EXHIBIT 4.2



 










Exhibit 4.2


This document is a non-binding convenience translation of the German-language
original. In case of any discrepancy between the English and German versions,
the German-language original shall prevail.




MASTER AGREEMENT




between




Bayer Aktiengesellschaft, Leverkusen




- hereinafter “BAG” -




and




LANXESS Aktiengesellschaft, Leverkusen




- hereinafter “LANXESS” -




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TABLE OF CONTENTS




	 	 	 	 	 
	List of Appendices
	 	 	4	 
	Preamble
	 	 	5	 
	I. Formation of the LANXESS Subgroup
	 	 	6	 
	§ 1 Catch-All Provisions for the Foreign Transfers and the Service Transfers
	 	 	6	 
	§ 2 Ensuring the Continuation of the LANXESS Subgroup
	 	 	8	 
	§ 3 Costs and Taxes Relating to the Formation of the LANXESS Subgroup
	 	 	9	 
	§ 4 Separation of Assets and Obligations
	 	 	11	 
	§ 5 Apportionment of Liability
	 	 	12	 
	II. Liability for Environmental Contamination, Antitrust Violations and Product Liability
	 	 	12	 
	§ 6 Liability for Environmental Contamination
	 	 	12	 
	6.1 Liability for Environmental Contamination of LANXESS Properties
	 	 	13	 
	6.2 Liability for Environmental Contamination of BAG Properties
	 	 	14	 
	6.3 Liability for Environmental Contamination of Other Properties
	 	 	16	 
	6.4 Liability for Environmental Contamination by Reference to List of Properties
	 	 	16	 
	6.5 Liability for Environmental Contamination Arising from Purchase and
Acquisition Agreements
	 	 	16	 
	6.6 Limitation of Liability for LANXESS
	 	 	16	 
	6.7 Requirements for the Duty to Indemnify; Procedures
	 	 	18	 
	6.8 Relationship of this Agreement to the Utilization Agreements
	 	 	20	 
	6.9 Limitation of Actions
	 	 	20	 
	6.10 Deductible Amount
	 	 	20	 
	§ 7 Product Liability
	 	 	20	 






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	7.1 Liability for Products Which Were or Will Be Introduced to the Market before
the Consummation Date by the Subgroups in Operation on the Economic
Effective Date
	 	 	20	 
	7.2 Liability for Products Which Will Be Introduced to the Market From the
Consummation Date by the Subgroups in Operation on the Economic Effective
Date
	 	 	21	 
	7.3 Liability for Products of Sold Companies, etc.
	 	 	21	 
	7.4 Liability For Certain Products
	 	 	21	 
	7.5 Product Liability Claims of the Contract Parties against Each Other
	 	 	22	 
	7.6 Introduction to the Market
	 	 	22	 
	7.7 Procedures
	 	 	22	 
	§ 8 Liability for Antitrust Violations
	 	 	23	 
	8.1 Liability for General Antitrust Violations
	 	 	23	 
	8.2 Liability for Certain Antitrust Violations
	 	 	24	 
	§ 9 Insurance Benefits and Third Party Compensation
	 	 	26	 
	III. Duty to Cooperate and Rules of Conduct
	 	 	27	 
	§ 10 Subsidies
	 	 	27	 
	§ 11 Shared Usage of IT Resources
	 	 	27	 
	§ 12 Treatment of Confidential Information
	 	 	28	 
	§ 13 Duty to Cooperate
	 	 	29	 
	IV. Miscellaneous
	 	 	31	 
	§ 14 Assertion of Claims
	 	 	31	 
	§ 15 Costs and Taxes
	 	 	31	 
	§ 16 Geographical Scope of Applicability of this Agreement
	 	 	32	 
	§ 17 Final Provisions
	 	 	32	 







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List of Appendices




	 	 	 	 	 
	APPENDIX
	 	DESCRIPTION

	 	3.3.1	 	 	Model tax clause on transfer of company shares

	 	3.3.2	 	 	Model tax clause on transfer of other assets

	 	6.1.1	 	 	Plan of properties which LANXESS shall acquire

	 	6.4	 	 	List of Properties

	 	6.5	 	 	List of sold companies, businesses, factories and plants

	 	7.3	 	 	List of sold companies, businesses, factories and plants

	 	7.4.1	 	 	List of UVP numbers

	 	7.4.2	 	 	List of business divisions of the former chemicals and polymers business areas

	 	7.4.3	 	 	List of trade names








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Preamble



BAG intends to divest itself of major portions of its chemical activities and
approximately one-third of its polymer activities, as well as the service
functions associated therewith (hereinafter, collectively, the “LANXESS
Subgroup”). For these purposes, the domestic and foreign activities of the
LANXESS Subgroup have been and will be combined into LANXESS Deutschland GmbH.
Thereafter, the entire shareholding held by BAG in LANXESS Deutschland GmbH
(and some other assets) shall be transferred to LANXESS by way of spin-off
(Abspaltung zur Aufnahme) pursuant to the German Transformation Act
(Umwandlungsgesetz) (hereinafter the “Spin-Off”). On the day of registration of
the Spin-Off in the Commercial Register at BAG’s registered office (hereinafter
the “Consummation Date”), the LANXESS Subgroup shall legally be separated from
the Bayer Group. Those activities remaining with BAG shall hereinafter be
referred to as the “Bayer Subgroup”.



The combining of activities of the LANXESS Subgroup into LANXESS Deutschland
GmbH shall largely be carried out by means of the following measures. Those
activities of Bayer Chemicals Aktiengesellschaft and Bayer MaterialScience
Aktiengesellschaft which belong to the LANXESS Subgroup shall each be
transferred to LANXESS Deutschland GmbH by way of spin-off (Abspaltung zur
Aufnahme) pursuant to the German Transformation Act (Umwandlungsgesetz)
(hereinafter, respectively, the “Chemicals Spin-Off” and the “MaterialScience
Spin-Off”).



Those service functions located in Germany which are to be allocated to the
LANXESS Subgroup shall be transferred from the service companies of the Bayer
Group by way of singular succession to LANXESS Deutschland GmbH under purchase
and acquisition agreements (hereinafter, the “Service Transfers”).



The foreign activities of the LANXESS Subgroup shall be transferred by way of
purchase and acquisition agreements or other corporate legal measures from
Bayer companies (hereinafter, in each case, a “Transferring BAG Company”) to
LANXESS Deutschland GmbH or to foreign companies which will in the future form
the LANXESS Group together with LANXESS (hereinafter, in each case, an
“Acquiring LANXESS Company”; the transfers hereinafter the “Foreign Transfers”
and together with the Chemicals Spin-Off, the MaterialScience Spin-Off and the
Service Transfers, collectively, the “Measures for Formation of the LANXESS
Subgroup”).



The Measures for Formation of the LANXESS Subgroup shall take place and have
taken place without any representations or warranties as to the quality or
state of the transferred activities being given or having been given. In
particular, no agreements have been reached in the areas of environmental
liability, product liability or liability for antitrust violations. The
measures shall take place and have taken place for the most part with economic
effect as of July 1, 2004, 0000 hours


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(hereinafter, the “Economic Effective Date”). In the event that another
effective date has been agreed in individual cases, the parties involved in
each measure shall adopt the same positions as if the measures had taken place
with economic effect as of the Economic Effective Date.



By the provisions below, BAG and LANXESS wish to ensure the formation of the
LANXESS Subgroup. At the same time, the apportionment of liability between the
future Bayer Group and the future LANXESS Group in the areas of environmental
liability, liability for antitrust violations and product liability shall be
finally settled between the parent companies of each group. Furthermore,
general terms, certain rules of conduct and duties of cooperation for the
period from and after the Consummation Date shall be stipulated.



Now, therefore, BAG and LANXESS (each a “Contract Party” and together the
“Contract Parties”) hereby agree as follows:








I.

Formation of the LANXESS Subgroup








§ 1

Catch-All Provisions for the Foreign Transfers and the Service Transfers





	1.1	 	In order to ensure the formation of the LANXESS Subgroup in foreign
jurisdictions, BAG and LANXESS shall ensure that the following catch-all
provisions are implemented by each company involved in those Foreign Transfers
which have been or shall be effected by way of singular succession from
economic assets. The same shall apply to those legal transactions, in
preparation of the Foreign Transfers, which have been or shall be effected by
way of singular succession from economic assets.





	 	1.1.1	 	Should certain assets and liabilities or other rights and
obligations, in particular those arising out of agreements, investments,
memberships, procedural and administrative law relationships or
administrative acts, which according to the relevant Foreign Transfer,
are to be transferred to the Acquiring LANXESS Company, not have been
transferred to the Acquiring LANXESS Company by virtue of the relevant
Foreign Transfer, the Transferring BAG Company shall transfer those
assets and liabilities and the other rights and obligations to the
Acquiring LANXESS Company. The Acquiring LANXESS Company shall accept the
transfer. As between themselves, the parties involved in the relevant
transaction shall adopt the same positions as if the assets and
liabilities and other rights and obligations set out in § 1.1.1 sentence
1 had been transferred as of the economic effective date agreed in each
case.




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	 	1.1.2	 	Should certain assets and liabilities or other rights and
obligations, in particular those arising out of agreements, investments,
memberships, procedural and administrative law relationships or
administrative acts, which are not to be transferred according to the
Foreign Transfers, nonetheless be transferred as a matter of law, the
Acquiring LANXESS Company shall be obligated to retransfer such rights. The
Transferring
BAG Company shall accept the retransfer. As between themselves, the
relevant parties involved shall adopt the same positions as if the
assets and liabilities and other rights and obligations set out in §
1.1.2 sentence 1 had not been transferred.
	 
	 	1.1.3	 	The terms set out in § 1.1.1 shall apply correspondingly should
assets or liabilities or other rights and obligations not be transferred
because they were mistakenly assigned to the foreign activities of the
Bayer Subgroup. The terms set out in § 1.1.2 shall apply correspondingly
should the assets and liabilities or other rights and obligations be
transferred because they were mistakenly assigned to the respective foreign
activities of the LANXESS Subgroup.
	 
	 	1.1.4	 	In connection with a transfer pursuant to § 1, the relevant parties
shall initiate all necessary and appropriate measures and legal actions,
and shall collaborate on such measures and actions. To the extent that for
the transfer of certain assets and liabilities or other rights and
obligations, or for the accession to agreements, the consent of third
parties or an approval under public law is required, the relevant
Transferring BAG Company and the relevant Acquiring LANXESS Company shall
endeavour to obtain such consent or approval. If a transfer to be made
pursuant to §§ 1.1.1 – 1.1.3 cannot be effected in relation to third
parties or can only be effected by incurring unreasonable expenses or is
impractical, then as between themselves the relevant parties shall adopt
the same positions as if the transfer had also become effective in relation
to third parties, as of the economic effective date agreed in each case.
This shall particularly apply in the event that a necessary consent or
approval cannot be obtained or can only be obtained by incurring
unreasonable expenses. These terms shall apply correspondingly to
retransfers to be made pursuant to §§ 1.1.1 – 1.1.3.
	 
	 	1.1.5	 	No claims may be asserted with respect to the quality or state of
assets and other rights and obligations of the relevant part of the LANXESS
Subgroup which have been transferred or shall be transferred pursuant to §
1. Each Contract Party shall ensure that the assets to be transferred
pursuant to § 1 are treated with the care usually employed in one’s own
affairs. To the extent that assets or other rights and




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	 	 	 	obligations to be transferred were disposed of by a party in the
course of ordinary business operations or if they no longer exist,
then substitutes therefore, e.g. sales proceeds, damage claims,
etc., shall be transferred. These terms shall apply
correspondingly to retransfers.
	 
	 	1.1.6	 	The catch-all provisions set out in §§ 1.1.1 – 1.1.5 shall apply
correspondingly to measures taken or which shall be taken in anticipation
of the Measures for Formation of the LANXESS Subgroup and as part of
which assets and liabilities and other rights and obligations were or
shall be transferred from a future LANXESS Group company to a company
remaining in the Bayer Group.
	 
	 	1.1.7	 	Claims under this § 1 shall be barred after December 31, 2014.





	1.2	 	The catch-all provisions set out in §§ 1.1.1 – 1.1.7 shall apply
correspondingly in order to ensure the Service Transfers for formation of the
LANXESS Subgroup, which shall take place by way of transfer of individual
assets. BAG and LANXESS shall ensure that the catch-all provisions are
implemented by the respective companies involved in the transfers.








§ 2

Ensuring the Continuation of the LANXESS Subgroup



For purposes of ensuring the unimpeded continuation of the LANXESS Subgroup,
the Contract Parties agree as follows:





	2.1	 	The Contract Parties assume that at the time of consummation of the
Measures for Formation of the LANXESS Subgroup, all assets (including all
assets not required to be, not able to be or simply not reported on the balance
sheet, and other rights which taking into account their origin, purpose or use
are to be exclusively or primarily assigned to the LANXESS Subgroup) required
by the Acquiring LANXESS Company to continue running the part of the LANXESS
Subgroup to the same extent existing at the time of consummation of the
relevant measure, have been or will be transferred to the relevant Acquiring
LANXESS Company or at least a right of use (beneficial ownership) has been or
will be granted. This shall not apply to the extent otherwise agreed with
respect to the relevant measure.
	 
	2.2	 	If assets required to continue running the part of the LANXESS Subgroup to
the same extent existing at the time of consummation of the relevant measure
are not transferred to the relevant Acquiring LANXESS Company and no right of
use (beneficial ownership) is granted, the Contract Parties shall take action
to cause the assets to be transferred. If a transfer is not legally possible,
is only possible by incurring unreasonable expenses or is




8









 






	 	 	impractical, the Contract Parties cause rights of use to be granted with
respect to these assets. If that is also not legally possible or only
possible by incurring unreasonable expenses or is impractical, then the
Contract Parties shall cause the relevant companies involved to adopt the
same positions economically as if the transfer or the grant of rights of
use had occurred as of the effective date agreed in each case, provided
however there shall be no right to claim for indirect damages or other
consequential damages such as loss of profit and loss of production. No
claims shall be made under § 2.2 to the extent that the assets are not
material for the continuation of activities of the LANXESS Subgroup
carried out by the Acquiring LANXESS Company. Claims shall also not be
made under § 2.2 to the extent that the continuation of the part of the
LANXESS Subgroup is assured by appropriate service or supply agreements
which have already been concluded.
	 
	 	 	To the extent that in order to transfer or grant rights of use for assets
the consent of third parties or an approval under public law is required, the
Contract Parties cause the companies involved to make every effort to obtain
such consent or approval.
	 
	2.3	 	Claims under this § 2 shall be barred after December 31, 2014.








§ 3

Costs and Taxes Relating to the Formation of the LANXESS Subgroup





	3.1	 	With respect to costs and taxes relating to the formation of the LANXESS
Subgroup, the following principles shall apply:





	 	3.1.1	 	Costs incurred prior to the Consummation Date shall be borne by BAG
or by the relevant transferring company affiliated with it. The same
shall apply to costs incurred in the period from the Consummation Date up
to June 30, 2005 and arising from formation measures, which were
commissioned before the Consummation Date.
	 
	 	3.1.2	 	Income taxes originating prior to the Economic Effective Date shall
be borne by BAG or by the relevant transferring company affiliated with
it. Income taxes originating after this date shall be borne by the
relevant company involved in the measure which under applicable tax laws
is the tax debtor, except as may otherwise be agreed by the Transferring
BAG Company and the Acquiring LANXESS Company in the agreements for the
transfer of those parts of the LANXESS Subgroup located in foreign
jurisdictions.
	 
	 	3.1.3	 	To the extent that in respect of income taxes originating prior to
the Economic Effective Date, in particular as a result of a tax audit,
the taxable income or a tax loss




9









 






	 	 	 	carry-forward of the transferring company affiliated with BAG or
of a company consolidated with BAG for tax purposes is
subsequently adjusted, and this subsequently has an inverse effect
on the taxable income or on an existing tax loss carry-forward of
the acquiring company affiliated with LANXESS or of a company
consolidated with LANXESS for tax purposes, then the acquiring
company affiliated with LANXESS shall refund to the transferring
company affiliated with BAG the net present value of a tax
reduction, or the transferring company affiliated with BAG shall
refund to the acquiring company affiliated with LANXESS the net
present value of a tax increase arising for the acquiring company
affiliated with LANXESS or for the company consolidated with
LANXESS for tax purposes, as the case may be.
	 
	 	 	 	The net present value of the tax reduction or increase, as the case
may be, shall be calculated on the basis of the tax rates applicable in
the year of the change in income or tax loss carryforward, assuming equal
distribution of the inverse effect over five years in the case of fixed
assets, over one year in the case of current assets, over eight years in
the case of pension provisions and over one year in the case of other
liabilities, as well as by applying a discount factor of 5% per annum.
	 
	 	3.1.4	 	Regardless of when they arise, transfer taxes shall be borne by
LANXESS or by the relevant acquiring company affiliated with LANXESS.





	 	 	To the extent that agreements for the formation of the LANXESS Subgroup
contain provisions which deviate from these principles, the Contract Parties
shall ensure that the respective agreements are amended to comply with these
principles. The terms contained in § 3.1.1, § 3.1.2 and § 3.1.4 shall also
apply to the Chemical and MaterialScience spin-off agreements. The provisions
in those agreements shall otherwise remain unaffected.
	 
	3.2	 	The following clarifications are agreed with respect to the agreements for
the transfer of those parts of the LANXESS Subgroup located in foreign
jurisdictions: All thresholds for the assertion of tax indemnification claims
(steuerliche Ausgleichsansprüche) shall be deemed to be exceeded as soon as one
individual claim or the sum of several individual claims exceeds the relevant
contractually agreed threshold. Upon the threshold being exceeded, all
indemnification claims which have arisen to that point shall be settled.
Indemnification claims which arise thereafter shall only be settled once the
relevant threshold has again been exceeded, however no later than by the end of
the contractually agreed limitation period. No interest shall accrue on
indemnification claims during the period up to settlement.




10









 






	3.3	 	If on transfer of parts of the LANXESS Subgroup no particular stipulation
was made in particular regarding tax treatment, for example in cases where the
transfer is based on a spin-off pursuant to the corporate law of a foreign
jurisdiction, the relationship between the Transferring BAG Company and the
Acquiring LANXESS Company shall be governed either by the provisions contained
in Appendix 3.3.1, in the case of a transfer of company shares, or by the
provisions contained in Appendix 3.3.2, in the case of transfer of other assets
individually or in their entirety. This also applies in cases where company
shares or other assets of a Transferring BAG Company are transferred to an
Acquiring LANXESS Company through one or more other BAG companies. § 3.1.3
shall apply correspondingly.
	 
	3.4	 	The Contract Parties shall ensure that the terms contained in §§ 3.2 and
3.3 shall be implemented by the respective companies involved in the Foreign
Transfer.








§ 4

Separation of Assets and Obligations



As a result of the world-wide realignment of the Bayer Group decided upon in
2002 and as a result of the Measures for Formation of the LANXESS Subgroup, it
cannot be ruled out that obligations and the assets required to fulfill such
obligations may have been assigned to different companies of the Bayer Group
(as it existed prior to the Consummation Date). For such cases, the Contract
Parties agree as follows:





	4.1	 	To the extent that LANXESS requires assets in order to fulfill an
obligation to a third party existing on the Consummation Date that was
transferred to LANXESS in the context of the Measures for Formation of the
LANXESS Subgroup and these assets have remained with BAG or with a company
affiliated with BAG, BAG shall, on demand by LANXESS and at its discretion,
ensure that BAG or one of its affiliates fulfills this obligation either to
LANXESS or directly to the third party. In consideration of this, BAG shall
receive any compensation owed by the third party to LANXESS. Sentences 1 and 2
shall be applied correspondingly to obligations of companies affiliated with
LANXESS.
	 
	4.2	 	To the extent that BAG requires assets in order to fulfill an obligation to
a third party incumbent upon it existing on the Consummation Date and these
assets were transferred to LANXESS or to a company affiliated with LANXESS,
LANXESS shall, on demand by
BAG and at its discretion, ensure that LANXESS or one of its affiliates
fulfills this obligation either to BAG or directly to the third party. In
consideration of this, LANXESS shall receive any compensation owed by the
third party to BAG. Sentences 1 and 2 shall be applied correspondingly to
obligations of companies affiliated with BAG.




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	4.3	 	Third parties within the meaning of § 4.1 are all persons and companies
which on the Consummation Date are not affiliated with LANXESS within the
meaning of §§ 15 et seq. of the German Stock Corporation Act (Aktiengesetz).
Third parties within the meaning of § 4.2 are all persons and companies which
on the Consummation Date are not affiliated with BAG within the meaning of §§
15 et seq. of the German Stock Corporation Act (Aktiengesetz).
	 
	4.4	 	Claims under this § 4 shall be made in writing against the other Contract
Party by December 31, 2009.








§ 5

Apportionment of Liability





	5.1	 	BAG shall indemnify LANXESS and all companies affiliated with LANXESS
against liabilities of BAG or companies affiliated with BAG arising by statute
or by application of common law and existing on the Consummation Date and which
were not assigned to LANXESS or companies affiliated with LANXESS by the
Measures for Formation of the LANXESS Subgroup or the Spin-Off.
	 
	5.2	 	LANXESS shall indemnify BAG and all companies affiliated with BAG against
liability arising by statute or by application of the common law for
obligations of LANXESS or companies affiliated with LANXESS which existed on
the Consummation Date and which were assigned to LANXESS or companies
affiliated with LANXESS by the Measures for Formation of the LANXESS Subgroup
or the Spin-Off.
	 
	5.3	 	The provisions of this § 5 shall not apply to the apportionment of
liability set out in §§ 6, 7 and 8.








II.

Liability for Environmental Contamination, Antitrust Violations and Product Liability








§ 6

Liability for Environmental Contamination



With respect to liability for all kinds of contamination of land, water
(including groundwater), buildings and plants (“Environmental Contamination”),
the Contract Parties agree as between themselves to be bound by the following
provisions. These provisions conclusively govern, as between the Contract
Parties, which of the Contract Parties shall be responsible for Environmental
Contamination which was caused or arose prior to the Economic Effective Date.
No further claims in


12









 





this respect shall be asserted between the Contract Parties. The Contract
Parties shall ensure that such claims are also not asserted by their respective
affiliated companies.



To the extent a Contract Party is liable that Contract Party shall, subject to
any further obligations, fully indemnify the other Contract Party and any
companies affiliated with it for any liability arising out of public or private
law owed to public authorities or other third parties for Environmental
Contamination of the relevant property.









	6.1	 	Liability for Environmental Contamination of LANXESS Properties





	 	6.1.1	 	Liability of LANXESS





	 	 	Subject to § 6.4, LANXESS shall be liable for Environmental
Contamination:





	 	—	 	of those areas, specified and shaded in red in Appendix 6.1.1 of the
Leverkusen, Dormagen, Uerdingen and Brunsbüttel chemical parks, which
LANXESS Deutschland GmbH shall purchase from BAG under a yet to be
concluded property purchase agreement;
	 
	 	—	 	of properties located in foreign jurisdictions, which have been or will
be, directly or indirectly, purchased by Acquiring LANXESS Companies from
Transferring BAG Companies; and
	 
	 	—	 	of all other properties exclusively or primarily used by the LANXESS
Subgroup on the Economic Effective Date





	 	 	(hereinafter, collectively, the “LANXESS Properties”), unless LANXESS
proves:





	 	a)	 	that the Environmental Contamination of the affected LANXESS
Property which triggered the liability was caused by contaminants carried in
the groundwater coming from another property which:





	 	(i)	 	on the Economic Effective Date was owned by BAG or by a
company affiliated with BAG or after the Economic Effective Date
was acquired by BAG or by a company affiliated with BAG, and was
not exclusively or primarily used by the LANXESS Subgroup on the
Economic Effective Date;
	 
	 	 	 	or




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	 	(ii)	 	while not owned by BAG or by a company affiliated with BAG on
or after the Economic Effective Date, was exclusively or primarily
used by BAG or by a company affiliated with BAG on or after the
Economic Effective Date for production purposes, storage purposes
or for the handling of products;





	 	 	 	or
	 
	 	b)	 	that the Environmental Contamination which triggered the liability was
caused by BAG or by a company affiliated with BAG after the Economic
Effective Date.





	 	6.1.2	 	Liability of BAG





	 	 	Subject to § 6.4, BAG shall be liable for any Environmental Contamination
of LANXESS Properties for which LANXESS is not liable as a result of having
provided exonerating evidence. The following provisions shall also apply:





	 	a)	 	In the situation described in § 6.1.1 a), BAG shall reimburse LANXESS
and the companies affiliated with LANXESS for expenses incurred in taking
appropriate, necessary and reasonable measures to avert the dangers
associated with such Environmental Contamination. There shall be no right
to claim for indirect damages such as loss of profit, loss of use and
loss of production.
	 
	 	b)	 	In the situation described in § 6.1.1 b), responsibility and
reciprocal claims shall be determined according to the laws generally
applicable in each case.









	6.2	 	Liability for Environmental Contamination of BAG Properties





	 	6.2.1	 	Liability of BAG





	 	 	Subject to § 6.4, BAG shall be liable for Environmental Contamination of
properties (excluding the LANXESS Properties) which on the Economic Effective
Date are owned by BAG or by a company affiliated with BAG, used by BAG or by a
company affiliated with BAG, or leased from third parties (hereinafter,
collectively, the “BAG Properties”), unless BAG proves:





	 	a)	 	that the Environmental Contamination of the affected BAG Property
which triggered the liability was caused by contaminants carried in the
groundwater coming from another property which:




14









 






	 	(i)	 	on the Economic Effective Date was owned by LANXESS or by a
company affiliated with LANXESS or after the Economic Effective
Date was acquired by LANXESS or by a company affiliated with
LANXESS, and was not exclusively or primarily used by the Bayer
Subgroup on the Economic Effective Date;
	 
	 	 	 	or
	 
	 	(ii)	 	while not owned by LANXESS or by a company affiliated with
LANXESS on or after the Economic Effective Date was exclusively or
primarily used by LANXESS or by a company affiliated with LANXESS
on or after the
Economic Effective Date for production purposes, storage purposes or
for the handling of products;





	 	 	 	or
	 
	 	b)	 	that the Environmental Contamination which triggered the liability was
caused by LANXESS or by a company affiliated with LANXESS after the
Economic Effective Date.
	 
	 	6.2.2	 	Liability of LANXESS





	 	 	Subject to § 6.4, LANXESS shall be liable for any Environmental
Contamination of BAG Properties for which BAG is not liable as a result of
having provided exonerating evidence.
The following provisions shall also apply:





	 	a)	 	In the situation described in § 6.2.1 a), LANXESS shall reimburse BAG
and the companies affiliated with BAG for expenses incurred in taking
appropriate, necessary and reasonable measures to avert the dangers
associated with Environmental Contamination. There shall be no right to
claim for indirect damages such as loss of profit, loss of use and loss
of production.
	 
	 	b)	 	In the situation described in § 6.2.1 b), responsibility and
reciprocal claims shall be determined according to the laws generally
applicable in each case.




15









 










	6.3	 	Liability for Environmental Contamination of Other Properties





	 	 	6.3.1 Liability of LANXESS





	 	 	Subject to § 6.4, LANXESS shall be liable for Environmental Contamination
of properties other than LANXESS Properties and BAG Properties (hereinafter,
the “Third Party Properties”) to the extent that such Environmental
Contamination is caused by contaminants carried in the groundwater from LANXESS
Properties to the Third Party Properties.
	 
	 	 	6.3.2 Liability of BAG
	 
	 	 	Subject to § 6.4, BAG shall be liable for Environmental Contamination of
Third Party Properties to the extent that such Environmental Contamination is
caused by contaminants carried in the groundwater from BAG Properties to the
Third Party Properties.









	6.4	 	Liability for Environmental Contamination by Reference to List of
Properties
	 
	 	 	BAG and LANXESS shall be liable for Environmental Contamination of the
properties (including landfills) specified on the list of properties in
Appendix 6.4 to the extent stated therein, unless the relevant Contract Party
is able to provide such exonerating evidence as is set out in § 6.1.1 b) or §
6.2.1 b).









	6.5	 	Liability for Environmental Contamination Arising from Purchase and
Acquisition Agreements
	 
	 	 	LANXESS shall be liable for Environmental Contamination in connection with
the sold companies, businesses, factories and plants listed in Appendix 6.5,
according to the terms of the relevant purchase and acquisition agreements.
Subject to § 6.4, BAG shall assume the liability for Environmental
Contamination in connection with the sold companies, businesses, factories and
plants not listed in Appendix 6.5, except for LANXESS Properties for which
LANXESS shall be liable pursuant to § 6.1.1.









	6.6	 	Limitation of Liability for LANXESS
	 
	 	 	The total liability of LANXESS and companies affiliated with LANXESS for
Environmental Contamination within the meaning of this § 6 shall, pursuant to
the following terms, be limited to 350 million euros (hereinafter the “Maximum
Liability Amount”). BAG shall be liable for claims asserted against LANXESS and
companies affiliated with LANXESS to the extent to which such claims in total
exceed the Maximum Liability Amount.




16









 






	 	6.6.1	 	The Maximum Liability Amount only applies to Environmental
Contamination to the extent it was caused before the Economic Effective
Date, the burden of proof lying with LANXESS.
	 
	 	6.6.2	 	The Maximum Liability Amount only applies to costs for measures:





	 	a)	 	which LANXESS or BAG, or companies affiliated with LANXESS or
BAG, were obligated to take as a result of decisions (whether or
not they are final and binding, unappealable or immediately
enforceable) issued by authorities or courts by December 31,
2009.;
	 
	 	b)	 	which LANXESS or BAG, or companies affiliated with LANXESS or
BAG, were obligated to take as a result of agreements subject to
public law and concluded by December 31, 2009 in which the other
Contract Party participated and consented;
	 
	 	c)	 	the taking of which the Contract Parties have agreed upon by
December 31, 2009; or
	 
	 	d)	 	which are taken by December 31, 2009 in order to avert a
specific and current danger.





	 	 	 	To the extent that the costs are incurred for measures resulting
from investigations which LANXESS or a company affiliated with LANXESS
performed or caused to be performed, these costs shall not be included in
the Maximum Liability Amount, unless:





	 	e)	 	there is a legally or officially imposed duty to carry out the
investigation;
	 
	 	f)	 	the investigation was performed in order to avert a specific
and current danger;
	 
	 	g)	 	the investigation was carried out in order to fulfill a
contractual obligation existing on the Economic Effective Date;
	 
	 	h)	 	the investigation was carried out with the prior consent of the
other Contract Party; or




17









 






	 	i)	 	investigations were reasonable and necessary in connection with
portfolio transactions, such as the sale of companies.





	 	 	 	To the extent that the costs are incurred for measures resulting
from information which LANXESS or a company affiliated with LANXESS has
disclosed to authorities or other third parties, these costs will not be
included in the Maximum Liability Amount, unless the disclosure of such
information:





	 	j)	 	was made in fulfillment of a legally or officially imposed
duty;
	 
	 	k)	 	was made in order to avert a specific and current danger;
	 
	 	l)	 	was made in order to fulfill a contractual obligation existing
on the Economic Effective Date;
	 
	 	m)	 	was made with the prior consent of the other Contract Party; or
	 
	 	n)	 	constituted necessary and appropriate information in connection
with portfolio transactions, such as the sale of a company.









	6.7	 	Requirements for the Duty to Indemnify; Procedures





	 	6.7.1	 	A duty to indemnify under § 6 shall only exist if the Contract
Party to be indemnified is required to take measures pursuant to
incontestable (final and binding, unappealable) or immediately
enforceable decisions of authorities or courts or as a result of
agreements subject to public law in which the other Contract Party
participated and consented, or if the Contract Parties have agreed on the
implementation of necessary measures in connection with Environmental
Contamination, or if necessary measures in connection with Environmental
Contamination cannot be postponed for legal reasons.
	 
	 	6.7.2	 	A duty to indemnify pursuant to § 6 shall not exist to the extent
that the costs are incurred for measures resulting from investigations
which the Contract Party asserting the claim for indemnification or a
company affiliated with it performed or caused to be performed, unless:





	 	a)	 	there is a legally or officially imposed duty to carry out the
investigation;




18









 






	 	b)	 	the investigation was performed in order to avert a specific and
current danger;
	 
	 	c)	 	the investigation was carried out in order to fulfill a
contractual obligation existing on the Economic Effective Date;
	 
	 	d)	 	the investigation was carried out with the prior consent of the
other Contract Party; or
	 
	 	e)	 	investigations were appropriate and necessary in connection with
portfolio transactions, such as the sale of companies.





	 	 	 	The above provision applies correspondingly to the disclosure of
information to authorities or other third parties.
	 
	 	6.7.3	 	To the extent that claims are asserted by a third party against the
Contract Party to be indemnified, that Contract Party shall without undue
delay fully inform the Contract Party having a duty to indemnify in
writing. The Contract Party having a duty to indemnify shall have the right
to take charge of further proceedings and shall be given a power of
attorney by the Contract Party to be indemnified to the extent necessary
for such purposes. At the request of the Contract Party having a duty to
indemnify, the Contract Party to be indemnified shall use its best efforts
to reasonably support the other party. The costs incurred in the defence
shall be borne by the Contract Party having a duty to indemnify. This does
not apply to internal costs incurred by the Contract Party to be
indemnified and companies affiliated with it.
	 
	 	6.7.4	 	The Contract Parties shall ensure that the other Contract Party is
provided with all documents and information required in connection with
mounting a defence pursuant to §§ 6.1.1 a) or 6.2.1 a) relating to possible
causes of the Environmental Contamination. The Contract Party having a duty
to indemnify shall be entitled to undertake appropriate and necessary
investigations and drilling. Sentences 1 and 2 also apply to the evidence
to be provided by LANXESS pursuant to § 6.6.1.
	 
	 	6.7.5	 	To the extent a Contract Party asserts claims under this § 6, it
shall provide the other Contract Party with copies of documents relating to
the property in question and the related Environmental Contamination. In
particular, copies of documents necessary





19









 






	 	 	 	to identify the property in question and the Environmental
Contamination related thereto within the appendices of this § 6
are to be provided.









	6.8	 	Relationship of this Agreement to the Utilization Agreements
	 
	 	 	To the extent the provisions of this § 6 deviate from the provisions
contained in the utilization agreements to be transferred to LANXESS
Deutschland GmbH in connection with the MaterialScience Spin-Off and the
Chemicals Spin-Off, the provisions of this § 6 shall take precedence.









	6.9	 	Limitation of Actions
	 
	 	 	Claims under this § 6 shall be barred after December 31, 2034.









	6.10	 	Deductible Amount
	 
	 	 	Claims pursuant to § 6 may only then be asserted if and to the extent that
an individual claim arising out of a single incident exceeds the amount of
50,000 euros and the sum of these individual claims exceed the amount of
250,000 euros (deductible amount).








§ 7

Product Liability




With respect to liability for duties and obligations arising out of or in
connection with defective products (within the meaning of the German Product
Liability Act or the laws applicable in each case) (hereinafter “Product
Liability Claims”), the Contract Parties agree in relation to each other to be
bound by the following apportionment of liability. To the extent a Contract
Party is liable, it shall indemnify the other Contract Party and any companies
affiliated with it against these Product Liability Claims.








	7.1	 	Liability for Products Which Were or Will Be Introduced to the Market
before the Consummation Date by the Subgroups in Operation on the Economic
Effective Date





	 	7.1.1	 	LANXESS shall be liable for all Product Liability Claims arising
out of or in connection with defective products which were introduced to
the market by the LANXESS Subgroup in operation on the Economic Effective
Date or which it will introduce to the market prior to the Consummation
Date.



20









 










	 	7.1.2	 	BAG shall be liable for all Product Liability Claims arising out of
or in connection with defective products which were introduced to the
market by the Bayer Subgroup in operation on the Economic Effective Date
or which will be introduced to the market prior to the Consummation Date.
	 
	 	7.1.3	 	The identification of the products introduced to the market by the
respective business unit shall, among other things, be carried out with
reference to so-called UVP numbers. § 7.6 shall remain unaffected.









	7.2	 	Liability for Products Which Will Be Introduced to the Market From the
Consummation Date by the Subgroups in Operation on the Economic Effective Date
	 
	 	 	Product Liability Claims arising out of or in connection with defective
products which will be introduced to the market from the Consummation Date
shall be governed by the relevant applicable laws.









	7.3	 	Liability for Products of Sold Companies, etc.
	 
	 	 	LANXESS shall be liable for all Product Liability Claims arising out of or
in connection with defective products introduced to the market by the sold
companies, businesses, factories and plants listed in Appendix 7.3. BAG shall
be liable for all Product Liability Claims arising out of or in connection with
defective products which were introduced to the market by entities other than
the sold companies, businesses, factories and plants listed in Appendix 7.3,
unless otherwise stipulated in § 7.4.









	7.4	 	Liability For Certain Products
	 
	 	 	LANXESS shall be liable for all Product Liability Claims arising out of or
in connection with defective products:





	 	a)	 	the UVP numbers of which are listed in Appendix 7.4.1 and which were
introduced to the market; or
	 
	 	b)	 	which were introduced to the market by the lines of business and
business divisions of the former chemicals and polymers business areas
which are listed in Appendix 7.4.2, regardless of the point in time at
which the product was introduced to the market; or



21









 










	 	c)	 	which were introduced to the market under the trade names listed in
Appendix 7.4.3 by the business divisions listed in that appendix.





	 	 	Unless this agreement provides otherwise, BAG shall be liable for all
Product Liability Claims arising out of and in connection with defective
products which are neither listed in Appendix 7.4.1, nor were introduced to
the market by the lines of business and business divisions of the former
chemicals and polymers business areas listed in Appendix 7.4.2, nor were
introduced to the market under the trade names listed in
Appendix 7.4.3 by the
business divisions listed in that appendix.









	7.5	 	Product Liability Claims of the Contract Parties against Each Other
	 
	 	 	The terms set out in §§ 7.1, 7.3 and 7.4 above shall only apply to Product
Liability Claims asserted by third parties and, unless the relevant parties
agree otherwise in a specific case, determine as between themselves which of
the Contract Parties shall be liable for the Product Liability Claims.
Therefore, claims for defective products within the meaning of §§ 7.1.1, 7.3
and 7.4 asserted by BAG against LANXESS and companies affiliated with LANXESS
and claims for defective products within the meaning of § 7.1.2 asserted by
LANXESS against BAG and companies affiliated with BAG are excluded. Each
Contract Party shall be responsible for ensuring that companies affiliated with
it do not assert such claims.









	7.6	 	Introduction to the Market
	 
	 	 	An introduction to the market within the meaning of §§ 7.1, 7.3 and 7.4
shall be determined in accordance with the provisions of the relevant
applicable product liability law, however, an introduction to the market shall
only be deemed to have occurred if the product in question was introduced to a
market outside of the Bayer Group (as it existed at the time of the relevant
introductory act). Actions within the Bayer Group (as it existed at the time of
the relevant introductory act), such as deliveries, shall not be considered as
an introduction to the market within the meaning of §§ 7.1, 7.3 and 7.4.









	7.7	 	Procedures
	 
	 	 	Each Contract Party shall inform the other Contract Party immediately if
third parties assert claims or threaten to assert claims against it or a
company affiliated with it which could lead to liability of the other Contract
Party (hereinafter the “Liable Contract Party”) under §§ 7.1, 7.3 or 7.4. In
such a case, the Contract Party shall disclose all relevant information to the
Liable Contract Party, grant inspection of all books and records, and allow
talks with



22









 





	 	 	employees, to the extent that this is reasonably necessary in the
estimation of the Liable Contract Party in order to assess the validity
of the claims asserted or threatened to be asserted. At the request of
the Liable Contract Party, the Contract Party shall ensure that the
defence of these claims, even within court proceedings shall be carried
out exclusively according to the instructions and at the cost of the
Liable Contract Party. The costs incurred in the defence shall be borne
by the Contract Party having a duty to indemnify. This does not apply to
internal costs incurred by the Contract Party to be indemnified and
companies affiliated with it.








§ 8

Liability for Antitrust Violations




The Contract Parties agree in relation to each other to the following
apportionment of liability for duties and obligations relating to the payment
of fines, pecuniary and other (additional) penalties, relating to damage claims
of third parties including payment of criminal sanctions, third party claims for the transfer of surplus proceeds or advantages arising out of antitrust
violations (hereinafter the “Antitrust Claims”).








	8.1	 	Liability for General Antitrust Violations





	 	8.1.1	 	Subject to § 8.2, LANXESS shall be liable for Antitrust Claims
arising out of antitrust violations committed by the LANXESS Subgroup and
shall reimburse BAG and companies affiliated with BAG for any necessary
expenses incurred to fulfill these Antitrust Claims.
	 
	 	8.1.2	 	Subject to § 8.2, BAG shall be liable for all Antitrust Claims
arising out of antitrust violations committed by the Bayer Subgroup and
shall reimburse LANXESS and companies affiliated with LANXESS for the
expenses incurred as necessary to fulfill these Antitrust Claims.
	 
	 	8.1.3	 	A Contract Party shall only have a duty to reimburse for expenses
incurred in fulfilling the Antitrust Claims arising out of (i)
incontestable decisions of authorities or courts, or (ii) irrevocable and
final court or out-of-court settlements which were issued or
concluded on or after the Economic Effective Date. A duty to reimburse
shall not exist if the reimbursement in the specific case would be
illegal or even a criminal offence under the relevant applicable laws.
Rights of indemnity of the Contract Parties shall not apply.



23









 










	 	8.1.4	 	If and to the extent Antitrust Claims are asserted against a
Contract Party or a company affiliated with it and the payments made by
this Contract Party or by the company affiliated with it are not or are
only partially tax deductible as business expenses and a claim for
reimbursement exists against the other Contract Party, the other Contract
Party shall pay an amount to compensate for the tax disadvantages in
addition to the reimbursement amount owed. The tax disadvantages to be
compensated for shall equal the tax burden applicable to the amount of
the reimbursement payment received by the Contract Party or the company
affiliated with it, against which the Antitrust Claims were asserted. The
utilization of tax loss carryforwards shall also be deemed to be a tax
burden (utilized amount of tax loss carryforward multiplied by the
corporate income tax rate and/or the trade tax base amount times the
local multiplier). Differing tax rates shall not be taken into account.









	8.2	 	Liability for Certain Antitrust Violations
	 
	 	 	With respect to liability for Antitrust Claims arising out of or in
connection with those proceedings which relate or were related to BAG’s former
rubber business division and regarding which, before the Economic Effective
Date, either in at least one jurisdiction official proceedings were pending or
were commenced (regardless of the Contract Parties’ knowledge), or BAG, a
company affiliated with BAG or a competitor of BAG has taken steps before an
antitrust authority in at least one jurisdiction with a view to commencing
proceedings (hereinafter “Antitrust Proceedings”), the Contract Parties intend
with the following provisions to in principle adopt the positions they would
have been in if the Antitrust Claim were divided vis-à-vis third parties
according to the following provisions and each Contract Party were liable
vis-à-vis third parties to this extent.





	 	8.2.1	 	LANXESS shall be liable for Antitrust Claims arising out of or in
connection with Antitrust Proceedings only up to the amount of 30% of
the relevant Antitrust Claim, and shall reimburse BAG for 30% of all
expenses incurred by it and by companies affiliated with it necessary to
fulfill these Antitrust Claims.
	 
	 	8.2.2	 	BAG shall be liable for Antitrust Claims arising out of or in
connection with Antitrust Proceedings in the amount of the remaining 70%
of the respective Antitrust Claim, and shall reimburse LANXESS for 70%
of all expenses incurred by it and by companies affiliated with it
necessary to fulfill these Antitrust Claims.



24









 










	 	8.2.3	 	The total liability of LANXESS for Antitrust Claims arising out of or
in connection with Antitrust Proceedings shall not exceed 100 million euros
(“Maximum Liability Limit”). Reimbursement payments under § 8.2.5 are not
counted in this amount.
	 
	 	 	 	To the extent that the total amount of expenses incurred by LANXESS or
a company affiliated with it for fulfillment of Antitrust Claims arising
out of or in connection with Antitrust Proceedings exceeds the Maximum
Liability Limit, BAG shall be fully liable for this part of the Antitrust
Claims and shall reimburse LANXESS for all expenses incurred by it and
companies affiliated with it as necessary to fulfill the Antitrust Claims
to the extent the expenses exceed the Maximum Liability Limit.
	 
	 	8.2.4	 	A Contract Party shall only have a duty to reimburse for expenses
incurred in fulfilling the Antitrust Claims arising out of (i)
incontestable decisions of authorities or courts, or (ii) irrevocable and
final court or out-of-court settlements which were issued or concluded on
or after the Economic Effective Date. A duty to reimburse shall not exist
if the reimbursement in the specific case would be illegal or a criminal
offence under the relevant applicable laws. Rights of indemnity of the
Contract Parties shall not apply.
	 
	 	8.2.5	 	If and to the extent Antitrust Claims arising out of or in connection
with Antitrust Proceedings are asserted against a Contract Party or a
company affiliated with it and the payments made by this Contract Party or
by a company affiliated with it are not or are only partially tax
deductible as business expenses, the other Contract Party shall pay an
amount to compensate for the tax disadvantages corresponding to its
proportion of liability in addition to the reimbursement amount owed. The
tax disadvantages compensated for shall be equal to the tax burden
applicable to the amount of the reimbursement payment received by the
Contract Party or the company affiliated with it, against which the
Antitrust Claims were asserted. The utilization of tax loss carryforwards
shall also be deemed to be a tax burden (utilized amount of tax loss
carryforward multiplied by the corporate income tax rate and/or the trade
tax base amount times the local multiplier). The chronological order of the
due dates of the Antitrust Claims shall be decisive. Differing tax rates
shall not be taken into account.
	 
	 	8.2.6	 	If in any calendar year reimbursement payments (including
compensation for the corresponding tax burden) to be made by LANXESS to BAG
or to a company affiliated with BAG exceed 50 million euros, the amount in
excess of 50 million



25









 





	 	 	 	euros shall be carried forward to the next calendar year and shall
only become payable on April 1 of that calendar year.





	 	8.2.7	 	BAG shall continue to conduct the legal defence of Antitrust
Proceedings in which it or companies affiliated with it are involved on
the Economic Effective Date. LANXESS shall itself or through a company
affiliated with it assume the legal defense of Antitrust Proceedings in
which Bayer Chemicals Aktiengesellschaft was involved on the Economic
Effective Date.
	 
	 	8.2.8	 	The external costs of conducting each Antitrust Proceeding
(including costs of the proceedings and costs of the defence) shall be
divided between BAG and LANXESS in a ratio of 70% to 30%. The duty of
LANXESS to assume external cost of conducting Antitrust Proceedings is not
limited to a maximum amount and shall not be included in the Maximum
Liability Limit set out in § 8.2.3. Each Contract Party shall bear its
own internal costs and the internal costs of companies affiliated with
it.
	 
	 	8.2.9	 	By the Consummation Date, the Contract Parties shall, taking each
other’s interest in account, agree on terms for conducting Antitrust
Proceedings as well as for mutual cooperation and appropriate information
exchange and shall enter into a so-called joint defense agreement in
order to, among other things, protect attorney-client privilege.








§ 9

Insurance Benefits and Third Party Compensation





	9.1	 	To the extent that a Contract Party has a duty of indemnification under §§
6 or 7, the other Contract Party shall forward to the Contract Party having the
duty to indemnify all insurance benefits or compensation from other third
parties received by it or by a company affiliated with it.
	 
	9.2	 	To the extent a Contract Party has a duty to reimburse expenses under § 8,
the reimbursed amount shall be reduced by the amount the other Contract Party
or a company affiliated with it receives as insurance benefits or a
compensation from other third parties.
	 
	9.3	 	Each Contract Party shall ensure that claims are asserted under existing
insurance coverage and that all insurance benefits received are forwarded.
There is no duty to assert claims against other third parties. To the extent
that in cases falling within §§ 6 and 7 a claim for compensation exists against
third parties, the Contract Party having a duty to indemnify shall be entitled
to have the claim assigned to it and to be provided with all documents required
in



26









 





	 	 	order to pursue the claim. Other third parties are persons who are
neither affiliated with, nor past or present employees of the Contract
Party having a duty to indemnify or of companies affiliated with it.








III.

Duty to Cooperate and Rules of Conduct








§ 10

Subsidies





	10.1	 	If, after the Economic Effective Date, as a result of an incontestable
decision issued by an authority or court, BAG or a company affiliated with BAG
is required to return, together with interest, a public subsidy granted
before the Economic Effective Date, because of an act or omission of LANXESS or
a company affiliated with LANXESS, LANXESS shall reimburse BAG for the amount
returned.
	 
	10.2	 	If, after the Economic Effective Date, as a result of an incontestable
decision issued by an authority or court, LANXESS or a company affiliated with
LANXESS is required to return, together with interest, a public subsidy granted
before the Economic Effective Date, because of an act or omission of BAG or a
company affiliated with BAG, BAG shall reimburse LANXESS for the amount
returned.
	 
	10.3	 	The Contract Parties shall keep each other reasonably informed so that
each is able to conduct itself, and to ensure that companies respectively
affiliated with it conduct themselves, in such a manner so as to avoid the risk
of public subsidies granted before the Economic Effective Date having to be
returned. In all other respects, the procedures set out in § 7.7 shall apply
correspondingly.








§ 11

Shared Usage of IT Resources





	11.1	 	For technical reasons, a complete separation of networks, servers,
applications and data (hereinafter, the “IT Resources”) by the Consummation
Date is not possible. Therefore, BAG
and LANXESS shall come to an understanding on the temporary shared usage of IT
Resources by their business divisions until complete separation has taken
place. In the phase up until complete separation of the IT Resources, the
Contract Parties shall use best efforts to take each other’s interests
into account and shall ensure that their respective affiliated companies
do the same.



27









 










	11.2	 	It is intended that the data required for the business operations of the
LANXESS Subgroup be migrated from the central data storage of BAG and/or of
companies affiliated with BAG to the data storage of LANXESS or of companies
affiliated with LANXESS. With respect to data pertaining to the LANXESS
Subgroup, LANXESS shall have the right, unlimited in time and free of charge,
to access information remaining with BAG and companies affiliated with BAG. The
migration costs shall be borne by BAG. BAG shall share these costs with
companies affiliated with it on an appropriate basis.








§ 12

Treatment of Confidential Information




Each Contract Party shall work towards and shall implement reasonable measures
in order to ensure that confidential information shall be treated by it and
the companies affiliated with it at the time according to the following
provisions.




	12.1	 	All information concerning the business unit of the other Contract Party,
irrespective of the form in which it is embodied or saved (in particular,
data), shall be deemed to be confidential information. Information which
shall not be deemed confidential is information:





	 	•	 	which either was publicly known before the Consummation Date or was
thereafter made public, unless the information was publicly disclosed in
breach of this agreement;
	 
	 	•	 	which the relevant Contract Party or companies affiliated with it
received from a third party on a non-confidential basis, provided that
the recipient, after making reasonable investigations, had no knowledge
that the third party had disclosed such information in breach of
statutory or contractual duties it owed to the other Contract Party or
companies affiliated Companies with it; or
	 
	 	•	 	which the relevant Contract Party or companies affiliated with it
developed independently of information from the other Contract Party or
companies affiliated with it.





	12.2	 	Confidential information shall be treated as strictly confidential and
shall not be disclosed to third parties, irrespective of its form, unless
this agreement expressly provides otherwise. Third parties within the meaning
of § 12 are all persons who are not companies affiliated with the relevant
Contract Party. Disclosure to an affiliated company shall only be permissible
if an objectively justifiable reason exists for such disclosure. Disclosure to



28









 





	 	 	professional advisers who are under a professional or statutory duty of
confidentiality is permissible.
	 
	12.3	 	All necessary and appropriate measures shall be taken to ensure that
confidential information is protected from disclosure to third persons, unless
this agreement expressly provides otherwise. Confidential information shall not
be used for one’s own purposes or for purposes of a third party, unless
expressly provided otherwise.
	 
	12.4	 	All employees shall be instructed to comply with the provisions of this §
12.
	 
	12.5	 	The limitations of § 12 do not apply to the extent that the relevant
Contract Party or a company affiliated with it has or may have a duty to
disclose information to courts and authorities or is otherwise required by law
or stock exchange regulations to disclose such information.








§ 13

Duty to Cooperate




Unless otherwise expressly provided for in this agreement, the Contract Parties
agree to the following duties to cooperate. Specific agreements made concerning
additional duties to cooperate shall remain unaffected.




	13.1	 	BAG and LANXESS shall ensure that all declarations shall be made, all
documents shall be drawn up and all other actions shall be performed which are
necessary or appropriate in connection with the transfer of the LANXESS
Subgroup.
	 
	13.2	 	LANXESS or companies affiliated with it shall be provided with all
business documents attributable to the LANXESS Subgroup according to the terms
of the relevant agreements entered into or relating thereto as kept by BAG and
the companies affiliated with BAG at the relevant time. LANXESS shall be
provided with all documents which are necessary to assert the rights
transferred to it. LANXESS shall keep all records and other documents for the
period required by law for which commercial records must be preserved, and
shall ensure that BAG and companies affiliated with BAG may inspect these
business documents and make copies of the same, provided a legitimate interest
exists.
	 
	13.3	 	After the Consummation Date, all business documents attributable to the
Bayer Subgroup or relating thereto shall remain with BAG and companies
affiliated with it. All documents necessary for asserting the rights remaining
with the Bayer Subgroup shall also remain with BAG or companies affiliated with
it. BAG shall keep all records and other recordings, for the



29









 





	 	 	period required by law for which commercial records must be preserved,
and shall ensure that LANXESS and companies affiliated with LANXESS may
inspect these business documents and make copies of the same, provided a
legitimate interest exists.





	13.4	 	Even after expiration of the period required by law for which commercial
records must be preserved, destruction of business documents, writings, books
and other records by a Contract Party or by companies affiliated with it may
only take place after express written consent from the other Contract Party has
been obtained.
	 
	13.5	 	The Contract Parties shall mutually assist each other in official
proceedings, particularly in tax audits and tax or other legal disputes,
which affect the LANXESS Subgroup. The Contract Parties shall especially
provide each other with all information and documents necessary or appropriate
to satisfy requirements and provide evidence for tax or other authorities or
courts, and shall mutually cause their employees to provide reasonable
assistance. Pursuant to § 147 of the
German Tax Code (Abgabenordnung), LANXESS and BAG shall specifically grant tax
authorities the right to inspect relevant tax documents and stored data created
with help of a data processing system, and shall enable the use of that data
processing system for purposes of auditing these documents and data to the
extent that such documents or date relate to time periods before the Economic
Effective Date. Cooperation with the tax authorities, in particular to
determine the extent of access to the relevant data by the tax authorities,
shall be exclusively decided upon in close consultation with the other Contract
Party. All rights of representation vis-à-vis courts and authorities shall
remain unaffected hereby.
	 
	13.6	 	Each Contract Party shall ensure that the provisions of this § 13 are
implemented and complied with according to the terms agreed upon by those
companies affiliated with it and taking part in the Measures for Formation of
the LANXESS Subgroup.
	 
	13.7	 	The Contract Parties shall agree on reasonable terms for sharing the costs
incurred in fulfilling the provisions set out in § 13.
	 
	13.8	 	LANXESS itself or LANXESS through companies affiliated with it at the
relevant time shall have the right to continue using generally accessible and
existing operations know-how (in particular terms and conditions of sale and
delivery, business guidelines, technical work standards, etc.) for purposes of
running the LANXESS Subgroup. No consideration shall be paid for this.



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IV.

Miscellaneous








§ 14

Assertion of Claims





	14.1	 	Claims under this agreement may only be asserted by BAG or LANXESS. Third
parties and companies affiliated with a Contract Party have no rights under
this agreement. Each Contract Party may authorize a company with which it is
affiliated to assert claims under this agreement and to accept performance of
actions in fulfillment of such claim. Claims under this agreement may only be
assigned by a Contract Party to a company with which it is affiliated with the
consent of the other Contract Party. Any assignment to third parties is
prohibited.
	 
	14.2	 	The assertion of a claim under this agreement shall be made in writing to
the other Contract Party. Each Contract Party shall authorize a company within
its group to conduct negotiations concerning the asserted claim. The company
authorized shall be the one closest to the matter and therefore most able to
appropriately handle, process and, as the case may be, fulfill the claim
asserted.
	 
	14.3	 	Actions in fulfillment of the asserted claim shall be performed for the
benefit of the Contract Party which asserted the claim unless it requires that
the actions in fulfillment be performed for the benefit of a company affiliated
with it. Each Contract Party may use a company affiliated with it to fulfill
its obligations under this agreement. The Contract Parties may mutually agree
in writing on other methods of fulfillment.
	 
	14.4	 	Each Contract Party’s right to pass on the cost of fulfilling a claim to a
company affiliated with it in a way that reflects the proportion of fault
remains unaffected.
	 
	14.5	 	Each Contract Party shall ensure that companies affiliated with it shall
not assert any claims arising from the agreements entered into for the
formation of the LANXESS Subgroup that would contradict the provisions of this
agreement.








§ 15

Costs and Taxes




BAG shall bear the cost of concluding this agreement. Each Contract Party shall
bear the cost of any taxes which may be payable as a result of entering into
this agreement.



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§ 16

Geographical Scope of Applicability of this Agreement




Subject to the following provisions, this agreement shall apply to all
activities of the LANXESS Subgroup and the Bayer Subgroup world-wide. The
provisions contained in this agreement shall not apply to divisions of the
LANXESS Subgroup and the Bayer Subgroup which are located or operating in the
USA, unless otherwise stipulated hereinafter.




	16.1	 	In calculating the Maximum Liability Amount under § 6.6 and the Maximum
Liability Limit under § 8.2, the liability amounts for Environmental
Contamination and antitrust violations, attributable, pursuant to the
agreements entered into in the USA, to divisions of the LANXESS Subgroup
located or operating in the USA, shall be included.
	 
	16.2	 	To the extent that the agreements concluded in the USA for the formation
of the LANXESS Subgroup materially differ from the fundamental rules contained
in §§ 2, 3, 5, 6 (except for the terms contained in §§ 6.4 and 6.5), 7 (except
for the terms contained in §§ 7.3 and 7.4) and 8, the Contract Parties shall
ensure that these agreements are amended to correspondingly reflect the
fundamental rules of this agreement, unless otherwise mutually agreed. The same
applies to the duties to cooperate contained in § 13. The parties agree that
for any amendments which may be necessary, particularities of US law shall
reasonably be taken into account. The Contract Parties expect that any
amendments which may be necessary shall be made by December 31, 2004. If any
amendments which may be necessary are not agreed in a legally binding manner by
the Consummation Date, any remaining open issues shall be decided in an
arbitration proceeding pursuant to § 17.2.








§ 17

Final Provisions





	17.1	 	In this agreement, “companies affiliated with LANXESS” means all companies
which are affiliated with LANXESS within the meaning of §§ 15 et seq. of the
German Stock Corporation Act (Aktiengesetz) upon consummation of the Spin-Off
on the Consummation Date, except where another date is expressly provided for
in this agreement. In this agreement, “companies affiliated with BAG” means all
companies which are affiliated with BAG within the meaning of §§ 15 et seq. of
the German Stock Corporation Act (Aktiengesetz) upon consummation of the Spin-Off on the Consummation
Date, except where another date is expressly provided for in this
agreement.
	 
	17.2	 	All disputes arising in connection with this agreement or concerning its
validity shall be finally settled by arbitration pursuant to the arbitration rules of the
Deutsche Institution für



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	 	 	Schiedsgerichtsbarkeit e.V. (DIS) without recourse to the ordinary courts
of law. The arbitral tribunal may also finally decide on the validity
of this agreement to arbitrate. The place of arbitration shall be
Leverkusen. The arbitral tribunal shall consist of three arbitrators.





	17.3	 	The appendices to this agreement are an integral part of this agreement.
	 
	17.4	 	Amendments and additions to this agreement, including a waiver of this
provision, must be in writing unless compliance with additional formalities is
required.
	 
	17.5	 	Except where expressly provided otherwise in this agreement, claims under
this agreement shall be barred after December 31, 2024.
	 
	17.6	 	This agreement shall be governed by the laws of the Federal Republic of
Germany.
	 
	17.7	 	Should one or more provisions of this agreement be or become void, invalid
or unenforceable in whole or in part, the validity of this agreement and its
remaining provisions shall not be affected thereby. The void, invalid or
unenforceable provision shall be replaced by a provision which most closely
reflects, in terms of form, content, time, measure and area of applicability,
the parties’ commercial intent and purpose of the void, invalid or
unenforceable provision. The same applies to any omissions in this agreement.





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