Exhibit 10.47
 
TRANSITION SUPPLY
AGREEMENT
 
This Transition Supply Agreement (this “Agreement”) is dated as of May 30, 2014
(the “Effective Date”), by and between GENZYME CORPORATION, a Massachusetts
corporation (“GENZYME”), and AASTROM BIOSCIENCES, INC., a Michigan corporation
(“AASTROM”).  Genzyme and Aastrom are referred to in this Agreement each as a
“Party” and collectively as the “Parties.”
 
PREAMBLE AND BACKGROUND
 
Sanofi, a French Société Anonyme (“Sanofi”), as the seller, and AASTROM, as the
buyer, have entered into an Asset Purchase Agreement on April 19, 2014 (the
“APA”), whereby AASTROM has purchased from Sanofi substantially all of the
assets constituting the Business (as such term is defined in the APA) under the
terms and conditions set forth in the APA; and
 
Pursuant to the APA, the Sanofi and AASTROM have agreed to enter into a certain
number of transitional agreements, including this Agreement, whereby Sanofi,
either directly, through one of its Affiliates, or through a third party shall
provide to AASTROM, for a limited period of time from the Closing Date (as such
term is defined in the APA), certain raw materials necessary for the Business as
such raw materials that are listed in Exhibit 1 (hereafter, such raw materials
manufactured by GENZYME, the “Genzyme Raw Materials”, such raw materials
manufactured by third parties, the “Third Party Raw Materials” and,
collectively, the “Raw Materials”).
 
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in the APA.
 
Now, therefore, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties agree as follows:
 
ARTICLE  1 - SCOPE OF THE AGREEMENT
 
For the duration of the Agreement, GENZYME undertakes to supply AASTROM with the
Raw Materials as so requested by AASTROM and AASTROM undertakes to purchase from
GENZYME its requirements of Raw Materials as determined in AASTROM’S sole
discretion, subject to the terms and conditions herein set forth.
 
ARTICLE  2 - SUPPLY
 
The Genzyme Raw Materials delivered hereunder shall be manufactured in
accordance with the applicable current Guidelines of Good Manufacturing
Practices for Drugs (“cGMP”) and other applicable health authority regulations
for therapeutic products as applicable to the Genzyme
 

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Raw Materials.  At the time of delivery to AASTROM by Genzyme, the Genzyme Raw
Materials shall have a shelf life of at least the time period specified for such
Raw Material on Exhibit 1.
 
ARTICLE  3 - FORECASTS - ORDERS
 
3.1                     Forecasts
 
In order to enable GENZYME to regularly supply AASTROM with Raw Materials,
AASTROM shall, before the fifth (5th) day of each month, provide GENZYME with a
rolling forecast of its needs of Raw Materials for the following six (6) months,
or until the end of the Term (defined below), broken down by calendar month. The
first three (3) months of the forecast shall be binding.
 
3.2                     Orders of Genzyme Raw Materials
 
AASTROM will order Genzyme Raw Materials directly from GENZYME. AASTROM will
order such quantities of Genzyme Raw Materials to be supplied by GENZYME no less
than three (3) months before the delivery date specified by AASTROM if such
quantities are included in the rolling forecast.
 
3.3                     Orders of Third Party Raw Materials
 
To the extent permitted under GENZYME’s agreements with the third party
manufacturers, AASTROM will order Third Party Raw Materials directly from such
third party, with such orders to be delivered to the GENZYME warehouse
facility.  Upon delivery, GENZYME will record the receipt of such orders via the
MFGPro platform.  Upon recording the receipt of such orders, AASTROM will have
forty-five (45) business days to inspect the Third Party Raw Materials, pursuant
to Section 5.2.1.  Unless the Third Party Raw Materials are rejected pursuant to
Secion 5.2.1, GENZYME will warehouse the Third Party Raw Materials and will fill
AASTROM’s orders of Third Party Raw Materials upon request for delivery,
pursuant to Section 3.4.  Upon delivery of the Third Party Raw Materials to
AASTROM, AASTROM will perform a further inspection of the Third Party Raw
Materials pursuant to Section 5.2.2. Notwithstanding anything to the contrary
contained in this Agreement, nothing contained in this Agreement shall require
GENZYME to take any actions that would reasonably be expected to result in a
breach of any of its existing third party agreements.
 
3.4                     General Provisions
 
GENZYME will supply the quantities ordered by AASTROM for a given calendar
month, provided that such orders do not exceed the forecast quantities for such
calendar month, in which case GENZYME will use commercially reasonable efforts
to meet AASTROM’s needs within a practical time. Notwithstanding the foregoing,
it is understood that GENZYME shall not be obliged to deliver any quantities of
Raw Materials in excess of the forecast quantities.
 
Under no circumstances shall GENZYME be obliged to accept any orders in
quantities smaller than the minimum order size as reflected in Exhibit 1, or to
deliver Raw Materials pursuant to such orders that are smaller than the minimum
order size as reflected in Exhibit 1.
 

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Within fifteen (15) working days of receipt of AASTROM’s orders of Genzyme Raw
Materials pursuant to Section 3.2, or AASTROM’s requests for delivery of Third
Party Raw Materials pursuant to Section 3.3, GENZYME will acknowledge receipt of
each order and either accept such order by confirming that it will deliver the
order on the delivery date requested by AASTROM or propose another reasonable
delivery date to AASTROM.  If AASTROM confirms that such revised delivery date
is acceptable to it within five (5) working days of GENZYME’s proposal, such
order will be deemed accepted for such confirmed delivery date.
 
If GENZYME is unable to supply Raw Materials to AASTROM in accordance with the
quantity or the delivery date specified in any accepted order, GENZYME shall
inform AASTROM immediately and the Parties shall agree on an appropriate
delivery date and/or other appropriate measures.  In the event AASTROM obtains
Raw Materials from another source due to a delay exceeding three (3) months,
then any raw materials obtained will reduce the binding portion of the forecast
accordingly.  To the extent such delay is caused exclusively by GENZYME,
GENZYME  will reimburse AASTROM for all fully documented direct costs and
expenses incurred byAASTROM in manufacturing or purchasing replacement Raw
Materials that were subject to the purchase order.
 
ARTICLE  4 - STORAGE
 
GENZYME shall maintain all stocks of Raw Materials in accordance with cGMP until
delivery of such Raw Materials to AASTROM in accordance with this Agreement.
 
ARTICLE  5 - QUALITY — CONTROL
 
5.1                     Genzyme Raw Materials
 
5.1.1                                The Genzyme Raw Materials delivered by
GENZYME hereunder shall be in conformance with the specifications, as specified
in Exhibit 1 (hereinafter referred to as the “SPECIFICATIONS”) at the time of
delivery. Each delivery of Genzyme Raw Materials by GENZYME shall be accompanied
by a certificate of analysis issued by GENZYME showing the conformity of the
delivered batch of Genzyme Raw Materials with the SPECIFICATIONS. Such
certificate of analysis shall conform with and be signed in accordance with cGMP
and the other applicable regulatory requirements.
 
5.1.2                                AASTROM or its designee shall immediately,
upon a shipment’s arrival on its site, carefully inspect such shipment of
Genzyme Raw Materials for transport damages, losses and shortfalls. AASTROM
shall notify the carrier of any apparent defects, including damaged containers
or missing packages of Genzyme Raw Materials, within ten business days of
arrival of the shipment and the freight documents at AASTROM or its designee’s
site and, where possible, obtain the countersignature of the carrier’s
representative. Failure of AASTROM or its designee to notify the carrier of such
apparent defects within such period shall excuse GENZYME from any liability with
respect to such defects.
 
5.1.3                                AASTROM undertakes to check GENZYME’s
certificates of analysis for the Genzyme Raw Materials against the
SPECIFICATIONS and will test any shipment of Genzyme Raw Materials for identity
and compliance with the SPECIFICATIONS.
 

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In the event that any shipment of Genzyme Raw Materials fails to conform with
the SPECIFICATIONS, AASTROM shall notify GENZYME thereof within forty-five (45)
days of the delivery of Genzyme Raw Materials to AASTROM.
 
If so requested by GENZYME, AASTROM shall send to GENZYME a sample of the
rejected shipment.
 
At GENZYME’s discretion, the batches of Genzyme Raw Materials which do not
conform with the SPECIFICATIONS shall either be returned to GENZYME, with
freight and insurance charges to be borne by GENZYME, or destroyed by AASTROM,
at GENZYME’s expense. In such latter case, AASTROM shall give GENZYME evidence
of such destruction.
 
GENZYME’s sole obligation and AASTROM’s sole and exclusive remedy with respect
to such non-conforming Genzyme Raw Materials shall be for GENZYME to replace
such Genzyme Raw Materials at no charge to AASTROM as soon as reasonably
possible.
 
5.1.4                                Failure of AASTROM to mail notice of
rejection within thirty (30) days of the delivery of Genzyme Raw Materials to
AASTROM or its designee, as applicable, shall constitute an irrevocable
acceptance of such Raw Materials.  Notwithstanding anything to the contrary in
this Agreement, if defect in the Genzyme Raw Materials could not reasonably be
discovered within such thirty (30) day period outlined above (a “Latent
Defect”), then AASTROM shall have the right to reject such Genzyme Raw Materials
within five (5) calendar days after discovering such Latent Defect, but in any
event no later than the shorter of (i) two (2) months from the delivery date of
such Genzyme Raw Materials, or (ii) the shelf life of such Genzyme Raw Materials
as listed on Exhibit 1.
 
Any dispute between the Parties regarding the conformity or non-conformity of
the Genzyme Raw Materials to the SPECIFICATIONS shall be submitted to an
independent laboratory, to be agreed upon by the Parties.
 
Should the Parties fail to agree on the designation of the independent
laboratory within thirty (30) working days of the date that such dispute arises,
either Party may seek redress in a court of competent jurisdiction in accordance
with the provisions of Article 13.
 
The decision of such independent laboratory shall be binding on both parties. 
Any costs or expenses incurred in connection with the dispute resolution by such
independent laboratory shall be borne by the non-prevailing Party.
 
5.1.5                                GENZYME makes no warranty of any kind,
express or implied, except that the Genzyme Raw Materials sold to AASTROM shall
have been manufactured in accordance with Article 2 and shall, upon delivery to
AASTROM, conform to the SPECIFICATIONS.
 
5.2                     Third Party Raw Materials
 
5.2.1                               In accordance with Section 3.3, upon arrival
of a delivery of Third Party Raw Materials at the GENZYME warehouse facility,
AASTROM shall be responsible for
 

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inspection of such Third Party Raw Materials, including checking any third party
manufacturer certificates of analysis against the relevant third party
manufacturer specifications or testing any shipment of Third Party Raw Materials
for identity and compliance with such specifications. To the extent the Third
Party Raw Materials do not conform with the relevant third party manufacturer
specifications, the Parties shall cooperate to cause such non-conforming Third
Party Materials to be returned to the third party manufacturer according to the
procedures prescribed by the underlying agreements with such third party
manufacturer.
 
GENZYME’s sole obligation and AASTROM’s sole and exclusive remedy with respect
to such non-conforming Third Party Raw Materials shall be for GENZYME to
cooperate with AASTROM to seek replacement pursuant to the underlying agreements
with such third party manufacturers.
 
5.2.2                               Upon final delivery of Third Party Raw
Materials from the GENZYME warehouse facility to AASTROM in accordance with
Section 3.3, AASTROM or its designee shall immediately inspect such shipment of
Third Party Raw Materials for transport damages, losses and shortfalls. AASTROM
shall notify the carrier of any apparent defects, including damaged containers
or missing packages of Third Party Raw Materials (but excluding defects governed
by Section 5.2.1), within ten business days of arrival of the shipment and the
freight documents at AASTROM or its designee’s site and, where possible, obtain
the countersignature of the carrier’s representative. Failure of AASTROM or its
designee to notify the carrier of such apparent defects within such period shall
excuse GENZYME from any liability with respect to such defects.
 
GENZYME’s sole obligation and AASTROM’s sole and exclusive remedy with respect
to such defective Third Party Raw Materials, where said defects were caused by
GENZYME, shall be for GENZYME to replace such Third Party Raw Materials at no
charge to AASTROM.
 
5.2.3                               All Third Party Raw Materials supplied by
GENZYME to AASTROM pursuant to this Agreement are provided on an “as-is” basis
at the sole risk of AASTROM, and GENZYME makes no warranties, express or
implied, with respect to any Third Party Raw Materials.  Notwithstanding the
foregoing, Genzyme will make commercially reasonable efforts to ensure that any
express or implied warranties running from any third party manufacturer of Third
Party Raw Materials to GENZYME shall also run to the benefit of AASTROM, and
such warranties, if any, shall be the sole warranties arising from the supply by
GENZYME of Third Party Raw Materials to AASTROM under this Agreement..
 
5.3                     General Provisions
 
EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 5.5, GENZYME MAKES NO WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO THE RAW MATERIALS OR ANY PHARMACEUTICAL
PRODUCTS PRODUCED FROM OR CONTAINING THE RAW MATERIALS AND EXPRESSLY DISCLAIMS
ALL IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OF NON-INFRINGEMENT.
 

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ARTICLE  6 - REGULATORY
 
6.1                     GENZYME shall diligently, at its cost, compile, submit
and, at all times during the term of this Agreement, maintain all regulatory
filings for the Genzyme Raw Materials in accordance with the standards required
by the applicable regulatory authority in the United States.
 
6.2                    GENZYME shall, at its cost, maintain all governmental,
regulatory and other licences, consents, approvals and authorisations necessary
to ensure the supply, without break in continuity, of Genzyme Raw Materials to
AASTROM during the term of this Agreement.
 
6.3                     GENZYME shall provide access at all times to applicable
regulatory authorities and co-operate fully with such authorities with respect
to any matter involving the Genzyme Raw Materials supplied to AASTROM, or with
respect to the warehousing and storage of the Third Party Raw Materials supplied
to AASTROM.
 
AASTROM will be allowed, at any time during the term of the Agreement, to carry
out reasonable quality assurance audits of the premises and facilities where the
Genzyme Raw Materials are manufactured by GENZYME or any of its Affiliates and
to inspect any documentation relating to the quality of the Genzyme Raw
Materials, during working hours and with reasonable prior notice to GENZYME.
 
Where any audit or inspection by the regulatory authorities or representatives
of AASTROM  identifies any issues that may affect the quality of the Genzyme Raw
Materials, such as non-compliance with the applicable cGMP or other legal or
regulatory requirements, such issues shall be resolved in accordance with the
governance and dispute resolution provisions of Article 3 of the Transition
Services Agreement.
 
6.4                     GENZYME shall retain all manufacturing records relating
to Genzyme Raw Materials purchased by AASTROM, and retention samples of all
Genzyme Raw Materials purchased by AASTROM, for a period of not less than six
(6) years.
 
6.5                     GENZYME shall retain exclusive responsibility for all
decisions and actions with respect to any complaint, recall, market withdrawal
or other corrective action with respect to any products created from or
incorporating the Raw Materials until the transfer to AASTROM of the licenses
with respect to such products, at which point all such responsibility will
transfer to AASTROM.
 
ARTICLE  7 - PRICES - TERMS OF PAYMENT AND DELIVERY
 
7.1                     The purchase price for Raw Materials shall be: (i) with
respect to Third Party Raw Materials, GENZYME’s cost of procuring the Third
Party Raw Materials plus five percent (the “Third Party Payment Amount”), and
(ii) with respect to Genzyme Raw Materials, GENZYME’s cost of producing the
Genzyme Raw Materials as set forth on Exhibit 1 plus five percent (the “Genzyme
Payment Amount”).
 
Title to a given shipment of Raw Materials shall pass to AASTROM upon full
payment of the Third Party Payment Amount or the Genzyme Payment Amount, as
applicable, for such shipment.
 

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Notwithstanding the retention of title, transfer of risk with respect to a given
shipment of the Raw Materials shall occur upon delivery of such shipment to
AASTROM or its designee’s site.
 
7.2                     GENZYME shall invoice AASTROM upon delivery of the Raw
Materials. Payment shall be due and payable by bank transfer in USD (US Dollars)
within thirty (30) days from the date of invoice.
 
In the absence of the express written consent of GENZYME, failure to pay all or
any part of an invoice when due will, without notice and without prejudice to
other remedies, automatically give rise to interest for late payment (which may
be increased by VAT) which rate shall be equal to the lesser of twelve percent
(12%) per annum or the maximum rate allowed by applicable law. Interest shall
accrue starting from the initial payment due date until the date of full payment
of the applicable invoice.
 
ARTICLE  8 - LIABILITY - INSURANCE - INDEMNITY
 
8.1                     AASTROM shall assume, upon delivery of any shipment of
Raw Materials according to Section 7.1, all risks and liabilities resulting from
the storage or any subsequent uses of such shipment of Raw Materials, including
in combination with other components, provided that, with respect to Genzyme Raw
Materials, at the time of delivery such Genzyme Raw Materials are in compliance
with the SPECIFICATIONS and otherwise in accordance with the provisions of this
Agreement.  GENZYME shall not be responsible for non-conforming Third Party Raw
Materials, unless such Third Party Raw Materials are damaged while in GENZYME’s
possession.
 
8.2                                       TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LEGAL REQUIREMENTS, AND EXCEPT FOR CLAIMS PURSUANT TO SECTIONS 8.5,
8.6 AND 8.7 AND IN CIRCUMSTANCES WHERE AWARDED TO A THIRD PARTY, (A) NEITHER
PARTY WILL BE LIABLE TO THE OTHER FOR ANY LOST PROFITS OR OTHER
SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES, HOWEVER
CAUSED, UNDER ANY THEORY OF LIABILITY, ARISING FROM THE PERFORMANCE OF, OR
RELATING TO, THIS AGREEMENT REGARDLESS OF WHETHER SUCH PARTY HAS BEEN NOTIFIED
OF THE POSSIBILITY OF, OR THE FORESEEABILITY OF, SUCH DAMAGES; AND (B) EACH
PARTY’S LIABILITY FOR DAMAGES IN CONNECTION WITH THIS AGREEMENT OR THE
PERFORMANCE OR NEGOTIATION HEREOF WILL NOT EXCEED THE AMOUNT OF THE INVOICE FOR
THE SHIPMENT OF RAW MATERIALS WITH RESPECT TO WHICH SUCH LOSSES, DAMAGES,
LIABILITIES OR EXPENSES AROSE.
 
8.3                     Each Party shall take all necessary steps, at its own
cost and its own behalf to properly insure, with a reputable insurance company
as far as reasonably possible, its entire legal liability resulting from its
activity performed pursuant to this Agreement.
 
8.4                     Each Party shall promptly inform the other Party of any
significant claims or threatened claims in connection with the Raw Materials and
shall consult with the other Party with respect to such claims or threatened
claims.
 
8.5                     AASTROM will indemnify, defend and hold harmless GENZYME
and its officers, directors, agents, employees and Affiliates, from and against
any and all Damages,
 

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including reasonable attorneys’ fees (collectively, “Losses”) arising out of,
relating to or resulting from (a) AASTROM’s material breach of this Agreement,
(b) AASTROM’s gross negligence or willful misconduct in connection with its
receipt of Raw Materials pursuant to this Agreement or (c) AASTROM’s use or
GENZYME’s provision of Raw Materials supplied pursuant to this Agreement, except
for those Losses for which GENZYME is obligated to indemnify, defend and hold
harmless Service Recipient and its officers, directors, agents, employees and
Affiliates pursuant to Section 8.6.
 
8.6                     GENZYME will indemnify, defend and hold harmless AASTROM
and its officers, directors, agents, employees and Affiliates from and against
any and all Losses arising out of, relating to or resulting from (a) GENZYME’s
material breach of this Agreement or (b) GENZYME’s gross negligence or willful
misconduct in the provision of Genzyme Raw Materials pursuant to this Agreement.
 
8.7                     An indemnifying Party’s indemnification obligations
hereunder will be conditioned upon (a) the indemnified Party providing the
indemnifying Party with written notice describing such indemnification claim
(“Claim”) in reasonable detail in light of the circumstances then known and then
providing the indemnifying Party with further notices to keep it reasonably
informed with respect thereto; provided however, that failure of the indemnified
Party to provide such notice or keep the indemnifying Party reasonably informed
as provided herein will not relieve the indemnifying Party of its obligations
hereunder except to the extent, if any, that the indemnified Party is materially
prejudiced thereby, (b) the indemnifying Party being entitled to participate in
such Claim and assume the defense thereof with counsel reasonably satisfactory
to the indemnified Party, at the indemnifying Party’s sole expense, and (c) the
indemnified Party reasonably cooperating with the indemnifying Party, at the
indemnifying Party’s sole cost and expense, in the defense of any Claim. The
indemnifying Party will not accept any settlement that places restrictions on
any indemnified Party or requires any payment by any indemnified Party and,
further, will not accept any settlement unless the settlement includes as an
unconditional term thereof the giving by the claimant or the plaintiff of a full
and unconditional release of the indemnified Parties, from all liability with
respect to the matters that are subject to such Claim, without the indemnified
Party’s prior written consent, which consent will not be unreasonably withheld,
delayed or conditioned. The indemnified Party may participate in the defense of
any claim with counsel reasonably acceptable to the indemnifying Party, at the
indemnified Party’s own expense.
 
8.8                     With the exception of any claims of fraud which are
proven and upon which a judgment entered in the involved proceeding will be
expressly based, the Parties acknowledge and agree that the provisions of
Sections 8.5, 8.6 and 8.7 will be the exclusive remedy for all claims relating
to this Agreement, including the negotiation or performance hereof.
 
ARTICLE  9 — CONFIDENTIALITY AND INTELLECTUAL PROPERTY
 
9.1                     The Parties may from time to time disclose to each other
Confidential Information (as defined in the APA).  For avoidance of doubt, the
Specifications and batch records, orders and purchasing terms of Aastrom shall
be deemed the Confidential Information of Aastrom. Each Party and its
Affiliates, shall not disclose such information to third Persons and shall not
use such information for purposes other than the purposes expressly set forth in
this Agreement, without the prior written consent of the other
 

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Party. Each Party may disclose such information on a strict need-to-know basis
only to Persons directly engaged with such Party’s activities under this
Agreement (including any Party’s Affiliates and their employees), and shall
ensure that such Persons are bound by confidentiality obligations equivalent to
those set forth in this Agreement. The obligation of confidentiality set forth
in this Section 9.1 shall apply during the term of the Agreement and ten
(10) years after its termination or expiration.
 
9.2                   The foregoing obligations shall not apply, however, to any
part of such information received, which:
 
a.
can be shown by written documentation to have been known to the receiving Party
and/or any of its Affiliates prior to disclosure by the disclosing Party, other
than such Confidential Information in the possession of Sanofi, GENZYME and
their respective Affiliates due to its previous ownership of the Business and/or
the Transferred Assets; or

 
b.
was known to the public or generally available to the public prior to the date
of the disclosure to the receiving Party by the disclosing Party; or

 
c.               enters the public domain by publication or otherwise through no
breach of this Agreement; or
 
d.
can be shown by written documentation to have been made known to the receiving
Party and/or any of its Affiliates without breach of any obligation of
confidentiality by a third party having the bona fide right to disclose or make
available such information.

 
9.3                   Each Party may disclose the confidential information if
such disclosure is required by applicable law, regulation or legal process,
provided that prior notification of such disclosure is given to to the other
Party. In such case, the receiving Party shall promptly notify the other Party
in writing and, upon such Party’s request (and at the disclosing Party’s cost),
the receiving Party will reasonably cooperate with the other Party in taking all
lawful action (at such other Party’s cost) against such compelled disclosure or
necessary to comply with such compelled disclosure, as applicable, provided
always that any disclosure shall be only to the extent required.
 
9.4                    If GENZYME becomes aware of any infringement of AASTROM’s
intellectual or industrial property rights related to the Raw Materials by third
parties, GENZYME shall immediately notify AASTROM thereof in writing. If
reasonably requested by AASTROM, GENZYME will assist or join AASTROM, at
AASTROM’s expense, in taking such steps as AASTROM and/or its counsel may deem
advisable for the protection of AASTROM’s rights. The commencement, strategies,
termination and settlement of any action relating to the validity or
infringement of such property rights shall be decided by AASTROM in its sole
discretion. Any such proceedings shall be at the expense of AASTROM and any
recoveries shall be for the benefit of AASTROM. Nothing herein, however, shall
be deemed to require AASTROM to enforce its property rights against others or to
allow AASTROM or require GENZYME to compromise or prejudice any intellectual or
industrial property rights belonging to GENZYME or licensed to GENZYME by any
third party.
 

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9.5                     AASTROM and/or its Affiliates, as the case may be,
retain all rights, title and interest in and to the technical information and
any other industrial and/or intellectual property rights related to the Raw
Materials.
 
ARTICLE  10 - FORCE MAJEURE
 
10.1
Each Party will be excused for any failure or delay in performing any of its
obligations under this Agreement, other than the obligations of AASTROM to make
payments to GENZYME for shipments of Raw Materials, if such failure or delay is
caused by any act of God, any accident, explosion, fire, act of terrorism,
storm, earthquake, flood, failure of common carrier, failure of third party
manufacturer, strike, work stoppage, shortage of any raw materials or any
components or any other circumstance or event outside of such Party’s reasonable
control (a “Force Majeure”).

 
10.2
The Party asserting Force Majeure shall promptly notify the other Party of the
event constituting Force Majeure and of all relevant details, and shall furnish
appropriate evidence of the occurrence.

 
10.3
Thereafter, the Parties shall consult with each other in order to find a fair
solution and shall use commercially reasonable efforts to minimise the
consequences of such Force Majeure.

 
10.4
Notwithstanding anything to the contrary, either Party shall have the right to
terminate this Agreement upon thirty (30) days’ prior written notice to the
other Party if the inability of such other Party to fulfil its obligations due
to Force Majeure exceeds a three (3)-month period.

 
10.5
If the Parties are unable to agree that an event of Force Majeure has occurred,
the matter shall be settled in accordance with the dispute resolution provisions
set forth in Article 14 of this Agreement.

 
ARTICLE  11 - TERM AND TERMINATION
 
11.1
This Agreement and all of its terms and conditions shall become effective as of
the Effective Date and shall remain in full force for a maximum period of twelve
(12) months (the “Term”).

 
11.2
Either Party may terminate this Agreement at any time during the Term, effective
immediately, upon written notice to the other Party:

 
(i)                         if the other Party commits a breach under this
Agreement and fails, within thirty (30) days of receipt of written notice of
such breach (or ten (10) days in the event of a payment breach), (x) to remedy
the same (if capable of remedy) or (y) if the breach is one which requires more
than thirty (30) days to cure, to commence without delay and diligently pursue
the remedy within such time;
 
(ii)                      if the other Party goes into bankruptcy or insolvency
or is liquidated (other than for the purposes of a bona fide corporate
reorganization or amalgamation); or
 
(iii)                   in the cases expressly provided for in Section 10.4.
 

 

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11.3            GENZYME shall be entitled to terminate the Agreement immediately
(i) with respect to any Third Party Raw Materials, in the event that the third
party agreements governing the supply of those materials are terminated;
provided that GENZYME shall have informed AASTROM in advance with respect to the
proposed termination of such third party agreements, or (ii) in the event of a
breach by AASTROM of the terms of Section 12.2 (Anti-Bribery), without payment
of any compensation or other damages to AASTROM arising out of such termination
(regardless of any activities or agreements with any third parties entered into
by AASTROM prior to the termination of this Agreement) by giving notice in
writing to AASTROM.  GENZYME will not be liable for, nor make any payment to
AASTROM in respect of, any direct economic loss or other loss of turnover,
profits, business or goodwill or any special, indirect or consequential losses
suffered by AASTROM as a result of such termination.  The right to terminate
this Agreement under this Clause 11.3 will be without prejudice to any other
right or remedy of GENZYME which may have accrued up to the date of
termination.  AASTROM shall be entitled to terminate the Agreement immediately
in the event of a breach by GENZYME of the terms of Section 12.2 (Anti-Bribery),
without payment of any compensation or other damages to GENZYME arising out of
such termination (regardless of any activities or agreements with any third
parties entered into by GENZYME prior to the termination of this Agreement) by
giving notice in writing to GENZYME.  AASTROM will not be liable for, nor make
any payment to GENZYME in respect of, any direct economic loss or other loss of
turnover, profits, business or goodwill or any special, indirect or
consequential losses suffered by GENZYME as a result of such termination.  The
right to terminate this Agreement under this Clause 11.3 will be without
prejudice to any other right or remedy of AASTROM which may have accrued up to
the date of termination.  AASTROM may terminate this Agreement in its entirety,
without charge or penalty upon written notice to GENZYME; provided that AASTROM
shall remain liable for any undelivered Raw Materials specified in the
then-current binding purchase orders for Raw Materials.
 
11.4
The termination of this Agreement for whatever cause shall neither affect any of
the rights or obligations of either Party which have accrued through the
effective date of such termination, nor affect any rights or obligations of
either Party under this Agreement that are intended by the Parties to survive
such expiration or termination.

 
11.5
The termination of this Agreement for whatever cause shall not excuse AASTROM
from the payment to GENZYME of any amounts due for shipments of Raw Materials
already delivered or from the reimbursement of GENZYME for any non-cancellable
costs incurred in connection with the manufacture or sourcing of the Raw
Materials through the effective date of such termination.

 
11.6
Any provision which by its nature should survive, including the provisions of
Section 11.7, Article 7, Article 8, and Article 12, will survive the expiration
or termination of this Agreement.

 
11.7
Upon any expiration or termination of this Agreement in whole or in part and for
any reason (a) each Party will use commercially reasonable efforts to cooperate
with the other Party as reasonably necessary to avoid disruption of the ordinary
course of the other Party’s business and (b) each Party will promptly return to
the other Party or destroy any and all confidential information or other
proprietary information of such

 

--------------------------------------------------------------------------------

 
other Party in its or its Affiliates’ possession upon expiration or termination
of this Agreement.
 
ARTICLE  12 - MISCELLANEOUS
 
12.1     Hardship
 
Should any unforeseen event, while not preventing either Party from performing
any of its obligations hereunder, cause either Party inequitable hardship with
respect to the performance of such obligations, and the Party can demonstrate
this by competent proof, then both Parties shall negotiate in good faith an
equitable way to adapt this Agreement to the new circumstances.
 
12.2
Anti-Bribery

 
Each Party warrants, represents and undertakes that (a) it will comply with the
requirements of all applicable anti-bribery legislation, both national and
foreign, including but not limited to the OECD Convention dated 17th
December 1997 on combating bribery of public officials in international
business, and (b) it has not and will not make, promise or offer to make any
payment or transfer anything of value (directly or indirectly) to (i) any
individual, (ii) corporation, (iii) association, (iv) partnership or (v) public
body (including but not limited to any officer or employee of any of the
foregoing) who, acting in their official capacity or of their own accord, are in
a position to influence, secure or retain any business for (and/or provide any
financial or other advantage to) the other Party by improperly performing a
function of a public nature or a business activity with the purpose or effect of
public or commercial bribery, acceptance of or acquiescence in extortion,
kickbacks or other unlawful or improper means of obtaining or retaining
business.
 
Each Party will immediately notify the other Party if, at any time during the
term of this Agreement, its circumstances, knowledge or awareness change such
that it would not be able to repeat the warranties set forth above at such time.
 
Each Party undertakes throughout the term of this Agreement to keep detailed and
up-to-date books of account and records of all acts by it in relation to this
Agreement for a minimum period of seven (7) years and, at the other Party’s
request, to make them available for inspection.  Without prejudice to the
generality of the foregoing, this obligation will extend to records of all
payments made by AASTROM in connection with this Agreement.  Each Party will
ensure that such books of account and records are sufficient to enable the other
Party to verify compliance with this Section 12.2.
 
12.3     Records
 
GENZYME shall maintain accurate records arising from or related to any Raw
Materials supplied hereunder, including accounting records and documentation
produced in connection with the supply of any Raw Materials, substantially
consistent with GENZYME’s past practices for similar supply of materials for its
own account.
 
12.4     Inspection Rights
 
During the Term and for ninety (90) days thereafter, GENZYME shall, upon
reasonable prior written notice from AASTROM, permit AASTROM, or its designated
 

--------------------------------------------------------------------------------

 
representatives, to inspect and audit GENZYME’s records relating to the supply
of Raw Materials during regular business hours, with the right to make any
copies, for the sole purpose of verifying the amount charged by GENZYME for the
Raw Materials; provided, that AASTROM shall comply with GENZYME’s reasonable
security and safety procedures as such procedures are communicated to AASTROM.
 
12.5     Interpretation
 
Except as otherwise explicitly specified to the contrary, (a) references to a
section, exhibit or schedule means a section of, or schedule or exhibit to this
Agreement, unless another agreement is specified, (b) the word “including” (in
its various forms) means “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, (f) unless otherwise specified “$” is
in reference to United States dollars, and (g) the headings contained in this
Agreement, in any exhibit or schedule to this Agreement and in the table of
contents to this Agreement are for reference purposes only and will not affect
in any way the meaning or interpretation of this Agreement.
 
12.6     Severability
 
Any provision of this Agreement which is held to be invalid and unenforceable in
any jurisdiction shall be ineffective as to such jurisdiction, without
invalidating the remaining provisions hereof or affecting the validity or
enforcement of such provision in other jurisdictions, and this Agreement will
continue in full force and effect without said provision; provided, however,
that if the economic terms of this Agreement are materially altered by such
invalidity for one of the Parties, the Parties shall negotiate to modify such
invalid clause in such a way as to preserve the financial equilibrium
contemplated at the signature of this Agreement.
 
12.7     Assignment, Sub-contracting and Licensees
 
This Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns, provided, however, that no
Party may assign any right or obligation hereunder, in whole or in part, without
the prior written consent of the other Party, which consent may not be
unreasonably withheld, provided that GENZYME is entitled to assign any of its
rights and/or obligations hereunder to any of its Affiliates, whether presently
existing or to be created or acquired in the future, without the prior written
approval of AASTROM.
 
AASTROM acknowledges that GENZYME may use contractors and third parties to
manufacture Third Party Raw Materials and supply Third Party Raw Materials to
AASTROM under this Agreement.  Subject to the provisions of Section 5.5, GENZYME
shall have no liability to AASTROM for any acts or omissions of such contractors
or third parties.
 

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12.8     Notice
 
Any notice required or permitted to be given hereunder must be provided in
writing and (a) delivered in person or by express delivery or courier service,
(b) sent by facsimile, or (c) deposited in the mail registered or certified
first class, postage prepaid and return receipt requested (provided that any
notice given pursuant to subsection (b) of this Section 12.8 is also confirmed
by the means described in subsections (a) or (c) of this Section 12.8) to such
address or facsimile of the Party set forth in this Section 12.8 or to such
other place or places as such Party from time to time may designate in writing
in compliance with the terms of this Section 12.8. Each notice will be deemed
given when so delivered personally, or sent by facsimile transmission, or, if
sent by express delivery or courier service, one Business Day after being sent,
or if mailed, five Business Days after the date of deposit in the mail. A notice
of change of address or facsimile number will be effective only when done in
accordance with this Section 12.8.
 

--------------------------------------------------------------------------------

(i)
To AASTROM at:
 
 
 
Aastrom Biosciences, Inc.
 
Domino’s Farms, Lobby K
 
24 Frank Lloyd Wright Drive
 
Ann Arbor, MI 48105
 
 
 
Attention: Nick Colangelo
 
Fax: +1-734-665-0485
 
Phone: +1-734-418-4400
 
 
 
With a copy to:
 
 
 
 
Goodwin Procter LLP
 
 
53 State Street
 
 
Exchange Place
 
 
Boston, MA 02109
 
 
 
 
 
Attention:
Mitchell S. Bloom, Esq.
 
 
 
Danielle Lauzon, Esq.
 
 
Fax: +1-617-523-1231
 
 
Phone: +1-617-570-1000
 
 
(ii)
To GENZYME at:
 
 
 
Genzyme Corporation
 
55 Cambridge Parkway
 
Cambridge, MA 02142
 
 
 
Attention: Head of Biosurgery Global GSU
 
Fax: +1-617-761-8918
 
 
 
With a copy to:
 
 
 
 
Sanofi
 
 
54, rue la Boétie
 
 
75008 Paris, France
 
 
 
 
 
Attention: General Counsel

 

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Fax: +33-1-5377-4303
 
 
 
 
 
And
 
 
 
 
 
Ropes & Gray LLP
 
 
Prudential Tower
 
 
800 Boylston Street
 
 
Boston, MA 02199-0566
 
 
 
 
 
Attention: Christopher Comeau
 
 
Fax: +1-617-235-0566

 
12.9     Independent Contractors
 
The Parties to this Agreement are and will remain independent contractors and
neither Party is an employee, agent, partner, franchisee or joint venturer of or
with the other. Each Party will be solely responsible for any employment-related
taxes, insurance premiums or other employment benefits respecting its employees.
Neither Party will hold itself out as an agent of the other and neither Party
will have the authority to bind the other.
 
12.10  Entire Agreement
 
This Agreement together with the Asset Purchase Agreement and the other
Ancillary Agreements, constitutes the entire agreement between and among the
Parties with regard to the subject matter of this Agreement, and supersedes all
prior agreements and understandings with regard to such subject matter. Except
for the Confidentiality Agreement, there are now no agreements, representations
or warranties between or among the Parties other than those set forth in this
Agreement or the Ancillary Agreements.
 
The provisions of this Agreement shall prevail over any conflicting or
inconsistent terms or conditions contained in any invoices, purchase orders or
other documents submitted by either Party to the other Party.
 
12.11       Amendment, Waivers and Consents
 
This Agreement may not be changed or modified, in whole or in part, except by
supplemental agreement or amendment signed by the Parties. Any Party may waive
compliance by any other Party with any of the covenants or conditions of this
Agreement, but no waiver will be binding unless executed in writing by the Party
making the waiver. No waiver of any provision of this Agreement will be deemed,
or will constitute, a waiver of any other provision, whether or not similar, nor
will any waiver constitute a continuing waiver. Any consent under this Agreement
must be in writing and will be effective only to the extent specifically set
forth in such writing.
 
12.12       Rules of Construction
 
The Parties acknowledge that each Party has read and negotiated the language
used in this Agreement. Because all Parties participated in negotiating and
drafting this Agreement, no rule of construction will apply to this Agreement
which construes
 

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ambiguous language in favor of or against any Party by reason of that Party’s
role in drafting this Agreement.
 
12.13       Rights of Parties
 
Nothing in this Agreement, whether express or implied, is intended to confer any
rights or remedies under or by reason of this Agreement on any Persons other
than the Parties to it and their respective successors and permitted assigns,
nor is anything in this Agreement intended to relieve or discharge the
obligation or liability of any Third Party to any Party, nor will any provision
give any Third Party any right of subrogation or action over or against any
Party.
 
12.14       Counterparts
 
This Agreement may be signed in any number of counterparts, including by
facsimile copies or by electronic scan copies delivered by email, each of which
will be deemed an original, with the same effect as if the signatures were upon
the same instrument.
 
ARTICLE  13 — GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL
 
13.1
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York, excluding its conflict of laws rules to the extent such
rules would apply the law of another jurisdiction.

 
13.2
Any judicial proceeding brought against any Party or any dispute arising out of
this Agreement or related to this Agreement, or the negotiation or performance
hereof, must be brought in the courts of the State of New York, or in the U.S.
District Court for the State of New York, and, by execution and delivery of this
Agreement, each of the Parties accepts the exclusive jurisdiction of such
courts, and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement and waives any claim and will not assert that
venue should properly lie in any other location within the selected
jurisdiction. The consents to jurisdiction in this Section 13.2 will not
constitute general consents to service of process in the State of New York for
any purpose except as provided in this Section 13.2 and will not be deemed to
confer rights on any Person other than the Parties. Service of any process,
summons, notice or document by U.S. mail to a Party’s address for notice
provided in or in accordance with Section 12.8 will be effective service of
process for any action, suit or proceeding in the State of New York with respect
to any matters for which it has submitted to jurisdiction pursuant to this
Section 13.2

 
13.3
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, 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 AND SUCH PROCEEDINGS WILL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
 
(The remainder of this page has been intentionally left blank.)
 

--------------------------------------------------------------------------------

 
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their respective officers thereto duly authorized as of the day and year
first above written.
 
 
GENZYME
By:
/s/ Jerome Delpech
 
Name: Jerome Delpech
 
Title: Attorney-in-Fact
 
 
 
 
AASTROM
By:
/s/ Dominick C. Colangelo
 
Name: Dominick C. Colangelo
 
Title: President and CEO

 
Signature Page to Transition Supply Agreement
 

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FIRST AMENDMENT TO TRANSITION SUPPLY AGREEMENT

This First Amendment (the “First Amendment”), effective as of the date last
signed by both parties (the “First Amendment Effective Date”) is by and between
Genzyme Corporation, a Massachusetts corporation (“Genzyme”), and Vericel
Corporation, formerly known as Aastrom Biosciences Inc., a Michigan corporation
(“Vericel”), (collectively, the “Parties”).

WHEREAS, effective as of May 30, 2014, Genzyme and Vericel entered into that
certain Transition Supply Agreement (the “Agreement”) which described transition
Raw Materials supply services that Genzyme agreed to provide to Vericel in
support of the sale of three (3) products (Carticel®, Epicel® and Matrix Applied
Characterized Autologous Cultured Chondrocytes [MACI®]) (the “Products”, or
individually, a “Product”)) to Vericel (the terms of the sale are memorialized
in a separate Asset Purchase Agreement) dated April 19, 2015, between Vericel
and Genzyme’s Affiliate, Sanofi, a French Société Anonyme (the “Asset Purchase
Agreement” or “APA”);

WHEREAS, the Agreement expiration date is May 29, 2015;

WHEREAS, Vericel requires additional supply support from Genzyme related to the
supply of 3T3 cells, as further set forth in the Agreement;

WHEREAS, Genzyme has agreed to continue to supply Genzyme Raw Materials 3T3
cells, subject to the terms and conditions of the Agreement for a limited period
of time;

WHEREAS, Vericel requires additional vial washing services from Genzyme for the
Carticel Product, such services previously subject to the terms and conditions
of the Transition Services Agreement between the Parties effective May 30, 2014
(“Transition Services Agreement”), an Ancillary Agreement to the Asset Purchase
Agreement; and

WHEREAS, Genzyme has agreed to continue to allow Vericel to access Genzyme’s
facility to wash vials, subject to the terms and conditions of this Agreement
for a limited period of time;
  
NOW, THEREFORE, in consideration of the above-recitals, the mutual benefits to
be derived by the parties, and other good and valuable consideration, the
receipt and satisfaction of which are acknowledged, Genzyme and Vericel agree to
amend the Agreement as follows:

1.
All capitalized terms not defined herein shall have the same meaning as set
forth in the Agreement, or, as further directed by the Agreement, as set forth
in the Asset Purchase Agreement.

2.
All references to Aastrom Biosciences Inc. are hereby deleted from the Agreement
and Vericel Corporation is substituted in its place.

3.
The Parties hereby agree that supply services provided after May 29, 2015, but
before the First Amendment First Amendment Effective Date are subject to, and
construed to be provided in compliance with, the Agreement.

4.
The Parties hereby agree that during the remaining Term of the Agreement,
Genzyme has no obligation to supply Vericel with (a) Third Party Raw Materials,
or (b) Genzyme Raw Materials other than the 3t3 cells outlined in Exhibit 1. The
Parties further agree that reference to 3t3 cells

--------------------------------------------------------------------------------

shall mean only those 3t3 cells or banks that are Genzyme Raw Materials subject
to the Agreement as further set forth in Exhibit 1.

5.
Article 1 - Scope of the Agreement. Article 1 is hereby stricken and replaced in
its entirety by the amended Article 1 below:

“Article 1 - SCOPE OF THE AGREEMENT
For the duration of the Agreement, GENZYME undertakes to supply VERICEL with the
Raw Materials as so requested by VERICEL and VERICEL undertakes to purchase from
GENZYME its requirements of Raw Materials as determined in VERICEL’S sole
discretion when purchasing from a third party supplier, subject to the terms and
conditions herein set forth, provided, however, that as of May 30, 2015,
GENZYME’s supply obligations are limited solely to the supply of 3T3 cells in
accordance with the specifications set forth in Exhibit 1. Further, as of the
First Amendment Effective Date, GENZYME undertakes to perform the Services as
further identified below, subject to the terms and conditions herein set forth.”

6.
Article 2 - Supply. Article 2 is hereby stricken and replaced in its entirety by
the amended Article 2 below:

“Article 2 - SUPPLY and SERVICES

2.1
Supply. The Genzyme Raw Materials delivered hereunder shall be manufactured in
accordance with the applicable current Guidelines of Good Manufacturing
Practices for Drugs (“cGMP”) and other applicable health authority regulations
for therapeutic products as applicable to the Genzyme Raw Materials. At the time
of delivery to VERICEL by Genzyme, the Genzyme Raw Materials shall have a shelf
life of at least the time period specified for such Raw Materials on Exhibit 1,
attached hereto and incorporated herein by reference.

Subject to Section 7.6 of the APA, promptly after final delivery of the 3t3
cells to VERICEL and its acceptance by VERICEL, GENZYME shall ship all remaining
master cell banks and production cell banks for the 3t3 cells to VERICEL in two
separate shipments as Transferred Assets. GENZYME shall ship these banks in
liquid nitrogen and in accordance with the requisite storage conditions set
forth in the SPECIFICATIONS for shipment of the current production cell banks.
At any time up to and including the shipment of these banks, GENZYME shall
provide VERICEL with copies of any documentation relating to the production or
quality of, or produced in connection with, the supply the 3t3 cells, including,
without limitation, standard operating procedures, manufacturing records and the
microcarrier process, provided, however, that GENZYME shall have no obligation
to provide proprietary documentation for Retained Intellectual Property that is
not related to the production, quality or supply of the 3t3 cells.

--------------------------------------------------------------------------------

The Parties hereby agree to the 3t3 cell production schedule as set forth below
for 2016, subject to Section 3.1:

Run #
Activity
Dates
Quarter
1
3T3
15Feb - 15Mar
1Q2016
2
3T3
15Mar - 15Apr
1Q2016
3
3T3
01May - 01Jun
2Q2016
4
3T3
01Jun - 01Jul
3Q2016
5
3T3
01Aug - 01Sep
3Q2016
6
3T3
01Nov - 01Dec
4Q2016

2.2
Services. GENZYME will allow VERICEL Personnel access to GENZYME’s facility to
wash vials (the “Services”) as further set forth, and in accordance with, the
terms and conditions set forth in Exhibit 2, attached hereto and incorporated
herein by reference.”

7.
Article 8, Liability, Insurance, Indemnity. The following sections in Article 8
are hereby amended as set forth below:

a.
Section 8.2: Clause B is hereby amended to “(B) EACH PARTY’S LIABILITY FOR
DAMAGES IN CONNECTION WITH THIS AGREEMENT OR THE PERFORMANCE OR NEGOTIATION
HEREOF WILL NOT EXCEED THE AMOUNT OF THE INVOICE FOR THE SHIPMENT OF RAW
MATERIALS OR PERFORMANCE OF SERVICES WITH RESPECT TO WHICH SUCH LOSSES, DAMAGES,
LIABILITIES, OR EXPENSES AROSE.”

b.
Section 8.4: The sole sentence in Section 8.4 is hereby stricken and replaced by
the following sentence: “Each Party shall promptly inform the other Party of any
significant claims or threatened claims in connection with the Raw Materials or
Services and shall consult with the other Party with respect to such claims or
threatened claims.”

c.
Section 8.5: Section 8.5 is hereby stricken in its entirety and replaced by the
following:

“VERICEL will indemnify, defend and hold harmless GENZYME and its officers,
directors, agents, employees and Affiliates, from and against any and all
Damages, including reasonable attorneys’ fees (collectively, “Losses”) arising
out of, relating to or resulting from (a) VERICEL’s material breach of this
Agreement, (b) VERICEL’s gross negligence or willful misconduct in connection
with its receipt of Raw Materials pursuant to this Agreement (c) VERICEL’s use
or GENZYME’s provision of Raw Materials supplied pursuant to this Agreement,
except for those Losses for which GENZYME is obligated to indemnify, defend and
hold harmless Service Recipient and its officers, directors, agents, employees
and Affiliates pursuant to Section 8.6., (d) VERICEL’s gross negligence or
willful misconduct in connection with its receipt of Services pursuant to this
Agreement, including the extent to which VERICEL personnel participate in the
Services, (e) with regard to Services only, VERICEL Personnel’s misuse of any of
GENZYME’s systems or Services, (f) with regard to Services only, VERICEL
Personnel’s disclosure or misuse of any of GENZYME’s Confidential Information,
or (g) with regard to Services only, VERICEL

--------------------------------------------------------------------------------

Personnel’s willful misconduct in connection with the use of GENZYME’s systems
or Services or Confidential Information.

d.
Section 8.6 is hereby stricken in its entirety and replaced by the following:
“GENZYME will indemnify, defend and hold harmless VERICEL and its officers,
directors, agents, employees and Affiliates from and against any and all Losses
arising out of, relating to or resulting from (a) GENZYME’s material breach of
this Agreement or (b) GENZYME’s gross negligence or willful misconduct in the
provision of Genzyme Raw Materials or Services pursuant to this Agreement, (c)
any GENZYME Personnel’s willful misconduct in connection with providing the
Services pursuant to this Agreement, or (d) any GENZYME Personnel’s disclosure
or misuse of the VERICEL’s Confidential Information.”

8.
Section 10.1, Force Majeure. Section 10.1 is hereby deleted in its entirety and
replaced by the following: “Each Party will be excused for any failure or delay
in performing any of its obligations under this Agreement, other than the
obligations of VERICEL to make payments to GENZYME for shipments of Raw
Materials or previously-provided Services, if such failure or delay is caused by
any act of God, any accident, explosion, fire, act of terrorism, storm,
earthquake, flood, failure of common carrier, failure of third party
manufacturer, strike, work stoppage, shortage of any raw materials or any
components or any other circumstance or event outside of such Party’s reasonable
control (a “Force Majeure”).”

9.
Section 11.1, Term. Section 11.1 is hereby stricken and replaced in its entirety
by the following:

“11.1. Term. This Agreement and all of its terms and conditions shall become
effective as of the Effective Date and shall remain in full force and effect
until December 31, 2016.”

10.
Section 11.6, Survival. Section 11.6 is hereby amended to add “6.4 and” after
the word “Section” and to replace “and Article 12” with “, Article 12 and
Article 13”.

11.
Exhibit 2, Services. Exhibit 2, Services, attached hereto as Attachment A and
incorporated herein by reference, is hereby appended to the end of the
Agreement.

*     *     *
The rights and obligations of the Parties or any dispute arising out of this
First Amendment will be interpreted, construed and enforced in accordance with
the laws of the State of New York, excluding its conflict of laws rules to the
extent such rules would apply the law of another jurisdiction.

This First Amendment will terminate in accordance with the terms set forth in
the Agreement.

Except as set forth in this First Amendment, the terms of the Agreement shall
remain in full force and effect; provided however, that in the event of a
conflict between a term contained in this First Amendment and a term contained
in the Agreement, the term contained in this First Amendment shall prevail.

[Signature page immediately follows.]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Genzyme and Vericel have caused this First Amendment to the
Agreement to be executed by their duly authorized representatives as of the
First Amendment Effective Date.

GENZYME CORPORATION                VERICEL CORPORATION

Signature:                        Signature:/s/ Gerard Michel                 
Name:                            Name: Gerard Michel
                                
Title:                            Title: CFO

Date:                            Date:                    

--------------------------------------------------------------------------------

Attachment A

EXHIBIT 2

SERVICES

1.
Control and Applicability. Except as otherwise expressly set forth in this
Exhibit 2, the terms of the Agreement, as amended herein, shall apply to the
Services as well as to the Raw Materials Supply, and will be construed to
include the Services as well as the Raw Materials Supply. Articles 3, 4, 5, 6,
and 7 do not apply to the Services, and therefore do not govern the terms and
conditions between the Parties with respect to the Services.

2.
Services.

1.Performance of Services. GENZYME will continue to perform Services as
historically provided under the Transition Services Agreement for the Carticel
Product:

1.Subject to the commercially reasonable availability of the equipment necessary
to perform the vial washing Services, GENZYME will perform the Services in
accordance with GENZYME SOPs, at a rate of $323.54 per run.

2.Such Services will typically be performed quarterly, with annual demand of
less than 6,000 vials per calendar year (“Annual Demand”), but may be more or
less frequent and/or include more or fewer vials upon the mutual agreement
between the Parties, such agreement not to be unreasonably withheld, provided,
however, that at no time will GENZYME be required to give priority to the
Services beyond the Annual Demand, which will be prorated in the event the Term
of the Agreement does not coincide with the end of the calendar year.

3.It is the nature of these Services that VERICEL employees must actively
participate in the vial washing process. VERICEL hereby agrees to ensure that
all VERICEL Personnel will abide by GENZYME’s SOPs.

2.Service Levels. GENZYME will perform the Services in a manner consistent with
the terms and conditions contained herein and in accordance with applicable
laws, rules or regulations. In addition, in performing the Services, GENZYME
will use a degree of care and diligence that is not materially less than the
care and diligence exercised by GENZYME and its Affiliates when engaged in
similar services or activities during the twelve (12) month period preceding the
Execution Date with respect to the Business, and will use commercially
reasonable efforts to deliver the Services in a manner consistent with GENZYME’s
and its Affiliates’ past practices. GENZYME will use qualified GENZYME or
Affiliate employees and/or contractors to perform the Services.

3.Additional Resources. In providing the Services, GENZYME will not be obligated
to:

1.hire any additional employees;

2.
maintain the employment of any specific employee;

3.
purchase, lease or license any additional equipment or software; or

--------------------------------------------------------------------------------

4.pay any costs related to the transfer or conversion of VERICEL’s data to
VERICEL or any alternate supplier of Services.

4.Third-Party Consents. If any consent or waiver from any third party is needed
in connection with GENZYME’s provision of the Services, GENZYME will be excused
from performing such Service until such consent or waiver is obtained and will
use commercially reasonable efforts to cooperate with VERICEL to obtain such
licenses or approvals, provided that any payments to third party in connection
with obtaining any such consent or waiver will be paid by VERICEL.

3.
Payment Terms.

3.1.    Charges for Services. VERICEL will pay GENZYME the charges as set forth
in 2.1.1 of this Exhibit for each Service run as adjusted, from time to time, in
accordance with Section 3.3 below.

3.2.    Expenses. VERICEL will, for each Service performed, reimburse GENZYME
for any reasonable documented out-of-pocket expenses payable to third parties
which are incurred by GENZYME or its Affiliates in connection with GENZYME’s
provision of such Service (“Expenses”); provided that the Expenses will not
include the allocation of any corporate overhead or similar expenses incurred by
GENZYME or its Affiliates in connection with the performance of the Services.
Within ten (10) days after the end of each calendar month during the Term,
GENZYME will provide VERICEL with a report detailing the Expenses for such
previous month. In addition, GENZYME will provide VERICEL with advance written
notice of any single Expense or series of related Expenses expected to be in
excess of $25,000.

1.Payment Terms. GENZYME will bill VERICEL monthly for all charges pursuant to
this Agreement for the previous calendar month. Such invoices will contain
reasonable detail of the Services provided and the charge therefor. VERICEL will
pay GENZYME for all undisputed amounts due for Services provided hereunder
within thirty (30) days from receipt of an invoice therefor. Late payments will
bear interest at the lesser of twelve percent (12%) per annum or the maximum
rate allowed by law. The Parties acknowledge and agree that failure to pay
undisputed amounts due hereunder pursuant to the terms of this Agreement is a
material breach and GENZYME may terminate this Agreement under Article 11 of the
Agreement.

2.Disputed Amounts. Amounts due hereunder will not be offset by amounts due
under any other agreement. Disputes related to any other agreement will not
serve as grounds to delay obligations under this Agreement. In particular,
VERICEL will not, and will cause its Affiliates to not, offset amounts owed to
GENZYME or any Affiliate under this Agreement against amounts owed or allegedly
owed by GENZYME or any Affiliate to VERICEL or any Affiliate under any
circumstances, and VERICEL hereby irrevocably waives any such right on its own
behalf and on behalf of each of its Affiliates.

4.
Transition Service Responsibilities.

1.Cooperation; Facilities; Access to Information. The Parties will use good
faith efforts to cooperate with each other in all matters relating to the
provision and receipt of Services. Such cooperation will include exchanging
information relevant to the provision of Services hereunder,

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good faith efforts to mitigate problems with the work environment interfering
with the Services, and each Party requiring its personnel to obey any security
regulations and other published policies of the other Party while on the other
Party’s premises. In addition, VERICEL will provide GENZYME with access to its
facilities as is reasonably necessary for GENZYME to perform the Services it is
obligated to provide hereunder, provide GENZYME with information and
documentation reasonably necessary for GENZYME to perform the Services it is
obligated to provide hereunder, and make available, as reasonably requested by
GENZYME, reasonable access to resources and provide timely decisions in order
that GENZYME may perform its obligations hereunder.

2.Savings Clause. To the extent VERICEL’s failure to discharge its obligations
set forth in Section 4.1 above or elsewhere in the Agreement or this Exhibit
impedes GENZYME’s ability to provide any Service or Additional Service
hereunder, GENZYME will be excused from its obligation to provide such Services
or Additional Services hereunder, provided, that GENZYME provides VERICEL with
notice of VERICEL’s failure to meet such obligation promptly after GENZYME
becomes aware of such failure.

5.
Intellectual Property

1.Existing Ownership Rights Unaffected. Except as expressly set out in this
Section 5, neither Party will gain, by virtue of this Agreement, any rights of
ownership or use of Copyrights, Patents, Trade Secrets, Trademarks or any other
Intellectual Property owned by the other Party.

2.Trademarks. Neither Party is granted hereunder any ownership in or license to
the Trademarks of the other Party.

3.Removal of Marks. Neither Party will remove any Copyright notices, proprietary
markings, Trademarks or other indicia of ownership of the other Party from any
materials of the other Party.

4.Ownership of Data and Intellectual Property. VERICEL will own all data and
records created by VERICEL or any of its Affiliates related exclusively to the
Business and generated in connection with the performance of the Services (the
“Data”). GENZYME will and hereby does, without further consideration, assign
(and will cause its Affiliates to assign) to VERICEL any and all right, title or
interest that GENZYME or its Affiliates may possess in or to the Data. Upon
VERICEL’s request, GENZYME will provide VERICEL with copies of the Data in the
format in which such Data is generated.

6.
VERICEL Employee Acknowledgment of No Sanofi Employment Benefits

6.1    Notwithstanding anything else in the Agreement or Exhibit 2, only VERICEL
employees (the “Cleared VERICEL Personnel”) who executed and delivered to the
GENZYME an acknowledgment and waiver in the form attached hereto as Attachment B
(or, as applicable, its prior version as set forth in the Transition Services
Agreement) may receive, or benefit from, Services that involve access to the
information services systems and applications of the GENZYME listed in this
Exhibit 2, and GENZYME is under no obligation to provide any such Services to
the extent any VERICEL employee other than the Cleared VERICEL Personnel would
receive, or benefit from, such Services.

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7.
Affiliate Performance. GENZYME may engage one or more Affiliates to perform all
or any portion of GENZYME’s duties under this Agreement; provided that GENZYME
remains liable for the performance of such Affiliates.

8.
No Warranty. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, GENZYME MAKES NO
WARRANTY OR REPRESENTATION WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR AGAINST INFRINGEMENT PROVIDED, HOWEVER, THAT WITHOUT PREJUDICE TO ANY RIGHTS
TO RELIEF IT MAY OTHERWISE HAVE, A PARTY MAY BE ENTITLED TO SEEK EQUITABLE
RELIEF, INCLUDING INJUNCTION, WITHOUT HAVING TO POST A BOND, IN THE EVENT OF ANY
MISUSE OR DISCLOSURE (EXCEPT AS PERMITTED AS SET FORTH IN SECTION 9.3) OF THE
PARTY’S CONFIDENTIAL INFORMATION BY THE OTHER PARTY OR ITS (AS IT RESPECTIVELY
APPLIES TO THE PARTY) SERVICE RECIPIENT PERSONNEL OR SERVICE PROVIDER PERSONNEL.

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Attachment B

ACKNOWLEDGMENT AND WAIVER

I,    , an employee or a prospective employee of Vericel Corporation (f/k/a
Aastrom Biosciences, Inc.) (“Vericel”), acknowledge that I may receive, or
benefit from, temporary transitional services provided by Sanofi US Services
Inc. and/or Genzyme Corporation and/or any of their affiliates (collectively
“Sanofi”) to Vericel in connection with the sale of Sanofi’s cell therapy and
regenerative medicine (CTRM) business to Vericel (the “Transaction”), which
closed under the relevant asset purchase agreement on or around April 19, 2014
(the “Closing Date”). In the interest of clarity and consistent with the terms
of the Employment Offer Letter I received from Vericel, I acknowledge that, as
from the Closing Date, I am or will be an employee of Vericel and that I am not
or will not be an employee of Sanofi. I understand and agree that, despite
Sanofi’s provision of temporary transitional services to Vericel, my employer,
Vericel, and not Sanofi, will be my employer after the Closing Date for all
purposes, including employee benefits. I understand and agree that because, as
from the Closing Date, I am or will be an employee of Vericel and not an
employee of Sanofi, I am not and will not be entitled to and will not claim or
assert any right to any compensation or benefits given by Sanofi to its regular
employees, including (without limitation) under any retirement, severance,
health and welfare or compensation plans. I understand and agree that this
acknowledgment and waiver applies to and survives any period during which I
perform services as an employee of Vericel, and will remain in effect even if it
is determined that during any period in which I performed services for Vericel I
was a “leased employee” or a “common law employee” of Sanofi. I acknowledge that
I have carefully read and have voluntarily signed this acknowledgment and waiver
and that I fully understand the final and binding effect of this acknowledgment
and waiver.

This acknowledgment and waiver is issued for the benefit of Sanofi.

By:        Date:     

Name
Printed:        Phone:         

Address: