 2008 (except as otherwise noted in subsection (g)), the Bayer Business has been conducted in the Ordinary Course of Business and, except for the matters disclosed on Schedule 6.7.1:

(a)   there has been no material loss, destruction, damage or eminent domain taking (in each case, whether or not insured) affecting the Bayer Business or any Acquired Asset (or any asset that would have been an Acquired Asset if not previously lost, destroyed, damaged or taken) or any material transfer of Acquired Assets, Business-Specific Licensed IP, Shared Licensed IP (with regard to the Shared Licensed IP, to the extent such material transfer by Bayer or any of its Affiliates of Bayer would affect Genzyme’s rights to such Shared Licensed IP under this Agreement), or assets or Intellectual Property or right that would have been an Acquired Asset or Business-Specific Licensed IP if not previously transferred, other than sales of Inventory in the Ordinary Course of Business;

(b)   neither Bayer nor any of its Affiliates has materially increased the Compensation payable or paid or altered the timing or methods of such payments, whether conditionally or otherwise, to any Business Employee other than in the Ordinary Course of Business;

(c)   neither Bayer nor any of its Affiliates has entered into, amended, terminated or otherwise modified any Transferred Contract required to be disclosed on Schedule 6.15(a) (or any Contractual Obligation that would have qualified as such had it not been previously terminated);

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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(d)   neither Bayer nor any of its Affiliates has made, changed or revoked any material Tax election with respect to the Bayer Business, elected or changed any method of accounting for Tax purposes with respect to the Bayer Business, settled any Action in respect of Taxes with respect to the Bayer Business or entered into any Contractual Obligation in respect of Taxes with respect to the Bayer Business;

(e)   neither Bayer nor any of its Affiliates has, with respect to the Bayer Business, terminated or closed any material facility;

(f)   neither Bayer nor any of its Affiliates has entered into any Contractual Obligation to do any of the things referred to elsewhere in this Section 6.7;

(g)   Neither Bayer nor any of its Affiliates has, since December 1, 2008, terminated, reduced the Compensation of or otherwise engaged in a course of conduct with respect to Business Employees, in each case to such an extent or in such a manner that has had or would reasonably be expected to have a Material Adverse Effect; and

(h)   no event or circumstance has occurred which constitutes a Material Adverse Effect.

6.7.2            Schedule 6.7.2 sets forth:

(a)   The advertising and promotion spending for the Licensed Products (i) for the twelve month period ending December 31, 2007, (ii) for the six (6) month period ending June 30, 2008, and (iii) for the twelve (12) month period ending December 31, 2008; and

(b)   The number of sales or field personnel (FTE) assigned to the Licensed Products as of December 31, 2007, June 30, 2008 and December 31, 2008 (i) in the United States, and (ii) the Major Market Countries.

6.8.         Assets.  Bayer and any of its Affiliates which holds Acquired Assets has good and marketable title to, or, in the case of property held under a lease, license or other Contractual Obligation, an Enforceable leasehold interest in, or right to use, all of the Acquired Assets.  Except as disclosed on Schedule 6.8, none of the Acquired Assets is subject to any Encumbrance which is not a Permitted Encumbrance.

6.9.         Real Property.  There is no real property or leasehold interest in real property included in the Acquired Assets.

6.10.       Intellectual Property.

6.10.1          Business Domain Names.  Schedule 6.10.1 identifies as of the Execution Date and will be updated to identify as of the Closing Date (a) all Business Domain Names (b) any pending application for a Business Domain Name and (c) any Contractual

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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Obligation relating to any Business Domain Name.  For each such Business Domain Name or application therefor, Schedule 6.10.1 sets forth the registrant, registrar and administrative contact names for the registrant and registrar, the expiration date, and whether the domain is active.  True, accurate and complete copies of all such registrations and applications, in each case, as amended, or otherwise modified and in effect, have been made available to Genzyme.

6.10.2          Licensed IP.

(a)        Part A of Schedule 6.10.2 identifies as of the Execution Date and will be updated to identify as of the Closing Date a complete and accurate list of (i) all registered Business-Specific Licensed Copyrights, registered Business-Specific Licensed Trademarks and issued Business-Specific Licensed Patents, (ii) each pending application with respect to any Business-Specific Licensed IP specified in (i) above, (iii) each Out-License Agreement pertaining to the Business-Specific Licensed IP and each item of Business-Specific Licensed Copyrights, Business-Specific Licensed Trademarks and Business-Specific Licensed Patents thereto, and (iv) each In-License Agreement pertaining to the Business-Specific Licensed IP and each item of Business-Specific Licensed Copyrights, Business-Specific Licensed Trademarks and Business-Specific Licensed Patents subject thereto.  True, accurate and complete copies of all such registrations, issuances, applications, Out-License Agreements and In-License Agreements, in each case, as amended, or otherwise modified and in effect, have been made available to Genzyme.

(b)        Part B of Schedule 6.10.2 identifies as of the Execution Date and will be updated to identify as of the Closing Date (A) a complete and accurate list of (i) all registered Shared Licensed Copyrights and issued Shared Licensed Patents, (ii) each pending application with respect to any Shared Licensed Copyrights and Shared Licensed Patents specified in (i) above, (iii) each Out-License Agreement pertaining to the Shared Licensed Copyrights and Shared Licensed Patents and each item of Shared Licensed Copyrights and Shared Licensed Patents subject thereto, and (iv) each In-License Agreement pertaining to the Shared Licensed Copyrights and Shared Licensed Patents and each item of Shared Licensed Copyrights and Shared Licensed Patents subject thereto and (B) representative samples of the (i) Shared Licensed Trademarks and (i) Shared Licensed Trade Dress.  True, accurate and complete copies of all such registrations, issuances, applications, Out-License Agreements and In-License Agreements, in each case, as amended, or otherwise modified and in effect, have been made available to Genzyme.

(c)        For each issued or filed Licensed Patent, Schedule 6.10.2 sets forth as of the Execution Date and will be updated to set forth as of the Closing Date, the country, title, patent number (if issued), application number, filing date, issue date, inventors, and any continuity relationship (such as continuation, continuation-in-part, divisional) with respect to any other Patent Right.  For each registered Shared Licensed Trademark, Schedule 6.10.2 sets forth as of the Execution Date and will be updated to set forth as of

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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the Closing Date, a representative sample of the ▇▇▇▇, and for each registered Business-Specific Licensed Trademark, Schedule 6.10.2 sets forth the ▇▇▇▇, country of registration, registration number (if issued), application number, filing date, issue date, and the description of goods or services covered.  For each registered Licensed Copyright, Schedule 6.10.2 sets forth as of the Execution Date and will be updated to set forth as of the Closing Date, the title of the work of authorship, the country, and the registration number and registration date if registered or the application date if filed but unregistered.  For the Shared Licensed Trade Dress, Schedule 6.10.2 sets forth a representative sample of this trade dress.

6.10.3          Third Party Agreements.  Other than the Third Party Agreements identified on Schedule 6.10.1 and Schedule 6.10.2, as of the Execution Date and as updated as of the Closing Date, there are no options, licenses, agreements, or covenants of any kind relating to the Business-Specific Licensed IP or Business Domain Names.  Except as provided in an Out-License Agreement identified on Schedule 6.10.2, as of the Execution Date and as updated as of the Closing Date, neither Bayer nor its Affiliates are obligated to indemnify any Person against a charge of infringement of Intellectual Property with respect to the Licensed Products.  Each Third Party Agreement and its amendments (i) assuming any such Third Party Agreement and any amendments thereto are Enforceable against the third party or parties that are party to such Third Party Agreement, constitutes an Enforceable Contractual Obligation of Bayer or its Affiliates party thereto, and is in full force and effect, and subject to Schedules 6.3 and 6.4, will continue to be in full force and effect on identical terms immediately following the Closing and (ii) represents the complete agreement and understanding between Bayer or its Affiliates and the other respective party or parties thereto relating to the Intellectual Property that is the subject of such Contractual Obligation.  Bayer or its Affiliate has performed in all material respects all of its obligations under each of the Third Party Agreements and Bayer or its Affiliates are not (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect under any Third Party Agreement and, to Bayer’s Knowledge, no other party to any such Contractual Obligation is (with or without the lapse of time or the giving of notice, or both) in breach or default in any material respect thereunder.  To Bayer’s Knowledge, each Third Party Agreement constitutes an Enforceable Contractual Obligation of the third party or parties that are party thereto.  None of the other parties to the Third Party Agreements has given any written notice to or made a written claim against Bayer or its Affiliates with respect to any breach or default under the Third Party Agreements.  Except for required consents to assign the agreements set forth on Schedules 6.3 and 6.4, the entry into and consummation of the Contemplated Transactions will not give the counterparty to any Third Party Agreement the right to terminate such Third Party Agreement and will not give rise to any other right of such counterparty with respect to the Business-Specific Licensed IP or Business Domain Names.  Complete and correct copies of the Third Party Agreements (including all amendments, supplements and waivers thereto) have been delivered to Genzyme.

6.10.4          Title.  Except as specified on Schedule 6.10.1 or Schedule 6.10.2, Bayer or its Affiliate identified on Schedule 6.10.1 or Schedule 6.10.2, as applicable, owns and

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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possesses all rights, title, and interests in and to (a) the Business Domain Names and (b) the Business-Specific Licensed IP, without Encumbrances other than Permitted Encumbrances, except to the extent the Business-Specific Licensed IP identified on Schedule 6.10.2 is subject to an In-License Agreement as indicated on Schedule 6.10.2.  Except as specified on Schedule 6.10.2, Bayer or its Affiliate identified on Schedule 6.10.2, as applicable, possesses all rights, title and interests in the Shared Licensed IP necessary for Bayer and its Affiliates to grant Genzyme the licenses granted in Section 2.1.1 under the Shared Licensed IP.  The license to Genzyme in Section 2.1.1 does not violate in any material respect the terms of any Third Party Agreement or any other agreement Bayer or any of its Affiliates has with a third party.  Bayer Controls all Know-How developed or received by Bayer or any of its Affiliates from a third party that is used in the Bayer Business and has sufficient legal and/or beneficial title and rights to grant the license set forth in Section 2.1.1 to Genzyme under such Know-How and the grant of such license does not violate in any material respect any agreements Bayer or any of its Affiliates has with any third party.

6.10.5          Validity and Enforceability.  Except as specified on Schedules 6.7.1 and 6.10.5, to Bayer’s Knowledge, the registered or issued Business-Specific Licensed IP is subsisting, valid and enforceable (or, in the case of applications for Patent Rights, are pending).

6.10.6          Orders.  Except as specified on Schedules 6.10.6 and 6.10.10, no Licensed IP owned by Bayer or its Affiliates is subject to any outstanding Governmental Order, and no Action is pending or, to Bayer’s Knowledge, threatened, that challenges the legality, validity, Enforceable nature of, use or ownership of such Licensed IP.  In addition, to Bayer’s Knowledge, no Licensed IP licensed to Bayer or its Affiliates is subject to any outstanding Governmental Order, and no Action is pending or threatened, that challenges the legality, validity, Enforceable nature of, use or ownership of such Licensed IP and there is no outstanding Governmental Order that restricts Bayer from granting to Genzyme the licenses granted in Section 2.1.1.

6.10.7          Infringement and Misappropriation.  To Bayer’s Knowledge, the conduct of the Bayer Business will not interfere with, infringe upon, misappropriate (or any other terms in jurisdictions other than the United States that have similar meaning) any Intellectual Property rights of third parties.  Except as set forth on Schedule 6.10.7A neither Bayer nor any of its Affiliates has received any charge, complaint, claim, demand, notice mentioning a third party Patent Right or notice alleging any such interference, infringement or misappropriation (or any other terms in jurisdictions other than the United States that have similar meaning) (including any claim that Bayer or its Affiliate must license or refrain from using any Intellectual Property of any third party in connection with the conduct of the Bayer Business).  Except as set forth on Schedule 6.10.7B, to Bayer’s Knowledge, no third party is infringing upon or misappropriated any Business-Specific Licensed IP or Business Domain Name.

6.10.8          Royalties.  Except as disclosed on Schedule 6.10.8, there are no contracts

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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which require the payment of royalties by Bayer or its Affiliates with respect to the sales of Licensed Products.  For each contract disclosed on Schedule 6.10.8, Schedule 6.10.8 sets forth the date on which such royalty was first paid and the royalty rate being paid by Bayer as of the Execution Date.

6.10.9          Employees and Consultants.  Except as disclosed on Schedule 6.10.9 and except to the extent Licensed Products include Genzyme Improvements, all current and former employees, agents and consultants of Bayer or its Affiliates who have made material contributions to the development of the Licensed Products or who have had access in any material respect to Bayer’s confidential and proprietary information with respect to the Licensed Products or the Bayer Business, have entered into Enforceable Contractual Obligations with Bayer or its Affiliate whereby (a) Bayer or its Affiliate is entitled to all ownership rights (except to the extent prevented by applicable Legal Requirements related to employees’ rights in and to their own inventions made in the course of their employment) in any Intellectual Property relating to the Bayer Business, that the employee, agent, or consultant may have invented, discovered, originated, made, or conceived while working for Bayer or its Affiliates, and all such ownership rights are duly assigned to Bayer or its Affiliate, and (b) the employee, agent, or consultant agrees, subject to applicable Legal Requirements, to hold and maintain in confidence all confidential and proprietary information of Bayer or its Affiliate (“Invention and Confidentiality Agreements”).  Bayer’s and its Affiliates’ general practice has been to require all employees, agents and consultants who contributed to the development of Licensed Products, except to the extent Licensed Products include Genzyme Improvements, or who have had access to Bayer’s or its Affiliates’ confidential and proprietary information with respect to the Licensed Product to enter into Invention and Confidentiality Agreements.  Schedule 6.10.9 identifies each Business-Specific Licensed Patent which names at least one inventor covered by the German Employee’s Invention Act (“GEIA”) who has not waived his or her rights according to Articles 14 and 16 of the GEIA.  In each such Business-Specific Licensed Patent where Bayer decided to pursue a patent application and/or patent, Bayer has (x) properly claimed the underlying invention in such patent application or patent in compliance with Article 6(1) of the GEIA or (y) entered into a contract with such inventor wherein the rights to the invention are transferred to Bayer.  In each such scheduled Business-Specific Licensed Patent where Bayer has decided not to pursue or to abandon a patent or patent application in any country, Bayer has properly informed any inventor who has not waived his right according to Article 14(2) GEIA in accordance with Article 14(2) of the GEIA.  No such informed inventor has notified Bayer that he or she intends to pursue his or her rights in such invention.

6.10.10       Litigation.  Except as specified on Schedule 6.10.10, to Bayer’s Knowledge, no Actions concerning the Licensed IP or Business Domain Names are currently pending or are, to Bayer’s Knowledge, threatened, that if determined adversely to Bayer would have a Material Adverse Effect on the Contemplated Transactions or would impair in any material respect Genzyme’s rights under the license granted in Section 2.1.1.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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6.10.11       Completeness.  The In-License Agreements that by their terms may be sublicensed (and therefore will be sublicensed) to Genzyme at Closing pursuant to this Agreement are listed in Schedule 6.10.11A.  The In-License Agreements that by their terms may not be sublicensed to Genzyme pursuant to this Agreement without the consent of the licensor are listed in Schedule 6.10.11B.  To Bayer’s knowledge, other than the (a) Intellectual Property licensed pursuant to the In-License Agreements listed on Schedule 6.10.11B, (b) the Business-Specific Licensed IP and (c) the Business Domain Names, there is no other Intellectual Property that is exclusively related to the Licensed Product and is used exclusively in, had been used exclusively in and is currently exclusive to, or was developed exclusively for and is currently exclusive to the Bayer Business.  To Bayer’s knowledge, other than the Intellectual Property (a) in the In-License Agreements listed in Schedule 6.10.11B and (b) the Shared Licensed IP (other than the Business-Specific Licensed IP and the Business Domain Names) there is no other Intellectual Property that relates to the Licensed Products that has been used in or developed with the identified intent that it would be useful in the Bayer Business.

6.11.       Legal Compliance; Permits; Regulatory Matters.

6.11.1          Compliance.  Subject to the qualifications set forth in Sections 6.11.2 and 6.11.3, neither Bayer nor any of its Affiliates, in each case with respect to the Bayer Business, has since January 1, 2008, been in material breach or violation of, or material default under (a) its Organizational Documents or (b) any material Legal Requirement.

6.11.2          Permits.  Except as set forth on Schedule 6.11.2, to Bayer’s knowledge, Bayer and each Affiliate which conducts a portion of the Bayer Business has been duly granted in the Major Market Countries and Other Key Countries, and to Bayer’s Knowledge, in all other countries, all material Permits under all Legal Requirements necessary for the conduct of the Bayer Business.  Schedule 6.11.2 lists as of the Execution Date and shall be updated to list as of the Closing Date each material Permit and pending application therefor used (or intended for use in, in the case of pending applications) in the Bayer Business, including all Permits pursuant to which Bayer or any of its Affiliates is authorized or licensed to manufacture, market or sell a Licensed Product.  Except as disclosed on Schedule 6.11.2, with respect to the Major Market Countries and Other Key Countries, and to Bayer’s Knowledge, all other countries, (a) such Permits are valid and in full force and effect, (b) neither Bayer nor any of its Affiliates is in material breach or violation of, or material default under, any such Permit, (c) Bayer and each Affiliate has filed all material reports, notifications and filings with, and has paid all regulatory fees to, the applicable Governmental Authority necessary to maintain all of such Permits in full force and effect, and (d) since January 1, 2008, neither Bayer nor any of its Affiliates has received written notice to the effect that a Governmental Authority was or is considering the withdrawal, suspension, termination, revocation or cancellation of any such Permit.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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6.11.3           Regulatory and Related Matters.

(a)   Except as disclosed on Schedule 6.11.3, and except with respect to claims made in promotional or advertising materials that have been either withdrawn or are no longer used and for which Genzyme and its Affiliates will not be responsible, neither Bayer nor any of its Affiliates has, since January 1, 2008 and with respect to the Bayer Business, in the Major Market Countries and Other Key Countries, and to Bayer’s Knowledge, in all other countries, received any (i) written notice from the FDA or any other Governmental Authority, including the Office of Inspector General, any United States Attorney, the Department of Justice or any attorney general of any jurisdiction, alleging any violation of any Drug Law, The False Claims Act (31 U.S.C. § 3729—3733) or false claims acts under state Legal Requirements, commencing or indicating an intention to conduct an investigation, audit, or review; (ii) notice of inspectional observation (including those recorded on form FDA 483), establishment inspection report, warning letter, penalty, fine, sanction, request for recall or other remedial action; or (iii) other written documents issued by the FDA or any other Governmental Authority alleging lack of compliance with any Drug Law by Bayer, any of its Affiliates, or Persons who are otherwise performing services for the benefit of Bayer or any of its Affiliates.

(b)   Bayer has, with respect to the Bayer Business, delivered or made available to Genzyme all material correspondence and meeting minutes received from or sent to the FDA and any other similar foreign Governmental Authorities in Major Market Countries and Other Key Countries since January 1, 2008, with respect to the Bayer Business, including any and all notices of inspectional observations, establishment inspection reports and any other material documents received by Bayer or any of its Affiliates since January 1, 2008 from the FDA or similar foreign Governmental Authorities which relate to Bayer’s compliance in any material respect with regulatory requirements of the FDA or similar foreign Governmental Authorities.

(c)   Except with respect to claims made in promotional or advertising materials or statements made by sales representatives to physicians or other customers, that have been either withdrawn, resolved or are no longer used, and for which Genzyme and its Affiliates will not be responsible, neither Bayer nor any of its Affiliates, nor to Bayer’s Knowledge, agent of Bayer or its Affiliates, has, with respect to the Bayer Business, made an untrue statement of a material fact or fraudulent statement to the FDA or any other Governmental Authority or to any physician or customer, failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Authority or to any physician or customer, or committed any material act, made any material statement, or failed to make any material statement, that would reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Fact, Bribery, and Illegal Gratuities”, set forth in FDA’s Compliance Policy Guide Sec. 120.100 (CPG 7150.09). Neither Bayer nor any of its Affiliates, nor to Bayer’s Knowledge, any agent, or subcontractor of Bayer or any of its Affiliates has, with

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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respect to the Bayer Business, (i) been convicted of any crime or engaged in any conduct that would reasonably be expected to result in or that has resulted in permanent debarment or disqualification by any Governmental Authority and (ii) any knowledge of facts that would lead to a false claim, or other proceedings or debarment, and to Bayer’s Knowledge there are no proceedings pending or threatened that would result in criminal liability or permanent debarment or disqualification by any Governmental Authority, in each case above, which criminal liability or permanent debarment or disqualification would reasonably be expected to be material to the Bayer Business.  For the avoidance of doubt, the fact that a violation of Drug Laws has been admitted or proved, which violation is related to claims made in promotional or advertising materials or statements made by sales representatives to physicians or other customers, which have been either withdrawn, resolved or are no longer used, will not be considered to be material for the purposes of this Section 6.11.3(c), and will be considered to be material, if at all, only if the said claims will affect Genzyme and/or the conduct of the Business following Closing.

(d)   Neither Bayer nor any of its Affiliates, nor any director, officer, employee or, to Bayer’s Knowledge, agent of Bayer or any of its Affiliates, has, with respect to the Bayer Business, (a) used any funds for contributions, gifts, entertainment or other expenses in violation in any material respect of applicable Legal Requirements, (b) paid any bribe, kickback or other similar payment, directly or indirectly, to any foreign government officials or employees in violation in any material respect of the Foreign Corrupt Practices Act of 1977 or other applicable Legal Requirement, (c) made any other payment of any kind in violation in any material respect of any Legal Requirement, to secure any improper advantage for the Bayer Business, or (d) knowingly incorrectly recorded any transactions in any of the foregoing categories on the books and records of Bayer or any of its Affiliates.

(e)   Bayer and each Affiliate has since January 1, 2008, with respect to the Bayer Business, complied in all material respects with the state marketing code of conduct required by the states of California and Nevada.

(f)    Except as disclosed on Schedule 6.11.3, to Bayer’s Knowledge, as of the Execution Date, no Person has made a filing with (i) a Governmental Authority or (ii) a non-Governmental Authority with authority to issue a Permit to permit the manufacturing, distribution, marketing or sale of a pharmaceutical product seeking approval to manufacture, distribute, market or sell a generic form of Oral Fludara in the Territory.

6.12.        Tax Matters.  Except as set forth on Schedule 6.12:

6.12.1           There are no Encumbrances with respect to Taxes upon any Acquired Asset, the Business-Specific Licensed IP or the Shared Licensed IP (with respect to the

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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Shared Licensed IP, to the extent such Encumbrances affect Genzyme’s rights to such Shared Licensed IP under this Agreement), other than for current Taxes not yet due and payable.

6.12.2           Each of Bayer and its Affiliates has, with respect to the Bayer Business, deducted, withheld and timely paid to the appropriate Governmental Authority all material Taxes required to be deducted, withheld or paid in connection with any amounts paid or owing to any employee, and each of Bayer and its Affiliates has complied in all material respects with all reporting and recordkeeping requirements.

6.12.3           None of the Acquired Assets, the Business-Specific Licensed IP or the Shared Licensed IP (with respect to the Shared Licensed IP, to the extent such Encumbrances affect Genzyme’s rights to such Shared Licensed IP under this Agreement) constitutes a “United States real property interest” within the meaning of Section 897(c) of the Code or the Bayer Affiliate transferring or licensing such Acquired Asset, Business-Specific Licensed IP or Shared Licensed IP is not a “foreign person” within the meaning of Section 1445(a) of the Code.

6.12.4           There are no written proposed reassessments of any of the Acquired Assets, the Business-Specific Licensed IP or the Shared Licensed IP (with respect to the Shared Licensed IP, to the extent such Encumbrances affect Genzyme’s rights to such Shared Licensed IP under this Agreement).

6.13.        Employee Benefit Plans.

6.13.1           Schedule 6.13.1 sets forth a complete and accurate list, as of the Execution Date, of all Employee Benefit Plans maintained, or contributed or required to be contributed to, by Bayer, any of Bayer’s Affiliates or any of their ERISA Affiliates (together, the “Bayer Employee Plans”).  For purposes of this Agreement, the following terms shall have the following meanings:  (i) “Employee Benefit Plan” means any “employee pension benefit plan” (as defined in Section 3(2) of ERISA), any “employee welfare benefit plan” (as defined in Section 3(1) of ERISA), and any other plan, program, arrangement, scheme or agreement involving direct or indirect compensation or fringe benefits, including all types of insurance coverage, severance benefits, sick/disability benefits, automobile benefits, deferred compensation, bonuses, stock options, stock purchase, phantom stock, stock appreciation, profit sharing or other forms of incentive compensation, pension or post-retirement compensation, retiree medical or life insurance, social security, savings plans or schemes, vacation, education, adoption, and all unexpired severance agreements, in each case for the benefit of, or relating to, any Business Employee or dependents or beneficiaries thereof; (ii) “ERISA” means the Employee Retirement Income Security Act of 1974; and (iii) “ERISA Affiliate” means any entity which is a member of (A) a controlled group of corporations (as defined in Section 414(b) of the Code), (B) a group of trades or businesses under common control (as defined in Section 414(c) of the Code) or (C) an affiliated service group (as defined under Section 414(m) of the Code or the regulations under Section 414(o) of the Code),

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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any of which includes or included Bayer.

6.13.2           Bayer has made available to Genzyme (a) a complete and accurate summary of the material terms of each Bayer Employee Benefit Plan, and (b) where applicable, the most recent summary plan description or similar summary and standard terms and conditions referencing any Bayer Employee Plan.

6.13.3           No lien has been imposed on the Acquired Assets pursuant to Section 302 or 4068 of ERISA or Section 412 of the Code, and no fact exists that would reasonably be expected to give rise to any such lien.

6.13.4           All the Bayer Employee Plans that are intended to be qualified under Section 401(a) of the Code have received from the IRS determination or opinion letters (in each case, on which Bayer may rely as to all provisions of the Bayer Employee Plan currently in effect, except with respect to any such provision as to which the remedial amendment period as determined under Section 401(b) of the Code remains open) to the effect that such Bayer Employee Plans are qualified and the plans and trusts related thereto are exempt from federal income taxes under Sections 401(a) and 501(a), respectively, of the Code; and no such determination letter has been revoked and, to Bayer’s Knowledge, no such revocation has been threatened; and no such Bayer Employee Plan has been amended or to Bayer’s Knowledge operated since the date of its most recent determination letter or application therefor in any manner, which, if not corrected, would reasonably be expected to adversely affect its qualification with respect to Hired Employees.

6.13.5           None of Bayer, any of its Affiliates or any of their ERISA Affiliates has incurred any liability under Title IV of ERISA with respect to any of the following plans that would reasonably be expected to become a liability of Genzyme or any Genzyme Affiliate by reason of the consummation of the Contemplated Transactions: (a)  a “defined benefit plan” (as defined in ERISA §3(35)) or any other Employee Benefit Plan which was ever subject to Section 412 of the Code or Title IV of ERISA, (b)  a “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA), (c) a “multiple employer plan” (as defined in Section 413 of the Code), or (d) a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA).

6.13.6           Except as otherwise disclosed on Schedule 6.13.6, none of the Bayer Employee Plans promises or provides retiree medical, life or other retiree welfare benefits to any Person, except as required by applicable Legal Requirements.

6.13.7           Except as otherwise disclosed on Schedule 6.13.7, (a) Business Employees who are offered employment by Genzyme in accordance with Section 8.11 and become Hired Employees and (b) Non-U.S. Business Employees who transfer automatically to Genzyme due to any applicable Legal Requirement, are not and would not be eligible for or entitled to severance or any termination-related benefits under any Bayer Employee Plan.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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6.13.8           With respect to each Bayer Employee Plan, Bayer and its Affiliates have complied in all material respects with any contribution, Tax, social security, notification and filing requirements and obligations under applicable Legal Requirements as they relate to Non-U.S. Business Employees, except for failures to so comply that would not become Liabilities of Genzyme.

6.14.        Environmental Matters.  Except as set forth in Schedule 6.14, Bayer and each Affiliate is, and has been, in material compliance with all Environmental Laws with respect to the Bayer Business.

6.15.        Contracts.

6.15.1           Contracts.

(a)        Schedule 6.15(a) sets forth as of the Execution Date and will be updated to set forth as of the Closing Date each Transferred Contract described below:

(i)    any Contractual Obligation (or group of related Contractual Obligations) the performance of which involves annual payments to or by Bayer and its Affiliates in the aggregate in excess of $[**], other than any Contractual Obligation which by its terms can be terminated upon no greater than sixty (60) days’ notice without material penalty or any further obligation or Liability to Bayer or any of its Affiliates;

(ii)   any licenses of Intellectual Property;

(iii)  any Contractual Obligation consisting of a partnership, limited liability company or joint venture agreement;

(iv)  any Contractual Obligation that limits or purports to limit the ability of any Person to compete in any line of business, with any other Person or in any geographic area, other than employment agreements entered into in the Ordinary Course of Business;

(v)   any Contractual Obligation with any Governmental Authority; and

(vi)  any Contractual Obligation not listed above that is material to the Bayer Business; and

(b)        Schedule 6.15(b) sets forth as of the Execution Date and will be updated to set forth as of the Closing Date each Joint Contract described below:

(i)    any Joint Contract in which the aggregate payments attributable to the Bayer Business exceeds $[**] in the aggregate;

(ii)   any Joint Contract that, with regard to the Bayer Business, limits or purports

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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to limit the ability of any Person to compete in the Business, with any other Person or in any geographic area; and

(iii)  any Joint Contract not listed above that is material to the Bayer Business.

Except for the Contractual Obligations described on Schedule 6.15(c), Bayer has made available to Genzyme true, accurate and complete copies of each written Contractual Obligation required to be listed on Schedules 6.15(a) and 6.15(b), in each case, as amended or otherwise modified and in effect.  Bayer has made available to Genzyme a written summary setting forth the terms and conditions of each oral Contractual Obligation required to be listed on Schedules 6.15(a) and 6.15(b).

6.15.2           Enforceability, etc.  Each Contractual Obligation required to be disclosed on Schedule 6.10.1 (Business Domain Names), 6.10.2 (Business-Specific Licensed IP), 6.15 (Contracts) or 6.16 (Customers) and which is a Transferred Contract or Joint Contract (each, a “Disclosed Contract”) is Enforceable against Bayer or its Affiliate (assuming for this purpose that such Contractual Obligation is Enforceable against the counterparties to such Contractual Obligation) and is in full force and effect, and, subject to obtaining any necessary consents disclosed in Schedule 6.3 or Schedule 6.4, will continue to be so Enforceable and in full force and effect on substantially identical terms immediately following the Closing.  To Bayer’s Knowledge, each Disclosed Contract constitutes in all material respects an Enforceable Contractual Obligation of the counterparty or counterparties that are party thereto.

6.15.3           Breach, etc.  Neither Bayer nor any of its Affiliates nor, to Bayer’s Knowledge, any other party to any Disclosed Contract, is in material breach or material violation of, or material default under any Disclosed Contract, or intends to commit any of the foregoing.

6.16.        Customers.  Schedule 6.16 sets forth a complete and accurate list of (a) the top twenty (20) customers in the United States for each of the Licensed Products in 2008; and (b) for each other country in the Territory, the top ten (10) customers for each of the Licensed Products in 2008.  Schedule 6.16 indicates the existing Contractual Obligations (other than purchase orders entered into in the Ordinary Course of Business) with each listed customer.  The relationships of the Bayer Business with the customers in the Major Market Countries and the Other Key Countries and to Bayer’s Knowledge, all other countries, required to be listed on Schedule 6.16 are good commercial working relationships and none of such customers has, since September 30, 2008, canceled, terminated or otherwise materially altered (including any material reduction in the rate or amount of sales or purchases or material increase in the prices charged or paid, as the case may be) or notified the Bayer Business in writing of any intention to do any of the foregoing or otherwise threatened in writing to cancel, terminate or materially alter (including any material reduction in the rate or amount of sales or purchases, as the case may be) its relationship with the Bayer Business.

[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

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6.17.        Employees.

6.17.1           Schedule 6.17.1 sets forth a list, complete and accurate as of the Execution Date, of all Business Employees, showing for each: (a) name, (b) entity by which employed, (c) hire date or adjusted service date, if applicable, (d) current job title, principal place of employment and position classification or grade [**], (e) actual base salary, bonus, commission, and other remuneration (whether cash or in-kind) provided during or otherwise due from calendar year 2008, (f) when available, 2009 annual base salary rate and 2009 target bonus or other incentive compensation, as well as any other remuneration (whether cash or in-kind) due in 2009, (g) whether there[**], (h) whether the Business Employee is [**]; (i) [**]; (j) identification of any [**] and (k) whether the Business Employee is [**].  Schedule 6.17.1 also identifies each Business Employee with managerial or senior administrative responsibilities and [**]. To Bayer’s Knowledge, there are no other current or former employees or consultants of Bayer or its Affiliates having the right to return to work in a Business Employee position or the right to be reinstated or re-engaged in such position or to be regarded as a Business Employee.  Except as disclosed on Schedule 6.17.1, to Bayer’s Knowledge, no Business Employee has any plans to terminate employment with Bayer or its Affiliates.  Schedule 6.17.1 will be updated by Bayer no later than every [**] days between the Execution Date and Closing Date to reflect any changes in the information included therein since the Execution Date or the previous update, as applicable, and finally, [**] Business Days prior to the Closing Date, and each updated list will contain complete and accurate information as of its update.

6.17.2           Schedule 6.17.2 sets forth, as of the Execution Date, (i) a complete list of all independent contractors and temporary employees currently performing services relating to the Bayer Business or under contract to perform such future services relating to the Bayer Business who does or will devote [**] or more of his or her work time to such business, and (ii) the start date, type of services to be provided, estimated completion date, and pay rate of such workers.  All such individuals have acknowledged in writing that they are not employees of Bayer or of any of its Affiliates and are not entitled to any employee Compensation, all in compliance with applicable Legal Requirements.  Accurate and complete copies of all such written agreements with any such independent contractor have been provided to Genzyme.

6.17.3           None of Bayer or any of its Affiliates is the subject of any proceeding asserting that Bayer or any of its Affiliates has committed an unfair or unlawful labor practice or seeking to compel it to bargain with any labor union, trade union, works council, employee representatives group or labor organization (collectively, “Union”) with regard to any Business Employee.  There are no pending or, to Bayer’s Knowledge, threatened labor strikes, disputes, walkouts, work stoppages, slow-downs, lockouts, grievances or complaints involving any Business Employee or any former Non-U.S. Business Employee.  Neither Bayer nor any of its Affiliates presently is, nor has it been since December 1, 2008, a party to or bound by any collective bargaining agreement or Union contract covering any Business Employee other than as set forth in Schedule 6.17.3, and no collective bargaining or Union agreement that would affect any Business Employee is being negotiated by Bayer or any of its Affiliates.  To Bayer’s