10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2010
Or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                               to

Commission File No. 0-14680

GENZYME CORPORATION
(Exact name of registrant as specified in its charter)

Massachusetts (State or other jurisdiction of incorporation or organization)	06-1047163 (I.R.S. Employer Identification No.)
500 Kendall Street Cambridge, Massachusetts (Address of principal executive offices)	02142 (Zip Code)
(617) 252-7500 (Registrant's telephone number, including area code)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

        Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes o    No ý

        Number of shares of Genzyme Stock outstanding as of July 31, 2010: 254,839,847

NOTE TO UPDATE SECOND QUARTER EARNINGS RELEASE

        On July 21, 2010, we issued a press release containing our financial results for the three month period ended June 30, 2010, which we furnished as an exhibit to a Current Report on Form 8-K prior to hosting a conference call. Subsequent to July 21, 2010, we identified additional inventories that did not meet our quality specifications. Our decision to discard these inventories has resulted in a second quarter write off of $6.5 million in addition to the $21.9 million write off previously reported. As a result, our second quarter net loss is $(3.8) million or $(0.01) per diluted share, compared with net income of $23.0 thousand or $0.00 per diluted share reported on July 21, 2010.

NOTE REGARDING REFERENCES TO GENZYME

        Throughout this Form 10-Q, the words "we," "us," "our" and "Genzyme" refer to Genzyme Corporation as a whole, and "our board of directors" refers to the board of directors of Genzyme Corporation.

NOTE REGARDING FORWARD-LOOKING STATEMENTS

        This Form 10-Q contains forward-looking statements. These forward-looking statements include, among others, statements regarding:

•

our expectations regarding the duration and amount of the continuing supply allocations of Cerezyme and Fabrazyme and our assessment of the factors that will influence those allocations;

•

our plans to increase bulk and fill-finish manufacturing capacity for Cerezyme, Fabrazyme and Myozyme/Lumizyme and the expected timing of receipt of regulatory approvals;

•

our assessment of the potential impact on our future revenues of healthcare reform legislation recently enacted in the United States;

•

our expectations regarding Myozyme/Lumizyme revenues;

•

our expectations for sales of Renagel/Renvela and Hectorol and the anticipated factors affecting the future growth of these products, including the final rule to establish a bundled payment system to reimburse dialysis providers;

•

our expectations that production interruption at our Haverhill, England manufacturing facility will not result in a supply constraint for Renagel/Renvela, the expected timing of new sevelamer carbonate production and the amount of additional costs we expect to incur during the third quarter of 2010 related to the remediation of this facility;

•

our assessment of competitors and potential competitors and the anticipated impact of potentially competitive products and services, including generic competition, on our revenues;

•

our estimates of the cost to complete our research and development programs for companies and assets that we have acquired;

•

our assessment of the financial impact of legal proceedings and claims on our financial position and results of operations;

•

the sufficiency of our cash, investments and cash flows from operations and our expected uses of cash;

•

our provision for potential tax audit exposures and our expectations regarding our unrecognized tax benefits;

•

the protection afforded by our patent rights; and

2

•

our expectations regarding the amortization of intangible assets related to our expected future contingent payments due to Bayer Schering Pharma A.G., or Bayer, Synpac (North Carolina), Inc., or Synpac, and Wyeth Pharmaceuticals (which is now a part of Pfizer Inc. and referred to as Pfizer).

        These statements are subject to risks and uncertainties, and our actual results may differ materially from those that are described in this report. These risks and uncertainties include:

•

the possibility that current reduced supply allocations of Fabrazyme and Cerezyme need to last longer than expected or need to be more severe than expected because third-party oversight under the consent decree we agreed to with the United States Food and Drug Administration, or FDA, results in delays in product releases, our demand forecasts and estimates are inaccurate, productivity of the new Fabrazyme working cell bank does not increase and/or we experience any additional disruptions in our manufacturing processes or timeline;

•

the possibility that we may encounter additional manufacturing problems due to variety of reasons, including equipment failures, viral or bacterial contamination, cell growth at lower than expected levels, fill-finish issues, disruptions in utility services to manufacturing facilities, human error or regulatory issues;

•

our ability to maintain regulatory approvals for our products, services and manufacturing facilities and processes, including our Allston, Massachusetts manufacturing facility, which we refer to as our Allston facility, and to obtain approval for proposed changes to enhance our manufacturing processes and new manufacturing capacity, including our new manufacturing facility in Framingham, Massachusetts for Fabrazyme and Cerezyme or an additional bioreactor for the production of Myozyme/Lumizyme in our Geel, Belgium facility, which we refer to as our Geel facility, all in the anticipated time frames;

•

our ability to successfully transition fill-finish operations for Cerezyme, Fabrazyme, Myozyme and Thyrogen out of our Allston facility and to our Waterford, Ireland plant and to Hospira, Inc., or Hospira, a third-party contract manufacturer, on the planned timelines because of delays in regulatory approval, manufacturing problems or for any other reason;

•

the possibility that we may be unable to produce new sevelamer carbonate at our Haverhill, England facility in the expected time frame due to production problems or regulatory issues;

•

the extent to which Gaucher and Fabry disease patients switch to competitors' products in place of Cerezyme or Fabrazyme or continue to reduce their doses of our products even after product supply stabilizes;

•

the possibility that we may experience supply constraints for Thyrogen, and the extent of those constraints, if we are not able to transfer fill-finish activities to Hospira on the planned timelines because of delays in regulatory approval, manufacturing problems or for any other reason;

•

the possibility that we are not able to repurchase some or all of the $1.0 billion remaining under our common stock repurchase plan or complete strategic transactions involving our genetic testing, diagnostic products and pharmaceutical intermediates business units in the expected timeframes or at all, or able to achieve anticipated levels of efficiencies and cost savings through the multi-year action plan we expect to begin implementing this year;

•

the possibility that we are unable to transition Lumizyme patients to commercial product as quickly as anticipated;

•

our ability to manufacture sufficient amounts of our products and maintain sufficient inventories, and to do so in a timely and cost-effective manner;

•

the availability of reimbursement for our products and services from third-party payors, the extent of such coverage and the accuracy of our estimates of the payor mix for our products;

3

•

competition from lower cost generic or biosimilar products;

•

the impact of legislative or regulatory changes, including implementation of the healthcare reform legislation recently enacted in the United States and the possibility that additional proposals to reduce healthcare costs may be adopted in the United States or elsewhere;

•

our ability and the ability of our collaboration partners to successfully complete preclinical and clinical development of new products and services within the anticipated timeframes and for anticipated indications;

•

regulatory authorities' views regarding the safety, efficacy and risk-benefit profiles of our new or current products and our manufacturing processes;

•

our ability to expand the use of current and next generation products in existing and new indications;

•

potential future product recalls or write offs of inventory, including the portions of Cerezyme, Myozyme and Thymoglobulin inventories that are being evaluated to ensure that such inventories meet quality specifications;

•

our ability to obtain and maintain adequate patent and other proprietary rights protection for our products and services and successfully enforce these proprietary rights;

•

our reliance on third parties to provide us with materials and services in connection with the manufacture of our products;

•

our ability to continue to generate cash from operations and to effectively use our cash resources to grow our business;

•

our ability to establish and maintain strategic license, collaboration, manufacturing and distribution arrangements and to successfully manage our relationships with licensors, collaborators, manufacturers, distributors and partners;

•

the impact of changes in the exchange rates for foreign currencies on our product and service revenues in future periods;

•

the outcome of legal proceedings by or against us;

•

the possibility that our integration of the products and development programs acquired from Bayer may be more costly or time consuming than expected;

•

the outcome of our Internal Revenue Service, or IRS, and foreign tax audits;

•

general economic conditions; and

•

the possible disruption of our operations due to terrorist activities, armed conflict, severe climate change, natural disasters or outbreak of diseases, including as a result of the disruption of operations of regulatory authorities or our subsidiaries, manufacturing facilities, customers, suppliers, utility providers, distributors, couriers, collaborative partners, licensees or clinical trial sites.

        We refer to more detailed descriptions of these and other risks and uncertainties under the heading "Risk Factors" in Management's Discussion and Analysis of Genzyme Corporation and Subsidiaries' Financial Condition and Results of Operations in Part I., Item 2. of this Form 10-Q. We encourage you to read those descriptions carefully. We caution investors not to place substantial reliance on the forward-looking statements contained in this Form 10-Q. These statements, like all statements in this Form 10-Q, speak only as of the date of this report (unless another date is indicated), and we undertake no obligation to update or revise the statements in light of future developments.

4

NOTE REGARDING INCORPORATION BY REFERENCE

        The United States Securities and Exchange Commission, commonly referred to as the SEC, allows us to disclose important information to you by referring you to other documents we have filed with them. The information that we refer you to is "incorporated by reference" into this Form 10-Q. Please read that information.

NOTE REGARDING TRADEMARKS

        Genzyme®, Cerezyme®, Fabrazyme®, Thyrogen®, Myozyme®, Renagel®, Renvela®, Campath®, Clolar®, Evoltra®, Mozobil®, Thymoglobulin®, Cholestagel®, Synvisc®, Synvisc-One®, Sepra®, Seprafilm®, Carticel®, Epicel®, MACI®, Hectorol® and Jonexa® are registered trademarks, and Lumizyme™ is a trademark, of Genzyme or its subsidiaries. Welchol® is a registered trademark of Sankyo Pharma, Inc. Aldurazyme® is a registered trademark of BioMarin/Genzyme LLC. Elaprase® is a registered trademark of Shire Human Genetic Therapies, Inc. Prochymal® and Chondrogen® are registered trademarks of Osiris Therapeutics, Inc. Fludara® and Leukine® are registered trademarks licensed to Genzyme. All other trademarks referred to in this Form 10-Q are the property of their respective owners. All rights reserved.

5

GENZYME CORPORATION AND SUBSIDIARIES

FORM 10-Q, JUNE 30, 2010

TABLE OF CONTENTS

		PAGE NO.
PART I.	FINANCIAL INFORMATION		7
ITEM 1.	Financial Statements		7
	Unaudited, Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2010 and 2009		7
	Unaudited, Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009		8
	Unaudited, Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2010 and 2009		9
	Notes to Unaudited, Consolidated Financial Statements		10
ITEM 2.	Management's Discussion and Analysis of Genzyme Corporation and Subsidiaries' Financial Condition and Results of Operations		41
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		91
ITEM 4.	Controls and Procedures		92
PART II.	OTHER INFORMATION		92
ITEM 1.	Legal Proceedings		92
ITEM 1A.	Risk Factors		95
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		95
ITEM 6.	Exhibits		96
Signatures			97

6

PART I.    FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

GENZYME CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited, amounts in thousands, except per share amounts)

			Three Months Ended June 30,						Six Months Ended June 30,
			2010			2009			2010			2009
Revenues:
	Net product sales		$	974,922		$	1,115,425		$	1,946,547		$	2,152,669
	Net service sales			103,589			105,693			205,504			207,192
	Research and development revenue			928			7,392			1,861			17,520
		Total revenues		1,079,439			1,228,510			2,153,912			2,377,381
Operating costs and expenses:
	Cost of products sold			301,644			288,899			581,383			524,461
	Cost of services sold			66,524			61,624			132,396			121,874
	Selling, general and administrative			402,535			354,128			955,845			672,089
	Research and development			225,558			210,522			446,488			417,447
	Amortization of intangibles			67,891			63,945			138,875			121,543
	Contingent consideration expense			10,021			9,090			72,570			9,090
		Total operating costs and expenses		1,074,173			988,208			2,327,557			1,866,504
Operating income (loss)				5,266			240,302			(173,645	)		510,877
Other income (expenses):
	Equity in loss of equity method investments			(870	)		—			(1,567	)		—
	Losses on investments in equity securities, net			(31,562	)		(105	)		(31,399	)		(681	)
	Gain on acquisition of business			—			24,159			—			24,159
	Other			356			(2,056	)		(246	)		(3,035	)
	Investment income			3,084			4,144			6,384			9,494
		Total other income (expenses)		(28,992	)		26,142			(26,828	)		29,937
Income (loss) before income taxes				(23,726	)		266,444			(200,473	)		540,814
Benefit from (provision for) income taxes				19,953			(78,870	)		81,752			(157,754	)
Net income (loss)			$	(3,773	)	$	187,574		$	(118,721	)	$	383,060
Net income (loss) per share:
	Basic		$	(0.01	)	$	0.69		$	(0.45	)	$	1.42
	Diluted		$	(0.01	)	$	0.68		$	(0.45	)	$	1.39
Weighted average shares outstanding:
	Basic			265,270			269,958			265,760			270,406
	Diluted			265,270			274,852			265,760			276,225

The accompanying notes are an integral part of these unaudited, consolidated financial statements.

7

GENZYME CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited, amounts in thousands, except par value amounts)

			June 30, 2010			December 31, 2009
ASSETS
Current assets:
	Cash and cash equivalents		$	681,807		$	742,246
	Short-term investments			152,706			163,630
	Accounts receivable, net			890,244			899,731
	Inventories			594,112			608,022
	Other current assets			193,445			210,747
	Deferred tax assets			183,698			178,427
		Total current assets		2,696,012			2,802,803
Property, plant and equipment, net				2,846,148			2,809,349
Long-term investments				139,641			143,824
Goodwill				1,403,639			1,403,363
Other intangible assets, net				1,963,429			2,313,262
Deferred tax assets-noncurrent				522,311			376,815
Investments in equity securities				74,227			74,438
Other noncurrent assets				118,492			136,870
		Total assets	$	9,763,899		$	10,060,724
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	130,323		$	189,629
	Accrued expenses			939,516			696,223
	Deferred revenue			34,288			24,747
	Current portion of contingent consideration obligations			155,898			161,365
	Current portion of long-term debt and capital lease obligations			8,510			8,166
		Total current liabilities		1,268,535			1,080,130
Long-term debt and capital lease obligations				1,105,956			116,434
Deferred revenue-noncurrent				12,338			13,385
Long-term contingent consideration obligations				821,311			853,871
Other noncurrent liabilities				80,354			313,252
		Total liabilities		3,288,494			2,377,072
Commitments and contingencies
Stockholders' equity:
	Preferred stock, $0.01 par value			—			—
	Common stock, $0.01 par value			2,531			2,657
	Additional paid-in capital			5,068,602			5,688,741
	Share purchase contract			(200,000	)		—
	Accumulated earnings			1,551,375			1,670,096
	Accumulated other comprehensive income			52,897			322,158
		Total stockholders' equity		6,475,405			7,683,652
		Total liabilities and stockholders' equity	$	9,763,899		$	10,060,724

The accompanying notes are an integral part of these unaudited, consolidated financial statements.

8

GENZYME CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

					Six Months Ended June 30,
					2010			2009
Cash Flows from Operating Activities:
	Net income (loss)				$	(118,721	)	$	383,060
	Reconciliation of net income (loss) to cash flows from operating activities:
		Depreciation and amortization				246,036			208,515
		Stock-based compensation				92,390			109,831
		Provision for bad debts				12,431			10,808
		Contingent consideration expense				72,570			9,090
		Equity in loss of equity method investments				1,567			—
		Gain on acquisition of business				—			(24,159	)
		Losses on investments in equity securities, net				31,399			681
		Deferred income tax benefit				(62,917	)		(50,632	)
		Tax benefit from employee stock-based compensation				28,392			9,239
		Excess tax benefit from (provision for) stock-based compensation				5,372			(4,424	)
		Other				3,314			4,068
		Increase (decrease) in cash from working capital changes (excluding impact of acquired assets and assumed liabilities):
			Accounts receivable			(71,630	)		(106,901	)
			Inventories			(47,156	)		21,795
			Other current assets			(20,504	)		(903	)
			Accounts payable, accrued expenses and deferred revenue			132,615			30,278
				Cash flows from operating activities		305,158			600,346
Cash Flows from Investing Activities:
	Purchases of investments					(175,816	)		(64,394	)
	Sales and maturities of investments					187,220			150,739
	Purchases of equity securities					(4,030	)		(7,363	)
	Proceeds from sales of investments in equity securities					4,134			1,473
	Purchases of property, plant and equipment					(330,298	)		(318,324	)
	Investments in equity method investment					(1,466	)		—
	Acquisitions					—			(117,073	)
	Purchases of other intangible assets					(6,155	)		(18,345	)
	Other					(7,661	)		(5,198	)
				Cash flows from investing activities		(334,072	)		(378,485	)
Cash Flows from Financing Activities:
	Proceeds from issuance of common stock					58,362			53,508
	Repurchases of our common stock					(800,000	)		(107,134	)
	Payments under shares purchase contract					(200,000	)		—
	Excess tax benefits from (provision for) stock-based compensation					(5,372	)		4,424
	Proceeds from issuance of debt, net					994,387			—
	Payments of debt and capital lease obligations					(4,549	)		(4,305	)
	Increase (decrease) in bank overdrafts					23,851			(14,303	)
	Payment of contingent consideration obligation					(61,336	)		—
	Other					939			3,660
				Cash flows from financing activities		6,282			(64,150	)
Effect of exchange rate changes on cash						(37,807	)		2,113
Increase (decrease) in cash and cash equivalents						(60,439	)		159,824
Cash and cash equivalents at beginning of period						742,246			572,106
Cash and cash equivalents at end of period					$	681,807		$	731,930
Supplemental disclosures of non-cash transactions:
	Strategic Transactions—Note 6.
	Goodwill and Other Intangible Assets—Note 8.
	Long-Term Debt—Note 11.

The accompanying notes are an integral part of these unaudited, consolidated financial statements.

9

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements

1. Description of Business

        We are a global biotechnology company dedicated to making a major impact on the lives of people with serious diseases. Our products and services are focused on rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune disease, and diagnostic testing. Our commitment to innovation continues today with a substantial development program focused on these fields, as well as multiple sclerosis, or MS, cardiovascular disease, neurodegenerative diseases, and other areas of unmet medical need.

        We are organized into five financial reporting units, which we also consider to be our reporting segments:

•

Personalized Genetic Health, which develops, manufactures and distributes therapeutic products with a focus on products to treat patients suffering from genetic diseases and other chronic debilitating diseases, including a family of diseases known as lysosomal storage disorders, or LSDs, and cardiovascular disease. The unit derives substantially all of its revenue from sales of Cerezyme, Fabrazyme, Myozyme, Aldurazyme and Elaprase and royalties earned on sales of Welchol;

•

Renal and Endocrinology, which develops, manufactures and distributes products that treat patients suffering from renal diseases, including chronic renal failure, and endocrine and immune-mediated diseases. The unit derives substantially all of its revenue from sales of Renagel/Renvela (including sales of bulk sevelamer), Hectorol and Thyrogen;

•

Biosurgery, which develops, manufactures and distributes biotherapeutics and biomaterial-based products, with an emphasis on products that meet medical needs in the orthopaedics and broader surgical areas. The unit derives substantially all of its revenue from sales of Synvisc/Synvisc-One and the Sepra line of products;

•

Hematology and Oncology, which develops, manufactures and distributes products for the treatment of cancer, the mobilization of hematopoietic stem cells and the treatment of transplant rejection and other hematologic and auto-immune disorders. The unit derives substantially all of its revenue from sales of Mozobil, Thymoglobulin, Clolar, Campath, Fludara and Leukine; and

•

Multiple Sclerosis, which is developing products, including alemtuzumab, for the treatment of MS and other auto-immune disorders.

        Effective January 1, 2010, based on changes in how we review our business, we re-allocated certain of our business units among our segments and adopted new names for certain of our reporting segments. Specifically:

•

our former Genetic Diseases reporting segment is now referred to as "Personalized Genetic Health," or "PGH," and now includes our cardiovascular business unit, which previously was reported under the caption "Cardiometabolic and Renal," and our Welchol product line, which previously was reported as part of our pharmaceuticals intermediates business unit under the caption "Other;"

•

our former Cardiometabolic and Renal reporting segment is now referred to as "Renal and Endocrinology" and now includes the assets that formerly comprised our immune-mediated diseases business unit, which previously was reported under the caption "Other," but no longer includes our cardiovascular business unit; and

•

our former Hematologic Oncology segment is now referred to as "Hematology and Oncology" and now includes our transplant business unit, which previously was reported under the caption

10

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

1. Description of Business (Continued)

"Other," but no longer includes our MS business unit, which is now reported as a separate reporting segment called "Multiple Sclerosis."

        We report the activities of the following business units under the caption "Other": our genetic testing business unit, which provides testing services for the oncology, prenatal and reproductive markets; and our diagnostic products and pharmaceutical intermediates business units. These operating segments did not meet the quantitative threshold for separate segment reporting.

        We report our corporate, general and administrative operations and corporate science activities under the caption "Corporate."

        We have revised our 2009 segment disclosures to conform to our 2010 presentation.

        In May 2010, we announced that we plan to pursue strategic alternatives for our genetic testing, diagnostic products and pharmaceutical intermediates business units. Possible alternatives include divestiture, spin-out or management buy-out. Our genetic testing business unit had revenue of approximately $371 million for the year ended December 31, 2009 and approximately $183 million for the six months ended June 30, 2010. Our diagnostic products business unit had revenue of approximately $167 million for the year ended December 31, 2009 and approximately $76 million for the six months ended June 30, 2010. Revenue from our pharmaceutical intermediates business unit for the same periods was significantly less in comparison.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

        Our unaudited, consolidated financial statements for each period include the statements of operations, balance sheets and statements of cash flows for our operations taken as a whole. We have eliminated all intercompany items and transactions in consolidation. We have reclassified certain 2009 data to conform to our 2010 presentation. We prepare our unaudited, consolidated financial statements following the requirements of the SEC for interim reporting. As permitted under these rules, we condense or omit certain footnotes and other financial information that are normally required by accounting principles generally accepted in the United States, or U.S. GAAP.

        These financial statements include all normal and recurring adjustments that we consider necessary for the fair presentation of our financial position and results of operations. Since these are interim financial statements, you should also read our audited, consolidated financial statements and notes included in Exhibit 99 to our Form 8-K filed with the SEC on June 14, 2010. Revenues, expenses, assets and liabilities can vary from quarter to quarter. Therefore, the results and trends in these interim financial statements may not be indicative of results for future periods. The balance sheet data as of December 31, 2009 that is included in this Form 10-Q was derived from our audited financial statements but does not include all disclosures required by U.S. GAAP.

        Our unaudited, consolidated financial statements for each period include the accounts of our wholly owned and majority owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. We account for our investments in entities not subject to consolidation using the equity method of accounting if we have a substantial ownership interest (20% to 50%) in or exercise significant influence over the entity. Our consolidated net income (loss) includes our share of the earnings or losses of these entities. From January 1, 2008 to December 31, 2009 we consolidated the results of BioMarin/Genzyme LLC, an entity we formed with BioMarin Pharmaceutical Inc., or BioMarin, in 1998, because we determined that we were the primary beneficiary of BioMarin/Genzyme LLC. Upon consolidation of the entity, we recorded the assets and liabilities of BioMarin/

11

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

2. Basis of Presentation and Significant Accounting Policies (Continued)

Genzyme LLC in our consolidated balance sheets at fair value. Effective January 1, 2010, in accordance with new guidance we adopted for consolidating variable interest entities, we no longer consolidate the results of BioMarin/Genzyme LLC because we determined that the entity does not have a primary beneficiary under the new guidance. As a result, we deconsolidated BioMarin/Genzyme LLC and no longer record the assets and liabilities in our consolidated balance sheets. Instead, effective January 1, 2010, we began to record our portion of BioMarin/Genzyme LLC's results in equity in loss of equity method investments in our consolidated statements of operations.

Revenue Recognition—Recent Healthcare Reform Legislation

        In March 2010, healthcare reform legislation was enacted in the United States, which contains several provisions that impact our business. Although many provisions of the new legislation do not take effect immediately, several provisions became effective in the first quarter of 2010. These include:

•

an increase in the minimum Medicaid rebate to states participating in the Medicaid program from 15.1% to 23.1% on our branded prescription drugs and an increase from 15.1% to 17.1% for our drugs that are approved exclusively for pediatric patients;

•

the extension of the Medicaid rebate to managed care organizations that dispense drugs to Medicaid beneficiaries;

•

the expansion of the 340(B) Public Health Services, or PHS, drug pricing program, which provides outpatient drugs at reduced rates, to include additional hospitals and healthcare centers (this provision, however, does not apply to orphan drugs); and

•

a requirement that the Medicaid rebate for a drug that is a "line extension" of a preexisting oral solid dosage form of the drug be linked in certain respects to the Medicaid rebate for the preexisting oral solid dosage form, such that the Medicaid rebate for most line extension drugs will be higher than it would have been absent the new law, especially if the preexisting oral solid dosage form has a history of significant price increases.

These provisions did not have a significant impact on our results of operations or financial position for the six months ended June 30, 2010.

        Effective October 1, 2010, the new legislation re-defines the Medicaid average manufacturer price, or AMP, such that the AMP and, consequently, the Medicaid rebate are expected to increase for some of our drugs, in particular those that offer discounted pricing to customers.

        Beginning in 2011, the new law requires that drug manufacturers provide a 50% discount to Medicare beneficiaries whose prescription drug costs cause them to be subject to the Medicare Part D coverage gap, which is known as the "donut hole." Also beginning in 2011, clinical laboratory fee schedule payments will be reduced by 1.75% over a period of five years and we will be required to pay our share of a new fee assessed on all branded prescription drug manufacturers and importers. This fee will be calculated based upon each organization's percentage share of total branded prescription drug sales to U.S. government programs (such as Medicare and Medicaid, the Department of Veterans Affairs, or VA, the Department of Defense, or DOD, and the TriCare retail pharmacy discount programs) made during the previous year. Sales of orphan drugs, however, are not included in the fee calculation. Final guidance relating to how we will be required to account for this fee is still pending, however, it is expected that the fee will be classified as either a reduction to net sales or an operating expense.

12

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

2. Basis of Presentation and Significant Accounting Policies (Continued)

        Presently, uncertainty exists as many of the specific determinations necessary to implement this new legislation have yet to be decided and communicated to industry participants. We are still assessing the full extent that the U.S. healthcare reform legislation may have on our business.

Accounts Receivable Related to Sales in Greece

        Total accounts receivable in our consolidated balance sheets includes approximately $57 million, net of reserves, as of both June 30, 2010 and December 31, 2009 of accounts receivable held by our subsidiary in Greece related to sales to government-owned or supported healthcare facilities in Greece. These sales are subject to significant payment delays due to government funding and reimbursement practices. We believe that this is an industry-wide issue for suppliers to these facilities. In May 2010, the government of Greece announced a plan for repayment of its debt to international pharmaceutical companies, which calls for immediate payment of accounts receivable balances that were established in 2005 and 2006. For accounts receivable established between 2007 and 2009, the government of Greece will issue non-interest bearing bonds, expected to be exchange tradable, with maturities ranging from 2 to 4 years. We recorded a charge of $7.2 million to bad debt expense, a component of selling, general and administrative expenses, or SG&A, in our consolidated statements of operations for the three and six months ended June 30, 2010 to write down the accounts receivable balances held by our subsidiary in Greece to present value using a 10% discount rate.

        In conjunction with this plan, the government of Greece also instituted price decreases of between 20% and 27% for all future pharmaceutical product sales. Because our customers in Greece are government owned or supported, we may also be impacted by declines in sovereign credit ratings or sovereign debt defaults. The government of Greece has recently required financial support from both the European Union and the International Monetary Fund, or IMF, to avoid defaulting on its sovereign debt. If significant additional changes occur in the availability of government funding in Greece, we may not be able to collect on amounts due from these customers. We do not expect this concentration of credit risk to have a material adverse impact on our financial position or liquidity.

Stock-Based Compensation

        All stock-based awards to non-employees are accounted for at their fair value. We periodically grant awards, including time vesting stock options, time vesting restricted stock units, or RSUs, and performance vesting restricted stock units, or PSUs, under our employee and director equity plans. Beginning in 2010, our long-term incentive program for senior executives includes a combination of:

•

time vesting stock options; and

•

performance and market vesting awards, tied to the achievement of pre-established performance and market goals over a three-year performance period.

Approximately half of each senior executive's grant consists of time vesting stock options with the remainder in PSUs. Grants under our former long-term incentive program were comprised of time vesting stock options and time vesting RSUs.

        We record the estimated fair value of awards granted as stock-based compensation expense in our consolidated statements of operations over the requisite service period, which is generally the vesting period. Where awards are made with non-substantive vesting periods, such as where a portion of the award vests upon retirement eligibility, we estimate and recognize expense based on the period from the grant date to the date on which the employee is retirement eligible.

13

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

2. Basis of Presentation and Significant Accounting Policies (Continued)

        The fair values of our:

•

stock option grants are estimated as of the date of grant using a Black-Scholes option valuation model. The estimated fair values of the stock options, including the effect of estimated forfeitures, are then expensed over the options' vesting periods;

•

time vesting RSUs are based on the market value of our stock on the date of grant. Compensation expense for time vesting RSUs is recognized over the applicable service period, adjusted for the effect of estimated forfeitures; and

•

PSUs subject to the cash flow return on investment performance metric, which includes both performance and service conditions, are estimated based on the market value of our stock on the date of grant. PSUs subject to the relative total shareholder return, or R-TSR performance metric, which includes both market and service conditions, are estimated using a lattice model with a Monte Carlo simulation. Compensation expense associated with our PSUs is initially based upon the number of shares expected to vest after assessing the probability that certain performance criteria will be met and the associated targeted payout level that is forecasted will be achieved, net of estimated forfeitures. Compensation expense for our PSUs is recognized over the applicable performance period, adjusted for the effect of estimated forfeitures.

Recent Accounting Pronouncements

        Periodically, accounting pronouncements and related information on the adoption, interpretation and application of U.S. GAAP are issued or amended by the Financial Accounting Standards Board, or FASB, or other standard setting bodies. Changes to the FASB Accounting Standards Codification™, or ASC, are communicated through Accounting Standards Updates, or ASUs. The following table shows FASB ASUs recently issued that could affect our disclosures and our position for adoption:

ASU Number	Relevant Requirements of ASU	Issued Date/Our Effective Dates	Status
2009-13 "Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force."	Establishes the accounting and reporting guidance for arrangements under which a vendor will perform multiple revenue-generating activities. Specifically, the provisions of this update address how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting.	Issued October 2009. Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted.	We will adopt the provisions of this update for the first quarter of 2011. We are currently assessing the impact the provisions of this update will have, if any, on our consolidated financial statements.

14

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

2. Basis of Presentation and Significant Accounting Policies (Continued)

ASU Number	Relevant Requirements of ASU	Issued Date/Our Effective Dates	Status
2010-06 "Improving Disclosures about Fair Value Measurements."	Requires new disclosures and clarifies some existing disclosure requirements about fair value measurements codified within ASC 820, "Fair Value Measurements and Disclosures," including significant transfers into and out of Level 1 and Level 2 investments of the fair value hierarchy. Also requires additional information in the roll forward of Level 3 investments including presentation of purchases, sales, issuances, and settlements on a gross basis. Further clarification for existing disclosure requirements provides for the disaggregation of assets and liabilities presented, and the enhancement of disclosures around inputs and valuation techniques.	Issued January 2010. Effective for the first interim or annual reporting period beginning after December 15, 2009, except for the additional information in the roll forward of Level 3 investments. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim reporting periods within those fiscal years.	We adopted the applicable provisions of this update, except for the additional information in the roll forward of Level 3 investments (as previously noted), in the first quarter of 2010. Besides a change in disclosure, the adoption of this update does not have a material impact on our consolidated financial statements. None of our instruments were reclassified between Level 1, Level 2 or Level 3 in 2010.
2010-11, "Scope Exception Related to Embedded Credit Derivatives."	Update provides amendments to Subtopic 815-15, "Derivatives and Hedging—Embedded Derivatives," to clarify the scope exception for embedded credit derivative features related to the transfer of credit risk in the form of subordination of one financial instrument to another.	Issued March 2010. Effective at the beginning of each reporting entity's first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each reporting entity's first fiscal quarter beginning after issuance of this update.	We will adopt the provisions of this update for the third quarter of 2010. We are currently assessing the impact the provisions of this update will have, if any, on our consolidated financial statements.
2010-17, "Milestone Method of Revenue Recognition—a consensus of the FASB Emerging Issues Task Force."	Update provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research and development transactions.	Issued April 2010. Effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted.	We will adopt the provisions of this update beginning January 1, 2011. We are currently assessing the impact the provisions of this update will have, if any, on our consolidated financial statements.
2010-19, "Foreign Currency Issues: Multiple Foreign Currency Exchange Rates."	Update codifies the SEC Staff Announcement made at a March 18, 2010 meeting of the Emerging Issues Task Force, or EITF. The Staff Announcement provides the SEC staff's view on certain foreign currency issues related to investments in Venezuela.	Issued May 2010. Staff announcements made at EITF meetings are effective as of the announcement date, which for this update is March 18, 2010, unless otherwise noted.	We have adopted the provisions of this update beginning March 18, 2010. We don't believe the impact of highly inflationary accounting on differences between amounts recorded for financial reporting purposes versus the underlying U.S. dollar denominated values is material to our consolidated financial statements.

15

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

3. Fair Value Measurements

        A significant number of our assets and liabilities are carried at fair value. These include:

•

fixed income investments;

•

investments in publicly-traded equity securities;

•

derivatives; and

•

contingent consideration obligations.

Fair Value Measurement—Definition and Hierarchy

        Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, we are permitted to use various valuation approaches, including market, income and cost approaches. We are required to follow an established fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available.

        The fair value hierarchy is broken down into three levels based on the reliability of inputs. We have categorized our fixed income, equity securities, derivatives and contingent consideration obligations within the hierarchy as follows:

•

Level 1—These valuations are based on a "market approach" using quoted prices in active markets for identical assets. Valuations of these products do not require a significant degree of judgment. Assets utilizing Level 1 inputs include money market funds, U.S. government securities, bank deposits and exchange-traded equity securities.

•

Level 2—These valuations are based primarily on a "market approach" using quoted prices in markets that are not very active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Fixed income assets utilizing Level 2 inputs include U.S. agency securities, including direct issuance bonds and mortgage-backed securities, asset-backed securities, corporate bonds and commercial paper. Derivative securities utilizing Level 2 inputs include forward foreign-exchange contracts.

•

Level 3—These valuations are based on various approaches using inputs that are unobservable and significant to the overall fair value measurement. Certain assets and liabilities are classified within Level 3 of the fair value hierarchy because they have unobservable value drivers and therefore have little or no transparency. The fair value measurement of the contingent consideration obligations related to the acquisition from Bayer is valued using Level 3 inputs.

Valuation Techniques

        Fair value is a market-based measure considered from the perspective of a market participant who would buy the asset or assume the liability rather than our own specific measure. All of our fixed income securities are priced using a variety of daily data sources, largely readily-available market data and broker quotes. To validate these prices, we compare the fair market values of our fixed income investments using market data from observable and corroborated sources. We also perform the fair value calculations for our derivatives and equity securities using market data from observable and corroborated sources. We determine the fair value of the contingent consideration obligations based on

16

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

3. Fair Value Measurements (Continued)

a probability-weighted income approach. The measurement is based on significant inputs not observable in the market. In periods of market inactivity, the observability of prices and inputs may be reduced for certain instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or from Level 2 to Level 3. During the six months ended June 30, 2010, none of our instruments were reclassified between Level 1, Level 2 or Level 3.

        The following tables set forth our assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2010 and December 31, 2009 (amounts in thousands):

Description			Balance as of June 30, 2010			Level 1		Level 2			Level 3
Fixed income investments(1):	Cash equivalents:	Money market funds/other	$	565,413		$	565,413	$	—		$	—
	Short-term investments:	U.S. Treasury notes		26,823			26,823		—			—
		Non U.S. Governmental notes		8,843			—		8,843			—
		U.S. agency notes		72,093			—		72,093			—
		Corporate notes—global		44,947			—		44,947			—
		Total		152,706			26,823		125,883			—
	Long-term investments:	U.S. Treasury notes		59,150			59,150		—			—
		U.S. agency notes		20,962			—		20,962			—
		Corporate notes—global		59,529			—		59,529			—
		Total		139,641			59,150		80,491			—
	Total fixed income investments			857,760			651,386		206,374			—
Equity holdings(1):	Publicly-traded equity securities			38,267			38,267		—			—
Derivatives:	Foreign exchange forward contracts			(501	)		—		(501	)		—
Contingent liabilities(2):	Contingent consideration obligations			(977,209	)		—		—			(977,209	)
Total assets (liabilities) at fair value			$	(81,683	)	$	689,653	$	205,873		$	(977,209	)

17

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

3. Fair Value Measurements (Continued)

Description			Balance as of December 31, 2009			Level 1		Level 2		Level 3
Fixed income investments(1):	Cash equivalents:	Money market funds/other	$	603,109		$	603,109	$	—	$	—
	Short-term investments:	U.S. Treasury notes		41,040			41,040		—		—
		Non U.S. Governmental notes		4,114			—		4,114		—
		U.S. Government agency notes		56,810			—		56,810		—
		Corporate notes—global		54,825			—		54,825		—
		Commercial paper		6,841			—		6,841		—
		Total		163,630			41,040		122,590		—
	Long-term investments:	U.S. Treasury notes		29,793			29,793		—		—
		Non U.S. Governmental notes		4,873			—		4,873		—
		U.S. Government agency notes		28,015			—		28,015		—
		Corporate notes—global		81,143			—		81,143		—
		Total		143,824			29,793		114,031		—
	Total fixed income investments			910,563			673,942		236,621		—
Equity holdings(1):	Publicly-traded equity securities			40,380			40,380		—		—
Derivatives:	Foreign exchange forward contracts			4,284			—		4,284		—
Contingent liabilities(2):	Contingent consideration obligations			(1,015,236	)		—		—		(1,015,236	)
Total assets (liabilities) at fair value			$	(60,009	)	$	714,322	$	240,905	$	(1,015,236	)

(1)

Changes in the fair value of our fixed income investments and investments in publicly-traded equity securities are recorded in accumulated other comprehensive income, a component of stockholders' equity, in our consolidated balance sheets.

(2)

Changes in the fair value of the contingent consideration obligations are recorded as contingent consideration expense, a component of operating expenses in our consolidated statements of operations. We recorded a total of $72.6 million of contingent consideration expense for the six months ended June 30, 2010 in our consolidated statements of operations, of which $(13.1) million was allocated to our Hematology and Oncology reporting segment and $85.7 million was allocated to our Multiple Sclerosis reporting segment. We recorded $9.1 million of contingent consideration expense for the six months ended June 30, 2009 in our consolidated statements of operations, including $4.3 million for our Hematology and Oncology reporting segment and $4.8 million for our Multiple Sclerosis reporting segment.

18

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

3. Fair Value Measurements (Continued)

        Changes in the fair value of our Level 3 contingent consideration obligations during the six months ended June 30, 2010 were as follows (amounts in thousands):

Balance as of December 31, 2009	$	(1,015,236	)
Payments		68,940
R&D reimbursement received		(7,604	)
Contingent consideration expense(1)		(72,570	)
Effect of foreign currency translation adjustments		49,261
Fair value at June 30, 2010	$	(977,209	)

(1)

For the six months ended June 30, 2010, includes:

•

$37.3 million of contingent consideration expense attributable to transaction gains and losses resulting from fluctuations in foreign currency exchange rates on liabilities that will be settled in a currency other than the entity's functional currency; and

•

a $20.9 million reduction in contingent consideration expense related to changes in estimates.

        In June 2010, we issued $500.0 million aggregate principal amount of our 3.625% senior notes due in June 2015, which we refer to as our 2015 Notes, and $500.0 million aggregate principal amount of our 5.000% senior notes due in June 2020, which we refer to as our 2020 Notes, and, together with our 2015 Notes, as the Notes, as described in Note 11., "Long-Term Debt," to these consolidated financial statements. As of June 30, 2010 our:

•

2015 Notes had a fair value of $509.1 million and a carrying value of $498.4 million; and

•

2020 Notes had a fair value of $512.5 million and a carrying value of $495.9 million.

The fair values of our 2015 Notes and 2010 Notes were determined through a market-based approach using observable and corroborated sources; within the hierarchy of fair value measurements, these are classified as Level 2 fair values.

        The carrying amounts reflected in our consolidated balance sheets for cash, accounts receivable, other current assets, accounts payable, accrued expenses, current portion of contingent consideration obligations and current portion of long-term debt and capital lease obligations approximate fair value due to their short-term maturities.

Derivative Instruments

        As a result of our worldwide operations, we face exposure to adverse movements in foreign currency exchange rates. Exposures to currency fluctuations that result from sales of our products in foreign markets are partially offset by the impact of currency fluctuations on our international expenses. We may also use derivatives, primarily foreign exchange forward contracts for which we do not apply hedge accounting treatment, to further reduce our exposure to changes in exchange rates, primarily to offset the earnings effect from short-term foreign currency assets and liabilities. We account for such derivatives at market value with the resulting gains and losses reflected within SG&A in our consolidated statements of operations. We do not have any derivatives designated as hedging instruments and we do not use derivative instruments for trading or speculative purposes.

19

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

3. Fair Value Measurements (Continued)

Foreign Exchange Forward Contracts

        Generally, we enter into foreign exchange forward contracts with maturities of not more than 15 months. All foreign exchange forward contracts in effect as of June 30, 2010 and December 31, 2009 had maturities of 1 to 2 months. We report these contracts on a net basis. Net asset derivatives are included in other current assets and net liability derivatives are included in accrued expenses in our consolidated balance sheets.

        The following table summarizes the balance sheet classification of the fair value of these derivatives on both a gross and net basis as of June 30, 2010 and December 31, 2009 (amounts in thousands):

	Unrealized Gain/Loss on Foreign Exchange Forward Contracts
					As Reported
	Gross				Net
	Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
As of:	Other current assets		Accrued expenses		Other current assets		Accrued expenses
June 30, 2010	$	1,236	$	1,737	$	—	$	501
December 31, 2009	$	9,834	$	5,550	$	4,284	$	—

        Total foreign exchange (gains) and losses included in SG&A in our consolidated statements of operations includes unrealized and realized (gains) and losses related to both our foreign exchange forward contracts and our foreign currency assets and liabilities. The net impact of our overall unrealized and realized foreign exchange (gains) and losses for both the three and six months ended June 30, 2010 and 2009 was not significant.

        The following table summarizes the effect of the unrealized and realized net (gains)/losses related to our foreign exchange forward contracts on our consolidated statements of operations for the three and six months ended June 30, 2010 and 2009 (amounts in thousands):

		Net (Gain)/Loss Reported
		Three Months Ended June 30,				Six Months Ended June 30,
	Statement of Operations Location
Derivative Instrument		2010		2009		2010			2009
Foreign exchange forward contracts	SG&A	$	4,660	$	18,728	$	(381	)	$	7,898

20

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

4. Net Income (Loss) Per Share

        The following table sets forth our computation of basic and diluted net income (loss) per common share (amounts in thousands, except per share amounts):

			Three Months Ended June 30,					Six Months Ended June 30,
			2010			2009		2010			2009
Net income (loss)—basic and diluted			$	(3,773	)	$	187,574	$	(118,721	)	$	383,060
Shares used in computing net income (loss) per common share—basic				265,270			269,958		265,760			270,406
Effect of dilutive securities(1):
	Stock options(2)			—			3,555		—			4,554
	Restricted stock units			—			1,303		—			1,221
	Other			—			36		—			44
		Dilutive potential common shares		—			4,894		—			5,819
Shares used in computing net income (loss) per common share—diluted(1)				265,270			274,852		265,760			276,225
Net income (loss) per common share:
	Basic		$	(0.01	)	$	0.69	$	(0.45	)	$	1.42
	Diluted		$	(0.01	)	$	0.68	$	(0.45	)	$	1.39

(1)

For the three and six months ended June 30, 2010, basic and diluted net loss per share are the same. We did not include the securities described in the following table in the computation of diluted net loss per share because these securities would have an anti-dilutive effect due to our net loss for those periods (amounts in thousands):

		Three Months Ended June 30, 2010		Six Months Ended June 30, 2010
Stock options			2,316		2,633
Restricted stock units			2,391		2,462
Other			148		198
	Total shares excluded from calculation of diluted loss per share		4,855		5,293

(2)

We did not include the securities described in the following table in the computation of diluted earnings (loss) per share because these securities were anti-dilutive during the corresponding period (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Shares issuable upon exercise of outstanding options		23,158		19,732		21,903		14,191

21

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

5. Comprehensive Income (Loss)

        The components of comprehensive income (loss) for the periods presented are as follows (amounts in thousands):

			Three Months Ended June 30,					Six Months Ended June 30,
			2010			2009		2010			2009
Net income (loss)			$	(3,773	)	$	187,574	$	(118,721	)	$	383,060
Other comprehensive income (loss):
	Foreign currency translation adjustments			(141,890	)		153,780		(267,367	)		33,632
	Pension liability adjustments, net of tax(1)			(12	)		—		(21	)		—
	Unrealized gains (losses) on securities, net of tax:
		Unrealized gains (losses) arising during the period, net of tax		(3,639	)		9,657		(1	)		(10,950	)
		Reclassification adjustment of (gains) losses included in net income (loss), net of tax		(694	)		37		(1,872	)		(160	)
		Unrealized gains (losses) on securities, net of tax(2)		(4,333	)		9,694		(1,873	)		(11,110	)
	Other comprehensive income (loss)			(146,235	)		163,474		(269,261	)		22,522
Comprehensive income (loss)			$	(150,008	)	$	351,048	$	(387,982	)	$	405,582

(1)

Tax amounts for all periods were not significant.

(2)

Net of $2.5 million of tax for the three months ended and $1.1 million of tax for the six months ended June 30, 2010 and $(5.6) million of tax for the three months ended and $6.3 million of tax for the six months ended June 30, 2009.

6. Strategic Transactions

Purchase of In-Process Research and Development

        The following table sets forth the significant in-process research and development, or IPR&D, projects for the companies and assets we acquired between January 1, 2006 and June 30, 2010 (amounts in millions):

Company/Assets Acquired	Purchase Price		IPR&D			Programs Acquired	Discount Rate Used in Estimating Cash Flows			Year of Expected Launch
Bayer (2009)	$	1,006.5	$	458.7		alemtuzumab for MS—US		16	%		2012
				174.2		alemtuzumab for MS—ex-US		16	%		2013
			$	632.9	(1)
Bioenvision, Inc., or Bioenvision (2007)	$	349.9	$	125.5	(2)	Clolar(3)		17	%		2010-2016	(4)
AnorMED Inc., or AnorMED (2006)	$	589.2	$	526.8	(2)	Mozobil(5)		15	%		2016

(1)

Capitalized as an indefinite-lived intangible asset.

(2)

Expensed on acquisition date.

(3)

Clolar is approved for the treatment of relapsed and refractory pediatric acute lymphoblastic leukemia, or ALL. The IPR&D projects for Clolar are related to the development of the product for the treatment of other indications.

22

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

6. Strategic Transactions (Continued)

(4)

Year of expected launch reflects both the ongoing launch of products for currently approved indications and the anticipated launch of the products in the future for new indications.

(5)

Mozobil received marketing approval for use in stem cell transplants in the United States in December 2008 and in Europe in July 2009. Mozobil is also being developed for tumor sensitization.

Pro Forma Financial Summary

        The following pro forma financial summary is presented as if the acquisition from Bayer was completed as of January 1, 2009. The pro forma combined results are not necessarily indicative of the actual results that would have occurred had the acquisition been consummated on that date, or of the future operations of the combined entities. Material nonrecurring charges related to this acquisition, such as a gain on acquisition of business of $24.2 million, are included in the pro forma financial summaries for the period presented (amounts in thousands, except per share amounts):

		Three Months Ended June 30,		Six Months Ended June 30,
		2009		2009
Total revenues		$	1,280,470	$	2,477,530
Net income		$	163,425	$	319,795
Net income per share:
	Basic	$	0.61	$	1.18
	Diluted	$	0.59	$	1.16
Weighted average shares outstanding:
	Basic		269,958		270,406
	Diluted		274,852		276,225

7. Inventories

		June 30, 2010		December 31, 2009
		(Amounts in thousands)
Raw materials		$	106,394	$	123,434
Work-in-process			283,648		288,653
Finished goods			204,070		195,935
	Total	$	594,112	$	608,022

Manufacturing-Related Charges

Cerezyme and Fabrazyme

        In order to build a small inventory buffer to help us more consistently manage the resupply of Cerezyme to patients and reduce interruptions in shipping that occur in the absence of inventory, we began shipping Cerezyme to meet 50% of estimated product demand at the end of February 2010. Although we achieved our goal of building a small inventory buffer during the first quarter of 2010, we continued shipping at 50% of demand level due to an interruption in operations at our Allston facility

23

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

7. Inventories (Continued)

at the end of March 2010. The interruption resulted from an unexpected city electrical power failure that compounded issues with the plant's water system. Once production resumed, we continued shipping at the 50% demand level through the end of the second quarter of 2010. We supplied approximately the same amount of Cerezyme in July 2010 as we supplied in each of May 2010 and June 2010, and expect that supply will then increase in the following months. However, there will be regional variations when Cerezyme will be available, and in some countries, patients' infusion schedules may need to shift due to short-term shipping delays.

        Since the fourth quarter of 2009, we have been shipping Fabrazyme to meet approximately 30% of estimated product demand. We have been working to increase the productivity of the Fabrazyme manufacturing process, which has performed at the low end of the historical range since the re-start of production. We have developed a new working cell bank for Fabrazyme that has been approved by the FDA and the European Medicines Agency, or EMA. The new working cell bank has completed three runs and has had 30% greater productivity than the old working cell bank. We expect to continue shipping Fabrazyme at the 30% of demand level through the third quarter and increase shipments of Fabrazyme in the fourth quarter.

        We recorded $14.9 million of charges for the three months ended and $16.4 million of charges for the six months ended June 30, 2010 to cost of products sold in our consolidated statements of operations to write off Cerezyme and Fabrazyme work-in-process material that was unfinished when the interruption occurred, based on our determination that such material could not be finished, and other inventory for these products that did not meet the necessary quality specifications.

        We also recorded charges of $6.0 million for the three months and $7.1 million for the six months ended June 30, 2010 to cost of products sold in our consolidated statements of operations to write off certain lots of Thyrogen that did not meet the necessary quality specifications.

        We capitalize inventory produced for commercial sale, which may result in the capitalization of inventory prior to regulatory approval of a product. If a product is not approved for sale, it would result in the write off of the inventory and a charge to earnings. As of June 30, 2010, the amount of inventory for Fabrazyme related to the new working cell bank that has not yet been approved for sale was not significant.

Inventory Subject to Additional Evaluation and Release

        At any particular period, we may have certain inventory that requires further evaluation or testing to ensure that it meets appropriate quality specifications. As of June 30, 2010, we have approximately $16 million of inventory that is being evaluated or tested, including $6.3 million of Fabrazyme, $3.9 million of Myozyme and $3.6 million of Thymoglobulin. If we determine that this inventory, or any portion thereof, does not meet the necessary quality standards, it would result in a write off of the inventory and a charge to earnings.

Sevelamer Hydrochloride and Sevelamer Carbonate

        We manufacture the majority of our supply requirements for sevelamer hydrochloride (the active ingredient in Renagel) and sevelamer carbonate (the active ingredient in Renvela) at our manufacturing facility in Haverhill, England. In December 2009, equipment failure caused an explosion and fire at this facility, which damaged some of the equipment used to produce these active ingredients

24

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

7. Inventories (Continued)

as well as the building in which the equipment was located. As a result, we temporarily suspended production of sevelamer hydrochloride and sevelamer carbonate at this facility so the damaged equipment could be repaired. We resumed production of sevelamer hydrochloride in May 2010. We anticipate that the facility will resume production of sevelamer carbonate in the fourth quarter of 2010. We believe that we have adequate supply levels to meet the current demand for both Renagel and Renvela and do not anticipate there will be any supply constraints for either product while the facility undergoes repairs. We recorded $6.1 million of expenses, net of $2.4 million of insurance reimbursements, for the three months ended and $13.7 million, net of $5.4 million of insurance reimbursements, for the six months ended June 30, 2010, to cost of products sold in our consolidated statements of operations for Renagel and Renvela related to the remediation cost of our Haverhill, England manufacturing facility, including repairs and idle capacity expenses. We expect to incur approximately $10 million of additional costs related to the remediation of this facility in the third quarter of 2010.

8. Goodwill and Other Intangible Assets

        The following table contains the change in our goodwill during the six months ended June 30, 2010 (amounts in thousands):

	Personalized Genetic Health		Renal and Endocrinology		Biosurgery			Hematology and Oncology		Multiple Sclerosis		Other			Total
Goodwill	$	339,563	$	319,882	$	110,376		$	375,889	$	318,059	$	261,631		$	1,725,400
Accumulated impairment losses(1)		—		—		(102,792	)		—		—		(219,245	)		(322,037	)
Balance as of December 31, 2009		339,563		319,882		7,584			375,889		318,059		42,386			1,403,363
Net exchange differences arising during the period		—		—		—			—		—		(19	)		(19	)
Other changes in carrying amounts during the period		—		—		—			—		—		295			295
Balance as of June 30, 2010	$	339,563	$	319,882	$	7,584		$	375,889	$	318,059	$	42,662		$	1,403,639
Goodwill	$	339,563	$	319,882	$	110,376		$	375,889	$	318,059	$	261,907		$	1,725,676
Accumulated impairment losses(1)		—		—		(102,792	)		—		—		(219,245	)		(322,037	)
Balance as of June 30, 2010	$	339,563	$	319,882	$	7,584		$	375,889	$	318,059	$	42,662		$	1,403,639

(1)

Accumulated impairment losses include:

•

a $102.8 million pre-tax charge recorded in 2003 to write off the goodwill of our Biosurgery reporting segment's orthopaedics reporting unit; and

25

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

8. Goodwill and Other Intangible Assets (Continued)

•

a $219.2 million pre-tax charge recorded in 2006 to write off the goodwill of our genetic testing reporting unit.

Other Intangible Assets

        The following table contains information about our other intangible assets for the periods presented (amounts in thousands):

		As of June 30, 2010							As of December 31, 2009
		Gross Other Intangible Assets		Accumulated Amortization			Net Other Intangible Assets		Gross Other Intangible Assets		Accumulated Amortization			Net Other Intangible Assets
Finite-lived other intangible assets:
	Technology(1)	$	1,939,330	$	(942,470	)	$	996,860	$	2,180,232	$	(877,611	)	$	1,302,621
	Distribution rights(2)		446,427		(260,557	)		185,870		440,521		(227,726	)		212,795
	Patents		188,651		(138,520	)		50,131		188,651		(131,898	)		56,753
	License fees		98,272		(50,031	)		48,241		98,647		(47,052	)		51,595
	Customer lists		87,421		(48,282	)		39,139		87,423		(43,822	)		43,601
	Trademarks		60,608		(50,332	)		10,276		60,608		(47,623	)		12,985
	Total finite-lived other intangible assets		2,820,709		(1,490,192	)		1,330,517		3,056,082		(1,375,732	)		1,680,350
Indefinite-lived other intangible assets:
	IPR&D		632,912		—			632,912		632,912		—			632,912
	Total other intangible assets	$	3,453,621	$	(1,490,192	)	$	1,963,429	$	3,688,994	$	(1,375,732	)	$	2,313,262

(1)

For the year ended December 31, 2009, includes a gross technology intangible asset of $240.3 million and related accumulated amortization of $(24.0) million related to the consolidated results of BioMarin/Genzyme LLC. Effective January 1, 2010, under new guidance we adopted for consolidating variable interest entities, we no longer consolidate the results of this joint venture and no longer include this gross technology asset and the related accumulated amortization or a related other noncurrent liability in our consolidated balance sheets.

(2)

Includes an additional $6.0 million for the six months ended June 30, 2010 for additional payments made or accrued in connection with the reacquisition of the Synvisc sales and marketing rights from Pfizer in January 2005. As of June 30, 2010, the contingent royalty payments to Pfizer payable under the agreement are substantially complete. We completed the contingent royalty payments to Pfizer related to North American sales of Synvisc in the first quarter of 2010 and anticipate completing the remaining contingent royalty payments to Pfizer related to sales of the product outside of the United States by first quarter of 2011, the amount of which is not significant.

        All of our finite-lived other intangible assets are amortized over their estimated useful lives.

26

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

8. Goodwill and Other Intangible Assets (Continued)

        As of June 30, 2010, the estimated future amortization expense for our finite-lived other intangible assets for the remainder of fiscal year 2010, the four succeeding fiscal years and thereafter is as follows (amounts in thousands):

Year Ended December 31,	Estimated Revenue- Based Amortization Expense(1)		Estimated Other Amortization Expense		Total Estimated Amortization Expense(1)
2010 (remaining six months)	$	49,255	$	91,146	$	140,401
2011		119,112		175,060		294,172
2012		94,168		148,174		242,342
2013		29,545		131,432		160,977
2014		26,308		109,116		135,424
Thereafter		21,578		352,219		373,797

(1)

Includes estimated future amortization expense for:

•

the Synvisc distribution rights based on the forecasted respective future sales of Synvisc and the resulting future contingent payments we may be required to make to Pfizer and the Myozyme/Lumizyme patent and technology rights pursuant to a license agreement with Synpac based on forecasted future Net Sales of Myozyme/Lumizyme and the milestone payments we may be required to make to Synpac. These contingent payments will be recorded as intangible assets when the payments are accrued; and

•

the technology intangible assets resulting from our acquisition of the worldwide rights to Fludara, which are being amortized based on the forecasted future sales of Fludara.

9. Investment in BioMarin/Genzyme LLC

        We and BioMarin have entered into agreements to develop and commercialize Aldurazyme, a recombinant form of the human enzyme alpha-L-iduronidase, used to treat an LSD known as mucopolysaccharidosis, or MPS, I. Under the relationship, an entity we formed with BioMarin in 1998 called BioMarin/Genzyme LLC has licensed all intellectual property related to Aldurazyme and other collaboration products on a royalty-free basis to BioMarin and us. BioMarin holds the manufacturing rights and we hold the global marketing rights. We are required to pay BioMarin a tiered royalty payment ranging from 39.5% to 50% of worldwide net product sales of Aldurazyme.

        Prior to January 1, 2010, we determined that we were the primary beneficiary of BioMarin/Genzyme LLC and, as a result, we:

•

consolidated the income (losses) of BioMarin/Genzyme LLC and recorded BioMarin's portion of BioMarin/Genzyme LLC's income (losses) as minority interest in our consolidated statements of operations; and

•

recorded the assets and liabilities of BioMarin/Genzyme LLC in our consolidated balance sheets at fair value.

        Effective January 1, 2010, in accordance with new guidance we adopted for consolidating variable interest entities, we were required to reassess our designation as primary beneficiary of

27

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

9. Investment in BioMarin/Genzyme LLC (Continued)

BioMarin/Genzyme LLC. Under the new guidance, the entity with the power to direct the activities that most significantly impact a variable interest entity's economic performance is the primary beneficiary. We have concluded that BioMarin/Genzyme LLC is a variable interest entity, but does not have a primary beneficiary because the power to direct the activities of BioMarin/Genzyme LLC that most significantly impact its performance, is, in fact, shared equally between us and BioMarin through our commercialization rights and BioMarin's manufacturing rights. Effective January 1, 2010, we no longer consolidate the results of BioMarin/Genzyme LLC and instead record our portion of the results of BioMarin/Genzyme LLC in equity in loss of equity method investments in our consolidated statements of operations. For the three and six months ended June 30, 2010, the results of BioMarin/Genzyme LLC and our portion of the results of BioMarin/Genzyme LLC were not significant.

10. Investment in Isis Pharmaceuticals, Inc. Common Stock

        We review for potential impairment the carrying value of each of our strategic investments in equity securities on a quarterly basis. The closing price per share of Isis Pharmaceuticals, Inc, or Isis, common stock exhibited volatility during 2009 and the six months ended June 30, 2010 and has remained below our historical cost since September 1, 2009, with closing prices since that date ranging from a high of $15.69 per share to a low of $8.66 per share. We considered all available evidence in assessing the decline in value of our investment in Isis common stock, including investment analyst reports and Isis's expected results and future outlook. However, despite such evidence if the fair value of any of our investments remain below our historical cost for a consecutive nine months, we will generally conclude that it is unclear over what period the stock price of our investment would recover and that any evidence suggesting that the investment would recover to at least our historical cost is not sufficient to overcome the presumption that the current market price is the best indicator of the value of this investment. Accordingly, given the significance and duration of the decline in value of our investment in Isis common stock as of June 30, 2010, we considered the decline in value of this investment to be other than temporary and we recorded a $32.3 million impairment charge to losses on investment in equity securities, net in our consolidated statements of operations for the three and six months ended June 30, 2010.

11. Long-Term Debt

2015 and 2020 Senior Notes

        In June 2010, we sold $500.0 million aggregate principal amount of our 2015 Notes and $500.0 million aggregate principal amount of our 2020 Notes through institutional private placements to fund the $1.0 billion payment under our accelerated share repurchase agreement, as discussed in Note 12., "Stockholders' Equity," to these consolidated financial statements. We received net proceeds from the sale of the Notes of approximately $986.6 million, after deducting commissions and other expenses related to the offerings. We recorded the net proceeds in our consolidated balance sheets as of June 30, 2010 as:

•

a $7.7 million increase to other noncurrent assets for the capitalized debt offering costs, including $6.3 million for commissions and $1.4 million of other offering expenses; and

•

a $1.0 billion increase to long-term liabilities for the principal of the Notes, offset by $5.7 million for the debt discount on the Notes.

28

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

11. Long-Term Debt (Continued)

Both the debt offering costs and debt discount will be amortized to interest expense in our consolidated statements of operations. The debt offering costs have been allocated proportionately to our 2015 Notes and our 2020 Notes and are being amortized based on the term of each such group of the Notes. The debt discount for each group of the Notes will be amortized using the effective interest method. The 2015 Notes mature in June 2015 and the 2020 Notes mature in June 2020. Interest accrues on the Notes from June 17, 2010 and is payable semi-annually in arrears on June 15 and December 15 of each year starting on December 15, 2010.

        The Notes are our senior unsecured obligations and rank equally in right of payment with all of our other senior unsecured indebtedness from time to time outstanding. The Notes are fully and unconditionally guaranteed by one of our subsidiaries that also guarantees our indebtedness under our 2006 revolving credit facility. We may redeem the Notes in whole or in part at any time at a redemption price equal to the greater of:

•

100% of the principal amount of the Notes redeemed; or

•

the sum of the present values of the remaining scheduled payments of interest and principal thereon discounted at the Treasury Rate plus 25 basis points in the case of our 2015 Notes and 30 basis points in the case of our 2020 Notes.

We may be required to offer to repurchase the Notes at a purchase price equal to 101% of their principal amount if we are subject to certain changes of control.

Revolving Credit Facility

        In July 2006, we entered into a five-year $350.0 million senior unsecured revolving credit facility with JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, ABN AMRO Bank N.V., Citizens Bank of Massachusetts and Wachovia Bank, National Association, as co-documentation agents, and a syndicate of lenders, which we refer to as our 2006 revolving credit facility. The proceeds of loans under our 2006 revolving credit facility can be used to finance working capital needs and for general corporate purposes. We may request that our 2006 revolving credit facility be increased at any time by up to an additional $350.0 million in the aggregate, subject to the agreement of the lending banks, as long as no default or event of default has occurred or is continuing and certain other customary conditions are satisfied. Borrowings under our 2006 revolving credit facility will bear interest at various rates depending on the nature of the loan.

        As of June 30, 2010, we had approximately $9 million of outstanding standby letters of credit and no borrowings, resulting in approximately $341 million of available credit under our 2006 revolving credit facility, which matures July 14, 2011. The terms of this credit facility include various covenants, including financial covenants that require us to meet minimum interest coverage ratios and maximum leverage ratios. As of June 30, 2010, we were in compliance with these covenants.

12. Stockholders' Equity

Share Repurchase Plan

        In April 2010, our board of directors authorized a $2.0 billion share repurchase plan consisting of the near-term purchase of $1.0 billion of our common stock to be financed with proceeds of newly issued debt, and the purchase of an additional $1.0 billion of our common stock by June 2011. On

29

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

12. Stockholders' Equity (Continued)

June 17, 2010, we entered into an accelerated share repurchase agreement with Goldman Sachs & Co., or Goldman Sachs, under which we will repurchase $1.0 billion worth of shares of our common stock. Our effective per share purchase price will be based generally on the average of the daily volume weighted average prices per share of our common stock, less a discount, calculated during a period of up to four months. In connection with this agreement, we paid $1.0 billion to Goldman Sachs and received 15.6 million shares, of which:

•

$800.0 million, or 80%, represents the value, based on the closing price of our common stock on June 17, 2010, of the 15.6 million shares of our common stock that Goldman Sachs delivered to us; and

•

$200.0 million, or 20%, represents an advance payment that, depending on our effective per share purchase price, either will cover additional shares Goldman Sachs may be required to deliver to us or will be applied towards any additional amount that may be owed by us if our effective per share purchase price exceeds the closing price of our common stock on June 17, 2010.

We recorded the $1.0 billion payment to the bank as a decrease to stockholders' equity in our consolidated balance sheet as of June 30, 2010, consisting of decreases of $0.2 million in common stock and $799.8 million in additional paid-in capital as well as a $200.0 million share purchase contract receivable for the advance payment described above.

        The total number of shares ultimately repurchased will not be known until the calculation period ends and a final settlement occurs. Upon final settlement, we will either receive a settlement amount of additional shares of our common stock or be required to remit a settlement amount, payable, at our option, in cash or common stock. Shares repurchased under this agreement will be deemed authorized shares that are no longer outstanding.

Modification of Certain Stock Options and RSUs

        On May 26, 2010, in connection with our plan to approve strategic alternatives for our genetic testing, diagnostic products and pharmaceutical intermediates business units, the compensation committee of our board of directors approved certain modifications to the stock options and RSUs previously granted to the employees of those business units, to be effective as of the date of divestiture of each business unit. The post-termination exercise period for these stock options was modified to extend the post-termination exercise period from three months to one year. We used Black-Scholes valuation models, based on the following assumptions, to determine the valuation adjustment required for the extension of the post-termination exercise period, and recorded stock-based compensation expense using an expected term of seven months:

	New Post-Termination Period			Original Post-Termination Period
Grant date fair value as of May 26, 2010		$50.00			$50.00
Term		19 months			10 months
Dividend		0			0
Volatility		38.00	%		30.00	%
Risk-free interest rate		0.63	%		0.32	%

30

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

12. Stockholders' Equity (Continued)

        Based on our analysis, we recorded an additional $9.1 million of stock-based compensation expense in our consolidated statements of operations for the three months ended June 30, 2010 for the valuation adjustment related to the modification of these stock options.

        On May 26, 2010, the compensation committee of our board of directors also approved the following modifications to certain RSUs granted to the employees of these three business units, to be effective as of the date of divestiture for each business unit, including:

•

acceleration of the vesting of the RSUs granted in May 2008; and

•

pro-ration of the vesting of the RSUs granted in May 2009 over a 19-month, instead of a three-year, period.

        Prior to these modifications, the RSUs granted in May 2008 had a grant date fair value of $68.48 per share and the RSUs granted in May 2009 had a grant date fair value of $58.66 per share based on the closing price of our common stock at the date of each grant. The modifications triggered a new measurement date for these RSUs and, as a result, we revalued these RSUs based on a new grant date fair value of $50.00 per share, the closing price of our common stock on the date of modification. We recorded a net reduction in stock-based compensation for these RSUs of $(2.9) million in our consolidated statements of operations for the three months ended June 30, 2010 to adjust the cumulative stock-based compensation expense recorded for these RSUs for the modifications, including:

•

$(8.3) million for the reversal of the cumulative to-date stock-based compensation expenses recorded through May 25, 2010, prior to the modifications; offset, in part, by

•

$5.4 million of stock-based compensation expenses for the period from May 26, 2010 through June 30, 2010 based on the new, reduced grant date fair value of these awards.

We expect to record approximately $13 million of additional stock-based compensation expense for these RSUs during the second half of 2010 as a result of these modifications.

Long-Term Incentive Program for Senior Executives

        From 2007 through 2009, our long-term incentive program for senior executives was comprised of equity awards in the form of time vesting stock options and time vesting RSUs. Beginning with 2010, the equity vehicles for our long-term incentive program for senior executives includes a combination of:

•

time vesting stock options; and

•

performance and market vesting awards comprised of PSUs, tied to the achievement of pre-established performance and market goals over a three-year performance period, and cash.

Approximately half of each senior executive's grant consists of time vesting stock options with the remainder in PSUs.

        For the 2010 through 2012 performance period, the performance metrics are:

•

cash flow return on invested capital; and

•

R-TSR measured against the performance of a subset of biotechnology peer companies (currently 28 companies) in the S&P 500 Health Care Index.

31

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

12. Stockholders' Equity (Continued)

        Each metric is weighted equally. For both metrics, performance between the threshold level and the target level will be awarded in PSUs. The PSUs will be paid out in shares of our stock at the end of the three-year period if performance between the threshold level and target level is achieved. If performance above the target level is achieved, the portion of the award above the target level will be paid out in cash up to a predetermined maximum cash award. Since it is possible that the PSUs may not pay out at all, it is completely "at risk" compensation.

        In January 2010, the compensation committee of our board of directors approved a range for the three-year cash flow return on invested capital metric of 85% to 115%. For performance between 85% and 100% of the cash flow return on invested capital target, the payout range is 50% to 100% of the senior executive's target PSU award associated with this performance measure. Performance between 101% and 115% of the cash flow return on invested capital target will result in a cash payment that will be awarded based on performance achieved between target and maximum levels, up to a predetermined maximum.

        The committee also approved the following performance levels for R-TSR:

Performance Level	Percentile Rank
Threshold		40th
Target		65th
Maximum		75th

        For performance between the R-TSR threshold and target levels, the payout range is 35% to 100% of the senior executive's target PSU award associated with this performance measure. R-TSR performance between the target and maximum levels will result in a cash payment that will be awarded based on performance achieved between target and maximum levels, up to a predetermined maximum.

        If a participating senior executive's employment is terminated before the end of the performance period because of death, disability or retirement, payment of the PSU will be pro-rated to the date of termination based upon the company's actual achievement of performance levels at the end of the performance period. Upon a change in control, payment of a PSU will be paid out at the target performance level and pro-rated to the date of the change of control.

PSUs

        During the six months ended June 30, 2010, we granted a total of 223,066 PSUs with a weighted average grant date fair value of $49.86 per share to senior executives under our 2004 Equity Plan. The PSUs are subject to the attainment of certain performance criteria established at the beginning of the performance period, as described above, and cliff vest at the end of the performance period, which ends December 31, 2012. Compensation expense associated with our PSUs is initially based upon the number of shares expected to vest after assessing the probability that certain performance criteria will be met and the associated targeted payout level that is forecasted will be achieved, net of estimated forfeitures. Compensation expense for our PSUs is recognized over the applicable performance period, adjusted for the effect of estimated forfeitures.

        The fair value of PSUs subject to the cash flow return on investment performance metric, which includes both performance and service conditions, is estimated based on the market value of our stock on the date of grant. We use a lattice model with a Monte Carlo simulation to determine the fair value

32

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

12. Stockholders' Equity (Continued)

of PSUs subject to the R-TSR performance metric, which includes both market and service conditions. The lattice model requires various highly judgmental assumptions to determine the fair value of the awards. This model samples paths of our stock price and the stock prices of a group of peer companies in the S&P 500 Health Care Index, which we refer to as the Peer Group, and calculates the resulting change in cash flow multiple at the end of the forecasted performance period. This model iterates these randomly forecasted results until the distribution of results converge on a mean or estimated fair value.

        We used the following assumptions to determine the fair value of these awards:

Expected dividend yield	0%
Range of risk free rate of return	1.33%-1.45%
Range of our expected stock price volatility	35.11%-36.06%
Range of Peer Group expected stock price volatility	21.27%-60.32%
Range of our average closing stock prices on the grant dates	$51.83-$56.50
Range of Peer Group average closing stock prices on the grant dates	$7.22-$348.13
Range of our historical total shareholder return on the grant dates	5.75%-15.28%
Range of historical total shareholder return for the Peer Group on the grant dates	(19.78)%-23.22%

Stock-Based Compensation Expense, Net of Estimated Forfeitures

        We allocated pre-tax stock-based compensation expense, net of estimated forfeitures, based on the functional cost center of each employee as follows (amounts in thousands):

		Three Months Ended June 30,						Six Months Ended June 30,
		2010			2009			2010			2009
Pre-tax stock-based compensation expense, net of estimated forfeitures(1)		$	(44,694	)	$	(65,167	)	$	(92,335	)		(109,773	)
Less: tax benefit from stock options			13,476			15,144			26,548			27,733
	Total stock-based compensation expense, net of tax	$	(31,218	)	$	(50,023	)	$	(65,787	)	$	(82,040	)

(1)

We also capitalized the following amounts of stock-based compensation expense to inventory, all of which is attributable to participating employees that support our manufacturing operations (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Stock-based compensation expense capitalized to inventory	$	4,038	$	5,729	$	7,840	$	9,141

        We amortize stock-based compensation expense capitalized to inventory based on inventory turns.

        At June 30, 2010, there was $275.6 million of pre-tax stock-based compensation expense, net of estimated forfeitures, related to unvested awards not yet recognized which is expected to be recognized over a weighted average period of 2.2 years.

33

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

13. Commitments and Contingencies

FDA Consent Decree

        On May 24, 2010, we entered into a consent decree with the FDA relating to our Allston facility. Under the terms of the consent decree, we will pay an upfront disgorgement of past profits of $175.0 million. Conditioned upon our compliance with the terms of the consent decree, we may continue to ship Cerezyme and Fabrazyme, which are manufactured, filled and finished at the facility, as well as Thyrogen, which is filled and finished at the facility. In the United States, Thyrogen that is filled and finished at the facility will only be distributed based on medical necessity, in accordance with FDA criteria. The consent decree requires us to move our fill-finish operations out of the Allston facility for Thyrogen sold within the United States by November 22, 2010 and for Fabrazyme sold within the United States by November 24, 2010. We must move our fill-finish operations for all products sold outside of the United States by August 31, 2011. If we are not able to meet these deadlines, the FDA can require us to disgorge 18.5% of the revenue from the sale of any products that are filled and finished at the Allston facility after the applicable deadlines.

        The consent decree also requires us to implement a plan to bring the Allston facility operations into compliance with applicable laws and regulations. The plan must address any deficiencies previously reported to us or identified as part of a comprehensive inspection conducted by a third-party expert, who we are required to retain, and who will monitor and oversee our implementation of the plan. In 2009, we began implementing a comprehensive remediation plan, prepared with assistance from our compliance consultant, The Quantic Group, Ltd., or Quantic, to improve quality and compliance at the Allston facility. We intend to revise that plan to include any additional remediation efforts required in connection with the consent decree as identified by Quantic, who we are retaining as the third-party expert under the consent decree. The plan, as revised, which will be subject to FDA approval, is expected to take approximately 3-4 years to complete and will include a timetable of specified compliance milestones. If the milestones are not met in accordance with the timetable, the FDA can require us to pay $15,000 per day, per affected drug, until these compliance milestones are met. Upon satisfying the compliance requirements in accordance with the terms of the consent decree, we will be required to retain an auditor to monitor and oversee ongoing compliance at the Allston facility for an additional five years. The consent decree is subject to, and effective upon, approval by the U.S. District Court for the District of Massachusetts. The consent decree was filed with the U.S. District Court on May 24, 2010 and we are awaiting the court's approval.

Legal Proceedings

Federal Securities Litigation

        In July 2009 and August 2009, two purported securities class action lawsuits were filed in the U.S. District Court for the District of Massachusetts against us and our President and Chief Executive Officer. The lawsuits were filed on behalf of those who purchased our common stock during the period from June 26, 2008 through July 21, 2009 and allege violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Each of the lawsuits is premised upon allegations that we made materially false and misleading statements and omissions by failing to disclose instances of viral contamination at two of our manufacturing facilities and our receipt of a list of inspection observations from the FDA related to one of the facilities, which detailed observations of practices that the FDA considered to be deviations from good manufacturing practice, or GMP. The plaintiffs seek unspecified damages and reimbursement of costs, including attorneys' and

34

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

13. Commitments and Contingencies (Continued)

experts' fees. In November 2009, the lawsuits were consolidated in In Re Genzyme Corp. Securities Litigation and a lead plaintiff was appointed. In March 2010, the plaintiffs filed a consolidated amended complaint that extended the class period from October 24, 2007 through November 13, 2009. In June 2010, we filed a motion to dismiss the class action. If the action is not dismissed, we intend to defend this lawsuit vigorously.

Shareholder Demand Letters

        Since August 2009, we have received ten letters from shareholders demanding that our board of directors take action on behalf of Genzyme Corporation to remedy alleged breaches of fiduciary duty by our directors and certain executive officers. The demand letters are primarily premised on allegations regarding our disclosures to shareholders with respect to manufacturing issues and compliance with GMP and our processes and decisions related to manufacturing at our Allston facility. Several of the letters also assert that certain of our executive officers and directors took advantage of their knowledge of material non-public information about Genzyme to illegally sell stock they personally held in Genzyme. Our board of directors has designated a special committee of three independent directors to oversee the investigation of the allegations made in the demand letters and to recommend to the independent directors of the board whether any action should be instituted on behalf of Genzyme Corporation against any officer or director. The committee has retained independent legal counsel. If the independent members of our board of directors were to make a determination that it was in our best interest to institute an action against any officers or directors, any monetary recovery would be to the benefit of Genzyme Corporation. The special committee's investigation is ongoing.

Shareholder Derivative Actions

        In December 2009, two actions were filed by shareholders derivatively for Genzyme's benefit in the U.S. District Court for the District of Massachusetts against our board of directors and certain of our executive officers after a ninety day period following their respective demand letters had elapsed (the "District Court Actions"). In January 2010, a derivative action was filed in Massachusetts Superior Court (Middlesex County) by a shareholder who has not issued a demand letter and in February and March 2010, two additional derivative actions were filed in Massachusetts Superior Court (Suffolk County and Middlesex County, respectively) by two separate shareholders after the lapse of a ninety day period following the shareholders' respective demand letters (collectively, the "State Court Actions").

        The derivative actions in general are based on allegations that our board of directors and certain executive officers breached their fiduciary duties by causing Genzyme to make purportedly false and misleading or inadequate disclosures of information regarding manufacturing issues, compliance with GMP, ability to meet product demand, expected revenue growth, and approval of Lumizyme. The actions also allege that certain of our directors and executive officers took advantage of their knowledge of material non-public information about Genzyme to illegally sell stock they personally held in Genzyme. The plaintiffs generally seek, among other things, judgment in favor of Genzyme for the amount of damages sustained by Genzyme as a result of the alleged breaches of fiduciary duty, disgorgement to Genzyme of proceeds that certain of our directors and executive officers received from sales of Genzyme stock and all proceeds derived from their service as directors or executives of Genzyme, and reimbursement of plaintiffs' costs, including attorneys' and experts' fees. The District

35

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

13. Commitments and Contingencies (Continued)

Court Actions have been consolidated in In Re Genzyme Derivative Litigation and the plaintiffs have agreed to a joint stipulation staying these cases until our board of directors has had sufficient time to exercise its duties and complete an appropriate investigation, which is ongoing. On July 9, 2010, one of the State Court Actions was dismissed without prejudice for plaintiffs' failure to serve process on the defendants. The Middlesex Court also ordered transfer and consolidation of the remaining two State Court Actions in the Suffolk Superior Court Business Litigation Session. The court has indicated that discovery in that action also will be stayed for some period pending the board of director's completion of its ongoing investigation in response to the shareholders demand.

Fabrazyme Patent Litigation

        In October 2009, Shelbyzyme LLC filed a complaint against us in the U.S. District Court for the District of Delaware alleging infringement of U.S. patent 7,011,831 by "making, using, selling and promoting a method for the treatment of" Fabry disease. The '831 patent, which is directed to a method for treating Fabry disease, was issued in March 2006 and expired in March 2009. The plaintiffs seek damages for past infringement, including treble damages for alleged willful infringement and reimbursement of costs, including attorney's fees. We intend to defend this lawsuit vigorously.

Other Matters

        We are party to a legal action brought by Kayat pending before the District Court in Nicosia, Cyprus. Kayat alleges that we breached a 1996 distribution agreement under which we granted Kayat the right to distribute melatonin tablets in the Ukraine, primarily by not providing products or by providing non-conforming products. Kayat further claims that due to the alleged breach, it suffered lost profits that Kayat claims it would have received under agreements it alleges it had entered into with subdistributors. Kayat also alleges common law fraud and violations of Mass. Gen. L. c. 93A and the Racketeer Influenced and Corrupt Organizations Act. Kayat filed its suit on August 8, 2002 and a trial began in Cyprus in December 2009. Kayat seeks damages for its legal claims and for expenses it claims it has incurred, including legal fees and advertising, promotion and other out-of-pocket expenses. We believe we acted appropriately in all regards, including properly terminating the agreement when we decided to exit the melatonin business, and we intend to defend this lawsuit vigorously.

        We are not able to predict the outcome of the lawsuits and matters described above or estimate the amount or range of any possible loss we might incur if we do not prevail in final, non-appealable determination of these matters. Therefore, we have not accrued any amounts in connection with the lawsuits and matters described above.

        We also are subject to other legal proceedings and claims arising in connection with our business. Although we cannot predict the outcome of these proceedings and claims, we do not believe the ultimate resolution of any of these existing matters would have a material adverse effect on our consolidated financial position or results of operations.

36

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

14. Benefit from (Provision for) Income Taxes

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
	(Amounts in thousands)
Benefit from (provision for) income taxes	$	19,953		$	(78,870	)	$	81,752		$	(157,754	)
Effective tax rate		(84	)%		30	%		(41	)%		29	%

        Our effective tax rate for all periods presented varies from the U.S. statutory tax rate as a result of:

•

income and expenses taxed at rates other than the U.S. statutory tax rate;

•

our provision for state income taxes;

•

domestic manufacturing benefits;

•

benefits related to tax credits; and

•

non-deductible stock-based compensation expenses totaling $9.1 million for the three months ended and $21.0 million for the six months ended June 30, 2010, as compared to $21.8 million for the three months ended and $31.5 million for the six months ended June 30, 2009.

        In addition, our tax benefit for both the three and six months ended June 30, 2010 includes:

•

tax expenses resulting from the remeasurement of the deferred tax assets related to our acquisition from Bayer in 2009 in the amount of $9.9 million for the three months ended June 30, 2010 and $20.6 million for the six months ended June 30, 2010; and

•

$10.0 million of tax benefits due to the realization, for U.S. income tax purposes, of prior periods' foreign income tax paid.

Our benefits from tax provisions for the six months ended June 30, 2010 also includes tax benefits in the amount of $15.2 million as a result of the resolution of tax examinations in major tax jurisdictions.

        We are currently under audit by various states and foreign jurisdictions for various years. We believe that we have provided sufficiently for all audit exposures. Settlement of these audits or the expiration of the statute of limitations on the assessment of income taxes for any tax year will likely result in a reduction of future tax provisions. Any such benefit would be recorded upon final resolution of the audit or expiration of the applicable statute of limitations.

15. Segment Information

        We present segment information in a manner consistent with the method we use to report this information to our management. Effective January 1, 2010, based on changes in how we review our business, we re-allocated certain of our business units amongst our segments and adopted new names for certain of our reporting segments. Under the new reporting structure, we are organized into five reporting segments as described above in Note 1., "Description of Business," to these consolidated financial statements. We have revised our 2009 segment disclosures to conform to our 2010 presentation.

37

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

15. Segment Information (Continued)

        We have provided information concerning the operations of these reportable segments in the following tables (amounts in thousands):

			Three Months Ended June 30,						Six Months Ended June 30,
			2010			2009			2010			2009
Revenues:
	Personalized Genetic Health(1,3)		$	350,540		$	581,728		$	743,044		$	1,131,688
	Renal and Endocrinology			258,379			247,277			510,802			489,745
	Biosurgery			163,982			139,327			301,348			258,849
	Hematology and Oncology(2)			176,497			111,990			332,807			200,563
	Multiple Sclerosis(2)			—			5,066			—			12,357
	Other			129,753			142,568			265,612			283,171
	Corporate			288			554			299			1,008
		Total	$	1,079,439		$	1,228,510		$	2,153,912		$	2,377,381
Income (loss) before income taxes:
	Personalized Genetic Health(1,3)		$	70,571		$	332,700		$	43,555		$	684,495
	Renal and Endocrinology			113,436			111,106			227,960			217,168
	Biosurgery			61,608			33,750			90,603			62,083
	Hematology and Oncology(2)			31,826			(17,030	)		40,196			(20,015	)
	Multiple Sclerosis(2)			(52,355	)		(2,161	)		(142,280	)		(18,607	)
	Other(4)			(447	)		15,013			3,781			10,215
	Corporate(5)			(248,365	)		(206,934	)		(464,288	)		(394,525	)
		Total	$	(23,726	)	$	266,444		$	(200,473	)	$	540,814

(1)

Includes the impact of supply constraints for Cerezyme and Fabrazyme for all periods presented.

(2)

On May 29, 2009, we acquired the worldwide rights to the oncology products Campath, Fludara and Leukine and alemtuzumab for MS from Bayer. As of that date, we ceased recognizing research and development revenue for Bayer's reimbursement of a portion of the development costs for alemtuzumab for MS. The fair value of the research and development costs for alemtuzumab for MS that will be reimbursed by Bayer is accounted for as an offset to the contingent consideration obligations for alemtuzumab for MS.

38

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

15. Segment Information (Continued)

Income (loss) before income taxes for our Hematology and Oncology and Multiple Sclerosis reporting segments includes the following contingent consideration expenses (amounts in thousands):

			Three Months Ended June 30,					Six Months Ended June 30,
			2010			2009		2010			2009
Contingent consideration expenses:
	Hematology and Oncology		$	(34,506	)	$	4,330	$	(13,074	)	$	4,330
	Multiple Sclerosis			44,527			4,760		85,644			4,760
		Total contingent consideration expenses	$	10,021		$	9,090	$	72,570		$	9,090

In addition, income (loss) before income taxes for our Multiple Sclerosis reporting segment includes a gain on acquisition of business of $24.2 million for the three and six months ended June 30, 2009 for which there were no comparable amounts in 2010. The fair value of the identifiable assets acquired of $1.03 billion exceeded the fair value of the purchase price for the transaction of $1.01 billion.

(3)

Includes a charge of $175.0 million recorded to SG&A for the six months ended June 30, 2010 for the upfront disgorgement of past profits provided for in the consent decree we entered into with the FDA. For more information about the consent decree, see Note 13., "Commitments and Contingencies," to these consolidated financial statements.

(4)

Includes a charge of $18.2 million recorded to research and development expense in our consolidated statements of operations in January 2009 for intellectual property we acquired from EXACT Sciences Corporation, or EXACT Sciences.

(5)

Loss before income taxes for Corporate includes our corporate, general and administrative and corporate science activities, all of our stock-based compensation expenses, as well as net gains on our investments in equity securities, investment income, interest expense and other income and expense items that we do not specifically allocate to a particular reporting segment.

39

GENZYME CORPORATION AND SUBSIDIARIES

Notes to Unaudited, Consolidated Financial Statements (Continued)

15. Segment Information (Continued)

Segment Assets

        We provide information concerning the assets of our reportable segments in the following table (amounts in thousands):

			June 30, 2010		December 31, 2009
Segment Assets(1):
	Personalized Genetic Health(2)		$	1,211,225	$	1,525,602
	Renal and Endocrinology			1,193,872		1,283,731
	Biosurgery			482,117		509,064
	Hematology and Oncology			1,343,840		1,406,684
	Multiple Sclerosis			951,332		956,448
	Other			447,740		462,978
	Corporate(3)			4,133,773		3,916,217
		Total	$	9,763,899	$	10,060,724

(1)

Assets for our five reporting segments and Other include primarily accounts receivable, inventory and certain fixed and intangible assets, including goodwill.

(2)

For the year ended December 31, 2009, includes a gross technology intangible asset of $240.3 million and related accumulated amortization of $(24.0) million related to our consolidation of the results of BioMarin/Genzyme LLC. Effective January 1, 2010, under new guidance we adopted for consolidating variable interest entities, we no longer consolidate the results of this joint venture and no longer include this gross technology asset and the related accumulated amortization or a related other noncurrent liability in our consolidated balance sheet.

(3)

Includes the assets related to our corporate, general and administrative operations, and corporate science activities that we do not allocate to a particular segment. Segment assets for Corporate consist of the following (amounts in thousands):

		June 30, 2010		December 31, 2009
Cash, cash equivalents, short- and long-term investments in debt securities		$	974,154	$	1,049,700
Deferred tax assets, net			706,009		555,242
Property, plant & equipment, net			1,986,309		1,787,054
Investments in equity securities			74,227		74,438
Other			393,074		449,783
	Total	$	4,133,773	$	3,916,217

40

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF GENZYME CORPORATION AND SUBSIDIARIES' FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that characterize our business. In particular, we encourage you to review the risks and uncertainties described under the heading "Risk Factors" below. These risks and uncertainties could cause actual results to differ materially from those forecasted in forward-looking statements or implied by past results and trends. Forward-looking statements are statements that attempt to project or anticipate future developments in our business; we encourage you to review the examples of forward looking statements under "Note Regarding Forward-Looking Statements" at the beginning of this report. These statements, like all statements in this report, speak only as of the date of this report (unless another date is indicated), and we undertake no obligation to update or revise the statements in light of future developments.

Note: All references to increases or decreases for the three months ended June 30, 2010 are as compared to the three months ended June 30, 2009. All references to increases or decreases for the six months ended June 30, 2010 are as compared to the six months ended June 30, 2009, unless otherwise noted.

INTRODUCTION

        We are a global biotechnology company dedicated to making a major impact on the lives of people with serious diseases. Our products and services are focused on rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune disease, and diagnostic testing. Our commitment to innovation continues today with a substantial development program focused on these fields, as well as MS, cardiovascular disease, neurodegenerative diseases, and other areas of unmet medical need.

        We are organized into five financial reporting units, which we also consider to be our reporting segments:

•

Personalized Genetic Health, which develops, manufactures and distributes therapeutic products with a focus on products to treat patients suffering from genetic diseases and other chronic debilitating diseases, including a family of diseases known as LSDs, and cardiovascular disease. The unit derives substantially all of its revenue from sales of Cerezyme, Fabrazyme, Myozyme/Lumizyme, Aldurazyme and Elaprase and royalties earned on sales of Welchol;

•

Renal and Endocrinology, which develops, manufactures and distributes products that treat patients suffering from renal diseases, including chronic renal failure, and endocrine and immune-mediated diseases. The unit derives substantially all of its revenue from sales of Renagel/Renvela (including sales of bulk sevelamer), Hectorol and Thyrogen;

•

Biosurgery, which develops, manufactures and distributes biotherapeutics and biomaterial-based products, with an emphasis on products that meet medical needs in the orthopaedics and broader surgical areas. The unit derives substantially all of its revenue from sales of Synvisc/Synvisc-One and the Sepra line of products;

•

Hematology and Oncology, which develops, manufactures and distributes products for the treatment of cancer, the mobilization of hematopoietic stem cells and the treatment of transplant rejection and other hematologic and auto-immune disorders. The unit derives substantially all of its revenue from sales of Mozobil, Thymoglobulin, Clolar, Campath, Fludara and Leukine; and

•

Multiple Sclerosis, which is developing products, including alemtuzumab, for the treatment of MS and other auto-immune disorders.

41

        Effective January 1, 2010, based on changes in how we review our business, we re-allocated certain of our business units among our segments and adopted new names for certain of our reporting segments. Specifically:

•

our former Genetic Diseases reporting segment is now referred to as "Personalized Genetic Health," or "PGH," and now includes our cardiovascular business unit, which previously was reported under the caption "Cardiometabolic and Renal," and our Welchol product line, which previously was reported as part of our pharmaceutical intermediates business unit under the caption "Other;"

•

our former Cardiometabolic and Renal reporting segment is now referred to as "Renal and Endocrinology" and now includes the assets that formerly comprised our immune-mediated diseases business unit, which previously was reported under the caption "Other," but no longer includes our cardiovascular business unit; and

•

our former Hematologic Oncology segment is now referred to "Hematology and Oncology" and now includes our transplant business unit, which previously was reported under the caption "Other," but no longer includes our multiple sclerosis business unit, which is now reported as a separate reporting segment called "Multiple Sclerosis."

        We report the activities of the following business units under the caption "Other": our genetic testing business unit, which provides testing services for the oncology, prenatal and reproductive markets; and our diagnostic products and pharmaceutical intermediates business units. These operating segments did not meet the quantitative threshold for separate segment reporting.

        We report our corporate, general and administrative operations and corporate science activities under the caption "Corporate."

        We have revised our 2009 segment disclosures to conform to our 2010 presentation.

        In May 2010, we announced a plan to pursue strategic alternatives for our genetic testing, diagnostic products and pharmaceutical intermediates business units. Possible alternatives include divestiture, spin-out or management buy-out. Our genetic testing business unit had revenue of approximately $371 million for the year ended December 31, 2009 and approximately $183 million for the six months ended June 30, 2010. Our diagnostic products business unit had revenue of approximately $167 million for the year ended December 31, 2009 and approximately $76 million for the six months ended June 30, 2010. Revenue from our pharmaceutical intermediates business unit for the same periods was significantly less in comparison. Transactions for these business units are targeted for the end of 2010.

Update to Second Quarter Earnings Release

        On July 21, 2010, we issued a press release containing our financial results for the three month period ended June 30, 2010, which we furnished as an exhibit to a Current Report on Form 8-K prior to hosting a conference call. Subsequent to July 21, 2010, we identified additional inventories that did not meet our quality specifications. Our decision to discard these inventories has resulted in a second quarter write off of $6.5 million in addition to the $21.9 million write off previously reported. As a result, our second quarter net loss is $(3.8) million or $(0.01) per diluted share, compared with net income of $23.0 thousand or $0.00 per diluted share reported on July 21, 2010.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

        Our critical accounting policies and significant judgments and estimates are set forth under the heading "Management's Discussion and Analysis of Genzyme Corporation and Subsidiaries' Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and

42

Estimates" in Part II., Item 7. to our 2009 Form 10-K. Excluding the addition of our policy for PSUs to our stock-based compensation policy, there have been no significant changes to our critical accounting policies or significant judgments and estimates since December 31, 2009. Additional information regarding our provisions and estimates for our product sales allowances, sales allowance reserves and accruals, and distributor fees and our revised stock-based compensation policy are included below.

Revenue Recognition

Product Sales Allowances

        Sales of many biotechnology products in the United States are subject to increased pricing pressure from managed care groups, institutions, government agencies and other groups seeking discounts. We and other biotechnology companies in the U.S. market are also required to provide statutorily defined rebates and discounts to various U.S. government agencies in order to participate in the Medicaid program and other government-funded programs. In most international markets, we operate in an environment where governments may and have mandated cost-containment programs, placed restrictions on physician prescription levels and patient reimbursements, emphasized greater use of generic drugs and enacted across-the-board price cuts as methods to control costs. In some cases, we have estimated the potential impact of these allowances. The sensitivity of our estimates can vary by program, type of customer and geographic location. Estimates associated with Medicaid and other government allowances may become subject to adjustment in a subsequent period.

        We record product sales net of the following significant categories of product sales allowances:

•

Contractual adjustments—We offer chargebacks and contractual discounts and rebates, which we collectively refer to as contractual adjustments, to certain private institutions and various government agencies in both the United States and international markets. We record chargebacks and contractual discounts as allowances against accounts receivable in our consolidated balance sheets. We account for rebates by establishing an accrual for the amounts payable by us to these agencies and institutions, which is included in accrued liabilities in our consolidated balance sheets. We estimate the allowances and accruals for our contractual adjustments based on historical experience and current contract prices, using both internal data as well as information obtained from external sources, such as independent market research agencies and data from wholesalers. We continually monitor the adequacy of these estimates and adjust the allowances and accruals periodically throughout each quarter to reflect our actual experience. In evaluating these allowances and accruals, we consider several factors, including significant changes in the sales performance of our products subject to contractual adjustments, inventory in the distribution channel, changes in U.S. and foreign healthcare legislation impacting rebate or allowance rates, changes in contractual discount rates and the estimated lag time between a sale and payment of the corresponding rebate;

•

Discounts—In some countries, we offer cash discounts for certain products as an incentive for prompt payment, which are generally a stated percentage off the sales price. We account for cash discounts by reducing accounts receivable by the full amounts of the discounts. We consider payment performance and adjust the accrual to reflect actual experience; and

•

Sales returns—We record allowances for product returns at the time product sales are recorded. The product returns reserve is estimated based on the returns policies for our individual products and our experience of returns for each of our products. We also consider the product's lifecycle and possible competition pending, including generic products. If the price of a product changes or if the history of product returns changes, the reserve is adjusted accordingly. We determine our estimates of the sales return accrual for new products primarily based on the historical sales returns experience of similar products, or those within the same or similar therapeutic category.

43

        Our provisions for product sales allowances reduced gross product sales as follows (amounts in thousands):

			Three Months Ended June 30,												Six Months Ended June 30,
									Increase/ (Decrease)			Increase/ (Decrease) % Change									Increase/ (Decrease)			Increase/ (Decrease) % Change
			2010			2009									2010			2009
Product sales allowances:
	Contractual adjustments		$	221,061		$	149,049		$	72,012			48	%	$	401,489		$	285,229		$	116,260			41	%
	Discounts			7,702			6,764			938			14	%		14,504			13,040			1,464			11	%
	Sales returns			7,711			9,375			(1,664	)		(18	)%		15,256			15,898			(642	)		(4	)%
		Total product sales allowances	$	236,474		$	165,188		$	71,286			43	%	$	431,249		$	314,167		$	117,082			37	%
Total gross product sales			$	1,211,396		$	1,280,613		$	(69,217	)		(5	)%	$	2,377,796		$	2,466,836		$	(89,040	)		(4	)%
Total product sales allowances as a percent of total gross product sales				20	%		13	%								18	%		13	%

        Total product sales allowances increased for both the three and six months ended June 30, 2010, primarily due to:

•

increased contractual adjustments totaling $48.0 million for the three months and $77.1 million for the six months for our Renal and Endocrinology reporting segment, and $18.6 million for the three months and $30.1 million for the six months for our Biosurgery reporting segment;

•

$11.3 million for the three months and $26.6 million for the six months of increased product sales allowances for our Hematology and Oncology reporting segment primarily due to contractual adjustments related to sales of Campath, Fludara and Leukine, which we acquired from Bayer in May 2009; and

•

changes in our overall product mix.

        These increases were offset, in part, by decreases of $6.3 million for the three months and $16.2 million for the six months in the aggregate product sales allowances for Cerezyme and Fabrazyme as a result of supply constraints.

        Total estimated product sales allowance reserves and accruals in our consolidated balance sheets increased approximately 11% to approximately $263 million as of June 30, 2010, as compared to approximately $236 million as of December 31, 2009, primarily due to increased contractual adjustments for our Renal and Endocrinology reporting segment and changes in the timing of certain payments. Our actual results have not differed materially from amounts recorded. The annual variation has been less than 0.5% of total product sales for the last three years.

Accounts Receivable Related to Sales in Greece

        Total accounts receivable in our consolidated balance sheets includes approximately $57 million, net of reserves, as of both June 30, 2010 and December 31, 2009 of accounts receivable held by our subsidiary in Greece related to sales to government-owned or supported healthcare facilities in Greece. These sales are subject to significant payment delays due to government funding and reimbursement practices. We believe that this is an industry-wide issue for suppliers to these facilities. In May 2010, the government of Greece announced a plan for repayment of its debt to international pharmaceutical companies, which calls for immediate payment of accounts receivable balances that were established in 2005 and 2006. For accounts receivable established between 2007 and 2009, the government of Greece will issue non-interest bearing bonds, expected to be exchange tradable, with maturities ranging from 2

44

to 4 years. We recorded a charge of $7.2 million to bad debt expense, a component of SG&A, in our consolidated statements of operations for the three and six months ended June 30, 2010 to write down the accounts receivable balances held by our subsidiary in Greece to present value using a 10% discount rate.

        In conjunction with this plan, the government of Greece also instituted price decreases of between 20% and 27% for all future pharmaceutical product sales. Because our customers in Greece are government owned or supported, we may also be impacted by declines in sovereign credit ratings or sovereign debt defaults. The government of Greece has recently required financial support from both the European Union and the IMF to avoid defaulting on its sovereign debt. If significant additional changes occur in the availability of government funding in Greece, we may not be able to collect on amounts due from these customers. We do not expect this concentration of credit risk to have a material adverse impact on our financial position or liquidity.

Healthcare Reform Legislation

        In March 2010, healthcare reform legislation was enacted in the United States. Although many provisions of the new legislation do not take effect immediately, several provisions became effective in the first quarter of 2010. These include:

•

an increase in the minimum Medicaid rebate to states participating in the Medicaid program from 15.1% to 23.1% on our branded prescription drugs and an increase from 15.1% to 17.1% for our drugs that are approved exclusively for pediatric patients;

•

the extension of the Medicaid rebate to managed care organizations that dispense drugs to Medicaid beneficiaries;

•

the expansion of the 340(B) PHS drug pricing program, which provides outpatient drugs at reduced rates, to include additional hospitals and healthcare centers (this provision, however, does not apply to orphan drugs); and

•

a requirement that the Medicaid rebate for a drug that is a "line extension" of a preexisting oral solid dosage form of the drug be linked in certain respects to the Medicaid rebate for the preexisting oral solid dosage form, such that the Medicaid rebate for most line extension drugs will be higher than it would have been absent the new law, especially if the preexisting oral solid dosage form has a history of significant price increases.

These provisions did not have a significant impact on our results of operations or financial position for the six months ended June 30, 2010.

        Effective October 1, 2010, the new legislation re-defines the Medicaid AMP such that the AMP and, consequently, the Medicaid rebate are expected to increase for some of our drugs, in particular those that offer discounted pricing to customers.

        Beginning in 2011, the new law requires drug manufacturers to provide a 50% discount to Medicare beneficiaries whose prescription drug costs cause them to be subject to the Medicare Part D coverage gap, which is known as the "donut hole". Also beginning in 2011, clinical laboratory fee schedule payments will be reduced 1.75% over a period of five years and we will be required to pay our share of a new fee assessed on all branded prescription drug manufacturers and importers. This fee will be calculated based upon each organization's percentage share of total branded prescription drug sales to U.S. government programs (such as Medicare and Medicaid and VA, DOD and TriCare retail pharmacy discount programs) made during the previous year. Sales of orphan drugs, however, are not included in the fee calculation. Final guidance relating to how we will be required to account for this fee is still pending; however, it is expected that the fee will be classified as either a reduction of net sales or an operating expense. The aggregated industry wide fee is expected to total approximately

45

$28 billion through 2019, ranging from $2.5 billion to $4.1 billion annually. Beginning in 2013, a 2.3% excise tax will be imposed on sales of all medical devices except retail purchases by the public intended for individual use.

        Presently, uncertainty exists as many of the specific determinations necessary to implement this new legislation have yet to be decided and communicated to industry participants. We have made several estimates with regard to important assumptions relevant to determining the financial impact of this legislation on our business due to the lack of availability of both certain information and complete understanding of how the process of applying the legislation will be implemented. Although we are still assessing the full extent that the U.S. healthcare reform legislation may have on our business, we currently estimate that our revenues in the United States will be adversely impacted by less than approximately $20 million in 2010, with most of the impact occurring in the third and fourth quarters, and by approximately $30 million to $40 million in 2011.

        We expect that the U.S. Congress and state legislatures will continue to review and assess healthcare proposals, and public debate of these issues will likely continue. We cannot predict which, if any, of such reform proposals will be adopted and when they might be adopted. In addition, we anticipate seeing continued efforts to reduce healthcare costs in many other countries outside the United States. For example, in May 2010, the Greek health ministry imposed a flat mandatory discount of 27% on medicinal products above a certain price level. This discount, however, does not apply to our orphan drugs or Thymoglobulin. The Greek health ministry has stated that this newly imposed pricing will apply up through August 31, 2010, at which time the ministry will issue new pricing for most medicinal products based on the average of the three lowest prices in the European Union, and at that time, also determine the pricing for orphan products. As another example, the German government has enacted legislation, effective August 2010, that among other things, increases mandatory discounts from 6% to 16% and imposes August 2009 pricing levels on pharmaceuticals through the end of 2013. We expect that our revenues would be negatively impacted if these or similar measures are implemented or maintained.

Distributor Fees

        Cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor's products or services and, therefore, is appropriately characterized as a reduction in revenue. We include such fees in contractual adjustments, which are recorded as a reduction to product sales. That presumption is overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

•

the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and

•

the vendor can reasonably estimate the fair value of the benefit received.

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        We record service fees paid to our distributors as a charge to SG&A, a component of operating expenses, only if the criteria set forth above are met. The following table sets forth the distributor fees recorded as a reduction to product sales and charged to SG&A (amounts in thousands):

			Three Months Ended June 30,										Six Months Ended June 30,
							Increase/ (Decrease)			Increase/ (Decrease) % Change							Increase/ (Decrease)			Increase/ (Decrease) % Change
			2010		2009								2010		2009
Distributor fees:
	Included in contractual adjustments and recorded as a reduction to product sales		$	5,685	$	7,909	$	(2,224	)		(28	)%	$	11,745	$	12,156	$	(411	)		(3	)%
	Charged to SG&A			1,547		3,481		(1,934	)		(56	)%		4,893		7,028		(2,135	)		(30	)%
		Total distributor fees	$	7,232	$	11,390	$	(4,158	)		(37	)%	$	16,638	$	19,184	$	(2,546	)		(13	)%

Stock-Based Compensation

        We use the Black-Scholes model to value both service condition and performance condition option awards. For awards with only service conditions and graded-vesting features, we recognize compensation cost on a straight-line basis over the requisite service period. For awards with performance conditions, we recognize stock-based compensation expense based on the graded-vesting method. Determining the appropriate fair value model and related assumptions requires judgment, including estimating stock price volatility, forfeiture rates, and expected terms. The expected volatility rates are estimated based on historical and implied volatilities of our common stock. The expected term represents the average time that options that vest are expected to be outstanding based on the vesting provisions and our historical exercise, cancellation and expiration patterns. We estimate pre-vesting forfeitures when recognizing stock-based compensation expense based on historical rates and forward-looking factors. We update these assumptions at least on an annual basis and on an interim basis if significant changes to the assumptions are warranted.

        We issue PSUs to our senior executives, which vest upon the achievement of certain financial performance goals, including cash flow return on investment and R-TSR. The fair value of PSUs subject to the cash flow return on investment performance metric, which includes both performance and service conditions, is based on the market value of our stock on the date of grant. We use a lattice model with a Monte Carlo simulation to value PSUs subject to the R-TSR performance metric, which is a market condition. We recognize compensation cost for our PSUs on a straight-lined basis over the requisite performance period. Determining the appropriate amount to expense based on the anticipated achievement of the stated goals requires judgment, including forecasting future financial results. The estimate of expense is revised periodically based on the probability of achieving the required performance targets and adjustments are made as appropriate. The cumulative impact of any revision is reflected in the period of change. In the case of PSUs subject to the R-TSR performance metric, if the financial performance goals are not met, the award does not vest, no compensation cost is recognized and any previously recognized stock-based compensation expense is reversed.

        We review our valuation assumptions periodically and, as a result, we may change our valuation assumptions used to value share-based awards granted in future periods. Such changes may lead to a significant change in the expense we recognize in connection with share-based payments.

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RESULTS OF OPERATIONS

        The following discussion summarizes the key factors our management believes are necessary for an understanding of our consolidated financial statements.

REVENUES

        The components of our total revenues are described in the following table (amounts in thousands):

		Three Months Ended June 30,										Six Months Ended June 30,
						Increase/ (Decrease)			Increase/ (Decrease) % Change							Increase/ (Decrease)			Increase/ (Decrease) % Change
		2010		2009								2010		2009
Product revenue		$	974,922	$	1,115,425	$	(140,503	)		(13	)%	$	1,946,547	$	2,152,669	$	(206,122	)		(10	)%
Service revenue			103,589		105,693		(2,104	)		(2	)%		205,504		207,192		(1,688	)		(1	)%
	Total product and service revenue		1,078,511		1,221,118		(142,607	)		(12	)%		2,152,051		2,359,861		(207,810	)		(9	)%
Research and development revenue			928		7,392		(6,464	)		(87	)%		1,861		17,520		(15,659	)		(89	)%
	Total revenues	$	1,079,439	$	1,228,510	$	(149,071	)		(12	)%	$	2,153,912	$	2,377,381	$	(223,469	)		(9	)%

Product Revenue

        The following table sets forth our products and their related indications:

Reporting Segments	Products	Approved Indications
Personalized Genetic Health	Cerezyme	Gaucher disease
	Fabrazyme	Fabry disease
	Myozyme/Lumizyme	Pompe disease
	Aldurazyme	MPS I
	Elaprase	MPS II
	Royalties earned on sales of Welchol	Reduction of LDL in patients with hypercholesterolemia
	Cholestagel	Reduction of LDL in patients with hypercholesterolemia
Renal and Endocrinology	Renagel/Renvela and bulk sevelamer	Control of serum phosphorus in patients with chronic kidney disease, or CKD, on dialysis and in Europe in CKD patients both on and not on dialysis with serum phosphorus above a certain level
	Hectorol	Secondary hyperparathyroidism in CKD patients

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Reporting Segments	Products	Approved Indications
	Thyrogen	An adjunctive diagnostic agent used in the follow-up treatment of patients with well-differentiated thyroid cancer and an adjunctive therapy in the ablation of remnant thyroid tissue in patients that have undergone thyroid removal
Biosurgery	Synvisc/Synvisc-One/Jonexa	Treatment of pain associated with osteoarthritis
	Sepra products	Prevention of adhesions following various surgical procedures in the abdomen and pelvis
Hematology and Oncology	Mozobil	Mobilization of hematopoietic stem cells
	Thymoglobulin	Immunosuppression of certain types of cells responsible for organ rejection in transplant patients and treatment of aplastic anemia
	Clolar	Relapsed and refractory ALL
	Campath	Leukemia
	Fludara	Leukemia and lymphoma
	Leukine	Reduction of the incidence of severe and life-threatening infections in older adult patients with acute myelogenous leukemia, or AML, following chemotherapy and certain other uses
Other	Diagnostic products	Infectious disease and cholesterol testing products
	Pharmaceutical intermediates products	Pharmaceutical intermediates

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        The following table sets forth our product revenue on a reporting segment basis (amounts in thousands):

		Three Months Ended June 30,										Six Months Ended June 30,
						Increase/ (Decrease)			Increase/ (Decrease) % Change							Increase/ (Decrease)			Increase/ (Decrease) % Change
		2010		2009								2010		2009
Personalized Genetic Health		$	350,517	$	581,685	$	(231,168	)		(40	)%	$	743,001	$	1,131,608	$	(388,607	)		(34	)%
Renal and Endocrinology			258,229		247,269		10,960			4	%		510,486		489,724		20,762			4	%
Biosurgery			151,807		127,113		24,694			19	%		278,068		236,241		41,827			18	%
Hematology and Oncology			176,490		110,846		65,644			59	%		332,781		197,490		135,291			69	%
Other product revenue			37,879		48,512		(10,633	)		(22	)%		82,211		97,606		(15,395	)		(16	)%
	Total product revenue	$	974,922	$	1,115,425	$	(140,503	)		(13	)%	$	1,946,547	$	2,152,669	$	(206,122	)		(10	)%

Personalized Genetic Health

Regulatory and Manufacturing

FDA Consent Decree

        On May 24, 2010, we entered into a consent decree with the FDA relating to our Allston facility. Under the terms of the consent decree, we will pay an upfront disgorgement of past profits of $175.0 million. Conditioned upon our compliance with the terms of the consent decree, we may continue to ship Cerezyme and Fabrazyme, which are manufactured, filled and finished at the facility, as well as Thyrogen, which is filled and finished at the facility. In the United States, Thyrogen that is filled and finished at our Allston facility will only be distributed based on medical necessity, in accordance with FDA criteria. The consent decree requires us to move our fill-finish operations out of our Allston facility for Thyrogen sold within the United States by November 22, 2010 and for Fabrazyme sold within the United States by November 24, 2010. We must move our fill-finish operations for all products sold outside of the United States by August 31, 2011. If we are not able to meet these deadlines, the FDA can require us to disgorge 18.5 percent of the revenue from the sale of any products that are filled and finished at our Allston facility after the applicable deadlines.

        The consent decree also requires us to implement a plan to bring our Allston facility operations into compliance with applicable laws and regulations. The plan must address any deficiencies previously reported to us or identified as part of a comprehensive inspection conducted by a third-party expert, who we are required to retain, and who will monitor and oversee our implementation of the plan. In 2009, we began implementing a comprehensive remediation plan, prepared with assistance from our compliance consultant, Quantic, to improve quality and compliance at our Allston facility. We intend to revise that plan to include any additional remediation efforts required in connection with the consent decree as identified by Quantic, who we are retaining as the third-party expert under the consent decree. The plan, as revised, which will be subject to FDA approval, is expected to take approximately 3-4 years to complete and will include a timetable of specified compliance milestones. If the milestones are not met in accordance with the timetable, the FDA can require us to pay $15,000 per day, per affected drug, until these compliance milestones are met. Upon satisfying the compliance requirements in accordance with the terms of the consent decree, we will be required to retain an auditor to monitor and oversee ongoing compliance at our Allston facility for an additional five years. The consent decree is subject to, and effective upon, approval by the U.S. District Court for the District of Massachusetts. The consent decree was filed with the U.S. District Court on May 24, 2010 and we are awaiting the court's approval.

Manufacturing and Supply of Cerezyme and Fabrazyme

        In June 2009, we interrupted production of Cerezyme and Fabrazyme at our Allston facility after identifying a virus, Vesivirus 2117, in a bioreactor used for Cerezyme production. The virus we

50

identified impairs the viability of cells used in the manufacturing process and is not known to cause infection in humans. We completed sanitization of the facility and resumed production there in the third quarter of 2009. Cerezyme and Fabrazyme inventories were not sufficient to avoid shortages.

        We resumed Cerezyme shipments in the fourth quarter of 2009. In order to build a small inventory buffer to help us more consistently manage the resupply of Cerezyme to patients and reduce interruptions in shipping that occur in the absence of inventory, we began shipping Cerezyme to meet 50% of estimated product demand at the end of February 2010. Although we achieved our goal of building a small inventory buffer during the first quarter of 2010, we continued shipping at the 50% of demand level due to an interruption in operations at our Allston facility at the end of March 2010. The interruption resulted from an unexpected city electrical power failure that compounded issues with the facility's water system. Once production resumed, we continued shipping at the 50% of demand level through the end of the second quarter of 2010. We supplied approximately the same amount of Cerezyme in July 2010 as we supplied in each of May 2010 and June 2010, and expect that supply will then increase in the following months. However, there will be regional variations when Cerezyme will be available, and in some countries, patients' infusion schedules may need to shift due to short-term shipping delays.

        Since the fourth quarter of 2009, we have been shipping Fabrazyme to meet approximately 30% of estimated product demand. We have been working to increase the productivity of the Fabrazyme manufacturing process, which has performed at the low end of the historical range since the re-start of production. We have developed a new working cell bank for Fabrazyme that has been approved by the FDA and EMA. The new working cell bank has completed three runs and has had 30% greater productivity than the old working cell bank. We expect to continue shipping Fabrazyme at the 30% of demand level through the third quarter and increase shipments of Fabrazyme in the fourth quarter of 2010.

        We will continue to work with minimal levels of inventory for Cerezyme and Fabrazyme until our new Framingham manufacturing facility is approved, which is anticipated to take place in late 2011. Any additional manufacturing interruptions or delays will likely impact supply of these products. We are also working to transition fill-finish operations out of our Allston facility to our Waterford, Ireland plant and to Hospira, a third-party contract manufacturer. The fill-finish area of the Waterford facility is being expanded to accommodate the long-term growth of our PGH products, and we currently anticipate receiving approval of this new capacity in 2011.

Lumizyme Approval

        In May 2010, we received FDA approval to market Lumizyme, alglucosidase alfa produced at the 4000L scale in the United States. Lumizyme is the first treatment approved in the U.S. specifically to treat patents with late-onset Pompe disease. We produce Lumizyme at our Geel facility, where we have produced Myozyme at the 4000L scale since February 2009 when we received approval for the 4000L scale process in Europe. As of the first quarter of 2010, the majority of markets outside of the United States have transitioned to the 4000L scale product. At our Geel facility, we are adding a third bioreactor for the production of Myozyme/Lumizyme produced at the 4000L scale, for which we expect to receive FDA approval in mid-2011.

        We have implemented a Risk Evaluation and Mitigation Strategy, or REMS, which we call the Lumizyme ACE Program, to ensure that the appropriate patients receive Lumizyme commercially. We have initiated this program with the health care professionals involved in the Alglucosidase Alfa Temporary Access Program, or ATAP, the program created in 2007 through which we have provided therapy free of charge to nearly 200 patients prior to commercial approval of Lumizyme. We will keep ATAP open until August 20, 2010 to ensure that patients have uninterrupted therapy while working to enroll participants in the Lumizyme ACE Program. We have also begun working with U.S. health care

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professionals to enable those adult patients who have been waiting to access treatment to begin Lumizyme therapy.

Personalized Genetic Health Product Revenue

		Three Months Ended June 30,										Six Months Ended June 30,
						Increase/ (Decrease)			Increase/ (Decrease) % Change							Increase/ (Decrease)			Increase/ (Decrease) % Change
		2010		2009								2010		2009
		(Amounts in thousands)
Cerezyme		$	138,736	$	298,087	$	(159,351	)		(53	)%	$	317,883	$	594,057	$	(276,174	)		(46	)%
Fabrazyme			39,484		134,302		(94,818	)		(71	)%		92,725		256,503		(163,778	)		(64	)%
Myozyme/Lumizyme			92,054		79,273		12,781			16	%		178,113		146,665		31,448			21	%
Aldurazyme			43,651		39,190		4,461			11	%		83,548		76,027		7,521			10	%
Other Personalized Genetic Health			36,592		30,833		5,759			19	%		70,732		58,356		12,376			21	%
	Total Personalized Genetic Health	$	350,517	$	581,685	$	(231,168	)		(40	)%	$	743,001	$	1,131,608	$	(388,607	)		(34	)%

        PGH product revenue decreased for the three and six months ended June 30, 2010, primarily due to the temporary suspension of production at our Allston facility in June 2009 during a time of already low levels of inventory for Cerezyme and Fabrazyme, resulting in supply constraints for Cerezyme and Fabrazyme since that time offset, in part, by:

•

favorable exchange rate fluctuations for the six months ended June 30, 2010 offset, in part, by unfavorable exchange rates for the three months ended June 30, 2010;

•

continued growth in sales volume for Aldurazyme and other PGH products, primarily Elaprase; and

•

the addition of sales of Lumizyme after it received FDA approval in May 2010.

Cerezyme and Fabrazyme

        The supply constraint for Cerezyme adversely impacted Cerezyme revenue by $154.9 million for the three months ended June 30, 2010 and by $280.5 million for the six months ended June 30, 2010. The weakening of foreign currencies, primarily the Euro, against the U.S. dollar, adversely impacted Cerezyme revenue by $1.5 million for the three months ended June 30, 2010. Exchange rate fluctuations, primarily the Euro against the U.S. dollar, positively impacted Cerezyme revenue by $5.9 million for the six months ended June 30, 2010. Our results of operations are dependent on sales of Cerezyme and any reduction in revenue from sales of this product adversely affects our results of operations. Sales of Cerezyme were approximately 13% of our total revenue for the three months ended June 30, 2010, and 15% of our total revenue for the six months ended June 30, 2010 which reflect periods of supply constraint, as compared to approximately 24% and 25% for the same periods in 2009.

        The supply constraint for Fabrazyme adversely impacted Fabrazyme revenue by $94.2 million for the three months ended June 30, 2010 and by $166.6 million for the six month ended June 30, 2010. The weakening of foreign currencies against the U.S. dollar had no significant impact on Fabrazyme revenue for the three months ended June 30, 2010. Exchange rate fluctuations positively impacted Fabrazyme revenue by $2.3 million for the six months ended June 30, 2010.

        Under the FDA consent decree, we are required to move our fill-finish operations for Cerezyme and Fabrazyme out of our Allston facility. We are in the process of transferring these operations to Hospira.

        The Cerezyme and Fabrazyme supply constraints resulting from the suspension of production at our Allston facility have created opportunities for our competitors and our future sales may be

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negatively affected by competitive products by Shire Human Genetic Therapies Inc., a business unit of Shire plc, or Shire, and Protalix Biotherapeutics Ltd., or Protalix. After our products experienced supply constraints, Shire and Protalix were able to offer their developmental therapies for the treatment of Gaucher disease to patients in the United States through an FDA-approved treatment investigational new drug application, or T-IND, protocol and to patients in the European Union and other countries through pre-approval access programs. Shire received marketing approval for VPRIV™ from the FDA in late February 2010 and announced that it will price this therapy lower than Cerezyme. Shire also received a positive opinion from the EMA Committee for Human Medicinal Product in June 2010. Shire has announced that it expects its manufacturing plant to be approved for commercial product in late 2011 or early 2012. Protalix submitted its new drug application, or NDA, for UPLYSO™ to the FDA in December 2009 and has been granted "fast track" designation with a Prescription Drug User Fee Act, or PDUFA, date of February 25, 2011. In December 2009, Protalix and Pfizer entered into an agreement to develop and commercialize UPLYSO. The FDA has granted orphan drug status to both Shire's and Protalix's therapies for the treatment of Gaucher disease. Outside of the United States, Fabrazyme currently competes with Replagal, a product marketed by Shire. In the United States, the FDA has approved a T-IND for Replagal. In August 2010, Shire reported that it had withdrawn its biologics license application, or BLA, for Replagal that it had submitted in December 2009 to the FDA, and for which it had been granted "fast track" designation, to consider updating it with additional clinical data. In June 2010, Shire closed enrollment in its T-IND in the United States for Replagal and announced plans to actively manage emergency requests for the drug from new patients.

        We are aware that some Gaucher and Fabry patients have switched to one of our competitors' therapies during the period of supply constraint and there is a risk that they may not switch back to our products, which would result in the loss of additional revenue for us. In April 2010, the EMA advised physicians to consider switching Fabry disease patients from Fabrazyme to Replagal based on its concerns that certain patients were not tolerating reduced dosages of Fabrazyme. We also have encouraged patients to switch to competitors products during the period of supply constraint. These actions may result in additional patients switching to our competitors' therapies. In July 2010, the EMA issued a temporary recommendation to physicians that new Fabry disease patients be treated with Replagal as an alternative to Fabrazyme because of continued supply shortages of Fabrazyme. In addition, the institution of treatment guidelines and dose conservation measures during the supply constraint present the risk that physicians and patients will not resume prior treatment or dosage levels after the supply constraint has ended, potentially resulting in further loss of revenue for us. Our estimates of the demand for Cerezyme and Fabrazyme and, as a result, estimates of our shipping allocations based on such demand, are impacted by patients switching to our competitors' therapies and by long-term adoption by patients of lower treatment or dosage levels.

Myozyme/Lumizyme

        Myozyme/Lumizyme revenue increased for the three and six months ended June 30, 2010 due to increased patient identification outside of the United States following the European approval in February 2009 and the U.S. approval in May 2010 of the product produced at our Geel facility using the 4000L scale process. We implemented a price increase for Myozyme/Lumizyme as of June 1, 2010 which had no significant impact on Myozyme/Lumizyme revenue for the three and six months ended June 30, 2010. The weakening of foreign currencies, primarily the Euro, against the U.S. dollar, adversely impacted Myozyme/Lumizyme revenue by $3.7 million for the three months ended June 30, 2010. Exchange rate fluctuations had no significant impact on Myozyme/Lumizyme revenue for the six months ended June 30, 2010.

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Aldurazyme

        Aldurazyme revenue increased for the three and six months ended June 30, 2010 due to increased patient identification worldwide as Aldurazyme was introduced into new markets. Exchange rate fluctuations had no significant impact on Aldurazyme revenue for the three and six months ended June 30, 2010.

Other Personalized Genetic Health

        Other PGH product revenue increased for the three and six months ended June 30, 2010, primarily due to increased sales of Elaprase attributable to the continued identification of new patients in our territories. We have rights to commercialize Elaprase in Japan and other Asia Pacific countries under an agreement with Shire. The strengthening of foreign currencies, primarily the Japanese yen, against the U.S. dollar, positively impacted Other PGH product revenue by $1.0 million for the three months ended June 30, 2010 and by $1.5 million for the six months ended June 30, 2010.

Renal and Endocrinology

		Three Months Ended June 30,										Six Months Ended June 30,
						Increase/ (Decrease)			Increase/ (Decrease) % Change							Increase/ (Decrease)			Increase/ (Decrease) % Change
		2010		2009								2010		2009
		(Amounts in thousands)
Renagel/Renvela (including sales of bulk sevelamer)		$	170,066	$	175,398	$	(5,332	)		(3	)%	$	334,673	$	345,997	$	(11,324	)		(3	)%
Hectorol			41,863		28,981		12,882			44	%		83,888		62,011		21,877			35	%
Thyrogen			46,300		42,860		3,440			8	%		91,925		81,686		10,239			13	%
Other Renal and Endocrinology			—		30		(30	)		(100	)%		—		30		(30	)		(100	)%
	Total Renal and Endocrinology	$	258,229	$	247,269	$	10,960			4	%	$	510,486	$	489,724	$	20,762			4	%

        Sales of Renagel/Renvela, including sales of bulk sevelamer, decreased for the three and six months ended June 30, 2010, primarily due to the effect of Renagel pricing in Brazil and the conversion of patients to Renvela in the United States. In 2009, we decreased the price of Renagel in Brazil in connection with successfully negotiating a government tender in the face of competition from two similar products that had been approved in that country. Total revenue for Renagel/Renvela, including sales of bulk sevelamer, reflects the increasing percentage of Renvela sales within the United States. The weakening of foreign currencies, primarily the Euro, against the U.S. dollar, had no significant impact on Renagel revenue for the three months ended June 30, 2010. Exchange rate fluctuations positively impacted Renagel revenue by $6.7 million for the six months ended June 30, 2010.

        We manufacture the majority of our supply requirements for sevelamer hydrochloride (the active ingredient in Renagel) and sevelamer carbonate (the active ingredient in Renvela) at our manufacturing facility in Haverhill, England. In December 2009, equipment failure caused an explosion and fire at this facility, which damaged some of the equipment used to produce these active ingredients as well as the building in which the equipment was located. As a result, we temporarily suspended production of sevelamer hydrochloride and sevelamer carbonate at this facility while repairs were made. We resumed production of sevelamer hydrochloride in May 2010. We anticipate that the facility will resume production of sevelamer carbonate in the fourth quarter of 2010. We believe that we have adequate supply levels to meet the current demand for both Renagel and Renvela and do not anticipate there will be any supply constraints for either product while the facility undergoes repairs. We recorded a total of $6.1 million of expenses, net of $2.4 million of insurance reimbursements, for the three months ended and a total of $13.7 million, net of $5.4 million of insurance reimbursements, for the six months ended June 30, 2010 to cost of products sold in our consolidated statements of operations for Renagel and Renvela related to the remediation cost of our Haverhill, England

54

manufacturing facility, including repairs and idle capacity expenses. We expect to incur approximately $10 million of additional costs related to the remediation of this facility in the third quarter of 2010.

        Sales of Hectorol increased for the three and six months ended June 30, 2010, primarily due to price increases in the second and fourth quarters of 2009 and the first quarter of 2010. Sales of Hectorol also include an increase in sales volume due to the addition of the Hectorol 1mcg capsule formulation in August 2009.

        Renagel/Renvela and Hectorol currently compete with several other marketed products and will have additional competitors in the future. Competitive products, especially if they are lower cost generic or follow-on products, will adversely impact the revenues we recognize from Renagel/Renvela. Our core patents protecting Renagel/Renvela and Hectorol expire in 2014 in the United States. We are unable to accurately estimate the unfavorable qualitative and quantitative impact of the expiration of these patents on our future operations and liquidity, as the impact is dependent on numerous factors beyond our control. These factors include: the outcome of pending patent litigations; the timing of a competitive generic product's entry into the market; the number of generic products that actually enter the market and which markets generic entrants choose or are authorized to enter; the identity and the operational, manufacturing, distribution and marketing capabilities of the generic entrants; the reimbursement environment for the products in the United States and globally; and, in the case of Renagel/Renvela, requirements that the various regulatory agencies around the globe may impose on a manufacturer to demonstrate bioequivalence of these non-absorbed polymer-based products. Because these conditional events described above have not yet occurred, the current periods reflected in this filing have not been adversely affected; however, we expect the future impact to be unfavorable. See also "Some of our products may face competition from lower cost generic or follow-on products" under the heading "Risk Factors" in this filing.

        The Medicare Improvements for Patients and Providers Act of 2008, or MIPPA, directs the Centers for Medicare and Medicaid Services, or CMS, to establish a bundled payment system to reimburse dialysis providers treating patients with end stage renal disease, or ESRD. On July 26, 2010, CMS issued a final rule setting forth the dialysis bundled payment system that will begin on January 1, 2011. The final rule delays until 2014 the inclusion of ESRD-related oral drugs such as Renagel/Renvela and other oral phosphate binders that do not have an intravenous or injectable equivalent, in the bundled payment system. As a result, Renagel/Renvela will continue to be separately reimbursed by Medicare until 2014. However, beginning January 1, 2011, the bundled payment system will include ESRD-related IV drugs and biologics and their oral equivalents, including intravenous Vitamin D analogs and their oral equivalents such as Hectorol for Infusion and Hectorol capsules. We are in the process of evaluating the potential impact of the bundled payment system on our business.

        Sales of Thyrogen increased for the three months ended June 30, 2010, primarily due to a price increase in July 2009. Sales of Thyrogen increased for the six months ended June 30, 2010, primarily due to a price increase in July 2009. Exchange rate fluctuations, primarily the Euro against the U.S. dollar, positively impacted Thyrogen revenue by $1.1 million for the six months ended June 30, 2010. The weakening of foreign currencies, primarily the Euro against the U.S. dollar, had no significant impact on Thyrogen revenue for the three months ended June 30, 2010. Under the FDA consent decree, Thyrogen distributed in the United States and filled and finished at our Allston facility will only be distributed based on medical necessity, in accordance with FDA criteria. In addition, the consent decree requires us to move our fill-finish operations out of our Allston facility for Thyrogen sold within the United States by November 22, 2010 and for Thyrogen sold outside the United States by August 31, 2011. We are in the process of transferring these operations to Hospira, a third-party contract manufacturer.

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Biosurgery

		Three Months Ended June 30,										Six Months Ended June 30,
						Increase/ (Decrease)			Increase/ (Decrease) % Change							Increase/ (Decrease)			Increase/ (Decrease) % Change
		2010		2009								2010		2009
		(Amounts in thousands)
Synvisc/Synvisc-One		$	107,686	$	82,417	$	25,269			31	%	$	187,193	$	145,588	$	41,605			29	%
Sepra products			38,935		36,038		2,897			8	%		76,112		70,342		5,770			8	%
Other Biosurgery			5,186		8,658		(3,472	)		(40	)%		14,763		20,311		(5,548	)		(27	)%
	Total Biosurgery	$	151,807	$	127,113	$	24,694			19	%	$	278,068	$	236,241	$	41,827			18	%

        Biosurgery product revenue increased for the three and six months ended June 30, 2010, primarily due to increased sales for Synvisc/Synvisc-One due to the addition of Synvisc-One sales in the United States. We received marketing approval for Synvisc-One in the United States in February 2009. Exchange rate fluctuations, primarily the Euro against the U.S. dollar, positively impacted Biosurgery revenue by $2.2 million for the six months ended June 30, 2010. The weakening of foreign currencies, primarily the Euro against the U.S. dollar, had no significant impact on Biosurgery revenue for the three months ended June 30, 2010.

Hematology and Oncology

	Three Months Ended June 30,									Six Months Ended June 30,
					Increase/ (Decrease)		Increase/ (Decrease) % Change							Increase/ (Decrease)		Increase/ (Decrease) % Change
	2010		2009							2010		2009
	(Amounts in thousands)
Mozobil	$	22,141	$	11,650	$	10,491		90	%	$	41,107	$	22,487	$	18,620		83	%
Thymoglobulin		58,232		53,632		4,600		9	%		111,142		104,287		6,855		7	%
Clolar		25,520		19,708		5,812		29	%		50,208		37,868		12,340		33	%
Other Hematology and Oncology		70,597		25,856		44,741		>100	%		130,324		32,848		97,476		>100	%
Total Hematology and Oncology	$	176,490	$	110,846	$	65,644		59	%	$	332,781	$	197,490	$	135,291		69	%

        Hematology and Oncology product revenue increased for the three and six months ended June 30, 2010, primarily due to:

•

increased sales of Mozobil due to increased penetration of the product in the United States and the launch of the product in Europe in August 2009;

•

increased demand for Clolar globally; and

•

the addition of sales of Campath, Fludara and Leukine beginning the end of May 2009 as a result of our acquisition from Bayer.

Exchange rate fluctuations had no significant impact on Hematology and Oncology revenue for the three and six months ended June 30, 2010.

Other Product Revenue

	Three Months Ended June 30,										Six Months Ended June 30,
					Increase/ (Decrease)			Increase/ (Decrease) % Change							Increase/ (Decrease)			Increase/ (Decrease) % Change
	2010		2009								2010		2009
	(Amounts in thousands)
Total Other product revenue	$	37,879	$	48,512	$	(10,633	)		(22	)%	$	82,211	$	97,606	$	(15,395	)		(16	)%

56

        Other product revenue decreased for the three and six months ended June 30, 2010, primarily due to decreased demand for pharmaceutical intermediates products.

Service Revenue

        We derive service revenues primarily from the following sources:

•

sales of Matrix-induced Autologous Chondrocyte Implantation, or MACI, a proprietary cell therapy product for cartilage repair, in Europe and Australia, Carticel for the treatment of cartilage damage in the United States, and Epicel for the treatment of severe burns, all of which are included in our Biosurgery reporting segment; and

•

genetics business unit, which provides reproductive and oncology diagnostic testing services, and is included in Other service revenue.

        The following table sets forth our service revenue on a segment basis (amounts in thousands):

		Three Months Ended June 30,										Six Months Ended June 30,
						Increase/ (Decrease)			Increase/ (Decrease) % Change							Increase/ (Decrease)			Increase/ (Decrease) % Change
		2010		2009								2010		2009
Personalized Genetic Health		$	23	$	43	$	(20	)		(47	)%	$	43	$	80	$	(37	)		(46	)%
Biosurgery			11,771		11,344		427			4	%		22,317		21,176		1,141			5	%
Hematology and Oncology			—		292		(292	)		(100	)%		—		737		(737	)		(100	)%
Other service revenue			91,795		94,014		(2,219	)		(2	)%		183,144		185,199		(2,055	)		(1	)%
	Total service revenue	$	103,589	$	105,693	$	(2,104	)		(2	)%	$	205,504	$	207,192	$	(1,688	)		(1	)%

        Service revenue decreased slightly for the three and six months ended June 30, 2010, primarily due to a decrease in genetic testing service revenue due to a decrease in demand for higher priced genetics testing services offset, in part, by an increase in Biosurgery service revenue due to increased demand for Carticel and MACI. Exchange rate fluctuations had no significant impact on service revenue for the three and six months ended June 30, 2010.

International Product and Service Revenue

        A substantial portion of our revenue is generated outside of the United States. The following table provides information regarding the change in international product and service revenue as a percentage of total product and service revenue during the periods presented (amounts in thousands):

	Three Months Ended June 30,										Six Months Ended June 30,
					Increase/ (Decrease)			Increase/ (Decrease) % Change							Increase/ (Decrease)			Increase/ (Decrease) % Change
	2010		2009								2010		2009
International product and service revenue	$	501,568	$	606,988	$	(105,420	)		(17	)%	$	1,015,027	$	1,158,100	$	(143,073	)		(12	)%
% of total product and service revenue		47%		50%								47%		49%

        International product and service revenue decreased for the three and six months ended June 30, 2010, primarily due to a decrease in international sales volume for Cerezyme and Fabrazyme for the three and six months ended June 30, 2010 due to supply constraints.

        This decrease was offset, in part, by:

•

growth in the international sales volume of Myozyme, Aldurazyme, Elaprase, Thyrogen, Synvisc, Seprafilm, Thymoglobulin and Clolar for the three and six months ended June 30, 2010;

57

•

the addition of international product sales of Campath as of May 29, 2009 in lieu of and in excess of international royalties formerly earned on sales of Campath prior to our transaction with Bayer;

•

the addition of international sales of Fludara and additional sales of Campath as of May 2009 and sales of Mozobil in Europe beginning in the third quarter of 2009; and

•

exchange rate fluctuation, primarily the Euro against the U.S. dollar, which positively impacted total product and service revenue by $23.8 million for the six months ended June 30, 2010. The weakening of foreign currencies, primarily the Euro against the U.S. dollar, adversely impacted total product and service revenue by $6.2 million for the three months ended June 30, 2010.

Research and Development Revenue

        The following table sets forth our research and development revenue on a segment basis (amounts in thousands):

		Three Months Ended June 30,										Six Months Ended June 30,
						Increase/ (Decrease)			Increase/ (Decrease) % Change							Increase/ (Decrease)			Increase/ (Decrease) % Change
		2010		2009								2010		2009
Renal and Endocrinology		$	150	$	8	$	142			>100	%	$	316	$	21	$	295			>100	%
Biosurgery			404		870		(466	)		(54	)%		963		1,432		(469	)		(33	)%
Hematology and Oncology			7		852		(845	)		(99	)%		26		2,336		(2,310	)		(99	)%
Multiple Sclerosis			—		5,066		(5,066	)		(100	)%		—		12,357		(12,357	)		(100	)%
Other			67		99		(32	)		(32	)%		256		381		(125	)		(33	)%
Corporate			300		497		(197	)		(40	)%		300		993		(693	)		(70	)%
	Total research and development revenue	$	928	$	7,392	$	(6,464	)		(87	)%	$	1,861	$	17,520	$	(15,659	)		(89	)%

        Total research and development revenue decreased for the three and six months ended June 30, 2010, primarily due to a decrease in Multiple Sclerosis research and development revenue as a result of our acquisition from Bayer and termination of the Campath profit share arrangement. As of May 29, 2009, the effective date of our acquisition from Bayer, we ceased recognizing research and development revenue for Bayer's reimbursement of a portion of the development costs for alemtuzumab for MS. The fair value of the research and development costs to be reimbursed by Bayer is accounted for as an offset to the contingent consideration obligations for alemtuzumab for MS.

GROSS PROFIT AND MARGINS

        The components of our total margins are described in the following table (amounts in thousands):

	Three Months Ended June 30,										Six Months Ended June 30,
					Increase/ (Decrease)			Increase/ (Decrease) % Change							Increase/ (Decrease)			Increase/ (Decrease) % Change
	2010		2009								2010		2009
Gross product profit	$	673,278	$	826,526	$	(153,248	)		(19	)%	$	1,365,164	$	1,628,208	$	(263,044	)		(16	)%
Product margin		69%		74%								70%		76%
Gross service profit	$	37,065	$	44,069	$	(7,004	)		(16	)%	$	73,108	$	85,318	$	(12,210	)		(14	)%
Service margin		36%		42%								36%		41%
Total gross product and service profit	$	710,343	$	870,595	$	(160,252	)		(18	)%	$	1,438,272	$	1,713,526	$	(275,254	)		(16	)%
Total product and service margin		66%		71%								67%		73%

58

Gross Product Profit and Product Margin

        Our overall gross product profit decreased for the three and six months ended June 30, 2010, primarily due to:

•

decreased sales volume for Cerezyme and Fabrazyme;

•

price decreases for Renagel outside of the United States, primarily in Brazil in connection with successfully negotiating a government tender in the face of competition from two similar products that had been approved in that country; and

•

charges of $10.2 million for the three months ended June 30, 2010 and $18.9 million for the six months ended June 30, 2010 for the amortization of inventory step-up of Campath, Fludara and Leukine resulting from our transaction with Bayer in May 2009 as compared to $6.6 million for the three and six months ended June 30, 2009.

        These decreases were offset, in part, by:

•

increased sales volumes for Myozyme, Aldurazyme, Elaprase, Hectorol, Synvisc, Seprafilm and Clolar;

•

the addition of sales of Lumizyme after it received FDA approval in May 2010; and

•

the addition of sales of Fludara and Leukine and additional sales of Campath as of May 29, 2009 and the addition of sales of Mozobil in Europe beginning in August 2009.

        Our product margin decreased for the three and six months ended June 30, 2010, primarily due to:

•

a shift in product mix to lower margin products attributable to the supply constraints for Cerezyme and Fabrazyme;

•

the increase in sales volume for Myozyme, Aldurazyme and Elaprase, all of which are lower margin products; and

•

the addition of sales of Fludara and Leukine and additional sales of Campath as of the end of May 29, 2009, all of which are lower margin products.

        Gross product profit and gross product margin also decreased for the three and six months ended June 30, 2010 due to manufacturing-related charges as described below:

•

$28.5 million of charges for the three months ended June 30, 2010, of which $14.9 million is related to the write off of Cerezyme and Fabrazyme work-in-process material that was unfinished when the interruption occurred, based on our determination that such material could not be finished, and other inventory for these products that did not meet the necessary quality specifications, $6.1 million, net of $2.4 million of insurance reimbursements, is related to the temporary suspension of production of sevelamer hydrochloride and sevelamer carbonate at and subsequent remediation of our Haverhill, England facility resulting from an explosion and fire in December 2009 and $6.0 million is related to the write off of Thyrogen inventory; and

•

$39.3 million of charges for the six months ended June 30, 2010, of which $16.4 million is related to the write off of Cerezyme and Fabrazyme inventory, as described above, $13.7 million, net of $5.4 million of insurance reimbursements, is related to the temporary suspension of production of sevelamer hydrochloride and sevelamer carbonate at and subsequent remediation of our Haverhill, England facility resulting from an explosion and fire in December 2009 and $7.1 million is related to the write off of Thyrogen inventory.

Gross product profit and gross product margin for the three and six months ended June 30, 2009 includes $14.2 million of charges for the initial costs related to the remediation of our Allston facility and $8.4 million of charges for the write off of Cerezyme work-in-process material recorded in June 2009.

59

        Our gross product profit and product margin for the three months ended June 30, 2010 were also impacted by the unfavorable effect of foreign exchange rates on product sales outside of the United States, offset, in part, by the favorable effect of such rates on the cost of those products. Our gross product profit and product margin for the six months ended June 30, 2010 were also impacted by the favorable effect of foreign exchange rates on product sales outside of the United States, offset, in part, by the unfavorable effect of such rates on the cost of those products.

        We expect to incur approximately $10 million of additional costs related to the remediation of our Haverhill, England facility in the third quarter of 2010.

        At any particular period, we may have certain inventory that requires further evaluation or testing to ensure that it meets appropriate quality specifications. As of June 30, 2010, we have approximately $16 million of inventory that is being evaluated or tested, including $6.3 million of Fabrazyme, $3.9 million of Myozyme and $3.6 million of Thymoglobulin. If we determine that this inventory, or any portion thereof, does not meet the necessary quality standards, it would result in a write off of the inventory and a charge to earnings.

Gross Service Profit and Service Margin

        Our overall gross service profit and total service margin decreased for the three and six months ended June 30, 2010, primarily due to increased employee, rent and depreciation expenses for our genetic testing business unit.

OPERATING EXPENSES

Selling, General and Administrative Expenses

        The following table provides information regarding the change in SG&A during the periods presented (amounts in thousands):

	Three Months Ended June 30,											Six Months Ended June 30,
							Increase/ (Decrease)		Increase/ (Decrease) % Change									Increase/ (Decrease)		Increase/ (Decrease) % Change
	2010			2009								2010			2009
Selling, general and administrative expenses	$	402,535		$	354,128		$	48,407		14	%	$	955,845		$	672,089		$	283,756		42	%
% of total revenue		37	%		29	%							44	%		28	%

        SG&A increased for the three and six months ended June 30, 2010, primarily due to spending increases of:

•

$5.0 million for PGH for the three months ended June 30, 2010, primarily due to an increase in bad debt expense recorded to SG&A and $180.2 million for PGH for the six months ended June 30, 2010, primarily due to a charge of $175.0 million we recorded in our consolidated statements of operations for the six months ended June 30, 2010 relating to the consent decree we entered into with the FDA that provides for an upfront disgorgement of past profits;

•

$6.9 million for the three months ended June 30, 2010 and $13.7 million for the six months ended June 30, 2010 for Renal and Endocrinology, primarily due to an increase in sales and marketing expenses related to the Renvela product launch and increased litigation expenses for Renagel/Renvela and Hectorol;

•

$9.7 million for the three months ended June 30, 2010 and $24.2 million for the six months ended June 30, 2010 for Hematology and Oncology, primarily due to an increase in sales and marketing expenses to support the addition of Campath, Fludara and Leukine and sales force expansion to support the launch of Mozobil in Europe beginning in the third quarter of 2009; and

60

•

$33.2 million for the three months ended June 30, 2010 and $58.2 million for the six months ended June 30, 2010 for Corporate, primarily due to increased spending related to upgrading our information technology systems, including installation and implementation of a new enterprise resource planning system worldwide, the costs for which did not meet the criteria for capitalization, as well as increased employee benefit costs and expenses related to our contested 2010 director elections.

SG&A increased by $2.1 million for the three months ended June 30, 2010 due to unfavorable exchange rate fluctuations for the three months ended June 30, 2010. SG&A decreased by $6.2 million for the six months ended June 30, 2010 due to favorable exchange rate fluctuations for the six months ended June 30, 2010.

Research and Development Expenses

        The following table provides information regarding the change in research and development expenses during the periods presented (amounts in thousands):

	Three Months Ended June 30,											Six Months Ended June 30,
							Increase/ (Decrease)		Increase/ (Decrease) % Change									Increase/ (Decrease)		Increase/ (Decrease) % Change
	2010			2009								2010			2009
Research and development expenses	$	225,558		$	210,522		$	15,036		7	%	$	446,488		$	417,447		$	29,041		7	%
% of total revenue		21	%		17	%							21	%		18	%

        Research and development expenses increased for the three and six months ended June 30, 2010, primarily due to:

•

a $10.9 million increase in spending for the three months ended June 30, 2010 and a $22.4 million increase for the six months ended June 30, 2010 on our PGH research and development programs, primarily due to expenses related to the ongoing eliglustat tartrate phase 3b study;

•

a $5.1 million increase in spending for the three months ended June 30, 2010 and a $12.5 million increase for the six months ended June 30, 2010 on our Hematology and Oncology research and development programs, primarily due to increase in research and development spending related to Campath, Fludara and Leukine; and

•

a $5.9 million increase in spending for the three months ended June 30, 2010 and a $19.3 million increase for the six months ended June 30, 2010 for Corporate, primarily due to increases in personnel, support services and consulting expenses.

Research and development expense increased by $1.1 million for the three months ended June 30, 2010 due to unfavorable exchange rate fluctuations for the three months ended June 30, 2010. Research and development expense decreased by $1.7 million for the six months ended June 30, 2010 due to favorable exchange rate fluctuations for the six months ended June 30, 2010.

        These increases were partially offset by a spending decrease of:

•

$7.7 million for the three months ended June 30, 2010 and $12.1 million for the six months ended June 30, 2010 on our Renal and Endocrinology research and development programs, primarily due to a decrease in spending as a result of the termination of our clinical trial for expanded use of phosphate binders; and

•

$16.7 million on research and development programs included under the category "Other," primarily due to a payment of $18.2 million to EXACT Sciences for the purchase of intellectual property in January 2009 for which there was no comparable amount for the six months ended June 30, 2010.

61

Amortization of Intangibles

        The following table provides information regarding the change in amortization of intangibles expense during the periods presented (amounts in thousands):

	Three Months Ended June 30,											Six Months Ended June 30,
							Increase/ (Decrease)		Increase/ (Decrease) % Change									Increase/ (Decrease)		Increase/ (Decrease) % Change
	2010			2009								2010			2009
Amortization of intangibles	$	67,891		$	63,945		$	3,946		6	%	$	138,875		$	121,543		$	17,332		14	%
% of total revenue		6	%		5	%							6	%		5	%

        Amortization of intangibles expense increased for the three and six months ended June 30, 2010, primarily due to the acquisition of the worldwide marketing and distribution rights to the oncology products Campath, Fludara and Leukine from Bayer and to additional amortization expense for the Synvisc sales and marketing rights we reacquired from Pfizer.

        As discussed in Note 8., "Goodwill and Other Intangible Assets," to our consolidated financial statements included in this Form 10-Q, we calculate amortization expense for the Synvisc sales and marketing rights we reacquired from Pfizer and the Myozyme/Lumizyme patent and technology rights pursuant to a licensing agreement with Synpac by taking into account forecasted future Net Sales of the products, and the resulting estimated future contingent payments we will be required to make. In addition, we also calculate amortization for the technology intangible assets for Fludara based on forecasted future sales of Fludara. We completed the contingent royalty payments to Pfizer related to North American sales of Synvisc in the first quarter of 2010 and anticipate completing the remaining contingent royalty payments to Pfizer related to sales of the product outside of the United States by the first quarter of 2011, the amount of which is not significant. As a result, we expect amortization of intangibles expense to fluctuate over the next five years based on the future contingent payments to Synpac, as well as changes in the forecasted revenue for Fludara.

Contingent Consideration Expense

        The following table provides information regarding the change in contingent consideration expense during the periods presented (amounts in thousands):

	Three Months Ended June 30,											Six Months Ended June 30,
							Increase/ (Decrease)		Increase/ (Decrease) % Change								Increase/ (Decrease)		Increase/ (Decrease) % Change
	2010			2009								2010			2009
Contingent consideration expense	$	10,021		$	9,090		$	931		10	%	$	72,570		$	9,090	$	63,480		>100	%
% of total revenue		1	%		1	%							3	%		—

        In June 2009, we recorded contingent consideration obligations totaling $964.1 million for the acquisition date fair value of the contingent royalty and milestone payments due to Bayer based on future sales and the successful achievement of certain sales volumes for Campath, Fludara and Leukine and for alemtuzumab for MS.

        Any change in the fair value of the contingent consideration obligations subsequent to the acquisition date, including changes from events after the acquisition date, such as changes in our estimates of the sales volume for these products, will be recognized in earnings in the period the estimated fair value changes. The fair value estimates are based on the probability weighted sales volumes to be achieved for Campath, Fludara, Leukine and for alemtuzumab for MS over the earn-out period for each product. A change in the fair value of the acquisition-related contingent consideration obligations could have a material affect on our consolidated statements of operations and financial position in the period of the change in estimate.

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        As of June 30, 2010, the fair value of the total contingent consideration obligations was $977.2 million primarily due to changes in the assumed timing and amount of revenue and expense estimates. Accordingly, we recorded a total of $10.0 million for the three months ended June 30, 2010 and $72.6 million for the six months ended June 30, 2010 of contingent consideration expenses, of which $(13.1) million was allocated to our Hematology and Oncology reporting segment and $85.7 million was allocated to our Multiple Sclerosis reporting segment. Contingent consideration expense of $20.9 million relates to changes in estimates for the six months ended June 30, 2010.

Purchase of In-Process Research and Development

        The following table sets forth the significant IPR&D projects for the companies and assets we acquired between January 1, 2006 and June 30, 2010 (amounts in millions):

Company/Assets Acquired	Purchase Price		IPR&D			Programs Acquired	Discount Rate Used in Estimating Cash Flows			Year of Expected Launch			Estimated Cost to Complete
Bayer (2009)	$	1,006.5	$	458.7		alemtuzumab for MS—US		16	%		2012		$	169.7	(1)
				174.2		alemtuzumab for MS—ex-US		16	%		2013		$	64.4	(2)
			$	632.9	(3)
Bioenvision (2007)	$	349.9	$	125.5	(4)	Clolar(5)		17	%		2010-2016	(6)	$	20.0
AnorMED (2006)	$	589.2	$	526.8	(4)	Mozobil(7)		15	%		2016		$	14.9

(1)

Does not include anticipated reimbursements from Bayer totaling approximately $44 million.

(2)

Does not include anticipated reimbursements from Bayer totaling approximately $16 million.

(3)

Capitalized as an indefinite-lived intangible asset.

(4)

Expensed on acquisition date.

(5)

Clolar is approved for the treatment of relapsed and refractory pediatric ALL. The IPR&D projects for Clolar are related to the development of the product for the treatment of other indications.

(6)

Year of expected launch reflects both the ongoing launch of the products for currently approved indications and the anticipated launch of the products in the future for new indications.

(7)

Mozobil received marketing approval for use in stem cell transplants in the United States in December 2008 and in Europe in July 2009. Mozobil is also being developed for tumor sensitization.

OTHER INCOME AND EXPENSES

		Three Months Ended June 30,												Six Months Ended June 30,
								Increase/ (Decrease)			Increase/ (Decrease) % Change									Increase/ (Decrease)			Increase/ (Decrease) % Change
		2010			2009									2010			2009
		(Amounts in thousands)
Equity in loss of equity method investments		$	(870	)	$	—		$	(870	)		N/A		$	(1,567	)	$	—		$	(1,567	)		N/A
Losses on investment in equity securities, net			(31,562	)		(105	)		(31,457	)		>(100	)%		(31,399	)		(681	)		(30,718	)		>(100	)%
Gain on acquisition of business			—			24,159			(24,159	)		(100	)%		—			24,159			(24,159	)		(100	)%
Other			356			(2,056	)		2,412			>100	%		(246	)		(3,035	)		2,789			92	%
Investment income			3,084			4,144			(1,060	)		(26	)%		6,384			9,494			(3,110	)		(33	)%
	Total other income (expenses)	$	(28,992	)	$	26,142		$	(55,134	)		>(100	)%	$	(26,828	)	$	29,937		$	(56,765	)		>(100	)%

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Equity in Loss of Equity Method Investments

        Effective January 1, 2010, in accordance with changes in the guidance related to how we account for variable interest entities, we were required to reassess our designation as primary beneficiary of BioMarin/Genzyme LLC based on a control-based approach. Under this approach, an entity must have the power to direct the activities that most significantly impact a variable interest entity's economic performance in order to meet the requirements of a primary beneficiary. We have concluded that BioMarin/Genzyme LLC is a variable interest entity, but does not have a primary beneficiary because the power to direct the activities of BioMarin/Genzyme LLC that most significantly impact its performance, is, in fact, shared equally between us and BioMarin through our commercialization rights and BioMarin's manufacturing rights. Effective January 1, 2010, we no longer consolidate the results of BioMarin/Genzyme LLC and instead record our portion of the results of BioMarin/Genzyme LLC in equity in loss of equity method investments in our consolidated statements of operations.

Losses on Investment in Equity Securities, Net

        We review for potential impairment the carrying value of each of our strategic investments in equity securities on a quarterly basis. The closing price per share of Isis common stock exhibited volatility during 2009 and the six months ended June 30, 2010 and has remained below our historical cost since September 1, 2009, with closing prices since that date ranging from a high of $15.69 per share to a low of $8.66 per share. We considered all available evidence in assessing the decline in value of our investment in Isis common stock, including investment analyst reports and Isis's expected results and future outlook. However, despite such evidence if the fair value of any of our investments remain below our historical cost for a consecutive nine months, we will generally conclude that it is unclear over what period the stock price of our investment would recover and that any evidence suggesting that the investment would recover to at least our historical cost is not sufficient to overcome the presumption that the current market price is the best indicator of the value of this investment. Accordingly, given the significance and duration of the decline in value of our investment in Isis common stock as of June 30, 2010, we considered the decline in value of this investment to be other than temporary and we recorded a $32.3 million impairment charge to losses on investment in equity securities, net in our consolidated statements of operations for the three and six months ended June 30, 2010.

Gain on Acquisition of Business

        We recorded a gain on acquisition of business of $24.2 million for the three months ended June 30, 2009 for our Multiple Sclerosis reporting segment related to our acquisition of the worldwide rights to the oncology products Campath, Fludara, Leukine and alemtuzumab for MS from Bayer for which there were no comparable amounts in 2010. The fair value of the identifiable assets acquired of $1.03 billion exceeded the fair value of the purchase price for the transaction of $1.01 billion.

Investment Income

        Our investment income decreased for the three and six months ended June 30, 2010 primarily due to a decrease in our average portfolio yield and lower average cash and investment balances.

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BENEFIT FROM (PROVISION FOR) INCOME TAXES

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
	(Amounts in thousands)
Benefit from (provision for) income taxes	$	19,953		$	(78,870	)	$	81,752		$	(157,754	)
Effective tax rate		(84	)%		30	%		(41	)%		29	%

        Our effective tax rate for all periods presented varies from the U.S. statutory tax rate as a result of:

•

income and expenses taxed at rates other than the U.S. statutory tax rate;

•

our provision for state income taxes;

•

domestic manufacturing benefits;

•

benefits related to tax credits; and

•

non-deductible stock-based compensation expenses totaling $9.1 million for the three months ended and $21.0 million for the six months ended June 30, 2010, as compared to $21.8 million for the three months ended and $31.5 million for the six months ended June 30, 2009.

        In addition, our tax benefit for both the three and six months ended June 30, 2010 includes:

•

tax expenses resulting from the remeasurement of the deferred tax assets related to our acquisition from Bayer in 2009 in the amount of $9.9 million for the three months ended June 30, 2010 and $20.6 million for the six months ended June 30, 2010; and

•

$10.0 million of tax benefits due to the realization, for U.S. income tax purposes, of prior periods' foreign income tax paid.

Our benefits from tax provisions for the six months ended June 30, 2010 also includes tax benefits in the amount of $15.2 million as a result of the resolution of tax examinations in major tax jurisdictions.

        We are currently under audit by various states and foreign jurisdictions for various years. We believe that we have provided sufficiently for all audit exposures. Settlement of these audits or the expiration of the statute of limitations on the assessment of income taxes for any tax year will likely result in a reduction of future tax provisions. Any such benefit would be recorded upon final resolution of the audit or expiration of the applicable statute of limitations.

LIQUIDITY AND CAPITAL RESOURCES

        We continue to generate cash from operations. We had cash, cash equivalents and short-and long-term investments of $974.2 million at June 30, 2010 and $1.05 billion at December 31, 2009.

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        The following is a summary of our statements of cash flows for the six months ended June 30, 2010 and 2009:

Cash Flows from Operating Activities

        Cash flows from operating activities are as follows (amounts in thousands):

		Six Months Ended June 30,
		2010			2009
Cash flows from operating activities:
Net income (loss)		$	(118,721	)	$	383,060
Non-cash charges, net			430,554			273,017
Net income, excluding net non-cash charges			311,833			656,077
Increase (decrease) in cash from working capital changes			(6,675	)		(55,731	)
	Cash flows from operating activities	$	305,158		$	600,346

        Cash provided by operating activities decreased $295.2 million for the six months ended June 30, 2010, driven by a $344.2 million decrease in net income, excluding net non-cash charges, offset by a $49.1 million decrease in working capital, primarily due to the Cerezyme and Fabrazyme supply constraints and a corresponding reduction in collection activities for these products.

        Non-cash charges, net, increased by $157.5 million for the six months ended June 30, 2010, primarily attributable to:

•

a $37.5 million increase in depreciation and amortization expenses;

•

a $63.5 million increase in contingent consideration expenses related to an increase in the fair value of the contingent consideration obligations recorded as a result of our acquisition from Bayer in May 2009; and

•

a $30.7 million increase in losses on investments in equity securities, net, due to a charge of $32.3 million recorded in June to write down our investment in Isis to fair value as the unrealized losses were determined to be other than temporary.

Cash Flows from Investing Activities

        Cash flows from investing activities are as follows (amounts in thousands):

		Six Months Ended June 30,
		2010			2009
Cash flows from investing activities:
Net sales (purchases) of investments, excluding investments in equity securities		$	11,404		$	86,345
Net sales (purchases) of investments in equity securities			104			(5,890	)
Purchases of property, plant and equipment			(330,298	)		(318,324	)
Acquisitions, net of acquired cash			—			(117,073	)
Investments in equity method investment			(1,466	)		—
Purchases of other intangible assets			(6,155	)		(18,345	)
Other investing activities			(7,661	)		(5,198	)
	Cash flows from investing activities	$	(334,072	)	$	(378,485	)

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        For the six months ended June 30, 2010, capital expenditures accounted for significant cash outlays for investing activities. During the six months ended June 30, 2010, we used $330.3 million of cash to fund the purchase of property, plant and equipment, primarily related to the ongoing expansion of our manufacturing capacity in the Republic of Ireland, France and Belgium, planned improvements at our Allston facility, the additional manufacturing capacity we are constructing in Framingham, Massachusetts and capitalized costs related to the implementation of an enterprise software system.

        For the six months ended June 30, 2009, investing activities used $318.3 million of cash to fund the purchase of property, plant and equipment, primarily related to the ongoing expansion of our manufacturing capacity in the Republic of Ireland and France, planned improvements at our Allston facility and capitalized costs of an internally developed enterprise software system. In addition, we used $117.1 million of cash in connection with our acquisition of the worldwide rights to Campath, Fludara, Leukine and alemtuzumab for MS from Bayer.

Cash Flows from Financing Activities

        Cash flows from financing activities are as follows (amounts in thousands):

		Six Months Ended June 30,
		2010			2009
Cash flows from financing activities:
Proceeds from the issuance of our common stock		$	58,362		$	53,508
Repurchases of our common stock			(800,000	)		(107,134	)
Payments under shares purchase contract			(200,000	)		—
Excess tax benefits from stock-based compensation			(5,372	)		4,424
Proceeds from the issuance of debt			994,387			—
Payments of debt and capital lease obligations			(4,549	)		(4,305	)
Increase (decrease) in bank overdrafts			23,851			(14,303	)
Payment of contingent consideration obligation			(61,336	)		—
Other financing activities			939			3,660
	Cash flows from financing activities	$	6,282		$	(64,150	)

        Cash used by financing activities decreased by $70.4 million for the six months ended June 30, 2010, as compared to the same period of 2009, primarily a result of $994.4 million of proceeds, net of a $5.6 million discount, from the issuance of $1.0 billion in principal of debt, including $500.0 million in aggregate principal amount of our 2015 Notes and $500.0 million in aggregate principal amount of our 2020 Notes. These proceeds were offset by a $692.9 million increase in cash used to repurchase shares of our common stock. Also, cash used by financing activities increased as a result of an advance payment to Goldman Sachs of $200.0 million recorded in June 2010 as part of the repurchase of our common stock. Finally, the proceeds from issuance of debt were also offset by $61.3 million in contingent consideration payments to Bayer in the six months ended June 30, 2010, for which there were no comparable payments for the same period of 2009.

2015 and 2020 Senior Notes

        In June 2010, we sold $500.0 million aggregate principal amount of our 2015 Notes and $500.0 million aggregate principal amount of our 2020 Notes through institutional private placements to fund the $1.0 billion payment under our accelerated share repurchase agreement, as discussed under the caption "Share Repurchase Plan" below. We received net proceeds from the sale of the Notes of approximately $986.6 million, after deducting commissions and other expenses related to the offerings.

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Interest accrues on the Notes from June 17, 2010 and is payable semi-annually in arrears on June 15 and December 15 of each year starting on December 15, 2010.

        The Notes are our senior unsecured obligations and rank equally in right of payment with all of our other senior unsecured indebtedness from time to time outstanding. The Notes are fully and unconditionally guaranteed by one of our subsidiaries that also guarantees our indebtedness under our 2006 revolving credit facility. We may redeem the Notes in whole or in part at any time at a redemption price equal to the greater of:

•

100% of the principal amount of the Notes redeemed; or

•

the sum of the present values of the remaining scheduled payments of interest and principal thereon discounted at the Treasury Rate plus 25 basis points in the case of our 2015 Notes and 30 basis points in the case of our 2020 Notes.

We may be required to offer to repurchase the Notes at a purchase price equal to 101% of their principal amount if we are subject to certain changes of control.

Revolving Credit Facility

        As of June 30, 2010, we had approximately $9 million of outstanding standby letters of credit issued against this facility and no borrowings, resulting in approximately $341 million of available credit under our 2006 revolving credit facility, which matures July 14, 2011. The terms of this credit facility include various covenants, including financial covenants that require us to meet minimum interest coverage ratios and maximum leverage ratios. As of June 30, 2010, we were in compliance with these covenants.

Share Repurchase Plan

        In April 2010, our board of directors authorized a $2.0 billion share repurchase plan consisting of the near-term purchase of $1.0 billion of our common stock to be financed with proceeds of newly issued debt, and the purchase of an additional $1.0 billion of our common stock by June 2011. On June 17, 2010, we entered into an accelerated share repurchase agreement with Goldman Sachs under which we will repurchase $1.0 billion worth of shares of our common stock. Our effective per share purchase price will be based generally on the average of the daily volume weighted average prices per share of our common stock, less a discount, calculated during a period of up to four months. In connection with this agreement, we paid $1.0 billion to Goldman Sachs and received 15.6 million shares, of which:

•

$800.0 million, or 80%, represents the value, based on the closing price of our common stock on June 17, 2010, of the 15.6 million shares of our common stock that Goldman Sachs delivered to us; and

•

$200.0 million, or 20%, represents an advance payment that, depending on our effective per share purchase price, either will cover additional shares Goldman Sachs may be required to deliver to us or will be applied towards any additional amount that may be owed by us if our effective per share purchase price exceeds the closing price of our common stock on June 17, 2010.

        The total number of shares ultimately repurchased will not be known until the calculation period ends and a final settlement occurs. Upon final settlement, we will either receive a settlement amount of additional shares of our common stock or be required to remit a settlement amount, payable, at our option, in cash or common stock. Shares repurchased under this agreement will be deemed authorized shares that are no longer outstanding.

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Contractual Obligations

        As of June 30, 2010, we had committed to make the following payments under contractual obligations (amounts in millions):

		Payments Due by Period
Contractual Obligations		Total		July 1, 2010 through December 31, 2010		2011		2012		2013		2014		After 2014
Long-term debt obligations(1,2)		$	1,022.0	$	0.2	$	1.6	$	1.7	$	1.8	$	1.8	$	1,014.9
Capital lease obligations(2)			141.9		7.6		15.5		15.5		16.9		18.9		67.5
Operating leases(2)			374.3		39.9		69.4		52.6		33.9		27.5		151.0
Contingent payments(3)			1,796.2		132.8		211.6		117.1		297.8		481.2		555.7
Interest obligations(4)			348.8		23.8		44.2		44.1		44.0		44.0		148.7
Defined pension benefit plans payments			31.3		1.0		1.9		2.2		2.4		2.9		20.9
Unconditional purchase obligations			99.8		41.1		28.1		19.6		7.0		2.0		2.0
Capital commitments(5)			1,084.0		405.0		532.9		117.6		25.3		3.2		—
	Total contractual obligations	$	4,898.3	$	651.4	$	905.2	$	370.4	$	429.1	$	581.5	$	1,960.7

(1)

Includes $500.0 million in principal of our 2015 Notes and $500.0 million in principal of our 2020 Notes.

(2)

See Note L., "Long-term Debt and Leases" to our consolidated financial statements included in Item 8 of Exhibit 99 to our Form 8-K filed with the SEC on June 14, 2010 for additional information on long-term debt and lease obligations.

(3)

For all periods presented consists primarily of a total of $1.80 billion of contingent royalty and milestone payments, the value of which has not been risk adjusted or discounted, that we are obligated to pay to Bayer based on future sales and the successful achievement of certain sales volumes for Campath, Fludara and Leukine and alemtuzumab for MS.

Bayer is also eligible to receive a payment between $75.0 million and $100.0 million for a new Leukine manufacturing facility located in Lynnwood, Washington upon the facility receiving FDA approval, which is expected in 2011. We have not included any amounts for the contingent payments for this facility because we cannot be certain that the FDA will approve the facility or do so in the anticipated timeframe.

Contingent payments also include a $20.0 million milestone payment to Synpac estimated to occur in 2010 once sales of Myozyme/Lumizyme reach $400.0 million. Contingent payments exclude any liabilities pertaining to uncertain tax positions as we cannot make a reliable estimate of the period of cash settlement with the respective taxing authorities.

From time to time, as a result of mergers, acquisitions or license arrangements, we may enter into agreements under which we may be obligated to make contingent payments upon the occurrence of certain events, and/or royalties on sales of acquired products or distribution rights. The actual amounts for and the timing of contingent payments may depend on numerous factors outside of our control, including the success of our preclinical and clinical development efforts with respect to the products being developed under these agreements, the content and timing of decisions made by the United States Patent and Trademark Office, the FDA and other regulatory authorities, the existence and scope of third-party intellectual property, the reimbursement and competitive landscape around these products, the volume of sales or gross margin of a product in a specified territory and other factors described under the heading "Risk Factors" below. Because we cannot predict with certainty the amount or specific timing of contingent payments, we have included amounts for contingent payments that we believe are probable of being paid in our contractual obligations table. See Note C., "Strategic Transactions," to our consolidated financial statements

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included in Item 8 of Exhibit 99 to our Form 8-K filed with the SEC on June 14, 2010 for additional information on our transaction with Bayer.

(4)

Represents interest payment obligations related to the senior notes that we issued in June 2010, promissory notes to three former shareholders of Equal Diagnostics and the mortgage payable we assumed in connection with the purchase of land and a manufacturing facility we formerly leased in Framingham, Massachusetts.

(5)

Consists of contractual commitments to vendors that we have entered into as of June 30, 2010 related to our outstanding capital and internally developed software projects. Our estimated cost of completion for assets under construction as of June 30, 2010 is as follows (amounts in millions):

Location		Cost to Complete at June 30, 2010
Framingham, Massachusetts, U.S (approximately 38% for software development).		$	428.1
Westborough, Massachusetts, U.S. (primarily software development)			33.8
Lyon, France			12.0
Geel, Belgium			344.2
Waterford, Ireland			28.5
Allston, Massachusetts, U.S.			96.1
Ridgefield, New Jersey, U.S.			27.0
Haverhill, England			26.0
Other			88.3
	Total estimated cost to complete	$	1,084.0

Financial Position

        We believe that our available cash, investments and cash flows from operations, together with our revolving credit facility and other available debt financing will be adequate to meet our operating, investing and financing needs in the foreseeable future. Although we currently have substantial cash resources and positive cash flow, we have used or intend to use substantial portions of our available cash and may make additional borrowings for:

•

expanding and maintaining existing and constructing additional manufacturing facilities, including investing significant funds to expand our Allston, Massachusetts, Geel, Belgium and Waterford, Ireland facilities and constructing a new manufacturing facility with capacity for Cerezyme and Fabrazyme;

•

implementing process improvements and system updates for our biologics manufacturing operations;

•

product development and marketing;

•

strategic business initiatives;

•

repurchasing additional shares of our common stock;

•

upgrading our information technology systems, including installation and implementation of a new enterprise resource planning system worldwide;

•

contingent payments under business combinations, license and other agreements, including a milestone payment to Synpac if Net Sales of Myozyme/Lumizyme reach $400.0 million, as well as payments related to our license of mipomersen from Isis, ataluren from PTC Therapeutics, Inc., or PTC, and Prochymal and Chondrogen from Osiris Therapeutics, Inc., or Osiris, as well as

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contingent consideration obligations related to our acquisition of the worldwide rights to the oncology products Campath, Fludara and Leukine and alemtuzumab for MS from Bayer (for more information on these payments please read Note C., "Strategic Transactions," to our consolidated financial statements included in Item 8 of Exhibit 99 to our Form 8-K filed with the SEC on June 14, 2010);

•

consulting and other fees related to our compliance with the consent decree;

•

working capital and satisfaction of our obligations under capital and operating leases; and

•

repayment of our 2015 Notes and our 2020 Notes.

        In May 2010, we announced a $2.0 billion stock repurchase program. In June 2010, we executed an accelerated share repurchase agreement with Goldman Sachs for the repurchase of $1.0 billion of our common stock, which we financed with the net proceeds of our $1.0 billion senior note offering. We plan to repurchase the additional $1.0 billion before June 2011.

        In addition, we have several outstanding legal proceedings. Involvement in investigations and litigation can be expensive and a court may also ultimately require that we pay expenses and damages. As a result of legal proceedings, we also may be required to pay fees to a holder of proprietary rights in order to continue certain operations.

Off-Balance Sheet Arrangements

        We do not use special purpose entities or other off-balance sheet financing arrangements. We enter into guarantees in the ordinary course of business related to the guarantee of our own performance and the performance of our subsidiaries. In addition, we have joint ventures and certain other arrangements that are focused on research, development, and the commercialization of products. Entities falling within the scope of ASC 810 are included in our consolidated statements of operations if we qualify as the primary beneficiary. Entities not subject to consolidation under ASC 810 are accounted for under the equity method of accounting if our ownership percent exceeds 20% or if we exercise significant influence over the entity. We account for our portion of the income (losses) of these entities in the line item "Equity in loss of equity method investments" in our consolidated statements of operations. We also acquire companies under agreements in which we agree to pay contingent consideration based on attaining certain thresholds.

Recent Accounting Pronouncements

        Periodically, accounting pronouncements and related information on the adoption, interpretation and application of U.S. GAAP are issued or amended by the FASB or other standard setting bodies. Changes to the ASC are communicated through ASUs. The following table shows FASB ASUs recently issued that could affect our disclosures and our position for adoption:

ASU Number	Relevant Requirements of ASU	Issued Date/Our Effective Dates	Status
2009-13 "Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force."	Establishes the accounting and reporting guidance for arrangements under which a vendor will perform multiple revenue-generating activities. Specifically, the provisions of this update address how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting.	Issued October 2009. Effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. Early adoption is permitted.	We will adopt the provisions of this update for the first quarter of 2011. We are currently assessing the impact the provisions of this update will have, if any, on our consolidated financial statements.

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ASU Number	Relevant Requirements of ASU	Issued Date/Our Effective Dates	Status
2010-06 "Improving Disclosures about Fair Value Measurements."	Requires new disclosures and clarifies some existing disclosure requirements about fair value measurements codified within ASC 820, "Fair Value Measurements and Disclosures," including significant transfers into and out of Level 1 and Level 2 investments of the fair value hierarchy. Also requires additional information in the roll forward of Level 3 investments including presentation of purchases, sales, issuances, and settlements on a gross basis. Further clarification for existing disclosure requirements provides for the disaggregation of assets and liabilities presented, and the enhancement of disclosures around inputs and valuation techniques.	Issued January 2010. Effective for the first interim or annual reporting period beginning after December 15, 2009, except for the additional information in the roll forward of Level 3 investments. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim reporting periods within those fiscal years.	We adopted the applicable provisions of this update, except for the additional information in the roll forward of Level 3 investments (as previously noted), in the first quarter of 2010. Besides a change in disclosure, the adoption of this update does not have a material impact on our consolidated financial statements. None of our instruments were reclassified between Level 1, Level 2 or Level 3 in 2010.
2010-11, "Scope Exception Related to Embedded Credit Derivatives."	Update provides amendments to Subtopic 815-15, "Derivatives and Hedging—Embedded Derivatives," to clarify the scope exception for embedded credit derivative features related to the transfer of credit risk in the form of subordination of one financial instrument to another.	Issued March 2010. Effective at the beginning of each reporting entity's first fiscal quarter beginning after June 15, 2010. Early adoption is permitted at the beginning of each reporting entity's first fiscal quarter beginning after issuance of this update.	We will adopt the provisions of this update for the third quarter of 2010. We are currently assessing the impact the provisions of this update will have, if any, on our consolidated financial statements.
2010-17, "Milestone Method of Revenue Recognition—a consensus of the FASB Emerging Issues Task Force."	Update provides guidance on defining a milestone and determining when it may be appropriate to apply the milestone method of revenue recognition for research and development transactions.	Issued April 2010. Effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted.	We will adopt the provisions of this update beginning January 1, 2011. We are currently assessing the impact the provisions of this update will have, if any, on our consolidated financial statements.
2010-19, "Foreign Currency Issues: Multiple Foreign Currency Exchange Rates."	Update codifies the SEC Staff Announcement made at a March 18, 2010 meeting of the EITF. The Staff Announcement provides the SEC staff's view on certain foreign currency issues related to investments in Venezuela.	Issued May 2010. Staff announcements made at EITF meetings are effective as of the announcement date, which for this update is March 18, 2010, unless otherwise noted.	We have adopted the provisions of this update beginning March 18, 2010. We don't believe the impact of highly inflationary accounting on differences between amounts recorded for financial reporting purposes versus the underlying U.S. dollar denominated values is material to our consolidated financial statements.

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RISK FACTORS

        Our future operating results could differ materially from the results described in this report due to the risks and uncertainties related to our business, including those discussed below. In addition, these factors represent risks and uncertainties that could cause actual results to differ materially from those implied by forward-looking statements. We refer you to our "Cautionary Note Regarding Forward-Looking Statements," which identifies forward-looking statements in this report. The risks described below are not the only risks we face. Additional risk and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition or results of operations.

Manufacturing problems have caused inventory shortages, loss of revenues and unanticipated costs and may do so in the future.

        In order to generate revenue from our approved products, we must be able to produce sufficient quantities of the products to satisfy demand. Many of our products are very difficult to manufacture. Our products that are biologics, for example, require processing steps that are more difficult than those required for most chemical pharmaceuticals. Accordingly, we employ multiple steps to attempt to control the manufacturing processes. Problems with these manufacturing processes, even minor deviations from the normal process, could result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims and insufficient inventory. In the past, we have had to write off and incur other charges and expenses for products that failed to meet internal or external specifications, including Thymoglobulin, and for products that experience terminated production runs, including Myozyme produced at the 4000L scale. We also have had to write off work-in-process materials and incur other charges and expenses associated with a viral contamination, described below, at two of our facilities. Similar charges could occur in the future.

        Certain of the raw materials required in the commercial manufacturing and the formulation of our products are derived from biological sources, including bovine serum and human serum albumin. Such raw materials are difficult to procure and may be subject to contamination or recall. Also, some countries in which we market our products may restrict the use of certain biologically derived substances in the manufacture of drugs. A material shortage, contamination, recall, or restriction on the use of certain biologically derived substances in the manufacture of our products could adversely impact or disrupt commercial manufacturing of our products or could result in a withdrawal of our products from markets. This, in turn, could adversely affect our ability to satisfy demand for our products, which could materially and adversely affect our operating results.

        In addition, we may only be able to produce some of our products at a very limited number of facilities and, therefore, have limited or no redundant manufacturing capacity for these products. For example, we manufacture all of our bulk Cerezyme and most of our bulk Fabrazyme products at our Allston facility, all of our bulk Myozyme produced at the 160L scale at our Framingham facility, and all of our bulk Myozyme/Lumizyme produced at the 4000L scale at our Belgium facility. In some cases, we contract out the manufacturing of our products to third parties, of which there are only a limited number capable of executing the manufacturing processes we require. A number of factors could cause production interruptions at our facilities or the facilities of our third-party providers, including equipment malfunctions, facility contamination, labor problems, raw material shortages or contamination, natural disasters, disruption in utility services, terrorist activities, human error or disruptions in the operations of our suppliers.

        In June 2009, we announced that we had detected a virus, Vesivirus 2117, that impairs cell growth in one of the bioreactors used at our Allston facility to produce Cerezyme. We believe the virus was likely introduced through a raw material used in the manufacturing process. We temporarily interrupted bulk production at the plant to sanitize the facility, which affected production of Cerezyme and Fabrazyme. Cerezyme and Fabrazyme inventories were not sufficient to meet global demand. In 2009,

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we confirmed that Vesivirus 2117 was the cause of declines in cell productivity in one previous instance in 2008 at our Allston facility and one previous instance in 2008 at our Belgium facility. We were able to detect the virus in 2009 at our Allston facility using a highly specific assay we had developed after standard tests were unable to identify the cause of the productivity declines that occurred in 2008. We are in the process of adding steps to increase the robustness of our raw materials screening, process monitoring for viruses and viral removal processes. Some of these steps are subject to regulatory approval. However, given the nature of biologics manufacturing, contamination issues could occur at our facilities in the future. The Vesivirus contamination has had a material adverse effect on our Cerezyme and Fabrazyme revenues as well as on our results of operations, and any future contamination could have a similarly material financial impact.

        The steps in successfully producing our biologic products are highly complex and in the normal course are subject to equipment failures and other production difficulties. For example, when we restarted Fabrazyme production at Allston, we experienced cell growth at lower than expected levels, which negatively affected our ability to supply the product to patients. In addition, in March 2010, we experienced an interruption in operations at our Allston facility resulting from an unexpected city electrical power failure that compounded issues with the plant's water system. This resulted in continued supply limitations for Cerezyme and Fabrazyme as well as product write-offs. We also have experienced other shipment interruptions since restarting Cerezyme and Fabrazyme production. We will continue to work with minimal levels of inventory for Cerezyme and Fabrazyme until our new Framingham manufacturing facility is approved and any additional manufacturing delays will likely impact supply of these products.

Our Cerezyme and Fabrazyme supply constraints have created opportunities for our competitors.

        Outside of the United States, Fabrazyme competes with Replagal, a product marketed by Shire plc. In the United States, the FDA has approved a treatment protocol for Replagal. In August 2010, Shire reported that it had withdrawn its BLA for Replagal that it had submitted in December 2009 to the FDA, and for which it had been granted "fast track" designation, to consider updating it with additional clinical data. In June 2010, Shire closed enrollment in their T-IND in the U.S. for Replagal and announced plans to actively manage emergency requests for the drug from new patients. For Cerezyme, Shire and Protalix were able to offer their developmental therapies for the treatment of Gaucher disease to patients in the United States through an FDA-approved treatment protocol and to patients in the European Union and other countries through pre-approval access programs. Shire received FDA approval of VPRIV to treat Gaucher disease in February 2010 and announced it will price its therapy lower than Cerezyme. In addition, Shire received a positive opinion from the EMA Committee for Human Medicinal Products in June 2010. Shire expects to launch its therapy in the European Union by the end of 2010 and in other countries beginning in 2011. Also, Shire has announced that it expects its manufacturing plant to be approved for commercial product in late 2011 or early 2012. Protalix submitted its NDA for UPLYSO to the FDA in December 2009 and has been granted "fast track" designation, with a PDUFA date of February 25, 2011. In December 2009, Protalix and Pfizer entered into an agreement to develop and commercialize UPLYSO. The FDA has granted orphan drug status to both Shire's and Protalix's therapies for the treatment of Gaucher disease. In addition, Zavesca® is currently approved in the United States for patients with Gaucher disease for whom enzyme replacement therapy is unsuitable.

        The approval of treatment protocols and access programs for Shire's and Protalix's therapies has allowed physicians to treat Fabry and Gaucher disease patients with the therapies ahead of their commercial availability. Some Gaucher and Fabry patients have used our competitors' therapies during the period of supply constraint and there is a risk that they may not switch back to our products, which would result in the loss of additional revenue for us. In April 2010, the EMA advised physicians to consider switching Fabry disease patients from Fabrazyme to Replagal based on its concerns that certain patients were not tolerating reduced dosages of Fabrazyme. We also have encouraged patients

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to switch to competitive products during the period of supply constraint. These actions may result in additional patients switching to our competitors' therapies. In July 2010, the EMA issued a temporary recommendation to physicians that new Fabry disease patients be treated with Replagel as an alternative to Fabrazyme because of continued supply shortages of Fabrazyme. In addition, the institution of treatment guidelines and dose conservation measures during the supply constraint presents the risk that physicians and patients will not resume regular treatment levels after the supply constraint has ended.

Our products and manufacturing facilities are subject to significant government regulations and approvals, which are often costly and could result in adverse consequences to our business if we fail to comply with the regulations or maintain the approvals.

        Our commercial products and the manufacturing facilities in which they are produced are subject to extensive continuing government regulations relating to, among other things, testing, quality control, labeling and promotion. For example, we and certain of our third-party suppliers are required to maintain compliance with GMP requirements, and are subject to inspections by the FDA, the EMA and comparable agencies in other jurisdictions to confirm such compliance. Failure to comply with applicable regulatory requirements could result in regulatory authorities taking actions such as:

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issuing warning letters;

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levying fines and other civil penalties;

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imposing consent decrees;

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suspending regulatory approvals;

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refusing to approve pending applications or supplements to approved applications;

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suspending manufacturing activities or product sales, imports or exports;

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requiring us to communicate with physicians and other customers about concerns related to actual or potential safety, efficacy, and other issues involving our products;

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mandating product recalls or seizing products; and

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criminal prosecution.

        For example, on May 24, 2010, we entered into a consent decree with the FDA relating to our Allston facility. Under the terms of the consent decree, we will pay an upfront disgorgement of past profits of $175.0 million. The consent decree requires us to move all of our fill-finish operations out of our Allston facility by certain deadlines. If we are not able to meet these deadlines, the FDA can require us to disgorge 18.5% of the revenue from the sale of any products that are filled and finished at our Allston facility after the applicable deadlines. The consent decree also requires us to implement a plan to bring our Allston facility operations into compliance with applicable laws and regulations. The plan must address any deficiencies previously reported to us or identified as part of a comprehensive inspection conducted by a third-party expert, who we are required to retain, and who will monitor and oversee our implementation of the plan. In 2009, we began implementing a comprehensive remediation plan, prepared with assistance from our compliance consultant, Quantic, to improve quality and compliance at our Allston facility. We intend to revise that plan to include any additional remediation efforts required in connection with the consent decree as identified by Quantic, who we are retaining as the third-party expert under the consent decree. The plan, as revised, which will be subject to FDA approval, is expected to take approximately 3-4 years to complete and will include a timetable of specified compliance milestones. If the milestones are not met in accordance with the timetable, the FDA can require us to pay $15,000 per day, per affected drug, until these compliance milestones are met. Upon satisfying the compliance requirements in accordance with the terms of the consent decree, we will be required to retain an auditor, which can be Quantic, to monitor and oversee ongoing

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compliance at our Allston facility for an additional five years. If we are unable to satisfy the terms of the consent decree, or if satisfaction of our obligations takes longer than expected, our business could be adversely impacted.

        The FDA, the EMA and comparable regulatory agencies worldwide may require post-marketing clinical trials or patient outcome studies. We have agreed with the FDA, for example, to a number of post-marketing commitments as a condition to U.S. marketing approval for Fabrazyme, Aldurazyme, Myozyme/Lumizyme, Clolar and Mozobil. In addition, holders of exclusivity for orphan drugs are expected to assure the availability of sufficient quantities of their orphan drugs to meet the needs of patients. Failure to do so could result in the withdrawal of marketing exclusivity for the drug.

        In recent years, several states, including California, Vermont, Maine, Minnesota, Massachusetts, New Mexico and West Virginia, in addition to the District of Columbia, have enacted legislation requiring biotechnology, pharmaceutical and medical device companies to establish marketing compliance programs and file periodic reports on sales, marketing, and other activities. Similar legislation is being considered in other states. Many of these requirements are new and uncertain, and available guidance is limited. We could face enforcement action, fines and other penalties and could receive adverse publicity, all of which could harm our business, if it is alleged that we have failed to fully comply with such laws and related regulations.

The development of new biotechnology products involves a lengthy and complex process, and we may be unable to commercialize any of the products we are currently developing.

        We have numerous products under development and devote considerable resources to research and development, including clinical trials.

        Before we can commercialize our product candidates, we need to:

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conduct substantial research and development;

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undertake preclinical and clinical testing, sampling activity and other costly and time-consuming measures;

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develop and scale-up manufacturing processes; and

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pursue marketing and manufacturing approvals and, in some jurisdictions, pricing and reimbursement approvals.

        This process involves a high degree of risk and takes many years. Our product development efforts with respect to a product candidate may fail for many reasons, including:

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failure of the product candidate in preclinical studies;

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delays or difficulty enrolling patients in clinical trials, particularly for disease indications with small patient populations;

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patients exhibiting adverse reactions to the product candidate or indications of other safety concerns;

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insufficient clinical trial data to support the effectiveness or superiority of the product candidate;

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our inability to manufacture sufficient quantities of the product candidate for development or commercialization activities in a timely and cost-efficient manner, if at all;

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our failure to obtain, or delays in obtaining, the required regulatory approvals for the product candidate, the facilities or the process used to manufacture the product candidate; or

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changes in the regulatory environment, including pricing and reimbursement, that make development of a new product or of an existing product for a new indication no longer desirable.

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        Few research and development projects result in commercial products, and success in preclinical studies or early clinical trials often is not replicated in later studies. For example, in our pivotal study of hylastan for treatment of patients with osteoarthritis of the knee, hylastan did not meet its primary endpoint. In addition, in November 2009, we discontinued development of an advanced phosphate binder. Although the advanced phosphate binder met its primary endpoint in its phase 2/3 trial, it did not demonstrate significant improvement in phosphate lowering compared to Renvela. In September 2009, our collaboration partner Osiris, to whom we have made substantial nonrefundable upfront payments, announced that its two phase 3 trials evaluating Prochymal for the treatment of acute Graft-versus-Host Disease failed to meet their primary endpoints, drawing into question the size of the market that may benefit from use of the product.

        We may decide to abandon development of a product or service candidate at any time, or we may be required to expend considerable resources repeating clinical trials or conducting additional trials, either of which would increase costs of development and delay any revenue from those programs.

        In addition, a regulatory authority may deny or delay an approval because it was not satisfied with the structure or conduct of clinical trials or due to its assessment of the data we supply. A regulatory authority, for instance, may not believe that we have adequately addressed negative safety signals. Clinical data are subject to varied interpretations, and regulatory authorities may disagree with our assessments of data. In any such case, a regulatory authority could insist that we provide additional data, which could substantially delay or even prevent commercialization efforts, particularly if we are required to conduct additional pre-approval clinical studies.

        We are also developing new products, such as mipomersen and ataluren, through strategic alliances and collaborations. If we are unable to manage these external opportunities successfully or if the product development process is unsuccessful, we will not be able to grow our business in the way that we currently expect.

If we fail to increase sales of several existing products and services or to commercialize new products and services in our pipeline, we will not meet our financial goals.

        Over the next few years, our success will depend substantially on our ability to increase revenue from our existing products and services. These products and services include our Cerezyme, Renvela, Synvisc-One, Fabrazyme, Myozyme/Lumizyme, Aldurazyme, Thymoglobulin, Thyrogen, Clolar and Mozobil products.

        Our ability to increase sales depends on a number of factors, including:

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our ability, and the ability of our collaborators, to efficiently manufacture sufficient quantities of each product to meet demand and to do so in a timely and cost efficient manner;

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acceptance by the medical community of each product or service;

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the availability of competing treatments that are deemed safer, more efficacious, more convenient to use, more cost effective, or having a more reliable source of supply;

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compliance with regulation by regulatory authorities of these products and services and the facilities and processes used to manufacture these products;

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the scope of the labeling approved by regulatory authorities for each product and competitive products or risk management activities, including a REMS, which we call the Lumizyme ACE Program;

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the effectiveness of our sales force;

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the availability and extent of coverage, pricing and level of reimbursement from governmental agencies and third-party payors; and

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the size of the patient population for each product or service and our ability to identify new patients.

        Part of our growth strategy involves conducting additional clinical trials to support approval of expanded uses of some of our products, including Mozobil, Clolar and alemtuzumab for MS, pursuing marketing approval for our products in new jurisdictions and developing next generation products, such as eliglustat tartrate (formerly Genz-112638). The success of this component of our growth strategy will depend on the outcome of these additional clinical trials, the content and timing of our submissions to regulatory authorities and whether and when those authorities determine to grant approvals. Because the healthcare industry is extremely competitive and regulatory requirements are rigorous, we spend substantial funds marketing our products and attempting to expand approved uses for them. These expenditures depress near-term profitability with no assurance that the expenditures will generate future profits that justify the expenditures. For example, we received a complete response letter from the FDA in October 2009 for Clolar's use in adult AML in which the agency recommended that a randomized, controlled clinical study be conducted for label expansion of Clolar in this indication, which are ongoing and from which we expect to report results before the end of this year.

Our future success will depend on our ability to effectively develop and market our products and services against those of our competitors.

        The human healthcare products and services industry is extremely competitive. Other organizations, including pharmaceutical, biotechnology, device and genetic and diagnostic testing companies, and generic and biosimilar manufacturers, have developed and are developing products and services to compete with our products, services and product candidates. If healthcare providers, patients or payors prefer these competitive products or services or these competitive products or services have superior safety, efficacy, pricing or reimbursement characteristics, we will have difficulty maintaining or increasing the sales of our products and services. As described under the heading "The Cerezyme and Fabrazyme supply constraints resulting from the suspension of production at our Allston facility have created opportunities for our competitors," the virus at our Allston facility and associated production interruption have provided new opportunities for our competitors.

        There are currently two other marketed products aimed at treating Gaucher disease, the disease addressed by Cerezyme: Zavesca® and VPRIV. Zavesca is a small molecule oral therapy that has been approved in approximately thirty-five countries, including the United States, European Union and Israel, for use in patients with mild to moderate Type 1 Gaucher disease for whom enzyme replacement therapy is unsuitable. Zavesca has been sold in the European Union since 2003 and in the United States since 2004. VPRIV is an enzyme replacement therapy developed by Shire that received marketing approval in the United States in February 2010. In addition, UPLYSO, an enzyme replacement therapy in development by Protalix to treat Gaucher disease, is available to patients in the United States under an FDA-approved treatment protocol and Protalix has submitted an NDA to the FDA for its therapy. Both the Shire and Protalix therapies are available to patients in the European Union and other countries through pre-approval access programs.

        Replagal is a competitive enzyme replacement therapy for Fabry disease, the disease addressed by Fabrazyme, which is approved for sale outside of the United States. In August 2010, Shire reported that it had withdrawn its BLA for Replagal that it had submitted in December 2009 to the FDA, and for which it had been granted "fast track" designation in February 2010, to consider updating it with additional clinical data. In addition, Amicus Therapeutics initiated a phase 3 clinical trial in June 2009 of an oral chaperone medication to treat Fabry disease and expects to have preliminary results by mid-2011.

        Myozyme has marketing exclusivity in the United States until 2013 and in the European Union until 2016 due to its orphan drug status, although companies may seek to overcome the associated marketing exclusivity. In addition, we are aware of one company pursuing phase 1 clinical studies (after putting a phase 2 study on hold) for a small molecule pharmacologic chaperone treatment for Pompe disease.

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        Renagel and Renvela compete with several other products for the control of elevated phosphorus levels in patients with CKD on hemodialysis, including PhosLo®, a prescription calcium acetate preparation marketed in the United States and Fosrenol®, a prescription lanthanum carbonate marketed in the United States, Europe, Canada and Latin America. Generic formulations of PhosLo were launched in the United States in 2008 and 2009. Renagel and Renvela also compete with over-the-counter calcium carbonate products such as TUMS® and metal-based options such as aluminum and magnesium. Our core patents protecting Renagel and Renvela expire in 2014 in the United States and in Europe in 2015. However, our Renagel and Renvela patents are the subjects of Abbreviated New Drug Application, or ANDA, filings in the United States by generic drug manufacturers as described in more detail in this Risk Factors section under the heading, "Some of our products will likely face competition from lower cost generic or follow-on products."

        Current competition for Synvisc/Synvisc-One includes: Supartz®/Artz®; Hyalgan®; Orthovisc®; Euflexxa®; Monovisc™, which is marketed in Europe and Turkey; and Durolane®, which is marketed in Europe and Canada. Durolane and Euflexxa are produced by bacterial fermentation, which may provide these products a competitive advantage over avian-sourced Synvisc/Synvisc-One. We believe that single injection products will have a competitive advantage over multiple injection products. Synvisc-One is currently the only single injection viscosupplementation product approved in the United States, but competitors are seeking FDA approval for their single injection products. Furthermore, several companies market products that are not viscosupplementation products but which are designed to relieve the pain associated with osteoarthritis. Synvisc/Synvisc-One will have difficulty competing with competitive products to the extent those products have a similar safety profile and are considered more efficacious, less burdensome to administer or more cost-effective.

        Competition for Campath for patients with B-CLL includes single agent and combination chemotherapy regimens; Rituxan®/MabThera® (rituximab), which is marketed globally; Treanda®/Ribomustin® (bendamustine) which is marketed globally; and Arzerra® (ofatumumab), which is marketed in the United States and Europe. There are also other therapies under clinical study for the treatment of B-CLL, including lumiliximab and lenalidomide. Competition for Clolar for the treatment of pediatric patients 1 to 21 years old with relapsed or refractory ALL after at least two prior regimens includes cytarabine and mitoxantrone, which are available as generics with no significant commercial promotion, and Arranon®/Atriance® (nelarabine), which is indicated for the treatment of patients with T-cell ALL whose disease has not responded to or has relapsed following treatment with at least two chemotherapy regimens. T-cell ALL is estimated to represent less than 20% of pediatric ALL patients. In addition, there are anti-cancer agents in clinical trials for the treatment of relapsed pediatric ALL. Leukine primarily competes with two colony stimulating growth factors, Neupogen® (filgrastim) and Neulasta® (pegfilgrastim). The primary competition for Fludara is generic versions of fludarabine. Mozobil primarily competes with Neupogen and generic chemo-mobilization regimens.

        The examples above are illustrative and not exhaustive. Almost all of our products and services currently face competition. Furthermore, the field of biotechnology is characterized by significant and rapid technological change. Discoveries by others may make our products or services obsolete. For example, competitors may develop approaches to treating LSDs that are more effective, convenient or less expensive than our products and product candidates. Because a significant portion of our revenue is derived from products that address this class of diseases and a substantial portion of our expenditures is devoted to developing new therapies for this class of diseases, such a development would have a material negative impact on our results of operations.

If we fail to obtain and maintain adequate levels of reimbursement for our products and services from third-party payors, demand for our products and services will be significantly limited.

        Sales of our products and services are dependent, in large part, on the availability and extent of reimbursement from government health administration authorities, private health insurers and other

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third-party payors. These third-party payors may not provide adequate insurance coverage or reimbursement for our products and services, which could reduce demand for our products and services and impair our financial results.

        Third-party payors are increasingly scrutinizing pharmaceutical budgets and healthcare expenses and are attempting to contain healthcare costs by:

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challenging the prices charged for healthcare products and services;

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limiting both the coverage and the amount of reimbursement for new therapeutic products;

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reducing existing reimbursement rates for commercialized products;

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refusing to provide insurance coverage for a commercialized product if there is a lower cost alternative;

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denying or limiting coverage for products that are approved by the FDA, EMA or other governmental regulatory bodies but are considered experimental or investigational by third-party payors; and

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refusing in some cases to provide coverage when an approved product is used for disease indications in a way that has not received FDA, EMA or other applicable marketing approval.

        Efforts by third-party payors to reduce costs could decrease demand for our products and services. In March 2010, the U.S. Congress enacted healthcare reform legislation that imposes cost containment measures on the healthcare industry. Some states are also considering legislation that would control the prices of drugs. We believe that federal and state legislatures and health agencies will continue to focus on additional healthcare reform in the future.

        We encounter similar cost containment issues in countries outside the United States. In certain countries, including countries in the European Union and Canada, the coverage of prescription drugs, pricing and levels of reimbursement are subject to governmental control. Therefore, we may be unable to negotiate coverage, pricing or reimbursement on terms that are favorable to us. Moreover, certain countries reference the prices in other countries where our products are marketed. Thus, inability to secure adequate prices in a particular country may also impair our ability to maintain or obtain acceptable prices in existing and potential new markets.

        Government health administration authorities and private payors may also rely on analyses of the cost-effectiveness of certain therapeutic products in determining whether to provide reimbursement or insurance coverage for such products. Our ability to obtain satisfactory pricing and reimbursement, or the ability of our patients to obtain insurance coverage, may depend in part on whether our products, the cost of some of which is high in comparison to other therapeutic products, are viewed as cost-effective. The American Recovery and Reinvestment Act of 2009 provided significant funding for the federal government to conduct comparative effectiveness research. Although the U.S. Congress indicated that these studies are intended to improve the quality of health care, outcomes of such studies could influence reimbursement decisions. If, for example, any of our products or services were determined to be less cost-effective than alternatives, reimbursement for those products or services could be affected. As in the United States, we expect to see continued efforts to reduce healthcare costs in our international markets. As another example, the German government has enacted legislation, effective August 2010, that among other things, increases mandatory discounts from 6% to 16% and imposes August 2009 pricing levels on pharmaceuticals through the end of 2013.

        Furthermore, governmental regulatory bodies, such as the CMS in the United States, may from time-to-time make unilateral changes to reimbursement rates for our products and services. For example, MIPPA directs CMS to establish a bundled payment system to reimburse dialysis providers treating ESRD patients. On July 26, 2010, CMS issued a final rule setting forth the dialysis bundled

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payment system that will begin on January 1, 2011. The final rule delays until 2014 the inclusion of ESRD-related oral drugs such as Renagel/Renvela and other oral phosphate binders that do not have an IV equivalent, in the bundled payment system. As a result, Renagel/Renvela will continue to be separately reimbursed by Medicare until 2014. However, beginning January 1, 2011, the bundled payment system will include ESRD-related IV drugs and biologics and their oral equivalents, including intravenous Vitamin D analogs and their oral equivalents such as Hectorol for Infusion and Hectorol capsules.

        Changes to reimbursement rates, including implementation of CMS's bundled payment system the United States, could reduce our revenue by causing healthcare providers to be less willing to use our products and services. Although we actively seek to ensure that any initiatives that are undertaken by regulatory agencies involving reimbursement for our products and services do not have an adverse impact on us, we may not always be successful in these efforts. In addition, when a new product is approved, the availability of government and private reimbursement for that product is uncertain as is the amount for which that product will be reimbursed. We cannot predict the availability or amount of reimbursement for our product candidates.

We may encounter substantial difficulties managing our growth.

        Several risks are inherent to our plans to grow our business. Achieving our goals will require substantial investments in research and development, sales and marketing, and facilities. For example, we are spending considerable resources building and seeking regulatory approvals for our manufacturing facilities. These facilities may not prove sufficient to meet demand for our products or we may not have excess capacity at these facilities. For example, we had been operating with lower than usual inventories for Cerezyme and Fabrazyme because we had allocated capacity for Myozyme production at our Allston facility to meet Myozyme's worldwide growth. When we interrupted production of Cerezyme and Fabrazyme at the facility in June 2009 in order to sanitize the facility after identifying a virus in a bioreactor used to produce Cerezyme, inventories of Cerezyme and Fabrazyme were not sufficient to avoid product shortages. We are constructing a new manufacturing facility with capacity for Cerezyme and Fabrazyme in Framingham, Massachusetts, expanding our Allston facility, and adding an additional 4000L bioreactor to produce Myozyme/Lumizyme at our Geel facility. We are also expanding our fill-finish capacity in Waterford, Ireland and working with Hospira, a third-party contract manufacturer to transfer all of our Allston-based fill-finish activities to the contract manufacturer. If we experience a delay in completing these capacity expansions or securing regulatory approval for the new internal capacity or the fill-finish capacity from the contract manufacturer, we will not be able to build inventories in our expected timeframe.

        In addition, we only manufacture bulk Myozyme produced at the 160L scale in our Framingham facility. Because the approved indication for Lumizyme does not cover portions of the Pompe patient population (such as infantile-onset patients or late-onset patients under the age of eight), we need to continue to limit access to Myozyme produced at this smaller scale. However, there are some patients in the United States who are currently treated with Myozyme produced at the 160L scale who are eligible for treatment using Lumizyme. If a sufficient number of those patients do not transition to Lumizyme, our inventory of Myozyme produced at the 160L scale may become constrained.

        Building our facilities is expensive, and our ability to recover these costs will depend on increased revenue from the products produced at the facilities. In addition, to maintain product supply and to adequately prepare to launch a number of our late-stage product candidates, we must successfully implement a number of manufacturing projects on schedule, operate our facilities at appropriate production capacity, optimize manufacturing asset utilization, continue our use of third-party contract manufacturers and maintain a state of regulatory compliance.

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        We produce relatively small amounts of material for research and development activities and pre-clinical trials. Even if a product candidate receives all necessary approvals for commercialization, we may not be able to successfully scale-up production of the product material at a reasonable cost or at all and we may not receive additional approvals in sufficient time to meet product demand. For example, the FDA concluded that alglucosidase alfa produced in our larger scale bioreactors is a different product than alglucosidase alfa produced in our 160L bioreactors and required us to submit a separate BLA for the larger scale product. This delay in receipt of FDA approval of Lumizyme had an adverse effect on our revenue and earnings.

        If we are able to increase sales of our products, we may have difficulty managing inventory levels. Marketing new therapies is a complicated process, and gauging future demand is difficult. With Renagel, for example, we have encountered problems in the past managing inventory levels at wholesalers. Another example is with Myozyme/Lumizyme, where we underestimated the level of initial product demand. Comparable problems may arise with any of our products, particularly during market introduction.

        Growth in our business may also contribute to fluctuations in our operating results, which may cause the price of our securities to decline. Our revenue may fluctuate due to many factors, including changes in:

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wholesaler buying patterns;

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reimbursement rates;

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physician prescribing habits;

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the availability or pricing of competitive products; and

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currency exchange rates.

        We may also experience fluctuations in our quarterly results due to price changes and sales incentives. For example, purchasers of our products, particularly wholesalers, may increase purchase orders in anticipation of a price increase and reduce order levels following the price increase. We occasionally offer sales incentives and promotional discounts on some of our products and services that could cause similar fluctuations. In addition, some of our products, including Synvisc/Synvisc-One, are subject to seasonal fluctuation in demand.

We rely on third parties to provide us with materials and services in connection with the manufacture of our products and the performance of our services.

        Some materials necessary for commercial production of our products, including specialty chemicals and components necessary for manufacture, fill-finish and packaging, are provided by unaffiliated third-party suppliers. In some cases, such materials are specifically cited in our marketing applications with regulatory authorities so that they must be obtained from that specific source unless and until the applicable authority approves another supplier. In addition, there may only be one available source for a particular chemical or component. For example, we acquire polyalylamine, used in the manufacture of Renagel, Renvela, Cholestagel and Welchol, from Cambrex Charles City, Inc., and N925, which is necessary to manufacture our LSD products, from Invitrogen Corporation. These suppliers are the only sources for these materials currently qualified in our FDA marketing applications for these products. Our suppliers also may be subject to FDA regulations or the regulations of other governmental agencies outside the United States regarding manufacturing practices. We may be unable to manufacture our products in a timely manner or at all if these third-party suppliers were to cease or interrupt production or otherwise fail to supply sufficient quantities of these materials or products to us for any reason, including due to regulatory requirements or actions, adverse financial developments at or affecting the supplier, labor shortages or disputes, or contamination of materials or equipment. For

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example, we believe that a virus that we detected in one of our bioreactors used at our Allston facility to produce Cerezyme was likely introduced through a raw material used in the manufacturing process.

        We also source some of our manufacturing, fill-finish, packaging and distribution operations to third-party contractors. For example, we have entered into an agreement with Hospira for the provision of fill-finish manufacturing services for several of our products, including Thyrogen and Fabrazyme, which are currently fill-finished at our Allston facility. Our inability to coordinate with our third-party contractors, the inability of a third-party contractor to secure sufficient source materials, the lack of capacity available at a third-party contractor, problems with manufacturing services provided by a third-party contractor or any other problems with the operations of a third-party contractor could require us to delay shipment of saleable products, to recall products previously shipped, or impair our ability to supply products at all. This could increase our costs, cause us to lose revenue or market share and damage our reputation. In the case of Thyrogen and Fabrazyme, any issues that we encounter with our Hospira relationship could cause us to miss one or more of the transition deadlines set forth in our FDA consent decree, resulting in the potential disgorgement of a portion of the revenues that we receive from sale of the effected product or products. Furthermore, any third party we use to manufacture, fill-finish or package our products must also be licensed by the applicable regulatory authorities. As a result, alternative third-party providers may not be available on a timely basis or at all.

Our financial results are dependent on sales of Cerezyme.

        Sales of Cerezyme, our enzyme-replacement product for patients with Gaucher disease, totaled $317.9 million for the six months ended June 30, 2010, representing approximately 15% of our total revenue. Because our business is dependent on Cerezyme, negative trends in revenue from this product have had, and could continue to have, an adverse effect on our results of operations and cause the value of our common stock to further decline or fail to recover. In addition, we will lose revenue if alternative treatments for Gaucher disease gain commercial acceptance, if our marketing activities are restricted, or if coverage, pricing or reimbursement is limited. The patient population with Gaucher disease is not large. Because a significant percentage of that population already uses Cerezyme, opportunities for future sales growth are constrained. Furthermore, changes in the methods for treating patients with Gaucher disease, including treatment protocols that combine Cerezyme with other therapeutic products or reduce the amount of Cerezyme prescribed, could limit growth, or result in a decline, in Cerezyme sales. See "The Cerezyme and Fabrazyme supply constraints resulting from the suspension of production at our Allston facility have created opportunities for our competitors" above.

If our strategic alliances are unsuccessful, our operating results will be adversely impacted.

        Several of our strategic initiatives involve alliances with other biotechnology and pharmaceutical companies. The success of these arrangements is largely dependent on technology and other intellectual property contributed by our strategic partners or the resources, efforts, and skills of our partners. Disputes and difficulties in such relationships are common, often due to conflicting priorities or conflicts of interest. Merger and acquisition activity may exacerbate these conflicts. The benefits of these alliances are reduced or eliminated when strategic partners:

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terminate the agreements covering the strategic alliance or limit our access to the underlying intellectual property;

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fail to devote financial or other resources to the alliances and thereby hinder or delay development, manufacturing or commercialization activities;

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fail to successfully develop, manufacture or commercialize any products; or

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fail to maintain the financial resources necessary to continue financing their portion of the development, manufacturing, or commercialization costs of their own operations.

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        Furthermore, payments we make under these arrangements may exacerbate fluctuations in our financial results. In addition, under some of our strategic alliances, including Osiris, PTC and Isis, we make upfront and milestone payments well in advance of commercialization of products with no assurance that we will ever recoup these payments. We also may make equity investments in our strategic partners, as we did with EXACT Sciences in January 2009 and Isis in February 2008. Our strategic equity investments are subject to market fluctuations, access to capital and other business events, such as initial public offerings, the completion of clinical trials and regulatory approvals, which can impact the value of these investments. If any of our strategic equity investments decline in value and remain below cost for an extended duration, we may be required to write down our investment, as we did with our Isis holdings in June 2010.

Our international sales and operating expenses are subject to fluctuations in currency exchange rates.

        A significant portion of our business is conducted in currencies other than our reporting currency, the U.S. dollar. We recognize foreign currency gains or losses arising from our operations in the period in which we incur those gains or losses. As a result, currency fluctuations among the U.S. dollar and the currencies in which we do business have caused foreign currency translation gains and losses in the past and will likely do so in the future. Because of the number of currencies involved, the variability of currency exposures and the potential volatility of currency exchange rates, we may suffer significant foreign currency translation losses in the future due to the effect of exchange rate fluctuations. For the six months ended June 30, 2010, the change in foreign exchange rates had a net favorable impact on our revenue, as compared to a net unfavorable effect for 2009.

We may incur substantial costs as a result of litigation or other proceedings.

        We are or may become a party to litigation or other proceedings in the ordinary course of our business. A third party may sue us or one of our strategic collaborators for infringing the third party's patent or other intellectual property rights. Likewise, we or one of our strategic collaborators may sue to enforce intellectual property rights or to determine the scope and validity of third-party proprietary rights. If we do not prevail in this type of litigation, we or our strategic collaborators may be required to:

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pay monetary damages;

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stop commercial activities relating to the affected products or services;

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obtain a license in order to continue manufacturing or marketing the affected products or services; or

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compete in the market with a different product or service.

        We have several ongoing legal proceedings on which we will continue to expend substantial sums. For example, we have initiated patent infringement litigation against several generic manufacturers. In addition, we are the subject of two consolidated securities class action lawsuits and two consolidated securities derivative lawsuits. We may be subject to additional actions in the future. For example, the federal government, state governments and private payors are investigating and have filed actions against numerous pharmaceutical and biotechnology companies, including Genzyme, alleging that the companies may have overstated prices in order to inflate reimbursement rates. Domestic and international enforcement authorities also have instituted actions under healthcare "fraud and abuse" laws, including anti-kickback and false claims statutes. Moreover, individuals who use our products or services, including our diagnostic products and genetic testing services, sometimes bring product and professional liability claims, and third parties with whom we do business sometimes bring breach of contract claims against us or our subsidiaries.

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        Some of our products are prescribed by healthcare providers for uses not approved by the FDA, the EMA or comparable regulatory agencies. Although healthcare providers may lawfully prescribe our products for off-label uses, any promotion by us of off-label uses would be unlawful. Some of our practices intended to make healthcare providers aware of off-label uses of our products without engaging in off-label promotion could nonetheless be misconstrued as off-label promotion. Although we have policies and procedures in place designed to help assure ongoing compliance with regulatory requirements regarding off-label promotion, some non-compliant actions may nonetheless occur. Regulatory authorities could commence investigations into our practices and/or take enforcement action against us if they believe we are promoting, or have promoted, our products for off-label use. For example, the U.S. government has instituted an investigation into Genzyme's sales, marketing and promotion of Seprafilm. We are cooperating with the government in this inquiry.

        We have only limited amounts of insurance, which may not provide coverage to offset a negative judgment or a settlement payment. We may be unable to obtain additional insurance in the future, or we may be unable to do so on favorable terms. Our insurers may dispute our claims for coverage. For example, we are seeking from our insurers coverage amounting to approximately $30 million for reimbursement of portions of the costs incurred in connection with the litigation and settlement related to the consolidation of our tracking stocks. Any additional insurance we do obtain may not provide adequate coverage against any asserted claims.

        Regardless of merit or eventual outcome, investigations and litigation can result in:

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the diversion of management's time and attention;

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the expenditure of large amounts of cash on legal fees, expenses, and payment of damages;

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limitations on our ability to continue some of our operations;

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decreased demand for our products and services; and

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injury to our reputation.

Our international sales, clinical activities, manufacturing and other operations are subject to the economic, political, legal and business environments of the countries in which we do business, and our failure to operate successfully or adapt to changes in these environments could cause our international sales and operations to be limited or disrupted.

        Our international operations accounted for approximately 47% of our consolidated product and service revenue for the three months ended June 30, 2010. We expect that international product sales will continue to account for a significant percentage of our revenue for the foreseeable future. In addition, we have direct investments in a number of subsidiaries outside of the United States. Our international sales and operations could be limited or disrupted, and the value of our direct investments may be diminished, by any of the following:

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economic problems that disrupt foreign healthcare payment systems;

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the imposition of governmental controls, including foreign exchange and currency restrictions;

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less favorable intellectual property or other applicable laws;

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the inability to obtain any necessary foreign regulatory or pricing approvals of products in a timely manner;

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the inability to obtain third-party reimbursement support for products;

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product counterfeiting and intellectual property piracy;

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parallel imports;

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anti-competitive trade practices;

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import and export license requirements;

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political instability;

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terrorist activities, armed conflict, or a pandemic;

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restrictions on direct investments by foreign entities and trade restrictions;

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changes in tax laws and tariffs;

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difficulties in staffing and managing international operations; and

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longer payment cycles.

        Our international operations and marketing practices are subject to regulation and scrutiny by the governments of the countries in which we operate as well as the United States government. The United States Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions generally prohibit companies and their representatives from offering, promising, authorizing or making payments to foreign officials for the purpose of obtaining or retaining business. We operate in many parts of the world that have experienced governmental corruption to some degree. Although we have policies and procedures designed to help ensure that we, our employees and our agents comply with the Foreign Corrupt Practices Act, or FCPA, and other anti-bribery laws, such policies and procedures may not protect us against liability under the FCPA or other laws for actions taken by our employees, agents and intermediaries with respect to our business. Failure to comply with domestic or international laws could result in various adverse consequences, including possible delay in the approval or refusal to approve a product, recalls, seizures, withdrawal of an approved product from the market, or the imposition of criminal or civil sanctions, including substantial monetary penalties.

We may fail to adequately protect our proprietary technology, which would allow competitors or others to take advantage of our research and development efforts.

        Our long-term success largely depends on our ability to market technologically competitive products. If we fail to obtain or maintain adequate intellectual property protection in the United States or abroad, we may not be able to prevent third parties from using our proprietary technologies. Our currently pending or future patent applications may not result in issued patents. Patent applications are typically confidential for 18 months following their earliest filing, and because third parties may have filed patent applications for technology covered by our pending patent applications without us being aware of those applications, our patent applications may not have priority over patent applications of others. In addition, our issued patents may not contain claims sufficiently broad to protect us against third parties with similar technologies or products, or provide us with any competitive advantage. If a third party initiates litigation regarding our patents or those patents for which we have license rights, and is successful, a court could declare such patents invalid or unenforceable or limit the scope of coverage of those patents. Governmental patent offices and courts have not always been consistent in their interpretation of the scope and patentability of the subject matter claimed in biotechnology patents. Any changes in, or unexpected interpretations of, the patent laws may adversely affect our ability to enforce our patent position.

        We also rely upon trade secrets, proprietary know-how, and continuing technological innovation to remain competitive. We attempt to protect this information with security measures, including the use of confidentiality agreements with employees, consultants, and collaborators. These individuals may breach these agreements and any remedies available to us may be insufficient to compensate for our damages. Furthermore, our trade secrets, know-how and other technology may otherwise become known or be independently discovered by our competitors.

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Some of our products will likely face competition from lower cost generic or follow-on products.

        Some of our drug products, including Renagel, Renvela, Hectorol, Clolar, Fludara and Mozobil are approved under the provisions of the United States Food, Drug and Cosmetic Act, or FDCA, that render them susceptible to potential competition from generic manufacturers via the ANDA procedure. Generic manufacturers pursuing ANDA approval are not required to conduct costly and time-consuming clinical trials to establish the safety and efficacy of their products; rather, they are permitted to rely on the innovator's data regarding safety and efficacy. Thus, generic manufacturers can sell their products at prices much lower than those charged by the innovative pharmaceutical or biotechnology companies who have incurred substantial expenses associated with the research and development of the drug product.

        The ANDA procedure includes provisions allowing generic manufacturers to challenge the innovator's patent protection by submitting "Paragraph IV" certifications to the FDA in which the generic manufacturer claims that the innovator's patent is invalid or will not be infringed by the manufacture, use, or sale of the generic product. A patent owner who receives a Paragraph IV certification may choose to sue the generic applicant for patent infringement. If such patent infringement lawsuit is brought within a statutory 45-day period, then a 30-month stay of FDA approval for the ANDA is triggered. In recent years, generic manufacturers have used Paragraph IV certifications extensively to challenge the applicability of patents listed in the FDA's Approved Drug Products List with Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book, on a wide array of innovative therapeutic products. We expect this trend to continue and to implicate drug products with even relatively modest revenues.

        Renagel/Renvela and Hectorol are subjects of ANDAs containing Paragraph IV certifications. Renagel is the subject of ANDAs containing Paragraph IV certifications submitted by five companies. Our Renvela tablet product is the subject of ANDAs containing Paragraph IV certifications submitted by four companies. Our Renvela powder product is the subject of ANDAs containing Paragraph IV certifications submitted by three companies. We have initiated patent litigation against four of the five ANDA applicants with respect to Renagel and against all four of the ANDA applicants with respect to the Renvela tablet. With respect to our Renvela powder product, we have commenced patent litigation against two of the three ANDA applicants. At issue in these lawsuits is U.S. Patent No. 5,667,775, which expires in 2014 (the " '775 Patent"). See "Legal Proceedings" in Part I., Item 3. of our 2009 Form 10-K. If we are unsuccessful in these lawsuits, a generic manufacturer may launch its generic product prior to the expiration of the '775 Patent, but not before the expiration in 2013 of our other Orange Book-listed patents covering Renagel and Renvela. Regarding the cases where we have not brought suit, we are currently evaluating the Paragraph IV notice received from the ANDA applicants.

        Our Hectorol (doxercalciferol) products (vial and capsule) are collectively the subject of ANDAs containing Paragraph IV certifications submitted by seven companies. We have initiated patent litigation against five of these ANDA applicants. See "Legal Proceedings" in Part I., Item 3. of our 2009 Form 10-K. In all five cases we are pursuing claims with respect to our U.S. Patent No. 5,602,116 related to the use of Hectorol to treat hyperparathyroidism secondary to ESRD, which expires in 2014 (the " '116 Patent"). In two of the five cases, we are also pursuing claims with respect to our U.S. Patent No. 7,148,211 related to the formulation of our Hectorol vial product, which expires in 2023 (the " '211 Patent"). Our Hectorol capsule product is labeled for the treatment of secondary hyperparathyroidism in patients with CKD on dialysis and for those patients not on dialysis. In one of the four cases relating to our Hectorol capsule products, the ANDA filer is seeking approval of its generic 0.5µg capsule only for the treatment of patients with CKD who are not on dialysis, thereby attempting to avoid our '116 Patent. If we are unsuccessful in the patent infringement lawsuits that we have chosen to pursue against the ANDA filers, a generic manufacturer may launch its generic product prior to the expiration of our Orange-Book listed patents covering our Hectorol products.

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        As for the two Hectorol ANDA applicants against whom litigation was not initiated, they submitted Paragraph IV certifications with respect to only the '211 Patent. Because we did not initiate litigation, the FDA could approve the applicants' generic products upon the later of expiration or invalidation of the '116 Patent or expiration of the 180-day exclusivity, if any, accorded to the first ANDA filer.

        We also have two biologic products approved under the FDCA, Cerezyme and Thyrogen. This renders them susceptible to potential competition from follow-on or biosimilar manufacturers via the "505(b)2" pathway of the FDCA. As with an ANDA, the sponsor of a 505(b)2 application is permitted to rely, at least in part, on the safety and efficacy data of the innovator. For that reason, 505(b)(2) applicants may have a shorter time to approval than an applicant filing an NDA.

        Other of our products, including Fabrazyme, Aldurazyme, Myozyme, Campath and Leukine (so-called "biotech drugs") were approved in the United States under the Public Health Service Act, or PHSA. The PHSA was amended by the March 2010 enactment of healthcare reform legislation, which, among other things, establishes an abbreviated approval pathway for "biosimilar" products. This approval process differs from the ANDA approval process in a number of significant ways. In particular, a biosimilar product could not be approved based on the safety and efficacy data of one of our products until 12 years after initial approval of our product. Biosimilar legislation has also been adopted in the European Union.

        If an ANDA filer or any biosimilar manufacturer were to receive approval to sell a generic or biosimilar version of one of our products, that product would become subject to increased competition and our revenue for that product would be adversely affected.

Our operating results and financial position may be negatively impacted when we attempt to grow through business combination transactions.

        We may encounter problems assimilating operations acquired in business combination transactions. These transactions often entail the assumption of unknown liabilities, the loss of key employees, and the diversion of management attention. Furthermore, in any business combination there is a substantial risk that we will fail to realize the benefits we anticipate when we decide to undertake the transaction. We have in the past taken significant charges for impaired goodwill and for impaired assets acquired in business combination transactions. We may be required to take similar charges in the future. We enter into most such transactions with an expectation that the acquired assets will enhance the long-term strength of our business. These transactions, however, often depress our earnings and our returns on capital in the near-term and the expected long-term benefits may never be realized. Business combination transactions also either deplete cash resources, require us to issue substantial equity, or require us to incur significant debt.

Legislative or regulatory changes may adversely impact our business.

        New laws, regulations and judicial decisions, or new interpretations of existing laws, regulations and decisions, that relate to healthcare availability, methods of delivery or payment for products and services, or sales, marketing or pricing may cause our revenue to decline. In addition, we may need to revise our research and development plans if a program or programs no longer are commercially viable. Such changes could cause our stock price to decline or experience periods of volatility.

        The pricing and reimbursement environment for our products may change in the future and become more challenging due to among other reasons, new healthcare legislation or fiscal challenges faced by government health administration authorities. In the United States, enactment of health reform legislation in March 2010 is expected to adversely affect our revenues through, among other provisions, the imposition of fees on certain elements of our businesses and an increase in the Medicaid rebate.

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        On September 27, 2007, the Food and Drug Administration Amendment Act of 2007 was enacted, giving the FDA enhanced authority over products already approved for sale, including the authority to require post-marketing studies and clinical trials, labeling changes based on new safety information, and compliance with risk evaluations and mitigation strategies approved by the FDA. The FDA's exercise of its new authority could result in delays or increased costs during the period of product development, clinical trials and regulatory review and approval, increased costs to assure compliance with new post-approval regulatory requirements, and potential restrictions on the sale or distribution of approved products.

Credit and financial market conditions may exacerbate certain risk affecting our business.

        Sales of our products and services are dependent, in part, on the availability and extent of reimbursement from third-party payors, including governments and private insurance plans. As a result of the current volatility in the financial markets, third-party payors may delay payment or be unable to satisfy their reimbursement obligations. A reduction in the availability or extent of reimbursement could negatively affect our product and service revenues.

        In addition, we rely upon third parties for certain aspects of our business, including collaboration partners, wholesale distributors for our products, contract clinical trial providers, contract manufacturers, and third-party suppliers. Because of the tightening of global credit and the volatility in the financial markets, there may be a delay or disruption in the performance or satisfaction of commitments to us by these third parties, which could adversely affect our business.

Guidelines, recommendations and studies published by various organizations can reduce the use of our products and services.

        Professional societies, practice management groups, private health/science foundations, and organizations involved in various diseases may publish guidelines, recommendations or studies to the healthcare and patient communities from time to time. Recommendations of government agencies or these other groups/organizations may relate to such matters as usage, dosage, route of administration, cost-effectiveness, and use of related therapies. Organizations like these have in the past made recommendations about our products and services and those of our competitors. Recommendations, guidelines or studies that are followed by patients and healthcare providers could result in decreased use of our products or services. The perception by the investment community or shareholders that recommendations, guidelines or studies will result in decreased use of our products or services could adversely affect prevailing market price for our common stock. In addition, our success also depends on our ability to educate patients and healthcare providers about our products and services and their uses. If these education efforts are not effective, then we may not be able to increase the sales of our existing products and services or successfully introduce new products and services to the market.

We may be required to license patents from competitors or others in order to develop and commercialize some of our products and services, and it is uncertain whether these licenses would be available.

        Third-party patents may cover some of the products or services that we or our strategic partners are developing or producing. A patent is entitled to a presumption of validity, and accordingly, we face significant hurdles in any challenge to a patent. In addition, even if we are successful in challenging the validity of a patent, the challenge itself may be expensive and require significant management attention.

        To the extent valid third-party patent rights cover our products or services, we or our strategic collaborators would be required to seek licenses from the holders of these patents in order to manufacture, use or sell these products and services, and payments under them would reduce our profits from these products and services. We may not be able to obtain these licenses on favorable

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terms, or at all. If we fail to obtain a required license or are unable to alter the design of our technology to fall outside the scope of a third-party patent, we may be unable to market some of our products and services, which would limit our profitability.

Importation of products may lower the prices we receive for our products.

        In the United States and abroad, many of our products are subject to competition from lower-priced versions of our products and competing products from other countries where government price controls or other market dynamics result in lower prices for such products. Our products that require a prescription in the United States may be available to consumers in markets such as Canada, Mexico, Taiwan and the Middle East without a prescription, which may cause consumers to seek out these products in these lower priced markets. The ability of patients and other customers to obtain these lower priced imports has grown significantly as a result of the Internet, an expansion of pharmacies in Canada and elsewhere that target American purchasers, an increase in U.S.-based businesses affiliated with these Canadian pharmacies and other factors. Most of these foreign imports are illegal under current U.S. law. However, the volume of imports continues to rise due to the limited enforcement resources of the FDA and the United States Customs Service, and there is increased political pressure to permit such imports as a mechanism for expanding access to lower-priced medicines. The importation of lower-priced versions of our products into the United States and other markets adversely affects our profitability. This impact could become more significant in the future.

Our investments in marketable securities are subject to market, interest and credit risk that may reduce their value.

        We maintain a portfolio of investments in marketable securities. Our earnings may be adversely affected by changes in the value of this portfolio. In particular, the value of our investments may be adversely affected by increases in interest rates, downgrades in the corporate bonds included in the portfolio, instability in the global financial markets that reduces the liquidity of securities included in the portfolio, and by other factors which may result in other than temporary declines in value of the investments. Each of these events may cause us to record charges to reduce the carrying value of our investment portfolio or sell investments for less than our acquisition cost.

We may require significant additional financing, which may not be available to us on favorable terms, if at all.

        As of June 30, 2010, we had $974.2 million in cash, cash equivalents and short- and long-term investments, excluding our investments in equity securities.

        We intend to use substantial portions of our available cash for:

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expanding and maintaining existing and constructing new manufacturing facilities, including investing significant funds to expand our Allston, Massachusetts, Geel, Belgium and Waterford, Ireland facilities and constructing a new manufacturing facility with capacity for Cerezyme and Fabrazyme;

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implementing process improvements and system updates for our biologics manufacturing operations;

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product development and marketing;

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strategic business initiatives;

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repurchasing additional shares of our common stock;

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upgrading our information technology systems, including installation and implementation of a new enterprise resource planning system worldwide;

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•

contingent payments under business combinations, license and other agreements, including a milestone payment to Synpac if Net Sales of Myozyme/Lumizyme reach $400.0 million, as well as payments related to our license of mipomersen from Isis, ataluren from PTC, and Prochymal and Chondrogen from Osiris, as well as contingent consideration obligations related to our acquisition of the worldwide rights to the oncology products Campath, Fludara, Leukine and alemtuzumab for MS from Bayer;

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consulting and other fees related to our compliance with the consent decree;

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working capital and satisfaction of our obligations under capital and operating leases; and

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repayment of our 2015 Notes and our 2020 Notes.

        In May 2010, we announced a $2.0 billion stock repurchase program. In June 2010, we executed an accelerated share repurchase agreement with Goldman Sachs for the repurchase of $1.0 billion of our common stock, which we financed with the net proceeds of our $1.0 billion senior note offering. We plan to repurchase the additional $1.0 billion before June 2011.

        In addition, we have several outstanding legal proceedings. Involvement in investigations and litigation can be expensive and a court may ultimately require that we pay expenses and damages. As a result of legal proceedings, we may also be required to pay fees to a holder of proprietary rights in order to continue certain operations.

        We continue to believe that our available cash, investments and cash flow from operations, together with our revolving credit facility and other available debt financing, will be adequate to meet our operating, investing and financing needs in the foreseeable future.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        We are exposed to potential loss from exposure to market risks represented principally by changes in foreign exchange rates, interest rates and equity prices. At June 30, 2010, we held a number of financial instruments, including investments in marketable securities, debt instruments, and derivative contracts in the form of foreign exchange forward contracts. We do not hold derivatives or other financial instruments for speculative purposes.

Foreign Exchange Risk

        As a result of our worldwide operations, we may face exposure to potential adverse movements in foreign currency exchange rates, primarily to the Euro, British pound and Japanese yen. Exposures to currency fluctuations that result from sales of our products in foreign markets are partially offset by the impact of currency fluctuations on our international expenses. We use foreign exchange forward contracts to further reduce our exposure to changes in exchange rates, primarily to offset the earnings effect from short-term foreign currency assets and liabilities. We also hold a limited amount of foreign currency denominated equity securities. As of June 30, 2010, we estimate the potential loss in fair value of our foreign currency contracts and foreign equity holdings that would result from a hypothetical 10% adverse change in exchange rates to be $4.4 million, as compared to $4.8 million as of December 31, 2009. Since the contracts hedge mainly transactional exchange exposures, most changes in the fair values of the contracts would be offset by changes in the underlying values of the hedged items.

Interest Rate Risk

        We are exposed to potential loss due to changes in interest rates. Our principal interest rate exposure is to changes in U.S. interest rates. Instruments with interest rate risk include short- and long-term investments in fixed income securities and fixed rate senior notes. To estimate the potential loss due to changes in interest rates, we performed a sensitivity analysis using the instantaneous adverse

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change in interest rates of 100 basis points across the yield curve. On this basis, we estimate the potential loss in fair value to be $83.0 million as of June 30, 2010, as compared to $6.5 million as of December 31, 2009. The change is due to the impact of the interest rate sensitivity analysis on our $1.0 billion in senior unsecured notes which were issued in June 2010. We had no comparable debt in December, 2009.

Equity Price Risk

        We hold investments in a limited number of U.S. and European equity securities. We estimated the potential loss in fair value due to a 10% decrease in the equity prices of each marketable security held at June 30, 2010 to be $12.3 million, as compared to $15.5 million at December 31, 2009. The decrease is primarily due to the write-down of our investment in Isis to its market value in June. This estimate assumes no change in foreign exchange rates from quarter-end spot rates.

ITEM 4.    CONTROLS AND PROCEDURES

        As of June 30, 2010, we evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2010.

        There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

Federal Securities Litigation

        In July 2009 and August 2009, two purported securities class action lawsuits were filed in the U.S. District Court for the District of Massachusetts against us and our President and Chief Executive Officer. The lawsuits were filed on behalf of those who purchased our common stock during the period from June 26, 2008 through July 21, 2009 and allege violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Each of the lawsuits is premised upon allegations that we made materially false and misleading statements and omissions by failing to disclose instances of viral contamination at two of our manufacturing facilities and our receipt of a list of inspection observations from the FDA related to one of the facilities, which detailed observations of practices that the FDA considered to be deviations from GMP. The plaintiffs seek unspecified damages and reimbursement of costs, including attorneys' and experts' fees. In November 2009, the lawsuits were consolidated in In Re Genzyme Corp. Securities Litigation and a lead plaintiff was appointed. In March 2010, the plaintiffs filed a consolidated amended complaint that extended the class period from October 24, 2007 through November 13, 2009. In June 2010, we filed a motion to dismiss the class action. If the action is not dismissed, we intend to defend this lawsuit vigorously.

Shareholder Demand Letters

        Since August 2009, we have received ten letters from shareholders demanding that our board of directors take action on behalf of Genzyme Corporation to remedy alleged breaches of fiduciary duty by our directors and certain executive officers. The demand letters are primarily premised on allegations regarding our disclosures to shareholders with respect to manufacturing issues and

92

compliance with GMP and our processes and decisions related to manufacturing at our Allston facility. Several of the letters also assert that certain of our executive officers and directors took advantage of their knowledge of material non-public information about Genzyme to illegally sell stock they personally held in Genzyme. Our board of directors has designated a special committee of three independent directors to oversee the investigation of the allegations made in the demand letters and to recommend to the independent directors of the board whether any action should be instituted on behalf of Genzyme Corporation against any officer or director. The committee has retained independent legal counsel. If the independent members of our board of directors were to make a determination that it was in our best interest to institute an action against any officers or directors, any monetary recovery would be to the benefit of Genzyme Corporation. The special committee's investigation is ongoing.

Shareholder Derivative Actions

        In December 2009, two actions were filed by shareholders derivatively for Genzyme's benefit in the U.S. District Court for the District of Massachusetts against our board of directors and certain of our executive officers after a ninety day period following their respective demand letters had elapsed (the "District Court Actions"). In January 2010, a derivative action was filed in Massachusetts Superior Court (Middlesex County) by a shareholder who has not issued a demand letter and in February and March 2010, two additional derivative actions were filed in Massachusetts Superior Court (Suffolk County and Middlesex County, respectively) by two separate shareholders after the lapse of a ninety day period following the shareholders' respective demand letters (collectively, the "State Court Actions").

        The derivative actions in general are based on allegations that our board of directors and certain executive officers breached their fiduciary duties by causing Genzyme to make purportedly false and misleading or inadequate disclosures of information regarding manufacturing issues, compliance with GMP, ability to meet product demand, expected revenue growth, and approval of Lumizyme. The actions also allege that certain of our directors and executive officers took advantage of their knowledge of material non-public information about Genzyme to illegally sell stock they personally held in Genzyme. The plaintiffs generally seek, among other things, judgment in favor of Genzyme for the amount of damages sustained by Genzyme as a result of the alleged breaches of fiduciary duty, disgorgement to Genzyme of proceeds that certain of our directors and executive officers received from sales of Genzyme stock and all proceeds derived from their service as directors or executives of Genzyme, and reimbursement of plaintiffs' costs, including attorneys' and experts' fees. The District Court Actions have been consolidated in In Re Genzyme Derivative Litigation and the plaintiffs have agreed to a joint stipulation staying these cases until our board of directors has had sufficient time to exercise its duties and complete an appropriate investigation, which is ongoing. On July 9, 2010, one of the State Court Actions was dismissed without prejudice for plaintiffs' failure to serve process on the defendants. The Middlesex Court also ordered transfer and consolidation of the remaining two State Court Actions in the Suffolk Superior Court Business Litigation Session. The court has indicated that discovery in that action also will be stayed for some period pending the board of director's completion of its ongoing investigation in response to the shareholders demand.

Fabrazyme Patent Litigation

        In October 2009, Shelbyzyme LLC filed a complaint against us in the U.S. District Court for the District of Delaware alleging infringement of U.S. patent 7,011,831 by "making, using, selling and promoting a method for the treatment of" Fabry disease. The '831 patent, which is directed to a method for treating Fabry disease, was issued in March 2006 and expired in March 2009. The plaintiffs seek damages for past infringement, including treble damages for alleged willful infringement and reimbursement of costs, including attorney's fees. We intend to defend this lawsuit vigorously.

93

Other Matters

        We are party to a legal action brought by Kayat pending before the District Court in Nicosia, Cyprus. Kayat alleges that we breached a 1996 distribution agreement under which we granted Kayat the right to distribute melatonin tablets in the Ukraine, primarily by not providing products or by providing non-conforming products. Kayat further claims that due to the alleged breach, it suffered lost profits that Kayat claims it would have received under agreements it alleges it had entered into with subdistributors. Kayat also alleges common law fraud and violations of Mass. Gen. L. c. 93A and the Racketeer Influenced and Corrupt Organizations Act. Kayat filed its suit on August 8, 2002 and a trial began in Cyprus in December 2009. Kayat seeks damages for its legal claims and for expenses it claims it has incurred, including legal fees and advertising, promotion and other out-of-pocket expenses. We believe we acted appropriately in all regards, including properly terminating the agreement when we decided to exit the melatonin business, and we intend to defend this lawsuit vigorously.

ANDA Litigation

        As disclosed in our 2009 Form 10-K, we have initiated patent litigation against a number of companies that submitted to the FDA ANDAs containing Paragraph IV certifications seeking approval to market generic versions of Renagel, Renvela and Hectorol. One of the ANDA filers, Sandoz, Inc., or Sandoz, is seeking approval to market generic 400mg and 800mg sevelamer hydrochloride tablets after the expiration of the patents protecting Renagel that expire in 2013. In July 2009, we filed a complaint against Sandoz in the U.S. District Court for the District of Maryland alleging that Sandoz's proposed generic products infringe U.S. Patent No. 5,667,775, which expires in 2014 (the " '775 Patent") Sandoz filed an answer and counterclaims alleging that the '775 Patent and U.S. Patent No. 6,733,780, which expires in 2020 (the " '780 Patent") are invalid and/or not infringed by Sandoz's proposed generic sevelamer hydrochloride products. In the first quarter of 2010, the court granted our motion to dismiss Sandoz's counterclaims with respect to the '780 Patent. We also are subject to other legal proceedings and claims arising in connection with our business. Although we cannot predict the outcome of these proceedings and claims, we do not believe the ultimate resolution of any of these existing matters would have a material adverse effect on our consolidated financial position or results of operations.

        We have also initiated new ANDA litigation on our Renvela® products. On May 24, 2010 we sued Watson Laboratories Inc., Watson, in the U.S. District Court for the District of Maryland, alleging patent infringement of our Orange Book listed '775 patent. Watson is seeking to enter the market with a generic version of our 800 mg Renvela® tablet prior to the September 16, 2014 expiry of the '775 patent.

        During May and June, 2010, we sued Impax Laboratories Inc., Lupin Ltd. and Watson in the U.S. District Court for the District of Maryland for patent infringement of the '775 patent based on their ANDA applications seeking approval of generic versions of our 0.8 g and 2.4 g Renvela® sachet products. In each of these actions, the generic defendant is seeking to enter the market prior to the expiry of the '775 patent.

        We have also recently initiated three new ANDA lawsuits with respect to our Hectorol® products. With regard to our Hectorol® for Injection product, on May 21, 2010, we filed a complaint against Sandoz, in the U.S. District Court for the District of Delaware alleging patent infringement of our Orange Book listed patents U.S. 5,602,116 and U.S. 7,148,211. This action was based on notice provided to us by Sandoz of their ANDA, which seeks to market a generic version of our Hectorol® for Injection product, as supplied in amber glass vials, prior to the expiration of both of these patents in February, 2014 and September, 2023, respectively. We have previously brought suit against Sandoz in June, 2009, in the same court, alleging patent infringement of U.S. 5,602,116 by their proposed generic version of our Hectorol® for Injection product, as supplied in glass ampules.

94

        With regard to our Hectorol® Capsule product, we have brought patent infringement actions, on the same two patents and in the same court, against Anchen Pharmaceuticals, Inc., or Anchen, and Roxane Laboratories, Inc., or Roxane, on June 10, 2010 and July 23, 2010, respectively. Anchen is seeking to market generic versions of all three strengths (0.5 mcg, 1.0 mcg and 2.5 mcg) of our capsule product. We have previously initiated ANDA litigation against Roxane based on their earlier ANDA seeking approval of generic versions of our 0.5 mcg and 2.5 mcg products; this latest lawsuit relates to their newest attempt to produce a generic version of our 1.0 mcg product.

        We also are subject to other legal proceedings and claims arising in connection with our business. Although we cannot predict the outcome of these proceedings and claims, we do not believe the ultimate resolution of any of these existing matters would have a material adverse effect on our consolidated financial position or results of operations.

ITEM 1A.    RISK FACTORS

        We incorporate by reference our disclosure related to risk factors which is set forth under the heading "Management's Discussion and Analysis of Genzyme Corporation and Subsidiaries' Financial Condition and Results of Operations—Risk Factors" in Part I., Item 2. of this Form 10-Q.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

        The following table provides information about our repurchases of our equity securities during the quarter ended June 30, 2010:

Period		Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2010-April 30, 2010			—	$	—		—	$	711,797,363
May 1, 2010-May 31, 2010			—	$	—		—	$	711,797,363	(1)
June 1, 2010-June 30, 2010			15,555,123	$	51.43		15,555,123	$	1,000,000,000	(2)
	Total		15,555,123	$	51.43		15,555,123

(1)

In May 2007, our board of directors authorized the expenditure of up to $1.50 billion to repurchase 20,000,000 shares of our outstanding common stock over a three year period that began in June 2007 and ended in June 2010. We did not purchase any additional shares of our common stock under this program during the second quarter.

(2)

In April 2010, our board authorized a $2.0 billion share repurchase plan consisting of the near-term purchase of $1.0 billion of our common stock and the purchase of an additional $1.0 billion of our common stock by June 2011. In June 2010, we entered into an agreement with Goldman Sachs under which we will repurchase $1.0 billion worth of our common stock. Our effective per share purchase price will be based generally on the average of the daily volume weighted average prices per share of our common stock, less a discount, calculated during a period of up to four months. In connection with this agreement, we paid $1.0 billion to Goldman Sachs and received 15.6 million shares of our common stock. The total number of shares ultimately repurchased will not be known until the calculation period ends and a final settlement occurs. Upon final settlement, we will either receive a settlement amount of additional shares of our common stock or be required to remit a settlement amount, payable, at our option, in cash or

95

common stock. Shares purchased under this agreement will be deemed authorized shares that are no longer outstanding

ITEM 6.    EXHIBITS

(a)

Exhibits

        See the Exhibit Index following the signature page to this Form 10-Q.

96

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	GENZYME CORPORATION
Dated: August 9, 2010	By:	/s/ MICHAEL S. WYZGA Michael S. Wyzga Executive Vice President, Finance, Chief Financial Officer

97

GENZYME CORPORATION AND SUBSIDIARIES

FORM 10-Q, JUNE 30, 2010

EXHIBIT INDEX

EXHIBIT NO.		DESCRIPTION
	**2.1	License and Asset Purchase Agreement dated as of March 30, 2009 and related Letter Agreements between Genzyme Corporation and Bayer Schering Pharma AG, and License Agreement dated as of May 29, 2009 between Genzyme Corporation and Alcafleu Management GmbH & Co. KG. Filed herewith.
	*3.1	Restated Articles of Organization of Genzyme Corporation, as amended. Filed as Exhibit 3.1 to Genzyme's Form 8-K filed on June 22, 2010.
	*3.2	By-laws of Genzyme Corporation, as amended. Filed as Exhibit 3.2 to Genzyme's Form 8-K filed June 22, 2010.
	*4.1	Indenture dated as of June 17, 2010 by and between Genzyme Corporation and The Bank on New York Mellon Trust Company, N.A., as Trustee. Filed as Exhibit 4.1(a) to Genzyme's Form 8-K filed on June 17, 2010.
	*4.1.1	First Supplemental Indenture dated as of June 17, 2010 by and among Genzyme Corporation, the Subsidiary Guarantor(s) party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as Trustee (including forms of 3.625% Senior Note due 2015 and 5.000% Senior Note due 2010). Filed as Exhibit 4.1(b) to Genzyme's Form 8-K filed on June 17, 2010.
	10.1	First Amendment to Lease dated May 21, 2010, by and between FC 64 Sidney, Inc. and Genzyme Corporation. Filed herewith.
	*10.2	Registration Rights Agreement dated June 17, 2010 by and among Genzyme Corporation, Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co. and Banc of America Securities LLC. Filed as Exhibit 10.1 to Genzyme's Form 8-K filed on June 17, 2010.
	10.3	Master Confirmation dated June 17, 2010 between Genzyme Corporation and Goldman, Sachs & Co. Filed herewith.
	**10.3.1	Supplemental Confirmation dated June 17, 2010 between Genzyme Corporation and Goldman, Sachs &Co. Filed herewith.
	*10.4	Consent Decree dated May 24, 2010 between Genzyme Corporation and the United States Food and Drug Administration. Filed as Exhibit 99.1 to Genzyme's Form 8-K filed on May 24, 2010.
	*10.5	Amended and Restated agreement dated April 14, 2010 between Genzyme, Relational Investors LLC, Ralph V. Whitworth and the other parties identified therein. Filed as Exhibit 99.1 to Genzyme's Form 8-K filed on April 15, 2010.
	*10.6	Agreement dated June 9, 2010 by and among Genzyme Corporation, Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Partners Master Fund II L.P., Icahn Partners Master Fund III L.P. and High River Limited Partnership. Filed as Exhibit 99.1 to Genzyme's Form 8-K filed on June 9, 2010.
	***10.7	2004 Equity Incentive Plan, as amended. Filed herewith.
	***10.8	2007 Director Equity Plan, as amended. File herewith.
	**10.9	Master Supply Agreement dated as of June 30, 2010 among Genzyme Corporation, Genzyme Ireland Limited and Hospira Worldwide, Inc. Filed herewith.
	**10.10	License Agreement dated as of January 1, 1995 and First Amendment thereto, dated as of October 7, 2003, between Genzyme Corporation and Mount Sinai School of Medicine of the City University of New York. Filed herewith.
	31.1	Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.

EXHIBIT NO.		DESCRIPTION
	31.2	Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
	32.1	Certification of the Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.
	32.2	Certification of the Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.
	****101	The following materials from Genzyme Corporation's Form 10-Q for the quarter ended June 30, 2010, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Operations, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Cash Flows and (iv) Notes to Unaudited, Consolidated Financial Statements.

*

Previously filed with the SEC and incorporated herein by reference. Exhibits filed with Forms 10-Q and 8-K of Genzyme Corporation were filed under Commission File No. 0-14680.

**

Confidential treatment has been requested and/or granted for the deleted portions of the exhibit.

***

Management contract or compensatory plan or arrangement in which our executive officers or directors participate.

****

To be furnished in an amendment to this Form 10-Q to be filed by September 8, 2010, as permitted by Rule 405 of Regulation S-T.

EX-2.1

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.

1.	DEFINITIONS		1
2.	LICENSE OF ASSETS		26
	2.1.	Licenses and Related Provisions	26
	2.2.	Know-How Transfer	34
	2.3.	Transfer of Licensed IP	35
	2.4.	Covenant Not to Sue and [**]	35
	2.5.	Consents Under In-License Agreements	35
	2.6.	No Rights in SOT Assets	36
3.	PURCHASE AND SALE OF ASSETS; ASSIGNMENT AND ASSUMPTION OF LIABILITIES		36
	3.1.	Purchase and Sale; Assignment and Assumption	36
	3.2.	Consents	37
	3.3.	Consent Costs	37
4.	CONSIDERATION		38
	4.1.	Oncology Products	38
	4.2.	Alemtuzumab MS	43
	4.3.	Payment Provisions	45
	4.4.	Records; Audit	47
5.	CLOSING		48
	5.1.	The Closing	48
	5.2.	Closing Deliveries	48
	5.3.	Conveyance of Acquired Assets	50
6.	REPRESENTATIONS AND WARRANTIES OF BAYER		50
	6.1.	Organization	50
	6.2.	Power and Authorization	51
	6.3.	Authorization of Governmental Authorities	51
	6.4.	Noncontravention	51
	6.5.	Financial Information	52
	6.6.	Inventory	52
	6.7.	Absence of Certain Developments	52
	6.8.	Assets	53
	6.9.	Real Property	53
	6.10.	Intellectual Property	53

[**] = 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

			Page
	6.11.	Legal Compliance; Permits; Regulatory Matters	58
	6.12.	Tax Matters	60
	6.13.	Employee Benefit Plans	61
	6.14.	Environmental Matters	63
	6.15.	Contracts	63
	6.16.	Customers	64
	6.17.	Employees	65
	6.18.	Litigation; Governmental Orders	67
	6.19.	No Brokers	67
7.	REPRESENTATIONS AND WARRANTIES OF GENZYME		67
	7.1.	Organization	67
	7.2.	Power and Authorization	67
	7.3.	Authorization of Governmental Authorities	68
	7.4.	Noncontravention	68
	7.5.	No Brokers	68
8.	COVENANTS		69
	8.1.	Closing	69
	8.2.	Operation of Bayer Business	69
	8.3.	Notices and Consents	70
	8.4.	Genzyme’s Access to Premises; Information	72
	8.5.	Notice of Developments	72
	8.6.	Exclusivity	72
	8.7.	Transaction Expenses	73
	8.8.	Confidentiality	73
	8.9.	Publicity	75
	8.10.	[**] and Non-Solicitation	75
	8.11.	Employment	77
	8.12.	Transfer of Certain Funds Received Post-Closing	82
	8.13.	Access to Records and Employees and Assistance with Financial Statements After Closing	83

[**] = 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

			Page
	8.13.1	Access	83
	8.13.2	2008 Financial Statements	83
	8.13.3	SEC Financial Statements	83
	8.14.	Transfer of Permits	84
	8.15.	Finished Licensed Products	85
	8.16.	Rebates, Chargebacks, Returns and Other Adjustments	85
	8.17.	Joint Transition Team	87
	8.18.	Transition Assets	88
	8.19.	Leukine Bulk Drug Substance Manufacturing	88
	8.20.	Joint Contracts	88
	8.21.	Hospira Agreement Amendment	88
	8.22.	Further Assurances	89
	8.23.	NewCo	89
9.	INTELLECTUAL PROPERTY AND OTHER COVENANTS		90
	9.1.	Filing, Prosecution and Maintenance of Licensed Patents and Licensed Trademarks	90
	9.2.	Enforcement of Licensed IP	91
	9.3.	Claimed Infringement of Third Party Rights	93
	9.4.	Other Infringement Resolutions	94
	9.5.	Diligence	95
	9.6.	Covenant in Support of License	95
10.	CONDITIONS TO GENZYME’S OBLIGATIONS AT THE CLOSING		95
	10.1.	Representations and Warranties	95
	10.2.	Performance	95
	10.3.	Compliance Certificate	95
	10.4.	No Material Adverse Change	96
	10.5.	Qualifications	96
	10.6.	Absence of Litigation	96
	10.7.	Consents, etc.	96
	10.8.	Permits	96

[**] = 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

			Page
	10.9.	Ancillary Agreements	96
	10.10.	Release	96
	10.11.	Financial Statements	96
11.	CONDITIONS TO BAYER’S OBLIGATIONS AT THE CLOSING		97
	11.1.	Representations and Warranties	97
	11.2.	Performance	97
	11.3.	Compliance Certificate	97
	11.4.	Qualifications	97
	11.5.	Absence of Litigation	97
	11.6.	Ancillary Agreements	98
	11.7.	Confirmation of Release	98
12.	TERMINATION		98
	12.1.	Termination of Agreement	98
	12.2.	Effect of Termination	99
	12.3.	Termination by Bayer For Cause	99
13.	INDEMNIFICATION		102
	13.1.	Indemnification by Bayer	102
	13.2.	Indemnification by Genzyme	103
	13.3.	Time for Claims	104
	13.4.	Third Party Claims	105
	13.5.	Remedies Cumulative	107
	13.6.	Exclusive Remedy	107
	13.7.	Limitation of Liability	107
	13.8.	Insurance	107
	13.9.	Insurance Recoveries	108
	13.10.	Disclaimer	108
14.	TAX MATTERS		108
	14.1.	Tax Sharing Agreements	108
	14.2.	Certain Taxes and Fees	108
	14.3.	Rev. Proc. 2004-53	109

[**] = 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

			Page
	14.4.	Tax Record Retention; Cooperation on Tax Matters	109
	14.5.	Apportionment of Ad Valorem Taxes	109
	14.6.	Assignment of Agreement	110
15.	MISCELLANEOUS		110
	15.1.	Notices	110
	15.2.	Succession and Assignment	112
	15.3.	Amendments and Waivers	113
	15.4.	Entire Agreement	114
	15.5.	Counterparts	114
	15.6.	Severability	114
	15.7.	Headings	114
	15.8.	Construction	114
	15.9.	Governing Law	115
	15.10.	Dispute Resolution	115
	15.11.	Arbitration	116
	15.12.	Jurisdiction; Venue; Service of Process	118
	15.13.	Specific Performance	119
	15.14.	Waiver of Jury Trial	119
	15.15.	Certain Rules of Construction	119
	15.16.	Third Party Beneficiaries	120

[**] = 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.

1

(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 sue 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.

2

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.

8

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.

9

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 Abbott Laboratories), as amended December 28, 2004 and December 8, 2005.

“HSR Act” means the Hart-Scott-Rodino 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.

14

“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.

15

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 MSMilestone 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.

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“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.

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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 “Scher” 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.

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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.

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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.

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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.

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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 “Scher” 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 “Scher” 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.

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bear any Retained Names and Marks (or any name, mark, 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 “Scher” 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.

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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.

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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.

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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 Sue and [**].

(a)        Bayer hereby covenants that it shall not, and shall cause its Affiliates not to, sue 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 sue 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.

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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.

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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.

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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”):

Oncology Product	Percentage of Net Sales
Fludara	[**]% through calendar year [**]; [**]% during and after calendar year [**]
Leukine	[**]% through calendar year [**]; [**]% during and after calendar year [**]
Campath Oncology	[**]%

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”):

Event	Amount
If Net Sales of the Oncology Products in the Territory collectively reach US $[**] (“First Oncology Milestone Threshold”) in Oncology Year One	US $	[**]
If Net Sales of the Oncology Products in the Territory collectively reach US $[**] (“Second Oncology Milestone Threshold”) in Oncology Year Two	US $	[**]
If Net Sales of the Oncology Products in the Territory collectively reach US $[**] (“Third Oncology Milestone Threshold”) in Oncology Year Three	US $	[**]

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.

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(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”):

Aggregate Payments to Bayer	Percentage of Net Sales
Aggregate royalty payments to Bayer on Net Sales of Approved Alemtuzumab MS is less than or equal to US $[**]	[**]	%
Aggregate royalty payments to Bayer on Net Sales of Approved Alemtuzumab MS is greater than US $[**] and less than or equal to US $[**]	[**]	%

[**] = 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 MSMilestone Payments”):

Event	Amount
If Net Sales of Approved Alemtuzumab MS in the Territory reach US $[**] in any contiguous twelve (12) month period between [**] and [**]	[**]% of Net Sales of Approved Alemtuzumab MS in the Territory in the first such twelve (12) month period
If Net Sales of Approved Alemtuzumab MS in the Territory reach US $[**] in any contiguous twelve (12) month period between [**] and [**]	[**]% of Net Sales of Approved Alemtuzumab MS in the Territory in the first such twelve (12) month period
If Net Sales of Approved Alemtuzumab MS in the Territory reach US $[**] in any contiguous twelve (12) month period from [**] and [**]	[**]% of Net Sales of Approved Alemtuzumab MS in the Territory in the first such twelve (12) month period
If Net Sales of Approved Alemtuzumab MS in the Territory reach US $[**] in any contiguous twelve (12) month period from [**] and [**]	[**]% of Net Sales of Approved Alemtuzumab MS in the Territory in the first such twelve (12) month period

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 MSMilestone 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 MSMilestone 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 MSMilestone 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.

45

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 (http://www.ecb.int) 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.

47

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 & Jaworski 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 mark, and for each registered Business-Specific Licensed Trademark, Schedule 6.10.2 sets forth the mark, 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

[**] = 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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Knowledge, no Union organizing campaign or activity with respect to non-Union Business Employees is ongoing, pending or threatened.

6.17.4           To Bayer’s Knowledge, Bayer and its Affiliates have timely paid to all Business Employees all Compensation due and payable to such Business Employees.  Bayer and its Affiliates have complied since December 1, 2008 in all material respects and are currently in compliance in all material respects with all applicable Legal Requirements respecting employment, immigration, occupational health and safety, and wages and hours, in each case, with respect to their current and former Business Employees.  There are no Actions pending or, to Bayer’s Knowledge, threatened against Bayer or its Affiliates involving any current or former Business Employee. To Bayer’s Knowledge, there have been no workplace accidents, injuries, or exposures in the last twelve (12) months involving any Business Employee which are likely to result in, but have not yet resulted in, a claim for worker’s compensation payments or benefits.  Bayer and its Affiliates (a) have withheld and reported all amounts required by Legal Requirements or by contract to be withheld and reported with respect to wages, salaries, and other payments to Business Employees and former Business Employees; (b) are not liable for any arrears of wages or any Taxes or any interest, fine, or penalty for failure to comply with any of the foregoing; and (c) are not liable for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Authority with respect to unemployment compensation benefits, social security, or other benefits or obligations for Business Employees or former Business Employees.

6.17.5           Schedule 6.17.5 lists as of the Execution Date and will be updated to list as of the Closing Date each written Contractual Obligation with or relating to any Business Employee, including but not limited to any Contractual Obligation (a) under which the amount or timing of benefits are contingent, or the terms are altered or contingent, upon the occurrence of a transaction involving Bayer or its Affiliates of the nature of any Contemplated Transaction; (b) providing any term of employment, termination notice period, conditions of termination, employment conditions modification requirements, redundancy scheme or Compensation guarantee; or (c) providing severance or other benefits upon or after the termination of employment of such Business Employee or the transfer of such Business Employee to a different employer as a result of any transaction involving Bayer or its Affiliates of the nature of any Contemplated Transaction.  Except as set forth in Schedule 6.17.5, or, with respect to Non-U.S. Business Employees, as otherwise provided by applicable Legal Requirements, all Business Employees are employed at-will by Bayer or its Affiliates.

6.17.6           Within the one (1) year period prior to the Closing Date, Bayer and its Affiliates have not (a) given notice of a redundancy to the relevant authority or body, or consulted any Union under any applicable Legal Requirement with regard to making any Non-U.S. Business Employees redundant or (b) been party to the transfer of an undertaking as defined in the applicable Legal Requirements or failed to comply in any material respect with a duty to inform and consult a Union under applicable Legal Requirements.  The details of any arrangement or practice regarding redundancy

[**] = 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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payments, with a contractual, customary or discretionary payment above the statutory payment level are set forth on Schedule 6.17.6.

6.17.7           Since December 1, 2008 and as of the Execution Date, Bayer and its Affiliates have not, without the consent of Genzyme, terminated the employment of, or reassigned to another position that does not support the Bayer Business, any employee who was a Non-U.S. Business Employee at the time of such termination or reassignment.

6.18.        Litigation; Governmental Orders.  Except as disclosed on Schedule 6.18, there is no Action to which Bayer or an Affiliate is a party (either as plaintiff or defendant) or to which the Acquired Assets are subject pending, or to Bayer’s Knowledge, threatened, in each case with respect to the Bayer Business.  Except as disclosed on Schedule 6.18, there is no Action which, to Bayer’s Knowledge, Bayer or any of its Affiliates intends to initiate with respect to the Bayer Business.  Except as disclosed on Schedule 6.18, no Governmental Order has been issued and remains in force which is applicable to the Bayer Business or any Acquired Asset.

6.19.        No Brokers.  Neither Bayer nor any of its Affiliates has any Liability of any kind to, or is subject to any claim of, any broker, finder or agent in connection with the Contemplated Transactions other than those which will be borne by Bayer or an Affiliate.

7.          REPRESENTATIONS AND WARRANTIES OF GENZYME.

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

7.1.          Organization.  Genzyme and any Affiliate of Genzyme that will be a party to any Ancillary Agreement is (a) duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and (b) is duly qualified to do business and 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 have a material adverse effect on Genzyme.

7.2.          Power and Authorization.  The execution, delivery and performance by Genzyme and its Affiliates of this Agreement and each Ancillary Agreement to which Genzyme or such Affiliate is (or will be) a party and the consummation of the Contemplated Transactions are within the power and authority of Genzyme and any such Affiliate and have been duly authorized by all necessary corporate action on the part of Genzyme and any such Affiliate.  This Agreement and each Ancillary Agreement to which Genzyme or an Affiliate 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 Genzyme or its Affiliate and (b) assuming the due execution and delivery by Bayer is (or in the case of Ancillary Agreements to be entered into at, prior to or after the Closing, will be) a legal, valid 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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binding obligation of Genzyme or its Affiliate, enforceable against Genzyme or its Affiliate 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 Genzyme and each Affiliate that will be a party to any Ancillary Agreement has the full power and authority necessary to own and use the Acquired Assets and the Licensed IP related to the Business that is held by it as of the Closing Date and carry on its relevant portion of Business.

7.3.          Authorization of Governmental Authorities.  Except as disclosed on Schedule 7.3, 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 Genzyme or any of its Affiliates of this Agreement and each Ancillary Agreement to which it is (or will be) a party or (b) the consummation of the Contemplated Transactions by Genzyme or any of its Affiliates.

7.4.          Noncontravention.  Except as disclosed on Schedule 7.4 or as would not reasonably be expected to have a material adverse effect on the ability of Genzyme and its Affiliates to consummate the Contemplated Transactions on a timely basis, neither the execution, delivery and performance by Genzyme or any of its Affiliates of this Agreement or any Ancillary Agreement to which Genzyme or any of its Affiliates 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, as disclosed on Schedule 7.3, violate any provision of any Legal Requirement applicable to Genzyme or any of its Affiliates in any Material Country;

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

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

7.5.          No Brokers.  Neither Genzyme nor any of its Affiliates has any Liability of any kind to, and is not subject to any claim of, any broker, finder or agent with respect to the Contemplated Transactions other than those which will be borne by Genzyme 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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8.          COVENANTS.

8.1.          Closing.  Bayer will, and will cause its Affiliates to, and Genzyme will, each use commercially reasonable efforts to cause all of the conditions to the consummation of the Contemplated Transactions to be satisfied as soon as practicable.

8.2.          Operation of Bayer Business.

8.2.1             Conduct of Bayer Business.  From the Execution Date until the Closing Date, Bayer will, and will cause its Affiliates to:

(a)   conduct the Bayer Business only in the Ordinary Course of Business;

(b)   use its commercially reasonable efforts to (i) preserve its material contractual and non-contractual business relationships with third parties (including licensors, suppliers, distributors and customers), including the maintenance and renewal of any contractual business relationships with hospitals that purchase Leukine or Fludara, and (ii) to maintain in full force and effect all Permits used in the Bayer Business;

(c)   as it relates to the Bayer Business, inform Genzyme promptly (i) after receipt of any material non-written or any written communication between Bayer and its Affiliates, on the one hand, and the FDA or any similar foreign Governmental Authority, on the other hand, or inspections of any manufacturing facility or clinical trial site and where reasonably practicable before giving any written submission to the FDA or any similar foreign Governmental Authority, and (ii) where possible prior to making any material change to a study protocol, adding new trials, making any material change to a manufacturing plan or process, making a material change to a development timeline or initiating, or making a material change to, promotional or marketing materials or activities;

(d)   (i) not terminate any Business Employee other than termination for cause or for poor performance, (ii) not encourage or incent any Business Employee to leave the employ of Bayer or any of its Affiliates or to transfer to a position such that the individual would no longer be a Business Employee, (iii) not hire any new Business Employee except to replace a former Business Employee who has voluntarily left the employ of Bayer or any of its Affiliates or was terminated for cause or poor performance, (iv) not transfer an employee to the Bayer Business such that such transferred employee becomes a Business Employee, unless to replace a former Business Employee who has voluntarily left the employ of Bayer or any of its Affiliates or was terminated for cause or poor performance and (v) not transfer a Business Employee to another position such that such transferred employee is no longer a Business Employee;

(e)   maintain the level of shipments of each Licensed Product shipped to customers at levels appropriate given prevailing business conditions and Ordinary Course of Business and not release a level of products into the market that would

[**] = 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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reflect anything other than customer-generated demand in the Ordinary Course of Business;

(f)    consult with Genzyme prior to taking any action or entering into any transaction that could reasonably be expected to be of material strategic importance to the Business; and

(g)   file all clinical trial information and updates and other similar filings required under the Food and Drug Administration Amendments Act of 2007, as amended, and any other national clinical trial registry, on a timely basis, to the extent such filings relate to the Bayer Business.

For the avoidance of doubt, Bayer shall be relieved of any obligations to comply with any pre-Closing covenants in this Agreement to the extent any such failure to comply is due to Bayer’s compliance with the restrictions applicable to Business Employees set forth in Section 8.2.1(d) above.

8.2.2             Genzyme’s Consent.  Without limiting the generality of Section 8.2.1, without the written consent of Genzyme, which consent shall not be unreasonably withheld, between the Execution Date and the Closing Date, Bayer will not, and will cause its Affiliates not to, (except as expressly required by this Agreement) take or omit to take any action which, if taken or omitted to be taken between September 30, 2008 and the Execution Date, would have been required to be disclosed on Schedule 6.7.1.

8.2.3             Control of Bayer Business.  Nothing contained in this Agreement shall give Genzyme, directly or indirectly, the right to control or direct Bayer’s operations prior to the Closing, to the extent such right would violate applicable Legal Requirements.  Prior to the Closing, Bayer shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations.

8.3.          Notices and Consents.

8.3.1             Bayer.  Bayer will, and will cause its Affiliates to, give all notices to, make all filings with and use its commercially reasonable efforts to obtain all authorizations, consents or approvals from, any Governmental Authority or other Person that are set forth on Schedule 6.3 and Schedule 6.4 or as otherwise reasonably requested by Genzyme.

8.3.2             Genzyme.  Genzyme will give all notices to, make all filings with and use its commercially reasonable efforts to obtain all authorizations, consents or approvals from, any Governmental Authority or other Person that are set forth on Schedule 7.3 and Schedule 7.4 or as otherwise reasonably requested by Bayer.

8.3.3             HSR Act.  In addition to and without limiting the foregoing, Bayer and Genzyme will (a) take promptly all actions necessary to prepare any filings, or cause their “ultimate parent entities” as that term is defined in the HSR Act or relevant regulations to

[**] = 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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promptly prepare any filings required of any of them under the HSR Act or other antitrust or competiton Legal Requirements or as required by the SOT Order; (b) make such filings at the time directed by Genzyme (with reasonable advance notice to Bayer); (c) use commercially reasonable efforts to comply at the earliest practicable date with any request for additional information received by any of them from the FTC or the Antitrust Division of the Department of Justice or any other Governmental Authority with authority regarding antitrust or competition matters; and (d) reasonably cooperate with each other in connection with the preparation and making of any such filings and the clearance of the Contemplated Transactions under antitrust or competition Legal Requirements.  Notwithstanding the foregoing, nothing in this Agreement shall require Genzyme or Bayer or any of their respective Subsidiaries or Affiliates to sell, hold separate, license or otherwise dispose of any assets or conduct their business in a specified manner, or agree or proffer to sell, hold separate, license or otherwise dispose of any assets or conduct their business in a specified manner, or permit or agree to the sale, holding separate, licensing or other disposition of, any assets of Genzyme or Bayer or any of their respective Subsidiaries or Affiliates, whether as a condition to obtaining any approval from, or to avoid potential litigation or administrative action by, a Governmental Authority or any other Person or for any other reason.  Each party agrees to notify the other party promptly of any material communication from a Governmental Authority regarding the Contemplated Transactions.  Without limiting the generality of the foregoing, each party shall provide to the other party (or its Representatives) upon request copies of all correspondence and written productions between such party and any Governmental Authority relating to the Contemplated Transactions.  The parties may, as they deem advisable, designate any competitively sensitive materials provided to the other party under this Section 8.3.3 as “outside counsel only.”  Such materials and the information contained therein shall be given only to outside counsel of the recipient and will not be disclosed by such outside counsel to employees, officers, or directors of the recipient without the advance consent of the party providing such materials.  Subject to Legal Requirements, the parties will consult and cooperate with each other in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, and proposals made or submitted to any Governmental Authority regarding the Contemplated Transactions by or on behalf of any party.

8.3.4             Modifications in Response to Requirements from Governmental Authorities.  Notwithstanding anything else in this Agreement, if (a) a Governmental Authority with authority to administer or make determinations under antitrust or competition Legal Requirements requires as a condition to clearance of the Contemplated Transactions under applicable Legal Requirements that this Agreement and/or an Ancillary Agreement be amended (a “Regulatory Clearance Amendment”) only to (i) reduce the rights licensed or assets transferred to Genzyme hereunder or under an Ancillary Agreement, (ii) increase the payments to Bayer hereunder or under an Ancillary Agreement and/or (iii) increase the obligations of Genzyme hereunder or under an Ancillary Agreement and does not (A) increase the obligations of Bayer hereunder or under an Ancillary Agreement or (B) result in what Bayer determines, in its sole discretion exercised in good faith, is an unacceptable risk of non-compliance by Bayer

[**] = 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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with applicable Drug Laws and (b) Genzyme requests Bayer to amend this Agreement to implement a Regulatory Clearance Amendment, Bayer agrees to enter into good faith negotiations with Genzyme and amend this Agreement to reflect the Regulatory Clearance Amendment.

8.4.          Genzyme’s Access to Premises; Information.

8.4.1             Access.  Subject to applicable Legal Requirements, from the Execution Date until the Closing Date, Bayer will, and will cause its Affiliates to, permit Genzyme and its Representatives to have access (at reasonable times and upon reasonable notice) to those employees involved in the operation of the Bayer Business and consultants who conduct or have conducted the Bayer Business, all principal suppliers and customers of the Bayer Business, and to all premises, properties, books, records (excluding income Tax records), purchase order records, information and estimates regarding the amounts of each Licensed Product held by wholesalers, distributors and other resellers, contracts, financial and operating data and information and documents pertaining to the Bayer Business and print and make copies of such books, records, contracts, data, information and documents as Genzyme or its Representatives may reasonably request, so long as each such recipient is under an obligation to keep such information confidential.  For the avoidance of doubt, neither Bayer nor its Affiliates will be required to create records nor to compile data that it has not otherwise created or compiled.

8.4.2             Financial Information.  From the Execution Date until the Closing Date, Bayer will, and will cause its Affiliates to, cooperate and provide reasonable assistance to Genzyme in the preparation of financial statements necessary for Genzyme to comply with Legal Requirements related to securities.

8.5.          Notice of Developments.  From the Execution Date until the Closing Date, Bayer will give Genzyme prompt written notice upon Bayer or any of its Affiliates becoming aware of any material development affecting the Acquired Assets, Assumed Liabilities or Bayer Business, or any event or circumstance that has resulted or would reasonably be expected to result in a breach of, or material inaccuracy in, any of Bayer’s representations and warranties; provided, however, that no such disclosure will be deemed to prevent or cure any such breach of, or inaccuracy in, amend or supplement any Schedule to, or otherwise disclose any exception to, any of the representations and warranties set forth in this Agreement.

8.6.          Exclusivity.  From the Execution Date until the Closing, Bayer will not, and will cause its Affiliates and Representatives not to, directly or indirectly: (a) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to, or enter into or consummate any transaction relating to, the acquisition of all or a material portion of the Bayer Business or any of the Licensed Products (to the extent it is not Shared Licensed IP) or any similar transaction or alternative to the Contemplated Transactions or (b) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing.  Bayer will notify Genzyme promptly if any Person makes any

[**] = 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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proposal, offer, inquiry or contact with respect to any of the foregoing (whether solicited or unsolicited).  For clarity purposes, the restrictions in this Section 8.6 do not apply to any of Bayer’s activities with respect to the Shared Licensed IP, which do not breach the licenses granted in Section 2.1.1(b).

8.7.          Transaction Expenses.  Except as otherwise provided in Section 3.3, with respect to the costs and expenses (including legal, accounting, consulting, advisory and brokerage) incurred in connection with the Contemplated Transactions (such costs and expenses, the “Transaction Expenses”), each party will bear its own Transaction Expenses.

8.8.          Confidentiality.

8.8.1             Existing CDA.  The parties hereby agree that the Confidential Disclosure Agreement shall remain in full force and effect until the earlier of the Closing Date or the date this Agreement is terminated pursuant to Section 12.1 (the “Confidentiality Date”).  In the event the Confidentiality Date occurs before April 14, 2009, the parties hereby agree that the Confidential Disclosure Agreement will terminate upon the consummation of the Closing.  In the event that the Confidentiality Date occurs after April 14, 2009, the parties hereby agree that the one (1) year term referenced in Section 5 of the Confidential Disclosure Agreement shall be extended until the Closing Date.

8.8.2             Confidentiality of Bayer and its Affiliates.  From and after the Closing Date, information contained within the Business-Specific Licensed IP or the Acquired Assets and Assumed Liabilities, will be Genzyme’s Confidential Information and subject to the non-disclosure and non-use restrictions set forth in Section 8.8.3 below and in the Confidential Disclosure Agreement.

8.8.3             Non-Disclosure and Non-Use.

(a)   Confidential Information.  Genzyme and Bayer agree that the terms and conditions of this Agreement and the Ancillary Agreements, any activities conducted in connection with or pursuant to this Agreement or the Ancillary Agreements, and information disclosed by either party in accordance with this Agreement or the Ancillary Agreements or in the course of performance under the Ancillary Agreements, including the performance and receipt of services under the Transition Services Agreement (“Confidential Information”) will be used and disclosed by the receiving party only to perform its obligations and exercise its rights under this Agreement and the Ancillary Agreements and/or to conduct the Business.  Information relating to the Acquired Assets, Licensed Products (to the extent it is not Shared Licensed IP) and Business-Specific Licensed IP will be considered the Confidential Information of Genzyme.  Information relating to the Shared Licensed IP will be considered the Confidential Information of Bayer and its Affiliates.  The terms and conditions of this Agreement will be considered the Confidential Information of the parties to the Agreement, as if all parties were receiving parties.  Notwithstanding the foregoing, “Confidential Information” will

[**] = 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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not include:

(i)         information (other than information relating to the Acquired Assets, Licensed Products (to the extent it is not Shared Licensed IP) and Business-Specific Licensed IP) that the receiving party can establish was already known by the receiving party (other than under an obligation of confidentiality) at the time of disclosure by the disclosing party;

(ii)        information that the receiving party can establish was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party; or

(iii)       information that the receiving party can establish became generally available to the public or otherwise part of the public domain after its disclosure or development, as the case may be, other than through any act or omission of the receiving party or any of its Affiliates.

(b)   Authorized Disclosure and Use.  Notwithstanding the foregoing provisions of Subsection (a), each party may disclose Confidential Information belonging to the other party to the extent such disclosure is reasonably necessary to:

(i)         prosecute or defend an Action;

(ii)        comply with applicable Legal Requirements and stock exchange rules (including the rules and regulations of the Securities and Exchange Commission); or

(iii)       make filings and submissions to, or correspond or communicate with, any Governmental Authority.

In the event a party deems it reasonably necessary to disclose Confidential Information belonging to the other party pursuant to clauses (i), (ii) or (iii) of this Section 8.8.3, the disclosing party will (unless prohibited by applicable Legal Requirements) give reasonable advance notice of such disclosure to the other party, consult with the other party with regard to the disclosure of Confidential Information and take all reasonable measures to ensure confidential treatment of such information.  Each party will promptly notify the other party upon becoming aware of any misappropriation or unauthorized disclosure or use of the other party’s Confidential Information.

8.8.4             Enforcement of Confidentiality Agreements.  If Genzyme has a reasonable good faith belief that Bayer or any of its Affiliates may have a written confidentiality agreement with respect to the Bayer Business or a written non-competition agreement that would protect the Bayer Business, in each case other than a Transferred Contract (each, an “Unassigned Confidentiality Agreement”), and that a third party may have breached such agreement, then Genzyme may notify Bayer in writing, specifying 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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basis of such reasonable good faith belief (with respect to both Bayer or its Affiliate’s confidentiality agreement and with respect to the third party’s breach).  If Bayer does not believe that the basis provided by Genzyme is sufficient, it shall request additional information from Genzyme.  If the parties do not agree on the sufficiency, Genzyme can seek dispute resolution.  If Bayer accepts Genzyme’s basis as sufficient or if after dispute resolution it is determined that Genzyme’s basis is sufficient, Bayer will, and will cause its Affiliates (a) to use commercially reasonable efforts to determine if such an Unassigned Confidentiality Agreement exists; (b) to the extent Bayer is aware that such Unassigned Confidentiality Agreement exists and to the extent permitted by such Unassigned Confidentiality Agreement, Bayer will, and will cause its Affiliates to, confirm for Genzyme that the Unassigned Confidentiality Agreement specified by Genzyme contains such confidentiality and/or non-competition covenants; (c) provide Genzyme with a copy of the Unassigned Confidentiality Agreement (which may be redacted in good faith by Bayer with regard to non-Business-related information), and (d) use commercially reasonable efforts to provide Genzyme with assistance as reasonably requested by Genzyme in order to enjoin, restrain or obtain specific performance against, or for Genzyme to recover damages from, such counterparty or counterparties for any breach, suspected breach or anticipatory breach of such confidentiality or non-compete requirement.  In lieu of providing assistance as reasonably requested by Genzyme as described in the preceding sentence, Bayer may instead elect to seek specific performance against or recover damages (which, if received, would be paid over to Genzyme net of Bayer’s reasonable out-of-pocket enforcement expenses) from such counterparty or counterparties.  If Bayer elects for Genzyme to seek to enforce any such agreement, it will, or will cause its Affiliates to, assign to Genzyme, to the extent they can be assigned, such rights thereunder that are necessary for Genzyme to seek such enforcement.  Notwithstanding the foregoing, nothing in this Section 8.8.4 shall require [**].

8.9.          Publicity.  The parties have agreed to the press releases attached as Exhibit 8.9.  After the date hereof, the parties hereto may make public disclosures regarding the transactions contemplated by this Agreement provided such disclosure is consistent with Exhibit 8.9, as such Exhibit may be amended from time to time by the mutual written consent of Genzyme and Bayer, or other information previously publicly disclosed in compliance herewith.  The provisions of this Section 8.9 will not prohibit (a) any disclosure required by any applicable Legal Requirements, GAAP or the rules of The Nasdaq Global Market (in which case the disclosing party will provide the other parties with the opportunity to review in advance the disclosure) or (b) any disclosure made in connection with the enforcement of any right or remedy relating to this Agreement or the Contemplated Transactions.

8.10.        [**] and Non-Solicitation.

8.10.1           From and after the Closing Date [**] will not, and will cause its Affiliates not to, [**] (including through any [**], either directly or indirectly without the prior written consent of [**] any (a) [**] following the Closing Date, (b) [**] following the Closing Date, or (c) except as expressly permitted in Article 10 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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first commercial sale of [**] after regulatory approval thereof by the FDA or the EMEA.  [**] hereby represents and warrants that as of the Execution Date and the Closing Date neither [**] nor any of its Affiliates has made a [**] with respect to [**].  If [**] acquires a Person which is in the business of [**] following the consummation of any such acquisition; provided, however, if such business is acquired [**] and its Affiliates shall be required to [**] for its most recently completed fiscal year.

8.10.2           If the Closing does not occur, for a period of [**] from the Execution Date, Genzyme will not, and will cause its Affiliates not to, solicit, recruit, offer employment to, employ, engage as a consultant, lure or entice away, or in any other manner persuade or attempt to persuade, any Business Employee or other employee of Bayer or an Affiliate with whom Genzyme has had contact in connection with the Contemplated Transactions hereby to leave the employ of Bayer or any of its Affiliates, provided, however, that this Section 8.10.2 does not preclude Genzyme or any of its Affiliates from employing any such employee who (a) seeks employment with Genzyme in response to a general advertisement or other similar method not specifically directed towards employees of Bayer or its Affiliates, (b) responds to a solicitation by an independent recruiting firm, (c) has first contacted Genzyme on his or her own initiative or (d) was terminated by Bayer or an Affiliate prior to commencement of subsequent employment discussions between Genzyme and such employee.

8.10.3           Each party acknowledges that the other party could be irreparably harmed by any breach of this Section 8.10 and agrees, on its own behalf and on behalf of its Affiliates, that the limitations set forth in Sections 8.8 (Confidentiality), 8.10.1 ([**]) and 8.10.2 (Non-Solicitation) are reasonable and properly required for the adequate protection of Genzyme and Bayer.  Each party further acknowledge and agrees, on its own behalf and on behalf of its Affiliates, that the remedy at law for any breach or threatened breach by them of the agreements contained in Sections 8.8, 8.10.1 or 8.10.2 will be inadequate and agrees that the other party, in the event of such breach or threatened breach, in addition to all other remedies available for such breach or threatened breach (including a recovery of damages), may seek a preliminary or permanent injunctive relief without being required to prove as an element of its case the lack of an adequate remedy of law or to post a bond or other undertaking.  This Section 8.10.3 constitutes an independent and severable covenant and if any or all of the provisions of this Section 8.10.3 are held to be unenforceable for any reason whatsoever, it will not in any way invalidate or affect the remainder of this Agreement which will remain in full force and effect.  The parties intend for the covenants of Sections 8.8, 8.10.1 and 8.10.2 to be enforceable to the maximum extent permitted by Legal Requirements.  In the event that the covenants contained in Section 8.10.1 and 8.10.2, are more restrictive than permitted by applicable Legal Requirements, the parties agree that the covenants contained in Section 8.10.1 and 8.10.2 shall be enforceable and enforced to the extent permitted by applicable Legal Requirements.

[**] = 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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8.11.        Employment.

8.11.1           Genzyme Employment Offers.

(a)   As soon as practicable after the Execution Date and from time to time thereafter, Bayer will, and will cause its Affiliates to, make reasonable arrangements for Genzyme to contact the Business Employees for the purpose of determining whether Genzyme will offer employment to any such Business Employees following and contingent upon the Closing.  Genzyme, in its sole discretion, will or will cause its Affiliates to, as soon as reasonably practicable after the Execution Date and prior to the anticipated Closing Date, offer employment to (i) any or all Business Employees and (ii) any additional employees of the Bayer Business to the extent mutually agreed by the parties, which offers will be on terms and conditions consistent with Genzyme’s human resources (including compensation and benefits) practices and policies (provided, however, that any employment offers will be contingent upon and may not take effect until the Closing).  Business Employees and other employees of the Bayer Business who are offered employment by Genzyme or its Affiliates are referred to herein as “Offer Employees.”

(b)   All offers to hire by Genzyme or its Affiliates are subject to the Offer Employees’ completion and submission to Genzyme or its Affiliates, as may be applicable, of (A) Genzyme’s or its Affiliates’ agreement relating to confidentiality, nonsolicitation, noncompetition and Intellectual Property; (B) Genzyme’s or its Affiliates’ employment application; (C) Form I-9 or similar document for any non-U.S. employee; and (D) any other documents required to be submitted by other similarly situated employees of Genzyme or its Affiliates as a pre-condition to employment with Genzyme or its Affiliates.  Offer Employees who accept an offer of employment by Genzyme or an Affiliate of Genzyme will become employees of Genzyme or its Affiliates (“Hired Employees”), if at all, on or as of: (x) the date immediately following the Closing Date, if such Offer Employees are then actively at work; (y) the date immediately following the Closing Date, if such Offer Employees are then absent from work due to vacation or jury duty and return to active employment immediately following the end of the vacation or the completion of jury duty, as the case may be; or (z) the date such Offer Employees return to active employment, in the case of Offer Employees who, on the Closing Date, are absent from work due to short-term disability, maternity leave, military leave or other authorized leave of absence with a right to return to their jobs, and who return to active employment within the time required under the original terms and conditions applicable to such absence, and within [**] days after the Closing, subject to any applicable Legal Requirement.  At their expense, Bayer will, and will cause its Affiliates to, continue to provide the applicable leave and related leave benefits to any Offer Employee on a type of leave described in the immediately preceding clause (z) in accordance with the original terms and conditions applicable to such leave and any applicable Legal Requirement.

[**] = 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)   Notwithstanding anything to the contrary contained herein, if the employment of a Non-U.S. Business Employee or any other employee of Bayer or its Affiliates transfers to Genzyme or any of its Affiliates by operation of applicable non-U.S. Legal Requirements as a result of the Contemplated Transactions and Genzyme retains such individual as an employee (such that he/she is not or does not become a Non-Retained Employee, as defined below), then such individual will be deemed to be an Offer Employee and a Hired Employee and Genzyme will comply or cause its Affiliates to comply in all material respects with the provisions of applicable non-Legal Requirements with respect to such transfer of employment status.  With respect to any such transfer of employment, Bayer will, and will cause its Affiliates to, comply in all material respects with all requirements imposed on it or them by applicable non-U.S. Legal Requirements.  Any Non-U.S. Business Employees whose employment transfers to Genzyme or any of its Affiliates by operation of applicable non-U.S. Legal Requirements as a result of the Contemplated Transactions and whose employment is terminated by Genzyme or its Affiliates as of the Closing Date or within [**] days thereafter shall not be Offer Employees or Hired Employees and are referred to herein as “Non-Retained Employees”; provided, however, that in order to be treated as a Non-Retained Employee, Genzyme or its Affiliates must, within [**] Business Days prior to the Closing Date, notify Bayer or its Affiliates in writing of all Business Employees who are or will become Non-Retained Employees.

(d)   Bayer agrees to, and will cause its Affiliates to, (a) not impede or interfere in Genzyme’s recruitment efforts with respect to the Offer Employees, including without limitation, to lure or entice or in any other manner persuade or attempt to persuade any Offer Employees to not accept employment with Genzyme or any of its Affiliates; and (b) on the Closing Date, terminate the employment of the Offer Employees who have accepted employment with Genzyme (except for those Offer Employees on a leave as described in clause (z) of Section 8.11.1(b), whose employment shall be terminated by Bayer or its Affiliates immediately prior to the date, if any, upon which each such Offer Employee becomes a Hired Employee).  Without Genzyme’s written consent, Bayer will not, and will cause its Affiliates not to, solicit, recruit, offer employment to, employ, or engage as a consultant any Offer Employee described in the preceding sentence, or lure or entice or in any other manner persuade or attempt to persuade any Offer Employee described in the preceding sentence to not accept employment with or leave the employ of Genzyme or any of its Affiliates, as applicable, for a period of [**] after the Closing Date.  For the avoidance of doubt, neither Bayer nor its Affiliates will be required to terminate the employment of any Non-U.S. Business Employee who transfers to Genzyme or any of its Affiliates by operation of applicable non-US Legal Requirement.

8.11.2           Payments.

(a)   Subject to Section 8.11.2(b), Bayer and its Affiliates will be solely

[**] = 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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responsible for and agree to compensate each Business Employee for [**], including (i) any payments due to such Business Employees for any [**]; (ii) [**]], including payments, if any, to any Business Employee relating to [**], as well any payments, [**] of Bayer or any of its Affiliates; and (iii) amounts for any [**] as of the Closing Date. Bayer will also pay, and will cause its Affiliates to pay, (x) [**], and (y) [**], based on each Hired Employee’s [**], in each case when and if any [**].

(b)   If Genzyme and its Affiliates collectively do not make an Employment Offer, (i) Genzyme shall pay to Bayer [**] made by Bayer or its Affiliates, consistent with the severance policy or practice and employee agreements of Bayer and its Affiliates (in each case as set forth on Schedule 6.17.5 or any applicable Legal Requirement, to those Business Employees included on Schedule 6.17.1 (as updated [**] Business Days prior to the Closing Date) who (x) are not Hired Employees, (y) do not transfer to Genzyme or its Affiliates by operation of applicable non-U.S. Legal Requirement, and (z) are terminated by Bayer and its Affiliates as of or within [**] days after the Closing Date (collectively, the “Severed Employees”); provided, however, that Genzyme’s reimbursement obligation will not exceed [**], and (ii) Bayer shall pay to Genzyme [**] made by Genzyme or its Affiliates to Non-Retained Employees for any periods in excess of [**] months following the Closing Date up to any limits under applicable Legal Requirements.  If Genzyme and its Affiliates collectively make an Employment Offer, Bayer shall be solely responsible for any [**] to any Severed Employees and shall pay Genzyme for any [**] paid by Genzyme or its Affiliates to any Non-Retained Employees up to any limits under applicable Legal Requirements.  Bayer agrees to notify Genzyme of each Severed Employee whose employment is terminated by Bayer or its Affiliates during the [**] day period after the Closing Date, within two (2) Business Days after such employee’s termination.  For the purpose of this subparagraph (b) and Section 8.11.1(c), a Non-U.S. Business Employee will be deemed to be terminated within [**] days after the Closing if a party provides notice of termination within such [**]-day period but, because of applicable non-U.S. Legal Requirements, is unable to complete the employment termination process until a date that is after the end of such [**]-day period.  Notwithstanding the foregoing, each of Bayer and Genzyme shall share equally [**] made to any Non-Retained Employees with a principal place of employment in Italy listed on Schedule 6.17.1 as updated [**] Business Days prior to the Closing Date.

(c)   At the Closing, Genzyme and Bayer will prepare an estimate of any Severance Payment payable by Genzyme and any payments owed by Bayer to Genzyme pursuant to this Section 8.11.  The net amount of such estimates will be promptly paid by the party owing the same.  After [**] months after the Closing Date, Genzyme and Bayer will review actual payments made by the parties to Business Employees and adjust the amounts payable by either party pursuant to this Section 8.11.

[**] = 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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8.11.3           Bayer Welfare Plans.  Immediately following the Closing Date, each Hired Employee (and, to the extent applicable, their dependents and beneficiaries) shall cease to be covered by Bayer and its Affiliates’ employee welfare benefit plans (except to the extent the Hired Employee or any covered dependent elects continuation coverage under COBRA), including plans, programs, policies, and arrangements which provide medical, dental hospitalization or drug coverage, life and accident insurance, workers’ compensation coverage, and health care reimbursement and disability coverage, whether or not insured (collectively, the “Bayer Welfare Plans”), in accordance with the applicable Bayer Welfare Plans.  Bayer shall retain responsibility for all welfare benefit claims incurred by Hired Employees on or prior to the Closing Date.  For purposes of this subsection, a claim is deemed incurred for medical, dental, hospital and drug benefits and reimbursement benefits, when the services or products generating such expenses are performed or provided to the Hired Employee or a covered dependent; for life and accident insurance, when the death, injury, or dismemberment of the Hired Employee or other covered dependent occurred; for disability insurance, upon the occurrence of the accident, injury, illness, or disabling effect.

8.11.4           Benefits for Hired Employees. Immediately following the Closing Date, Hired Employees (and, to the extent applicable, their dependents and beneficiaries) shall be eligible to participate in Genzyme Employee Plans (as hereinafter defined) in accordance with the terms of such plans, and in fringe and other employee benefits that are consistent with those offered to similarly situated employees of Genzyme or its Affiliates, as the case may be.Any modifications or terminations of any Genzyme Employee Plans and other such benefits that may be made by Genzyme and its Affiliates after the Closing Date will be applied to all similarly situated employees of Genzyme or its Affiliates, including Hired Employees and, to the extent applicable, their dependents and beneficiaries, as the case may be.

8.11.5           Genzyme’s Employee Plans.  Immediately following the Closing Date, Genzyme shall cause the Hired Employees to receive full credit for prior service with Bayer and/or its Affiliates to the extent such service was credited under the Bayer Employee Plans as of the Closing Date, for purposes of eligibility and vesting under any comparable Genzyme Employee Plans (as hereinafter defined), and for the purpose of determining benefit levels under any comparable Genzyme Employee Plan or policy relating to vacation, sick time and any other paid-time-off program or severance, except where such credit would result in a duplication of benefits. In addition, Genzyme and its Affiliates shall recognize for purposes of annual deductible and out-of-pocket limits payable during the plan year in which the Closing Date occurs under the Genzyme Employee Plans, all deductible and out-of-pocket expenses paid by such Hired Employee through the Closing Date through medical and dental plans of Bayer or its Affiliates in the plan year in which the Closing Date occurs. Any pre-existing condition exclusions, evidence of insurability provisions, waiting period requirements, or other similar provisions under the Genzyme Employee Plans providing supplemental life insurance or long term disability insurance coverage or benefits shall apply to Hired Employees based in the United States and their covered beneficiaries and dependents to the extent that 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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conditions or requirements apply to any newly hired U.S. employees of Genzyme or its Affiliates.  All other Genzyme Employee Plans in which Hired Employees based in the United States are eligible to participate do not impose any limitations relating to pre-existing conditions for such Hired Employees and their covered beneficiaries and dependents.  Where required by any applicable non-U.S. Legal Requirement, or where reasonably feasible and permitted by the applicable Genzyme Employee Plan, Genzyme shall waive, and shall cause its Affiliates to waive, any limitations on benefits relating to pre-existing conditions for Hired Employees based outside of the United States and their covered beneficiaries and dependents to the same extent such limitations have been waived or satisfied under any Bayer Employee Plan as of the Closing Date.  For purposes of this Agreement, the term “Genzyme Employee Plan” means, to the extent applicable, 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, agreement or arrangement providing insurance coverage, severance benefits, disability benefits or vacation pay for the benefit of, or relating to, any Hired Employee. If, within [**] months following the Closing Date, Genzyme or any of its Affiliates causes the involuntary termination (other than termination for “cause,” as defined in the applicable agreement, policy or plan of Genzyme or any of its Affiliates, or in good faith by Genzyme or any of its Affiliates) of a Hired Employee’s employment, then the terminated Hired Employee will be entitled to receive cash severance payments that are no less favorable than those described on Schedule 8.11.5.

8.11.6           Genzyme Defined Contribution Plan. Genzyme currently maintains a qualified defined contribution plan (the “Genzyme DC Plan”) that contains provisions necessary for the acceptance of direct rollovers of non-Roth amounts from Hired Employees based in the United States.  The Genzyme DC Plan will accept rollovers (in the form of cash and notes relating to plan participant loans) of “eligible rollover distributions,” as defined in the Code and applicable regulations, that any Hired Employee is eligible to receive from any qualified defined contribution plan that is a Bayer Employee Plan to the extent permitted under the provisions of the Genzyme DC Plan.  The parties will (and will cause their respective applicable Affiliates to) cooperate with each other to enable such direct rollovers to occur before any Hired Employee participant loans under the qualified defined contribution Bayer Employee Plan become defaulted.  Bayer acknowledges that the Genzyme DC Plan accepts rollovers only of non-Roth contributions.  Genzyme will accept rollovers into the Genzyme DC Plan of up to a maximum of three (3) plan loans (based on one plan loan having been initiated per calendar year) per Hired Employee participant from a qualified defined contribution Bayer Employee Plan; provided, however, that Hired Employee participants shall not be permitted to initiate a new loan under the Genzyme DC Plan until all outstanding loans are paid in full.  Genzyme shall not, and nothing in this Agreement shall be construed to, require Genzyme to amend the terms of the Genzyme DC Plan or alter the Genzyme DC Plan’s administration to accept Roth rollover contributions from a qualified defined contribution Bayer Employee Plan.

8.11.7           WARN Act.  Bayer and its Affiliates shall be responsible for providing or

[**] = 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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discharging any and all notifications, benefits, and liabilities to Business Employees and Governmental Authorities under the Federal Workers Adjustment and Retraining Notification Act (“WARN Act”) or by any other Legal Requirement relating to plant closings, mass layoffs, or employee separations or severance pay that are first required to be provided or discharged on or prior to the Closing Date, and Genzyme and its Affiliates shall be responsible for providing any notice required pursuant to the WARN Act with respect to a plant closing, layoff, or employee separation or severance pay relating to the Hired Employees after the Closing Date.  Bayer and its Affiliates shall retain responsibility for any continuation coverage obligations under COBRA or any other applicable Legal Requirements that are triggered on or prior to the Closing Date with respect to all Business Employees and their covered dependents.  Genzyme and its Affiliates shall be responsible for any continuation coverage obligations under COBRA or any other applicable Legal Requirements that are triggered after the Closing Date with respect to the Hired Employees and their covered dependents.

8.11.8           No Third Party Beneficiaries.  No provision of this Section 8.11 will create any third party beneficiary rights in any Business Employee, Offer Employee, Hired Employee or Scheduled Employee or other Person (including any heir, beneficiary, executor, administrator or representative of, or any Person claiming through, any of the foregoing).

8.11.9           Consultations and Assistance.  Each of Bayer and Genzyme shall use commercially reasonable efforts to timely conduct, and shall cause their respective Affiliates to use commercially reasonable efforts to timely conduct, all consultations with Unions representing Non-U.S. Business Employees and consultations with individual Non-U.S. Business Employees, in each case, to the extent required by applicable non-U.S. Legal Requirements to consummate the Contemplated Transactions.  In addition, Bayer shall use commercially reasonable efforts to promptly provide, and shall cause its Affiliates to use commercially reasonable efforts to promptly provide, any assistance and information reasonably requested by Genzyme or its Affiliates to enable Genzyme and its Affiliates to conduct any such consultations and to otherwise comply with any applicable non-U.S. Legal Requirements with respect to employment matters in connection with the Contemplated Transactions.

8.12.        Transfer of Certain Funds Received Post-Closing.  With respect to any and all amounts received or collected by Bayer or any of its Affiliates from and after the Closing attributable to, or in respect of, the Business (other than with respect to a Retained Asset), Bayer will provide notice of such receipt or collection to Genzyme (including information included with such payment or otherwise within Bayer’s possession with respect to such payment, including invoice and/or remittance information) and pay monthly to Genzyme any and all such amounts so received or collected by wire transfer of immediately available funds to an account specified by Genzyme or by other means acceptable to Genzyme. With respect to any and all amounts received or collected by Genzyme or any of its Affiliates from and after the Closing attributable to, or in respect of, any Retained Asset, Genzyme will provide notice of such receipt or collection to Bayer (including information included with 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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payment or otherwise within Bayer’s possession with respect to such payment, including invoice and/or remittance information) and pay monthly to Bayer any and all such amounts so received or collected by wire transfer of immediately available funds to an account specified by Bayer or by other means acceptable to Bayer.

8.13.        Access to Records and Employees and Assistance with Financial Statements After Closing.

8.13.1              Access.  Except as agreed in Section 14.4, for a period of [**] years after the Closing Date, the parties will afford one another and their respective Representatives reasonable access to all of the books and records related to the Bayer Business to the extent that such access may reasonably be required by the requesting party or parties in connection with Tax matters or Actions (excluding litigation between Genzyme or any Affiliate of Genzyme, on the one hand, and Bayer or any Affiliate of Bayer, on the other hand) relating to the Bayer Business prior to the Closing Date.  Such access will be afforded upon receipt of reasonable advance notice and during normal business hours, and the requesting party will not be responsible for any costs or expenses incurred by them pursuant to this Section 8.13, except for reasonable out-of-pocket expenses incurred by the party of whom the request was made.  If Genzyme or Bayer desire to dispose of any of such books and records prior to the expiration of such [**] year period, such party will, prior to such disposition, give the other party a reasonable opportunity, at such party’s expense, to segregate and remove such books and records as such party may select.

8.13.2              2008 Financial Statements.  From and after the Execution Date, Bayer will, and will cause its Affiliates to, prepare an unaudited income statement (the “2008 Financial Statements”) for the Blue Business for the full calendar year 2008 in accordance with Regulation S-X and in a manner designed to reflect International Financial Reporting Standards (“IFRS”) as soon as reasonably practicable.  For a period of three (3) years after the Closing Date, Bayer and its Affiliates will provide reasonable assistance to Genzyme in the preparation of financial statements necessary for Genzyme to comply with applicable Legal Requirements.  Genzyme will reimburse Bayer for reasonable costs (which will include the cost of any external support Bayer may utilize to assist or prepare the 2008 Financial Statements) incurred by Bayer for Bayer’s activities pursuant to this Section 8.13.2.  Reasonable supporting documentation for this purpose does not require Bayer to provide detailed time sheets for internal costs, but does require a reasonable break-down of internal costs such that Genzyme may generally substantiate the internal costs for which Bayer seeks reimbursement hereunder.

8.13.3              SEC Financial Statements.  If Genzyme determines in good faith after consultation with Genzyme’s independent auditor that based on the information set forth in the 2008 Financial Statements, Genzyme would be required to file with the SEC pursuant to Rule 3-05 of Regulation S-X audited annual financial statements of the Bayer Business (the “Audited Financial Statements”) and/or unaudited quarterly financial statements of the Bayer Business (the “Unaudited Financial Statements”) for the periods

[**] = 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 by Rule 3-05 of Regulation S-X (any Audited Financial Statements together with any Unaudited Financial Statements, the “SEC Financial Statements”), Bayer will deliver to Genzyme as soon as reasonably practicable the SEC Financial Statements.  The SEC Financial Statements will be (a) prepared in accordance with the books and records of the Bayer Business, (b) prepared in accordance with Regulation S-X and GAAP, unless IFRS is acceptable for Genzyme’s filing of the SEC Financial Statements with the SEC, in which case the SEC Financial Statements will be prepared in accordance with IFRS and (c) in the case of the Audited Financial Statements, accompanied by an opinion (the “Audit Opinion”) of PricewaterhouseCoopers LLP, Deloitte Touche Tohmatsu LLP, KPMG, LLP or Ernst & Young LLP (the “Independent Auditor”), which opinion complies with Regulation S-X.  Bayer will use its commercially reasonable efforts to cause the Independent Auditor to provide to Genzyme the consents requested by Genzyme no later than [**] Business Days prior to the Closing (the “Auditor Consents”) to permit the inclusion of the Audit Opinion with respect to the Audited Financial Statements in Genzyme’s reports and registration statements filed with the SEC for periods required under applicable Legal Requirements. Genzyme will reimburse Bayer for Bayer’s reasonable costs (which will include the cost of any external support Bayer may utilize to assist or prepare the SEC Financial Statements) incurred by Bayer supported by reasonable documentation for Bayer’s activities pursuant to this Section 8.13.3.  Reasonable supporting documentation for this purpose does not require Bayer to provide detailed time sheets for internal costs, but does require a reasonable break-down of internal costs such that Genzyme may generally substantiate the internal costs for which Bayer seeks reimbursement hereunder.

8.14.        Transfer of Permits.

8.14.1           Promptly after the Execution Date, the parties will collaborate to determine a timetable and procedure for the transfer or re-issuance to Genzyme of all Permits used in the Bayer Business.  The parties shall, and shall cause their Affiliates to, use commercially reasonable efforts to (a) provide the required notices to, and/or obtain the authorizations, approvals, consents or waivers from, Governmental Authorities and third parties in order to transfer all Transferred Permits to Genzyme or its Affiliates, and/or to enable Genzyme or its Affiliates to obtain its or their own substitute Permits for the Bayer Business, and (b) to the extent permitted under applicable Legal Requirements and/or the issuing body of a Permit, allow Genzyme or its Affiliates to distribute, market, import and sell Licensed Products from and after the Closing while the applicable Permit remains held by Bayer or an Affiliate or until Genzyme or its Affiliates can obtain its or their own Permit.  With respect to all Permits that relate in part to the Bayer Business and in part to businesses of Bayer and its Affiliates other than the Bayer Business (the “Joint Permits”), each of Genzyme and Bayer shall use commercially reasonable efforts in seeking separate Permits for each such business.

8.14.2           If a Transferred Permit is not transferred at Closing or Genzyme or its designee has not obtained a substitute Permit required to distribute, market, import and sell a Licensed Product in a country at the time of the Closing, then, in accordance 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 timetable and procedure determined by the parties, at the request of Genzyme, the parties shall use commercially reasonable efforts to (a) enter into such contractual relationships with one another and/or, as appropriate, their respective Affiliates, and (b) do, execute, acknowledge and deliver all such further acts and other instruments and papers as may be reasonably required or appropriate, to enable the uninterrupted marketing, distribution, importation and sale of Licensed Products after the Closing in each country in which Licensed Products were marketed, distributed or sold prior to the Closing in a manner that allows Genzyme to record the revenue from such sale immediately after Closing, and in which Genzyme has confirmed it or its Affiliate wishes to continue to market, distribute, import and sell following the expiration of the periods referred to below.  Any such contractual arrangement must be consistent with applicable Legal Requirements and the applicable Permit, and not require Bayer to establish new procedures, structures or organizations than those in effect as of Closing and provide for indemnification of Bayer and, as applicable, its Affiliates.

8.14.3           Genzyme will, or will cause its Affiliates to, use commercially reasonable efforts to apply for transfers of Permits or issuances of substitute Permits as promptly as practicable following Closing and in any event, within [**] months after the Closing, provided, however, that in [**], Genzyme will, or will cause its Affiliates to, use commercially reasonable efforts to apply for transfers of Permits or issuances of substitute Permits within [**] months after the Closing; provided, further, that such period in any country may be extended by an additional period [**] months if (a) a delay in transfer, revocation, re-issuance or issuance of a Permit is due to the actions of an unrelated third party or is related to a relationship between Bayer and a third party or Governmental Authority that existed prior to Closing, or (b) Bayer agrees to such extension, such agreement not to be unreasonably withheld.

8.14.4           For the avoidance of doubt, this Section 8.14 shall not apply to Permits necessary for the performance of Bayer and its Affiliates under the Purchase and Sale Agreement, the Leukine Tolling Agreement and the Fludara Supply Agreement, which Permits shall be governed by those agreements.

8.15.        Finished Licensed Products.  After the Closing, Bayer agrees, and shall cause its Affiliates to agree to, destroy all finished Licensed Products Inventory that is not Transferred Inventory under this Agreement, at the sole expense of Bayer, except for any finished Licensed Products Inventory that Bayer or any of its Affiliates is required to retain pursuant to Legal Requirements.  Bayer shall provide Genzyme with a certificate of destruction of such finished Licensed Products Inventory.

8.16.        Rebates, Chargebacks, Returns and Other Adjustments.  Responsibility for returns, rebates, chargebacks, cash discounts and fees for services paid to wholesalers and distributors will be allocated between Bayer and Genzyme in accordance with this Section 8.16, except as may otherwise be required by applicable Legal Requirement.  Sections 8.16.1 through 8.16.5 apply to such items generated in the United States and in each other country where such allocation methods may reasonably be applied.  In each other country where 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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allocation methods cannot be reasonably applied, the parties will work in good faith to determine an alternative allocation method in accordance with the principles set forth herein.

8.16.1           Rebates.  All rebates calculated against periods entirely preceding the Closing date shall be the sole responsibility of Bayer.  All rebates calculated against periods including or following the Closing Date will be the sole responsibility of Genzyme, except that Bayer will make a payment to Genzyme to account for the portion of the quarter in which the Closing occurred during which Bayer owned the Business and the amount of inventory in the wholesale and distribution channels at the Closing.  Calculation of this payment will be based on the application of a ratio, being the [**], plus the [**], divided by the [**], stated as follows:

[**]

The “Rebate True Up Payment” will be equal to the product of (i) the [**] and (ii) the [**].  The Days of Channel Inventory on the Closing Date will be determined, to the extent practicable, on the basis of appropriate documentation and substantiation and, in circumstances where substantiation is not practicable, the reasonable, good faith estimate of the parties.  If the Parties cannot agree on the Days of Channel Inventory after an exchange of supporting documents and a meeting of the Parties the matter will be resolved in accord with Section 15.10.  The Rebate True Up Payment will be due and payable on the last day of the second quarter which begins after the Closing Date (for example, for a closing that occurs in the second quarter, the Rebate True Up Payment would be the last Business Day of the fourth quarter).  The parties will collaborate in good faith from and after the Execution Date to the date the Rebate True Up Payment is due to determine the Days of Channel Inventory and the amount of the Rebate True Up Payment in accordance with this Section 8.16.1.  This calculation must be performed separately on a Licensed Product-by-Licensed Product basis.

8.16.2           Chargebacks.  The obligations of the parties for chargebacks will be allocated based on the setting of a Chargeback Liability Shift Date with chargebacks on wholesaler invoices to their customers dated before the “Chargeback Liability Shift Date” being the obligation of Bayer, and chargebacks on wholesaler invoices to their customer sent on or after that date being the responsibility of Genzyme.  The Chargeback Liability Shift Date shall be [**].  Whether an invoice falls before or after the Chargeback Liability Shift Date shall be determined by reference to the date on the wholesaler invoice to its customer.  This analysis will be done on an invoice-by-invoice basis for each Licensed Product.  Genzyme will pay all chargebacks which become due after the Closing Date (except to the extent Bayer does so on Genzyme’s behalf under the Transition Services Agreement), and will invoice Bayer [**] for the chargebacks for which Bayer is responsible.

8.16.3           Cash Discounts.  The obligation for cash discounts shall be based on the date of the invoice to the customer.  Each cash discount on invoices which are dated on or before the Closing Date will be the responsibility of Bayer.  Each cash discount on

[**] = 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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invoices which are dated after the Closing Date are the responsibility of Genzyme.

8.16.4           Fees for Service.  If a wholesaler, distributor or retailer is entitled to a fee-for-service delivered over time (e.g. inventory management services) such fee will be pro-rated between Bayer and Genzyme based on the relative portion of such period falling before or after the Closing Date.

8.16.5           Returns.  Any return from a production lot of Licensed Product, [**] of which was sold by Bayer, will be the sole responsibility of Bayer.  Any return from a production lot of Licensed Product, [**] of which was sold by Genzyme, will be the sole responsibility of Genzyme.  Any return from a production lot sold partially by Bayer and partially by Genzyme shall be shared by Bayer and Genzyme as described below.

(a)The average dating of inventory of a Licensed Product manufactured in a production lot sold partially by Bayer and partially by Genzyme at the time of sale by Bayer or an Affiliate over [**] expressed in months to expiry will be determined as of the Closing Date (the “Average Age”) and added to the Closing Date to determine an “Adjusted Expiration Date.”  For example, if the Average Age is [**] months and Closing occurs on [**], the Adjusted Expiration Date will be [**] of the following year.

(b)The period extending from [**] months before the Adjusted Expiration Date to [**] months after the Adjusted Expiration Date will be the “Overlap Period.”

Any return of a Licensed Product prior to the Overlap Period will be the sole responsibility of Bayer.  Any return of a Licensed Product after the Overlap Period will be the sole responsibility of Genzyme.  Responsibility for any return of a Licensed Product during the Overlap Period will be [**].  The Average Age will be determined, to the extent practicable, on the basis of appropriate documentation and substantiation, and in circumstances where substantiation is not practicable, the reasonable, good faith estimate of the parties.

8.17.        Joint Transition Team.  Within five (5) Business Days following the Execution Date, Bayer and Genzyme shall establish a joint transition team (the “Joint Transition Team”).  The Joint Transition Team shall be co-chaired by the team leaders of each of Bayer and Genzyme as mutually agreed between the Parties.  The Joint Transition Team will be responsible for global coordination and oversight of transition activities across all functions between the Execution Date and Closing.  Within ten (10) Business Days following the Execution Date, the Joint Transition Team will first meet to establish a schedule of key meetings, milestones and deliverables, a plan for providing Genzyme access to Bayer personnel and information and a schedule of any other tasks related to the transition of the Bayer Business from Bayer to Genzyme.  Between the Execution Date and the Closing, the Joint Transition Team will (1) collaborate to, as soon as practicable, (a) identify any Service (as defined in the Transition Services Agreement) that cannot be provided by Bayer due to Legal Requirements or Contractual Obligations, and (b) identify the Services that 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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will utilize, and (2) coordinate to finalize the compensation for Services in accordance with the Transition Services Agreement.  Each of Bayer and Genzyme agrees to cause its respective representatives on the Joint Transition Team to use commercially reasonable efforts to fulfill its obligations under this Section 8.17 and otherwise facilitate the Contemplated Transactions.  The Joint Transition Team shall hold weekly meetings or teleconferences unless otherwise mutually agreed.

8.18.        Transition Assets.  To the extent Bayer or its Affiliates requires the use of any Acquired Asset to perform its obligations under any of the Ancillary Agreements (the “Transition Assets”), Bayer will inform Genzyme of such need and Genzyme will make such Transition Assets available to Bayer for this purpose for the period of time Bayer requires such Transition Assets to perform its obligations under any of the Ancillary Agreements.

8.19.        Leukine Bulk Drug Substance Manufacturing.  From the Execution Date until the Closing Date, Bayer will, and will cause its Affiliates to, use commercially reasonable efforts to manufacture Leukine Bulk Drug Substance in accordance with the amounts and timeline set forth on Schedule 8.19.

8.20.        Joint Contracts.  With respect to any Contractual Obligations with third parties relating in part to the Bayer Business and in part to the businesses of Bayer and its Affiliates other than the Bayer Business (each, a “Joint Contract”), Genzyme will attempt to enter into a separate Contractual Obligation with the counterparty or counterparties to such Joint Contract with respect to the portion of such Joint Contract exclusively related to the Bayer Business on the same terms and conditions applicable to the Bayer Business.  If Genzyme is unable to replace with a separate Contractual Obligation the portion of a Joint Contract exclusively related to the Bayer Business, Bayer will, and will cause its Affiliates to, if permitted by the terms of such Joint Contract, take commercially reasonable efforts to provide to Genzyme the benefits under such Joint Contract exclusively related to the Business and will enforce, at the request of and for the account of Genzyme, any rights of Bayer or any of its Affiliates arising under such Joint Contract exclusively related to the Business, until the stated expiration of such Joint Contract, without regard to any available renewal options with respect to the Business.  In such event, the benefits and obligations under such Joint Contract exclusively related to the Business shall be for the account of Genzyme, and the remaining benefits and obligations shall be retained by Bayer and its Affiliates.  Bayer and each of its Affiliates that are parties to any Joint Contract shall perform their obligations thereunder so as not to create a material default.  Neither Bayer nor its Affiliates will be obligated to extend credit to Genzyme under a Joint Contract.

8.21.        Hospira Agreement Amendment.  Bayer will, and will cause its Affiliates to, use commercially reasonable efforts to negotiate, execute and deliver an amendment to the Hospira Agreement that is not materially inconsistent with the proposed terms shared with Genzyme prior to the Execution Date.  Bayer or its affiliates may make immaterial amendments, modifications or extensions to the Hospira Agreement without Genzyme’s consent.  Bayer will not, and will cause its Affiliates not to, make material amendments, modifications, or extensions to the Hospira Agreement without Genzyme’s consent, 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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consent not to be unreasonably withheld.

8.22.        Further Assurances.  From and after the Closing Date, upon the request of either Bayer or Genzyme, each of the parties hereto will, and will cause their Affiliates to, do, execute, acknowledge and deliver all such further acts, assurances, deeds, assignments, transfers, conveyances and other instruments and papers as may be reasonably required or appropriate to carry out the Contemplated Transactions.  Bayer will, and will cause its Affiliates to, provide all cooperation reasonably requested by Genzyme in connection with any effort by Genzyme to establish, perfect, defend, or enforce its rights in or to the Acquired Assets, including executing further consistent assignments, transfers, pledges and releases, and causing its Representatives and agents to provide good faith testimony by affidavit, declaration, deposition or other means.  Bayer will, and will cause its Affiliates to, refer all customer inquiries relating to the Bayer Business to Genzyme from and after the Closing.  Bayer will, and will cause its Affiliates and its and their respective Representatives to, cooperate and assist Genzyme with an orderly transition of the Bayer Business and Acquired Assets to Genzyme.  Bayer will not, and will cause its Affiliates not to, take any action that is designed or intended to have the effect of discouraging any lessor, licensor, supplier, distributor or customer of the Bayer Business or other Person with whom the Bayer Business has a relationship from maintaining the same relationship with the Business after the Closing as it maintained prior to the Closing.

8.23.        NewCo.  In order to [**], prior to Closing, Bayer and Genzyme shall form at least one special purpose vehicle (each a “NewCo”) into which Bayer shall immediately prior to Closing (a) contribute the Business-Specific Licensed IP, which at Closing will be licensed by NewCo to Genzyme in accordance with Section 2.1.1(a) of this Agreement (or another license agreement between NewCo and Genzyme); (b) license the Shared Licensed IP to NewCo, which at Closing will be licensed by NewCo to Genzyme in accordance with Section 2.1.1 of this Agreement, and (c) assign the Distribution and Development Agreement, and, in Bayer’s sole discretion, any Ancillary Agreements (subject to the terms and conditions of such Ancillary Agreements).  NewCo shall have the right to claim payments due to Bayer under Article 4 of this Agreement that are associated with the foregoing contributions, licenses and assignment(s).  Bayer may select the Federal Republic of Germany as the jurisdiction of organization or formation of any such NewCo(s) without Genzyme’s consent and/or may select any alternative jurisdiction(s) subject to Genzyme’s consent if the formation of NewCo in such alternative jurisdiction(s) results in [**] as compared to the [**] provided for in a NewCo organized under the laws of the Federal Republic of Germany in accordance with the terms set forth on Schedule 8.23 or would have adverse Tax consequences to Genzyme as compared to the Tax consequences to Genzyme of having NewCo organized in the Federal Republic of Germany.  Should Bayer determine that a NewCo shall be formed or organized under the laws of the Federal Republic of Germany, then such German NewCo shall be organized in accordance with the term sheet set forth in Schedule 8.23.  Should Bayer determine that a NewCo should be organized under the laws of any other country, then such NewCo shall be organized on comparable terms and conditions as set forth in Schedule 8.23.

[**] = 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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9.          INTELLECTUAL PROPERTY AND OTHER COVENANTS.

9.1.          Filing, Prosecution and Maintenance of Licensed Patents and Licensed Trademarks.

9.1.1             Responsibility.

(a)        Business-Specific Licensed IP.  From and after Closing, Genzyme, through counsel of its choosing and at its sole discretion and expense, will be responsible for and have control over obtaining, prosecuting (including any interferences, reissue proceedings, re-examinations and oppositions), and maintaining throughout the Territory the Business-Specific Licensed Patents and Business-Specific Licensed Trademarks.  Genzyme shall keep Bayer informed regarding the prosecution and maintenance of the Business-Specific Licensed Patents and Business-Specific Licensed Trademarks, and Bayer will cooperate with Genzyme in regard to the prosecution and maintenance thereof.  Genzyme may, in its sole discretion, elect not to pursue patent protection for any Business-Specific Licensed Patent or trademark registration for any Business-Specific Licensed Trademark in one or more countries in the Territory.  If Genzyme intends to abandon or let go any Patent Right within the Business-Specific Licensed Patents set forth on Schedule 6.10.9, for which Bayer would have a legal obligation under the German Law on Employee’s Inventions to provide the inventor(s) the right to pursue patent protection for such Patent Right, Genzyme shall provide Bayer written notice of such intent in sufficient time to provide the inventor(s) the opportunity to take over the prosecution and/or maintaining of such Patent Rights.  If the inventor(s) take over such obligations, rights granted to Genzyme with respect to such Patent Right will revert to the inventor(s) to the extent provided under the German Law on Employee’s Inventions.  Except as provided in this Section 9.1.1(a), Bayer will have no right to take any actions to prosecute or maintain throughout the Territory the Business-Specific Licensed Patents and Business-Specific Licensed Trademarks.

(b)        Shared Licensed Patents.  From and after Closing, Bayer, through counsel of its choosing and at its sole discretion and expense, will be responsible for and have control over obtaining, prosecuting (including any interferences, reissue proceedings, re-examinations and oppositions) and maintaining throughout the Territory the Shared Licensed Patents and Shared Licensed Trademarks.  For a Shared Licensed Patent that covers a Licensed Product during the Exclusive Period for such Licensed Product, Bayer shall keep Genzyme informed regarding the prosecution and maintenance of such Shared Licensed Patent and give Genzyme a reasonable opportunity to provide timely comments for Bayer’s consideration on draft filings and correspondence relating to such prosecution or maintenance.  For a Shared Licensed Patent that covers a Licensed Product during the Non-Exclusive Period, Bayer shall have no obligation to keep Genzyme informed regarding the prosecution and maintenance of such Shared Licensed Patent.  Bayer may, in its sole discretion, elect not to pursue patent protection for any Shared Licensed Patent in one or 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.

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countries in the Territory.  Genzyme will have no right to take any actions to prosecute or maintain throughout the Territory the Shared Licensed Patents or Shared Licensed Trademarks.

9.1.2             Cooperation.  Bayer will: (a) make its Representatives reasonably available to Genzyme (or to Genzyme’s authorized Representatives), to the extent reasonably necessary to enable Genzyme to undertake patent prosecution and trademark registration of the Business-Specific Licensed Patents and Business-Specific Licensed Trademarks; (b) at the reasonable request of Genzyme, cooperate with Genzyme in gaining patent term extensions and trademark registration renewals wherever applicable to Business-Specific Licensed Patents and Business-Specific Licensed Trademarks that are subject to this Agreement; and (c) use its commercially reasonable and diligent efforts to minimize or avoid interference with the prosecution and maintenance of the Business-Specific Licensed Patents and Business-Specific Licensed Trademarks.  Genzyme will reimburse Bayer for Bayer’s reasonable out-of-pocket expenses in complying with this Section 9.1.2; provided, however, that Bayer provides Genzyme with invoices or other reasonable documentation evidencing such expenses on a timely basis after the incurrence of such expense.

9.1.3             Notwithstanding the rights granted to Genzyme in Section 9.1 related to the filing, prosecution and maintenance of Licensed Patents and Licensed Trademarks, such rights shall be subject to any and all limitations contained in any In-License Agreement related to the Intellectual Property licensed under such In-License Agreement.

9.2.          Enforcement of Licensed IP.

9.2.1             Notification.  Each party will promptly report in writing to the other party any (a) known or suspected third party infringement of any Licensed Patents, Licensed Trademarks, Shared Licensed Trade Dress or Licensed Copyrights, or (b) unauthorized use or misappropriation of any Licensed Know-How or other Confidential Information by a third party of which it becomes aware, and will provide the other party with all available evidence supporting such infringement or unauthorized use or misappropriation.

9.2.2             Right to Enforce.

(a)        Genzyme will have the sole and exclusive right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Territory infringing the Business-Specific Licensed Patents, Business-Specific Licensed Trademarks or Business-Specific Licensed Copyrights or the use without proper authorization of any Business-Specific Licensed Know-How, including (a) initiating or prosecuting an infringement or other appropriate Action against or (b) granting adequate rights and licenses necessary for continuing such activities in the Territory to any third party who at any time has infringed, or is suspected of infringing, any Business-Specific Licensed Patents, Business-Specific Licensed Trademarks or Business-Specific Licensed Copyrights or has used or is suspected of using without

[**] = 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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proper authorization the Business-Specific Licensed Know-How.  Without the written consent of Genzyme, Bayer will have no right to take any reasonable measures to stop any infringement of the Business-Specific Licensed Patents, Business-Specific Licensed Trademarks or Business-Specific Licensed Copyrights or the use without proper authorization of the Business-Specific Licensed Know-How.

(b)        Bayer will have the first right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Territory infringing the Shared Licensed Patents or Shared Licensed Copyrights or the use without proper authorization of any Shared Licensed Know-How, in each case in connection with a Person’s manufacture, use, sale, offering for sale, or importation of Licensed Products, including (a) initiating or prosecuting an infringement or other appropriate Action against or (b) granting adequate rights and licenses necessary for continuing such activities in the Territory to any such Person.  During the Exclusive Period, if Bayer does not initiate any such measures within [**] days of receiving written notice from Genzyme of such activities (or within a reasonable shorter time period if a shorter period to take action is required by applicable Legal Requirements to avoid the loss of legal rights), then Genzyme will have the second right, but not the obligation, to take any reasonable measures it deems appropriate to stop such activities; provided, however, Genzyme must coordinate and consult with Bayer regarding such measures and will not take any measures, without the written permission of Bayer, which permission will not be unreasonably withheld.  It shall be reasonable for Bayer to withhold such permission if Bayer reasonably believes such measures will affect the protection that any Shared Licensed IP affords Bayer; provided, however, the mere likelihood that a defendant would allege that the asserted Shared Licensed Patents or Shared Licensed Copyrights is invalid or unenforceable shall not be sufficient grounds for Bayer to withhold permission.  If either party brings a suit or action under this Section 9.2.2(b), during the Exclusive Period, the other party will have the right, at its expense, to retain its own counsel to monitor such Action.  Neither party will have the right to settle any infringement or misappropriation Action under this Section 9.2.2(b) in a manner that diminishes the rights or interests of the other party without the express written consent of such other party; provided, however that the grant by Genzyme of a sublicense under the Shared Licensed Patents or Shared Licensed Copyrights in accordance with this Agreement will not be considered to diminish the rights of Bayer, and the grant by Bayer of a license under the Shared Licensed IP that is not in conflict with the exclusive rights granted to Genzyme in Section 2.1.1 will not be considered to diminish the rights of Genzyme.  In addition, (i) Genzyme will not settle any such Action in a manner that admits the invalidity or unenforceability of any Shared Licensed IP without obtaining the prior written consent of Bayer and (ii) during the Exclusive Period, Bayer will not settle any such Action in a manner that admits the invalidity or unenforceability of any Shared Licensed Patents or Shared Licensed Copyrights without obtaining the prior written consent of Genzyme.

(c)        For clarity, all rights to enforce the Shared Licensed Trademarks or Shared

[**] = 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 Trade Dress shall be within the sole discretion of Bayer and nothing in this Section 9.2 shall be construed to grant Genzyme any rights to enforce or license any Shared Licensed Trademarks or Shared Licensed Trade Dress.

9.2.3             Procedures and Expenses.  The party with the right to take action pursuant to Section 9.2.2 will have the sole right to select counsel for any Action brought by it and will pay all expenses of such Action, including attorneys’ fees and court costs.  If required under applicable Legal Requirements in order for such party to initiate and/or maintain such Action, or if such party is unable to initiate or prosecute such Action solely in its own name or it is otherwise advisable to obtain an effective legal remedy, in each case, at such party’s request, the other party will join as a party to the Action and will execute and cause its Affiliates to execute all documents necessary for a party to initiate an Action to prosecute and maintain such Action.  In addition, at a party’s request, the other party will provide reasonable assistance in connection with such Action and the reasonable out-of-pocket expenses of the party providing assistance shall be reimbursed by the party requesting such assistance.

9.2.4             Recoveries.  If a party obtains from a third party infringer, in connection with an Action brought pursuant to Section 9.2.2, any damages, license fees, royalties or other compensation (including any amount received in settlement of such Action), then any amounts recovered will first be applied to the reimbursement of each party’s reasonable costs, expenses and legal fees, including amounts one party has reimbursed to the other.  The remaining balance shall be retained by Genzyme, but will be considered Net Sales and subject to Genzyme’s payment obligations under Article 4.  The party bringing such Action pursuant to Section 9.2.2 will bear all payments awarded against or agreed to be paid by such party pursuant to such Action, including any costs or expenses incurred that exceed the amounts recovered by such party.

9.2.5             Notwithstanding the rights granted to Genzyme in Section 9.2 related to the enforcement of Licensed IP, such rights shall be subject to any and all limitations contained in any In-License Agreement related to the Intellectual Property licensed under such In-License Agreement.

9.3.          Claimed Infringement of Third Party Rights.

9.3.1             Notice.  In the event that a third party at any time provides written notice of a claim to, or brings an Action against any party, or any of such party’s respective Affiliates or sublicensees, claiming infringement of its Patent Rights or unauthorized use or misappropriation of its Know-How, based upon the development, manufacture or commercialization of Licensed Products in the Territory (“Infringement Claim”), such party will promptly notify the other party of the Infringement Claim or the commencement of such action, suit or proceeding, enclosing a copy of the Infringement Claim and all papers served.  Each party agrees to make available to the other party its advice and counsel regarding the technical merits of any such claim at no cost to the other party and to offer reasonable assistance to the other party at no cost to the other party.

[**] = 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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9.3.2             Defense of Infringement Claim; Declaratory Judgment Actions.

(a)        As between Bayer and Genzyme, Genzyme will have the sole and exclusive right, but not the obligation, to control the defense of any Infringement Claim brought against Genzyme or any of its Affiliates or sublicensees arising out of the development, manufacture or commercialization of Licensed Products in the Territory.  As between Bayer and Genzyme, Bayer will have the sole and exclusive right, but not the obligation, to control the defense of any Infringement Claim brought against Bayer or any of its Affiliates or licensees (other than Genzyme) arising out of the development, manufacture or commercialization of Licensed Products in the Territory.  Neither party will settle any such Action in a manner that (i) admits that any Licensed Product infringes or misappropriates a third party’s Intellectual Property or (ii) agrees to any injunction or other equitable remedy binding the other party without obtaining the prior written consent of the other party, which consent will not be unreasonably withheld or delayed.  In addition, if applicable prior to the initiation of an Infringement Claim, either party has the right, but not the obligation, to bring a declaratory judgment action relating to any third party Patent Right that such third party has alleged is infringed by the development, manufacture or commercialization of Licensed Products in the Territory; provided, however, neither party shall bring such declaratory judgment action without first consulting with the other party.

(b)        The party controlling the defense of an Infringement Claim or bringing a declaratory judgment action will have the sole and exclusive right to select counsel for such Infringement Claim or such declaratory judgment action.  The party controlling the defense of an Infringement Claim or bringing a declaratory judgment Action will keep the other party informed, and will from time to time consult with the other party regarding the status of any such Action and will upon request provide the other party with copies of all documents filed in, and all written communications relating to, any suit brought in connection with such Action.  The other party will also have the right to participate and be represented in any such Action, at its own expense.

9.4.          Other Infringement Resolutions.  In the event of a dispute or potential dispute that has not ripened into a demand or Action of the types described in Section 9.2 and Section 9.3 (e.g., Actions seeking declaratory judgments and revocation proceedings), the same principles governing control of the resolution of the dispute, consent to settlements of the dispute, and implementation of the settlement of the dispute will apply.  Each party will immediately notify the other party of any certification of which it becomes aware filed pursuant to 21 U.S.C. § 355(b)(2)(A) or § 355(j)(2)(A)(vii) (or any amendment or successor statute thereto) or declaratory judgment action filed by a third party claiming that a Licensed Patent is invalid or that infringement of such Licensed Patent will not arise from the development, manufacture, use or sale of any product by a third party.  The provisions of Section 9.2 will thereafter apply as if such third party were an infringer or suspected infringer.

[**] = 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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9.5.          Diligence.  Genzyme shall, directly and through its Affiliates and sublicensees, to use commercially reasonable efforts to commercialize Fludara, Leukine and Campath, each as a whole, in the Major Market Countries in its approved indications.  For the purposes of this Section 9.5, “commercially reasonable efforts” means, with respect to the commercialization of each Licensed Product, at any given time as the case may be, efforts reasonably used by Genzyme or its Affiliates (giving due consideration to relevant industry standards) for Genzyme’s own products (including internally developed, acquired and in-licensed products) with similar commercial potential at a similar stage in their lifecycle (assuming continuing development of such product), taking into consideration their safety, tolerability and efficacy, [**], the extent of market exclusivity, patent protection, cost to develop the product, promotable claims, health economic claims, the approved indications and the regulatory and reimbursement structure involved.  This Section 9.5 shall have no further force or effect with respect to each of Fludara, Leukine and Campath once Genzyme no longer has any obligation to make payments to Bayer with respect to Net Sales of such Licensed Product under this Agreement.

9.6.          Covenant in Support of License.  Following the Closing, Bayer will not, and will cause its Affiliates not to, take any action that would cause any of the following representations to be false: Sections 6.4 (Non-Contravention) and 6.10.4 (Title).

10.        CONDITIONS TO GENZYME’S OBLIGATIONS AT THE CLOSING.

The obligations of Genzyme to consummate the Closing are subject to the fulfillment of each of the following conditions:

10.1.        Representations and Warranties.  The representations and warranties of Bayer contained in this Agreement and in any document, instrument or certificate delivered hereunder (a) that are not qualified by materiality or Material Adverse Effect will be true and correct at and as of the Execution Date and the Closing with the same force and effect as if made as of the Execution Date or the Closing, as applicable, except where the failure to be true and correct would not be reasonably expected to have a Material Adverse Effect  or a material adverse effect on the ability of Bayer to consummate the Contemplated Transactions or perform its obligations under this Agreement or the Ancillary Agreements, and (b) that are qualified by materiality or Material Adverse Effect will be true and correct in all respects at and as of the Execution Date and the Closing with the same force and effect as if made as of the date hereof or the Closing, as applicable, in each case, other than representations and warranties that expressly speak only as of a specific date or time, which will be true and correct to the extent described above as of such specified date or time.

10.2.        Performance.  Bayer will have performed and complied with, in all material respects, all agreements, obligations and covenants contained in this Agreement that are required to be performed or complied with by it at or prior to the Closing.

10.3.        Compliance Certificate.  Bayer will have delivered to Genzyme a certificate as to the matters set forth in Sections 10.1, 10.2 and 10.4 having been satisfied.

[**] = 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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10.4.        No Material Adverse Change.  Since the Execution Date, there will not have occurred a Material Adverse Effect.

10.5.        Qualifications.  Any applicable waiting periods (and any extensions thereof) under the HSR Act will have expired or otherwise been terminated and any applicable waiting periods (and any extensions thereof), permissions or clearances under the Legal Requirements relating to competition or antitrust relating to the Contemplated Transactions in the Material Countries (including any necessary consent under, modification to or termination of the SOT Order) shall have been terminated or received, as applicable.  No provision of any material applicable Legal Requirement and no Governmental Order, in each case in the Material Countries, will prohibit the consummation of any of the Contemplated Transactions.

10.6.        Absence of Litigation.  No Action brought by a Governmental Authority will be pending or threatened in writing which could result in a Governmental Order (nor will there be any Governmental Order in effect) (a) which would prevent consummation of any of the Contemplated Transactions, (b) which would result in any of the Contemplated Transactions being rescinded following consummation, (c) which would limit or otherwise adversely affect Genzyme’s right to own the Bayer Business or to operate all or any material portion of either the Bayer Business or the Acquired Assets or of Genzyme’s business or assets or that any of its Affiliates or (d) would compel Genzyme or any of its Affiliates to dispose of all or any material portion of either the Bayer Business or the Acquired Assets or the business or assets of Genzyme or any of its Affiliates.

10.7.        Consents, etc.  All actions by (including any authorization, consent or approval) or in respect of (including notice to), or filings with, any Governmental Authority or other Person that are required to consummate the Contemplated Transactions that are set forth on Schedule 10.7 will have been obtained or made, and no such authorization, consent or approval will have been revoked.

10.8.        Permits.  Genzyme will have obtained or otherwise have the right to use or have the benefit of (including pursuant to Section 8.14) all material Permits required to operate the Bayer Business that are not Transferred Permits assigned at the Closing.

10.9.        Ancillary Agreements.  Each of the Ancillary Agreements to which Genzyme and/or any of its Affiliates is party will have been duly executed and delivered to Genzyme by each of the other parties thereto, and each such agreement will be in full force and effect in accordance with its terms.

10.10.      Release.  Genzyme shall have received a release of claims executed by Bayer in the form attached hereto as Exhibit 10.10.

10.11.      Financial Statements.  Genzyme will have received the 2008 Financial Statements and, if Genzyme determines pursuant to Section 8.13.3 that SEC Financial Statements are required, Bayer will have delivered the SEC Financial Statements to Genzyme, and have

[**] = 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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caused to be delivered to Genzyme the Audit Opinion and Auditor Consents.

11.        CONDITIONS TO BAYER’S OBLIGATIONS AT THE CLOSING.

The obligations of Bayer to consummate the Closing are subject to the fulfillment of each of the following conditions:

11.1.        Representations and Warranties.  The representations and warranties of Genzyme contained in this Agreement and in any document, instrument or certificate delivered hereunder (a) that are not qualified by materiality will be true and correct at and as of the Execution Date and the Closing with the same force and effect as if made as of the Execution Date or the Closing, as applicable, except where the failure to be true and correct would not be reasonably expected to have a material adverse effect on the ability of Genzyme to consummate the Contemplated Transactions or perform its obligations under this Agreement or the Ancillary Agreements and (b) that are qualified by materiality will be true and correct in all respects at and as of the Execution Date and the Closing with the same force and effect as if made as of the Execution Date or the Closing, as applicable, in each case, other than representations and warranties that expressly speak only as of a specific date or time, which will be true and correct to the extent described above as of such specified date or time.

11.2.        Performance.  Genzyme will have performed and complied with, in all material respects, all agreements, obligations and covenants contained in this Agreement that are required to be performed or complied with by Genzyme at or prior to the Closing.

11.3.        Compliance Certificate.  Genzyme will have delivered to Bayer a certificate as to the matters set forth in Sections 11.1 and 11.2.

11.4.        Qualifications.  Any applicable waiting periods (and any extensions thereof) under the HSR Act will have expired or otherwise been terminated and any applicable waiting periods (and any extensions thereof), permissions or clearances under the Legal Requirements relating to competition or antitrust relating to the Contemplated Transactions in the Material Countries shall have been terminated or received, as applicable.  No provision of any material applicable Legal Requirement and no Governmental Order, in each case in the Material Countries, will prohibit the consummation of any of the Contemplated Transactions.

11.5.        Absence of Litigation.  No Action brought by a Governmental Authority will be pending or threatened in writing which could result in a Governmental Order, nor will there be any Governmental Order in effect (except as contemplated by Section 8.3.4), (a) which would prevent consummation of any of the Contemplated Transactions, (b) which would result in any of the Contemplated Transactions being rescinded following consummation (and no such Governmental Order will be in effect), (c) which would prevent or otherwise adversely affect Genzyme’s right to own the Bayer Business or to operate all or any material portion of either the Bayer Business or the Acquired Assets or (d) would compel Genzyme or any of its Affiliates to dispose of all or any material portion of either the Bayer Business or

[**] = 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 Acquired Assets.

11.6.        Ancillary Agreements.  Each of the Ancillary Agreements to which Bayer and/or any of its Affiliates is a party will have been duly executed and delivered to Bayer by each of the other parties thereto and each such Agreement will be in full force and effect in accordance with its terms.

11.7.        Confirmation of Release.  Bayer shall have received a release of claims executed by Genzyme in the form attached hereto as Exhibit 11.7.

12.        TERMINATION.

12.1.        Termination of Agreement.  This Agreement may be terminated (the date on which the Agreement is terminated, the “Termination Date”) at any time prior to the Closing:

(a)        by mutual written consent of Genzyme and Bayer;

(b)        by either Genzyme or Bayer by providing written notice to the other at any time after the date that is [**] months after the Execution Date (the “Outside Date”) if the Closing has not occurred by reason of the failure of any condition set forth in Section 10, in the case of Genzyme, or Section 11, in the case of Bayer, to be satisfied (unless such failure is the result of one or more breaches or violations of, or inaccuracy in any covenant, agreement, representation or warranty of this Agreement by the party seeking to terminate the Agreement);

(c)        by either Bayer or Genzyme if a final nonappealable Governmental Order permanently enjoining, restraining or otherwise prohibiting the Closing has been issued by a Governmental Authority of competent jurisdiction;

(d)        by Genzyme if either (i) there has been a breach of, or inaccuracy in, any representation or warranty of Bayer contained in this Agreement as of the Execution Date or as of any subsequent date (other than representations or warranties that expressly speak only as of a specific date or time, with respect to which Genzyme’s right to terminate will arise only in the event of a breach of, or inaccuracy in, such representation or warranty as of such specified date or time), or (ii) Bayer has breached or violated in any material respect any of its covenants and agreements contained in this Agreement, in the case of either (i) or (ii) which breach or violation would give rise, or could reasonably be expected to give rise, to a failure of a condition set forth in Section 10 and cannot be or has not been cured on or before the earlier of (1) [**] Business Days before the Outside Date or (2) [**] days after Genzyme notifies Bayer of such breach or violation, provided, however, that for clause (2), if the parties mutually agree on a plan for cure within such [**] day period, then such date may be extended as set forth in the mutually agreed cure plan.

(e)        by Bayer if either (i) there has been a breach of, or inaccuracy in, any representation or warranty of Genzyme contained in this Agreement as of the Execution

[**] = 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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Date or as of any subsequent date (other than representations or warranties that expressly speak only as of a specific date or time, with respect to which Bayer’s right to terminate will arise only in the event of a breach of, or inaccuracy in, such representation or warranty as of such specified date or time), or (ii) Genzyme has breached or violated in any material respect any of its covenants and agreements contained in this Agreement, in the case of either (i) or (ii) which breach or violation would give rise, or could reasonably be expected to give rise, to a failure of the condition set forth in Section 11 and cannot be or has not been cured on or before the earlier of (1) [**] Business Days before the Outside Date or (2) [**] days after Bayer notifies Genzyme of such breach or violation, provided, however, that for clause (2), if the parties mutually agree on a plan for cure within such [**] day period, then such date may be extended as set forth in the mutually agreed cure plan.

12.2.        Effect of Termination.  In the event of the termination of this Agreement pursuant to Section 12.1, this Agreement — other than the provisions of Sections 6.19, (No Brokers), 7.5 (No Brokers), 8.7 (Transaction Expenses), 8.8 (Confidentiality), 8.8.4 (Publicity), 8.10.1 (Non-Solicitation), 12.2 (Effect of Termination), 13 (Indemnification), 15 (Miscellaneous) and Section 1 (to the extent any terms defined therein are used in the above listed Sections) — will then be null and void and have no further force and effect and all other rights and Liabilities of the parties hereunder will terminate without any Liability of any party to any other party, except for Liabilities arising in respect of breaches under this Agreement by any party on or prior to the Termination Date.

12.3.        Termination by Bayer For Cause.

12.3.1           Material Default.  After Closing, if a Material Default (as defined below) continues for a period of [**] days after Bayer has delivered written notice to Genzyme stating the specific Material Default and citing this Section 12.3.1, then subject to Section 12.3.2 below, Bayer may terminate this Agreement by providing written notice to Genzyme and all Acquired Assets as defined in this Agreement transferred to Genzyme (to the extent such assets remain in existence and to the extent of the then right, title and interest of Genzyme or its Affiliates in such assets) and all licenses granted to Genzyme under this Agreement or any Ancillary Agreement and all other rights granted to Genzyme hereunder or thereunder shall automatically terminate and revert to Bayer and Genzyme shall, and shall cause its Affiliates to, execute all documents reasonably requested by Bayer to support such reversions.  It shall be a “Material Default” by Genzyme under this Section 12.3 if any of the following occurs:

(a)   Genzyme fails to timely pay any Royalty Payments under Sections 4.1.4, 4.1.5 or 4.2.1 under the terms specified in this Agreement;

(b)   Genzyme fails to timely pay any Milestone Payments under Sections 4.1.6 or 4.2.2 under the terms specified in this Agreement;

(c)   Genzyme files a petition under Chapter 7 of the U.S. Bankruptcy 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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seeking to liquidate its assets for the benefit of creditors prior to the date on which Genzyme no longer has any obligation to make royalty and milestone payments to Bayer pursuant to Sections 4.1.6 or 4.2.2;

(d)   (i) Genzyme stops selling an Oncology Product in a country or countries and (ii) such action would eliminate at least [**] of the Net Sales of the Oncology Products Business (calculated as the sales of the Oncology Product in such country or countries as a percentage of total Net Sales of the Oncology Products Business, in each case during the fiscal quarter prior to the fiscal quarter in which Genzyme stopped selling such Oncology Product), unless Genzyme stopped selling such Oncology Product in such country or countries because (A) the Oncology Product in question poses a safety risk to patients; (B) a regulatory authority of competent jurisdiction in the country or countries in question has ordered Genzyme to cease sales or suspended or revoked Genzyme’s authorization to sell such Oncology Product; (C) of a prolonged and continuous disruption of the supply of the Oncology Product in question for reasons beyond Genzyme’s reasonable control and Genzyme is unable, after commercially reasonable efforts, to secure a continued supply; (D) the sale of the Oncology Product in question infringes intellectual property as determined by a court or by mutual agreement of the parties and Genzyme, after commercially reasonable efforts, is unable to obtain a license to such intellectual property, (E) such action is done to [**], or (F) any (I) act of God, act of the public enemy, insurrection, riot, sabotage, strike, work-stoppage or other labor dispute or natural disaster or (II) explosion, fire or flood not resulting from the negligence of Genzyme, any of which prevents Genzyme from selling a Licensed Product; provided, further, that this paragraph (d) will no longer apply after Genzyme has made payments to Bayer aggregating $[**] with respect to Net Sales of Oncology Products; or

(e)   Genzyme fails to purchase the Leukine Plant in material breach of the Purchase and Sale Agreement.

12.3.2           Disputes Regarding Material Defaults. If Genzyme disputes in good faith the existence of a Material Default specified in a notice provided by Bayer pursuant to Section 12.3.1 above, and provides notice to Bayer of such dispute within the [**] day period following the date Bayer notifies Genzyme of the Material Default, Bayer will not have the right to terminate this Agreement unless and until the existence of such Material Default by Genzyme has been determined by a final arbitration award that is no longer subject to appeal or other review in accordance with the dispute resolution provisions of Sections 15.10 and 15.11, and Genzyme fails to cure such Material Default or satisfy the arbitration award or judicial order or judgment within [**] Business Days following such determination.  It is understood and acknowledged that during the pendency of such dispute, all the terms and conditions of this Agreement will remain in effect and the parties will continue to perform all of their respective obligations hereunder.

[**] = 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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12.3.3           Expiration of Termination Clause.  Section 12.3 shall have no further force or effect once Genzyme no longer has any obligation to make payments to Bayer with respect to the Net Sales under this Agreement.

12.3.4           Survival of Sublicenses.

(a)   At the request of Genzyme, and subject to Bayer’s consent, which consent will not be unreasonably withheld, delayed, or conditioned, Bayer will enter into a written agreement with any Genzyme Sublicensee under which Bayer will commit that if this Agreement is terminated under Section 12.3, Bayer will, subject to paragraph (b) below, provide such Sublicensee with a direct license on substantially the same terms as the Sublicensee has as a Sublicensee of Genzyme, so that the Sublicensee would be put in the same position as it was prior to the Agreement being terminated.

(b)   In the event the Agreement is terminated by Bayer under Section 12.3, at the request of the Sublicensee and subject to Bayer’s consent, Bayer will extend such a direct license to the Sublicensee.  Bayer will not unreasonably deny such consent if (i) such Sublicensee (a) is in good standing and (b) is not an Affiliate of Genzyme; (ii) such direct license will not increase Bayer’s obligations; and (iii) such direct license does not adversely affect Bayer’s commercial interests.

12.3.5           Effect of Termination.  In the event of termination pursuant to Section 12.3, the covenants contained in Sections 2.5 (Consents under In-License Agreements), 3.2 (Consents), 8.3.1 (Notice and Consents — Bayer), 8.3.2 (Notices and Consents — Genzyme), 8.4 (Genzyme’s Access to Premises; Information), 8.8 (Confidentiality), 8.14 (Transfer of Permits), 8.16 (Rebates, Chargebacks, Returns and Other Adjustments), 8.20 (Joint Contracts) and 8.22 (Further Assurances) of Bayer and its Affiliates shall become covenants of Genzyme and its Affiliates and vice versa.  Further, in the event this Agreement is terminated pursuant to this Section 12.3 at a time when future payments may become due and payable to Bayer pursuant to Section 4.1.5 or 4.1.6, and if at such time Genzyme has secured continuing supply of Leukine, whether through operation of the production facilities transferred to Genzyme under the Purchase and Sale Agreement, a supply arrangement with a third party or otherwise, at the election of Bayer made within [**] days of such termination, the parties will enter into good faith negotiations with each other for the [**] months following effective delivery of such notice to secure for Bayer continued supply of Leukine on commercially reasonable terms.  Such continued supply shall be accomplished, at the election of Genzyme, through conveyance to Bayer of the Leukine Plant or a supply agreement with Genzyme or a third party.  If Genzyme elects to convey to Bayer the Leukine Plant, then commercially reasonable terms shall include at a minimum a [**]; and if Genzyme elects to enter, or to cause a third party to enter, a supply agreement with Bayer, the commercially reasonable terms shall include at a minimum [**].  Notwithstanding the foregoing, in each case if a significant investment has been made in either capital or process improvements at the Leukine Plant or process improvements with respect to the manufacture of Leukine, then

[**] = 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 minimum purchase price or supply terms, respectively, specified in this Section 12.3.5 will be adjusted to reflect such investment.

13.        INDEMNIFICATION.

13.1.        Indemnification by Bayer.

13.1.1           Indemnification.  Subject to the limitations set forth in this Section 13, Bayer will indemnify and hold harmless Genzyme and each of its Affiliates, and the Representatives and Affiliates of each of the foregoing Persons (each, a “Genzyme Indemnified Person”), from, against and in respect of any and all Losses, incurred or suffered by the Genzyme Indemnified Persons or any of them as a result of, arising out of or directly or indirectly relating to:

(a)   any breach of, or inaccuracy in, any representation or warranty made by Bayer in this Agreement;

(b)   any breach or violation of any covenant or agreement of Bayer (including under this Section 13) in this Agreement;

(c)   any Excluded Bayer Liability; or

(d)   any fraud or intentional misrepresentation of Bayer or any of its Affiliates.

13.1.2           Monetary Limitations.  Bayer will have no obligation to indemnify the Genzyme Indemnified Persons in respect of Losses arising from the breach of, or inaccuracy in, any representation or warranty pursuant to Section 13.1.1(a) or breach of any covenant or agreement to be performed prior to the Closing pursuant to Section 13.1.1(b) with respect to claims brought after the Closing, unless the aggregate amount of all such Losses incurred or suffered by the Genzyme Indemnified Persons exceeds $[**] (the “Indemnity Basket”) [**].  Further, Bayer’s aggregate liability in respect of claims for indemnification arising from the breach of, or inaccuracy in, any representation or warranty pursuant to Section 13.1.1(a) and claims brought after the Closing arising from the breach of any covenant or agreement to be performed prior to the Closing pursuant to Section 13.1.1(b), will not exceed [**] (i) [**] or (ii) $[**] (such amount, the “Maximum Indemnity Cap”); and Genzyme Indemnified Persons shall be limited to recovering from Bayer in respect of claims for indemnification arising from the breach of, or inaccuracy in, any representation or warranty pursuant to Section 13.1.1(a) and claims brought after the Closing arising from the breach of any covenant or agreement to be performed prior to the Closing pursuant to Section 13.1.1(b), (x) [**] and (y) [**].  Except as provided in Section 13.1.3, the monetary limitations contained in this Section 13.1.2 will not apply to (1) claims for indemnification pursuant to [**], or (2) claims based upon fraud or intentional misrepresentation.  Except as provided in Section 13.1.3, claims for indemnification pursuant to [**] are not subject to the monetary limitations set forth in this Section 13.1.2.

[**] = 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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13.1.3           Lost Profits.  BAYER AND ITS AFFILIATES SHALL HAVE NO LIABILITY FOR ANY CLAIM BY GENZYME OR ITS AFFILIATES FOR ANY LOST PROFITS ARISING UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT SPECIFICALLY PERMITTED UNDER THIS SECTION 13.1.3.  The recovery for any amounts of lost profits from Bayer and its Affiliates under this Agreement and any Ancillary Agreements shall be applied against the Maximum Liability Cap.  Lost profits will be recoverable under this Agreement and the Ancillary Agreements from Bayer only to the extent the total of (x) [**] plus (y) [**], do not exceed the Maximum Indemnity Cap.  For purposes of this provision, that portion of any Loss arising under the Agreement or any Ancillary Agreement constituting lost profits damages will be subject to the Maximum Indemnity Cap, as provided herein, even in cases where other portions of such Loss will not be subject to the Maximum Indemnity Cap.  The parties acknowledge and agree that the limitations of this Section 13.1.3 will not apply with respect to any Third Party Claim or any Liability with respect to Bayer’s fraud or criminal acts.

13.2.        Indemnification by Genzyme.

13.2.1           Indemnification.  Subject to the limitations set forth in this Section 13, Genzyme will indemnify and hold harmless Bayer and its Affiliates, and the Representatives and Affiliates of each of the foregoing Persons (each, a “Bayer Indemnified Person”), from, against and in respect of any and all Losses incurred or suffered by the Bayer Indemnified Persons or any of them as a result of, arising out of or relating to, directly or indirectly:

(a)   any breach of, or inaccuracy in, any representation or warranty made by Genzyme in this Agreement;

(b)   any breach or violation of any covenant or agreement of Genzyme (including under this Section 13) in or pursuant to this Agreement;

(c)   any Assumed Liability;

(d)   any Excluded Genzyme Liability; or

(e)   any fraud or intentional misrepresentation of Genzyme or any of its Affiliates.

13.2.2           Monetary Limitations.  Genzyme will have no obligation to indemnify the Bayer Indemnified Persons in respect to Losses arising from the breach of, or inaccuracy in, an representation or warranty pursuant to Section 13.2.1(a) and the breach of any covenant or agreement to be performed prior to the Closing pursuant to Section 13.2.1(b) with respect to claims brought after the Closing unless and until the aggregate amount of all such Losses incurred or suffered by the Bayer Indemnified Persons exceeds [**].  Further, Genzyme’s aggregate liability in respect of claims for indemnification arising from the breach of, or inaccuracy in, an representation or warranty pursuant to

[**] = 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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Section 13.2.1(a) and claims brought after the Closing arising from the breach of any covenant or agreement to be performed prior to the Closing pursuant to Section 13.1.1(b) will not exceed [**]; provided, however, that, except as provided in Section 13.2.3, the foregoing limitations will not apply to (a) claims for indemnification pursuant to [**] or (b) claims based upon fraud or intentional misrepresentation.  Except as provided in Section 13.2.3, claims for indemnification pursuant to [**] are not subject to the limitations set forth in this Section 13.2.2.

13.2.3           Lost Profits.  GENZYME AND ITS AFFILIATES SHALL HAVE NO LIABILITY FOR ANY CLAIM BY BAYER OR ITS AFFILIATES FOR ANY LOST PROFITS ARISING UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT SPECIFICALLY PERMITTED UNDER THIS SECTION 13.2.3.  The recovery for any amounts of lost profits from Genzyme and its Affiliates under this Agreement and any Ancillary Agreements shall be applied against the Maximum Liability Cap.  Lost profits will be recoverable under this Agreement and the Ancillary Agreements from Genzyme only to the extent the total of (x) [**] plus (y) [**], do not exceed the Maximum Indemnity Cap.  For purposes of this provision, that portion of any Loss arising under the Agreement or any Ancillary Agreement constituting lost profits damages will be subject to the Maximum Indemnity Cap, as provided herein, even in cases where other portions of such Loss will not be subject to the Maximum Indemnity Cap.  The parties acknowledge and agree that the limitations of this Section 13.2.3 will not apply with respect to any Third Party Claim or any Liability with respect to Genzyme’s fraud or criminal acts.

13.3.        Time for Claims.  All representations and warranties and all covenants, to the extent required to be performed prior to the Closing, set forth herein will survive the Closing for the time period set forth below, provided, however, that no claim may be made or suit instituted seeking indemnification pursuant to Section 13.1.1(a) or 13.2.1(a) of this Agreement or with respect to breach of covenants or agreements to be performed prior to the Closing pursuant to Sections 13.1.1(b) or 13.2.1(b) of this Agreement, unless the claiming party provides notice as specified in Section 15.1 within the following time periods:

(a)   [**], in the case of any breach of, or inaccuracy in, the representations and warranties set forth in Sections 6.1 (Organization), 6.2 (Power and Authorization), 6.4(e) (Breach of Organizational Documents), 6.8 (Assets), 6.10.4 (Intellectual Property; Title), 6.19 (No Brokers), 7.1 (Organization), 7.2 (Power and Authorization), 7.4(d) (Breach of Organizational Documents) or 7.5 (No Brokers);

(b)   [**], in the case of any claim or suit based upon fraud or intentional misrepresentation;

(c)   [**] in the case of any breach of, or inaccuracy in, the representations and warranties set forth in Section 6.12 (Tax Matters); and

(d)   [**] after the Closing Date, in the case of any breach of, or inaccuracy 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.

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any other representation and warranty in this Agreement or breach of any covenant, to the extent required to be performed prior to the Closing Date (other than covenants relating to Taxes, with are not subject to the limitations of this Section 13.3).

[**].  No claim for Loss by Genzyme shall be deemed to have survived, and shall be deemed waived, if written notice has not been provided to Bayer within one year of actual knowledge of such Loss by the Genzyme individuals set forth on Schedule 13.3(A).  No claim for Loss by Bayer shall be deemed to have survived, and shall be deemed waived, if written notice has not been provided to Genzyme within one year of actual knowledge of such Loss by the Bayer individuals set forth on Schedule 13.3(B).

For avoidance of doubt, claims will be deemed to have been made within the survival period if a reasonably complete description of the claim based upon the facts available at the time is presented by the party seeking indemnification to the Indemnifying Party within the specified time period herein.

13.4.        Third Party Claims.

13.4.1           Notice of Claim.  If any third party notifies an Indemnified Party with respect to any matter (a “Third Party Claim”) that may give rise to an Indemnified Claim against an Indemnifying Party under this Section 13, then the Indemnified Party will promptly give written notice to the Indemnifying Party; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party will relieve the Indemnifying Party from any obligation under this Section 13, except to the extent such delay actually and materially prejudices the Indemnifying Party.

13.4.2           Assumption of Defense, etc.  The Indemnifying Party will be entitled to participate in the defense of any Third Party Claim (including a claim for Taxes) that is the subject of a notice given by the Indemnified Party pursuant to Section 13.4.1.  In addition, the Indemnifying Party will have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (a) the Indemnifying Party gives written notice to the Indemnified Party within [**] calendar days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party will indemnify the Indemnified Party from and against the entirety of any and all Losses the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim; (b) the Third Party Claim involves only money damages and does not seek an injunction or other equitable relief against the Indemnified Party; (c) the Indemnified Party has not been advised by counsel that an actual or potential conflict exists between the Indemnified Party and the Indemnifying Party in connection with the defense of the Third Party Claim; (d) the Third Party Claim does not relate to or otherwise arise in connection with Taxes or any criminal or regulatory enforcement Action; (e) settlement of an adverse judgment with respect to or the Indemnifying Party’s conduct of the defense of the Third Party Claim is not, in the good faith judgment of the Indemnified

[**] = 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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Party, reasonably likely to be materially adverse to the Indemnified Party’s reputation or continuing business interests (including its relationships with current or potential customers, suppliers or other parties material to the conduct of its business); and (f) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently.  The Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim; provided, however, that the Indemnifying Party will pay the fees and expenses of separate co-counsel retained by the Indemnified Party that are incurred prior to Indemnifying Party’s assumption of control of the defense of the Third Party Claim.

13.4.3           Limitations on Indemnifying Party.  The Indemnifying Party will not consent to the entry of any judgment or enter into any compromise or settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party unless such judgment, compromise or settlement (a) provides for the payment by the Indemnifying Party of money as sole relief for the claimant; (b) results in the full and general release of the Genzyme Indemnified Persons or Bayer Indemnified Persons, as applicable, from all liabilities arising or relating to, or in connection with, the Third Party Claim; and (c) involves no finding or admission of any violation of Legal Requirements or the rights of any Person and no effect on any other claims that may be made against the Indemnified Party.  Notwithstanding any provision to the contrary in Section 13.4.2 and 13.4.3, Bayer shall have the full and unrestricted right to defend, with counsel of its own choosing, any Action and negotiate and settle any Action initiated against it by any Governmental Authority which may in Bayer’s judgment, exercised in good faith, materially affect operations and activities of Bayer beyond the Business, even though such defense or settlement may or will also affect the Business, provided, however, that, if permitted by applicable Legal Requirements, Bayer notifies Genzyme of any such Action, keeps Genzyme apprised of material developments with respect to such Action and consults with Genzyme regarding such Action from time to time and nothing in this sentence excuses Bayer from performing its obligations under this Agreement or under the Ancillary Agreements.

13.4.4           Indemnified Party’s Control.  If the Indemnifying Party does not deliver the notice contemplated by clause (a) of Section 13.4.2 within [**] calendar days after the Indemnified Party has given notice of the Third Party Claim, or otherwise at any time fails to conduct the defense of the Third Party Claim actively and diligently, the Indemnified Party may defend and may consent to the entry of any judgment or enter into any compromise or settlement with respect to, the Third Party Claim in any manner it may deem appropriate (and the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in connection therewith).  If such notice is given on a timely basis and the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently but any of the other conditions in Section 13.4.2 is or becomes unsatisfied, the Indemnified Party may defend, and may consent to the entry of any judgment or enter into any compromise or settlement with respect to, the Third Party Claim; provided, however, that the Indemnifying Party will not be bound by the entry of any such judgment consented to, or any such compromise or settlement effected, without

[**] = 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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its prior written consent (which consent will not be unreasonably withheld or delayed).  In the event that the Indemnified Party conducts the defense of the Third Party Claim pursuant to this Section 13.4.4, the Indemnifying Party will (a) advance the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys’ fees and expenses) and (b) remain responsible for any and all other Losses that the Indemnified Party may incur or suffer resulting from, arising out of, relating to, in the nature of or caused by the Third Party Claim to the fullest extent provided in this Section 13.

13.4.5           Consent to Jurisdiction Regarding Third Party Claim.  Genzyme and Bayer, each in its capacity as an Indemnifying Party, hereby consents to the non-exclusive jurisdiction of any court in which any Third Party Claim may be brought against any Indemnified Party for purposes of any claim which such Indemnified Party may have against such Indemnifying Party pursuant to this Agreement in connection with such Third Party Claim, and in furtherance thereof, the provisions of Section 15.12 are incorporated herein by reference, mutatis mutandis.

13.5.        Remedies Cumulative.  The rights of each Genzyme Indemnified Person and Bayer Indemnified Person under this Section 13 are cumulative, and each Genzyme Indemnified Person and Bayer Indemnified Person, as the case may be, will have the right in any particular circumstance, in its sole discretion, to enforce any provision of this Section 13 without regard to the availability of a remedy under any other provision of this Section 13.  However, in no event shall either party be entitled to recover the same Loss more than once.

13.6.        Exclusive Remedy.  FROM AND AFTER THE CLOSING, AND EXCEPT AS SET FORTH IN SECTION 8.10.3 AND 15.13, THE INDEMNIFICATION PROVISIONS PROVIDED IN THIS SECTION 13 SHALL BE THE SOLE AND EXCLUSIVE REMEDIES OF THE PARTIES FOR RESOLUTION OF THE MATTERS SPECIFIED IN SECTIONS 13.1.1 AND 13.2.1, EXCEPT FOR INDEMNIFICATION RELATED TO A PARTY’S (A) FRAUD OR (B) CRIMINAL ACTS.

13.7.        Limitation of Liability.  NO PARTY SHALL BE LIABLE TO ANY OTHER PARTY FOR ANY CLAIMS FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, BUSINESS INTERRUPTION, EXEMPLARY OR INDIRECT DAMAGES, ARISING UNDER STATUTE, IN TORT, OR CONTRACT.  NO PARTY SHALL BE LIABLE TO ANY OTHER PARTY FOR ANY CLAIMS FOR LOST PROFITS ARISING UNDER STATUTE, IN TORT, OR IN CONTRACT IF THE CLOSING DOES NOT OCCUR.  THE FOREGOING LIMITATION WILL NOT APPLY TO LIMIT ANY PARTY’S LIABILITY WITH RESPECT TO (A) A THIRD PARTY CLAIM, (B) FRAUD OR (C) CRIMINAL ACTS.

13.8.        Insurance.  During the Term of this Agreement and for a period of at least [**] years following the expiration or earlier termination of the Term of this Agreement, each of Bayer and Genzyme shall maintain, at its sole cost and expense, general liability insurance, including product liability coverage, with bodily injury, death and property damage limits, 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.

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such amounts and with such scope of coverage as is consistent with drug industry standards.  Each of Bayer and Genzyme shall have its insurance carrier furnish to the other party certificates stating that all insurance required under this Agreement is in force.  Such certificates shall indicate any deductible and self-insured retention and the effective expiration dates of the policies.  All certificates are to stipulate that the other party shall be given thirty (30) days written notice of all cancellation, non-renewal or material changes in policy.  Each of Bayer and Genzyme shall be named as an additional insured on all insurance policies obtained by the other party in accordance with this Section 13.8.  Each of Bayer and Genzyme also agrees to waive and will use its commercially reasonable efforts to require its insurers to waive all rights of subrogation against each other’s Affiliates and Representatives on all of the foregoing coverages.

13.9.        Insurance Recoveries.  If an Indemnified Party has acquired insurance in compliance with Section 13.8 or otherwise, and such coverage is available to offset Losses incurred or suffered by such Indemnified Party, such Indemnified Party shall not be entitled to indemnification from the Indemnifying Party for such Losses under Article 13 to the extent such Indemnified Party has actually received cash payments from such insurers, net of any reasonably expected increase in premiums resulting therefrom.  In each such instance, the Indemnified Party shall use its commercially reasonable efforts to recover for some or all of such Losses under applicable insurance policies.

13.10.      Disclaimer.  EACH PARTY MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OTHER THAN THOSE EXPRESSLY MADE IN THIS AGREEMENT.  ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED.

14.        TAX MATTERS

14.1.        Tax Sharing Agreements.  All Tax sharing agreements or similar agreements and all powers of attorney that relate in any way to the Acquired Assets, the Business-Specific Licensed IP or the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent they would affect Genzyme’s rights to such Shared Licensed IP under this Agreement) or the Bayer Business will be terminated prior to the Closing or amended so that they no longer apply to the Acquired Assets, the Business-Specific Licensed IP or the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent they would affect Genzyme’s rights to such Shared Licensed IP under this Agreement) or the Business and, after the Closing, no such agreement or power of attorney will have any effect on the Acquired Assets, the Business-Specific Licensed IP or the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent they would affect Genzyme’s rights to such Shared Licensed IP under this Agreement) or the Business.

14.2.        Certain Taxes and Fees.  Subject to Section 4.3.5,  and except as otherwise provided in the Purchase and Sale Agreement, all transfer, documentary, sales, use, stamp,

[**] = 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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registration, excise and other similar Taxes (but excluding income Taxes), and any conveyance fees or recording charges incurred in connection with the Contemplated Transactions, will be [**].  Bayer will file (or caused to be filed) all necessary Tax Returns and other documentation with respect to all such Taxes, fees and charges and, if required by applicable law, Genzyme will (and will cause its Affiliates to) join in the execution of any such Tax Returns and other documentation.  The Parties hereby (a) acknowledge that section 82.04.500 of the Revised Code of Washington expresses the legislative intent that the Washington business and occupation tax be imposed upon persons engaged in business and be considered an item of overhead and (b) agree that section 82.04.500 of the Revised Code of Washington to the contrary notwithstanding, Genzyme shall [**] pursuant to the terms of this Section 14.2.

14.3.        Rev. Proc. 2004-53.  Genzyme will determine whether to implement either the standard or the alternate procedure set forth in Revenue Procedure 2004-53, and Bayer will cooperate in such implementation.

14.4.        Tax Record Retention; Cooperation on Tax Matters.  Each of Genzyme, Bayer and their respective Affiliates will retain all Tax records relating to the Bayer Business, the Acquired Assets, the Business-Specific Licensed IP or the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent they would affect Genzyme’s rights to such Shared Licensed IP under this Agreement) until the expiration of the applicable statute of limitations (including any extensions thereof).  Genzyme, Bayer and their respective Affiliates will cooperate fully, as and to the extent reasonably requested by the other party, in connection with any Tax matters relating to the Bayer Business, the Acquired Assets, the Business-Specific Licensed IP or the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent they would affect Genzyme’s rights to such Shared Licensed IP under this Agreement) (including by the provision of reasonably relevant records or information).  The party requesting such cooperation will pay the reasonable out-of-pocket expenses of the other party.

14.5.        Apportionment of Ad Valorem Taxes.

14.5.1           All real property taxes, personal property taxes, and similar ad valorem obligations levied with respect to the Acquired Assets, the Business-Specific Licensed IP or the 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) for a taxable period that includes (but does not end on) the Closing Date (collectively, the “Apportioned Taxes”) will be apportioned between Bayer and Genzyme (or, as appropriate, their respective Affiliates) based on the number of days of the taxable period prior to the Closing Date and the number of days in the full taxable period.  Bayer, or, as appropriate, its Affiliates, will be liable for the proportionate amount of Apportioned Taxes attributable to days before or on the Closing Date and Genzyme, or, as appropriate, its Affiliates, will be liable for the proportionate amount attributable to days 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.

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14.5.2           Apportioned Taxes will be timely paid, and all applicable filings, reports and returns will be filed as provided by applicable Legal Requirements.  The paying party will be entitled to reimbursement from the non-paying party in accordance with Section 14.5.1.  Upon payment of Apportioned Taxes, the paying party will present a statement to the non-paying party setting forth the amount of the reimbursement to which the paying party is entitled under Section 14.5.1 together with such supporting evidence as is reasonably necessary to calculate the amount to be reimbursed.  The non-paying party will reimburse the paying party no later than [**] Business Days after the presentation of  the statement.  Any payment not made within that time will bear interest from the payment due date until, but excluding, the date of the payment at an annual rate equal to the Prime Rate as published in The Wall Street Journal, East Coast Edition, in effect from time to time during the applicable period.  Such interest will be payable at the same time as the payment to which it relates and will be calculated daily on the basis of a year of 365 days without compounding.

14.6.        Assignment of Agreement.  The parties agree that if a party’s assignment of this Agreement or any of its rights, interests or obligations hereunder (or any other designation of another person to perform any payment obligation of the party) creates any additional Tax obligations or Tax Liabilities for the non-assigning party or its Affiliates (including any new or increased Tax withholding obligation by the assigning party or any of its Affiliates on payments made under this Agreement), the assigning party will reimburse the non-assigning party or its Affiliates for any such additional Tax obligations or Liabilities created by the assignment, and shall gross-up the non-assigning party or its Affiliate for additional Taxes resulting from reimbursements, until the non-assigning party or its Affiliates is made whole.  In the case of a new or increased Tax withholding obligation, the assigning party shall pay to the non-assigning party or its Affiliate the full amount of the payment that would have been due prior to the new or increased withholding obligation, and the assigning party shall nevertheless be responsible to withhold and pay the amount to required by applicable Legal Requirements to the appropriate Governmental Authority.  The reimbursement, gross-up and payment obligations pursuant to this Section 14.6 will be reduced by any Tax benefit actually received by the non-assigning party or its Affiliates (whether in the year of payment or a future period).

15.        MISCELLANEOUS

15.1.        Notices.  All notices, requests, demands, claims and other communications required or permitted to be delivered, given or otherwise provided under this Agreement must be in writing and must be delivered, given or otherwise provided:

(a)   by hand (in which case, it will be effective upon delivery);

(b)   by facsimile (in which case, it will be effective upon receipt of confirmation of good transmission); or

(c)   by overnight delivery by a nationally recognized courier service (in which

[**] = 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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case, it will be effective on the Business Day after being deposited with such courier service);

in each case, to the address (or facsimile number) listed below:

·	If to Bayer, to it at:
	Bayer Schering Pharma AG
	Berlin 13342 Germany
	Telephone number:	+49-30-468-1111
	Facsimile number:	+49-30-468-15305
	Attention:	Chairman of the Board of Management
·	with a copy to:
	Bayer Schering Pharma AG
	Berlin 13342 Germany
	Telephone number:	+49-30-468-1111
	Facsimile number:	+49-30-468-15305
	Attention:	General Counsel
·	with a copy to:
	Fulbright & Jaworski L.L.P.
	801 Pennsylvania Avenue, NW
	Washington, DC 20004
	Telephone number:	202-662-0200
	Facsimile number:	202-662-4643
	Attention:	Marilyn Mooney, Esq.
·	If to Genzyme, to it:
	Genzyme Corporation
	500 Kendall Square
	Cambridge, MA 02142
	Telephone number:	617-252-7500
	Facsimile number:	617-252-7600
	Attention:	President, Oncology and Multiple Sclerosis
·	with a copy to:
	Genzyme Corporation
	500 Kendall Square
	Cambridge, MA 02142

[**] = 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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Telephone number:	617-252-7500
Facsimile number:	617-252-7600
Attention:	General Counsel

Each of the parties to this Agreement may specify different address or facsimile number by giving notice in accordance with this Section 15.1 to each of the other parties hereto.

15.2.        Succession and Assignment.  Subject to subsections (a) through (g) below, this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, each of which such successors and permitted assigns will be deemed to be a party hereto for all purposes hereof.

(a)           No party may assign, delegate or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties.

(b)           Notwithstanding subsection (a) each party, upon providing the other parties written notice, may without the consent of the other parties, (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates and/or designate one or more of its Affiliates to be a purchaser of some or all of the Acquired Assets, an assumer of some or all of the Assumed Liabilities or a licensee of some or all of the Licensed IP, (ii) designate one or more of its Affiliates to perform its obligations hereunder, in each case, so long as the assigning party is not relieved of any Liability hereunder and so long as any such Affiliate remains such party’s Affiliate; provided, however, that such Affiliate assignee(s) provide the other parties with written acknowledgement of and agreement to the assigning party’s obligations under the Agreement that were assigned to it.

(c)           Notwithstanding Subsection (a), Genzyme, upon providing Bayer prior written notice, may without the consent of Bayer, assign and delegate to a third party the licenses to the Business-Specific Licensed IP granted in Section 2.1.1(a), and all rights and obligations related to the Business-Specific Licensed IP, so long as Genzyme is not relieved of any Liability hereunder and such assignment is a Qualified Assignment.

(d)           Notwithstanding Subsection (a) each party (or its permitted successive assignees or transferees hereunder), upon providing the other parties prior written notice, may without the consent of the other parties, assign or transfer this Agreement as a whole to an entity that succeeds to all or substantially all of the business or assets of such party or in the case of Genzyme, substantially all of the Licensed Products, in each case, so long as the assigning party is not relieved of any Liability hereunder and such assignment is a Qualified Assignment.

[**] = 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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(e)           For the purposes of this Agreement, a “Qualified Assignment” means any transaction that:

(i)is made in compliance with applicable Legal Requirements, including securities, tax and corporation laws;

(ii)includes the assignee’s written acknowledgement of and agreement to all of the assigning party’s obligations under the Agreement;

(iii)is made to an assignee that is, and will be after giving effect to the relevant assignment will be, Solvent;

(iv)is made to an assignee that is not subject at the time of such assignment to any order, decree or petition providing for (A) the winding-up or liquidation of such Person, (B) the appointment of a receiver over the whole or part of the assets of such Person or (C) the bankruptcy or administration of such Person; and

(v)is not a voidable fraudulent conveyance; and

(vi)has been made in compliance with Section 14.6.

(f)            Notwithstanding subsections (e)(i) through (v) above, (i) each party may at any time assign its rights, interests and obligations provided for hereunder to any Person by merger or (ii) with the prior written consent of the other parties.

(g)           For purposes of this Section 15.2, “Solvent” means, with respect to any Person as on any date of determination, that as of such date, (i) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person, (ii) such Person is able to pay all liabilities of such Person as such liabilities mature and (iii) such Person does not have unreasonably small capital.  In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represent the amount that can reasonably be expected to become an actual or matured liability.  In computing the value of the assets of a Person, the value shall be determined in the context of current facts and circumstances affecting such Person.

15.3.        Amendments and Waivers.  No amendment or waiver of any provision of this Agreement will be valid and binding unless it is in writing and signed, in the case of an amendment, by each party hereto, or in the case of a waiver, by the party against whom 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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waiver is to be effective.  No waiver by any party of any breach or violation or, default under or inaccuracy in any representation, warranty, agreement or covenant hereunder, whether intentional or not, will be deemed to extend to any prior or subsequent breach, violation, default of, or inaccuracy in, any such representation, warranty, agreement or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.  No delay or omission on the part of any party in exercising any right, power or remedy under this Agreement will operate as a waiver thereof.

15.4.        Entire Agreement.  This Agreement, together with the other Ancillary Agreements and any documents, instruments and certificates explicitly referred to herein, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, with respect thereto.

15.5.        Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute but one and the same instrument.  This Agreement will become effective when duly executed by each party hereto.

15.6.        Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  In the event that any provision hereof would, under applicable Legal Requirements, be invalid or unenforceable in any respect, each party hereto intends that such provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable Legal Requirements.

15.7.        Headings.  The headings contained in this Agreement are for convenience purposes only and will not in any way affect the meaning or interpretation hereof.

15.8.        Construction.  The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.  The parties intend that each representation, warranty and covenant contained herein will have independent significance.  If any party has breached or violated, or if there is an inaccuracy in, any representation, warranty, agreement or covenant contained herein in any respect, the fact that there exists another representation, warranty, agreement or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the party has not breached or violated, or in respect of which there is not an inaccuracy, will not detract from or mitigate the fact that the party has breached or violated, or there is an inaccuracy in, the first representation, warranty, agreement or covenant.  Provisions in this Agreement relating to jurisdiction, venue, governing law or other aspects of dispute resolution that expressly refer to the negotiation or

[**] = 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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performance of this Agreement are not intended to alter the application of principles under New York law relating to the construction or interpretation of contracts.

15.9.        Governing Law.  Except as otherwise expressly provided for in this Agreement, this Agreement, the rights of the parties and all Actions arising in whole or in part under or in connection with this Agreement or the negotiation or performance hereof, will be governed by and construed in accordance with the domestic substantive laws of the State of New York, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

15.10.      Dispute Resolution.

15.10.1         Prior to initiating arbitration, Genzyme and Bayer will negotiate in good faith to resolve, pursuant to the procedures described in Section 15.10.2, any dispute, controversy, difference or Action asserted by a Bayer Indemnified Person against Genzyme or by a Genzyme Indemnified Person against Bayer arising out of or related to this Agreement or the negotiation or performance hereof (a “Claim”), including any Claim for indemnification pursuant to Article 13 hereof, but excluding any Claim for indemnification between the Parties governed by Section 13.4.5.  Notwithstanding the foregoing, either party may apply to any court having jurisdiction pursuant to Section 15.12 without negotiating to resolve the Claim pursuant to Section 15.10.2 with respect to any Action seeking preliminary or emergency injunctive relief in accordance with Section 15.11.11 or any Action seeking equitable relief as contemplated by Sections 8.10.3 or 15.13.

15.10.2         Bayer or Genzyme may give the other party written notice of a Claim not resolved in the normal course of business (“Notice of Dispute”).  Within [**] Business Days after delivery of such Notice of Dispute, executives of Bayer and Genzyme who have authority to settle the Claim shall agree to meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a just and equitable solution satisfactory to such parties.  If the Claim has not been resolved within [**] days of the first meeting of such executives (or, if the parties are unable to mutually agree upon an acceptable time and place to meet, within [**] days of the disputing party’s Notice of Dispute), Genzyme or Bayer may, by notice to the other party (“Dispute Escalation Notice”), refer the Claim to the respective officers of the parties designated below.

For Bayer:	Chief Executive Officer
For Genzyme:	Chief Executive Officer

Such officers shall negotiate in good faith to resolve the Claim in a manner satisfactory to Genzyme and Bayer within [**] days of the Dispute Escalation Notice.  In the event 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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Claim is not resolved within such [**] day period, either party may initiate arbitration pursuant to Section 15.11.

15.11.      Arbitration.

15.11.1         Subject to Sections 15.10.1 and 15.10.2, any Claim required pursuant to Section 15.10.1 to be negotiated pursuant to Section 15.10.2, or any other claim or dispute that the parties agree in writing to arbitrate, shall be settled by arbitration administered by the American Arbitration Association in accordance with the then current Commercial Rules of the American Arbitration Association including the Procedures for Large, Complex Commercial Disputes (including the Optional Rules for Emergency Measures of Protection) (“AAA Rules”), except that any such arbitration must be conducted in accordance with the remainder of this Section 15.11.  Except as expressly limited by Section 15.11.7, the arbitrators shall have the authority to grant any equitable and legal remedies that would be available in any judicial proceeding instituted to resolve a disputed matter.

15.11.2         Number and Selection of Arbitrators.  The number of arbitrators shall be three (3), who shall be selected as follows:  each of Bayer, on the one hand, and Genzyme on the other hand, shall choose one (1) arbitrator within [**] Business Days of either initiating or receiving notice of an arbitration (as the case may be), and those party-appointed arbitrators shall unanimously select one (1) chairman arbitrator within [**] Business Days of the appointment of the last party-appointed arbitrator, who shall be a lawyer admitted to practice in New York for at least fifteen (15) years, and who is experienced with disputes in merger and acquisition transactions (“Qualifications”).  If the party-appointed arbitrators are unable to agree upon the selection of the third arbitrator within [**] Business Days of the appointment of the last party appointed arbitrator, such chairman arbitrator shall be selected by the AAA within [**] Business Days and shall have Qualifications.

15.11.3         Place and Language of Arbitration.  The place of arbitration shall be New York, New York, at a suitable venue to be agreed by the parties and arbitrators within [**] Business Days of the appointment of the chairman arbitrator.  The proceedings shall be conducted in the English language.

15.11.4         Binding Decision.  The decision and award of the arbitral tribunal shall be made by majority decision and shall be final, nonappealable and binding on the parties hereto and their successors and assigns.  The arbitral award shall be accompanied by a reasoned opinion.

15.11.5         Allocation of Costs.  The decision and award of the arbitral tribunal shall include a decision regarding the allocation of costs relating to any such arbitration.  For purposes of this subsection, “costs” shall include reasonable attorneys’ fees and reasonable experts’ fees actually incurred with respect to the arbitration proceeding.

[**] = 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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15.11.6         Interest.  The arbitral award may include both pre-and post-award interest, at a rate to be determined by the arbitral tribunal.

15.11.7         Limitation of Damages.  The arbitral tribunal shall be empowered to award damages only to the extent of actual damages suffered, and only to the extent consistent with Section 13.7.

15.11.8         Period for Arbitration.

(a)   The arbitration shall be completed no later than [**] after the selection of the chairman arbitrator, unless the chairman arbitrator determines, at the request of any party or on his or her own initiative, that such time period should be extended, in which case such time period may not be extended beyond an additional [**] months.

(b)   Notwithstanding any provision of the AAA Rules: (i) each of Genzyme and Bayer shall be permitted to serve up to twenty (20) interrogatories, and to take at least five (5) depositions of the other party, in addition to exchange of documents, exhibits and information as provided for in the AAA Rules, on dates and locations to be mutually agreed upon (or, failing such agreement, as the chairman arbitrator shall select after hearing from the parties); (ii) any documents not in English that are produced by a party shall be accompanied by a translation into English, which translation shall not be binding upon the other party or the arbitrators; (iii) each of Genzyme and Bayer covenant and agree that it shall produce documents, information, and deposition and hearing witnesses, as required by this Section 15.11.8 and as otherwise required by the AAA Rules; and (iv) subpoenas to non-parties, for production of documents and/or for testimony, shall be issued at the request of a party, up to ten (10) subpoenas per party.  The parties will make their respective employees, and will use commercially reasonable efforts to make their former employees, available for depositions and hearing testimony as requested by the other parties.

15.11.9         Enforcement of Judgment.  Judgment on the arbitral award may be entered in any court having jurisdiction thereof.

15.11.10       Confidentiality.  Except as required by Legal Requirements or as required for recognition and enforcement of the arbitral decision and award, neither a party nor an arbitrator may disclose the existence, content or results of any arbitration hereunder without the prior written consent of the parties.  Any documents submitted to the arbitrators shall be kept confidential and shall not be disclosed, except that any such documents may be disclosed in connection with any Action to collect the award, or if any such documents are discoverable or admissible in any Action in court contemplated by this 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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15.11.11       Enforcement; Interim Measures; Equitable Relief.  Notwithstanding the provisions of Section 15.11, each party may apply to any court having jurisdiction pursuant to Section 15.12.1 (a) to enforce the arbitration provisions of this Agreement, (b) to seek provisional injunctive relief so as to maintain the status quo (including, but not limited to, maintaining the confidentiality of any arbitration proceedings and non-public information) until the final arbitration award is rendered and is finally judicially confirmed if challenged judicially, or the dispute is otherwise resolved, or (c) to seek equitable relief as contemplated by Section 8.10.3 or 15.13.

15.12.      Jurisdiction; Venue; Service of Process.

15.12.1         Jurisdiction.  Subject to the provisions of Sections 13.4.5, 15.10.1, 15.11 and 15.13, each party to this Agreement, by its execution hereof, unless otherwise prohibited by applicable Legal Requirements (a) hereby irrevocably submits to the exclusive jurisdiction of the state courts of the State of New York in the Borough of Manhattan and to the United States District Court for the Southern District of New York for the purpose of any Action between the parties arising in whole or in part under or in connection with this Agreement or the negotiation or performance hereof, (b) hereby waives and agrees not to assert, by way of motion, as a defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such Action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court and (c) to the extent that an Action can be commenced in a court and not an arbitration, agrees not to commence any such Action in any court other than before one of the above-named courts.  Notwithstanding the previous sentence, a party may commence any Action in a court other than the above-named courts (i) for the purpose of enforcing an order or judgment issued by one of the above-named courts and (ii) for the purposes of asserting a cross-claim, counterclaim, third party action or similar forms of action for indemnification under this Agreement in any Action commenced by the other parties (subject to this Section 15.12.1), by any third party, or by any Governmental Authority.

15.12.2         Venue.  Each party waives any claim and will not assert that venue should properly lie in any other location within the selected jurisdiction.

15.12.3         Service of Process.  Each party hereby (a) consents to service of process in and commencement of any arbitration as permitted under the AAA Rules; (b) consents to service of process in any Action between the parties arising in whole or in part under or in connection with this Agreement in any manner permitted by New York law, (c) agrees that service of process made in accordance with clause (a) or (b) or made pursuant to Section 15.1, will constitute good and valid service of process in any Action and (d) waives and agrees not to assert (by way of motion, as a defense, or otherwise) in any

[**] = 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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Action any claim that service of process made in accordance with clause (a), (b) or (c) does not constitute good and valid service of process.

15.13.      Specific Performance.  Each of the parties acknowledges and agrees that the other parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached or violated.  Accordingly, each of the parties agrees that, without posting a bond or other undertaking, the other parties may seek an injunction or injunctions to prevent breaches or violations of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any Action instituted in any court specified in Section 15.12.1 or in an arbitration proceeding pursuant to Section 15.11.  An Action for specific performance as provided herein shall not preclude a party from pursuing any other remedy to which such party may be entitled, at law or in equity, in accordance with the terms of this Agreement.  Each party further agrees that, in the event of any Action for specific performance in respect of such breach or violation, it will not assert that the defense that a remedy at law would be adequate provided, however, each party also agrees that any party can assert any other defense it may have other than the defense of adequate remedy at law.  The provisions of this Section 15.13 shall not apply to any Action based upon any Section of this Agreement where the remedy sought is the payment of money.

15.14.      Waiver of Jury Trial.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE NEGOTIATION OR PERFORMANCE HEREOF OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS AND THAT ANY SUCH TRIAL WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

15.15.      Certain Rules of Construction.  Except as otherwise explicitly specified to the contrary, (a) references to a Section, Article, Exhibit or Schedule means a Section or Article of, or Schedule or Exhibit to this Agreement, unless another agreement is specified, (b) the word “including” will be construed as “including without limitation,” (c) references to a particular statute or regulation include all rules and regulations thereunder and any predecessor or successor statute, rules or regulation, in each case as amended or otherwise modified from time to time, (d) words in the singular or plural form include the plural 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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singular form, respectively, (e) references to a particular Person include such Person’s successors and assigns to the extent not prohibited by this Agreement and (f) the words “shall” and “will” will have the same meaning.

15.16.      Third Party Beneficiaries.  Except as specifically provided herein, all rights, benefits and remedies under this Agreement are solely intended for the benefit of Genzyme and Bayer, and no third party shall have any rights whatsoever to (i) enforce any obligation contained in this Agreement; (ii) seek a benefit or remedy for any breach of this Agreement; or (iii) take any other action relating to this Agreement under any legal theory, including but not limited to, actions in contract, tort (including but not limited to negligence, gross negligence and strict liability), or as a defense, setoff or counterclaim to any action or claim brought or made by the parties.

[Remainder of Page is Intentionally Blank.]

[**] = 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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IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as an agreement under seal as of the date first above written.

BAYER SCHERING PHARMA AG
By:	/s/ Andreas Fibig
	Name: Andreas Fibig
	Title: Chief Executive Officer
By:	/s/ Gunnar Rieman
	Name: Gunnar Rieman
	Title: Member of the Board
GENZYME CORPORATION
By:	/s/ Mark J. Enyedy
	Name: Mark J. Enyedy
	Title: President, Oncology & Multiple Sclerosis

[**] = 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.

Omitted Schedules to License and Asset Purchase Agreement

Schedule 1A — Bayer’s Knowledge

Schedule 1B — Business Domain Names

Schedule 1C — Business-Specific Licensed Patents

Schedule 1D — Business-Specific Licensed Trademarks

Schedule 1E — Fully Loaded Standard Costs

Schedule 1F — Retained Contracts

Schedule 1G — Scheduled Employees

Schedule 1H — Shared Licensed Patents

Schedule 1I — Shared Licensed Trade Dress

Schedule 1J — Shared Licensed Trademarks

Schedule 2.1.2(a) — In-License Agreements Limiting Sublicensing of Business-Specific Licensed IP

Schedule 2.1.2(b) — In-License Agreements Limiting Sublicensing of Shared Licensed IP

Schedule 2.1.3(b) — Business-Specific Licensed IP Retained Rights

Schedule 2.1.5(c) — Retained Names and Marks

Schedule 2.1.5(e) — Retained Marks

Schedule 2.1.5(f) — Retained Trade Dress

Schedule 2.5 — Consents Under In-License Agreements

Schedule 6.3 — Authorization of Governmental Authorities (Bayer)

Schedule 6.4 — Noncontravention (Bayer)

Schedule 6.5 — Financial Information

Schedule 6.6 — Inventory

Schedule 6.7.1 — Absence of Certain Developments

Schedule 6.7.2 — Advertising and Promotion Spending and Sales FTEs

Schedule 6.8 — Assets

Schedule 6.10.1 — Business Domain Names

Schedule 6.10.2 Part A — Business-Specific Licensed IP

Schedule 6.10.2 Part B — Shared Licensed IP

Schedule 6.10.5 — Validity and Enforceability

Schedule 6.10.6 — Orders

Schedule 6.10.7A — Infringement and Misappropriation

Schedule 6.10.7B — Third Party Infringement and Misappropriation

Schedule 6.10.8 — Royalties

Schedule 6.10.9 — Employees and Consultants

Schedule 6.10.10 — Litigation

Schedule 6.10.11A — Completeness (In-Licenses That May Be Sublicensed Without Consent)

Schedule 6.10.11B — Completeness (In-Licenses That May Not Be Sublicensed Without Consent)

Schedule 6.11.2 — Permits

Schedule 6.11.3 — Regulatory and Related Matters

Schedule 6.12 — Tax Matters

Schedule 6.13.1 — Employee Benefit Plans

Schedule 6.13.6 — Bayer Employee Plans

Schedule 6.13.7 — Severance and Termination-Related Benefits

Schedule 6.14 — Environmental Matters

Schedule 6.15(a) — Transferred Contracts

Schedule 6.15(b) — Joint Contracts

Schedule 6.15(c) — Contractual Obligations Not Provided

Schedule 6.16 — Customers

Schedule 6.17.1 — Business Employees

Schedule 6.17.2 — Independent Contractors and Temporary Employees

Schedule 6.17.3 — Union Contracts

Schedule 6.17.5 — Business Employee Contracts

Schedule 6.17.6 — Redundancy Payments

Schedule 6.18 — Litigation; Governmental Orders

[**] = 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.

Schedule 7.3 — Authorization of Governmental Authorities (Genzyme)

Schedule 7.4 — Noncontravention (Genzyme)

Schedule 8.11.5 — Hired Employee Severance

Schedule 8.19 — Leukine Bulk Drug Substance Manufacturing Plan

Schedule 8.23 — NewCo Term Sheet

Schedule 10.7 — Consents

Schedule 13.3A — Time for Claims (Genzyme)

Schedule 13.3B — Time for Claims (Bayer)

Genzyme Corporation agrees to furnish supplementally a copy of any omitted schedule to the Commission upon request.

[**] = 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.

GENZYME CORPORATION

500 KENDALL STREET

CAMBRIDGE, MA  02142

Amended and Restated as of December 7, 2009 and Effective as of May 29, 2009

Bayer Schering Pharma AG

Berlin 13342 Germany

Re:License and Asset Purchase Agreement (the “License Agreement”), dated as of March 30, 2009, between Genzyme Corporation (“Genzyme”) and Bayer Schering Pharma AG (“Bayer”)

Ladies and Gentlemen:

As we have discussed, several changes to the License Agreement and the Fludara Commercial Supply Agreement, dated the date hereof, by and between Bayer Schering Pharma AG and Genzyme (the “Fludara Supply Agreement”), are necessary to reflect, among other things, the recent agreement of Genzyme and Bayer regarding the transfer of Inventory to Genzyme at and after the Closing, including with respect to the countries listed on Exhibit A to this letter (each, an “Agency Model Country”).  Terms capitalized but not defined in this letter agreement are used as defined in the License Agreement.

A.Inventory Other than Agency Model Inventory

Any payment made by Genzyme Limited (for Ex-US-inventory) and any payment made by Genzyme (for US-inventory) to Bayer at Closing pursuant to Section 4.1.2 of the License Agreement made at [**] with respect to Inventory other than Agency Model Inventory (as defined below) (such Inventory is referred to as “Non Agency Inventory”) will not be a payment made for the purchase of such Inventory, but will instead serve as a deposit (the “Non Agency Inventory Deposit”) held by Bayer to secure the payment obligations of Genzyme and Genzyme’s Affiliates to Bayer and Bayer’s Affiliates described below with respect to such Inventory.  These payments and respective repayments shall be made in USD for US-inventory and in EUR for inventory of all other countries.  On or promptly following the Closing (and in any event, no later than the fifth day after the Closing), Bayer shall and shall cause each Bayer Affiliate which holds Non Agency Inventory to deliver to Genzyme or a Genzyme Affiliate (as designated on Exhibit B) an invoice with respect to the Non Agency Inventory it transferred to Genzyme or a Genzyme Affiliate at the Closing.  The price for Non Agency Inventory as set forth on such invoice shall be [**] of such Inventory as reflected on the local books and records of Bayer or the applicable Bayer Affiliate in the applicable local currency as of the Closing Date (the “Local Prices”).  Such invoices shall require payment by Genzyme or the applicable Genzyme Affiliate by the 30th day following 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.

·On or before the 30th day after the Closing Date, Genzyme shall, and shall cause each Genzyme Affiliate designated on Exhibit B to, pay the Local Prices set forth on each invoice plus any value-added or similar Tax (“VAT”) set forth thereon to Bayer or the applicable Bayer affiliate.

·Upon payment in full of the invoices by Genzyme and its Affiliates, Bayer shall release the Non Agency Inventory Deposit to Genzyme Limited (for Ex-US-inventory) and Genzyme Corp. (for US-inventory).

·Bayer shall then pay to Genzyme Limited (for Ex-US-inventory) and Genzyme Corp. (for US-inventory) an amount equal to the difference (“Difference Amount”) between (a) the [**] set forth on the invoices described above and (b) the [**] of the Non Agency Model Inventory invoiced as described above, in the case of both (a) and (b) converted into Euros (except USA) as of the Closing Date at the exchange rates published by Bloomberg or the European Central Bank (consistent with the procedures described in Section 4.3.3 of the License Agreement) or vice versa.

·In any country where the Parties agree that a local purchase agreement is required by law or is advantageous under local law and enter into a definitive local purchase agreement on or after the Closing Bayer shall pay to Genzyme Limited any amount (excluding VAT) paid by a Genzyme Affiliate to a Bayer Affiliate according to such local purchase agreement at Local Prices converted into Euro as of the Closing Date at the exchange rates published by Bloomberg or the European Central Bank (consistent with the procedures described in Section 4.3.3 of the License Agreement) except to the extent the local purchase price pertains to the purchase of any assets other than Acquired Assets.   After the Closing if either Party determines in good faith that a local agreement would be of reasonable benefit to it under the requirements of any country, it may request that the other Party execute such an agreement provided the agreement has commercially reasonable terms and is consistent with this Agreement, the License Agreement, and the Fludara Supply Agreement, such request not to be unreasonably refused.   All agreements executed after the Closing consistent with this provision shall be subject to approval of Genzyme and Bayer, such approval not to be unreasonably withheld.

At the time the Inventory Schedules become final, conclusive and binding pursuant to Section 4.1.3 of the License Agreement, and in lieu of the payments described in Section 4.1.3(h) of the License Agreement, Bayer/ Bayer affiliates shall provide Genzyme/ Genzyme affiliates with a revised invoice setting forth the final amount of Non Agency Inventory transferred and the Local Prices.  Genzyme/ Genzyme affiliates and Bayer/ Bayer affiliates shall, promptly pay the additional amount due on such invoices to Bayer/ Bayer affiliates or repay to Genzyme/ Genzyme affiliates the overpayment indicated on such invoices.  In addition, the “Difference Amount” described in the third bullet above will be recomputed based on the final [**] paid by Genzyme and its Affiliates to Bayer/ Bayer affiliates and the final [**] for Non Agency Inventory transferred to Genzyme and its Affiliates at the Closing.  Following such recomputation, Genzyme shall pay or shall require Genzyme Limited (for Ex-US-inventory) to pay and Genzyme Corp. (for US-inventory) shall pay to Bayer, or Bayer shall pay to Genzyme Limited (for Ex-US-inventory) and Genzyme Corp. (for US-inventory), as applicable, 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.

difference between the recomputed “Difference Amount” described above and the original “Difference Amount” that was paid initially.  For avoidance of doubt the Parties agree that in the event of a dispute under this Agreement the Inventory Referee shall address only issues he or she is permitted to address under the License Agreement.

Any payments of invoices that have to be made from Bayer/Bayer Affiliate to Genzyme/ Genzyme Affiliate under the parties’ planned transition procedure whereby after the Closing, in certain countries, Genzyme or an Affiliate of Genzyme will sell inventory of the Business to Bayer or an Affiliate of Bayer and Bayer or an Affiliate of Bayer will immediately then resell such inventory to the customer of the Business (the “Buy/Sell-Model”) due to the purchase of inventory for resale to any final customer shall not become due prior to receipt of the respective invoice payment from such final customer.

For avoidance of doubt, all provisions as agreed under this section A. (other than the preceding paragraph, which apply only to countries employing the “Buy/Sell-Model”) shall apply for all inventory transfers both for countries where the “Buy/Sell-Model” applies and for countries under “Genzyme Direct Model” and the United States.

For the avoidance of doubt, the gross invoiced sales amount billed by either Genzyme, Bayer or any of their Affiliates to any final customer under the Buy/Sell-Model (but not the amount billed to Genzyme by Bayer) shall be within the definition of Net Sales in the License Agreement and in that certain License Agreement between Alcafleu Management GmbH & Co. KG (“Alcafleu”) and Genzyme (“Alcafleu License Agreement”) (such amount adjusted as set forth in the definition of “Net Sales”).

B.Agency Model Inventory

Notwithstanding Section 3.1.1 of the License Agreement, Bayer’s and its Affiliates’ rights, title and interest (referred to as “legal title”) in all Inventory intended for sale in an Agency Model Country (“Agency Model Inventory”) will not be transferred to Genzyme or an Affiliate of Genzyme at Closing.  Although legal title to Agency Model Inventory will not be transferred at the Closing, Agency Model Inventory will be included within the definition of “Transferred Inventory” for the purposes of the inventory count provisions of Section 4.1.3 (but not the payment adjustment provisions thereof).  Physical custody of such Inventory may transfer to Genzyme at or after the Closing at a different time than legal title transfers.  In case of physical cross border transfer this is subject to Bayer’s approval which shall not be unreasonably withheld.

At Closing, Genzyme shall pay or shall have Genzyme Limited (for Ex-US-inventory) pay to Bayer EUR [**], which represents Bayer’s good faith estimate of the Inventory balance in the Agency Model Countries as of [**] (the “Agency Inventory Deposit”), and neither party will make the payments described in Section 4.1.2 and 4.1.3 with respect to Agency Model Inventory.  Exhibit C sets forth on country-by-country basis, the components of the Agency Inventory Deposit.  The Agency Inventory Deposit will serve as a deposit held by Bayer to secure Genzyme’s/ Genzyme affiliates payment obligations to Bayer/ Bayer affiliates on the Hand Over Date (as defined below) with respect to Agency Model Inventory.  At the time the Inventory Schedules are delivered to Genzyme pursuant to Section 4.1.3 of the License

[**] = 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.

Agreement, the Agency Inventory Deposit will be increased (Genzyme/Genzyme Limited pays Bayer) or decreased (Bayer pays Genzyme/Genzyme Limited), as appropriate, to an amount equal to the aggregate [**] of Agency Model Inventory as set forth on the Inventory Schedules.

From and after the Closing, Bayer will remit to Genzyme Limited any amounts actually collected by Bayer and its Affiliates from customers (excluding VAT) of the Business with respect to net sales made by Bayer and its Affiliates after the Closing consistent with the procedures outlined in Section 8.12 of the License Agreement.  Bayer may deduct from such payments the following amounts:

a)with respect to Agency Model Country Inventory in existence at the Closing Date that is sold to generate such net sales (with such deductions being taken in the month of the sale, not the month of the collection), the [**] of such Inventory sold;

b)with respect to Agency Model Supplied Product supplied after the Closing Date under the Fludara Supply Agreement that is sold to generate such net sales (with such deductions being taken in the month of the sale, not the month of the collection), the amount which would be due and owing Bayer under the Fludara Supply Agreement with respect to such product had delivery been made to Genzyme or Genzyme Limited in accordance with such agreement at the Packaging Facilities (as defined under the Fludara Supply Agreement) plus all [**] the Agency Model Country;

c)all [**] (as defined in the Transition Services Agreement) incurred in making the sale of Inventory referred to in (a) and (b) above [**] that would otherwise be due and payable to Bayer by Genzyme under the Transition Services Agreement;

d)all [**] incurred in providing any labeling, packaging or other manufacturing services or other services (other than mentioned in letter c)) [**] with regard to Campath supplied after the Closing Date that is sold to generate such net sales (with such deductions being taken in the month of the sale, not the month of the collection), plus the [**] if such Campath product was [**] after the Closing Date; and

e)any applicable withholding taxes (Section 4.3.4. License Agreement applies mutatis mutandis).

Any costs deducted by Bayer under this paragraph shall not be included in costs Bayer seeks to recover under the Transition Services Agreement.  In the event the foregoing deductions result in a negative amount (i.e. a payment owed to Bayer by Genzyme) in any month before or after the Hand Over Date, Genzyme will or will cause an affiliate to instead remit such amount to Bayer.

In the case of Agency Model Supplied Product supplied under the Fludara Supply Agreement, notwithstanding anything to the contrary in the Fludara Supply Agreement, prior to the Hand Over Date for a country, legal title to Fludara that would otherwise be purchased by Genzyme or Genzyme Limited under the Fludara Supply Agreement and which is designated by Genzyme as being intended for sale in an Agency Model Country will not pass to Genzyme or

[**] = 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.

Genzyme Limited, but will instead pass to the local Bayer Affiliate or local distributor, as applicable, and Genzyme or Genzyme Limited, as applicable, shall not be required to pay for such product at that time.  Except as described above, any Fludara Agency Model Supplied Product will still be treated as Product delivered to and sold to Genzyme or an Affiliate under the Fludara Supply Agreement and Product sold by Bayer on behalf of Genzyme shall be treated as Product sold by Genzyme into the market for purposes of the Fludara Supply Agreement, and for the avoidance of doubt, Genzyme and Bayer respectively shall have all rights and obligations with respect to such Products as set forth therein.

After consultation with Bayer, Genzyme will designate the date at which it will accept to purchase Inventory then held by Bayer / Bayer Affiliate (the “Hand Over Date”) for each Agency Model Country by delivery of written notice thereof to Bayer as soon as reasonably practicable prior to the applicable Hand Over Date.  Thereafter, Bayer will, and will cause its Affiliates to, sell to Genzyme or its designated Affiliate at the applicable Hand Over Date, all Inventory then held by Bayer or an Affiliate (including any Fludara supplied by Bayer and any Campath supplied by Genzyme after the Closing as described below — such Fludara and Campath Inventory is referred to as “Agency Model Supplied Product”) intended for sale in the applicable Agency Model Country, free and clear of any Encumbrances, other than Permitted Encumbrances.  The provisions of Section 4.1.2 and 4.1.3 of the License Agreement, as modified above with respect to Non Agency Model Inventory, will apply with respect to the count associated with any such transfer of Agency Model Inventory as if the applicable Hand Over Date was the Closing Date (provided that in the last sentence of Section 4.1.3(c) of the License Agreement, Closing Date shall mean May 29, 2009 and not the Hand Over Date) and the Agency Model Inventory being transferred on such Hand Over Date to Genzyme constituted all of the Inventory described in such sections.  Notwithstanding the above, if the Hand Over Date occurs later than the adjustment dates set forth in Section 4.1.3(i) of the License Agreement that would entitle Genzyme to a refund, then Genzyme shall not be obligated to purchase any Agency Model Inventory to which Genzyme would otherwise be entitled to receive a refund under Section 4.2.3(i).  At the Hand Over Date, Genzyme will be required to pay: (i) for any Agency Model Supplied Product supplied under the Fludara Supply Agreement that is transferred to Genzyme at such time and with respect to which Bayer has not taken a deduction referred in paragraph b) above, and (ii) for any Agency Model Supplied Product that is Campath that is transferred to Genzyme at such time and with respect to which Bayer has not taken a deduction referred to in paragraph d) above.  Further, on the applicable Hand Over Date, the portion of the Agency Model Deposit that pertained to the applicable Agency Model Country will be repaid to Genzyme Limited.

To ensure that the intent of the parties as set forth in the License Agreement is properly implemented in the Agency Model Countries and the Buy/Sell Model Countries after the modifications described above:

·paragraphs (f) and (g) in the definition of “Excluded Genzyme Liabilities” will include all Liabilities that are attributable to sales of all Products and inventory, including those made by Bayer, or an Affiliate of Bayer after the Closing for the benefit of Genzyme pursuant to the Transition Services Agreement, the License Agreement, or this 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.

·paragraph (h) in the definition of “Excluded Genzyme Liabilities” will refer to “the conduct of the Business by Genzyme or Bayer on Genzyme’s behalf after Closing”;

·in the event that Bayer is determined by a taxing authority to be liable for income tax, or tax in lieu of income tax such as gross receipts tax, and Bayer and/or its Affiliates did not actually receive the income or gross receipts on which such tax was based, and such tax would not have arisen but for the Agency Model, then Genzyme shall reimburse Bayer for such tax.  Notwithstanding the foregoing, Genzyme shall not reimburse Bayer in connection for any transfer pricing adjustments imposed by taxing authorities that arise from Bayer’s internal transfer pricing; and

·the gross invoiced sales amount of Agency Model Inventory and Agency Model Supplied Products billed by either Genzyme or Bayer or any of their Affiliates shall be included within the definition of Net Sales (adjusted as set forth in the definition of “Net Sales”) in the License Agreement and the Alcafleu License Agreement.

In the case of any casualty or other insured loss of Agency Model Inventory for which Genzyme has paid Bayer, Bayer will remit to Genzyme any insurance proceeds it receives in respect thereof.

Prior to the applicable Hand Over Date, Bayer will, and will cause its Affiliates to, keep Genzyme reasonably informed of the amount of Campath and Fludara Inventory they hold that is intended for sale in Agency Model Countries from time to time in accordance with the reporting requirements under the Transition Services Agreement.

Prior to the Hand Over Date, Genzyme will, from time to time, supply additional Campath inventory to Bayer at no charge such that such Bayer or Bayer Affiliate may satisfy its obligations under the Transition Services Agreement and hereunder.

Genzyme or Genzyme Limited shall place orders under the Fludara Supply Agreement for the supply of Fludara to all countries, including the Agency Model Countries, in accordance with the terms of that Fludara Supply Agreement.

In accordance with Section 3.6 of the Transition Services Agreement, Bayer and Genzyme acknowledge that, regardless of the circumstances or the sales model that may be relied upon by the parties, any sales activities conducted after the Closing must comply with Legal Requirements (including without limitation United States trade compliance rules and regulations) applicable to Genzyme and Bayer.  In this regard, Bayer confirms that it will not engage in any sales activities relating to any Oncology Product in the countries of Cuba, Iran, Sudan and Syria, with the sole exception of sales activities in Iran involving Campath Oncology with the parties listed on Exhibit D to this letter agreement following prior authorization from Genzyme that such sales may be made.

[**] = 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.

C.Application Provisions

1.Allocation of Risks.  Aspects of this letter agreement are being executed by Bayer as an accommodation for Genzyme and its affiliates.  As a result Genzyme and Genzyme Limited, jointly and severally, have agreed that except as set forth below, it will bear all risks of loss or liability under the License Agreement, the Ancillary Agreements or otherwise, associated with or arising from Bayer’s and Genzyme’s or their Affiliates’ conduct hereunder with respect to the Agency Model as if Genzyme or its Affiliates had taken legal and physical possession of all of Inventory on the Closing Date (or Fludara Inventory purchased under the Fludara Supply Agreement prior to the Hand Over Date upon delivery of such Inventory to the specified location) and had thereafter sold or otherwise transferred that Product in its own name.  The risks and liabilities assumed by Genzyme and Genzyme Limited, jointly and severally, under this Agreement with respect to the Agency Model and Buy/Sell-Model arrangements, include but are not limited to risks of product loss, spoilage, damage or destruction, product liability risks, regulatory risks, and commercial risks (including the risk of customer failure to take delivery or pay for product).  For avoidance of doubt, except as set forth below, the Parties agree that any Liabilities or Loss arising from sales of Licensed Product to third parties by Bayer or any Affiliate of Bayer under the terms of this Agreement shall be treated as sales by Genzyme for purposes of the License Agreement and all Ancillary Agreements.  Except as set forth below, Genzyme shall fully indemnify and hold harmless Bayer and its Affiliates, their officers, employees, directors and agents from all Liabilities and Losses arising from Bayer’s performance of the activities specified in this Letter Agreement with respect to the Agency Model and the Buy/Sell Model.  Nothing set forth herein will be deemed to waive Genzyme’s rights to indemnification from Bayer under the License Agreement or an Ancillary Agreement provided however any Genzyme claim for indemnification from Bayer shall not arise merely because Bayer now acts in the capacity of seller of Product in accordance with the terms of this Agreement.  Further, nothing set forth herein shall require Genzyme to indemnify Bayer for its or its Affiliate’s breach of this Agreement, the License Agreement or any Ancillary Agreement or Bayer’s or its Affiliate’s gross negligence, willful misconduct or criminal act in performance of its obligations under this Agreement the License Agreement, or any Ancillary Agreement.

2.Regulatory Matters.  Nothing in Letter Agreement shall be deemed to restrict or prevent Bayer from taking any action it regards as reasonably necessary to comply with all applicable Legal Requirements.  Bayer will not be required to make any filing, present any request, nor to undertake any action or to omit to take any action under this Agreement with respect to any Governmental Authority in any country, that in Bayer’s judgment, exercised in good faith, would likely have the effect of damaging Bayer’s or Bayer’s Affiliates’ existing or future business reputation or commercial interests in any country.

3.Term.  The obligations of Bayer and its Affiliates to sell Licensed Products under the Buy/Sell Model or in Agency Model Countries as described above shall terminate by country on the applicable Hand Over Date with respect to 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.

country; provided that all such obligations shall terminate no later than May 29, 2010, unless otherwise expressly agreed by the parties in writing.

D.Section 12.3 of the License Agreement

The parties agree that:

·references to “this Agreement” in subsections (a) and (b) of Section 12.3.1 of the License Agreement shall be replaced by references to the “License Agreement (“Alcafleu License Agreement”) between Genzyme and Alcafleu Management GmbH & Co. KG (“Alcafleu”)”;

·the reference “to Bayer pursuant to Sections 4.1.6 or 4.2.2” in subsection (c) of Section 12.3.1 shall be replaced with “to Alcafleu pursuant to Sections 4.1.6 or 4.2.2 of the Alcafleu License Agreement”;

·the reference to “payments to Bayer aggregating $[**] with respect to Net Sales of Oncology Products” in the proviso at the end of subsection (d) of Section 12.3.1 shall be replaced with “payments to Alcafleu aggregating $[**] with respect to Net Sales of Oncology Products”;

·references to “Bayer with respect to the Net Sales under this Agreement” in Section 12.3.3 of the License Agreement shall be replaced with “Alcafleu with respect to the Net Sales under the Alcafleu License Agreement”;

·the reference to “future payments may become due and payable to Bayer pursuant to Section 4.1.5 or 4.1.6” in Section 12.3.5 shall be replaced with “future payments may become due and payable to Alcafleu pursuant to Section 4.1.5 or 4.1.6 of the Alcafleu License Agreement”; and

·the following definitions are added to Section 1 of the License Agreement:

15.17.“Alcafleu” is defined in Section 12.3.1.”

15.18.“Alcafleu License Agreement” is defined in Section 12.3.1.”

E.Indemnification

The parties desire to have the right to indemnification under the Alcafleu License Agreement that is identical to their right to recovery under the License Agreement.  Accordingly, the parties agree to amend Article 13 of the License Agreement as follows:

In Section 13.1 of the License Agreement:

·the phrase, “or by Alcafleu in the Alcafleu License Agreement” shall be added at the end of subsection (a) of Section 13.1.1 of the License Agreement;

·the phrase, “or of Alcafleu in the Alcafleu License Agreement” shall be added to the end of subsection (b) of Section 13.1.1 of the License Agreement;

·references “to Bayer” in Section 13.1.2 of the License Agreement shall be replaced by references “to Bayer or Alcafleu”; 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.

·Section 13.1.2 of the License Agreement shall be further amended at the end of clause (1) of the second-to-last sentence thereof by adding the phrase, “or the corresponding sections of the Alcafleu License Agreement”.

In Section 13.2 of the License Agreement:

·the phrase, “or by Genzyme in the Alcafleu License Agreement” shall be added at the end of subsection (a) of Section 13.2.1 of the License Agreement;

·the phrase, “or of Genzyme in the Alcafleu License Agreement” shall be added to the end of subsection (b) of Section 13.2.1 of the License Agreement; and

·Section 13.2.2 of the License Agreement shall be further amended at the end of clause (a) of the second-to-last sentence thereof by adding the phrase, “or the corresponding sections of the Alcafleu License Agreement”.

In Section 13.1.3 of the License Agreement:

·the reference to “Bayer’s fraud or criminal acts” in the last sentence of Section 13.1.3 shall be replaced with “Bayer’s or Alcafleu’s fraud or criminal acts”.

The parties further agree that references to “PARTY” or “PARTIES” under Sections 13.6, 13.7, and 13.10 shall be deemed to include Alcafleu.

F.Miscellaneous

A breach of this Letter Agreement shall be treated as a breach of the License Agreement.

Nothing in this Agreement shall be construed to relieve Genzyme of any obligations under the Leukine Tolling Agreement and the Fludara Commercial Supply Agreement to comply with the minimum volume requirements and the forecast and purchase requirements.

This Letter Agreement will automatically terminate upon termination of the License Agreement.

The notice, assignment, and dispute resolution provisions of Section 15 (Sections 15.1, 15.2, 15.3, 15.9, 15.10, 15.11, 15.12, 15.13, and 15.14) of the License Agreement shall apply to this letter agreement.

[Remainder of Page Intentionally Left Blank]

[**] = 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.

If the foregoing is in accordance with our agreement, please acknowledge the same by signing below.

GENZYME CORPORATION
By:	/s/ Mark J. Enyedy
Name: Mark J. Enyedy
Title: President, Oncology and Multiple Sclerosis
Accepted and agreed:
BAYER SCHERING PHARMA AG
By:	/s/ Joachim Neipp
Name: Joachim Neipp
Title: President Financial Operations
By:	/s/ Steffen Schroeder
Name: Steffen Schroeder
Title: Legal Counsel

[**] = 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.

GENZYME CORPORATION

500 KENDALL STREET

CAMBRIDGE, MA  02142

May 29, 2009

Bayer Schering Pharma AG

Berlin 13342 Germany

Re:License and Asset Purchase Agreement (the “License Agreement”), dated as of March 30, 2009, between Genzyme Corporation (“Genzyme”) and Bayer Schering Pharma AG (“Bayer”)

Ladies and Gentlemen:

The following arrangements reflect the agreements of each of Bayer and Genzyme with respect to the formation of Alcafleu Management GmbH & Co. KG (“Alcafleu”).

Each of Bayer and Genzyme approves the  License Agreement between Alcafleu and Genzyme (“Alcafleu License Agreement”) in the form attached hereto.

Bayer agrees that Genzyme’s performance of an obligation under the Alcafleu License Agreement shall constitute performance of the identical obligation under the License Agreement.  For example, and without limiting the generality of the foregoing, Genzyme’s payment to Alcafleu of amounts due under Section 4.1.4, 4.1.5, 4.1.6, 4.2, and 4.3 shall constitute performance of Genzyme’s obligations under the same sections of the License Agreement.

Bayer will cause Alcafleu and Lilienthalstraße Nr. 4 GmbH, the general partner of Alcafleu, to comply with the SPV Documents; provided however, if such compliance requires an action that may not be taken without the consent of Genzyme or one of its Affiliates, then Bayer will not be obligated to cause Alcafleu or Alcafleu GmbH to take such action until such consent is obtained.  For the purposes of this letter agreement, the “SPV Documents” mean (i) the Partnership Agreement of Alcafleu, (ii) the Shareholders Agreement dated as of May 29, 2009 among Bayer, Genzyme, and Genzyme Luxembourg S.a.r.l. relating to Alcafleu (the “Shareholders Agreement”), (iii) the Articles of Association of Lilienthalstraße Nr. 4 GmbH, (iv) the Partnership Interest Sale and Purchase Agreement between Bayer and Genzyme Luxembourg S.a.r.l. relating to Alcafleu, (v) the Contribution and License Agreement dated as of May 29, 2009 between Bayer and Alcafleu, and (vi) the Alcafleu License Agreement.  In addition, subject to the rights of Alcafleu under Section 8.7 of the Partnership Agreement, Bayer shall cause Alcafleu not to assign the Alcafleu License Agreement or the Distribution and Development Agreement to any Person (including any Bayer Affiliate) without the prior written approval of Genzyme, so long as Genzyme or any of its Affiliates (or their successors or permitted assigns) is a party to such agreements.

[**] = 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.

Bayer and Genzyme further agree to execute the Distribution and Development Agreement set forth at Exhibit 5.2(g)(i) of the License Agreement immediately prior to Bayer’s execution of the Contribution and License Agreement between Bayer and Alcafleu and thus immediately prior to Closing of the License Agreement.  In the event Closing of the License Agreement does not occur within one business day of the execution of the Distribution and Development Agreement, then such agreement shall be null and void.

In addition, Genzyme approves and consents to the assignment as of the Closing Date by Bayer to Alcafleu of Bayer’s rights and obligations under Article 4 of the License Agreement.

[Remainder of Page Intentionally Left Blank]

[**] = 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.

If the foregoing is in accordance with our agreement, please acknowledge the same by signing below.

GENZYME CORPORATION
By:	/s/ Earl M. Collier, Jr.
Name: Earl M. Collier, Jr.
Title: Executive Vice President
Accepted and agreed:
BAYER SCHERING PHARMA AG
By:	/s/ Joachim Neipp
Name: Joachim Neipp
Title: Vice President Financial Operations
By:	/s/ Martin Eisenhauer
Name: Martin Eisenhauer
Title: Legal Counsel

[**] = 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.

LICENSE AGREEMENT

DATED AS OF MAY 29, 2009

BETWEEN

GENZYME CORPORATION

AND

ALCAFLEU MANAGEMENT GMBH & CO. KG

[**] = 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

			Page
1.	DEFINITIONS		1
2.	LICENSE OF ASSETS		13
	2.1.	Licenses and Related Provisions	13
	2.2.	Know-How Transfer	23
	2.3.	Transfer of Licensed IP	23
	2.4.	[INTENTIONALLY OMITTED]	23
	2.5.	[INTENTIONALLY OMITTED]	23
	2.6.	No Rights in SOT Assets	23
3.	[INTENTIONALLY OMITTED]		24
4.	CONSIDERATION		24
	4.1.	Oncology Products	24
	4.2.	Alemtuzumab MS	26
	4.3.	Payment Provisions	27
	4.4.	Records; Audit	30
5.	[INTENTIONALLY OMITTED]		31
6.	REPRESENTATIONS AND WARRANTIES OF ALCAFLEU		31
	6.1.	Organization	31
	6.2.	Power and Authorization	31
	6.3.	Authorization of Governmental Authorities	31
	6.4.	Noncontravention	31
	6.5.	[Intentionally Omitted]	32
	6.6.	[Intentionally Omitted]	32

[**] = 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.

i

TABLE OF CONTENTS

(continued)

			Page
	6.7.	[Intentionally Omitted]	32
	6.8.	[Intentionally Omitted]	32
	6.9.	[Intentionally Omitted]	32
	6.10.	Intellectual Property	32
	6.11.	[Intentionally Omitted]	33
	6.12.	[Intentionally Omitted]	33
	6.13.	[Intentionally Omitted]	33
	6.14.	[Intentionally Omitted]	33
	6.15.	[Intentionally Omitted]	33
	6.16.	[Intentionally Omitted]	33
	6.17.	[Intentionally Omitted]	33
	6.18.	[Intentionally Omitted]	33
	6.19.	[Intentionally Omitted]	33
7.	REPRESENTATIONS AND WARRANTIES OF GENZYME		33
	7.1.	Organization	33
	7.2.	Power and Authorization	34
	7.3.	Authorization of Governmental Authorities	34
	7.4.	Noncontravention	34
	7.5.	[Intentionally Omitted]	34
8.	COVENANTS		34
	8.1.	[Intentionally Omitted]	34
	8.2.	[Intentionally Omitted]	34

[**] = 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)

		Page
8.3.	[Intentionally Omitted]	35
8.4.	[Intentionally Omitted]	35
8.5.	[Intentionally Omitted]	35
8.6.	[Intentionally Omitted]	35
8.7.	[Intentionally Omitted]	35
8.8.	Confidentiality	35
8.9.	[Intentionally Omitted]	36
8.10.	[Intentionally Omitted]	36
8.11.	[Intentionally Omitted]	36
8.12.	[Intentionally Omitted]	36
8.13.	[Intentionally Omitted]	36
8.14.	[Intentionally Omitted]	37
8.15.	[Intentionally Omitted]	37
8.16.	[Intentionally Omitted]	37
8.17.	[Intentionally Omitted]	37
8.18.	[Intentionally Omitted]	37
8.19.	[Intentionally Omitted]	37
8.20.	[Intentionally Omitted]	37
8.21.	[Intentionally Omitted]	37
8.22.	Further Assurances	37
8.23.	[Intentionally Omitted]	37

[**] = 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)

			Page
9.	INTELLECTUAL PROPERTY AND OTHER COVENANTS		37
	9.1.	Filing, Prosecution and Maintenance of Licensed Patents and Licensed Trademarks	37
	9.2.	Enforcement of Licensed IP	38
	9.3.	Claimed Infringement of Third Party Rights	41
	9.4.	Other Infringement Resolutions	42
	9.5.	Diligence	42
	9.6.	Covenant in Support of License	43
10.	CONDITIONS TO GENZYME’S OBLIGATIONS AT THE CLOSING		43
11.	[Intentionally Omitted]		43
12.	TERMINATION		43
	12.1.	[Intentionally Omitted]	43
	12.2.	[Intentionally Omitted]	43
	12.3.	Termination by Alcafleu For Cause	43
13.	INDEMNIFICATION		44
	13.1.	[Intentionally Omitted]	44
	13.2.	[Intentionally Omitted]	44
	13.3.	[Intentionally Omitted]	44
	13.4.	[Intentionally Omitted]	44
	13.5.	[Intentionally Omitted]	44
	13.6.	[Intentionally Omitted]	44
	13.7.	[Intentionally Omitted]	44
	13.8.	[Intentionally Omitted]	44

[**] = 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)

			Page
	13.9.	[Intentionally Omitted]	44
	13.10.	Disclaimer	44
14.	TAX MATTERS		44
	14.1.	Tax Sharing Agreements	44
	14.2.	Certain Taxes and Fees	45
	14.3.	[Intentionally Omitted]	45
	14.4.	Tax Record Retention; Cooperation on Tax Matters	45
	14.5.	Apportionment of Ad Valorem Taxes	45
	14.6.	Assignment of Agreement	46
15.	MISCELLANEOUS		46
	15.1.	Notices	46
	15.2.	Succession and Assignment	48
	15.3.	Amendments and Waivers	50
	15.4.	Entire Agreement	50
	15.5.	Counterparts	50
	15.6.	Severability	50
	15.7.	Headings	51
	15.8.	Construction	51
	15.9.	Governing Law	51
	15.10.	Dispute Resolution	51
	15.11.	Arbitration	52
	15.12.	Jurisdiction; Venue; Service of Process	54

[**] = 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

TABLE OF CONTENTS

(continued)

		Page
15.13.	Specific Performance	55
15.14.	Waiver of Jury Trial	56
15.15.	Certain Rules of Construction	56
15.16.	Third Party Beneficiaries	56

[**] = 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.

vi

LICENSE AGREEMENT

This License Agreement (the “Agreement”), dated as of May 29, 2009 (the “Effective Date”), is between Genzyme Corporation (“Genzyme”) and Alcafleu Management GmbH & Co. KG (“Alcafleu”).

RECITALS

WHEREAS, Bayer Schering Pharma AG (“Bayer”) and Genzyme entered into that certain License and Asset Purchase Agreement on March 30, 2009 (the “LAPA “) in which section 8.23 required Bayer to form Alcafleu and to assign certain assets to Alcafleu and to license certain assets to Alcafleu; and

WHEREAS, as part of such transaction, Alcafleu would subsequently license both the assigned assets and licensed assets to Genzyme under the exact same terms and conditions that Genzyme was licensed under the LAPA.

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 Alcafleu hereby agree as follows:

1.             DEFINITIONS.

Terms not otherwise defined herein shall have those meanings set forth in the LAPA.  As used herein, the following terms will have the following meanings:

“AAA Rules” is defined in Section 15.11.1.

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

“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.  Alcafleu shall be deemed to be an Affiliate of Bayer.

“Agreement” is defined in the Preamble.

[**] = 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.

1

“Alcafleu “ 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 Alcafleu 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.

“Bayer” means Bayer Schering Pharma AG.

“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 Improvements” means any of the following:

(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 [**].

“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.

[**] = 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.

2

“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 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 of the LAPA 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 of the LAPA.

[**] = 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.

3

“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.

“Claim” is defined in Section 15.10.1.

“Closing” shall have the meaning given that term in the LAPA.

“Closing Date” shall have the meaning given that term in the LAPA.

“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”.

“Confidential Information” is defined in Section 8.8.3.

“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.

“Dispute Escalation Notice” is defined in Section 15.10.2.

“Effective Date” is defined in the Preamble.

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

“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.

[**] = 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.

4

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

“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) of the LAPA.

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

“Genzyme” is defined in the Preamble.

“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 [**].

“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).

“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.

[**] = 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.

5

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

“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.

“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.

“Joint Transition Team” shall have the meaning given such term in the LAPA.

“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.

“LAPA” is defined in the first Whereas clause.

“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).

[**] = 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.

6

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

“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.

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

“Material Default” is defined in Section 12.3.1.

“Milestone Buyout Payment” is defined in Section 4.2.3.

“Milestone Payments” means, collectively, the Alemtuzumab MSMilestone 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 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

[**] = 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.

7

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 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

[**] = 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.

8

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.

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

“Notice of Dispute” is defined in Section 15.10.2.

“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 Product Milestone Payments” is defined in 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.

9

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

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

“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.

“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.

“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.

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

“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.

“Qualifications” is defined in Section 15.11.2.

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

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

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

[**] = 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.

10

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

“Royalty Payments” is defined in Section 4.3.1.

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

“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, 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 of the LAPA 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 of the LAPA.  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.

[**] = 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 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 of the LAPA.

“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 Alcafleu 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.

“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.

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

“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.

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

“VAT” is defined in Section 4.3.5(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.

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[**] 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:  Alcafleu hereby grants to Genzyme an exclusive (even as to Alcafleu), 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 Alcafleu and its Affiliates have rights in the Business-Specific Licensed IP.

(b)           For the Shared Licensed IP:

(i)            Alcafleu 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 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 Alcafleu and its Affiliates have rights in the Shared Licensed Patents, Shared Licensed Know-How, and Shared Licensed Copyrights.

[**] = 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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(ii)           Subject to the terms and conditions of Section 2.1.5, Alcafleu 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 “Scher” 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 Alcafleu’s consent; provided, however, that (i) Genzyme will be fully responsible for the performance of such Sublicensees hereunder, (ii) each such sublicense shall permit Alcafleu 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) of the LAPA.

(b)           For the Shared Licensed Patents, Shared Licensed Know-How, and Shared Licensed Copyrights, Genzyme may grant sublicenses (i) with Alcafleu’s prior written consent, (ii) without Alcafleu’s consent to a Genzyme Affiliate, or (iii) without Alcafleu’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 Alcafleu to audit the Sublicensee on substantially the same terms as those set forth in Section 4.4, (C) each Sublicensee of any commercial rights shall agree to diligence requirements no less than those specified 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.

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Section 9.5 to the extent applicable to the activities to be undertaken by such Sublicensee and (D) Genzyme provides notice to Alcafleu 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) of the LAPA.

(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)           Alcafleu retains the non-exclusive, non-transferable (except for the right to license Bayer) right under the Business-Specific Licensed IP only to the extent necessary for Alcafleu or its Affiliates to perform their obligations under this Agreement, the LAPA and the Ancillary Agreements.  This retained right may be licensed by Alcafleu or Bayer as reasonably necessary in Alcafleu’s or Bayer’s sole discretion for Alcafleu or its Affiliates to perform their obligations under this Agreement, the LAPA and the Ancillary Agreements, provided, however, that (i) Alcafleu will, or will cause its Affiliates to, be fully responsible for the performance of such sublicensees and (ii) Alcafleu 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)           Alcafleu 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 Alcafleu or its Affiliates to perform their supply obligations and grant the rights granted by Bayer under the agreements entered into by Bayer prior to the execution date of the LAPA as set forth in Schedule 2.1.3(b) of the LAPA.

(c)           For the purpose of clarity, subject to the [**] of the LAPA, and notwithstanding anything else to the contrary in this Agreement, Alcafleu and its Affiliates 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 [**] of the LAPA, Bayer and its Affiliates 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.

[**] = 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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2.1.4.      Third Party Agreements.

(a)           Generally.  Alcafleu 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 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).  Alcafleu 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.  Alcafleu agrees to keep Genzyme fully informed of the rights that Alcafleu 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 Alcafleu or its Affiliates under an In-License Agreement that is not a Transferred Contract (the “In-Licensed IP”).  Alcafleu 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.  Alcafleu will, and will cause its Affiliates to, immediately notify Genzyme of (i) any event of which Alcafleu is aware that affects in any material respect the rights granted to Alcafleu under an In-License Agreement that are, in turn, sublicensed to Genzyme pursuant to this Agreement or (ii) receipt by Alcafleu of any written notice received under any Third Party Agreement, including any of breach or termination of any Third Party Agreement.  Alcafleu will, and will cause its Affiliates to, promptly furnish Genzyme with copies of all reports and other communications that Alcafleu 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

[**] = 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 reports or communication relate to the efforts of Genzyme under this Agreement, Alcafleu 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 Alcafleu or Bayer, not more frequently than annually, Genzyme will send Alcafleu and 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 Alcafleu and/or Bayer notifies Genzyme in writing of such breach, Alcafleu and/or 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 Alcafleu and/or Bayer pursuant to this Section 2.1.5, and provides notice to Alcafleu and Bayer of such dispute within the sixty (60) day period following the date that Alcafleu and/or Bayer notified Genzyme of the breach, Alcafleu and 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 Alcafleu’s and 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

[**] = 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 Trade Dress and fails to cure such breach within sixty (60) days after Alcafleu and/or Bayer notifies Genzyme in writing of such breach, Alcafleu and/or 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, Alcafleu and Bayer shall retain any other rights and remedies either 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, 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

[**] = 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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[**] 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 “Scher” 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 “Scher” 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) of the LAPA, 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 bear any Retained Names and Marks (or any name, mark, 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 neither Bayer nor its Affiliates shall has any 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

[**] = 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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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 Alcafleu or 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 “Scher” 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) of the LAPA (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 Alcafleu’s or 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 Alcafleu’s 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) of the LAPA (collectively the “Retained Trade Dress”) in any way that would impair the validity of such Retained Trade Dress as proprietary trademarks, service marks, trade names and/or trade dress in any jurisdiction, (ii) take any action which would impair Alcafleu’s or 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

[**] = 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 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 Alcafleu’s 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, the LAPA and the Ancillary Agreements, and except as expressly provided in this Agreement, the LAPA 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 of the LAPA, 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 Alcafleu or Bayer as of the Closing Date (regardless of whether such third party later becomes an Affiliate of Alcafleu or 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 Alcafleu 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

[**] = 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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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 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.

[**] = 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.

22

2.2.         Know-How Transfer.  To enable Genzyme to exercise the rights granted under this Agreement, Alcafleu shall cause Bayer to 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, Alcafleu shall cause Bayer to 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, Alcafleu shall cause Bayer to 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 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 Alcafleu 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.         [INTENTIONALLY OMITTED]

2.5.         [INTENTIONALLY OMITTED]

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 Alcafleu is not licensing or transferring to Genzyme any of Alcafleu’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.

[**] = 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.

23

3.             [INTENTIONALLY OMITTED]

4.             CONSIDERATION

4.1.         Oncology Products.

4.1.1.      [Intentionally Omitted]

4.1.2.      [Intentionally Omitted]

4.1.3.      [Intentionally Omitted]

4.1.4.      Royalties under In-License Agreements.  From and after the Closing Date, 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 Alcafleu 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 Alcafleu by paying a percentage of Net Sales in the Territory of the Oncology Products as set forth below (collectively, the “Oncology Product Royalty Payments”):

Oncology Product	Percentage of Net Sales
Fludara	[**]% through calendar year [**]; [**]% during and after calendar year [**]
Leukine	[**]% through calendar year [**]; [**]% during and after calendar year [**]
Campath Oncology	[**]%

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 Alcafleu the following milestone payments (the “Oncology Product Milestone 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.

24

Event	Amount
If Net Sales of the Oncology Products in the Territory collectively reach US $[**] (“First Oncology Milestone Threshold”) in Oncology Year One	US $	[**]
If Net Sales of the Oncology Products in the Territory collectively reach US $[**] (“Second Oncology Milestone Threshold”) in Oncology Year Two	US $	[**]
If Net Sales of the Oncology Products in the Territory collectively reach US $[**] (“Third Oncology Milestone Threshold”) in Oncology Year Three	US $	[**]

Wherein for Section 4.1.6:

(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

[**] = 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

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 Alcafleu by paying a percentage of Net Sales in the Territory of Approved Alemtuzumab MS as set forth below (collectively, the “Alemtuzumab MS Royalty Payments”):

Aggregate Payments to Alcafleu	Percentage of Net Sales
Aggregate royalty payments to Alcafleu on Net Sales of Approved Alemtuzumab MS is less than or equal to US $[**]	[**]	%
Aggregate royalty payments to Alcafleu on Net Sales of Approved Alemtuzumab MS is greater than US $[**] and less than or equal to US $[**]	[**]	%

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 Alcafleu the following milestone payments (the “Alemtuzumab MSMilestone 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.

26

Event	Amount
If Net Sales of Approved Alemtuzumab MS in the Territory reach US $[**] in any contiguous twelve (12) month period between [**] and [**]	[**]% of Net Sales of Approved Alemtuzumab MS in the Territory in the first such twelve (12) month period
If Net Sales of Approved Alemtuzumab MS in the Territory reach US $[**] in any contiguous twelve (12) month period between [**] and [**]	[**]% of Net Sales of Approved Alemtuzumab MS in the Territory in the first such twelve (12) month period
If Net Sales of Approved Alemtuzumab MS in the Territory reach US $[**] in any contiguous twelve (12) month period from [**] and [**]	[**]% of Net Sales of Approved Alemtuzumab MS in the Territory in the first such twelve (12) month period
If Net Sales of Approved Alemtuzumab MS in the Territory reach US $[**] in any contiguous twelve (12) month period from [**]and [**]	[**]% of Net Sales of Approved Alemtuzumab MS in the Territory in the first such twelve (12) month period

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 MSMilestone 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 MSMilestone 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 to Alcafleu 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 MSMilestone 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

[**] = 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

calendar quarter, Genzyme will deliver to Alcafleu 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 Alcafleu’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 Alcafleu.

(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 Alcafleu.

(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 Alcafleu.

(d)           [Intentionally Omitted]

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 (http://www.ecb.int) 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,

[**] = 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

(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 Alcafleu 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 Alcafleu 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 Alcafleu accompanying the payment with respect to which such payment, deduction or withholding has been made.  Upon written request from Alcafleu, Genzyme will promptly provide (or cause to be provided) to Alcafleu 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 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 Alcafleu 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 Alcafleu without any deduction or withholding, or any reduced deduction or withholding, if possible.

4.3.5.       VAT.  All agreed remunerations are considered to be net of value added tax (“VAT”).  VAT applies additionally as legally owed, payable after

[**] = 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

receipt of a correct invoice, which meets all requirements according to the applicable VAT Legal Requirements.  For the avoidance of doubt, Alcafleu 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.  Alcafleu and Genzyme agree to cooperate in finding and implementing acceptable solutions for all parties that mitigate or eliminate VAT costs, including administrative and compliance costs.

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 Alcafleu’s auditors from Ernst & Young, KPMG, Deloitte, PricewaterhouseCoopers or any other auditing firm to which Genzyme has 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 Alcafleu 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.  Alcafleu will cause its auditors not to provide Alcafleu with any copies of such accounts, records or reports and not to disclose to Alcafleu any information other than information relating solely to the accuracy of the accounting and payments made by Genzyme pursuant to this Section 4.  Alcafleu will cause its auditors to promptly provide a copy of their report to Genzyme.  If such audit determines that payments are due to Alcafleu, Genzyme will pay to Alcafleu any such additional amounts within [**] days after the date on which such auditor’s written report is delivered to Genzyme and Alcafleu, 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 Alcafleu, Alcafleu 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 Alcafleu.  Any such inspection of records will be at Alcafleu’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 Alcafleu’s confidentiality and non-use obligations under Section 8.8.3, and Alcafleu 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.

[**] = 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

5.             [INTENTIONALLY OMITTED]

6.             REPRESENTATIONS AND WARRANTIES OF ALCAFLEU.

In order to induce Genzyme to enter into and perform this Agreement, Alcafleu hereby represents and warrants to Genzyme, as of the Effective Date, as follows:

6.1.          Organization.  Alcafleu 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) 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 would not have a material adverse effect on Alcafleu.

6.2.          Power and Authorization.  The execution, delivery and performance by Alcafleu of this Agreement is within the power and authority of Alcafleu and have been duly authorized by all necessary entity action on the part of Alcafleu.  This Agreement (a) has been duly executed and delivered by Alcafleu and (b) assuming the due execution and delivery by Genzyme is  a legal, valid and binding obligation of Alcafleu, enforceable against Alcafleu 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).

6.3.          Authorization of Governmental Authorities.  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 the authorization, execution, delivery and performance by Alcafleu of this Agreement.

6.4.          Noncontravention.  Except with respect to the In-License Agreements, the execution, delivery and performance by Alcafleu will not:

(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 violate any Legal Requirement applicable to Alcafleu in any Material Country;

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

(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 Alcafleu or 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.

31

(d)           result in the creation or imposition of a material Encumbrance upon, or the forfeiture of, 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 Alcafleu or its Affiliates.

6.5.          [Intentionally Omitted]

6.6.          [Intentionally Omitted]

6.7.          [Intentionally Omitted]

6.8.          [Intentionally Omitted]

6.9.          [Intentionally Omitted]

6.10.        Intellectual Property.

6.10.1.     [Intentionally Omitted]

6.10.2.     [Intentionally Omitted]

6.10.3.     [Intentionally Omitted]

6.10.4.     Title.  Except as specified on Schedule 6.10.2 of the LAPA, Alcafleu owns and possesses all rights, title, and interests in and to the Business-Specific Licensed IP to the same extent as Bayer or its Affiliates owned the Business Specific Licensed IP prior to the contribution of the Business Specific Licensed IP to Alcafleu pursuant to the Contribution and License Agreement between Bayer and Alcafleu entered into immediately prior to the execution of this Agreement, without Encumbrances other than Permitted Encumbrances, except to the extent the Business-Specific Licensed IP identified on Schedule 6.10.2 of the LAPA is subject to an In-License Agreement as indicated on Schedule 6.10.2 of the LAPA.  Except as specified on Schedule 6.10.2 of the LAPA, Alcafleu or its Affiliate identified on Schedule 6.10.2 of the LAPA, as applicable, possesses all rights, title and interests in the Shared Licensed IP necessary for Alcafleu 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 Alcafleu or any of its Affiliates has with a third party.  Alcafleu or 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 Alcafleu has sufficient legal and/or beneficial title and rights to grant 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.

32

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 Alcafleu or any of its Affiliates has with any third party.

6.10.5.          [Intentionally Omitted]

6.10.6.          [Intentionally Omitted]

6.10.7.          [Intentionally Omitted]

6.10.8.          [Intentionally Omitted]

6.10.9.          [Intentionally Omitted]

6.10.10.        [Intentionally Omitted]

6.10.11.        [Intentionally Omitted]

6.11.        [Intentionally Omitted]

6.12.        [Intentionally Omitted]

6.13.        [Intentionally Omitted]

6.14.        [Intentionally Omitted]

6.15.        [Intentionally Omitted]

6.16.        [Intentionally Omitted]

6.17.        [Intentionally Omitted]

6.18.        [Intentionally Omitted]

6.19.        [Intentionally Omitted]

7.             REPRESENTATIONS AND WARRANTIES OF GENZYME.

In order to induce Alcafleu to enter into and perform this Agreement, Genzyme hereby represents and warrants to Alcafleu, as of the Effective Date, that:

7.1.          Organization.  Genzyme is (a) duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and (b) duly qualified to do business and 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 have a material adverse effect on 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.

33

7.2.          Power and Authorization.  The execution, delivery and performance by Genzyme of this Agreement is within the power and authority of Genzyme and has been duly authorized by all necessary corporate action on the part of Genzyme.  This Agreement (a) has been duly executed and delivered by Genzyme and (b) assuming the due execution and delivery by Alcafleu is a legal, valid and binding obligation of Genzyme enforceable against Genzyme 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).  Genzyme has the full power and authority necessary to use the Licensed IP related to the Business that is held by it as of the Closing Date and carry on its relevant portion of Business.

7.3.          Authorization of Governmental Authorities.  Except as disclosed on Schedule 7.3 of the LAPA, 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 the authorization, execution, delivery and performance by Genzyme.

7.4.          Noncontravention.  Except as disclosed on Schedule 7.4 of the LAPA, the execution, delivery and performance by Genzyme of this Agreement 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, as disclosed on Schedule 7.3 of the LAPA, violate any provision of any Legal Requirement applicable to Genzyme or any of its Affiliates in any Material Country;

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

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

7.5.          [Intentionally Omitted]

8.             COVENANTS.

8.1.          [Intentionally Omitted]

8.2.          [Intentionally Omitted]

[**] = 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

8.3.          [Intentionally Omitted]

8.4.          [Intentionally Omitted]

8.5.          [Intentionally Omitted]

8.6.          [Intentionally Omitted]

8.7.          [Intentionally Omitted]

8.8.          Confidentiality.

8.8.1.       [Intentionally Omitted]

8.8.2.       [Intentionally Omitted]

8.8.3.       Non-Disclosure and Non-Use.

(a)           Confidential Information.  Genzyme and Alcafleu agree that the terms and conditions of this Agreement, any activities conducted in connection with or pursuant to this Agreement, the LAPA or the Ancillary Agreements, and information disclosed by either party in accordance with this Agreement, the LAPA or the Ancillary Agreements or in the course of performance under the LAPA or Ancillary Agreements, including the performance and receipt of services under the Transition Services Agreement (“Confidential Information”) will be used and disclosed by the receiving party only to perform its obligations and exercise its rights under this Agreement, the LAPA and the Ancillary Agreements and/or to conduct the Business.  Information relating to Licensed Products (to the extent it is not Shared Licensed IP) and Business-Specific Licensed IP will be considered the Confidential Information of Genzyme.  Information relating to the Shared Licensed IP will be considered the Confidential Information of Alcafleu and its Affiliates.  The terms and conditions of this Agreement will be considered the Confidential Information of the parties to the Agreement, as if all parties were receiving parties.  Notwithstanding the foregoing, “Confidential Information” will not include:

(i)            information (other than information relating to the Licensed Products (to the extent it is not Shared Licensed IP) and Business-Specific Licensed IP) that the receiving party can establish was already known by the receiving party (other than under an obligation of confidentiality) at the time of disclosure by the disclosing party;

[**] = 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

(ii)           information that the receiving party can establish was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party; or

(iii)          information that the receiving party can establish became generally available to the public or otherwise part of the public domain after its disclosure or development, as the case may be, other than through any act or omission of the receiving party or any of its Affiliates.

(b)           Authorized Disclosure and Use.  Notwithstanding the foregoing provisions of Subsection (a), each party may disclose Confidential Information belonging to the other party to the extent such disclosure is reasonably necessary to:

(i)            prosecute or defend an Action;

(ii)           comply with applicable Legal Requirements and stock exchange rules (including the rules and regulations of the Securities and Exchange Commission); or

(iii)          make filings and submissions to, or correspond or communicate with, any Governmental Authority.

In the event a party deems it reasonably necessary to disclose Confidential Information belonging to the other party pursuant to clauses (i), (ii) or (iii) of this Section 8.8.3, the disclosing party will (unless prohibited by applicable Legal Requirements) give reasonable advance notice of such disclosure to the other party, consult with the other party with regard to the disclosure of Confidential Information and take all reasonable measures to ensure confidential treatment of such information.  Each party will promptly notify the other party upon becoming aware of any misappropriation or unauthorized disclosure or use of the other party’s Confidential Information.

8.8.4.       [Intentionally Omitted]

8.9.          [Intentionally Omitted]

8.10.        [Intentionally Omitted]

8.11.        [Intentionally Omitted]

8.12.        [Intentionally Omitted]

8.13.        [Intentionally Omitted]

[**] = 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

8.14.        [Intentionally Omitted]

8.15.        [Intentionally Omitted]

8.16.        [Intentionally Omitted]

8.17.        [Intentionally Omitted]

8.18.        [Intentionally Omitted]

8.19.        [Intentionally Omitted]

8.20.        [Intentionally Omitted]

8.21.        [Intentionally Omitted]

8.22.        Further Assurances.  From and after the Effective Date, upon the request of either Alcafleu or Genzyme, each of the parties hereto will, and will cause their Affiliates to, do, execute, acknowledge and deliver all such further acts, assurances, deeds, assignments, transfers, conveyances and other instruments and papers as may be reasonably required or appropriate to carry out the transactions contemplated by this Agreement.

8.23.        [Intentionally Omitted]

9.             INTELLECTUAL PROPERTY AND OTHER COVENANTS.

9.1.          Filing, Prosecution and Maintenance of Licensed Patents and Licensed Trademarks.

9.1.1.       Responsibility.

(a)           Business-Specific Licensed IP.  From and after Closing, Genzyme, through counsel of its choosing and at its sole discretion and expense, will be responsible for and have control over obtaining, prosecuting (including any interferences, reissue proceedings, re-examinations and oppositions), and maintaining throughout the Territory the Business-Specific Licensed Patents and Business-Specific Licensed Trademarks.  Genzyme shall keep Alcafleu informed regarding the prosecution and maintenance of the Business-Specific Licensed Patents and Business-Specific Licensed Trademarks, and Alcafleu will cooperate with Genzyme in regard to the prosecution and maintenance thereof.  Genzyme may, in its sole discretion, elect not to pursue patent protection for any Business-Specific Licensed Patent or trademark registration for any Business-Specific Licensed Trademark in one or more countries in the Territory.  If Genzyme intends to abandon or let go any Patent Right

[**] = 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

within the Business-Specific Licensed Patents set forth on Schedule 6.10.9 of the LAPA, for which Alcafleu and/or Bayer would have a legal obligation under the German Law on Employee’s Inventions to provide the inventor(s) the right to pursue patent protection for such Patent Right, Genzyme shall provide Alcafleu and Bayer written notice of such intent in sufficient time to provide the inventor(s) the opportunity to take over the prosecution and/or maintaining of such Patent Rights.  If the inventor(s) take over such obligations, rights granted to Genzyme with respect to such Patent Right will revert to the inventor(s) to the extent provided under the German Law on Employee’s Inventions.  Except as provided in this Section 9.1.1(a), Alcafleu will have no right to take any actions to prosecute or maintain throughout the Territory the Business-Specific Licensed Patents and Business-Specific Licensed Trademarks.

(b)           [Intentionally Omitted]

9.1.2.       Cooperation.  Alcafleu will: (a) make its Representatives reasonably available to Genzyme (or to Genzyme’s authorized Representatives), to the extent reasonably necessary to enable Genzyme to undertake patent prosecution and trademark registration of the Business-Specific Licensed Patents and Business-Specific Licensed Trademarks; (b) at the reasonable request of Genzyme, cooperate with Genzyme in gaining patent term extensions and trademark registration renewals wherever applicable to Business-Specific Licensed Patents and Business-Specific Licensed Trademarks that are subject to this Agreement; and (c) use its commercially reasonable and diligent efforts to minimize or avoid interference with the prosecution and maintenance of the Business-Specific Licensed Patents and Business-Specific Licensed Trademarks.  Genzyme will reimburse Alcafleu for Alcafleu’s reasonable out-of-pocket expenses in complying with this Section 9.1.2; provided, however, that Alcafleu provides Genzyme with invoices or other reasonable documentation evidencing such expenses on a timely basis after the incurrence of such expense.

9.1.3.       Notwithstanding the rights granted to Genzyme in Section 9.1 related to the filing, prosecution and maintenance of Licensed Patents and Licensed Trademarks, such rights shall be subject to any and all limitations contained in any In-License Agreement related to the Intellectual Property licensed under such In-License Agreement.

9.2.          Enforcement of Licensed IP.

9.2.1.       Notification.  Each party will promptly report in writing to the other party any (a) known or suspected third party infringement of any Licensed Patents, Licensed Trademarks, Shared Licensed Trade Dress or Licensed Copyrights, or (b) unauthorized use or misappropriation of any Licensed Know-How or other Confidential Information by a third party of which it becomes

[**] = 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

aware, and will provide the other party with all available evidence supporting such infringement or unauthorized use or misappropriation.

9.2.2.       Right to Enforce.

(a)           Genzyme will have the sole and exclusive right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Territory infringing the Business-Specific Licensed Patents, Business-Specific Licensed Trademarks or Business-Specific Licensed Copyrights or the use without proper authorization of any Business-Specific Licensed Know-How, including (a) initiating or prosecuting an infringement or other appropriate Action against or (b) granting adequate rights and licenses necessary for continuing such activities in the Territory to any third party who at any time has infringed, or is suspected of infringing, any Business-Specific Licensed Patents, Business-Specific Licensed Trademarks or Business-Specific Licensed Copyrights or has used or is suspected of using without proper authorization the Business-Specific Licensed Know-How.  Without the written consent of Genzyme, Alcafleu will have no right to take any reasonable measures to stop any infringement of the Business-Specific Licensed Patents, Business-Specific Licensed Trademarks or Business-Specific Licensed Copyrights or the use without proper authorization of the Business-Specific Licensed Know-How.

(b)           Alcafleu and/or Bayer will have the first right, but not the obligation, to take any reasonable measures it deems appropriate to stop activities in the Territory infringing the Shared Licensed Patents or Shared Licensed Copyrights or the use without proper authorization of any Shared Licensed Know-How, in each case in connection with a Person’s manufacture, use, sale, offering for sale, or importation of Licensed Products, including (a) initiating or prosecuting an infringement or other appropriate Action against or (b) granting adequate rights and licenses necessary for continuing such activities in the Territory to any such Person.  During the Exclusive Period, if Alcafleu and/or Bayer does not initiate any such measures within [**] days of receiving written notice from Genzyme of such activities (or within a reasonable shorter time period if a shorter period to take action is required by applicable Legal Requirements to avoid the loss of legal rights), then Genzyme will have the second right, but not the obligation, to take any reasonable measures it deems appropriate to stop such activities; provided, however, Genzyme must coordinate and consult with Alcafleu and Bayer regarding such measures and will not take any measures, without the written permission of Bayer, which permission will not be unreasonably withheld.  It shall be reasonable for Alcafleu and/or Bayer to withhold such permission if Alcafleu and/or Bayer reasonably believes such measures will affect 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.

39

protection that any Shared Licensed IP affords Alcafleu and/or Bayer; provided, however, the mere likelihood that a defendant would allege that the asserted Shared Licensed Patents or Shared Licensed Copyrights is invalid or unenforceable shall not be sufficient grounds for Alcafleu and/or Bayer to withhold permission.  If either party brings a suit or action under this Section 9.2.2(b), during the Exclusive Period, the other party will have the right, at its expense, to retain its own counsel to monitor such Action.  Neither party will have the right to settle any infringement or misappropriation Action under this Section 9.2.2(b) in a manner that diminishes the rights or interests of the other party without the express written consent of such other party; provided, however that the grant by Genzyme of a sublicense under the Shared Licensed Patents or Shared Licensed Copyrights in accordance with this Agreement will not be considered to diminish the rights of Alcafleu and/or Bayer, and the grant by Alcafleu of a license under the Shared Licensed IP that is not in conflict with the exclusive rights granted to Genzyme in Section 2.1.1 will not be considered to diminish the rights of Genzyme.  In addition, (i) Genzyme will not settle any such Action in a manner that admits the invalidity or unenforceability of any Shared Licensed IP without obtaining the prior written consent of Bayer and (ii) during the Exclusive Period, Alcafleu will not settle any such Action in a manner that admits the invalidity or unenforceability of any Shared Licensed Patents or Shared Licensed Copyrights without obtaining the prior written consent of Genzyme.

(c)           [Intentionally Omitted]

9.2.3.       Procedures and Expenses.  The party with the right to take action pursuant to Section 9.2.2 will have the sole right to select counsel for any Action brought by it and will pay all expenses of such Action, including attorneys’ fees and court costs.  If required under applicable Legal Requirements in order for such party to initiate and/or maintain such Action, or if such party is unable to initiate or prosecute such Action solely in its own name or it is otherwise advisable to obtain an effective legal remedy, in each case, at such party’s request, the other party will join as a party to the Action and will execute and cause its Affiliates to execute all documents necessary for a party to initiate an Action to prosecute and maintain such Action.  In addition, at a party’s request, the other party will provide reasonable assistance in connection with such Action and the reasonable out-of-pocket expenses of the party providing assistance shall be reimbursed by the party requesting such assistance.

9.2.4.       Recoveries.  If a party obtains from a third party infringer, in connection with an Action brought pursuant to Section 9.2.2, any damages, license fees, royalties or other compensation (including any amount received in settlement of such Action), then any amounts recovered will first be applied 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.

40

reimbursement of each party’s reasonable costs, expenses and legal fees, including amounts one party has reimbursed to the other.  The remaining balance shall be retained by Genzyme, but will be considered Net Sales and subject to Genzyme’s payment obligations under Article 4.  The party bringing such Action pursuant to Section 9.2.2 will bear all payments awarded against or agreed to be paid by such party pursuant to such Action, including any costs or expenses incurred that exceed the amounts recovered by such party.

9.2.5.       Notwithstanding the rights granted to Genzyme in Section 9.2 related to the enforcement of Licensed IP, such rights shall be subject to any and all limitations contained in any In-License Agreement related to the Intellectual Property licensed under such In-License Agreement.

9.3.          Claimed Infringement of Third Party Rights.

9.3.1.       Notice.  In the event that a third party at any time provides written notice of a claim to, or brings an Action against any party, or any of such party’s respective Affiliates or sublicensees, claiming infringement of its Patent Rights or unauthorized use or misappropriation of its Know-How, based upon the development, manufacture or commercialization of Licensed Products in the Territory (“Infringement Claim”), such party will promptly notify the other party of the Infringement Claim or the commencement of such action, suit or proceeding, enclosing a copy of the Infringement Claim and all papers served.  Each party agrees to make available to the other party its advice and counsel regarding the technical merits of any such claim at no cost to the other party and to offer reasonable assistance to the other party at no cost to the other party.

9.3.2.       Defense of Infringement Claim; Declaratory Judgment Actions.

(a)           As between Alcafleu and Genzyme, Genzyme will have the sole and exclusive right, but not the obligation, to control the defense of any Infringement Claim brought against Genzyme or any of its Affiliates or sublicensees arising out of the development, manufacture or commercialization of Licensed Products in the Territory.  As between Alcafleu and Genzyme, Alcafleu will have the sole and exclusive right, but not the obligation, to control the defense of any Infringement Claim brought against Alcafleu or any of its Affiliates or licensees (other than Genzyme) arising out of the development, manufacture or commercialization of Licensed Products in the Territory.  Neither party will settle any such Action in a manner that (i) admits that any Licensed Product infringes or misappropriates a third party’s Intellectual Property or (ii) agrees to any injunction or other equitable remedy binding the other party without obtaining the prior written consent of the other party, which consent will not be unreasonably withheld or delayed.  In addition, if applicable prior to the initiation of an Infringement Claim, either party 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.

41

the right, but not the obligation, to bring a declaratory judgment action relating to any third party Patent Right that such third party has alleged is infringed by the development, manufacture or commercialization of Licensed Products in the Territory; provided, however, neither party shall bring such declaratory judgment action without first consulting with the other party.

(b)           The party controlling the defense of an Infringement Claim or bringing a declaratory judgment action will have the sole and exclusive right to select counsel for such Infringement Claim or such declaratory judgment action.  The party controlling the defense of an Infringement Claim or bringing a declaratory judgment Action will keep the other party informed, and will from time to time consult with the other party regarding the status of any such Action and will upon request provide the other party with copies of all documents filed in, and all written communications relating to, any suit brought in connection with such Action.  The other party will also have the right to participate and be represented in any such Action, at its own expense.

9.4.          Other Infringement Resolutions.  In the event of a dispute or potential dispute that has not ripened into a demand or Action of the types described in Section 9.2 and Section 9.3 (e.g., Actions seeking declaratory judgments and revocation proceedings), the same principles governing control of the resolution of the dispute, consent to settlements of the dispute, and implementation of the settlement of the dispute will apply.  Each party will immediately notify the other party of any certification of which it becomes aware filed pursuant to 21 U.S.C. § 355(b)(2)(A) or § 355(j)(2)(A)(vii) (or any amendment or successor statute thereto) or declaratory judgment action filed by a third party claiming that a Licensed Patent is invalid or that infringement of such Licensed Patent will not arise from the development, manufacture, use or sale of any product by a third party.  The provisions of Section 9.2 will thereafter apply as if such third party were an infringer or suspected infringer.

9.5.          Diligence.  Genzyme shall, directly and through its Affiliates and sublicensees, to use commercially reasonable efforts to commercialize Fludara, Leukine and Campath, each as a whole, in the Major Market Countries in its approved indications.  For the purposes of this Section 9.5, “commercially reasonable efforts” means, with respect to the commercialization of each Licensed Product, at any given time as the case may be, efforts reasonably used by Genzyme or its Affiliates (giving due consideration to relevant industry standards) for Genzyme’s own products (including internally developed, acquired and in-licensed products) with similar commercial potential at a similar stage in their lifecycle (assuming continuing development of such product), taking into consideration their safety, tolerability and efficacy, [**], the extent of market exclusivity, patent protection, cost to develop the product, promotable claims, health economic claims, the approved indications and the regulatory and reimbursement structure involved.  This Section 9.5 shall have no further force or effect with respect to

[**] = 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

each of Fludara, Leukine and Campath once Genzyme no longer has any obligation to make payments to Alcafleu with respect to Net Sales of such Licensed Product under this Agreement.

9.6.          Covenant in Support of License.  Covenant in Support of License.  Following the Closing, Alcafleu will not, and will cause its Affiliates not to, take any action that would cause any of the following representations to be false: Sections 6.4 (Non-Contravention) and 6.10.4 (Title).

10.           CONDITIONS TO GENZYME’S OBLIGATIONS AT THE CLOSING.

11.           [INTENTIONALLY OMITTED]

12.           TERMINATION.

12.1.        [Intentionally Omitted]

12.2.        [Intentionally Omitted]

12.3.        Termination by Alcafleu For Cause.

12.3.1.     [Intentionally Omitted]

12.3.2.     [Intentionally Omitted]

12.3.3.     [Intentionally Omitted]

12.3.4.     Survival of Sublicenses.

(a)           At the request of Genzyme, and subject to Alcafleu’s consent, which consent will not be unreasonably withheld, delayed, or conditioned, Alcafleu will enter into a written agreement with any Genzyme Sublicensee under which Alcafleu will commit that if this Agreement is terminated under Section 12.3 of the LAPA, Alcafleu will, subject to paragraph (b) below, provide such Sublicensee with a direct license on substantially the same terms as the Sublicensee has as a Sublicensee of Genzyme, so that the Sublicensee would be put in the same position as it was prior to the Agreement being terminated.

(b)           In the event the Agreement is terminated by Alcafleu under Section 12.3 of the LAPA, at the request of the Sublicensee and subject to Alcafleu’s consent, Alcafleu will extend such a direct license to the Sublicensee.  Alcafleu will not unreasonably deny such consent if (i) such Sublicensee (a) is in good standing and (b) is not an Affiliate of Genzyme; (ii) such direct license will not increase Alcafleu’s obligations; 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.

43

(iii) such direct license does not adversely affect Alcafleu’s and/or Bayer’s commercial interests.

12.3.5.     [Intentionally Omitted]

13.           INDEMNIFICATION.

Any indemnification for claims or losses hereunder shall be governed by Article 13 of the LAPA.

13.1.        [Intentionally Omitted]

13.2.        [Intentionally Omitted]

13.3.        [Intentionally Omitted]

13.4.        [Intentionally Omitted]

13.5.        [Intentionally Omitted]

13.6.        [Intentionally Omitted]

13.7.        [Intentionally Omitted]

13.8.        [Intentionally Omitted]

13.9.        [Intentionally Omitted]

13.10.      Disclaimer.  EACH PARTY MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OTHER THAN THOSE EXPRESSLY MADE IN THIS AGREEMENT.  ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED.

14.           TAX MATTERS

14.1.        Tax Sharing Agreements.  All Tax sharing agreements or similar agreements and all powers of attorney that relate in any way to the Business-Specific Licensed IP or the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent they would affect Genzyme’s rights to such Shared Licensed IP under this Agreement) will be terminated prior to the Closing or amended so that they no longer apply to the Business-Specific Licensed IP or the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent they would affect Genzyme’s rights to such Shared Licensed IP under this Agreement) and, after the Closing, no such agreement or power of attorney will have any effect on the Business-Specific Licensed IP or the Shared

[**] = 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

Licensed IP (with regard to the Shared Licensed IP, to the extent they would affect Genzyme’s rights to such Shared Licensed IP under this Agreement) or the Business.

14.2.        Certain Taxes and Fees.  Subject to Section 4.3.5,  and except as otherwise provided in the Purchase and Sale Agreement, all transfer, documentary, sales, use, stamp, registration, excise and other similar Taxes (but excluding income Taxes), and any conveyance fees or recording charges incurred in connection with the Contemplated Transactions, will be [**].  Alcafleu and/or Bayer will file (or caused to be filed) all necessary Tax Returns and other documentation with respect to all such Taxes, fees and charges and, if required by applicable law, Genzyme will (and will cause its Affiliates to) join in the execution of any such Tax Returns and other documentation.

14.3.        [Intentionally Omitted]

14.4.        Tax Record Retention; Cooperation on Tax Matters.  Each of Genzyme, Alcafleu and their respective Affiliates will retain all Tax records relating to the Business-Specific Licensed IP or the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent they would affect Genzyme’s rights to such Shared Licensed IP under this Agreement) until the expiration of the applicable statute of limitations (including any extensions thereof).  Genzyme, Alcafleu and their respective Affiliates will cooperate fully, as and to the extent reasonably requested by the other party, in connection with any Tax matters relating to the Alcafleu Business, the Business-Specific Licensed IP or the Shared Licensed IP (with regard to the Shared Licensed IP, to the extent they would affect Genzyme’s rights to such Shared Licensed IP under this Agreement) (including by the provision of reasonably relevant records or information).  The party requesting such cooperation will pay the reasonable out-of-pocket expenses of the other party.

14.5.        Apportionment of Ad Valorem Taxes.

14.5.1.     All real property taxes, personal property taxes, and similar ad valorem obligations levied with respect to the Business-Specific Licensed IP or the 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) for a taxable period that includes (but does not end on) the Closing Date (collectively, the “Apportioned Taxes”) will be apportioned between Alcafleu and/or Bayer and Genzyme (or, as appropriate, their respective Affiliates) based on the number of days of the taxable period prior to the Closing Date and the number of days in the full taxable period.  Alcafleu, or, as appropriate, its Affiliates, will be liable for the proportionate amount of Apportioned Taxes attributable to days before or on the Closing Date and Genzyme, or, as appropriate, its Affiliates, will be liable for the proportionate amount attributable to days after the Closing Date.

14.5.2.     Apportioned Taxes will be timely paid, and all applicable filings, reports and returns will be filed as provided by applicable Legal Requirements. 

[**] = 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.

45

The paying party will be entitled to reimbursement from the non-paying party in accordance with Section 14.5.1.  Upon payment of Apportioned Taxes, the paying party will present a statement to the non-paying party setting forth the amount of the reimbursement to which the paying party is entitled under Section 14.5.1 together with such supporting evidence as is reasonably necessary to calculate the amount to be reimbursed.  The non-paying party will reimburse the paying party no later than [**] Business Days after the presentation of  the statement.  Any payment not made within that time will bear interest from the payment due date until, but excluding, the date of the payment at an annual rate equal to the Prime Rate as published in The Wall Street Journal, East Coast Edition, in effect from time to time during the applicable period.  Such interest will be payable at the same time as the payment to which it relates and will be calculated daily on the basis of a year of 365 days without compounding.

14.6.        Assignment of Agreement.  The parties agree that if a party’s assignment of this Agreement or any of its rights, interests or obligations hereunder (or any other designation of another person to perform any payment obligation of the party) creates any additional Tax obligations or Tax Liabilities for the non-assigning party or its Affiliates (including any new or increased Tax withholding obligation by the assigning party or any of its Affiliates on payments made under this Agreement), the assigning party will reimburse the non-assigning party or its Affiliates for any such additional Tax obligations or Liabilities created by the assignment, and shall gross-up the non-assigning party or its Affiliate for additional Taxes resulting from reimbursements, until the non-assigning party or its Affiliates is made whole.  In the case of a new or increased Tax withholding obligation, the assigning party shall pay to the non-assigning party or its Affiliate the full amount of the payment that would have been due prior to the new or increased withholding obligation, and the assigning party shall nevertheless be responsible to withhold and pay the amount to required by applicable Legal Requirements to the appropriate Governmental Authority.  The reimbursement, gross-up and payment obligations pursuant to this Section 14.6 will be reduced by any Tax benefit actually received by the non-assigning party or its Affiliates (whether in the year of payment or a future period).

15.           MISCELLANEOUS

15.1.        Notices.  All notices, requests, demands, claims and other communications required or permitted to be delivered, given or otherwise provided under this Agreement must be in writing and must be delivered, given or otherwise provided:

(a)           by hand (in which case, it will be effective upon delivery);

(b)           by facsimile (in which case, it will be effective upon receipt of confirmation of good transmission); or

[**] = 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.

46

(c)           by overnight delivery by a nationally recognized courier service (in which case, it will be effective on the Business Day after being deposited with such courier service);

in each case, to the address (or facsimile number) listed below:

·	If to Alcafleu, to it at:
	Alcafleu Management GmbH & Co KG
	Lilienthalstraße Nr. 4
	15732 Schönefeld, Ortsteil Waltersdorf
	Germany
	Telephone number:
	Facsimile number:
	Attention:
·	with a copy to:
	Fulbright & Jaworski L.L.P.
	801 Pennsylvania Avenue, NW
	Washington, DC 20004
	Telephone number:	202-662-0200
	Facsimile number:	202-662-4643
	Attention:	Marilyn Mooney, Esq.
·	If to Genzyme, to it:
	Genzyme Corporation
	500 Kendall Square
	Cambridge, MA 02142
	Telephone number:	617-252-7500
	Facsimile number:	617-252-7600
	Attention:	President, Oncology and Multiple Sclerosis

[**] = 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.

47

·	with a copy to:
	Genzyme Corporation
	500 Kendall Square
	Cambridge, MA 02142
	Telephone number:	617-252-7500
	Facsimile number:	617-252-7600
	Attention:	General Counsel

Each of the parties to this Agreement may specify different address or facsimile number by giving notice in accordance with this Section 15.1 to each of the other parties hereto.

15.2.       Succession and Assignment.  Subject to subsections (a) through (g) below, this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, each of which such successors and permitted assigns will be deemed to be a party hereto for all purposes hereof.

(a)           No party may assign, delegate or otherwise transfer either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties.

(b)           Notwithstanding subsection (a) each party, upon providing the other parties written notice, may without the consent of the other parties, (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates, (ii) designate one or more of its Affiliates to perform its obligations hereunder, in each case, so long as the assigning party is not relieved of any Liability hereunder and so long as any such Affiliate remains such party’s Affiliate; provided, however, that such Affiliate assignee(s) provide the other parties with written acknowledgement of and agreement to the assigning party’s obligations under the Agreement that were assigned to it; and provided further, however, that subject to the rights of Alcafleu under Section 8.7 of the Partnership Agreement of Alcafleu, Alcafleu shall not assign this Agreement to any Affiliate without the prior written approval of Genzyme.

(c)           Notwithstanding Subsection (a), Genzyme, upon providing Alcafleu prior written notice, may without the consent of Alcafleu, assign and delegate to a third party the licenses to the Business-Specific Licensed IP granted in Section 2.1.1(a), and all rights and obligations related to the Business-Specific Licensed IP, so long as Genzyme is not relieved of any Liability hereunder and such assignment is a Qualified Assignment.

(d)           Notwithstanding Subsection (a), and subject to the restrictions in the Partnership Agreement of Alcafleu and 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.

48

Sharedholders Agreement dated as of May 29, 2009 among Bayer, Genzyme and Genzyme Luxembourg S.a.r.l. related to Alcafleu, each party (or its permitted successive assignees or transferees hereunder), upon providing the other parties prior written notice, may without the consent of the other parties, assign or transfer this Agreement as a whole to an entity that succeeds to all or substantially all of the business or assets of such party or in the case of Genzyme, substantially all of the Licensed Products, in each case, so long as the assigning party is not relieved of any Liability hereunder and such assignment is a Qualified Assignment.

(e)           For the purposes of this Agreement, a “Qualified Assignment” means any transaction that:

(i)            is made in compliance with applicable Legal Requirements, including securities, tax and corporation laws;

(ii)           includes the assignee’s written acknowledgement of and agreement to all of the assigning party’s obligations under the Agreement;

(iii)          is made to an assignee that is, and will be after giving effect to the relevant assignment will be, Solvent;

(iv)          is made to an assignee that is not subject at the time of such assignment to any order, decree or petition providing for (A) the winding-up or liquidation of such Person, (B) the appointment of a receiver over the whole or part of the assets of such Person or (C) the bankruptcy or administration of such Person; and

(v)           is not a voidable fraudulent conveyance; and

(vi)          has been made in compliance with Section 14.6.

(f)            Notwithstanding subsections (e)(i) through (v) above, (i) subject to the restrictions in the Partnership Agreement of Alcafleu and the Shareholders Agreement dated as of May 29, 2009 among Bayer, Genzyme and Genzyme Luxembourg S.a.r.l related to Alcafleu, each party may at any time assign its rights, interests and obligations provided for hereunder to any Person by merger or (ii) with the prior written consent of the other parties.

(g)           For purposes of this Section 15.2, “Solvent” means, with respect to any Person as on any date of determination, that as of such date, (i) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of 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.

49

Person, (ii) such Person is able to pay all liabilities of such Person as such liabilities mature and (iii) such Person does not have unreasonably small capital.  In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represent the amount that can reasonably be expected to become an actual or matured liability.  In computing the value of the assets of a Person, the value shall be determined in the context of current facts and circumstances affecting such Person.

15.3.       Amendments and Waivers.  No amendment or waiver of any provision of this Agreement will be valid and binding unless it is in writing and signed, in the case of an amendment, by each party hereto, or in the case of a waiver, by the party against whom the waiver is to be effective.  No waiver by any party of any breach or violation or, default under or inaccuracy in any representation, warranty, agreement or covenant hereunder, whether intentional or not, will be deemed to extend to any prior or subsequent breach, violation, default of, or inaccuracy in, any such representation, warranty, agreement or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.  No delay or omission on the part of any party in exercising any right, power or remedy under this Agreement will operate as a waiver thereof.

15.4.       Entire Agreement.  This Agreement, together with the LAPA, other Ancillary Agreements and any documents, instruments and certificates explicitly referred to herein, constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, with respect thereto.

15.5.       Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute but one and the same instrument.  This Agreement will become effective when duly executed by each party hereto.

15.6.       Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  In the event that any provision hereof would, under applicable Legal Requirements, be invalid or unenforceable in any respect, each party hereto intends that such provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable Legal Requirements.

[**] = 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.

50

15.7.       Headings.  The headings contained in this Agreement are for convenience purposes only and will not in any way affect the meaning or interpretation hereof.

15.8.       Construction.  The parties have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.  The parties intend that each representation, warranty and covenant contained herein will have independent significance.  If any party has breached or violated, or if there is an inaccuracy in, any representation, warranty, agreement or covenant contained herein in any respect, the fact that there exists another representation, warranty, agreement or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the party has not breached or violated, or in respect of which there is not an inaccuracy, will not detract from or mitigate the fact that the party has breached or violated, or there is an inaccuracy in, the first representation, warranty, agreement or covenant.  Provisions in this Agreement relating to jurisdiction, venue, governing law or other aspects of dispute resolution that expressly refer to the negotiation or performance of this Agreement are not intended to alter the application of principles under New York law relating to the construction or interpretation of contracts.

15.9.       Governing Law.  Except as otherwise expressly provided for in this Agreement, this Agreement, the rights of the parties and all Actions arising in whole or in part under or in connection with this Agreement or the negotiation or performance hereof, will be governed by and construed in accordance with the domestic substantive laws of the State of New York, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

15.10.     Dispute Resolution.

15.10.1. Prior to initiating arbitration, Genzyme and Alcafleu will negotiate in good faith to resolve, pursuant to the procedures described in Section 15.10.2, any dispute, controversy, difference or Action asserted by Alcafleu against Genzyme or by Genzyme against Alcafleu arising out of or related to this Agreement or the negotiation or performance hereof (a “Claim”).  Notwithstanding the foregoing, either party may apply to any court having jurisdiction pursuant to Section 15.12 without negotiating to resolve the Claim pursuant to Section 15.10.2 with respect to any Action seeking preliminary or emergency injunctive relief in accordance with Section 15.11.11 or any Action seeking equitable relief as contemplated by Section 15.13.

15.10.2. Alcafleu or Genzyme may give the other party written notice of a Claim not resolved in the normal course of business (“Notice of Dispute”).  Within [**] Business Days after delivery of such Notice of Dispute, executives of Alcafleu and Genzyme who have authority to settle the Claim shall

[**] = 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.

51

agree to meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a just and equitable solution satisfactory to such parties.  If the Claim has not been resolved within [**] days of the first meeting of such executives (or, if the parties are unable to mutually agree upon an acceptable time and place to meet, within [**] days of the disputing party’s Notice of Dispute), Genzyme or Alcafleu may, by notice to the other party (“Dispute Escalation Notice”), refer the Claim to the respective officers of the parties designated below.

For Alcafleu:	Chairman of the Board of Management,
	Bayer Schering Pharma AG
For Genzyme:	Chief Executive Officer

Such officers shall negotiate in good faith to resolve the Claim in a manner satisfactory to Genzyme and Alcafleu within [**] days of the Dispute Escalation Notice.  In the event the Claim is not resolved within such [**] day period, either party may initiate arbitration pursuant to Section 15.11.

15.11.     Arbitration.

15.11.1. Subject to Sections 15.10.1 and 15.10.2, any Claim required pursuant to Section 15.10.1 to be negotiated pursuant to Section 15.10.2, or any other claim or dispute that the parties agree in writing to arbitrate, shall be settled by arbitration administered by the American Arbitration Association in accordance with the then current Commercial Rules of the American Arbitration Association including the Procedures for Large, Complex Commercial Disputes (including the Optional Rules for Emergency Measures of Protection) (“AAA Rules”), except that any such arbitration must be conducted in accordance with the remainder of this Section 15.11.  Except as expressly limited by Section 15.11.7, the arbitrators shall have the authority to grant any equitable and legal remedies that would be available in any judicial proceeding instituted to resolve a disputed matter.

15.11.2. Number and Selection of Arbitrators.  The number of arbitrators shall be three (3), who shall be selected as follows:  each of Alcafleu, on the one hand, and Genzyme on the other hand, shall choose one (1) arbitrator within [**] Business Days of either initiating or receiving notice of an arbitration (as the case may be), and those party-appointed arbitrators shall unanimously select one (1) chairman arbitrator within [**] Business Days of the appointment of the last party-appointed arbitrator, who shall be a lawyer admitted to practice in New York for at least fifteen (15) years, and who is experienced with disputes in merger and acquisition transactions (“Qualifications”).  If the party-appointed arbitrators are unable to agree upon the selection of the third arbitrator within [**] Business Days of the appointment of the last party appointed arbitrator, 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.

52

chairman arbitrator shall be selected by the AAA within [**] Business Days and shall have Qualifications.

15.11.3. Place and Language of Arbitration.  The place of arbitration shall be New York, New York, at a suitable venue to be agreed by the parties and arbitrators within [**] Business Days of the appointment of the chairman arbitrator.  The proceedings shall be conducted in the English language.

15.11.4. Binding Decision.  The decision and award of the arbitral tribunal shall be made by majority decision and shall be final, nonappealable and binding on the parties hereto and their successors and assigns.  The arbitral award shall be accompanied by a reasoned opinion.

15.11.5. Allocation of Costs.  The decision and award of the arbitral tribunal shall include a decision regarding the allocation of costs relating to any such arbitration.  For purposes of this subsection, “costs” shall include reasonable attorneys’ fees and reasonable experts’ fees actually incurred with respect to the arbitration proceeding.

15.11.6. Interest.  The arbitral award may include both pre-and post-award interest, at a rate to be determined by the arbitral tribunal.

15.11.7. Limitation of Damages.  The arbitral tribunal shall be empowered to award damages only to the extent of actual damages suffered, and only to the extent consistent with Section 13.7 of the LAPA.

15.11.8. Period for Arbitration.

(a)           The arbitration shall be completed no later than [**] after the selection of the chairman arbitrator, unless the chairman arbitrator determines, at the request of any party or on his or her own initiative, that such time period should be extended, in which case such time period may not be extended beyond an additional [**] months.

(b)           Notwithstanding any provision of the AAA Rules: (i) each of Genzyme and Alcafleu shall be permitted to serve up to twenty (20) interrogatories, and to take at least five (5) depositions of the other party, in addition to exchange of documents, exhibits and information as provided for in the AAA Rules, on dates and locations to be mutually agreed upon (or, failing such agreement, as the chairman arbitrator shall select after hearing from the parties); (ii) any documents not in English that are produced by a party shall be accompanied by a translation into English, which translation shall not be binding upon the other party or the arbitrators; (iii) each of Genzyme and Alcafleu covenant and agree that it shall produce documents, information, and deposition and hearing witnesses, as required by this Section 15.11.8 and as otherwise required by

[**] = 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.

53

the AAA Rules; and (iv) subpoenas to non-parties, for production of documents and/or for testimony, shall be issued at the request of a party, up to ten (10) subpoenas per party.  The parties will make their respective employees, and will use commercially reasonable efforts to make their former employees, available for depositions and hearing testimony as requested by the other parties.

15.11.9. Enforcement of Judgment.  Judgment on the arbitral award may be entered in any court having jurisdiction thereof.

15.11.10.               Confidentiality.  Except as required by Legal Requirements or as required for recognition and enforcement of the arbitral decision and award, neither a party nor an arbitrator may disclose the existence, content or results of any arbitration hereunder without the prior written consent of the parties.  Any documents submitted to the arbitrators shall be kept confidential and shall not be disclosed, except that any such documents may be disclosed in connection with any Action to collect the award, or if any such documents are discoverable or admissible in any Action in court contemplated by this Agreement.

15.11.11.               Enforcement; Interim Measures; Equitable Relief.  Notwithstanding the provisions of Section 15.11, each party may apply to any court having jurisdiction pursuant to Section 15.12.1 (a) to enforce the arbitration provisions of this Agreement, (b) to seek provisional injunctive relief so as to maintain the status quo (including, but not limited to, maintaining the confidentiality of any arbitration proceedings and non-public information) until the final arbitration award is rendered and is finally judicially confirmed if challenged judicially, or the dispute is otherwise resolved, or (c) to seek equitable relief as contemplated by Section 15.13.

15.12.     Jurisdiction; Venue; Service of Process.

15.12.1. Jurisdiction.  Subject to the provisions of Sections 15.10.1, 15.11 and 15.13, each party to this Agreement, by its execution hereof, unless otherwise prohibited by applicable Legal Requirements (a) hereby irrevocably submits to the exclusive jurisdiction of the state courts of the State of New York in the Borough of Manhattan and to the United States District Court for the Southern District of New York for the purpose of any Action between the parties arising in whole or in part under or in connection with this Agreement or the negotiation or performance hereof, (b) hereby waives and agrees not to assert, by way of motion, as a defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such Action brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency 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.

54

some other proceeding in any court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court and (c) to the extent that an Action can be commenced in a court and not an arbitration, agrees not to commence any such Action in any court other than before one of the above-named courts.  Notwithstanding the previous sentence, a party may commence any Action in a court other than the above-named courts (i) for the purpose of enforcing an order or judgment issued by one of the above-named courts and (ii) for the purposes of asserting a cross-claim, counterclaim, third party action or similar forms of action for indemnification under this Agreement in any Action commenced by the other parties (subject to this Section 15.12.1), by any third party, or by any Governmental Authority.

15.12.2. Venue.  Each party waives any claim and will not assert that venue should properly lie in any other location within the selected jurisdiction.

15.12.3. Service of Process.  Each party hereby (a) consents to service of process in and commencement of any arbitration as permitted under the AAA Rules; (b) consents to service of process in any Action between the parties arising in whole or in part under or in connection with this Agreement in any manner permitted by New York law, (c) agrees that service of process made in accordance with clause (a) or (b) or made pursuant to Section 15.1, will constitute good and valid service of process in any Action and (d) waives and agrees not to assert (by way of motion, as a defense, or otherwise) in any Action any claim that service of process made in accordance with clause (a), (b) or (c) does not constitute good and valid service of process.

15.13.     Specific Performance.  Each of the parties acknowledges and agrees that the other parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached or violated.  Accordingly, each of the parties agrees that, without posting a bond or other undertaking, the other parties may seek an injunction or injunctions to prevent breaches or violations of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any Action instituted in any court specified in Section 15.12.1 or in an arbitration proceeding pursuant to Section 15.11.  An Action for specific performance as provided herein shall not preclude a party from pursuing any other remedy to which such party may be entitled, at law or in equity, in accordance with the terms of this Agreement.  Each party further agrees that, in the event of any Action for specific performance in respect of such breach or violation, it will not assert that the defense that a remedy at law would be adequate provided, however, each party also agrees that any party can assert any other defense it may have other than the defense of adequate remedy at law.  The provisions of this Section 15.13 shall not apply to any Action based upon any Section of this Agreement where the remedy sought is the payment of money.

[**] = 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.

55

15.14.     Waiver of Jury Trial.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE NEGOTIATION OR PERFORMANCE HEREOF OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS AND THAT ANY SUCH TRIAL WILL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

15.15.     Certain Rules of Construction.  Except as otherwise explicitly specified to the contrary, (a) references to a Section, Article, Exhibit or Schedule means a Section or Article of, or Schedule or Exhibit to this Agreement, unless another agreement is specified, (b) the word “including” will be construed as “including without limitation,” (c) references to a particular statute or regulation include all rules and regulations thereunder and any predecessor or successor statute, rules or regulation, in each case as amended or otherwise modified from time to time, (d) words in the singular or plural form include the plural and singular form, respectively, (e) references to a particular Person include such Person’s successors and assigns to the extent not prohibited by this Agreement and (f) the words “shall” and “will” will have the same meaning.

15.16.     Third Party Beneficiaries.  Bayer shall be considered a third party beneficiary of this Agreement.  Except as specifically provided herein, all rights, benefits and remedies under this Agreement are solely intended for the benefit of Genzyme and Alcafleu, and no third party shall have any rights whatsoever to (i) enforce any obligation contained in this Agreement; (ii) seek a benefit or remedy for any breach of this Agreement; or (iii) take any other action relating to this Agreement under any legal theory, including but not limited to, actions in contract, tort (including but not limited to negligence, gross negligence and strict liability), or as a defense, setoff or counterclaim to any action or claim brought or made by the parties.

[Remainder of Page is Intentionally Blank.]

[**] = 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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IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as an agreement under seal as of the date first above written.

ALCAFLEU MANAGEMENT GMBH & CO. KG
By:	/s/ Michael Fredrich
	Name: Michael Fredrich
	Title: Managing Director
By:	/s/ Wolfgang Abmus
	Name: Wolfgang Abmus
	Title: Managing Director
GENZYME CORPORATION
By:	/s/ Earl M. Collier
	Name: Earl M. Collier
	Title: Executive Vice President

[**] = 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.

57

EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO LEASE

THIS FIRST AMENDMENT TO LEASE (hereinafter referred to as the “Amendment”) is dated as of this 21st day of May, 2010 by and between FC 64 SIDNEY, INC., a Massachusetts corporation (“Landlord”) and GENZYME CORPORATION, a Massachusetts corporation (“Tenant”).  Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to such term in the Lease.

W I T NE S S E T H

WHEREAS, Landlord and Tenant entered into that certain Lease dated as of November 30, 2005 (the “Lease”), with respect to certain premises located at 64 Sidney Street, Cambridge, Massachusetts;

WHEREAS, Landlord and Tenant desire to amend the Lease to, among other changes, extend the term of the Lease, all as set forth in this Amendment.

NOW, THEREFORE, in consideration of the premises and mutual covenants hereinafter contained and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree to amend the Lease effective as of the date hereof as follows:

1.The term “Initial Term” on Exhibit A to the Lease shall be deleted in its entirety and replaced as follows:

“Initial Term: Eight (8) years, commencing on February 8, 2006 and terminating on February 8, 2014.”

2.The term “Annual Fixed Rent for the Term” on Exhibit A to the Lease shall be deleted in its entirely and replaced as follows:

“Annual Fixed Rent for
the Term:	February 9, 2006 –
	February 8, 2011:	$35.00 per rentable
		square foot, NNN
	February 9, 2011–
	February 8, 2012:	$50.00 per rentable
		square foot, NNN
	February 9, 2012–
	February 8, 2013:	$51.00 per rentable
		square foot, NNN
	February 9, 2013–
	February 8, 2014:	$52.00 per rentable
		square foot, NNN”

3.Section 2.6 of the Lease shall be amended by deleting the first paragraph thereof and replacing it with the following paragraph:

“Provided that there has been no Event of Default which is uncured and continuing on the part of the Tenant and the Tenant is, as of the date of such exercise and as of the commencement date of the Extension Term (as such term is defined below), actually occupying sixty percent (60%) or more of the Premises for its own business purposes, the Tenant shall have the right to extend the Term hereof for one (1) period of three (3) years (such period referred to herein as the “Extension Term”).”

4.Section 2.6(a) of the Lease shall be amended by deleting the words and numbers “six (6)” in the last sentence of said section and replacing it with “three (3)”.

5.Section 4.1 of the Lease shall be amended by adding the following sentences to the end of this Section:

“Notwithstanding the foregoing, Tenant shall have the right to provide, install, replace, maintain and remove its own security system within the Premises during the Initial Term of the Lease and any and all of the extensions.  This shall include the right to provide its own security officer coverage and install, in a workmanlike fashion, system components of Tenant’s choosing that include but are not limited to security cameras, televisions, monitors and other electronic monitoring devises, electronic door strikes, door contacts, exit sensors, car readers (which may be mounted immediately outside the Premises in common areas), motion detectors, glass break detectors and other similar security systems and/or methods which will protect the Premises to meet Tenant’s corporate security standards.”

6.Section 11.9 of the Lease shall be amended by adding the following sentences to the end of the first paragraph thereof:

“Notwithstanding anything to the contrary contained in this Lease, Tenant shall not be obligated to restore the Premises or remove any alterations or additions to the Premises at the end of the Term, except for any new items installed after the expiration of the Initial Term which Landlord identified in written notice delivered prior to Landlord approving Tenant’s plans for any alterations or improvements as items which Tenant must remove prior to the expiration of the Lease.  Tenant shall not be required to remove its computer and telecommunications wiring, cable and other equipment provided, however, that to the extent that Tenant replaces any such wiring and cable during the Initial Term or any other extension thereof then it shall, as part of that installation pull and remove from the Premises any wiring and cable that it no longer uses from the specific portion of the Premises in which Tenant is replacing such wiring or cabling. Tenant will yield-up the Premises to Landlord in broom swept condition, reasonable wear and tear and damage resulting from casualty excepted.”

7.As consideration for this Amendment, Tenant hereby forgives any obligation Landlord has with respect to funding any remaining portion of the Leasehold Improvements Allowance pursuant to Exhibit C of the Lease.

8.Each of Tenant and Landlord warrant and represent to the other that it has had no dealings with any broker or agent in connection with this Lease other than FHO Partners and Colliers Meredith & Grew (the “Brokers”).  Tenant and Landlord agree to defend with counsel reasonably approved by the other, hold harmless and indemnify the other from and against any and all cost, expense or liability for any compensation, commissions and charges which may be asserted against the other as a result of the other’s breach of this warranty.  Landlord shall pay commissions due and owing to FHO Partners at the rate of $1.00 per square foot of the Premises per year during the Extension Term, which shall be paid as follows:  fifty percent (50%) upon the execution of this Amendment and fifty percent (50%) on or prior to February 8, 2011, as discussed in more particular detail in a separate agreement with Broker.

9.Landlord and Tenant agree to execute a Notice of Lease within thirty (30) days of the date of this Amendment.  Landlord hereby authorizes Tenant to record the Notice of Lease upon execution by both parties.

10.This Amendment may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

11.The Lease, as amended hereby, is in full force and effect, and is ratified and confirmed, and there are no other amendments or modifications thereto.

12.This Amendment will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment under seal, as of the day, month and year first above written.

FC 64 SIDNEY, INC.,
a Massachusetts corporation
By:	/s/ Michael Farley
Name: Michael Farley
Title: Vice President
GENZYME CORPORATION,
a Massachusetts corporation
By:	/s/ Michael Wyzga
Name: Michael Wyzga
Title: Executive Vice President and CFO

EX-10.3

Exhibit 10.3

GOLDMAN, SACHS & CO. | 200 WEST STREET | NEW YORK, NEW YORK 10282-2198 | TEL:  212-902-1000

Opening Transaction

To:	Genzyme Corporation 500 Kendall Street, Cambridge, MA 02142
A/C:	042227413
From:	Goldman, Sachs & Co.
Re:	Accelerated Stock Buyback
Ref. No:	As provided in the Supplemental Confirmation
Date:	June 17, 2010

This master confirmation (this “Master Confirmation”), dated as of June 17, 2010 is intended to set forth certain terms and provisions of certain Transactions (each, a “Transaction”) entered into from time to time between Goldman, Sachs & Co. (“GS&Co.”) and Genzyme Corporation (“Counterparty”).  This Master Confirmation, taken alone, is neither a commitment by either party to enter into any Transaction nor evidence of a Transaction.  The additional terms of any particular Transaction shall be set forth in a Supplemental Confirmation in the form of Schedule A hereto (a “Supplemental Confirmation”), which shall reference this Master Confirmation and supplement, form a part of, and be subject to this Master Confirmation.  This Master Confirmation and each Supplemental Confirmation together shall constitute a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Master Confirmation.  This Master Confirmation and each Supplemental Confirmation evidence a complete binding agreement between Counterparty and GS&Co. as to the subject matter and terms of each Transaction to which this Master Confirmation and such Supplemental Confirmation relate and shall supersede all prior or contemporaneous written or oral communications with respect thereto.

This Master Confirmation and each Supplemental Confirmation supplement, form a part of, and are subject to an agreement in the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border) (the “Agreement”) as if GS&Co. and Counterparty had executed the Agreement on the date of this Master Confirmation (but without any Schedule except for (i) the election of Loss and Second Method, New York law (without reference to its choice of laws doctrine other than Title 14 of Article 5 of the New York General Obligations Law) as the governing law and US Dollars (“USD”) as the Termination Currency, (ii) the election that subparagraph (ii) of Section 2(c) will not apply to the Transactions, (iii) the replacement of the word “third” in the last line of Section 5(a)(i) with the word “first”, (iv) the election that the “Cross Default” provisions of Section 5(a)(vi) shall apply to Counterparty, with a “Threshold Amount” of USD 50 million), (v) the designation of the General Guarantee Agreement of The Goldman Sachs Group, Inc. (“GS Group”) dated January 30, 2006 as a Credit Support Document under the Agreement and (vi) the designation of GS Group as a Credit Support Provider in relation to GS&Co. under the Agreement). In addition, Section 5(a)(vi) of the Agreement shall be amended by (i) deleting in the seventh line thereof the words “or becoming capable at such time of being declared” and (ii) adding at the end of such section the following: “provided, however that, notwithstanding the foregoing, an Event of Default shall not be deemed to have occurred at any time under clause (2) hereof if the default is a failure to pay caused, as demonstrated to the reasonable

satisfaction of the other party, solely by an error or omission of an administrative or operational nature where (i) funds or securities required to make payment or delivery, as the case may be, were available to the relevant party to enable it to make the relevant payment or delivery when due and (ii) such payment or delivery is in fact made within two Local Business Days after the relevant party receives written notice from an interested party of such default.”

The Transactions shall be the sole Transactions under the Agreement.  If there exists any ISDA Master Agreement between GS&Co. and Counterparty or any confirmation or other agreement between GS&Co. and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between GS&Co. and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which GS&Co. and Counterparty are parties, the Transactions shall not be considered Transactions under, or otherwise governed by, such existing or deemed ISDA Master Agreement.

All provisions contained or incorporated by reference in the Agreement shall govern this Master Confirmation and each Supplemental Confirmation except as expressly modified herein or in the related Supplemental Confirmation.

If, in relation to any Transaction to which this Master Confirmation and a Supplemental Confirmation relate, there is any inconsistency between the Agreement, this Master Confirmation, any Supplemental Confirmation and the Equity Definitions, the following will prevail for purposes of such Transaction in the order of precedence indicated: (i) such Supplemental Confirmation; (ii) this Master Confirmation; (iii) the Agreement; and (iv) the Equity Definitions.

1.             Each Transaction constitutes a Share Forward Transaction for the purposes of the Equity Definitions.  Set forth below are the terms and conditions that, together with the terms and conditions set forth in the Supplemental Confirmation relating to any Transaction, shall govern such Transaction.

General Terms:

	Trade Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
	Buyer:	Counterparty
	Seller:	GS&Co.
	Shares:	Common stock, par value $0.01 per share, of Counterparty (Ticker: GENZ)
	Exchange:	The Nasdaq Global Select Market
	Related Exchange(s):	All Exchanges.
	Prepayment\Variable Obligation:	Applicable
	Prepayment Amount:	For each Transaction, as set forth in the related Supplemental Confirmation.
	Prepayment Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Valuation:
	VWAP Price:	For any Exchange Business Day, as determined by the Calculation Agent based on the NASDAQ 10b-18 Volume Weighted Average Price per Share for the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading session for such Exchange Business Day), as published by Bloomberg at 4:15 p.m. New York time (or 15 minutes following the end of any extension of the regular trading session) on such Exchange Business Day, on Bloomberg page “GENZ.Q <Equity> AQR_SEC” (or any

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	successor thereto), or if such price is not so reported on such Exchange Business Day for any reason or is, in the Calculation Agent’s good faith and reasonable discretion, erroneous, such VWAP Price shall be as reasonably determined by the Calculation Agent in good faith and in a commercially reasonable manner. For purposes of calculating the VWAP Price, the Calculation Agent will include only those trades that are reported during the period of time during which Counterparty could purchase its own shares under Rule 10b-18(b)(2) and are effected pursuant to the conditions of Rule 10b-18(b)(3), each under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (such trades, “Rule 10b-18 eligible transactions”).
Forward Price:	The average of the VWAP Prices for the Exchange Business Days in the Calculation Period, subject to “Valuation Disruption” below.
Forward Price Adjustment Amount:	For each Transaction, as set forth in the related Supplemental Confirmation.
Calculation Period:	The period from and including the Calculation Period Start Date to and including the Termination Date.
Calculation Period Start Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Termination Date:	The Scheduled Termination Date; provided that GS&Co. shall have the right to designate any Exchange Business Day on or after the First Acceleration Date to be the Termination Date (the “Accelerated Termination Date”) by delivering notice to Counterparty of any such designation prior to 11:59 p.m. New York City time on the Exchange Business Day immediately following the designated Accelerated Termination Date.
Scheduled Termination Date:	For each Transaction, as set forth in the related Supplemental Confirmation, subject to postponement as provided in “Valuation Disruption”.
First Acceleration Date:	For each Transaction, as set forth in the related Supplemental Confirmation.
Valuation Disruption:	The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and inserting the words “at any time on any Scheduled Trading Day during the Calculation Period or Settlement Valuation Period” after the word “material,” in the third line thereof.
	Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.
	Notwithstanding anything to the contrary in the Equity Definitions, to the extent that a Disrupted Day occurs (i) in the Calculation Period, the Calculation Agent may, in its good faith and commercially reasonable discretion, postpone the Scheduled Termination Date, or (ii) in the Settlement Valuation Period, the Calculation Agent may extend the Settlement Valuation Period. If any such Disrupted Day is a Disrupted Day because of a Market Disruption Event (or a deemed Market Disruption Event as provided herein), the Calculation Agent shall determine in good faith and in a commercially reasonable manner whether (i) such Disrupted Day is a Disrupted Day in full, in which case the VWAP Price for such Disrupted Day shall not be included for purposes of determining the Forward Price or the Settlement Price, as the case may be, or (ii) such

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		Disrupted Day is a Disrupted Day only in part, in which case the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent based on Rule 10b-18 eligible transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market Disruption Event on such day, and the weighting of the VWAP Price for the relevant Exchange Business Days during the Calculation Period or the Settlement Valuation Period, as the case may be, shall be adjusted in a commercially reasonable manner by the Calculation Agent for purposes of determining the Forward Price or the Settlement Price, as the case may be, with such adjustments based on, among other factors, the duration of any Market Disruption Event and the volume, historical trading patterns and price of the Shares. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to be a Disrupted Day in full.
		If a Disrupted Day occurs during the Calculation Period or the Settlement Valuation Period, as the case may be, and each of the nine immediately following Scheduled Trading Days is a Disrupted Day, then the Calculation Agent, in its good faith and commercially reasonable discretion, may deem such ninth Scheduled Trading Day to be an Exchange Business Day that is not a Disrupted Day and, in the case of the Calculation Period or the Settlement Valuation Period, determine the VWAP Price for such ninth Scheduled Trading Day using its good faith estimate of the value of the Shares on such ninth Scheduled Trading Day based on the volume, historical trading patterns and price of the Shares and such other factors as it deems appropriate.
Settlement Terms:
	Physical Settlement:	If the Number of Shares to be Delivered is positive, Physical Settlement shall be applicable; provided that GS&Co. does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the Equity Definitions related to the restrictions imposed by applicable securities laws with respect to any Shares delivered by GS&Co. to Counterparty under any Transaction. If the Number of Shares to be Delivered is negative, then the Counterparty Settlement Provisions in Annex A shall apply.
	Number of Shares to be Delivered:	A number of Shares equal to (x)(a) the Prepayment Amount divided by (b)(i) the Forward Price minus (ii) the Forward Price Adjustment Amount minus (y) the number of Initial Shares.
	Excess Dividend Amount:	For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.
	Settlement Date:	If the Number of Shares to be Delivered is positive, the date that is one Settlement Cycle immediately following the Termination Date.
	Settlement Currency:	USD
	Initial Share Delivery:	GS&Co. shall deliver a number of Shares equal to the Initial Shares to Counterparty on the Initial Share Delivery Date in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date deemed to be a “Settlement Date” for purposes of such Section 9.4.
	Initial Share Delivery Date:	For each Transaction, as set forth in the related Supplemental Confirmation.

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	Initial Shares:	For each Transaction, as set forth in the related Supplemental Confirmation.
Share Adjustments:
	Potential Adjustment Event:	Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, an Extraordinary Dividend shall not constitute a Potential Adjustment Event.
		It shall constitute an additional Potential Adjustment Event if the Scheduled Termination Date for any Transaction is postponed pursuant to “Valuation Disruption” above, in which case the Calculation Agent may, in good faith and in its commercially reasonable discretion, adjust any relevant terms of any such Transaction as necessary to preserve as nearly as practicable the fair value of such Transaction to GS&Co. prior to such postponement.
	Extraordinary Dividend:	Any dividend or distribution on the Shares (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions).
	Method of Adjustment:	Calculation Agent Adjustment
Extraordinary Events:
	Consequences of Merger Events:

	(a)	Share-for-Share:		Modified Calculation Agent Adjustment
	(b)	Share-for-Other:		Cancellation and Payment
	(c)	Share-for-Combined:		Component Adjustment
Tender Offer:			Applicable; provided that (i) Section 12.1(l) of the Equity Definitions shall be amended (x) by deleting the parenthetical in the fifth line thereof, (y) by replacing “that” in the fifth line thereof with “whether or not such announcement” and (z) by adding immediately after the words “Tender Offer” in the fifth line thereof “, and any publicly announced change or amendment to such an announcement (including the announcement of an abandonment of such intention)” and (ii) Sections 12.3(a) and 12.3(d) of the Equity Definitions shall each be amended by replacing each occurrence of the words “Tender Offer Date” by “Announcement Date.”
Consequences of Tender Offers:
	(a)	Share-for-Share:		Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.
	(b)	Share-for-Other:		Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.
	(c)	Share-for-Combined:		Modified Calculation Agent Adjustment or Cancellation and Payment, at the election of GS&Co.
Nationalization, Insolvency or Delisting:			Cancellation and Payment; provided that in addition to the provisions of Section

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12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the American Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.

Additional Disruption Events:

(a)	Change in Law:	Applicable
(b)	Failure to Deliver:	Applicable
(c)	Insolvency Filing:	Applicable
(d)	Loss of Stock Borrow:	Applicable
	Maximum Stock Loan Rate:	200 basis points per annum
(e)	Increased Cost of Stock Borrow:	Applicable
	Initial Stock Loan Rate:	25 basis points per annum
	Hedging Party:	GS&Co.
	Determining Party:	GS&Co.. Following any determination or calculation by the Determining Party hereunder, upon a written request by Counterparty, the Determining Party will promptly (but in any event within three Scheduled Trading Days) provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written request a report (in a commonly used file format for the storage and manipulation of financial data without disclosing GS&Co.’s proprietary models) displaying in reasonable detail the basis for such determination or calculation, as the case may be.

Additional Termination Event(s):	Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, any Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with such terminated Transaction(s) (or portions thereof) being the Affected Transaction(s) and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction(s).
	The declaration by the Issuer of any Extraordinary Dividend, the ex-dividend date for which occurs or is scheduled to occur during the Relevant Dividend Period, will constitute an Additional Termination Event, with Counterparty as the sole Affected Party and all Transactions hereunder as the Affected Transactions.
Relevant Dividend Period:	The period from and including the Calculation Period Start Date to and including the Relevant Dividend Period End Date.

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Relevant Dividend Period End Date:		If the Number of Shares to be Delivered is negative, the last day of the Settlement Valuation Period; otherwise, the Termination Date.
Non-Reliance/Agreements and Acknowledgements Regarding Hedging Activities/Additional Acknowledgements:		Applicable
Transfer:		Notwithstanding anything to the contrary in the Agreement, GS&Co. may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of GS&Co. under any Transaction, in whole or in part, to an affiliate of GS&Co. whose obligations are guaranteed by GS Group without the consent of Counterparty.
GS&Co. Payment Instructions:		Chase Manhattan Bank New York
		For A/C Goldman, Sachs & Co.
		A/C #930-1-011483
		ABA: 021-000021
Counterparty’s Contact Details for Purpose of Giving Notice:		To be provided by Counterparty
GS&Co.’s Contact Details for Purpose of Giving Notice:		Goldman, Sachs & Co. 200 West Street New York, NY 10282-2198 Attention: Serge Marquie, Equity Capital Markets Telephone: 212-902-9779 Facsimile: 917-977-4253 Email: serge.marquie@gs.com With a copy to: Attention: Jared Kramer, Equity Capital Markets Telephone: +1-212-902-3002 Facsimile: +1-212-256-5847 Email: jgkramer@am.ibd.gs.com And email notification to the following address: Eq-derivs-notifications@am.ibd.gs.com
2.	Calculation Agent.	GS&Co.; provided that GS&Co. shall act in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will promptly (but in any event within three Scheduled Trading Days) provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written request a report (in a commonly used file format for the storage and manipulation of financial data without disclosing GS&Co.’s proprietary models) displaying in reasonable detail the basis for such determination or calculation, as the case may be.

3.             Additional Mutual Representations, Warranties and Covenants of Each Party.  In addition to the representations, warranties and covenants in the Agreement, each party represents, warrants and covenants to the other party that:

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(a)           Eligible Contract Participant.  It is an “eligible contract participant”, as defined in the U.S. Commodity Exchange Act (as amended), and is entering into each Transaction hereunder as principal (and not as agent or in any other capacity, fiduciary or otherwise) and not for the benefit of any third party.

(b)           Accredited Investor.  Each party acknowledges that the offer and sale of each Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2) thereof.  Accordingly, each party represents and warrants to the other that (i) it has the financial ability to bear the economic risk of its investment in each Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined under Regulation D under the Securities Act and (iii) the disposition of each Transaction is restricted under this Master Confirmation, the Securities Act and state securities laws.

(c)           Recourse.  Each party agrees it will look solely to the other party (or any guarantor in respect thereof) for performance of such other party’s obligations under any Transaction.

4.             Additional Representations, Warranties and Covenants of Counterparty.  In addition to the representations, warranties and covenants in the Agreement, Counterparty represents, warrants and covenants to GS&Co. that:

(a)           The purchase or writing of each Transaction and the transactions contemplated hereby will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.

(b)           It is not entering into any Transaction (i) on the basis of, and is not aware of, any material non-public information with respect to the Shares (ii) in anticipation of, in connection with, or to facilitate, a distribution of its securities, a self tender offer or a third-party tender offer or (iii) to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares).

(c)           Each Transaction is being entered into pursuant to a publicly disclosed Share buy-back program and its Board of Directors has approved the use of an accelerated share repurchase program to effect the Share buy-back program.

(d)           Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that GS&Co. is not making any representations or warranties with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity.

(e)           As of (i) the date hereof and (ii) the Trade Date for each Transaction hereunder, Counterparty is in compliance with its reporting obligations under the Exchange Act and its most recent Annual Report on Form 10-K, together with all reports subsequently filed by it pursuant to the Exchange Act, taken together and as amended and supplemented to the date of this representation, do not, as of their respective filing dates, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(f)            Counterparty shall report each Transaction to the extent required under the Exchange Act and the rules and regulations thereunder.

(g)           The Shares are not, and Counterparty will not cause the Shares to be, subject to a “restricted period” (as defined in Regulation M promulgated under the Exchange Act) at any time during any Regulation M Period (as defined below) for any Transaction unless Counterparty has provided written notice to GS&Co. of such restricted period not later than the Scheduled Trading Day immediately preceding the first day of such “restricted period”; Counterparty acknowledges that any such notice may cause a Disrupted Day to occur pursuant to Section 5 below; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 6 below; “Regulation M Period” means, for any Transaction, (i) the Relevant Period (as defined below) and (ii) the Settlement Valuation Period, if any, for such Transaction. “Relevant Period” means, for any Transaction, the period commencing on the Calculation Period Start Date for such Transaction and ending on the earlier of (i) the Scheduled Termination Date and (ii) the last Additional Relevant Day (as specified in the related

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Supplemental Confirmation) for such Transaction, or such earlier day as elected by GS&Co. and communicated to Counterparty on such day (or, if later, the First Acceleration Date without regard to any acceleration thereof pursuant to “Special Provisions for Friendly Acquisition Transaction Announcements” below).

(h)           As of the Trade Date, the Prepayment Date, the Initial Share Delivery Date, the Settlement Date and the date of any Second Settlement, for each Transaction, Counterparty is not “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”)) and Counterparty would be able to purchase a number of Shares with a value equal to the Prepayment Amount in compliance with the laws of the jurisdiction of Counterparty’s incorporation.

(i)            Counterparty is not and, after giving effect to any Transaction, will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(j)            Counterparty will not enter into any obligation that would contractually limit it from effecting Cash Settlement or Net Share Settlement under any Transaction.

(k)           Counterparty has not and will not enter into agreements similar to the Transactions described herein where any initial hedge period, calculation period, relevant period or settlement valuation period (each however defined) in such other transaction will overlap at any time (including as a result of extensions in such initial hedge period, calculation period, relevant period or settlement valuation period as provided in the relevant agreements) with any Relevant Period or, if applicable, any Settlement Valuation Period under this Master Confirmation.  In the event that the initial hedge period, relevant period, calculation period or settlement valuation period in any other similar transaction overlaps with any Relevant Period or, if applicable, Settlement Valuation Period under this Master Confirmation as a result of any postponement of the Scheduled Termination Date or extension of the Settlement Valuation Period pursuant to “Valuation Disruption” above, Counterparty shall promptly amend such transaction to avoid any such overlap.

5.             Regulatory Disruption.  In the event that GS&Co., on the advice of counsel, concludes, in good faith and in its commercially reasonable discretion, that it is appropriate with respect to any legal, regulatory or self-regulatory requirements or policies and procedures that are generally applicable to transactions of this nature and are related to its compliance with applicable laws (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by GS&Co.), for it to refrain from or decrease any market activity in connection with any Transaction on any Scheduled Trading Day or Days during the Calculation Period or, if applicable, the Settlement Valuation Period, GS&Co. may by written notice to Counterparty elect to deem that a Market Disruption Event has occurred and will be continuing on such Scheduled Trading Day or Days.

6.             10b5-1 Plan.  It is the intent of the parties that each Transaction entered into under this Master Confirmation comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and each Transaction entered into under this Master Confirmation shall be interpreted to comply with the requirements of Rule 10b5-1(c). Counterparty represents, warrants and covenants to GS&Co. that:

(a)           Counterparty is entering into this Master Confirmation and each Transaction hereunder in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) or any other antifraud or anti-manipulation provisions of the federal or applicable state securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging transaction or position with respect to the Shares.

(b)           Counterparty will not seek to control or influence GS&Co.’s decision to make any “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into under this Master Confirmation, including, without limitation, GS&Co.’s decision to enter into any hedging transactions.  Counterparty represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Master Confirmation and each Supplemental Confirmation under Rule 10b5-1.

(c)           Counterparty acknowledges and agrees that any amendment, modification, waiver or termination of this Master Confirmation or the relevant Supplemental Confirmation must be effected in accordance with the

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requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c).  Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5, and no such amendment, modification or waiver shall be made at any time at which Counterparty or any officer, director, manager or similar person of Counterparty is aware of any material non-public information regarding Counterparty or the Shares.

7.             Counterparty Purchases.  Without the prior written consent of GS&Co., except for purchases which are not solicited by or on behalf of Counterparty (or any “affiliated purchaser” of Counterparty as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)), Counterparty (or any “affiliated purchaser” of Counterparty as defined in Rule 10b-18) shall not directly or indirectly purchase any Shares (including by means of a derivative instrument), listed contracts on the Shares or securities that are convertible into, or exchangeable or exercisable for Shares (including, without limitation, any Rule 10b-18 purchases of blocks (as defined in Rule 10b-18)) during any Relevant Period or, if applicable, Settlement Valuation Period, except through GS&Co. or an Affiliate of GS&Co..

8.             10b-18.   During the Relevant Period and, if applicable, the Settlement Valuation Period and with respect to any purchases executed as a result of an occurrence of an Additional Termination Event (in each case, other than purchases made by GS&Co. in connection with GS&Co.’s dynamic adjustments to its Hedge Positions in respect of the equity options comprising part of any Transaction), GS&Co. agrees to make all purchases of Shares in a manner that would comply with the limitations set forth in clauses (b)(2), (b)(4) and (c) of Rule 10b-18, and GS&Co. agrees to use commercially reasonable efforts to make all purchase of Shares in a manner that would comply with the limitations set forth in clause b(3) of Rule 10b-18, in each case as if such rule was applicable to such purchases and taking into account any applicable Securities and Exchange Commission no-action letters as appropriate, and subject to any delays between the execution and reporting of a trade of the Shares on the Exchange and other circumstances beyond GS&Co.’s control.

9.             Special Provisions for Merger Transactions.  Notwithstanding anything to the contrary herein or in the Equity Definitions:

(a)           Counterparty agrees that it:

(i)       will not during the period commencing on the Trade Date through the end of the Relevant Period or, if applicable, the Settlement Valuation Period for any Transaction make, or, to the extent within its reasonable control, permit to be made, any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction, except to the extent required by any law, regulation or rule applicable to Counterparty, unless such public announcement is made prior to the opening or after the close of the regular trading session on the Exchange for the Shares;

(ii)      shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) notify GS&Co. following any such announcement that such announcement has been made; and

(iii)     shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) provide GS&Co. with written notice specifying (i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately preceding the announcement date that were not effected through GS&Co. or its affiliates and (ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months preceding the announcement date.  Such written notice shall be deemed to be a certification by Counterparty to GS&Co. that such information is true and correct.  In addition, Counterparty shall promptly notify GS&Co. of the earlier to occur of the completion of such transaction and the completion of the vote by target shareholders.  Counterparty acknowledges that any such notice may cause the terms of any Transaction to be adjusted or such Transaction to be terminated; accordingly, Counterparty acknowledges that its delivery of such notice must comply with the standards set forth in Section 6 above.

(b)           GS&Co. in its sole discretion may (i) make adjustments to the terms of any Transaction, including, without limitation, the Scheduled Termination Date and/or suspend the Calculation Period and/or any

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Settlement Valuation Period or (ii) treat the occurrence of such public announcement as an Additional Termination Event with Counterparty as the sole Affected Party and the Transactions hereunder as the Affected Transactions and with the amount under Section 6(e) of the Agreement determined taking into account the fact that the Calculation Period or Settlement Valuation Period, as the case may be, had fewer Scheduled Trading Days than originally anticipated.

“Merger Transaction” means any merger, acquisition or similar transaction involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

10.           Special Provisions for Friendly Acquisition Transaction Announcements.  (a) If a Friendly Transaction Announcement occurs on or prior to the Settlement Date for any Transaction, then the Number of Shares to be Delivered for such Transaction shall be determined as if clause (x)(b)(ii) of the definition thereof were replaced with “(b)(ii) the Prorated Forward Price Adjustment Amount.”  If a Friendly Transaction Announcement occurs after the Trade Date, but prior to the First Acceleration Date of any Transaction, the First Acceleration Date shall be the date of such Friendly Transaction Announcement.  If a Friendly Transaction Announcement occurs after the Settlement Date for any Transaction or any earlier date of termination or cancellation of such Transaction pursuant to Section 6 of the Agreement or Article 12 of the Equity Definitions, then a second settlement of such Transaction (a “Second Settlement”) shall occur (notwithstanding such earlier termination or cancellation) with a Number of Shares to be Delivered equal to the lesser of (i) zero and (ii) (x) the Number of Shares to be Delivered determined pursuant to the first sentence of this paragraph as if such Friendly Transaction Announcement occurred prior to such Settlement Date minus (y) the Number of Shares to be Delivered determined pursuant to Section 1 of this Master Confirmation (provided that in the case of a Second Settlement occurring after such an early termination or cancellation, a Number of Shares to be Delivered shall not be determined and instead a Forward Cash Settlement Amount will be determined as provided in Annex A).

(b)           “Friendly Transaction Announcement” means (i) an Acquisition Transaction Announcement by Counterparty or its board of directors prior to the Settlement Date or any earlier date of termination or cancellation of the relevant Transaction pursuant to Section 6 of the Agreement or Article 12 of the Equity Definitions (such date, the “Actual Termination Date”), (ii) an announcement by Counterparty or its board of directors prior to the date three months following the Scheduled Termination Date that an Acquisition Transaction that is the subject of an Acquisition Transaction Announcement occurring prior to the Actual Termination Date has been approved, agreed to, recommended by or otherwise consented to by Counterparty or its board of directors, or negotiated by Counterparty or any authorized representative of Counterparty, or (iii) where Counterparty or its board of directors has a legal obligation to make a recommendation to its shareholders in respect of any such Acquisition Transaction prior to the date three months following the Scheduled Termination Date, the absence of a recommendation that its shareholders reject such transaction.

(c)           “Acquisition Transaction Announcement” means (i) the announcement of an Acquisition Transaction, (ii) an announcement that Counterparty or any of its subsidiaries has entered into an agreement, a letter of intent or an understanding designed to result in an Acquisition Transaction, (iii) the announcement of the intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, an Acquisition Transaction, or (iv) any other similar announcement that in the reasonable judgment of the Calculation Agent is reasonably likely to result in an Acquisition Transaction. For the avoidance of doubt, announcements as used in the definition of Acquisition Transaction Announcement refer to any public announcement whether made by the Counterparty or a third party.

(d)           “Acquisition Transaction” means (i) any Merger Event (for purposes of this definition the definition of Merger Event shall be read with the references therein to “100%” being replaced by “25%” and to “50%” by “75%” and without reference to the clause beginning immediately following the definition of Reverse Merger therein to the end of such definition), Tender Offer or Merger Transaction or any other transaction involving the merger of Counterparty with or into any third party, (ii) the sale or transfer of all or substantially all of the assets of Counterparty, (iii) a recapitalization, reclassification, binding share exchange or other similar transaction, (iv) any acquisition, lease, exchange, transfer, disposition (including by way of spin-off or distribution) of assets (including any capital stock or other ownership interests in subsidiaries) or other similar event by Counterparty or any of its subsidiaries where the aggregate consideration transferable or receivable by or to Counterparty or its subsidiaries exceeds 25% of the market capitalization of Counterparty and (v) any transaction in which Counterparty or its board

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of directors has a legal obligation to make a recommendation to its shareholders in respect of such transaction (whether pursuant to Rule 14e-2 under the Exchange Act or otherwise).

(e)           “Prorated Forward Price Adjustment Amount” means the Forward Price Adjustment Amount multiplied by the Proration Fraction.

(f)            “Proration Fraction” means the fraction (x) if the Friendly Transaction Announcement (or, in the case of a Friendly Transaction Announcement of the type described in clause (ii) or clause (iii) of the definition thereof, the date of the related Acquisition Transaction Announcement) occurs on or prior to the First Acceleration Date, zero, and (y) if the Friendly Transaction Announcement (or, in the case of a Friendly Transaction Announcement of the type described in clause (ii) or clause (iii) of the definition thereof, the date of the related Acquisition Transaction Announcement) occurs after the First Acceleration Date the fraction (A) the numerator of which is the number of Scheduled Trading Days during the period commencing on the First Acceleration Date and ending on the date of any Friendly Transaction Announcement (inclusive), and (B) the denominator of which is the number of Scheduled Trading Days during the period commencing on the First Acceleration Date and ending on the Scheduled Termination Date (inclusive).

11.Acknowledgments.  (a) The parties hereto intend for:

(i)          each Transaction to be a “securities contract” as defined in Section 741(7) of the Bankruptcy Code, a “swap agreement” as defined in Section 101(53B) of the Bankruptcy Code and a “forward contract” as defined in Section 101(25) of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 555, 556, 560 and 561 of the Bankruptcy Code;

(ii)         the Agreement to be a “master netting agreement” as defined in Section 101(38A) of the Bankruptcy Code;

(iii)        a party’s right to liquidate, terminate or accelerate any Transaction, net out or offset termination values or payment amounts, and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement with respect to the other party or any Extraordinary Event that results in the termination or cancellation of any Transaction to constitute a “contractual right” (as defined in the Bankruptcy Code); and

(iv)        all payments for, under or in connection with each Transaction, all payments for the Shares (including, for the avoidance of doubt, payment of the Prepayment Amount) and the transfer of such Shares to constitute “settlement payments” and “transfers” (as defined in the Bankruptcy Code).

(b)           Counterparty acknowledges that:

(i)          during the term of any Transaction, GS&Co. and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to establish, adjust or unwind its hedge position with respect to such Transaction;

(ii)         GS&Co. and its affiliates may also be active in the market for the Shares other than in connection with hedging activities in relation to any Transaction;

(iii)        GS&Co. shall make its own determination as to whether, when or in what manner any hedging or market activities in Counterparty’s securities shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Forward Price and the VWAP Price;

(iv)        any market activities of GS&Co. and its affiliates with respect to the Shares may affect the market price and volatility of the Shares, as well as the Forward Price and VWAP Price, each in a manner that may be adverse to Counterparty; and

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(v)         each Transaction is a derivatives transaction in which it has granted GS&Co. an option;  GS&Co. may purchase shares for its own account at an average price that may be greater than, or less than, the price paid by Counterparty under the terms of the related Transaction.

12.           Credit Support Documents.  The parties hereto acknowledge that no Transaction hereunder is secured by any collateral that would otherwise secure the obligations of Counterparty herein or pursuant to the Agreement.

13.           Set-off.  (a)  The parties agree to amend Section 6 of the Agreement by adding a new Section 6(f) thereto as follows:

“(f)  Upon the occurrence of an Event of Default or Termination Event in respect of all Transactions under this Master Confirmation with respect to a party who is the Defaulting Party or the Affected Party (“X”), the other party (“Y”) will have the right (but not be obliged) without prior notice to X or any other person to set-off or apply any obligation of X owed to Y (or any Affiliate of Y) (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation) against any obligation of Y (or any Affiliate of Y) owed to X (whether or not matured or contingent and whether or not arising under the Agreement, and regardless of the currency, place of payment or booking office of the obligation).  Y will give notice to the other party of any set-off effected under this Section 6(f).

Amounts (or the relevant portion of such amounts) subject to set-off may be converted by Y into the Termination Currency at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency.  If any obligation is unascertained, Y may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained.  Nothing in this Section 6(f) shall be effective to create a charge or other security interest.  This Section 6(f) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).”

(b)           Notwithstanding anything to the contrary in the foregoing, GS&Co. agrees not to set off or net amounts due from Counterparty with respect to any Transaction against amounts due from GS&Co. to Counterparty with respect to contracts or instruments that are not Equity Contracts.  “Equity Contract” means any transaction or instrument that does not convey to GS&Co. rights, or the ability to assert claims, that are senior to the rights and claims of common stockholders in the event of Counterparty’s bankruptcy.

14.           Delivery of Shares.  Notwithstanding anything to the contrary herein, GS&Co. may, by prior notice to Counterparty, satisfy its obligation to deliver any Shares or other securities on any date due (an “Original Delivery Date”) by making separate deliveries of Shares or such securities, as the case may be, at more than one time on or prior to such Original Delivery Date, so long as the aggregate number of Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the number required to be delivered on such Original Delivery Date.

15.           Early Termination.  In the event that an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to any Transaction (except as a result of a Merger Event in which the consideration or proceeds to be paid to holders of Shares consists solely of cash), if either party would owe any amount to the other party pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Amount”), then, in lieu of any payment of such Payment Amount, Counterparty may, no later than the Early Termination Date or the date on which such Transaction is terminated, elect to deliver or for GS&Co. to deliver, as the case may be, to the other party a number of Shares (or, in the case of a Merger Event, a number of units, each comprising the number or amount of the securities or property that a hypothetical holder of one Share

13

would receive in such Merger Event (each such unit, an “Alternative Delivery Unit” and, the securities or property comprising such unit, “Alternative Delivery Property”)) with a value equal to the Payment Amount, as determined in good faith and in a commercially reasonable manner by the Calculation Agent (and the parties agree that, in making such determination of value, the Calculation Agent may take into account a number of factors, including the market price of the Shares or Alternative Delivery Property on the date of early termination and, if such delivery is made by GS&Co., the prices at which GS&Co. purchases Shares or Alternative Delivery Property to fulfill its delivery obligations under this Section 15); provided that in determining the composition of any Alternative Delivery Unit, if the relevant Merger Event involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash. If such delivery is made by Counterparty, paragraphs 2 through 7 of Annex A shall apply as if such delivery were a settlement of the Transaction to which Net Share Settlement applied, the Cash Settlement Payment Date were the Early Termination Date and the Forward Cash Settlement Amount were zero (0) minus the Payment Amount owed by Counterparty.

16.           Calculations and Payment Date upon Early Termination.  The parties acknowledge and agree that in calculating Loss pursuant to Section 6 of the Agreement GS&Co. may (but need not) determine losses without reference to actual losses incurred but based on expected losses assuming a commercially reasonable (including without limitation with regard to reasonable legal and regulatory guidelines) risk bid were used to determine loss to avoid awaiting the delay associated with closing out any hedge or related trading position in a commercially reasonable manner prior to or sooner following the designation of an Early Termination Date.  Notwithstanding anything to the contrary in Section 6(d)(ii) of the Agreement, all amounts calculated as being due in respect of an Early Termination Date under Section 6(e) of the Agreement will be payable on the day that notice of the amount payable is effective; provided that if Counterparty elects to receive Shares or Alternative Delivery Property in accordance with Section 15, such Shares or Alternative Delivery Property shall be delivered on a date selected by GS&Co. as promptly as practicable.

17.           Delivery of Cash.  For the avoidance of doubt, nothing in this Master Confirmation shall be interpreted as requiring Counterparty to deliver cash in respect of the settlement of the Transactions contemplated by this Master Confirmation following payment by Counterparty of the relevant Prepayment Amount, except in circumstances where the required cash settlement thereof is permitted for classification of the contract as equity by EITF 00-19 as in effect on the relevant Trade Date (including, without limitation, where Counterparty so elects to deliver cash or fails timely to elect to deliver Shares or Alternative Delivery Property in respect of the settlement of such Transactions).

18.           Automatic Termination Provisions.  Notwithstanding anything to the contrary in Section 6 of the Agreement, if a Termination Price is specified in any Supplemental Confirmation, then an Additional Termination Event with Counterparty as the sole Affected Party and the Transaction to which such Supplemental Confirmation relates as the Affected Transaction will automatically occur without any notice or action by GS&Co. or Counterparty if the price of the Shares on the Exchange at any time falls below such Termination Price, and the Exchange Business Day that the price of the Shares on the Exchange at any time falls below the Termination Price will be the “Early Termination Date” for purposes of the Agreement.

19.           Claim in Bankruptcy.  GS&Co. acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Counterparty’s bankruptcy.

20.           Governing Law.  The Agreement, this Master Confirmation, each Supplemental Confirmation and all matters arising in connection with the Agreement, this Master Confirmation and each Supplemental Confirmation shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (without reference to its choice of laws doctrine other than Title 14 of Article 5 of the New York General Obligations Law).

21.Offices.

(a)           The Office of GS&Co. for each Transaction is:  200 West Street, New York, NY 10282-2198.

(b)           The Office of Counterparty for each Transaction is: Genzyme Corporation, 500 Kendall Street, Cambridge, Massachusetts 02142.

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22.           Arbitration.  The Agreement, this Master Confirmation and each Supplemental Confirmation are subject to the following arbitration provisions:

(a)           All parties to this Master Confirmation are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.

(b)           Arbitration awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.

(c)           The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.

(d)           The arbitrators do not have to explain the reason(s) for their award.

(e)           The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry, unless Counterparty is a member of the organization sponsoring the arbitration facility, in which case all arbitrators may be affiliated with the securities industry.

(f)            The rules of some arbitration forums may impose time limits for bringing a claim in arbitration.  In some cases, a claim that is ineligible for arbitration may be brought in court.

(g)           The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this Master Confirmation.

Counterparty agrees that any and all controversies that may arise between Counterparty and GS&Co., including, but not limited to, those arising out of or relating to the Agreement or any Transaction hereunder, shall be determined by arbitration conducted before the FINRA Dispute Resolution (“FINRA-DR”), or, if the FINRA-DR declines to hear the matter, before the American Arbitration Association, in accordance with their arbitration rules then in force.  The award of the arbitrator shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction.

No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; (ii) the class is decertified; or (iii) Counterparty is excluded from the class by the court.

Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Master Confirmation except to the extent stated herein.

23.           Counterparts.       This Master Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Master Confirmation by signing and delivering one or more counterparts.

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Counterparty hereby agrees (a) to check this Master Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect to any particular Transaction to which this Master Confirmation relates, by manually signing this Master Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, Facsimile No. 212-428-1980/83.

		Yours faithfully,
		GOLDMAN, SACHS & CO.
		By:	/s/ Neasa Doyle
			Authorized Signatory   VICE PRESIDENT
			Name  NEASA DOYLE
Agreed and Accepted By:
GENZYME CORPORATION
By:	/s/ Michael S. Wyzga
Name: Michael S. Wyzga
Title: Executive Vice President and Chief Financial Officer

SCHEDULE A

SUPPLEMENTAL CONFIRMATION

To:	Genzyme Corporation 500 Kendall Street, Cambridge, MA 02142
From:	Goldman, Sachs & Co.
Subject:	Accelerated Stock Buyback
Ref. No:	[Insert Reference No.]
Date:	[Insert Date]

The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between Goldman, Sachs & Co. (“GS&Co.”) and Genzyme Corporation (“Counterparty”) (together, the “Contracting Parties”) on the Trade Date specified below.  This Supplemental Confirmation is a binding contract between GS&Co. and Counterparty as of the relevant Trade Date for the Transaction referenced below.

1.             This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of June 17, 2010 (the “Master Confirmation”) between the Contracting Parties, as amended and supplemented from time to time.  All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.

2.             The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

Trade Date:	[                ]
Forward Price Adjustment Amount:	USD[     ]
Calculation Period Start Date:	[                ]
Scheduled Termination Date:	[                ]
First Acceleration Date:	[                ]
Prepayment Amount:	USD[                ]
Prepayment Date:	[                ]

A-1

Initial Shares:	[                ] Shares; provided that if, in connection with the Transaction, GS&Co. is unable to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that GS&Co. is able to so borrow or otherwise acquire, and GS&Co. shall use reasonable good faith efforts to borrow or otherwise acquire a number of Shares equal to the shortfall in the Initial Share Delivery and to deliver such additional Shares as soon as reasonably practicable. The aggregate of all Shares delivered to Counterparty in respect of the Transaction to which this Supplemental Confirmation relates pursuant to this paragraph shall be the “Initial Shares” for the purposes of “Number of Shares to be Delivered” in the Master Confirmation.
Initial Share Delivery Date:	[                ]
Additional Relevant Days:	The [    ] Exchange Business Days immediately following the Calculation Period.
Other:	[                ]

3.             Counterparty represents and warrants to GS&Co. that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs, except as otherwise disclosed to GS&Co..

4.             This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

A-2

Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect to the Transaction to which this Supplemental Confirmation relates, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, facsimile No. 212-428-1980/83.

	Yours sincerely,
	GOLDMAN, SACHS & CO.
	By:
		Authorized Signatory
Agreed and Accepted By:
GENZYME CORPORATION
By:
Name:
Title:

A-3

ANNEX A

COUNTERPARTY SETTLEMENT PROVISIONS

1.             The following Counterparty Settlement Provisions shall apply to the extent indicated under the Master Confirmation:

Settlement Currency:	USD
Settlement Method Election:	Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to GS&Co. in writing on the date it notifies GS&Co. of its election that, as of such date, the Electing Party is not aware of any material non-public information concerning Counterparty or the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.
Electing Party:	Counterparty
Settlement Method Election Date:	The earlier of (i) the Scheduled Termination Date and (ii) the second Exchange Business Day immediately following the Accelerated Termination Date (in which case the election under Section 7.1 of the Equity Definitions shall be made no later than 10 minutes prior to the open of trading on the Exchange on such second Exchange Business Day), as the case may be; provided that if a Friendly Transaction Announcement occurs after the Settlement Date, the Settlement Method Election Date for the Second Settlement shall be the date of the Friendly Transaction Announcement.
Default Settlement Method:	Cash Settlement
Forward Cash Settlement Amount:	The Number of Shares to be Delivered multiplied by the Settlement Price; provided that in the case of a Second Settlement occurring after an early termination or cancellation of the relevant Transaction pursuant to Section 6 of the Agreement or Article 12 of the Equity Definitions, the Forward Cash Settlement Amount shall equal the lesser of (i) zero and (ii)(x) the Payment Amount that would have been calculated for such early termination or cancellation if clause (x)(b)(ii) in the definition of Number of Shares to be Delivered had been replaced with “(b)(ii) the Prorated Forward Price Adjustment Amount”, as determined by the Calculation Agent minus (y) the actual Payment Amount calculated for such early termination or cancellation (in each case, with an amount that would have been owed by Counterparty expressed as a negative number for purposes of this calculation).

Settlement Price:	The average of the VWAP Prices (or, in the case of a Second Settlement, the Relevant Prices) for the Exchange Business Days in the Settlement Valuation Period, subject to Valuation Disruption as specified in the Master Confirmation or, in the case of a Second Settlement, subject to Section 6.6(a) of the Equity Definitions as if such dates were Valuation Dates.
Settlement Valuation Period:	A number of Scheduled Trading Days selected by GS&Co. in good faith and in its reasonable discretion, beginning on the Scheduled Trading Day immediately following the earlier of (i) the Scheduled Termination Date or (ii) the Exchange Business Day immediately following the Termination Date or, in the case of a Second Settlement, the date of the Friendly Transaction Announcement.
Cash Settlement:	If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.
Cash Settlement Payment Date:	The date five Exchange Business Days following the last day of the Settlement Valuation Period.
Net Share Settlement Procedures:	If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below.

2.             Net Share Settlement shall be made by delivery on the Cash Settlement Payment Date of a number of Shares satisfying the conditions set forth in paragraph 3 below (the “Registered Settlement Shares”), or a number of Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in either case with a value equal to the absolute value of the Forward Cash Settlement Amount, with such Shares’ value based on the value thereof to GS&Co. (which value shall, in the case of Unregistered Settlement Shares, take into account a commercially reasonable illiquidity discount), in each case as determined by the Calculation Agent in a commercially reasonable manner.

3.             Counterparty may only deliver Registered Settlement Shares pursuant to paragraph 2 above if:

(a)           a registration statement covering public resale of the Registered Settlement Shares by GS&Co. (the “Registration Statement”) shall have been filed with the Securities and Exchange Commission under the Securities Act and been declared or otherwise become effective on or prior to the date of delivery, and no stop order shall be in effect with respect to the Registration Statement; a printed prospectus relating to the Registered Settlement Shares (including any prospectus supplement thereto, the “Prospectus”) shall have been delivered to GS&Co., in such quantities as GS&Co. shall reasonably have requested, on or prior to the date of delivery;

(b)           the form and content of the Registration Statement and the Prospectus (including, without limitation, any sections describing the plan of distribution) shall be reasonably satisfactory to GS&Co.;

(c)           as of or prior to the date of delivery, GS&Co. and its agents shall have been afforded a reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities and the results of such investigation are satisfactory to GS&Co., in its discretion; and

2

(d)           as of the date of delivery, an agreement (the “Underwriting Agreement”) shall have been entered into with GS&Co. in connection with the public resale of the Registered Settlement Shares by GS&Co. substantially similar to underwriting agreements customary for underwritten offerings of equity securities, in form and substance satisfactory to GS&Co., which Underwriting Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, GS&Co. and its affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters.

4.             If Counterparty delivers Unregistered Settlement Shares pursuant to paragraph 2 above:

(a)           all Unregistered Settlement Shares shall be delivered to GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof;

(b)           as of or prior to the date of delivery, GS&Co. and any potential purchaser of any such shares from GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) identified by GS&Co. shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation with respect to Counterparty customary in scope for private placements of equity securities (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them);

(c)           as of the date of delivery, Counterparty shall enter into an agreement (a “Private Placement Agreement”) with GS&Co. (or any affiliate of GS&Co. designated by GS&Co.) in connection with the private placement of such shares by Counterparty to GS&Co. (or any such affiliate) and the private resale of such shares by GS&Co. (or any such affiliate), substantially similar to private placement purchase agreements customary for private placements of equity securities, in form and substance commercially reasonably satisfactory to GS&Co., which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating, without limitation, to the indemnification of, and contribution in connection with the liability of, GS&Co. and its affiliates and the provision of customary opinions, accountants’ comfort letters and lawyers’ negative assurance letters, and shall provide for the payment by Counterparty of all fees and expenses in connection with such resale, including all fees and expenses of counsel for GS&Co., and shall contain representations, warranties, covenants and agreements of Counterparty reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales; and

(d)           in connection with the private placement of such shares by Counterparty to GS&Co. (or any such affiliate) and the private resale of such shares by GS&Co. (or any such affiliate), Counterparty shall, if so requested by GS&Co., prepare, in cooperation with GS&Co., a private placement memorandum in form and substance reasonably satisfactory to GS&Co.

5.             GS&Co., itself or through an affiliate (the “Selling Agent”) or any underwriter(s), will, exercising principles of best execution, sell all, or such lesser portion as may be required hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares and any Makewhole Shares (as defined below) (together, the “Settlement Shares”) delivered by Counterparty to GS&Co. pursuant to paragraph 6 below commencing on the Cash Settlement Payment Date and continuing until the date on which the aggregate Net Proceeds (as such term is defined below) of such sales, as determined by GS&Co., is equal to the absolute value of the Forward Cash Settlement Amount (such date, the “Final Resale Date”).  If the proceeds of any sale(s) made by GS&Co., the Selling Agent or any underwriter(s), net of any fees and commissions (including, without limitation, underwriting or placement fees) customary for similar transactions under the circumstances at the time of the offering, together with carrying charges and expenses incurred in connection with the offer and sale of the Shares (including, but without limitation to, the covering of any over-allotment or short position (syndicate or otherwise)) (the “Net Proceeds”) exceed the absolute value of the Forward Cash Settlement Amount, GS&Co. will refund, in USD, such excess to Counterparty on the date that is three (3) Currency Business Days following the Final Resale Date, and, if any portion of the Settlement Shares remains unsold, GS&Co. shall return to Counterparty on that date such unsold Shares.

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6.             If the Calculation Agent determines that the Net Proceeds received from the sale of the Registered Settlement Shares or Unregistered Settlement Shares or any Makewhole Shares, if any, pursuant to this paragraph 6 are less than the absolute value of the Forward Cash Settlement Amount (the amount in USD by which the Net Proceeds are less than the absolute value of the Forward Cash Settlement Amount being the “Shortfall” and the date on which such determination is made, the “Deficiency Determination Date”), Counterparty shall on the Exchange Business Day next succeeding the Deficiency Determination Date (the “Makewhole Notice Date”) deliver to GS&Co., through the Selling Agent, a notice of Counterparty’s election that Counterparty shall either (i) pay an amount in cash equal to the Shortfall on the day that is one (1) Currency Business Day after the Makewhole Notice Date, or (ii) deliver additional Shares.  If Counterparty elects to deliver to GS&Co. additional Shares, then Counterparty shall deliver additional Shares in compliance with the terms and conditions of paragraph 3 or paragraph 4 above, as the case may be (the “Makewhole Shares”), on the first Clearance System Business Day which is also an Exchange Business Day following the Makewhole Notice Date in such number as the Calculation Agent reasonably believes would have a market value on that Exchange Business Day equal to the Shortfall.  Such Makewhole Shares shall be sold by GS&Co. in accordance with the provisions above; provided that if the sum of the Net Proceeds from the sale of the originally delivered Shares and the Net Proceeds from the sale of any Makewhole Shares is less than the absolute value of the Forward Cash Settlement Amount then Counterparty shall, at its election, either make such cash payment or deliver to GS&Co. further Makewhole Shares until such Shortfall has been reduced to zero.

7.             Notwithstanding the foregoing, in no event shall the aggregate number of Settlement Shares and Makewhole Shares be greater than the Reserved Shares minus the amount of any Shares actually delivered by Counterparty under any other Transaction(s) under this Master Confirmation (the result of such calculation, the “Capped Number”).  Counterparty represents and warrants (which shall be deemed to be repeated on each day that a Transaction is outstanding) that the Capped Number is equal to or less than the number of Shares determined according to the following formula:

A – B

WhereA = the number of authorized but unissued shares of the Counterparty that are not reserved for future issuance on the date of the determination of the Capped Number; and

B = the maximum number of Shares required to be delivered to third parties if Counterparty elected Net Share Settlement of all transactions in the Shares (other than Transactions in the Shares under this Master Confirmation) with all third parties that are then currently outstanding and unexercised.

“Reserved Shares” means initially, 38,887,809 Shares.  The Reserved Shares may be increased or decreased in a Supplemental Confirmation.

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EX-10.3.1

Exhibit 10.3.1

SUPPLEMENTAL CONFIRMATION

To:	Genzyme Corporation 500 Kendall Street, Cambridge, MA 02142
From:	Goldman, Sachs & Co.
Subject:	Accelerated Stock Buyback
Ref. No:	SDB 1631 855 313
Date:	June 17, 2010

The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the Transaction entered into between Goldman, Sachs & Co. (“GS&Co.”) and Genzyme Corporation (“Counterparty”) (together, the “Contracting Parties”) on the Trade Date specified below.  This Supplemental Confirmation is a binding contract between GS&Co. and Counterparty as of the relevant Trade Date for the Transaction referenced below.

1.             This Supplemental Confirmation supplements, forms part of, and is subject to the Master Confirmation dated as of June 17, 2010 (the “Master Confirmation”) between the Contracting Parties, as amended and supplemented from time to time.  All provisions contained in the Master Confirmation govern this Supplemental Confirmation except as expressly modified below.

2.             The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

Trade Date:	June 17, 2010
Forward Price Adjustment Amount:	USD [**]
Calculation Period Start Date:	June 18, 2010
Scheduled Termination Date:	October 18, 2010
First Acceleration Date:	[**]
Prepayment Amount:	USD1,000,000,000
Prepayment Date:	June 22, 2010

[**] = 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.

Initial Shares:	15,555,123 Shares; provided that if, in connection with the Transaction, GS&Co. is unable to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that GS&Co. is able to so borrow or otherwise acquire, and GS&Co. shall use reasonable good faith efforts to borrow or otherwise acquire a number of Shares equal to the shortfall in the Initial Share Delivery and to deliver such additional Shares as soon as reasonably practicable. The aggregate of all Shares delivered to Counterparty in respect of the Transaction to which this Supplemental Confirmation relates pursuant to this paragraph shall be the “Initial Shares” for the purposes of “Number of Shares to be Delivered” in the Master Confirmation.
Initial Share Delivery Date:	June 22, 2010
Additional Relevant Days:	The ten (10) Exchange Business Days immediately following the Calculation Period.
Other:	GS&Co. is paying a fee to another broker-dealer in connection with this Transaction.  Details are available upon request.

3.             Counterparty represents and warrants to GS&Co. that neither it nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act) has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act during either (i) the four full calendar weeks immediately preceding the Trade Date or (ii) during the calendar week in which the Trade Date occurs, except as otherwise disclosed to GS&Co..

4.             This Supplemental Confirmation may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Supplemental Confirmation by signing and delivering one or more counterparts.

[**] = 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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Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by GS&Co.) correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect to the Transaction to which this Supplemental Confirmation relates, by manually signing this Supplemental Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Equity Derivatives Documentation Department, facsimile No. 212-428-1980/83.

		Yours sincerely,
		GOLDMAN, SACHS & CO.
		By:	/s/ Neasa Doyle
			Authorized Signatory Vice President
			Name Neasa Doyle
Agreed and Accepted By:
GENZYME CORPORATION
By:	/s/ Michael S. Wyzga
Name:	Michael S. Wyzga
Title:	Executive Vice President and Chief Financial Officer

[**] = 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.

EX-10.7

Exhibit 10.7

GENZYME CORPORATION

2004 EQUITY INCENTIVE PLAN

1.PURPOSE

The 2004 Equity Incentive Plan (the “Plan”) has been established to promote the interests of the Company and its shareholders by strengthening the Company’s ability to attract, motivate, and retain key employees and consultants of the Company and its Affiliates upon whose judgment, initiative, and efforts the financial success and growth of the business of the Company largely depend.  The Plan is intended to provide an additional incentive for such individuals through stock ownership and other rights that promote and recognize the financial success and growth of the Company and create value for shareholders.  Certain capitalized terms used herein and certain operating rules related thereto are defined and set forth in Section 10 below.

The Plan provides for the grant of Stock Options, including ISOs and NSOs, Restricted Stock, and Restricted Stock Units (each an “Award”).

The Plan shall become effective upon shareholder approval (the “Effective Date”) and unless earlier terminated pursuant to Section 8, shall terminate ten years from the Effective Date.  After the Plan is terminated, no new Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their terms and conditions and the Plan’s terms and conditions applicable thereto.

The Plan constitutes a merger and restatement of the Company’s 1997 Equity Incentive Plan (the “Prior Plan”) and supersedes the Prior Plan, the separate existence of which shall terminate on the Effective Date.  The rights and privileges of holders of Awards outstanding under the Prior Plan shall not be adversely affected by the foregoing action.

2.ADMINISTRATION

The Compensation Committee shall be the Administrator of the Plan except as hereinafter provided.  The Compensation Committee may delegate to one or more of its members such of its duties, powers and responsibilities as it may determine.  To the extent determined by the Compensation Committee and permitted by applicable law, the Compensation Committee may also (i) delegate to one or more executive officers of the Company the power to grant Awards to, or allocate Awards among, Participants who are not Reporting Persons or Covered Employees and to make such determinations under the Plan with respect thereto as the Compensation Committee determines; and (ii) authorize any such executive officer to further delegate to an Employee or another executive officer temporary authority to grant or allocate Awards when the executive officer is unavailable.  The Compensation Committee may also delegate to such Employees or other persons as it determines such ministerial tasks as it deems appropriate.  In the event of any delegation described in this paragraph, the term “Administrator” shall include the person or persons so delegated to the extent of such delegation.

The Administrator has discretionary authority, subject only to the express provisions of the Plan, to interpret the Plan; determine eligibility for and grant Awards; select the Participants to receive Awards and determine, modify or waive the terms and conditions of any Award; prescribe forms, rules and procedures; and otherwise do all things necessary to carry out the purposes of the Plan.  The terms of each Award grant need not be identical, and the Administrator need not treat Participants uniformly.  Except as otherwise provided by the Plan or a particular Award, any determination with respect to an Award may be made by the Administrator at the time of grant or at any time thereafter.  In the case of any Award intended to be eligible for the performance-based compensation exception under Section 162(m), the Administrator will exercise its discretion consistent with qualifying the Award for that exception.  Determinations made by the

Administrator shall be final and binding upon Participants, the Company, and all other interested parties.

3.STOCK AVAILABLE FOR GRANT; LIMITS

(a)  Number of Shares.  Subject to adjustment as provided under Section 6, the maximum number of shares available for issuance to Participants under the Plan shall be 46,638,951 shares.  Subject to such overall maximum, up to 46,638,951 shares of Stock may be issued upon the exercise of ISOs; up to 46,638,951 shares of Stock may be issued upon exercise of NSOs; and up to 10,200,000 shares of Stock may be issued for grants of Restricted Stock or Restricted Stock Units.  Stock delivered by the Company under the Plan may be authorized but unissued Stock or previously issued Stock acquired by the Company.  No fractional shares of Stock will be delivered under the Plan.  To the extent consistent with the requirements of Section 422 of the Code, and with other applicable legal requirements (including applicable NASDAQ or stock exchange requirements), Stock issued under option grants, restricted stock grants, or restricted stock unit grants of an acquired company that are assumed in connection with the acquisition, or under Stock Options, Restricted Stock, or Restricted Stock Units issued in substitution for options, restricted stock, or restricted stock units of an acquired-company, shall not reduce the number of shares available for issuance under the Plan.

(b)  Section 162(m) Limits.  The maximum number of shares of Stock for which Stock Options may be granted to any person in any calendar year will be 2,000,000.

4.ELIGIBILITY AND PARTICIPATION

All employees and consultants of the Company or any Affiliate capable of contributing significantly to the successful performance of the Company, other than a person who has irrevocably elected not be eligible, are eligible to be Participants in the Plan.  Eligibility for ISOs is limited to employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as those terms are defined in Section 424 of the Code.  The Administrator, in its sole discretion, shall determine from the group of eligible persons whether an individual shall be a Participant under the Plan.  Any grant made under the Plan shall be made in the sole discretion of the Administrator and no prior grant shall entitle a person to any future grant.

5.RULES APPLICABLE TO AWARDS

(a)   Documentation.  Each Award granted under the Plan shall be evidenced by a writing specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Administrator considers necessary or advisable to achieve the purposes of the Plan or to comply with applicable tax and regulatory laws and accounting principles.

(b)  Transferability.  In the discretion of the Administrator, any Award may be made transferable upon such terms and conditions and to such extent as the Administrator determines, provided that ISOs may not be transferred other than by will or by the laws of descent and distribution.  Any non-transferable Stock Option requiring exercise, including any ISO, may be exercised only by the Participant during the Participant’s lifetime.  The Administrator may in its discretion, other than in the case of Stock Options intended to continue to qualify as ISOs, waive any restriction on transferability.

(c)    Vesting; Exercisability.   The Administrator shall determine the time or times at which an Award will vest or become exercisable and the terms on which a Stock Option will remain exercisable during or following termination of Employment and the payment terms of any Restricted Stock Unit.  Without limiting the foregoing, the Administrator may at any time

accelerate the vesting or exercisability of, or payment under, an Award, regardless of any adverse or potentially adverse tax consequences resulting from such acceleration; provided, that the Administrator’s discretion shall not be exercised, in the case of an Award providing for “nonqualified deferred compensation” subject to Section 409A, in a manner inconsistent with the requirements of Section 409A.

(d)    Taxes.  The Participant shall pay to the Company, or make provision satisfactory to the Administrator for payment of, any taxes required by law to be withheld in respect of the grant, vesting or exercise of any Award or the delivery of stock or other property under any Award, in each case no later than the date of the event creating the tax liability.  The Company and its Affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind due to the Participant hereunder or otherwise.

(e)    Dividend Equivalents, Etc.  The Administrator may provide for the payment of amounts in lieu of cash dividends or other cash distributions with respect to Restricted Stock, Restricted Stock Units, or Stock subject to a Stock Option.  Any such arrangement for the payment of amounts in lieu of dividends or other distributions shall be established and administered consistent with exemption from, or compliance with, the requirements of Section 409A.

(f)Rights Limited.  Nothing in the Plan will be construed as giving any person the right to continued employment or service with the Company or its Affiliates, or any rights as a shareholder except as to shares of Stock actually issued under the Plan.  In no event shall the Plan, or any grant made under the Plan, form a part of an employee’s or consultant’s contract of employment or service, if any.  The loss of existing or potential profit in any Award will not constitute an element of damages in the event of termination of employment or service for any reason, even if the termination is in violation of an obligation of the Company or Affiliate to the Participant.

(g)    Non-U.S. Awards.  Awards may be granted under the Plan to any eligible person regardless of the jurisdiction in which he or she works or resides.  In order to comply with the laws in other countries in which the Company operates, the Administrator, in its sole discretion, shall have the power and authority to:

(i)  Establish one or more separate sub-plans or programs under the Plan for the grant of Awards to eligible persons in a specified jurisdiction or jurisdictions;

(ii)  Include in any such sub-plan or program such special rules as it determines to be necessary or advisable; and

(iii)  Take any action, before or after an Award grant is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals.

Notwithstanding the above, the Administrator may not take any actions hereunder, and no Award shall be granted, that would violate applicable law.

(h)    Exercise Price of Stock Option.  The exercise price of a Stock Option will not be less than 100% of the Fair Market Value of the Stock on the date of grant.  Once granted, no Stock Option may be repriced (as that term is used under applicable NASDAQ or stock exchange rules) without shareholder approval.

(i)     Time and Manner of Exercise of Stock Option.  Unless the Administrator expressly provides otherwise, a Stock Option will not be deemed to have been exercised until the Company receives a notice of exercise (in a form acceptable to the Administrator) signed by the appropriate person and accompanied by payment of the exercise price.  If the Stock Option is exercised by any person other than the Participant, the Administrator may require satisfactory evidence that

the person exercising the Stock Option has the right to do so.  All Stock Options granted pursuant to the Plan shall terminate if not exercised within ten years of the date of grant, or such earlier date as the Administrator may determine.

(j)     Payment of Stock Option.  No shares shall be delivered pursuant to any exercise of a Stock Option until payment in full of the exercise price therefor is received by the Company.  Such payment may be made in whole or in part in cash or, to the extent permitted by the Administrator at or after the grant of the Stock Option, in shares of Stock owned by the Participant (which shares must be owned for at least six months) valued at their Fair Market Value on the date of delivery, or such other lawful consideration, including use of a broker-assisted exercise program or similar program, as the Administrator may determine.  The delivery of shares in payment of the exercise price may be accomplished either by actual delivery or by constructive delivery through attestation of ownership, subject to such rules as the Administrator may prescribe.

(k)    Grants of Restricted Stock and Restricted Stock Units. Grants of Restricted Stock and Restricted Stock Units may be made in exchange for such lawful consideration, including services, as the Administrator determines.

(l)     Compliance with Section 409A.  Awards under the Plan shall be construed and administered consistent with exemption from, or compliance with, the requirements of Section 409A.  Notwithstanding any provision of Section 8 to the contrary, the Administrator may amend the Plan and/or any Award to satisfy the requirements of Section 409A, including the requirements for exemption from Section 409A.

6.EFFECT OF CERTAIN TRANSACTIONS

(a)    Covered Transactions.  Except as otherwise provided under the terms of an Award grant, in the event of a Covered Transaction in which there is an acquiring or surviving entity, the Administrator may provide for the assumption of some or all outstanding Awards, or for the grant of new awards in substitution therefor, by the acquiror or survivor or an affiliate of the acquiror or survivor, in each case on such terms and subject to such conditions as the Administrator determines.  In the absence of such an assumption or if there is no substitution, except as otherwise provided in the Award, each Stock Option will become fully exercisable, and the delivery of shares of Stock issuable under each outstanding Restricted Stock Unit will be accelerated and such shares will be issued, prior to the Covered Transaction, in each case on a basis that gives the holder of the Stock Option or the Restricted Stock Unit a reasonable opportunity, as determined by the Administrator, following exercise of the Stock Option or the issuance of shares, as the case may be, to participate as a shareholder in the Covered Transaction, and the Stock Option will terminate upon consummation of the Covered Transaction.  Any shares of Stock issued pursuant to the preceding sentence in satisfaction of a grant of Restricted Stock Units may, in the discretion of the Administrator, contain such restrictions, if any, as the Administrator deems appropriate to reflect any performance or other vesting condition to which the grant of Restricted Stock Units was subject.  In the case of Restricted Stock, the Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.

Without limiting the general scope of the Administrator’s discretionary authority under the Plan, the Administrator may provide, as to some or all Awards, if any, that in the event of a Change in Control of the Company, whether or not such Change in Control is also a Covered Transaction, the vesting and exercisability, if applicable, of, or the payment of benefits under, such Award will be accelerated on such terms as the Administrator determines.

(b)    Distributions; Changes in Capital Stock; Basic Adjustment Provisions. In the event of a stock dividend, stock split (including reverse stock split) or combination of shares, recapitalization or other change in the Company’s capital structure, the Administrator will make appropriate adjustments to the maximum number of shares specified in Section 3(a) that may be delivered under the Plan, to the maximum number of shares specified in Section 3(a) that may be issued upon the exercise of ISOs, to the maximum number of shares specified in Section 3(a) that may be issued upon exercise of NSOs, and to the maximum share limits described in Section 3(b).  The Administrator will also make appropriate adjustments to the number and kind of shares of stock or securities subject to Awards then outstanding or subsequently granted, any exercise prices relating to Stock Options and any other provision of Awards affected by such change.

(c)    Certain Other Adjustments.  To the extent consistent with qualification of ISOs under Section 422 of the Code, with the performance-based compensation rules of Section 162(m), where applicable, and with the requirements of (including the requirements for exemption under) Section 409A, the Administrator may also make adjustments of the type above to take into account distributions to shareholders other than those provided for in Section 6(a), or any other event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to preserve the value of Award grants made hereunder.

(d)    Continuing Application of Plan Terms.  References in the Plan to shares of Stock will be construed to include any stock or securities resulting from an adjustment pursuant to this Section 6.

7.LEGAL CONDITIONS ON DELIVERY OF STOCK

The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the Plan until: (i) the Company is satisfied that all legal matters in connection with the issuance and delivery of such shares have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance; and (iii) all conditions of the grant have been satisfied or waived.  If the sale of Stock has not been registered under the Securities Act of 1933, as amended, the Company may require, as a condition to exercise of the Stock Option or receipt of the Restricted Stock or Restricted Stock Unit, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of such Act.  The Company may require that certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer applicable to such Stock.

8.AMENDMENT AND TERMINATION

The Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any future grants of Awards; provided, that except as otherwise expressly provided in the Plan the Administrator may not, without the Participant’s consent, alter the terms of an Award so as to affect adversely a Participant’s rights under the Award, unless the Administrator expressly reserved the right to do so at the time of grant.  Amendments to the Plan shall be conditioned upon shareholder approval only to the extent, if any, such approval is required by law (including the Code and applicable NASDAQ or stock exchange requirements), as determined by the Administrator.  Notwithstanding the foregoing, the Company shall submit for shareholder approval any amendment to the Plan (other than an amendment or adjustment pursuant to Section 6) that would: (a) increase the maximum number of shares for which Stock Options, Restricted Stock, or Restricted Stock Units may be granted under the Plan; (b) reduce the price at which a Stock Option may be granted below the price provided for in Section 5(h); (c) reduce the exercise price of outstanding Stock Options; or (d) increase the limits set forth in Section 3.

9.OTHER COMPENSATION ARRANGEMENTS

The existence of the Plan or the grant of any Award will not in any way affect the Company’s right to award a person bonuses or other compensation in addition to grants made under the Plan.

10.DEFINITIONS

The following terms, when used in the Plan, will have the meanings and be subject to the provisions set forth below:

“Administrator”: has the meaning set forth in Section 2.

“Affiliate”:  Any corporation or other entity owning, directly or indirectly, 50% or more of the outstanding Stock of the Company, or in which the Company or any such corporation or other entity owns, directly or indirectly, 50% of the outstanding capital stock (determined by aggregate voting rights) or other voting interests.

“Award”:  a Stock Option, Restricted Stock Unit, or award of Restricted Stock.

“Board”:  The Board of Directors of the Company.

“Change in Control”:  A change in ownership or control of the Company or a change in the ownership of a substantial portion of the Company’s assets, determined in accordance with such rules, if any, as may be established by the Administrator.

“Code”:  The U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or any successor statute as from time to time in effect.

“Compensation Committee”:  The Compensation Committee of the Board.

“Company”:  Genzyme Corporation.

“Covered Employees”:  A “covered employee” within the meaning of Section 162(m).

“Covered Transaction”:  Any of (i) a consolidation, merger, or similar transaction or series of related transactions in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the Company’s assets, or (iii) a dissolution or liquidation of the Company.  Where a Covered Transaction involves a tender offer that is reasonably

expected to be followed by a merger described in clause (i) (as determined by the Administrator), the Covered Transaction shall be deemed to have occurred upon consummation of the tender offer.

“Employee”:  Any person who is employed by the Company or an Affiliate.

“Employment”:  A Participant’s employment or other service relationship with the Company and its Affiliates.  Employment will be deemed to continue, unless the Administrator expressly provides otherwise, so long as the Participant is employed by, or otherwise is providing services in a capacity described in Section 4 to the Company or its Affiliates.   If a Participant’s employment or other service relationship is with an Affiliate and that entity ceases to be an Affiliate, the Participant’s Employment will be deemed to have terminated when the entity ceases to be an Affiliate unless the Participant transfers Employment to the Company or its remaining Affiliates.

“Exchange Act”:  The Securities Exchange Act of 1934, as amended, as from time to time further amended and in effect, or any successor statute as from time to time in effect.

“Fair Market Value”:  The fair market value as determined by the Compensation Committee in good faith, or in the manner established by the Compensation Committee in good faith, from time to time.

“ISO”:  A Stock Option intended to be an “incentive stock option” within the meaning of Section 422 of the Code.  Each option granted pursuant to the Plan will be treated as providing by its terms that it is to be a non-incentive option unless, as of the date of grant, it is expressly designated as an ISO.

“NSO”:  A Stock Option that is not an ISO.

“Participant”:  A person who is granted an Award under the Plan.

“Plan”:  The Genzyme Corporation 2004 Equity Incentive Plan as from time to time amended and in effect.

“Reporting Person”:  A person subject to the reporting requirements of Section 16 of the Exchange Act.

“Restricted Stock”:  An award of Stock for so long as the Stock remains subject to restrictions requiring that it be redelivered or offered for sale to the Company if specified performance or other vesting conditions are not satisfied.

“Restricted Stock Unit”:  An unfunded and unsecured promise to deliver Stock in the future, subject to the satisfaction of specified performance or other vesting conditions.

“Section 162(m)”:  Section 162(m) of the Code.

“Section 409A”:  Section 409A of the Code.

“Stock”:  Common Stock of the Company, par value $.01 per share.

“Stock Option”:  An option entitling the recipient to acquire shares of Stock upon payment of the exercise price.

Adopted by Board of Directors February 26, 2004

Approved by Shareholders May 27, 2004

Amended by Board of Directors May 27, 2004

Amended by Board of Directors October 7, 2004

Amended by Board of Directors March 14, 2005

Amended by Board of Directors May 26, 2005

Approved by Shareholders May 26, 2005

Amended by Board of Directors March 1, 2006

Approved by Shareholders May 25, 2006

Amended by Board of Directors, February 28, 2007

Approved by Shareholders May 24, 2007

Amended by Board of Directors February 28, 2008

Approved by Shareholders May 22, 2008

Amended by Board of Directors February 26, 2009

Approved by Shareholders May 21, 2009

Amended by Board of Directors February 25, 2010

Approved by Shareholders June 16, 2010

EX-10.8

Exhibit 10.8

GENZYME CORPORATION

2007 Director Equity Plan

1.General; Purpose.

This 2007 Director Equity Plan dated February , 2007 (the “Plan”) governs (1) options to purchase common stock, $0.01 par value (the “Stock”), of Genzyme Corporation (the “Company”), (2) awards of Stock for so long as the Stock remains subject to restrictions requiring that it be redelivered or offered for sale to the Company if specified performance or other vesting conditions are not satisfied (“Restricted Stock”), and (3) unfunded and unsecured promises to deliver Stock in the future, subject to the satisfaction of specified performance or other vesting conditions (“Restricted Stock Units”), granted on or after the date hereof by the Company to members of the Board of Directors (each, a “Director”) of the Company (the “Board”) who are not also officers or employees of the Company.  Options, Restricted Stock and Restricted Stock Units are collectively referred to in this Plan as “Awards”.  The Plan constitutes an amendment and restatement of the Company’s 1998 Director Stock Option Plan (the “Prior Plan”) and supersedes the Prior Plan, the separate existence of which shall terminate on the effective date of this Plan.  The rights and privileges of holders of options outstanding under the Prior Plan shall not be adversely affected by the foregoing action.

The purpose of the Plan is to attract and retain qualified persons to serve as Directors of the Company and to encourage ownership of stock of the Company by such Directors so as to provide additional incentives to promote the success of the Company.

2.Administration of the Plan; Governing Law.

Grants of Awards under the Plan shall be automatic as provided in Section 7.  All questions of interpretation with respect to the Plan and Awards granted under it shall be determined by a committee consisting of all Directors of the Company who are not eligible to participate in the Plan, and such determination shall be final and binding upon all persons having an interest in the Plan.  This Plan shall be governed by and interpreted in accordance with the laws of The Commonwealth of Massachusetts.

3.Persons Eligible to Participate in the Plan.

Members of the Board who are not also officers or employees of the Company shall be eligible to participate in the Plan.

4.Shares Subject to the Plan.

(a)  The maximum aggregate number of shares available for issuance under the Plan shall be 1,712,491.  Up to 1,712,491 shares of Stock may be issued upon exercise of options granted under this Plan and up to 125,000 shares of Stock may be issued for grants of Restricted Stock or Restricted Stock Units under this Plan.  In the event of a stock dividend, split-up, combination or reclassification of shares, recapitalization or other similar capital change relating to the Stock, the maximum aggregate number and kind of shares or securities of the Company as to which Awards may be granted under this Plan and as to which options then outstanding shall be exercisable, and the option price of such options, shall be appropriately adjusted by the Board (whose determination shall be conclusive) so as to preserve the value of the Award.

(b) In the event of a consolidation or merger of the Company with another corporation where the Company’s shareholders do not own a majority in interest of the surviving or resulting corporation, or the sale or exchange of all or substantially all of the assets of the Company, or a reorganization or liquidation of the Company (“Covered

Transaction”), each option will become fully exercisable, and the delivery of shares of Stock issuable under each outstanding Restricted Stock Unit will be accelerated.  Such shares will be issued, prior to the Covered Transaction so as to give, in each case on a basis that gives the holder of the option or the Restricted Stock Unit a reasonable opportunity, as determined by the Company, following exercise of the option or the issuance of shares, as the case may be, to participate as a shareholder in the Covered Transaction, and the option and the Restricted Stock Unit will terminate upon consummation of the Covered Transaction.  Any shares of Stock issued pursuant to this Section 4(b) in satisfaction of a grant of Restricted Stock Units may, in the discretion of the Company, contain such restrictions, if any, as the Company deems appropriate to reflect any performance or other vesting condition to which the grant of Restricted Stock Units was subject.  In the case of Restricted Stock, the Company may require that any amounts delivered, exchanged or otherwise paid in respect of such Stock in connection with the Covered Transaction be placed in escrow or otherwise made subject to such restrictions as the Company deems appropriate to carry out the intent of the Plan.   However, in lieu of the foregoing sentences of this Section 4(b), the Board may make such other provision as it may consider equitable to holders and in the best interests of the Company.

(c)  Whenever options under this Plan (including options outstanding under the Prior Plan as of the effective date of this Plan) lapse or terminate or otherwise become unexercisable, the shares of Stock which were subject to such options may again be subjected to options under this Plan.  The Company shall at all times while this Plan is in force reserve such number of shares of Stock as will be sufficient to satisfy the requirements of this Plan.

5.Nonstatutory Stock Options.

All options granted under this Plan shall be nonstatutory options not entitled to special tax treatment under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).

6.Form of Awards.

Awards granted hereunder shall be in such form as the Board may from time to time determine.

7.Grant of Awards.

(a)  Automatic Grant of Options.  At each annual meeting of the shareholders of the Company, those Directors who are eligible to receive options under this Plan shall automatically be granted options to purchase 7,125 shares of Stock. In addition, upon the election of an eligible Director under this Plan other than at an annual meeting of shareholders (whether by the Board or the shareholders and whether to fill a vacancy or otherwise), such Director shall automatically be granted options to purchase the number of shares of Stock described in the preceding sentence.  The “Date of Option Grant” for options granted under this Plan shall be the date of the annual meeting of shareholders, or the election as a Director, as the case may be.  No options shall be granted hereunder after ten years from the date on which this Plan was initially approved and adopted by the Board.  As used herein, “Fair Market Value” for the Stock shall mean the closing sale price of the Stock as reported by the NASDAQ Global Market or the principal securities exchange or over-the-counter market on which the Stock is listed or quoted on the Date of Option Grant of such options or, if the Stock is not then listed on the NASDAQ Global Market or any securities exchange or quoted in the over-the-counter market, the fair market value of the Stock as determined in good faith by the Board.

(b)  Option Price.  The option price per share for each option granted under this Plan shall be equal to the Fair Market Value of the Stock with respect to which the option is exercisable.

(c)  Term of Option.  The term of each option granted under this Plan shall be ten years from the Date of Option Grant.

(d)  Period of Option Exercise.  Options granted under this Plan shall become exercisable on the date of the next annual meeting of shareholders following their Date of Option Grant, if and only if the option holder is a member of the Board at the opening of business on that date.  Directors holding exercisable options under this Plan who cease to serve as members of the Board may, during their lifetime, exercise the rights they had under such options at the time they ceased being a Director for the full unexpired term of such option.  Upon the death of a Director, those entitled to do so under the Director’s will or the laws of descent and distribution shall have the right, at any time within twelve months after the date of death, to exercise in whole or in part any rights which were available to the Director at the time of his or her death.  Options granted under this Plan shall terminate, and no rights thereunder may be exercised, after the expiration of the applicable exercise period.  Notwithstanding the foregoing provisions of this section, no rights under any options may be exercised after the expiration of ten years from their Date of Option Grant.

(e)  Method of Option Exercise and Payment.  Options may be exercised only by written notice to the Company at its head office accompanied by payment of the full option price for the shares of Stock as to which they are exercised.  The option price shall be paid in cash or by check.  Upon receipt of such notice and payment, the Company shall promptly issue and deliver to the optionee (or other person entitled to exercise the option) a certificate or certificates for the number of shares as to which the exercise is made.

(f)  Grants of Restricted Stock and Restricted Stock Units.  Grants of Restricted Stock and Restricted Stock Units may be made in exchange for such lawful consideration, including services, as the Company decides.  The Company may specify performance or other vesting conditions, including continuation of employment, passage of time or satisfaction of performance criteria, for the Restricted Stock and Restricted Stock Units.  At each annual meeting of the shareholders of the Company, those Directors who are eligible to receive Restricted Stock and Restricted Stock Units under this Plan shall automatically be granted Restricted Stock Units representing 2,375 shares of Stock.   In addition, upon the election of an eligible Director under this Plan other than at an annual meeting of shareholders (whether by the Board or the shareholders and whether to fill a vacancy or otherwise), such Director shall automatically be granted Restricted Stock Units as described in this Section 7(f).  The “Date of RS/RSU Grant” for Restricted Stock or Restricted Stock Units granted under this Plan shall be the date of the annual meeting of shareholders, or the election as a Director, as the case may be.

(g)  Vesting of Awards.  The Board shall determine the time or times at which an Award will vest or become exercisable.  Notwithstanding the foregoing, Restricted Stock Units shall vest on the date of the next annual meeting of shareholders following the date of grant, if and only if the Director is a member of the Board at the opening of business on that date.

(h)  Transferability.  Any Award granted under this Plan may be transferred without consideration (or for such consideration as the committee may from time to time deem appropriate) by the holder thereof to any Family Member of such Director; provided, however, that no subsequent transfer of such Award shall be permitted except for transfers: (i) to a Family Member of such Director; (ii) back to the Director; or (iii) pursuant to the applicable laws of descent and distribution.  For this purpose, “Family Member” shall mean (i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including any adoptive relationships, and any other person sharing the transferor director’s household (other than as a tenant or employee); (ii) any trust in which any of the persons described in clause (i) holds a greater than 50% beneficial interest; (iii) any foundation in which any of the persons described in clause (i) or the transferor director controls the management of assets; or (iv) any other entity in which any of the persons described in clause (i) or the director holds more than 50% of the voting interests.

8.Limitation of Rights.

(a)  No Right to Continue as a Director.  Neither this Plan, nor the granting of an Award or any other action taken pursuant to this Plan, shall constitute an agreement or understanding, express or implied, that the Company will retain an Award holder as a Director for any period of time or at any particular rate of compensation.

(b)  No Shareholders’ Rights for Options.  Directors shall have no rights as a shareholder with respect to the shares covered by their options until the date they exercise such options and pay the option price to the Company, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such option is exercised and paid for.

(c)  No Shareholders’ Rights for Restricted Stock Units.  Directors shall have no rights as a shareholder with respect to the shares covered by their Restricted Stock Units until the date such Restricted Stock Units vest and shares issuable under the Restricted Stock Units are delivered to the Directors, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such shares are delivered.

(d)  Shareholders’ Rights for Restricted Stock.  Directors shall have no rights as a shareholder with respect to their Restricted Stock until such time, if any, as such shares are delivered to the Directors, and no adjustment will be made for dividends or other rights for which the record date is prior to the date such shares are delivered.

9.Effective Date; Amendment or Termination.

This Plan shall be effective as of February 28, 2007.  The Company may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any future grants of Awards; provided, that except as otherwise expressly provided in the Plan the Company may not, without the Award holder’s consent, alter the terms of an Award so as to affect adversely an Award holder’s rights under the Award, unless the Company expressly reserved the right to do so at the time of grant.  Amendments to the Plan shall be conditioned upon shareholder approval only to the extent, if any, such approval is required by law (including the U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or any successor statute as from time to time in effect and applicable NASDAQ or stock exchange requirements), as determined by the Company.  Notwithstanding the foregoing, the Company shall submit for shareholder approval any amendment to the Plan (other than an amendment or adjustment pursuant to Section 4(b)) that would: (a) increase the maximum number of shares for which Awards may be granted under the Plan; (b) reduce the price at which an option may be granted below the price provided for in Section 7(b); (c) reduce the exercise price of outstanding options; or (d) increase the limits set forth in Section 4(a).

10.Shareholder Approval.

This Plan is subject to approval by the shareholders of the Company by the affirmative vote of the holders of a majority of the votes properly cast by holders of the shares of Stock of the Company present, or represented and entitled to vote, at a meeting duly held in accordance with the laws of The Commonwealth of Massachusetts.  In the event such approval is not obtained, all Awards granted under this Plan shall be void and without effect.

11.Compliance with Section 409A.

Awards under the Plan shall be construed and administered consistent with exemption from, or compliance with, the requirements of Section 409A of the Internal Revenue Code of 1986 (“Section 409A”).  Notwithstanding any provision of Section 9 to the contrary, the Board may amend the Plan and/or any Award to satisfy the requirements of Section 409A, including the requirements for exemption from Section 409A.

Adopted by board of directors on February 28, 2007

Approved by shareholders on May 24, 2007

Amended by board of directors on February 28, 2008.

Approved by shareholders on May 22, 2008.

Amended by board of directors on August 19, 2009

Amended by board of directors on February 25, 2010

Approved by shareholders on June 16, 2010

EX-10.9

Exhibit 10.9

MASTER SUPPLY AGREEMENT

THIS MASTER SUPPLY AGREEMENT (hereinafter referred to as the “Master Agreement”) with an effective date of this 30th day of June 2010 (the “Effective Date”) is made by and among Genzyme Corporation, a Massachusetts corporation having its headquarters at 500 Kendall Street, Cambridge, Massachusetts 02142, U.S.A., Genzyme Ireland Limited, a wholly-owned subsidiary company of Genzyme Corporation, organized under the laws of the Republic of Ireland with a principal place of business in Waterford, Ireland, and its and their Affiliates (collectively, hereinafter referred to as “Genzyme”), and Hospira Worldwide, Inc., a Delaware corporation having its headquarters at 275 North Field Drive, Lake Forest, Illinois 60045, U.S.A. (hereinafter referred to as “Hospira”).

GENERAL PROVISIONS; AGREEMENT STRUCTURE

From time to time, Genzyme may request Hospira to provide Services (as defined herein).  This Master Agreement contains general terms and conditions under which Genzyme will engage Hospira to provide Services, and under which Hospira will provide such Services.  Genzyme and Hospira shall complete and execute a Project Statement of Work relative to each Product.

ARTICLE 1.DEFINITIONS

The following words and phrases when used herein with capital letters shall have the meanings set forth or referenced below:

1.1“Act” shall mean the United States Federal Food, Drug and Cosmetic Act (21 U.S.C. 301), as amended from time to time.

1.2“Affiliate” shall mean any corporation or non-corporate business entity which controls, is controlled by, or is under common control of a Party to this Master Agreement.  A corporation or non-corporate business entity shall be regarded as in control of another corporation or non-corporate business entity if it owns, or directly or indirectly controls, in excess of fifty percent (50%) of the voting stock of the other corporation, or (a) in the absence of the ownership of in excess of fifty percent (50%) of the voting stock of a corporation, or (b) in the case of a non-corporate business entity, if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation or non-corporate business entity, as applicable.

1.3“Alliance Team” shall have the meaning set forth in Section 7.8.

1.4“Applicable Law” shall mean all laws applicable to the Manufacturing, processing, and distribution of the Products, including, without limitation, the Act and the regulations promulgated thereunder; the Canadian Food and Drugs Act (R.S., chapter F-27) and related regulations; European Directive 2003/94/EC and 2001/83/EC, and related legislation; the Japanese Pharmaceutical Affairs Law, 2003 (as amended); all applicable cGMP; and all other corresponding laws, ordinances, rules and regulations of any other applicable jurisdiction.

[**] = 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.

1.5“Bulk” or “Bulk Product(s)” shall mean the active ingredient of the Products in bulk form that (i) meets the applicable Bulk Specifications, and (ii) Genzyme delivers to Hospira for incorporation into the Products.

1.6“Bulk Specifications” shall mean the detailed description and parameters of the Bulk as specified in the relevant Project SOW.

1.7“Business Day” shall mean any day on which banking institutions in New York, New York, United States are open for business.

1.8“Certificate of Analysis” shall mean a document, signed by an authorized representative of Hospira and provided to Genzyme, that sets forth the analytical test methods and the results thereof in relation to the Product Specifications for a specified lot or batch of Product(s).

1.9“Certificate of Compliance” shall mean a document, signed by an authorized representative of Hospira and provided to Genzyme, that certifies, warrants and reflects that a particular lot, batch, or run of Product(s) was Manufactured in accordance with cGMP, Applicable Law, and the Product Specifications.  The Certificate of Compliance may be included within the Certificate of Analysis, or separately, as specified by Genzyme.

1.10“cGMP”shall mean those principles and guidelines of good manufacturing practices as set forth in 21 C.F.R. Parts 210 and Part 211; the good manufacturing practices provisions contained in Part C, Division 2 of the Canadian Food and Drugs Regulations; EU Directive 2003/94/EC - guidelines of good manufacturing practices for medicinal products for human use (EudraLex Vol. 4); Japanese GMP regulations, ordinances and practice guidelines as contained in the Pharmaceutical Affairs Law; the ICH Guideline on Good Manufacturing Practice for Active Pharmaceutical Ingredients (ICH Q7A), adopted by EU Directive 2004/27; and the corresponding requirements of each other applicable jurisdiction; and all other relevant rules, regulations or guidelines of global good manufacturing practices adopted and in effect in any other regulatory jurisdiction, as applicable.

1.11“Commercial Product” shall mean a filled or finished Product as Manufactured by Hospira for Genzyme’s commercial sale, pursuant to a given Project SOW, in accordance with the requirements of the Product Specifications incorporated therein.

1.12“Confidential Information” shall mean all information disclosed hereunder, except that which:

(a)is lawfully known to the recipient at the time of the disclosure, as evidenced by its written records or other competent evidence;

(b)is disclosed to the recipient by a third person lawfully in possession of such information and not under an obligation of nondisclosure;

[**] = 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)is or becomes published or otherwise part of the public domain through no fault of the recipient; or

(d)is developed by or for the recipient independently of Confidential Information disclosed hereunder as evidenced by the recipient’s written records or other competent evidence.

1.13“Consent” shall mean any consent, authorization, permit, certificate, license, approval, or exemption by any Regulatory Authority or other person.

1.14“Dedicated Equipment” shall have the meaning set forth in Section 7.2.

1.15“Development Product” shall mean the pharmaceutical product, as specified in the applicable Project SOW, Manufactured by Hospira for Genzyme’s pre-clinical, clinical, and/or regulatory purposes.

1.16“Development Project” shall mean Services necessary for regulatory approval and Manufacture of the Products for clinical, non-commercial purposes.

1.17“DMFs” shall mean Drug Master Files as set forth in Section 4.3.

1.18“Exclusivity Period” shall have the meaning set forth in Section 7.9(a).

1.19“Facility” shall mean Hospira’s fill and finish Manufacturing facility at McPherson, Kansas and/or Liscate, Italy, or such other fill and finish manufacturing facility operated by Hospira, and approved by Genzyme.

1.20“Force Majeure” shall have the meaning set forth in Section 15.1.

1.21“Fill Slot Forecast” shall have the meaning set forth in Section 8.1.

1.22“FDA” shall mean the United States Food and Drug Administration, and any successor agency thereto.

1.23“Firm Order Period” shall have the meaning set forth in Section 8.3.

1.24“Inability to Supply” shall have the meaning set forth in Section 9.5.

1.25“Letters of Authorization” shall mean documentation which shall be prepared and delivered by Hospira to the appropriate Regulatory Authorities permitting such Regulatory Authorities to consult Hospira’s DMFs in their review of Genzyme’s Product marketing applications (as set forth in Section 4.3).

1.26“Manufacture”, “Manufactured” or “Manufacturing” shall mean the filling and/or finishing of Products, in each case as specified in the applicable Project SOW.

[**] = 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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1.27“Master Batch Record” shall mean the document that defines the manufacturing methods, materials, and other procedures, directions and controls associated with the Manufacture and testing of the Product, which may be amended in writing from time to time by mutual agreement of the Parties.

1.28“MSDS” shall have the meaning set forth in Section 7.4.

1.29“Notice Period” shall have the meaning set forth in Section 7.9(a)(ii).

1.30“Occurrence” shall have the meaning set forth in Section 7.1(f)(i).

1.31“Parties” shall mean Genzyme and Hospira together, with each individual entity being a “Party”.

1.32“Person(s)-in-the-Plant” shall have the meaning set forth in Section 10.3(c)(e).

1.33“Product” or “Products” shall mean any filled and finished drug product comprised of Bulk and, where applicable, excipients and other raw materials, in each case as specified in the applicable Project SOW.  A list of Products covered under this Master Agreement is set forth on Exhibit 1.33 hereto.  The Parties may amend Exhibit 1.33 from time to time during the Term by written agreement of the Parties.

1.34“Product Fill Slot Commitment” shall have the meaning set forth in Section 8.1.

1.35“Product Specifications” shall mean the product, labeling and performance specifications for a Product, approved by the FDA or other relevant Regulatory Authorities, including Product formulae, labeling, and materials required for the Manufacture of the specific Product that is to be purchased and supplied under the relevant Project SOW.

1.36“Project” shall mean the totality of the technology transfer, development, Manufacturing and/or other Services that Hospira will perform under a relevant Project SOW.

1.37“Project Statement of Work” or “Project SOW” shall mean a written order for the performance of Services by Hospira for each Product, substantially in the form attached hereto as Exhibit 2.5, signed by duly authorized representatives from both Parties and referencing this Master Agreement.

1.38“Project Inventions” shall have the meaning set forth in Section 12.3.

1.39“Purchase Orders” shall have the meaning set forth in Section 8.4.

1.40“Quality Technical Agreement” shall have the meaning as set forth in Section 10.2.

[**] = 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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1.41“Regulatory Authority” shall mean any federal, state or local or international regulatory agency, department, bureau or other governmental entity including, without limitation, the FDA, which is responsible for issuing approvals, licenses, registrations or authorizations necessary for the Manufacture, use, storage, import, transport or sale of Product in the Territory.

1.42“Relationship Managers” shall have the meaning set forth in Section 14.4.

1.43“Renewal Term” shall have the meaning set forth in Section 13.1.

1.44“Service” or “Services” shall mean the technology transfer, development and/or Manufacturing services and/or other services to be performed by Hospira, as described in each Project SOW and initiated by Genzyme as described in Article 2.

1.45“Service Fees” shall have the meaning set forth in Section 3.1.

1.46“Specially Regulated Waste” shall mean any hazardous waste, toxic waste, medical waste, nuclear waste, mixed waste, or other waste materials or by-products, including waste water, which may be subject to or require special handling, treatment, storage, or disposal under any federal, state or local laws or regulations intended to address such types of waste materials that arise from the Manufacture of Product.

1.47“Technical Contact” shall have the meaning set forth in Section 3.3.

1.48“Term” shall have the meaning set forth in Section 13.1.

1.49“Territory” shall mean those countries of the world where Genzyme intends to market, promote, distribute and/or use the Product, as specified in the relevant Project SOW.

1.50“Third Party” shall mean a Party other than Hospira or Genzyme and their respective Affiliates.

1.51“Waste” shall mean all rejects, improper goods, garbage, refuse, remainder, residue, waste water or other discarded material, including solid, liquid, semisolid, or contained gaseous material that arises from the Manufacture of the Products including, but not limited to, rejected or unsuitable materials, Bulk or Products.  The term Waste shall not include any Specially Regulated Waste.

1.52“Yield Metrics” shall have the meaning set forth in Section 7.1(g)(i).

ARTICLE 2.PROJECT OVERVIEW

2.1General.  During the Term, Hospira shall provide to Genzyme, or its designee, Services pursuant to Purchase Orders delivered from time to time by Genzyme to Hospira in accordance with Section 8.4.  Hospira shall perform the Services in accordance with the terms 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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this Master Agreement and any related Project SOW executed by the Parties.  Prior to the execution of any Project SOW, Hospira will prepare a proposal which clearly specifies the scope of work and costs associated with each Project.  Thereafter, the Parties shall negotiate, in good faith, the terms and conditions of the relevant Project SOW under which Hospira will perform the Services.  For the avoidance of doubt, each Project will be governed by the terms and conditions of this Master Agreement, the Quality Technical Agreement and the relevant Project SOW.

2.2Facilities, Equipment and Materials.  Other than as specifically set forth herein, Hospira agrees to provide, at its own cost and expense, all facilities, equipment, machinery, and materials in accordance with the Product Specifications and the Project SOW, and the labor necessary for the performance of the Services.

2.3Responsibility.  Unless otherwise specified herein or expressly consented to in writing by Genzyme, Hospira shall be solely responsible for performance of all activities necessary to perform the Services contemplated hereunder.  Neither Party shall amend or modify the Product Specifications, or any protocols, processes or procedures used to perform the Services without the express written approval of the other Party.  Unless otherwise expressly agreed in writing in advance by Genzyme, Hospira may not sublicense or subcontract the Services to be performed by Hospira under this Master Agreement to an Affiliate or Third Party.

2.4Exceptions; Governing Documents.  In the event of a conflict or inconsistency between the terms and conditions of a Project SOW and those of this Master Agreement, then except where expressly permitted under Section 15.12, or where any provision of this Master Agreement is expressly waived in a written agreement signed by both Parties, the terms and conditions of this Master Agreement shall govern and control.

2.5Project Statement of Work.

(a)Each Project SOW will, to the extent possible: (a) describe the Services to be provided by Hospira and the applicable Service Fees related thereto, (b) describe the Product, including the Product Specifications for each applicable Development Product and/or Commercial Product, (c) describe the criteria for an acceptable Development Product or Commercial Product, (d) set forth the Bulk Specifications and any special conditions for delivery and/or use of the Bulk, (e) describe the information and analysis to be included in the Bulk, (f) describe shipping and receiving requirements for Bulk and Product, (g) if applicable, describe the costs and responsibilities for disposal of Specially Regulated Waste and any Waste that shall become Specially Regulated Waste during the term of the Project SOW, (h) include any other information required to be provided pursuant to this Master Agreement or any additional provision the Parties may mutually agree upon, and (i) be in the form similar to the template set forth in Exhibit 2.5 attached hereto and incorporated herein.

(b)Although the Parties intend to enter into good faith negotiations to Manufacture the Development Product(s) contemplated hereunder, nothing herein shall require Genzyme or Hospira to proceed with a Project SOW for the Manufacture of such Development Products.

[**] = 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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2.6Commercially Reasonable Efforts.  Each Party shall negotiate in good faith, and use commercially reasonable efforts to complete, each Project SOW.

ARTICLE 3.PROJECT STATEMENT OF WORK EFFORTS

3.1Service Fees.  Genzyme shall pay to Hospira fees for the Services Hospira provides under each Project SOW (“Service Fees”).  Genzyme will pay such fees in accordance with the amounts, payment terms and schedules set forth in each Project SOW.  Where appropriate, and to the extent commercially reasonable, the Parties will seek to establish compatible pricing for Products that are Manufactured in the same Facility and using the same Manufacturing processes.

3.2Changes in Project Scope.  If (a) changes occur in a Project SOW or the Product Specifications, or (b) technical difficulties arise during the technology transfer process requiring that Hospira perform either additional work or repeat work, and such additional work or repeat work is not as a result of Hospira’s fault, negligence or failure to comply with the terms and conditions of this Master Agreement, Hospira shall provide Genzyme with cost estimates for such work.  If Genzyme approves such costs, Hospira shall perform such work and Genzyme shall pay Hospira’s costs for such work within [**] days of completion of such work.  Reimbursement for such additional work or repeat work shall be at a rate of [**] per hour per person, plus [**].

3.3Technical Contact.  Each Party will appoint a contact person having primary responsibility for day-to-day interactions with the other Party for the activities under the relevant Project (“Technical Contact”).  Any change to a Technical Contact will be identified in writing to the other Party.  Each Party will use reasonable efforts to provide the other Party with at least fifteen (15) days prior written notice of any change in that Party’s Technical Contact.  All communications between Hospira and Genzyme regarding the conduct of the activities under the Project will be facilitated through the Party’s Technical Contact identified in the Project SOW.

3.4Development Product(s).  In any relevant Project SOW, based on Genzyme’s final Product formulations, concentration, fill volumes, and the Parties’ agreement to the final Product Specifications, Hospira will Manufacture Development Products at the prices set forth in the relevant Project SOW.  Genzyme shall issue a Purchase Order for any such Development Product(s) at least [**] days before the requested delivery date.  Genzyme and Hospira shall agree mutually to the formulation, concentration, fill volume and the components for each lot of Development Product(s).

ARTICLE 4.GENZYME’S REGULATORY SUBMISSIONS

4.1Hospira’s Review.  For any relevant Project, at Genzyme’s request, Hospira shall review and consult with Genzyme on those portions of Genzyme’s proposed regulatory submissions relating to Hospira’s packaging or Manufacturing procedures before the submissions are filed with the appropriate Regulatory Authorities in the Territory.  Hospira shall

[**] = 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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complete its review of the submissions within [**] days for submissions in English, or within [**] days for submissions not in English, following receipt of a proposed regulatory submission.  Genzyme shall be the sole owner of any regulatory submission filed pursuant to this Master Agreement.  In the event that a Regulatory Authority requires additional review and consultation from Hospira (for example, for technical responses to a Regulatory Authority finding of deficiency, should one arise), Hospira shall provide Genzyme with cost estimates for any additional work to be done.  If Genzyme approves such costs in writing, Genzyme shall reimburse Hospira for such additional work based on a rate of [**] per hour.  Hospira shall provide Genzyme with an executed copy of its comments.

4.2Supplemental Regulatory Filings.  Hospira shall quote a price for supplemental regulatory, packaging and development work to support regulatory filings outside of the Territory specified in the initial Project SOW for the relevant Product separately and on a country-by-country basis.

4.3Access to Drug Master Files and Other Reports.  Hospira shall grant Genzyme reference rights to all Drug Master Files (“DMFs”) and other regulatory filings deemed necessary to support Genzyme’s applications for regulatory approval of Products.  To effectuate this, Hospira shall execute Letters of Authorization which shall be delivered to the appropriate Regulatory Authorities permitting such Regulatory Authorities to consult Hospira’s DMFs and, as applicable, other regulatory filings (as described in the Quality Technical Agreement)  in their review of Genzyme’s Product marketing applications.  Hospira shall send copies of such Letters of Authorization to Genzyme.  Hospira shall update its DMFs annually and shall inform Genzyme prior to any modifications thereto in order to permit Genzyme to amend or supplement any affected regulatory applications and filings for the Products.

ARTICLE 5.HOSPIRA’S OBLIGATIONS

5.1Consents.  Hospira shall obtain all Consents for which it is responsible for the Manufacture and supply of Product(s) under the terms of this Master Agreement.  At all times, Hospira shall maintain and comply with all Consents which may from time to time be required by any Regulatory Authority having jurisdiction with respect to the Services and/or the Facility and otherwise obtained by Hospira to permit the performance of its obligations under this Master Agreement.  In the event any Consent held by Hospira relating to the Facility or its ability to Manufacture Product(s) in accordance with this Master Agreement is hereafter suspended or revoked, or Hospira has material restrictions imposed upon it by any Regulatory Authority affecting Product(s) or the Facility, Hospira shall promptly notify Genzyme and shall provide a schedule of compliance and such other information related thereto as is reasonably requested by Genzyme.

5.2Notification of Adverse Effects on Fill and Finish Activities.  Hospira shall advise Genzyme within one Business Day of any information arising out of its Manufacturing activities that may have adverse regulatory, compliance and/or reporting consequences concerning any Product(s) or the Facility.

[**] = 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.

8

5.3Regulatory Authorities.  Hospira shall notify Genzyme of any requests from any relevant Regulatory Authority for information related to Hospira’s provision of Services hereunder.  Hospira shall promptly advise Genzyme of any requests by any Regulatory Authority for inspections of the Facility.

5.4Adverse Reaction Reporting.  As provided in the Quality Technical Agreement, Hospira shall promptly forward to Genzyme any and all information reported to Hospira relating to any adverse experience, whether expected or unexpected, relating to the use of any Product(s).

5.5Equipment.  Hospira agrees to provide sufficient resources in order to meet Genzyme’s requirements for Products including, without limitation, the provision of all equipment, machinery and labor.

5.6Inventories.  Hospira shall maintain an inventory of the materials that the Parties agree is necessary to provide the Services and to ensure the fulfillment of its supply obligations herein, and shall respect the procedure of “first in first out” to control and release the inventory.  Hospira further agrees to maintain redundancies in the sourcing for all such materials so as to mitigate any potential shortage of supply.  The Parties’ initial estimates of the required levels of such materials inventories per Product are set forth in Exhibit 5.6.  The Parties shall refine these estimates as the Services progress.

5.7Validation.  Hospira will complete, or ensure the completion of, validation of its equipment, facilities, cleaning processes, and Manufacturing equipment as required by cGMPs and any other applicable regulatory requirements as may be required from time to time.  Hospira will routinely assemble and retain, or ensure the assembly and retention of, validation/qualification documents and validation summary reports pertaining to the Manufacturing activities for a period of time as agreed under the Quality Technical Agreement, and will provide copies thereof to Genzyme.

5.8Accident Reports.  Upon request, Hospira shall provide to Genzyme a quarterly summary report on environmental, health and safety matters at the Facility, which matters may include all material incidents related to Facility operations, including:  (a) accidents resulting in significant personal injury requiring more than first aid treatment, (b) accidents resulting in chronic illness or loss of consciousness, (c) accidents resulting in material property damage, (d) accidents resulting in material environmental release, and (e) accidents that result in regulatory, safety, health or environmental audits.  Hospira shall promptly provide Genzyme with a copy of any accident report related to the Manufacture of the Products.  In the event that Genzyme requires specific reporting on any non-material incidents directly related to the Manufacture of any of the Products, Hospira will compile a report as soon as reasonably practicable; provided, however, that Genzyme shall be required to pay Hospira’s reasonable costs for the compilation work to be done.  The Genzyme point of contact person for all such reporting will be Genzyme’s Person-in-the-Plant.

5.9Records, Retained Samples and Storage.  Hospira shall retain samples and maintain records from each batch or lot of Product for a period of time required by Applicable

[**] = 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.

9

Laws for record keeping, testing and regulatory purposes or as specified in the Quality Technical Agreement.  When storing Bulk, nonconforming Bulk, Waste, or Specially Regulated Waste, Hospira shall comply with and maintain all storage facilities in compliance with Bulk Specifications and in accordance with cGMP and Applicable Laws.

5.10Maintenance of Facility.  During the Term, and specifically in connection with the performance of the Services hereunder, Hospira shall maintain the Facility, and all personal property, equipment, machinery, systems, intangibles and contract rights in use at the Facility during the Term in the ordinary course of business, in compliance with cGMPs and Applicable Laws.

ARTICLE 6.MANUFACTURE OF PRODUCTS

6.1Manufacture of Products.  Pursuant to the terms and conditions of the relevant Project SOW and for the duration of the Project SOW, Hospira shall Manufacture and deliver the Products to Genzyme, and Genzyme shall take delivery of the Products from Hospira, pursuant to Purchase Orders issued by Genzyme to Hospira.  Hospira shall Manufacture the Products in accordance with the Product Specifications.  The Parties may alter the Product Specifications from time to time by written agreement without amending the Project SOW.

6.2Regulatory Approvals.  Hospira agrees to Manufacture and supply those quantities of Products requested in Purchase Orders by Genzyme that are necessary to validate Hospira’s manufacturing facilities, obtain regulatory approval(s) and build Genzyme’s inventory of the Products, and Genzyme shall be required to [**].

ARTICLE 7.SUPPLY OF PRODUCTS

7.1Bulk.

(a)Supply.

(i)Hospira shall Manufacture Product for Genzyme from Bulk that Genzyme shall supply to Hospira in quantities sufficient to satisfy Hospira’s gross manufacturing requirements of Product.  Unless otherwise specified in the relevant Project SOW, Genzyme shall deliver all required quantities of Bulk for a particular Product no later than thirty (30) days prior to the date that Manufacturing of such Product is scheduled to commence.  Hospira’s use of Bulk received from Genzyme shall be limited to those purposes contemplated by this Master Agreement and the Manufacture of Product for Genzyme.  Genzyme shall deliver Bulk [**] Hospira’s Facility for all deliveries, pursuant to no-cost Purchase Orders that Hospira issues to Genzyme.  Genzyme shall be responsible for all costs of transport and carriage insurance.  In the event Genzyme fails more than once to deliver the required quantities of Bulk for a particular Product at least [**] days prior to the date that Manufacturing of such Product is scheduled to commence, or as specified in the relevant Project SOW, the Alliance Team leaders shall meet to establish a remediation plan to address the failure.  If Genzyme fails more than twice to deliver the required quantities of Bulk for a particular Product at least [**] days prior to the date 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.

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Manufacturing of such Product is scheduled to commence, or as specified in the relevant Project SOW, then a member of the senior management team from each Party shall meet with one another to review the remediation plan established by the Alliance Team and determine whether Genzyme is capable of delivering Bulk within the specified delivery timeframe.  The Parties will at that time determine whether Hospira will continue with the Manufacture the Product in question or, alternatively, decide in the best interests of the Parties that Hospira no longer manufacture such Product.

(ii)With each delivery of Bulk, Genzyme will include a certificate of analysis, signed by an authorized individual from Genzyme’s Quality Group (or his/her designee) containing basic information regarding the Bulk, including:  (A) the manufacturing date of the batch/lot delivered; (B) the batch/lot number; (C) the quantity of Bulk in such batch/lot as shipped to Hospira; (D) an indication of the expiry date of the batch/lot of Bulk by which Hospira must begin filling operations; and (E) the testing (if any) to which the batch/lot of Bulk has been subjected and the test results.

(iii)Unless otherwise specified in the relevant Project SOW, within [**] calendar days of Hospira’s receipt of any Bulk supplied by Genzyme hereunder, Hospira shall:  (A) perform an identification test on the Bulk and confirm the shipment quantity; and (B) notify Genzyme of any inaccuracies with respect to quantity or of any claim that any portion of the shipment fails the identification test.  In the event Hospira notifies Genzyme of any deficiency in the quantity of Bulk received, Genzyme shall promptly investigate such deficiency and provide Hospira with instructions on how to handle the Bulk.  Genzyme may ship to Hospira, at Genzyme’s expense, the quantity of Bulk necessary to complete the Bulk shipment.  In the event Hospira notifies Genzyme that the Bulk shipment does not conform to the Bulk Specifications, as evidenced by the results of the relevant identification test, Genzyme shall have the right to confirm such findings at Hospira’s Facility.

(iv)If Genzyme determines that such shipment of Bulk did, in fact, conform to the Bulk Specifications, the Parties shall submit samples of such shipment to a mutually acceptable independent expert for testing.  If such independent expert determines that the shipment conformed to the Bulk Specifications, Hospira shall bear all expenses of shipping and testing such shipment samples.  If Genzyme or such independent expert confirms that such shipment did not meet the Bulk Specifications, Genzyme shall use commercially reasonable efforts to replace, at no cost to Hospira, the portion of the Bulk shipment which does not conform to the Bulk Specifications and bear all expenses of shipping and testing the shipment samples.  Notwithstanding the foregoing, the independent expert may also determine that additional sample testing by an independent laboratory is necessary.

(b)Title.  Notwithstanding the [**] shipping terms set forth in Section 7.1(a)(i), all Bulk supplied to Hospira by Genzyme is supplied as consignment stock and shall be clearly identified as the property of Genzyme, shall be kept segregated and maintained in the Facility, and Genzyme shall retain title thereto.

(c)Handling and Storage of Bulk.  Hospira represents, warrants and covenants that unless otherwise agreed to by Genzyme in writing, it will (i) store the Bulk at 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.

11

Facility only; and (ii) store and maintain the Bulk, at its cost and expense, in accordance with cGMP, the Quality Technical Agreement, the Bulk Specifications, the relevant Project SOWs, and all Applicable Laws (including, without limitation, the receipt and possession of all applicable Consents), as well as Genzyme’s reasonable prior written instructions.

(d)Inspection.  At no additional cost to Genzyme, Genzyme shall be entitled to inspect the Bulk and its related records on a quarterly basis, during normal business hours upon reasonable request and prior written notice, and with the least reasonably possible interference with Hospira’s ordinary course of business.  Genzyme’s Person-in-the-Plant shall be responsible for carrying out any such inspections.

(e)Risk of Loss.  Subject to the limitation in Section 7.1(f)(ii), Hospira shall assume full responsibility and risk of loss associated with the safekeeping, storage and handling of all Bulk in its possession and all shipments of Bulk delivered hereunder and accepted by Hospira including, without limitation, loss of Bulk due to casualty, spoilage, loss, theft, fire, damage or destruction.

(f)Replacement.

(i)In the event of loss or damage of Bulk delivered hereunder promptly upon receiving notice from Hospira of any such loss, damage or failure (each, an “Occurrence”) Genzyme shall investigate the matter and provide Hospira with direction on how to manage the Bulk and/or Products.  Genzyme may choose to supply to Hospira replacement Bulk [**] in accordance with the terms set forth in Section 7.1(a); provided, however, that if any loss or damage of such Bulk results from a negligent act or omission by Hospira in the Manufacture, handling or storage of the Bulk or the Products or due to casualty, spoilage, loss, theft, fire, damage or destruction, Hospira shall reimburse Genzyme for [**] in an amount equal to [**] within [**] days of Genzyme [**].

(ii)Excluding Hospira’s contribution obligations pursuant to Sections 9.4 and 15.9 hereunder, in no event shall Hospira’s aggregate liability for replacement of Bulk (on a Product by Product basis) exceed: (a) [**] per Occurrence during the [**] Manufacturing of Commercial Products [**]; and (b) [**] per Occurrence during Manufacturing of Products after the [**]; provided, however, in the event any Occurrence is due to the willful misconduct or intentional act(s) of Hospira or its agent(s), Hospira shall [**], and the limitations set forth in this Section 7.1(f)(ii) shall not apply.

(iii)Hospira shall not be responsible for the inability to use any batch/lot of Bulk in the event that Genzyme delivers such Bulk to Hospira with an expiry date shorter than the minimum set forth in the relevant Project SOW.

(g)Yield Metrics.

(i)After Hospira has completed its initial validation runs of Product and during the initial stages of Hospira’s Manufacture of Product, the members of the Alliance

[**] = 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.

12

Team shall consult with a view to developing a strategy for maximizing the production yield of Product from the Bulk supplied by Genzyme.  Based upon such consultations, the Parties will establish Manufacturing guidelines for each Product, including Bulk yield minimums, maximum Bulk consumption factor targets, and permitted variances of quantities of Products to be delivered according to Genzyme’s Purchase Orders (“Yield Metrics”), and consequences of out-of-variance performance.  It shall be Hospira’s goal to achieve production of consistent batch quantities of Product in accordance with the Yield Metrics throughout the term of each Project.  The Alliance Team may meet from time to time to discuss, agree upon and implement measures for improving the Yield Metrics.

(ii)In the event Hospira fails to meet the Yield Metrics for any Product, the Alliance Team leaders shall meet to establish a remediation plan to address the failure.  If Hospira fails to meet the Yield Metrics for any Product more than once, then a member of the senior management team from each Party shall meet with one another to review the remediation plan established by the Alliance Team and determine whether Hospira is capable of meeting the Yield Metrics.  The Parties will at that time determine whether Hospira will continue with the Manufacture the Product in question or, alternatively, decide in the best interests of the Parties that Genzyme should have the right to seek an alternate source of supply for such Product.

7.2Dedicated Equipment Costs.  If non-standard, specialized equipment is required to perform the Services in connection with any Project (“Dedicated Equipment”), Hospira shall pay the cost of such equipment, subject to Genzyme’s prior approval of such costs, which approval shall not be unreasonably withheld.  Prior to the execution of any Project SOW, Hospira shall advise Genzyme of specialized equipment required and the estimated costs associated with the purchase, installation and validation of such equipment for the related Project.  After Genzyme approves such costs, Hospira shall install and validate the equipment and bill Genzyme for the associated costs.  The costs and payment terms for Dedicated Equipment shall be as set forth in the relevant Project SOW.  Title to the Dedicated Equipment shall be in Genzyme’s name.  Hospira shall cooperate with Genzyme in the completion of any and all document filings required to secure Genzyme’s interest in the Dedicated Equipment.  Further, if Hospira wishes to use the Dedicated Equipment for Manufacture of a product other than the Products for Genzyme, Hospira and Genzyme shall meet and discuss the technical and practical ramifications of such use and appropriate compensation to Genzyme.

7.3Product Labeling; Packaging.  The labeling and packaging responsibilities of the Parties shall be as set forth in the relevant Project SOW.  All such labeling and packaging shall be in accordance with the Manufacturing Batch Record and applicable Product Specifications.

7.4Off-Site Waste.  If necessary, Hospira shall hire, direct and pay all costs for a waste contractor to remove all Product-related Waste from Hospira’s Facility, consistent with each Product’s Material Safety Data Sheets (“MSDS”).  The costs associated with the removal of Specially Regulated Waste, as set forth in the relevant Project SOW, shall be borne by Genzyme.  Hospira shall only dispose of Specially Regulated Waste at sites and through waste management vendors that have been approved in writing by Genzyme, whose approval shall not

[**] = 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.

13

be unreasonably withheld.  Hospira shall document the destruction of any Specially Regulated Waste in writing and provide copies of such written documentation to an authorized representative of Genzyme.  Genzyme maintains the right, but not the obligation, to witness the actual disposal of Specially Regulated Waste.  Genzyme shall, upon request by Hospira, provide the MSDS for the Bulk and the MSDS for each Product to Hospira.

7.5Delivery.  Hospira shall deliver the Products, packed and ready for shipment, to Genzyme [**].  Risk of loss shall pass to Genzyme [**].  Shipment shall be via a carrier designated by Genzyme.  Hospira shall not ship any Product until both Hospira and Genzyme have released such Product pursuant to the Product Specifications and the Quality Technical Agreement.  All freight, handling, insurance, duties, taxes and shipping expense will be borne by Genzyme.  For any shipments outside the United States, Genzyme shall be the exporter of record.

7.6Price and Payment.

(a)Price.  Hospira shall invoice Genzyme for the Products delivered by Hospira at the prices set forth in the relevant Project SOW.  Unless otherwise specified in the relevant Project SOW, Hospira shall provide Genzyme with notice of any price increase by October 1 of each calendar year, and price increases shall be effective for deliveries beginning January 1 of the following calendar year.  Such increases shall not [**] of (i) the [**], or (ii) [**].

(b)Payment.  Hospira shall invoice Genzyme upon delivery of the Products.  Genzyme shall make payment net [**] days from the date of receipt of Hospira’s invoice.  In the event Genzyme fails to pay any undisputed invoice within [**] days of receipt of the invoice, Hospira may [**] (i) [**], or (ii) [**].

(c)Taxes.  Genzyme shall pay all federal, state, county or municipal sales or use tax, excise, customs charges, duties or similar charge, or any other tax assessment (other than that assessed against income), license, fee or other charge lawfully assessed or charged on the Manufacture, delivery or transportation of the Products sold pursuant to this Master Agreement.

(d)User and Filing Fees.  Genzyme shall also be responsible for all user and filing fees required by Regulatory Authorities in connection with the Services, and Prescription Drug User (“PDUFA”) annual establishment fees with respect to all of the Products.

(e)Sub-lots.  Should Genzyme desire Hospira to split a Manufacturing lot of the Products into several sub-lots during packaging, there will be a [**] for each sub-lot packaged.

(f)Cold Storage Fee.  A cold storage fee shall be due and payable to Hospira if Hospira stores the Products at the Facility and such Products require cold storage for more than [**] days after each individual Product’s final release by Genzyme.  The fee shall be at the rate of [**] or any part thereof.

[**] = 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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7.7Inspection and Replacement of Nonconforming Product.

(a)Certificate of Analysis.  Hospira will include a Certificate of Analysis with each batch of Products confirming that the Products have been Manufactured in conformity with the Product Specifications and all Applicable Laws.

(b)Inspection; Rejection.  Upon completion of the Manufacture of each batch of Products, Hospira will provide Genzyme with a copy of the Master Batch Record and all other documents and records as required by the Quality Technical Agreement for release of Products.  Genzyme will have [**] days from the date of its receipt of all such documentation to inspect, and accept or reject, the corresponding batch of Product as conforming or non-conforming with the Product Specifications and cGMP.  If Genzyme rejects such batch, it shall promptly so notify Hospira and, if applicable, provide to Hospira samples of Products included in such batch for testing.  If Hospira tests such samples and determines that it did conform to the Product Specifications, the Parties shall submit samples of such Product to a mutually acceptable independent expert for testing.

(c)Testing.  If such independent expert determines that the Product conformed to the Product Specifications, Genzyme shall bear all expenses of shipping and testing such Product samples.  If such independent expert confirms that such Product did not meet the Product Specifications, Hospira shall bear all expenses of shipping and testing the shipment samples.  Notwithstanding the foregoing, the independent expert may also determine that additional sample testing by an independent laboratory is necessary.  Absent manifest error, the test results of the independent expert (or those of the independent laboratory, if so referred by the expert) shall be binding on the Parties.

(d)Replacement; Disposition of Rejected Product.  Hospira shall use its best efforts to replace, at no cost to Genzyme, that portion of the Product which does not conform to the Product Specifications as soon as reasonably practicable, as jointly determined by the Parties, given manufacturing capacities and scheduling at the Facility; provided, however, that Genzyme provides sufficient Bulk to Hospira [**] (subject to the limitations set forth in Section 7.1(f)(ii) & (iii)).  Genzyme’s duty to pay all amounts otherwise payable to Hospira in respect of the rejected Product shall be suspended until Hospira replaces all nonconforming Product in accordance with this Section 7.7.  Any nonconforming portion of any shipment shall be disposed of as directed by Genzyme, at Hospira’s expense.  In lieu of receiving replacement Product, Genzyme may [**].

(e)Deemed Acceptance; Latent Defects.  Any Product that Genzyme does not reject pursuant to this Section 7.7 shall be deemed accepted, and all claims with respect to Product not conforming with Product Specifications shall be deemed waived by Genzyme, except as to latent defects which are not reasonably discoverable and render the Product not conforming to Product Specifications.  Upon the conclusion of all appropriate internal investigations, should the Parties disagree on the nature and cause of such latent defects, then the Parties shall engage an independent expert to determine the cause of the latent defect.  If it is confirmed that the cause of the defect is attributable to the Manufacturing of the Product then,

[**] = 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.

15

subject to the limitations set forth in Section 7.1(f)(ii), Hospira will replace at no cost to Genzyme all such defective Products with Products that meet the Product Specifications.

7.8Alliance Team and Dedicated Personnel.  Hospira and Genzyme will form a team (“Alliance Team”) comprised of at least three members from each Party which will meet at least quarterly to review performance metrics, address issues and oversee the relationship between Genzyme and Hospira.  The Alliance Team will be a working committee that will have as its goal the quick and mutually agreeable resolution of financial, technical and quality issues, thus preserving throughout the term of each Project SOW the relationship established by Genzyme and Hospira.  Either Party may change its representatives on the Alliance Team at any time by written notice to the other.  Promptly following the Effective Date, Hospira shall hire, at its own expense, two dedicated personnel at the Facility to solely support the relationship between Genzyme and Hospira.  These personnel, a contract manufacturing analyst, and a contract manufacturing specialist, shall support the ordering, Manufacturing, release and supply of the Products for Genzyme.

7.9[**]; Risk Mitigation.

(a)[**].

(i)Subject to the terms of this Master Agreement, the execution of a relevant Project SOW, the Quality Technical Agreement and any preexisting contractual

obligation of Genzyme, Hospira shall have the [**] that Genzyme does not [**], or any other [**], unless otherwise specified in this Agreement.

(ii)Should Genzyme, in its discretion, decide to [**], then Genzyme shall [**].  If Hospira [**].

(iii)If Hospira accepts [**], the Parties shall mutually [**], it being understood and agreed that Hospira will be [**].  Genzyme will be [**].  The Parties agree that all terms of this Master Agreement, including Product prices, shall [**].

(iv)The Parties shall [**].  In the event that Hospira [**], then Genzyme shall [**].

(v)For the avoidance of doubt, upon [**], Genzyme shall not [**]; provided however, that the foregoing shall not [**] as described elsewhere in this Master Agreement.

(b)Possible Acquisitions.  In the event that during the Term Hospira acquires or is acquired by a Third Party with a company, business or pharmaceutical production facility that manufactures products that treat the disease states set forth on Exhibit 14.5, then Hospira will notify Genzyme as soon as such information is able to be released and Hospira shall [**].

(c)Risk Mitigation.  As soon as possible after the Effective Date, members of the Alliance Team and/or senior management will meet and discuss the ways of planning 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.

16

implementing Manufacturing redundancies at Hospira’s McPherson, Kansas Facility.  Such redundancies may include, without limitation, the qualification of another filling line or lines, lyophilizers or other equipment for the Manufacture of the Products.  Upon agreement on the qualification plan, the Parties will undertake any necessary qualification procedures.  Hospira will be responsible for its own costs in carrying out all of the necessary technical qualification procedures and Genzyme will be responsible for all of its own related qualification costs.  The Parties shall also consider implementing additional Manufacturing redundancies at Hospira’s Liscate, Italy Facility to Manufacture one of more of the Products

(d)Notwithstanding the foregoing, nothing in this Section 7.9 shall preclude Genzyme from qualifying an alternate contract manufacturer to provide fill and/or finishing services related to the Products.  Further, the Parties hereto agree that the [**].

ARTICLE 8.ORDERS AND FORECASTS

8.1[**] Year Product Supply Forecast.  For capacity planning purposes, in connection with a Project SOW, by [**] of each calendar year Genzyme shall provide Hospira with a non-binding, written [**]-year forecast of Genzyme’s annual requirements for fill slots needed during the first three calendar years of the relevant Project SOW (“Fill Slot Forecast”).  Within [**] days of Hospira’s receipt of each Fill Slot Forecast, Hospira shall provide Genzyme with either: (a) a written acceptance of the Fill Slot Forecast, and accordingly allocate its annual capacity to Manufacture the Products for Genzyme, or (b) a written rejection of the Fill Slot Forecast.  Any written acceptance shall constitute Hospira’s fill slot commitment for each of the calendar years covered by the Fill Slot Forecast (“Product Fill Slot Commitment”) but shall not be binding on Genzyme.  When Genzyme submits, and Hospira accepts, a subsequent Fill Slot Forecast covering one or more previously covered calendar years, such subsequent Fill Slot Forecast shall constitute Hospira’s Product Fill Slot Commitment for such calendar year(s).  In the event Hospira rejects a Fill Slot Forecast, Hospira and Genzyme shall meet as soon as possible to discuss in good faith the batch quantities of the Products that Hospira is willing and able to provide during each of the three calendar years covered by the Fill Slot Forecast.  Any such amount shall be agreed to in writing.  If the Parties conclude that Hospira will be unable to supply Products to meet Genzyme’s Manufacturing needs, then the exclusivity granted to Hospira pursuant to Section 7.9 shall be waived for the affected Product(s) to enable Genzyme to pursue other sources of supply to meet its demand.

8.2Minimum Purchase Requirement.

(a)During the term of each Project SOW, Genzyme agrees to purchase from Hospira, and Hospira agrees to Manufacture and deliver to Genzyme, minimum aggregate quantities of the Products set forth in the relevant Project SOW (the “Minimum Purchase Requirement”) not to exceed its applicable Product Fill Slot Commitment.  Subject to any differing terms contained in any Project SOW, during the term of a Project SOW, Genzyme shall purchase not less than [**] of year one in the Product Fill Slot Commitment accepted by Hospira in accordance with Section 8.1.

[**] = 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.

17

(b)In lieu of Genzyme taking delivery of each calendar year’s Minimum Purchase Requirements of the Products, Genzyme shall have the option to pay for its Minimum Purchase Requirement at the Product prices set forth in the relevant Project SOW and waive Hospira’s Manufacture and delivery obligations for the Products.  In the latter event, Hospira shall invoice Genzyme for the Service Fees, less the applicable costs for vials, stoppers and crimps; provided that Hospira is reasonably able to use such materials in future Genzyme product orders.  Genzyme shall pay Hospira any amounts due hereunder within [**] days after receipt of Hospira’s invoice in accordance with Section 7.6(b) hereof.

8.3Rolling Forecast.  Concurrent with the execution of a Project SOW, and on the [**] thereafter, Genzyme shall provide to Hospira a good faith, estimated rolling forecast of the fill slots and Products that Genzyme expects to order for the subsequent eighteen-month period of time (each, a “Rolling Forecast”).  Notwithstanding the foregoing, and subject to the Minimum Purchase Requirement, Genzyme shall provide Hospira with a binding, Product-specific forecast for months one through four of each Rolling Forecast, and a binding fill slot forecast for months one through seven of each Rolling Forecast (individually and collectively, “Firm Order Period”).  For illustrative purposes only, if the Rolling Forecast is submitted on [**], Genzyme shall provide Hospira with a binding Product-specific forecast for [**], and a binding fill slot forecast for [**].

8.4Purchase Orders.  After execution of a Project SOW, Genzyme shall submit a purchase order (“Purchase Order”) to Hospira at least [**] days prior to the first requested fill date for a Product.  Thereafter, on or before the [**], Genzyme shall submit a purchase order to Hospira in connection with said Project SOW.  Hospira shall use its commercially reasonable efforts to meet the delivery dates set forth in each Purchase Order.  Each Purchase Order shall reference this Master Agreement or the relevant Project SOW and shall be governed exclusively by the terms contained herein or therein.  Any terms or conditions contained in a Purchase Order that are inconsistent or in conflict with this Master Agreement or any relevant Project SOW shall be deemed not to be a part of such Purchase Order.

8.5Purchase Order Acceptance.  Within [**] days after receipt of a Purchase Order issued in accordance with Section 8.4, Hospira shall confirm to Genzyme its acceptance of the Purchase Order, delivery date(s), the quantity of Products ordered and the purchase price to be paid by Genzyme.  Hospira may reject, in whole or in part, a Purchase Order only if it calls for the delivery of Products:  (a) for which sufficient quantities of Bulk have not been delivered by Genzyme or its designee in accordance with Section 7.1, or (b) less than [**] days after the date of the Purchase Order.

8.6Additional Quantities.  Should Genzyme order additional quantities of the Products in excess of [**] over the latest Firm Order Period, Hospira shall not be obligated to supply said additional quantities; provided, however, that Hospira shall, until Genzyme’s orders in the aggregate reach the applicable annual Product Supply Commitment, use reasonable commercial efforts to produce and deliver to Genzyme said additional quantities within [**] days of issuance of the Purchase Order for such additional quantities.

[**] = 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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8.7Purchase Order Changes; Cancellations.

(a)Changes.  If Genzyme requests that changes be made to any of its Purchase Orders within the Firm Order Period, Hospira shall attempt to accommodate such changes within reasonable Manufacturing capabilities and efficiencies.  If Hospira can accommodate such changes, Hospira shall advise Genzyme of any costs associated therewith.  If Genzyme indicates in writing to Hospira that it should proceed to make the changes, Genzyme shall be deemed to have accepted the obligation to pay Hospira for such costs.  If Hospira cannot accommodate such change, Genzyme shall nonetheless be bound to its original Purchase Orders.

(b)Cancellations.  If Genzyme cancels any Purchase Order within the Firm Order Period, Hospira shall be relieved of its Manufacturing obligations relating to such order but Genzyme will not be relieved of its payment obligation unless Hospira agrees to waive such obligation in writing.  Furthermore, if Genzyme does not supply sufficient Bulk to allow Hospira to fulfill any Purchase Order Genzyme shall remain liable for the full amount of the Purchase Order, regardless of whether Hospira Manufactures the Product or whether Genzyme takes delivery of the Product.

ARTICLE 9.INABILITY TO SUPPLY

9.1Notification.  Hospira will promptly notify Genzyme if it anticipates a delay in any delivery of Products and the time of any delay in delivery.  In the event that Hospira anticipates that it will otherwise be unable to Manufacture and supply the Product in accordance with Genzyme’s firm Purchase Orders, Hospira shall notify Genzyme promptly and shall use best efforts to cure any Inability to Supply (as defined in Section 9.5) as soon as possible.  In particular, Hospira shall promptly inform Genzyme of any notice, written or oral, received from any of its materials suppliers regarding a possible shortage.  If Hospira’s Inability to Supply is not attributable to Genzyme’s breach of its obligations under this Agreement, then Hospira shall be solely responsible for undertaking all commercially reasonable measures to minimize any possible shortage of Product to Genzyme.  If such inability is partial, Hospira shall fulfill Purchase Orders with such quantities of Product as are available for supply to Genzyme hereunder.

9.2Inability to Supply.

(a)Delays in Production.  In the event that Hospira experiences, or anticipates that it will experience, a delay in Manufacturing and supplying Products to Genzyme for more than [**] days, the Parties will promptly meet to discuss and formulate options to resolve the delay and to minimize the impact of the delay on Genzyme and its customers.  Such options will include, without limitation (i) plans to temporarily shift Manufacturing of one or more of the Products from Hospira’s Facilities to one of Genzyme’s manufacturing facilities, (ii) plans to shift Manufacture of one or more Products from dedicated filling lines or other production equipment at the McPherson, Kansas Facility to other qualified lines and equipment at such Facility, or (iii) plans to shift Manufacture of one or more of the Products to the Liscate, Italy Facility.  Upon notification of such actual or anticipated delay, all Purchase Orders accepted

[**] = 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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by Hospira and all outstanding Purchase Orders affected by such Inability to Supply shall be tolled, pending resolution of the delay.

(b)Minimums Reduced.  Genzyme’s Minimum Purchase Requirement for the calendar year in which a delay in Manufacture and/or supply of Products has occurred shall be reduced by the quantities of Product affected by the Inability to Supply, whether Purchase Orders were partially filled, cancelled outright by Genzyme as a result of the Inability to Supply, or Product is obtained from any Third Party manufacturer as a result of such Inability to Supply.

9.3Contract Manufacturer.  In the case of an Inability to Supply that Hospira is unable to resolve in whole or in major part within [**] days, or if Hospira notifies Genzyme that it will not be able to alleviate such Inability to Supply within such [**] day period, Genzyme may, upon notice to Hospira, terminate the relevant Project SOW, and Genzyme may contract with a Third Party contract manufacturer to supply the Product.

9.4Transfer Assistance.  In the event that Genzyme contracts with a Third Party contract manufacturer, as contemplated in Section 9.3, Hospira shall use commercially reasonable efforts for a reasonable period of time to assist Genzyme in the transfer of the Project SOW information to the Third Party contract manufacturer.  Hospira shall be responsible for [**], and shall [**] as set forth on Exhibit 9.4; provided, however, that Hospira shall not [**] in the event that an Inability to Supply has been caused by an event of Force Majeure.  Notwithstanding the foregoing, nothing contained herein shall require Hospira to disclose any Hospira intellectual property rights or Hospira Confidential Information to such Third Party manufacturer, nor grant Genzyme any right to use such rights or Hospira Confidential Information.

9.5Definition.  For purposes of this Master Agreement, “Inability to Supply” means:  (i) Hospira’s failure to supply at least [**] of Genzyme’s requirements for Product meeting Product Specifications for any [**] for any reason, or (ii) Genzyme reasonably concludes that Hospira, due to [**] of Genzyme’s requirements for Product meeting Product Specifications for a period which is expected to continue in excess of [**] days.  Inability to Supply shall not include [**] this Master Agreement.

Article 10.QUALITY

10.1Quality Control.  Hospira shall apply its quality control procedures and in-plant quality control checks to the Manufacture of the Products for Genzyme in the same manner as Hospira applies such procedures and checks to products of similar nature manufactured for sale by Hospira.  In addition, Hospira will test and release the Products in accordance with the test methods described in the relevant Project SOW to ensure that the Products conform to the Product Specifications.  The Parties may change the test methods from time to time by mutual written agreement.

10.2Quality Technical Agreement.  The Parties have entered into a Quality Technical Agreement as attached hereto as Exhibit 10.2.  Authorized personnel of the Parties may amend

[**] = 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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provisions of the Quality Technical Agreement by mutual agreement in writing, without formal amendment to this Master Agreement.

10.3Audit Rights.

(a)General Audit.  Upon [**] days prior written notice to Hospira, Genzyme shall have the right to visit the Facility during normal business hours to review Hospira’s Manufacturing operations related to the Products, assess its compliance with cGMP and quality assurance standards and discuss any related issues with Hospira’s Manufacturing and management personnel.  Hospira shall provide Genzyme with copies of Hospira’s Manufacturing records relating to the Products for the purposes of assuring the quality of the Products and compliance with agreed-upon Manufacturing procedures.  Such general audits shall:  (i) be limited to not more than [**] auditors designated by or representing Genzyme; (ii) last for not more than [**] days; and (iii) may be conducted not more than [**] per calendar year.

(b)For Cause Audits.  Genzyme shall also have the right to conduct “for-cause” audits to address significant Product or safety concerns as discovered through Product failures related to Hospira’s Manufacture of the Products.  “Product failures” would include issues related to stability out of specification, sterility, labeling, container integrity, or any other issues or concerns related to Bulk.  Genzyme shall notify Hospira in writing in advance of the audit and, thereafter, Genzyme and Hospira shall mutually determine the timing of the audit.  Each for-cause audit shall be limited to [**] auditors for no more than [**] days, except if the Parties mutually agree that a longer for-cause audit period is necessary.

(c)Regulatory Authority Audits.

(i)Hospira shall allow audits conducted by Regulatory Authorities related to the Manufacture of the Products, which may be required by such Regulatory Authorities.  Hospira agrees to cooperate with the Regulatory Authorities in connection with any such audit or inspection.  Hospira will promptly (but in any event within [**] Business Day) notify Genzyme upon receipt of a notice in connection with any such audit or inspection, and will, to the extent permitted by Regulatory Authorities’ practices, allow Genzyme to be present at the Facility during such audit or inspection.

(ii)Hospira will notify Genzyme of all relevant portions of any Regulatory Authority notice of observations or potential violations, to the extent that such notice relates to the safety, efficacy or quality of the Products, the Facility, or other issues that would adversely impact Hospira’s performance hereunder, as well as a copy of Hospira’s response thereto.  In addition, Hospira will provide Genzyme copies of any FDA 483(s) and Establishment Inspection Reports (or their equivalents), which Hospira may redact to protect its own Confidential Information or that of its other customers.  Hospira shall use its commercially reasonable efforts to correct all identified deficiencies in a timely manner and advise Genzyme periodically of progress being made, as well as when all deficiencies have been corrected.

(iii)In the event that inspections are requested or required by or for any Regulatory Authority outside of the Territory identified in the initial Project SOW for 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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relevant Product, and such inspections are not general inspections of the Facility but are directly related to the Manufacture of the Product(s), then Hospira shall be entitled to an additional fee of [**] per each such Regulatory Authority inspection; provided, however, that Hospira shall use reasonable efforts to schedule any additional inspections concurrently so as to avoid any additional fees.  In the event there is more than one such inspection occurring at the same time, only one fee shall be assessed.

(d)Confidential Information in Audits.  Audits by Genzyme or its designees may involve the transfer of Confidential Information, and any such Confidential Information shall be subject to the terms of Article 14 hereof.  The results of such audits and inspections shall be considered Confidential Information under Article 14 and shall not be disclosed to Third Parties, excluding Regulatory Authorities, unless required by law and only then upon prior written notice to Hospira.

(e)Persons-in-the-Plant.  Notwithstanding the per person audit rights under this Section 10.3, Hospira will permit up to two (2) employees of Genzyme to have reasonable access to the Facility to observe and consult with Hospira during active Manufacturing of the Products (the “Person(s)-in-the-Plant”).  During such visits, Genzyme personnel will abide by all Hospira policies regarding persons in the plant.  Genzyme will provide Hospira with sufficient advance notice of any requests for such persons in the plant visits so that Hospira may make appropriate arrangements for them.

10.4Notification of Complaints.  Genzyme shall notify Hospira promptly of any customer complaints involving Hospira’s Manufacturing or other Services in sufficient time to allow Hospira to evaluate and investigate the complaints and assist Genzyme in responding to such complaints.  Hospira shall be responsible for all routine costs of such investigation.  In any case, Hospira will use all reasonable commercial efforts to provide a written investigation report to Genzyme within [**] days of notification.

10.5Failed Batch.  In accordance with the Quality Technical Agreement, Hospira shall investigate, and cooperate fully with Genzyme in investigating, any batch of Product that fails to comply with cGMP or fails to meet the Product Specifications or any Regulatory Authority requirements.  Hospira shall keep Genzyme informed of the status of any investigation and, upon completion of the investigation, shall provide Genzyme with a final written report describing the cause of the failure and summarizing the results of the investigation, and the corrective and preventative actions, with a schedule for completion of each action.

10.6Product Recalls.

(a)Recall.  Genzyme shall direct and control responses to all Product recalls, and Hospira shall provide reasonable cooperation to Genzyme in connection with any such responses.  In the event: (i) any Regulatory Authority or other national government authority issues a request, directive or order that any Product be recalled; (ii) a court of competent jurisdiction orders a recall of any Product; or (iii) Genzyme reasonably determines that any Product should be recalled, the Parties shall take all appropriate corrective actions, and shall cooperate in any governmental investigations surrounding the recall.

[**] = 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)Administrative Expenses.  In the event that such recall results from the breach of Hospira’s express warranties under Sections 11.2(a) or 11.2(b), or the gross negligence or willful misconduct of Hospira, Hospira shall be responsible for promptly replacing the quantity of Products that were recalled, at no cost to Genzyme, or reimbursing Genzyme for the cost of the recalled Products, including the cost for Bulk and Manufacturing, subject to the limitation in Section 7.1(f)(ii).  In addition, Hospira agrees that it shall be responsible for the administrative expenses of any recall, provided, however, that Hospira shall not pay more than [**] for the administrative expenses per recall.  For purposes of this Agreement, administrative expenses of recall shall include, but not be limited to, the expenses of notification and destruction or return of the recalled Product, and any costs associated with the distribution of the replacement Product, but shall not include lost profits of either Party.  In the event that the recall does not result from the breach of Hospira’s express warranties, gross negligence or willful misconduct, Genzyme shall be responsible for all of the expenses of the recall.

ARTICLE 11.WARRANTIES; COVENANTS AND INDEMNIFICATION

11.1Genzyme’s Warranties.

(a)Genzyme represents and warrants to Hospira that all Bulk delivered to Hospira pursuant to this Master Agreement shall, at the time of delivery, not be adulterated or misbranded within the meaning of the Act or within the meaning of any Applicable Law in which the definitions of adulteration and misbranding are substantially the same as those contained in the Act, as the Act and such Applicable Laws are constituted and effective at the time of delivery, and will not be an article which may not, under the provisions of Sections 404 and 505 of the Act, be introduced into interstate commerce.

(b)Genzyme further warrants to Hospira that Bulk supplied to Hospira hereunder shall have been manufactured in accordance with all applicable cGMP and shall meet the Bulk Specifications set forth in the relevant Project SOW.

(c)Genzyme further warrants that all specifications including Bulk Specifications and Product Specifications that Genzyme provides to Hospira shall conform to the applicable regulatory filing Genzyme files with the appropriate Regulatory Authorities.

(d)Genzyme further represents and warrants to Hospira that Genzyme’s performance of its obligations under this Master Agreement will not result in a material violation or breach of any agreement, contract, commitment or obligation to which Genzyme is a party or by which it is bound and will not conflict with or constitute a default under its corporate charter or bylaws.

11.2Hospira’s Warranties and Covenants.

(a)Hospira represents and warrants to Genzyme that all Products Hospira delivers to Genzyme pursuant to this Master Agreement shall, at the time of delivery, not be

[**] = 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.

23

adulterated or misbranded within the meaning of the Act or within the meaning of any Applicable Law in which the definitions of adulteration and misbranding are substantially the same as those contained in the Act, as the Act and such Applicable Laws are constituted and effective at the time of delivery, and will be an article which may, under the provisions of Sections 404 and 505 of the Act, be introduced into interstate commerce.

(b)Hospira further represents and warrants to Genzyme that all Products Hospira delivers to Genzyme pursuant to this Master Agreement shall, at the time of delivery and through the expiration date of the Products, be free from defects in material and workmanship and shall be Manufactured: (a) in accordance and conformity with, and shall meet, the Product Specifications set forth in the relevant Project SOW; and (b) in compliance with all Applicable Laws including those relating to the environment, food or drugs and occupational health and safety including, without limitation, those enforced or promulgated by the FDA or any other applicable Regulatory Authority (including, without limitation, compliance with cGMP).

(c)Hospira further represents and warrants to Genzyme that Hospira’s performance of its obligations under this Master Agreement will not result in a material violation or breach of any agreement, contract, commitment or obligation to which Hospira is a party or by which it is bound and will not conflict with or constitute a default under its Certificate of Incorporation or corporate bylaws.

(d)The foregoing warranties shall not extend to any nonconformity or defect which relates to or is caused by Bulk supplied by Genzyme to Hospira.  Subject to Section 11.4, the replacement provisions of Sections 7.1(f) shall be Genzyme’s sole and exclusive remedy for nonconforming or defective Products.

11.3EACH PARTY MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO BULK OR PRODUCT.  ALL OTHER WARRANTIES, EXPRESS OR IMPLIED INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED.

11.4Indemnification by Hospira.  Hospira shall indemnify and hold harmless Genzyme, its Affiliates, officers, directors and employees from and against all claims, causes of action, suits, costs and expenses (including reasonable attorney’s fees), losses or liabilities of any kind related to this Master Agreement or any relevant Project SOW and asserted by Third Parties to the extent such arise out of or are attributable to (a) Hospira’s breach of this Master Agreement, any relevant Project SOW, or any representation or warranty set forth herein or therein, (b) any violation of any proprietary right of any Third Party relating to Hospira’s processes used in the Manufacture of the Products pursuant to this Master Agreement (excluding claims related to the Bulk active ingredients or excipients), (c) any breach of Section 14.4 hereunder, or (d) any negligent or wrongful act or omission on the part of Hospira, its employees, agents or representatives and which relates to Hospira’s performance hereunder; provided, however, that this indemnification shall not apply to the extent that such claim results from Genzyme’s (or its agents’, employees’ or representatives’) breach of this Master

[**] = 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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Agreement, any relevant Project SOW or any warranty herein or therein, or Genzyme’s (or its agents’, employees’ or representatives’) negligence or willful misconduct.

11.5Indemnification by Genzyme.  Genzyme shall indemnify and hold harmless Hospira, its Affiliates, officers, directors and employees harmless from and against all claims, causes of action, suits, costs and expenses (including reasonable attorney’s fees), losses or liabilities of any kind related to this Master Agreement or any relevant Project SOW and asserted by Third Parties to the extent such arise out of or are attributable to (a) Genzyme’s breach of this Master Agreement, any relevant Project SOW, or any representation or warranty set forth herein or therein; (b) any violation of any proprietary right of any Third Party relating to the Bulk and expressly excluding all other Third Party proprietary rights, including those incorporated in Hospira’s processes used in the Manufacture of the Products pursuant to this Master Agreement; (c) any use of, or lack of safety or efficacy of Bulk or the Products that is attributed to Genzyme’s actions or failure to act; or (d) any negligent or wrongful act or omission on the part of Genzyme, its employees, agents or representatives and which relate to Genzyme’s performance hereunder; provided, however, that this indemnification shall not apply to the extent that such claim results from Hospira’s (or its agents’, employees’ or representatives’) breach of this Master Agreement, any relevant Project SOW or breach of any warranty herein or therein, or Hospira’s (or its agents’, employees’ or representatives’) negligence or willful misconduct.

11.6Conditions of Indemnification.  If either Party seeks indemnification from the other hereunder, it shall promptly give notice to the other Party of any such claim or suit threatened, made or filed against it which forms the basis for such claim of indemnification and shall cooperate fully with the other Party in the investigation and defense of all such claims or suits.  The indemnifying Party shall have the option to assume the other Party’s defense in any such claim or suit with counsel reasonably satisfactory to the other Party.  No settlement or compromise shall be binding on a Party hereto without its prior written consent, such consent not to be unreasonably withheld.

11.7No Consequential Damages.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES RESULTING FROM ANY BREACH OF THIS MASTER AGREEMENT EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.  THIS LIMITATION ON LIABILITY SHALL NOT APPLY TO ANY DAMAGES OR CLAIMS ARISING FROM A VIOLATION OF ARTICLE 14 HEREOF, OR OUT OF ANY INDEMNITY PURSUANT TO THIS ARTICLE 11.

ARTICLE 12.INTELLECTUAL PROPERTY RIGHTS

12.1Hospira’s Proprietary Rights.  Except for the purposes of this Master Agreement and/or relating to the Products and Services hereunder, Hospira has granted no license, express or implied, to Genzyme to use Hospira’s proprietary technology, know-how or other proprietary rights (i) existing as of the Effective Date; or (ii) developed by or for Hospira on or after the Effective Date.  It is understood and agreed by the Parties that Genzyme shall owe no further fees, payments or royalties of any kind on any Product Manufactured by Hospira (except as

[**] = 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

expressly detailed in the applicable Project SOW), regardless of the technology, know-how or other proprietary processes used by Hospira in the Manufacture of Products or the performance of Services hereunder.

12.2Genzyme’s Proprietary Rights.  Except for the purposes of this Master Agreement and the Manufacture of Products or performance of Services hereunder, Genzyme has granted no license, express or implied, to Hospira to use Genzyme’s proprietary technology, know-how or other proprietary rights.

12.3Project Inventions. Notwithstanding Hospira’s rights, the Parties agree that Genzyme shall be the sole owner of any technology, know-how or other proprietary rights developed by or for Hospira pursuant to any Project undertaken by Hospira (the “Project Inventions”). Hospira shall promptly notify Genzyme of all Project Inventions and shall use all reasonable efforts to cooperate with Genzyme in any related patent filing and prosecution (each at Genzyme’s expense) and shall assign all right, title and interest in any such Project Inventions to Genzyme.

ARTICLE 13.TERM AND TERMINATION

13.1Term.  This Master Agreement shall commence on the Effective Date and, unless earlier terminated as provided in this Section 13, shall expire on the later of:  (a) five (5) years from the Effective Date or (b) the date of the last to expire Project SOW (“Term”).  This Master Agreement shall be automatically extended for additional and successive renewal terms of one (1) year each (“Renewal Term”); provided, however, that this Master Agreement or any Project SOW for a Commercial Product (in whole or in part) may be terminated at the end of the Term or any Renewal Term upon either Party providing the other with at least twenty-four (24) months prior written notice of termination.

13.2Termination of a Development Project.  Either Party wishing to terminate a Development Project (or any portion of it as it relates to any one or more of the Products) shall request in writing a pre-termination consultation with the other Party to review potential concerns and to make reasonable efforts to continue with the Development Project. [**] days following said consultation:  (i) Genzyme may terminate the Development Project upon [**] days prior written notice to Hospira, or (ii) Hospira may terminate the Development Project upon [**] months prior written notice to Genzyme in the event that the terminating Party determines in good faith, and in its sole discretion, that the successful performance of the Services is not technically, financially, or commercially feasible using commercially reasonable efforts.  If the Development Project is terminated in whole or in part, Hospira shall advise Genzyme of the costs it has incurred in performing the Services (or the relevant portion thereof) prior to such termination.  Genzyme shall pay Hospira for all reasonable and documented costs for Services performed up to the date the termination notice is received.  In the event of complete termination of the Development Project, the Project SOW shall automatically terminate; provided, however, that this Master Agreement shall remain in full force and 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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13.3Termination.

(a)Project Termination Rights.

(i)Either Party shall have the right to terminate an individual Project SOW by giving the other Party no less than [**] days prior written notice upon the non-terminating Party’s breach of any warranty or any other material provision of the relevant Project SOW if the breach is not cured within [**] days after written notice thereof to the non-terminating Party.  In the event that the material breach is curable and the Party in breach anticipates that it may not be able to cure such material breach within the prescribed [**] day period despite its continuing diligent efforts to do so, it shall provide the other Party with notice of all relevant issues.  The Parties may thereafter agree to extend the period to cure for an additional [**] day period.

(ii)Either Party shall have the right to terminate an individual Development Project SOW by giving the other Party no less than [**] days prior written notice if a Development Product has not received regulatory approval from the FDA (or any other relevant Regulatory Authority) by the date specified in the relevant Project SOW.

(iii)Either Party shall have the right to terminate an individual Project SOW upon written notice to the other Party, should the non-terminating Party be unable to perform its obligations under any Project SOW for a period in excess of [**] days by reason of force majeure, in accordance with Section 15.1(a).

(iv)Genzyme may terminate an individual Project SOW upon [**] days prior notice following the loss or damage to Bulk and/or Product(s) with an aggregate Bulk value of more than $[**] within any [**] month period, while such Bulk Product(s) and/or Product(s) are in Hospira’s custody; provided, however, that during such [**] day notice period the Parties shall meet to discuss whether there is any ability to implement procedures which would avoid future losses; and further provided that, in the event the Parties reach a written agreement on such procedures prior to the expiry of the [**] day notice period (or any agreed extension thereof), such termination shall not be effective.

(v)Genzyme shall have the right to terminate an individual Project SOW upon notice in the event that Hospira fails to provide Genzyme with reasonable assurances acceptable to Genzyme of its ability to resume the Manufacture and supply of Products as set forth in Article 9.

(vi)Hospira shall have the right to terminate an individual Project SOW for Commercial Product upon notice if in any [**] consecutive calendar years, Genzyme fails to purchase its Minimum Purchase Requirement, irrespective of whether Genzyme waives Hospira’s Manufacturing and delivery obligations pursuant to Section 8.2(b).

[**] = 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)Master Agreement Termination Rights.

(i)Either Party may immediately terminate this Master Agreement by providing written notice upon the bankruptcy or the insolvency of the other Party.

(ii)Either Party may terminate this Master Agreement by giving the other Party ninety (90) days prior written notice upon the other Party’s material breach of any provision of this Master Agreement, if the breach is not cured within [**] days after written notice thereof to the Party in breach.  In the event that the material breach is curable and the Party in breach anticipates that it may not be able to cure such material breach within the prescribed [**] day period despite its continuing diligent efforts to do so, it shall provide the other Party with notice of all relevant issues.  The Parties may thereafter extend the period to cure for whatever time they agree is reasonable under the circumstances.

(iii)Either Party may terminate this Master Agreement by giving the other Party written notice should the non-terminating Party be unable to perform its obligations under any Project SOWs for a period in excess of [**] days by reason of force majeure, in accordance with Section 15.1(a).

(iv)Genzyme may terminate this Master Agreement, upon [**] days prior notice following the loss or damage to Bulk Product(s) and/or Product(s) with an aggregate value of more than $[**] within any [**] month period, while such Bulk Product(s) and/or Product(s) are in Hospira’s custody; provided, however, that during such [**] day notice period the Parties shall meet to discuss whether there is any ability to implement procedures which would avoid future losses; and further provided that, in the event the Parties reach a written agreement on such procedures prior to the expiry of the [**] day notice period (or any agreed extension thereof), such termination shall not be effective.

(v)Genzyme may terminate this Master Agreement if there is an Inability to Supply affecting more than [**] Products that continues for more than [**] days.

(vi)Hospira may terminate this Master Agreement upon [**] days prior notice if in any [**] consecutive calendar years Genzyme fails to purchase its Minimum Purchase Requirements for [**] or more Project SOWs, irrespective of whether Genzyme waives Hospira’s manufacturing and delivery obligations pursuant to Section 8.2(b).

13.4Accrued Payment Obligations.  Upon termination of any Project SOW or this Master Agreement pursuant to Sections 13.3(a)(ii), 13.3(a)(iv), or 13.3(b)(iv), as applicable, Genzyme shall reimburse Hospira for Hospira’s cost of all supplies purchased and on hand or on order, to the extent such supplies were ordered by Hospira based on Purchase Orders and such supplies cannot be reasonably used by Hospira for other purposes.  Hospira shall invoice Genzyme for all amounts due hereunder.  Payment shall be made pursuant to Section 7.6(b).

13.5Return of Inventory, Dedicated Equipment and Product.  In the event of any termination, Hospira shall promptly return any remaining inventory of Bulk, all Dedicated Equipment, and any Product to Genzyme at Genzyme’s expense, unless such termination shall have been as a result of a breach of any relevant Project SOW or this Master Agreement by Hospira, or if Hospira terminates under Section 13.3(a)(ii) or Genzyme terminates under Section

[**] = 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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13.3(a)(iv), or Section 13.3(b)(iv), in which case such inventory, Dedicated Equipment and any Product shall be returned at Hospira’s expense.

13.6Exclusive Rights and Remedies.  Termination of any Project SOW or this Master Agreement under Sections 13.3(a)(v), 13.3(a)(vi), 13.3(b)(v), or 13.3(b)(vi), respectively, is an election of remedies.  With regard to such provisions, except in instances of willful misconduct or gross negligence, all rights and remedies of the Parties provided under Sections 9.4 or 8.2(b) of this Master Agreement, as applicable, are exclusive.

13.7Survival.  Expiry or early termination of any relevant Project SOW or this Master Agreement shall not relieve either Party of any obligations that it may have incurred prior to expiration or early termination and all covenants and agreements contained in any relevant Project SOW or this Master Agreement including, but not limited to, Sections 10.3, 10.6 and 13.7, and Articles 11, 12 and 14, which by their terms or context are intended to survive and will continue in full force and effect for a period of five (5) years unless a different time period is indicated in this Master Agreement.

ARTICLE 14.CONFIDENTIAL INFORMATION AND NON-COMPETE

14.1Nondisclosure.  It is contemplated that in the course of the performance of this Master Agreement each Party may, from time to time, disclose Confidential Information to the other.  Hospira agrees that, except as expressly provided herein, it shall not disclose Confidential Information received from Genzyme, and shall not use Confidential Information disclosed to it by Genzyme, for any purpose other than to fulfill Hospira’s obligations hereunder.  Hospira further agrees that it will limit the permitted disclosures of Genzyme’s Confidential Information only to those persons within Hospira’s One 2 One® group and the Facilities who have a “need to know” such Confidential Information and as further set forth in Section 14.4.  Genzyme agrees that, except as expressly provided herein, it shall not disclose Confidential Information received from Hospira, and shall not use Confidential Information disclosed to it by Hospira, for any purpose other than to fulfill Genzyme’s obligations hereunder.

14.2Exceptions to Duty of Nondisclosure.  Notwithstanding the above, nothing contained in this Master Agreement shall preclude: (a) Genzyme from utilizing Confidential Information as may be necessary in prosecuting patent rights related to Project Inventions as set forth in Article 12, or (b) either Party from (i) obtaining governmental marketing approvals, (ii) Manufacturing the Products pursuant to the terms and conditions of this Master Agreement, (iii) complying with other Applicable Laws (provided that the Party disclosing such Confidential Information uses reasonable efforts to seek confidential treatment of such Confidential Information, except for information included in any Project Invention patent applications), or (iv) corresponding with any Regulatory Authority in connection with this Master Agreement, or on any relevant matter.  The obligations of the Parties relating to Confidential Information shall expire ten (10) years after the termination of this Master Agreement.

14.3Public Announcements.  Neither Party shall make any public announcement concerning the transactions contemplated herein, or make any public statement which includes

[**] = 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

the name of the other Party or any of its Affiliates, or otherwise use the name of the other Party or any of its Affiliates in any public statement or document, except as (i) may be required by Applicable Laws (including U.S. federal securities regulations) or judicial order, or (ii) is made to a Regulatory Authority, without the written consent of the other Party, which consent shall not be unreasonably withheld.  Subject to any legal or judicial disclosure obligation, any such public announcement proposed by a Party that names the other Party shall first be provided in draft to the other Party for the other Party’s review and approval.

14.4[**] Cost Information.  Any information related to the cost of [**] provided by Genzyme to Hospira shall only be provided on a need to know basis, as determined by Genzyme, and in any case only disclosed to the following individuals within the Hospira One2One® group  (i) the Hospira Vice President and General Manager of Contract Manufacturing Services, (ii) the Director of Business Development, and (iii) the Manager of Business Development (collectively, the “Relationship Managers”).  Any disclosure by Hospira to individuals other than to the Relationship Managers, must be approved in writing by the Genzyme Senior Vice President of Materials Management (or his/her designee), and is otherwise expressly prohibited.  Notwithstanding the foregoing, any such disclosure to the Relationship Managers, or any other authorized individual, shall be used exclusively for the purpose of calculating the costs for any [**] under this Master Agreement.  Any information related to the cost of [**] shall be in writing and marked as “highly confidential” along with a notice that significant penalties may attach in the event of unauthorized use or disclosure.

14.5[**].  Notwithstanding the Minimum Purchase Requirements of Section 8.2, in consideration of Genzyme’s ordering and purchasing in each calendar year, the minimum number of batches of Products as set forth in Exhibit 14.5, the Hospira [**], as may be amended from time to time by the Parties.  Should Genzyme fail to meet the minimum batch requirements set forth in Exhibit 14.5, then the [**].  Notwithstanding the foregoing, if Genzyme decides not to renew this Master Agreement and so notifies Hospira, then Hospira may provide development services for products that treat the disease states set forth in Exhibit 14.5 within one (1) year prior to the expiration of this Master Agreement, which development services shall not include any manufacturing services including, without limitation, product verification runs, engineering runs, or any other technology transfer manufacturing services.  In addition, in lieu of Genzyme taking delivery of the batch requirements set forth in Exhibit 14.5, Genzyme shall have the option to pay for the batch requirements at the Product prices set forth in the relevant Project SOW and waive Hospira’s Manufacture and delivery obligations for the Products.  In the latter event, Hospira shall invoice Genzyme for [**], and Genzyme shall pay Hospira within [**] days after receipt of Hospira’s invoice, in accordance with Section 7.6(b).

14.6Injunctive Relief. The Parties acknowledge that either Party’s breach of this Article 14 may cause the other Party irreparable injury for which it would not have an adequate remedy at law.  In the event of such breach, the non-breaching Party may be entitled to seek injunctive relief in addition to any other remedies it may have at law or in equity.

[**] = 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

ARTICLE 15.MISCELLANEOUS

15.1Force Majeure and Failure of Suppliers.

(a)Excusable Delay.  Neither Party shall be considered to be in breach of any relevant Project SOW or this Master Agreement if a delay in the performance of any of its duties or obligations hereunder (except the payment of money) has been caused by or is the result of an act of God, acts of a public enemy, acts of terrorism, insurrections, riots, embargoes, labor disputes, including strikes, lockouts, job actions, boycotts, fires, explosions, floods, shortages of material or energy, or other unforeseeable causes beyond the control and without the fault or negligence of the Party so affected (each an event of  “Force Majeure”).  The performance of the affected Party shall be extended for a period equal to the period of such delay; provided, however, that affected Party shall give prompt notice to the other Party of such cause, and shall promptly take whatever reasonable steps are necessary to relieve the effect of such force majeure and resume compliance with the relevant Project SOW or this Master Agreement as soon as possible.  Should the event of Force Majeure continue for a period longer than ninety (90) days, then the Party not so affected may terminate the relevant Project SOW in accordance with Section 13.3(a)(iii).  Should the event of Force Majeure continue for a period longer than one hundred and eighty (180) days, then the Party not so affected may terminate this Master Agreement in accordance with Section 13.3(b)(iii).

(b)Failure of Suppliers.  The Parties understand and agree that Genzyme has chosen the excipient and primary container packaging component suppliers listed in the Product Specifications.  Under no circumstances shall Hospira have any liability to Genzyme, nor shall Hospira be deemed to be in breach of this Master Agreement, if Hospira is unable to supply the Products or any Product to Genzyme due to a failure of such suppliers to provide such excipients and/or primary container packaging components to Hospira (provided that such failure is due in no part to Hospira’s negligence).

15.2Notices.  All notices hereunder shall be delivered as follows: (a) personally; (b) by facsimile and confirmed by first class mail (postage prepaid); (c) by registered or certified mail (postage prepaid); or (d) by overnight courier service, to the following addresses of the respective Parties:

If to Genzyme:	With a copy to:
Genzyme Corporation	Genzyme Corporation
200 Crossing Boulevard	500 Kendall Street
Framingham, MA 01701-9322	Cambridge, MA 02139
Attention: Senior Vice President, Materials Management	Attention: General Counsel
Facsimile: (508) 661-8538	Facsimile: (617) 252-7553
Genzyme Ireland Limited
IDA Industrial Park

[**] = 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

Old Kilmeaden Road

Cork Road

Waterford

Attn: Director

If to Hospira:	With copy to:
Hospira, Inc.	Hospira, Inc.
275 North Field Drive	Building H1; Department NLEG
Lake Forest, IL 60045	275 N. Field Drive
Attention: Vice President, Contract Manufacturing	Lake Forest, IL 60045
	Attention: General Counsel
Facsimile: (224) 212-3210	Facsimile: (224) 212-2086

Notices shall be effective upon receipt if personally delivered or delivered by facsimile and confirmed by first class mail, on the third business day following the date of registered or certified mailing, or on the first business day following the date of delivery to the overnight courier. A Party may change its address listed above by written notice to the other Party.

15.3Choice of Law.  This Master Agreement shall be construed, interpreted and governed by the laws of the State of Delaware, excluding its choice of law provisions.  The United Nations Convention on the International Sale of Goods is hereby expressly excluded.

15.4Assignment.  Neither Party shall assign any Project SOW or this Master Agreement nor any part thereof without the prior written consent of the other Party; provided, however, that either Party, without such consent, may assign a Project SOW and/or this Master Agreement in connection with the transfer, sale or divestiture of substantially all of its business to which the Project SOW or this Master Agreement pertains or in the event of its merger or consolidation with another entity unless, in the case of Hospira, such assignment would be to a competitor of Genzyme, in which case Hospira shall obtain Genzyme’s prior written consent to such assignment which consent shall not be unreasonably withheld.  Any permitted assignee shall assume all obligations of its assignor under the relevant Project SOW or this Master Agreement.  No assignment shall relieve any Party of responsibility for the performance of any accrued obligation which such Party then has hereunder.

15.5Entire Agreement.  This Master Agreement, together with the Quality Technical Agreement, the Exhibits and Project Statements of Work referenced and incorporated herein, constitute the entire agreement between the Parties concerning the subject matter hereof and supersede all written or oral prior agreements or understandings between the Parties with respect thereto.

[**] = 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

15.6Severability.  This Master Agreement and any associated Project SOW is subject to the restrictions, limitations, terms and conditions of all applicable governmental regulations, approvals and clearances.  If any term or provision of this Master Agreement any associated Project SOW shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Master Agreement any associated Project SOW shall be interpreted and construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein.

15.7Waiver Modification of Agreement.  No waiver or modification of any of the terms of this Master Agreement any associated Project SOW shall be valid unless in writing and signed by authorized representatives of both Parties.  Failure by either Party to enforce any such rights under this Master Agreement any associated Project SOW shall not be construed as a waiver of such rights, nor shall a waiver by either Party in one or more instances be construed as constituting a continuing waiver or as a waiver in other instances.

15.8Insurance.  Each Party will procure and maintain, at its own expense, for the duration of this Master Agreement, and for five (5) years thereafter if written on a claims made or occurrence reported form, the types of insurance specified below with carriers rated A-VII or better with A.M. Best or like rating agencies:

(a)Workers’ Compensation accordance with applicable statutory requirements and shall provide a waiver of subrogation in favor of the other Party;

(b)Employer’s Liability with a limit of liability in an amount of not less than $[**];

(c)Commercial General Liability including premises operations, products & completed operations, blanket contractual liability, personal injury and advertising injury including fire legal liability for bodily injury and property damage in an amount not less than $[**]per occurrence and $[**] in the aggregate;

(d)Commercial Automobile Liability for owned, hired and non-owned motor vehicles with a combined single limit in an amount not less than $[**] each occurrence;

(e)Excess Liability including products liability with a combined single limit in an amount of not less than $[**] per occurrence and in the aggregate;

(f)Professional Liability with a limit of liability in an amount of not less than $[**] per claim and in the aggregate;

(g)Commercial Crime or Fidelity Bond in an amount of not less than $[**] per occurrence and in the aggregate including an endorsement for Third Party liability without the requirement of a conviction; 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.

33

(h)Marine Insurance covering all shipments from warehouse to warehouse as described on the bill of lading at a full replacement cost.

Each Party shall include the other Party and its Affiliates, directors, officers, employees and agents as additional insureds with respect to Commercial General Liability, Commercial Automobile Liability and Excess Liability but only as their interest may appear by written contract.  Promptly after the Effective Date, and annually thereafter, each Party shall furnish to the other Party certificates of insurance evidencing the insurance coverages stated above and shall require at least thirty (30) days written notice to the other Party prior to any cancellation, non-renewal or material change in said coverage.  In the case of cancellation, non-renewal or material change in said coverage, each Party shall promptly provide the other Party with a new certificate of insurance evidencing that the coverage meets the requirements in this Section.  Each Party agrees that its insurance shall act as primary and noncontributory from any other valid and collectible insurance maintained by the other Party.  Each Party may, at its option, satisfy, in whole or in part, its obligation under this Section through its self-insurance program.

15.9Supplemental Insurance.  Notwithstanding the foregoing, Genzyme may obtain supplemental insurance coverage for operational or manufacturing risk of loss of Bulk and/or Product in excess of, or in addition to, any other insurance coverage Hospira and/or Genzyme may have in force.  In consideration of Genzyme’s Minimum Purchase Requirements set forth in Section 8.2 of this Agreement, Hospira shall [**] (up to [**] during the [**], and shall [**], except as otherwise set forth in [**].  In the event the [**], then Hospira shall [**].

15.10Exhibits.  All Exhibits referred to herein are hereby incorporated by reference.

15.11Debarment Warranty.  Hospira and Genzyme represent and warrant that neither Party uses nor will use in the future in any capacity the services of any person debarred under Section (a) or (b) of 21 U.S.C. Section 335a.

15.12Different Provisions for Specific Compounds. Both Parties accept that certain terms herein including, but not limited to, those respecting confidentiality and inventions, may need to be modified for a specific Project SOW.  Provided that any such modified terms are set forth in a Project SOW, those terms shall control over any terms herein (solely for that Project SOW) notwithstanding anything to the contrary in this Master Agreement.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOLLOWS

[**] = 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

IN WITNESS WHEREOF, the Parties, intending to be bound by the terms and conditions hereof, have caused this Master Agreement to be signed by their duly authorized representatives as of the date first above written.

HOSPIRA WORLDWIDE, INC.		GENZYME CORPORATION
By:	/s/ Anthony Cacich	By:	/s/ Henri A. Termeer
Name:	Anthony Cacich	Name:	Henri A. Termeer
Title:	Vice President & General Manager of Contract Manufacturing	Title:	President & Chief Executive Officer
		By:	/s/ Michael S. Wyzga
		Name:	Michael S. Wyzga
		Title:	Executive Vice President
			Chief Financial Officer
		GENZYME IRELAND LIMITED
		By:	/s/ Michael S. Wyzga
		Name:	Michael S. Wyzga
		Title:	Director
		By:	/s/ Dominic Carolan
		Name:	Dominic Carolan
		Title:	Director

[**] = 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.

Exhibit 1.33

Initial Product List

·Cerezyme® (imiglucerase for injection) 400 mg

·Fabrazyme® (agalsidase beta for injection) 5 mg

·Fabrazyme® (agalsidase beta for injection) 35 mg

·Thyrogen® (thyrotropin alpha for injection)

·Myozyme®/ Lumizyme™ (alglucosidase alfa for injection)

·Thymoglobulin® (rabbit-anti-human thymocyte immune globulin)

·[**]

·Campath® (alemtuzumab)

·[**]

Exhibit 2.5

Form of Project Statement of Work

[final to be attached]

Exhibit 5.6

Estimates of Required Materials Inventories

Component	Product	Hospira Inventory Number	Proposed Safety Stock(1)
[**]	[**]	[**]	[**]

(1)Amount is the sum required for all products using the same component with a 3 – 5% overage

Exhibit 5.6

Estimates of Required Materials Inventories (cont’d)

Product	Component	Hospira Inventory Number	Description	Qty/Batch(1)
[**]	[**]	[**]	[**]	[**]

(1)Based on current clinical or commercial batch sizes

Exhibit 9.4

Transfer Assistance

[**]

[**] = 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.

Exhibit 10.2

Quality Technical Agreement

[to be entered into by the parties]

Exhibit 14.5

[**]

Minimum Batch Requirements (per calendar year)

[**]

Products

[**]

*The minimums specified herein shall be pro rated for any partial calendar year.

[**] = 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.

EX-10.10

Exhibit 10.10

LICENSE AGREEMENT

This Agreement, effective as of the first day of January, 1995 (the “Effective Date”) by and between:

GENZYME CORPORATION, a corporation organized and existing under the laws of the Commonwealth of Massachusetts and having its principal office at One Kendall Square, Cambridge, Massachusetts 02139 (hereinafter referred to as “GENZYME”) and

MOUNT SINAI SCHOOL OF MEDICINE OF THE CITY UNIVERSITY OF NEW YORK, a not-for-profit corporation organized and existing under the laws of the State of New York and having its principal office at One Gustave L.  Levy Place, New York, New York 10029 (hereinafter referred to as “MSSM”).

WITNESSETH

WHEREAS, MSSMhas certain clinical and preclinical data, information and patent rights relating to the production and use of recombinant x-galactosidase A for the treatment of Fabry Disease;

WHEREAS, MSSM desires to have recombinant x-galactosidase A developed and made available for general use to patients for the treatment of Fabry Disease, and for these purposes is willing to grant an exclusive license to GENZYME upon the terms and conditions set forth below;

WHEREAS, GENZYME has or has access to the research and development capability, the manufacturing capacity and the marketing ability needed to manufacture and sell recombinant a galactosidase A therapeutic products in the United States and abroad;

WHEREAS, GENZYME desires to obtain an exclusive, worldwide license under MSSM technology upon the terms and conditions set forth below;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows:

ARTICLE I  - DEFINITIONS

For the purposes of this Agreement, the following words and phrases shall have the following meanings:

1.1“Affiliate” shall mean any corporation which directly or indirectly controls, is controlled by or is under common control with GENZYME, control being the ownership of at least 50% of the outstanding voting stock of such corporation.

1.2“First Commercial Sale” shall mean the first arms-length transaction pursuant to this Agreement to one or more third party of any Product following receipt of approval to

[**] = 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.

1

commence manufacturing and selling such Product from the applicable regulatory agency in the applicable country.

1.3“Licensed Patents” shall mean the United States and foreign patents and patent applications set forth in Schedule A attached hereto and owned or controlled by MSSM, and the United States patents and foreign patents issuing from said United States and foreign patent applications or later-filed foreign applications based upon any of said United States patents and application and any divisions, continuations, continuations-in-part, reissues or extensions of any of the foregoing.

1.4“Product” shall mean an enzyme replacement product for the treatment of Fabry disease, which includes recombinant x-galactosidase A.

1.5“Net Sales” shall mean GENZYME’s gross invoice price for Product less (a) normal cash and quantity discounts and rebates actually allowed; (b) sales actually made, but deemed uncollectible; (c) sales and excise taxes and duties directly imposed, or other governmental charges; (d) outbound transportation and insurance prepaid or allowed; (e) amounts actually allowed or credited on account of returns; and (f) other contractual allowances such as distribution fees.

1.6“Technical Information” shall mean any and all proprietary technical data, know-how, information and material relating to the Product, its manufacture or use, and set forth in Schedule B attached hereto.

1.7“Valid Claim” means a claim of an issued patent within the Licensed Patents that has not expired or been withdrawn, canceled, disclaimed or held invalid by a court or governmental agency of competent jurisdiction in an unappealed or unappealable decision.

ARTICLE II  - GRANT

2.1MSSM hereby grants to GENZYME an exclusive, worldwide right and license, and subject to approval by MSSM, which shall not be unreasonably withheld, the right to sublicense third parties, (a) to make, have made, use, and sell Product under the Licensed Patents; and (b) to use the Technical Information provided by MSSM.  MSSM agrees that [**]other than GENZYME by or under [**] during the term of this Agreement.

2.2GENZYME agrees to forward to MSSM a copy of any and all sublicense agreements, and further agrees to forward to MSSM annually a copy of royalty reports related to royalties received by GENZYME from its sublicensees during the preceding twelve (12) month period.

2.3GENZYME agrees to use its reasonable best efforts to substantially manufacture in the United States that Product which is intended for sale in the United States.

[**] = 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.

2

ARTICLE III  - REPRESENTATIONS AND WARRANTIES

3.1MSSM represents and warrants that MSSM is the owner of the entire right, title and interest in and to Licensed Patents, and has the right to grant the license as described herein, and that the grant of such license will not result in a breach of any agreement or other undertaking to which MSSM is a party.

3.2MSSM represents that the United States Government retains rights to the Licensed Patents and Technical Information.  All rights granted to GENZYME hereunder are subject to said retained rights as provided in 37 CFR 401 and 45 CFR 8.

ARTICLE IV  - CONSIDERATION

4.1For the rights, privileges and license granted hereunder, GENZYME shall pay or cause to be paid to MSSM a royalty of [**] of the Net Sales of Product sold by GENZYME and its Affiliates and [**] of the royalties payable to GENZYME by any sublicensees for the longer of (i) the life of the Licensed Patents for Product covered by Valid Claims in the country of sale, or (ii) [**] years after the First Commercial Sale of Product.  The royalty payable to MSSM shall be reduced to [**] of the Net Sales in any country in which a recombinant x-galactosidase A product derived from mammalian cells is commercially available from a third party.

4.2No multiple royalties shall be payable because Product, its manufacture, lease or sale, is or shall be covered by more than one Valid Claim, patent application or patent licensed under this Agreement.

4.3Royalty payments shall be paid to MSSM in United States dollars in New York, N.Y.  Any taxes which GENZYME or any Affiliate or sublicensee shall be required by law to withhold or pay on remittance of the royalty payments shall be deducted from royalty paid to MSSM.  GENZYME shall furnish MSSM upon request, copies of all official receipts for such taxes.  If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made by using the exchange rate as reported by the Wall Street Journal on the last business day of the calendar quarterly reporting period to which such royalty payments relate or when such conversion rate is next reported.

ARTICLE V  - REPORTS AND RECORDS

5.1GENZYME shall keep full, true and accurate accounts containing all particulars that may be necessary for the purpose of showing the amount payable to MSSM.  Said books of account shall be kept at GENZYME ‘s principal place of business or at such other location that is reasonably accessible.  Said books and the supporting data shall be open at all reasonable times, for three (3) years following the end of the calendar year to which they pertain, to inspection no more often than once a year by an independent certified public accountant retained by MSSM, at its expense, solely for the purpose of verifying, under suitable confidentiality obligations, GENZYME’s royalty statement to MSSM.  If GENZYME’s royalty statement is found to be in error by [**] or more, such inspection expenses shall be paid 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.

3

5.2Beginning with the First Commercial Sale, GENZYME, within sixty (60) days after March 31, June 30, September 30 and December 31, of each year, shall deliver to MSSM true and accurate reports, giving such particulars of the business conducted by GENZYME during the preceding quarter under this Agreement as shall be pertinent to a royalty accounting hereunder.  Reports shall include: (a) total billings for Product sold; (b) deductions applicable as provided in Paragraph 1.5; and (c) total royalties due.

5.3With each such report submitted, GENZYME shall pay to MSSM the royalties then due and payable.  If no royalties shall be due, GENZYME shall so report.

ARTICLE VI  - TECHNICAL INFORMATION

6.1Promptly after the effective date of this Agreement and periodically during the term thereof, MSSM, to the extent that it has all necessary legal and contractual rights to do so, shall disclose and furnish to GENZYME all Technical Information which is requested by GENZYME and which is known or possessed by MSSM.  To enable GENZYME to assist in protecting the rights licensed to GENZYME hereunder, MSSM shall, provide to GENZYME a [**] days prior right of review of MSSM publications relating to the Product.  GENZYME may then delay submission up to an additional [**] days to allow filing of appropriate patent applications.  GENZYME agrees to review oral disclosures or abstracts within [**] days of notification, and MSSM agrees to delete proprietary information as requested by GENZYME.

6.2Each of the parties, for itself and its Affiliates, undertakes during the term of this Agreement, to hold in confidence and not to disclose to any third party, the Technical Information received from the other, provided that such undertaking shall not apply to any portion of said Technical Information which:

(a)was known to the receiving party or any of its Affiliates prior to its receipt by the receiving party or any of its Affiliates hereunder;

(b)is received at any time by the receiving party or any of its Affiliates in good faith from a third party lawfully in possession of the same and having the right to disclose the same;

(c)is as of the date of the receipt by the receiving party or any of its Affiliates in the public domain or subsequently enters the public domain other than by reason of acts or omissions of the employees or agents of the receiving party or any of its Affiliates;

and provided further that nothing contained herein shall prevent GENZYME or any of its Affiliates from using and disclosing the Technical Information received from MSSM in connection with applying for and securing governmental authorizations for the marketing of licensed products or otherwise in the performance of its obligations under this 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.

4

ARTICLE VII  - PATENT SUPPORT AND PROSECUTION

7.1GENZYME shall [**] on a quarterly basis for [**] after the date of this Agreement in connection with the filing, prosecution and maintenance of all Licensed Patents filed, prosecuted or maintained at the request of GENZYME.  GENZYME shall not be required to [**].  If GENZYME elects not to [**], MSSM shall be free to license such patent to any other party.

7.2MSSM shall seek prompt issuance of, and maintain, [**], the Licensed Patents, and shall keep GENZYME informed of, and shall provide to GENZYME copies of, all official documents received from and sent to governmental patent offices.  MSSM shall keep GENZYME apprised on a timely basis of the progress of any patent prosecution, and shall provide GENZYME with a reasonable opportunity to preview and comment upon prosecution responses.  MSSM agrees to reasonably consider any such comments provided by GENZYME.

7.3If MSSM shall decide to discontinue any such prosecution, or shall decide not to maintain any patent, or not to file a patent application on an invention relating to the Product, or not to file same in a particular country, it shall promptly notify GENZYME in writing and in reasonably sufficient time for GENZYME to assume such prosecution or maintenance, or file such patent application, and shall take the necessary steps and execute the necessary documents to permit GENZYME to assume the filing, prosecution, or maintenance of the same at GENZYME’s expense and control, whereupon GENZYME shall possess a royalty-free, exclusive license to same for the life of any such patent.

ARTICLE VIII  - INFRINGEMENT

8.1MSSM shall have the first option to institute and prosecute [**] suits for infringement of Licensed Patents.  Any recovery of damages shall [**].

8.2If MSSM elects not to bring an action for infringement, GENZYME shall have the power, but not the obligation, to institute and prosecute [**] suits for infringement of Licensed Patents.  MSSM agrees to join as party plaintiff in any such suits instituted by GENZYME, and shall fully cooperate with GENZYME in the prosecution of such suits.  GENZYME may withhold up to [**] of royalties due hereunder during the pendency of such suits and GENZYME may apply such withheld amounts toward reimbursement of its expenses, including reasonable attorney’s fees in connection therewith.  Any recovery of damages by GENZYME shall be applied first in satisfaction of any unreimbursed expenses and legal fees relating to the suit or settlement thereof, and then toward reimbursement of MSSM for any royalties withheld and applied pursuant to this Article VIII.  Any remaining recoveries shall be deemed Net Sales for purposes of calculation of royalties hereunder.

8.3If GENZYME does not bring action, and MSSM chooses not to bring action, to halt infringement, then the applicable royalty in such country shall be [**] of the rate otherwise applicable, provided that GENZYME has suffered at least a [**] market share loss due to such infringement.

[**] = 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.

5

ARTICLE IX  - TERM AND TERMINATION

9.1This Agreement shall be effective as of the date first written above and shall continue in effect on a country-by-country basis until the later of (i) the expiration of the last to expire of the Licensed Patents in a particular country, or (ii) ten (10) years after the date of the First Commercial Sale.  Thereafter, Genzyme shall have a paid up license to the Technical Information.

9.2Should GENZYME fail in its payment to MSSM of royalties due in accordance with the terms of this Agreement, MSSM shall have the right to serve notice upon GENZYME by certified mail at the address designated in Article XVI hereof, of its intention to terminate this Agreement within [**] days after receipt of said notice of termination unless GENZYME shall pay to MSSM within the [**] day period, all such royalties due and payable, or institute arbitration proceedings as provided herein.  Upon the expiration of the [**] day period, if GENZYME shall not have paid all such royalties due and payable, or implemented arbitration, the rights, privileges and license granted hereunder shall thereupon immediately terminate.

9.3Upon any material breach or default of this Agreement by either party, other than those occurrences set out in Paragraph 9.2 above, the other party shall have the right to terminate this Agreement and the rights, privileges and license granted hereunder by [**] days’ notice including a detailed explanation of the reasons for termination, by certified mail to the defaulting party.  Such termination shall become effective unless the defaulting party shall have cured any such breach or default prior to the expiration of the other party’s notice of termination.

9.4GENZYME shall have the right, upon [**] days written notice, to terminate the license granted herein, on a country-by-country basis or to fully terminate the license and this Agreement.

9.5Upon termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation that matured prior to the effective date of such termination.  GENZYME and its Affiliates and sublicensees may, however, after the effective date of such termination, sell all Product, and complete Product in the process of manufacture at the time of such termination and sell the same, provided that GENZYME shall pay to MSSM the royalties thereon as required by Article IV of this Agreement and shall submit the reports required by Article V hereof on the sales of Product.

9.6The provisions of Article VI shall survive termination of this Agreement for a period of five (5) years.  The provisions of Article XII shall survive termination of this Agreement.

ARTICLE X  - ARBITRATION

Except as to issues relating to the validity, construction or effect of any patent licensed hereunder, any and all claims, disputes or controversies arising under, out of, or in connection with this Agreement, which have not been resolved by good faith negotiations between the parties, shall be resolved by final and binding arbitration in Boston, Massachusetts by three

[**] = 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.

6

arbitrators, one selected by each party within 30 days of receipt of notice to arbitrate, the remaining arbitrator to be selected by the party- selected arbitrators.  If a party fails to select an arbitrator within the thirty day period, it shall forfeit its right to make such a selection.  The arbitration shall be under the rules of the American Arbitration Association then obtaining.  The arbitrators shall have no power to modify any of the terms or conditions of this Agreement.  Any award rendered in such arbitration may be enforced by any of the parties in the United States District Court for Massachusetts, to whose jurisdiction for such purposes MSSM and GENZYME each hereby irrevocably consents and submits.  Each party shall bear its own costs.

ARTICLE XI  - THIRD PARTY PATENTS

In the event that a patent of a third party should exist during the term of this Agreement, which such third party alleges is infringed by the manufacture, use or sale of Product by GENZYME, or in the event that GENZYME shall undertake to challenge the validity or infringement of such patent by litigation, GENZYME may withhold up to [**] of the royalties otherwise due to MSSM towards the reimbursement of its out-of-pocket costs and expenses incurred in such litigation, and/or if GENZYME is required to pay to such other patentee a royalty under such patent, GENZYME may deduct up to [**] of the royalties paid to such third party.  In no event, however, shall the deductions allowed in this Article XI cause the total royalty payable to MSSM under Article 4.1 of this Agreement to be less than [**] of Net Sales.

ARTICLE XII  - INSURANCE AND INDEMNIFICATION

12.1GENZYME shall at all times during the term of this Agreement and thereafter, defend, indemnify and hold MSSM, its affiliates and their trustees, directors, officers, employees, medical staff, agents, volunteers and students harmless from any and all claims, demands, lawsuits, actions, settlements, judgments, and expenses (including legal expenses and attorney’s fees), arising from or in connection with the negligent acts or omissions or product liabilities of GENZYME, its Affiliates, employees or other agents committed in connection with this Agreement.  MSSM shall be required to provide GENZYME with prompt notice of any such claims, as well as such reasonable assistance and cooperation as GENZYME may request in the defense of such claims.  GENZYME’S obligation to protect, defend, indemnify and hold harmless hereunder shall Survive the expiration and termination of this Agreement.

12.2GENZYME shall purchase and keep in force the following minimum insurance coverages, naming MSSM as additional insured with such insurers as shall be acceptable to MSSM:

1) Comprehensive General Liability, including:

(a)Personal injury and bodily injury and Broad form property damage liability with a combined single limit of not less than $[**].

(b)Coverage for the contractual liability assumed by this 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.

7

2) Product liability insurance in an amount not less than [**] per occurrence, with an aggregate yearly limit of [**].  Prior to any work being performed under this Agreement, GENZYME shall deliver to MSSM certificates of insurance evidencing that the coverages specified in these sections are in effect.  Such certificates shall show that:

(a)MSSM is an additional named insured;

(b)the insurer shall give MSSM thirty (30) days written notice sent by registered mail of any material change in, or cancellation of, such insurance.

ARTICLE XIII  - ASSIGNMENT

13.1GENZYME shall be entitled to assign its rights hereunder, with the written consent of MSSM, which consent shall not be unreasonably withheld.  At GENZYME’s request, MSSM shall enter into a separate counterpart agreement with any such assignee, it being expressly agreed that GENZYME shall remain bound by the obligations hereof until such separate counterpart agreement is signed.  Such counterpart agreement shall be the same in form and substance except for necessary changes to reflect the extent of the assignment.

13.2MSSM shall be entitled to assign its rights hereunder with the written consent of GENZYME, which consent shall not be unreasonably withheld.

ARTICLE XIV  - NON-USE OF NAMES AND TRADEMARKS

14.1Neither party shall use the names or trademarks of the other party for any advertising, promotional or sales literature without prior written consent which consent shall not be unreasonably withheld, except that GENZYME may disclose that it is exclusively licensed by MSSM hereunder.  In all cases, GENZYME shall be permitted to make such disclosures as required by state and federal law.

14.2It is understood that MSSM has selected the trademark [**] for use in connection with the Product.  GENZYME agrees to reasonably consider said trademark for use in connection with its commercialization of the Product, and MSSM agrees to assign its rights to said trademark to GENZYME at no cost, upon GENZYME’s request.

ARTICLE XV  - DUE DILIGENCE

GENZYME shall use its reasonable efforts to develop the Product for commercialization.  Such efforts shall include the following:

(a)within [**] years of the Effective Date, to initiate [**] studies on the Product which is intended for use in clinical trials;

[**] = 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.

8

(b)within [**] years of the Effective Date to initiate [**] for the Product; and

(c)within [**] years of the Effective Date to [**].

ARTICLE XVI  - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

Any payment, notice or other communication pursuant to this Agreement shall be sufficiently made or given on the date of mailing if sent to such party by certified first class mail, postage prepaid, addressed to it as its address below or as it shall designate by written notice given to the other party:

In the case of MSSM:

Office of Science and Technology Development Mount Sinai School of Medicine

One Gustave L.  Levy Place

New York, NY 10029

Attention: Dr.  Frank Landsberger

Fax.  No.  (212) 348-3116

In the case of GENZYME:

Genzyme Corporation One Kendall Square

Cambridge, MA 02139

Attention: Senior Vice President and General Counsel

Fax.  No.  (508) 872-5415

ARTICLE XVII  - MISCELLANEOUS PROVISIONS

17.1This Agreement shall be construed, governed, interpreted and applied in accordance with the laws of the State of New York, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent was granted.

17.2The parties hereto acknowledge that this Agreement and the Research Agreement dated of even date sets forth the entire agreement and understanding of the parties hereto as to the subject matter hereof, and shall not be subject to any change or modification except by the execution of a written instrument subscribed to by the parties hereto.

17.3The provisions of this Agreement are severable, and in the event that any provision of this Agreement shall be determined to be invalid or unenforceable under any controlling body of law, such invalidity or unenforceability shall not in any way effect the validity or enforceability of the remaining provisions hereof.

17.4The failure of either party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other party.

[**] = 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.

9

17.5Neither party shall, without the consent of the other, which consent shall not be unreasonably withheld, originate any publicity, news release, or other public announcement, written or oral, whether to the public press, to stockholders, or otherwise, relating to this Agreement, any amendment hereto or performance hereunder, save any such announcement as in the opinion of legal counsel to the party making such announcement is required by law to be made.  Both parties acknowledge the likelihood that GENZYME may be required to make a general announcement regarding the existence of this Agreement as a material event.  The party making such announcement will give the other party an opportunity to review the form of the announcement before it is made.

17.6Both parties acknowledge and recognize the presence of risk regarding the development and sale of the Product contemplated hereunder, that potential markets discussed have only been estimated and are not being relied upon, and that the Product may be unsuccessful in any such market.

[**] = 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.

10

IN WITNESS WHEREOF, the parties hereto have caused this License Agreement to be executed by their duly authorized representatives as of the day and year first set forth above.

MOUNT SINAI SCHOOL OF MEDICINE		GENZYME CORPORATION
BY:	/s/[illegible] Katz	BY:	/s/ Gregory D. Phelps
TITLE:	[illegible]	TITLE:	Senior Vice President
DATE:	1-27-95	DATE:	2-3-95
ACCEPTED AND AGREED TO:
NAME:	/s/ Robert J. Desnick
	Robert J. Desnick, Ph.D., M.D.
DATE:	1-26-95

[**] = 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.

11

SCHEDULE A

A.  United States Patents and Application
6923-005	U.S. Patent No.  5,356,804
	Granted:  October 18, 1994
	To:	Desnick et al.
	For:	Cloning And Expression Of Biologically Active
	Alpha Galactosidase A
	By:	Desnick et el.
6923-030	U.S. Serial No.  07/903,451 (allowed)
	Filed:  November 30, 1992
	For:	Cloning’ And Expression Of Biologically Active Alpha-Galactomidase A
	By:	Desnick et al.
6923-042	U.S. Serial No.  00/261,577 (pending)
	Filed: June 17, 1994 (as a division of Serial No. 07/983,451)
	For:	Cloning And Expression Of Biologically Active Alpha-Galactosidase A
	By:	Desnick et al.
B.  Foreign Patents and Applications
6923-030-228	International Application No.  PCT/US93/11539
	Filed: November 30, 1993
	For:	Cloning And Expression Of Biologically Active Alpha-Galactosidase A
	By:	Desnick et al.
6923-030-158	Israeli Application No.  107814
	Filed: November 30, 1993
	For:	Cloning And Expression Of Biologically Active Alpha-Galactooidaso A
	By	Desnick et al.

[**] = 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.

Schedule B

Technical Information

[**]

[**] = 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.

FIRST AMENDMENT TO LICENSE AGREEMENT

This is the First Amendment to the January 1, 1995 License Agreement between Genzyme Corporation (“GENZYME”) and Mount Sinai School of Medicine of the City University of New York (“MSSM”).  This Amendment shall be effective as of October 7, 2003.

WHEREAS, in the License Agreement, MSSM has granted to GENZYME an exclusive license under certain Technical Information and Licensed Patents rights, including U.S.  patent No.  5,356,804 (“the ‘804 patent”), in connection with the commercialization of recombinant "-galactosidase A for the treatment of Fabry Disease; and

WHEREAS, MSSM and Genzyme are co-plaintiffs and appellants in a suit against Transkaryotic Therapies, Inc.  (“TKT”) alleging infringement of the ‘804 patent (the “Infringement Suit”), which Infringement Suit was originally brought in the United States District Court for the District of Delaware (Civil Action No.  00-677 GMS) and is now on appeal to the Court of Appeals for Federal Circuit (Appeal No.  02-1312);

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which each party acknowledges, MSSM and GENZYME hereby agree as follows:

1.Definitions.  Capitalized terms not defined in this First Amendment shall have the meaning given them in the License Agreement.

2.Restatement of Section 2.1.  Section 2.1 of the License Agreement shall be amended and restated to read as follows:

“2.1Except as provided in Article XVIII, MSMM hereby grants to GENZYME an exclusive, worldwide right and license, and subject to approval by MSMM, which shall not be unreasonably withheld, the right to sublicense third parties, (a) to make, have made, use, and sell Product under the Licensed Patents; and (b) to use the Technical Information provided by MSSM.  MSSM agrees that [**] other than GENZYME [**] by or under [**] during the term of this Agreement.”

3.Addition of Article XVIII.  New Article XVIII shall be added to the License Agreement, which Article shall read as follows:

“ARTICLE XVIII — INFRINGEMENT SUIT AGAINST TKT

18.1.1  In the event that GENZYME withdraws as plaintiff-appellant from the Infringement Suit, MSSM shall have the right (i) to continue the proceedings and maintain the Infringement Suit as the sole plaintiff [**] and (ii) to solely bring, defend or maintain any other proceeding relating to the Licensed Patents or Technical Information in which TKT is a party or has an interest [**].  Notwithstanding the foregoing, GENZYME shall [**] from any [**] for which [**] to the extent arising out of or related to (i) [**] or (ii) any agreement between

[**] = 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.

[**].  In addition, only to the extent permitted by any Settlement Agreement, GENZYME [**] shall reasonably cooperate with MSSM’s prosecution of the Infringement Suit or any other action related to the Licensed Patents or Technical Information.  Such cooperation includes making available to MSSM any documents, witnesses, or other information in GENZYME’s control.

18.2Any [**] in the Infringement Suit or any other proceeding between [**].

18.3Notwithstanding the provisions of Section 2.1, MSSM shall have [**].”

4.Acknowledgements.  GENZYME and MSSM acknowledge that, if GENZYME withdraws from the Infringement Suit:

a.Effective as of the date GENZYME withdraws, GENZYME confirms that, [**].  For the avoidance of doubt, amounts previously [**].

b.Section 8.3 of the License Agreement shall not apply to [**], or their respective successors, assigns or licensees.

Except as provided herein, the License Agreement shall remain in full force and effect.  Any capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the License 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.

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed and delivered as of the effective day and year set forth above.

MOUNT SINAI SCHOOL OF MEDICINE		GENZYME CORPORATION
By:	/s/ Kenneth L. Davis	By:	/s/ Thomas DesRosier
	Kenneth L. Davis, M.D.
Title:	Dean	Title:	Senior Vice President
Date:	10-7-2003	Date:	10-7-2003

[**] = 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.

EX-31.1

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Exhibit 31.1

Certification Pursuant to
Rules 13a-14(a) and 15d-14(a) Under The Securities Exchange Act of 1934, as Amended

I, Henri A. Termeer, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Genzyme Corporation (the "Registrant");

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.

The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.

The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls over financial reporting.

Date: August 9, 2010 /s/ HENRI A. TERMEER
Henri A. Termeer
Chief Executive Officer

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Exhibit 31.1

EX-31.2

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Exhibit 31.2

Certification Pursuant to
Rules 13a-14(a) and 15d-14(a) Under The Securities Exchange Act of 1934, as Amended

I, Michael S. Wyzga, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Genzyme Corporation (the "Registrant");

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.

The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.

The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls over financial reporting.

Date: August 9, 2010 /s/ MICHAEL S. WYZGA
Michael S. Wyzga
Chief Financial Officer

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Exhibit 31.2

EX-32.1

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Exhibit 32.1

Certification by the Chief Executive Officer Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

        Pursuant to 18 U.S.C. Section 1350, I, the undersigned Chief Executive Officer of Genzyme Corporation (the "Company"), hereby certify that the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2010 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ HENRI A. TERMEER
Henri A. Termeer
Chief Executive Officer
August 9, 2010

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Exhibit 32.1

EX-32.2

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Exhibit 32.2

Certification by the Chief Financial Officer Pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

        Pursuant to 18 U.S.C. Section 1350, I, the undersigned Chief Financial Officer of Genzyme Corporation (the "Company"), hereby certify that the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2010 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ MICHAEL S. WYZGA
Michael S. Wyzga
Chief Financial Officer
August 9, 2010

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Exhibit 32.2