Document:

Exhibit 10.92

             

            AMENDMENT AND RECONFIRMATION OF SUPPLEMENTAL INDEMNIFICATION AGREEMENT

             

            THIS AMENDMENT AND RECONFIRMATION OF SUPPLEMENTAL INDEMNIFICATION AGREEMENT (this “Agreement”) is entered into effective as of December 12, 2008, by and between FX ENERGY, INC., a Nevada corporation (the “Corporation”), and
            DENNIS B. GOLDSTEIN (“Goldstein” or “Indemnitee”), based on the following premises.

             

            Premises

             

            A.         The Corporation has the power and authority pursuant to its Restated Articles of Incorporation (“Articles”) to engage in any lawful act for which corporations may be organized under the laws of the state of Nevada. Further, Section 78.060 of the Nevada Revised Statutes states that corporations may, at any time,
            exercise these rights, privileges, and powers consistent with the purposes and objects for which the corporation is organized and that the corporation is empowered to make contracts.

             

            B.         Goldstein is currently a director of the Corporation, which agreed to indemnify, protect, and defend Goldstein and hold him harmless pursuant to that certain Indemnification Agreement effective December 9, 2004 (the “Director Indemnification”). Effective December 12, 2008, Goldstein and the Corporation terminated
            the Director Indemnification and entered into a new agreement pursuant to which the Corporation has agreed to indemnify, protect, and defend Goldstein and hold him harmless (the “Corporate Indemnity”).

             

            C.         As a requirement of his professional association with the law firm of Jeffer, Mangels, Butler & Marmaro, LLP (the “Law Firm”), Goldstein has agreed to indemnify, protect, defend, and hold the Law Firm, and its partners, employees, and representatives harmless from and against any and all claims made or
            asserted against the Law Firm and its partners, employees, and representatives on account of an act or omission of Goldstein performed for the Corporation, whether or not such action could be considered as legal advice (the “Goldstein Indemnification”), as set forth in Recital F to that certain Supplemental Indemnity Agreement (as defined below).

             

            D.         Goldstein and the Corporation are also parties to that certain Supplemental Indemnity Agreement effective December 9, 2004 pursuant to which the Corporation has agreed to further indemnify, protect, and defend Goldstein and hold him harmless from and against any and all losses, claims, damages, expenses, liabilities,
            judgments, fines, penalties and actions arising out of or related to the Goldstein Indemnification (the “Supplemental Indemnity Agreement”). 

             

            E.         In light of the fact that Goldstein and the Corporation have terminated the Director Indemnification and entered into the Corporate Indemnity, they desire to amend and reconfirm the Supplemental Indemnity Agreement. 

             

            Agreement

             

            NOW, THEREFORE, for and in consideration of these premises, which are incorporated herein by reference, and the mutual promises and covenants contained herein, the Corporation and Indemnitee do hereby covenant and agree as follows:

             

            
                

            

                          1.          Acknowledgement of the Corporate Indemnity. All references in the Supplemental Indemnity Agreement to the Director Indemnification are amended to refer to the Corporate Indemnity and all subsequent amendments
            thereto.

             

            2.          Reconfirmation of Supplemental Indemnity Agreement. Goldstein and the Corporation agree and confirm that notwithstanding thefact that they have terminated the Director Indemnification and
            enteredinto the Corporate Indemnity, the Supplemental Indemnity Agreement continues in full force and effect in accordance with its terms and conditions, except as expressly amended by this Agreement. 

             

            IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective on and as of the day and year first above written.

             

            
                	
                             

                        	
                            Corporation:

                        
	
                             

                        	
                             

                        	
                             

                        
	
                             

                        	
                             

                        	
                            FX ENERGY, INC.

                        
	
                             

                        	
                             

                        	
                             

                        
	
                             

                        	
                             

                        	
                            By: /s/ David N. Pierce

                        
	
                             

                        	
                             

                        	
                            David N. Pierce, President

                        
	
                             

                        	
                             

                        	
                             

                        
	
                             

                        	
                            Indemnitee:

                        
	
                             

                        	
                             

                        	
                             

                        
	
                             

                        	
                             

                        	
                            /s/ Dennis B. Goldstein

                        
	
                             

                        	
                             

                        	
                            DENNIS B. GOLDSTEIN

                        

            

             

             

            
                

                2EXHIBIT 10.56

 

COLLABORATION
AGREEMENT

 

by
and between

 

GENZYME
CORPORATION

 

and

 

OSIRIS
THERAPEUTICS, INC.

 

 

	
  ARTICLE 1:

  	
  DEFINITIONS

  	
  1

  
	
  ARTICLE 2:

  	
  GOVERNANCE OF THE PROGRAM

  	
  12

  
	
  2.1

  	
  Steering Committee

  	
  12

  
	
  2.2

  	
  Decisions

  	
  14

  
	
  ARTICLE 3:

  	
  DEVELOPMENT ACTIVITIES

  	
  15

  
	
  3.1

  	
  Prochymal Development Activities

  	
  15

  
	
  3.2

  	
  Chondrogen Development Activities

  	
  19

  
	
  3.3

  	
  Development Plans

  	
  19

  
	
  3.4

  	
  Development Costs

  	
  20

  
	
  3.5

  	
  Consideration of Resources

  	
  22

  
	
  3.6

  	
  Primary Contact Persons

  	
  22

  
	
  3.7

  	
  Visit of Facilities

  	
  22

  
	
  3.8

  	
  Records

  	
  23

  
	
  3.9

  	
  Ownership and Use of Data

  	
  23

  
	
  ARTICLE 4:

  	
  REGULATORY AND MANUFACTURING

  	
  23

  
	
  4.1

  	
  Regulatory

  	
  23

  
	
  4.2

  	
  Regulatory Expenses

  	
  24

  
	
  4.3

  	
  Safety Reporting

  	
  24

  
	
  4.4

  	
  Product Supply

  	
  25

  
	
  ARTICLE 5:

  	
  COMMERCIALIZATION

  	
  26

  
	
  5.1

  	
  Osiris Territory

  	
  26

  
	
  5.2

  	
  Genzyme Notification Right Regarding
  Distribution Outsourcing

  	
  27

  
	
  5.3

  	
  Genzyme Responsibilities in the Genzyme
  Territory

  	
  27

  
	
  ARTICLE 6:

  	
  CONSIDERATION

  	
  27

  
	
  6.1

  	
  Upfront Payments

  	
  27

  
	
  6.2

  	
  Prochymal Development Milestones

  	
  27

  
	
  6.3

  	
  Prochymal Sales Milestones

  	
  29

  
	
  6.4

  	
  Chondrogen Development Milestones

  	
  30

  
	
  6.5

  	
  Chondrogen Sales Milestones

  	
  31

  
	
  6.6

  	
  Royalties Payable to Osiris

  	
  31

  
	
  6.7

  	
  Royalties Payable to Genzyme

  	
  33

  
	
  6.8

  	
  Records; Audits

  	
  33

  
	
  6.9

  	
  Calculation of Payment

  	
  34

  
	
  6.10

  	
  Late Payments

  	
  34

  
	
  6.11

  	
  FIN 46 Cooperation

  	
  34

  
	
  ARTICLE 7:

  	
  GRANT OF RIGHTS

  	
  34

  
	
  7.1

  	
  License to Genzyme

  	
  34

  
	
  7.2

  	
  Covenant Not to Sue Osiris

  	
  35

  
	
  7.3

  	
  Additional Rights

  	
  36

  
	
  7.4

  	
  No Other Rights

  	
  36

  
	
  7.5

  	
  Rights to Exploit Intellectual Property
  Outside of Collaboration

  	
  36

  
	
  7.6

  	
  Rights to Exploit Joint Patent Rights and
  Joint Technology

  	
  36

  
	
  7.7

  	
  Exclusivity

  	
  36

  
	
  7.8

  	
  Right of Notification

  	
  37

  
	
  ARTICLE 8:

  	
  INTELLECTUAL PROPERTY RIGHTS

  	
  37

  
	
  8.1

  	
  Ownership of Technology and Patent Rights;
  Prosecution of Patent Rights

  	
  37

  

 

 

	
  8.2

  	
  Filing, Prosecution, Maintenance and
  Enforcement of Patent Rights

  	
  39

  
	
  ARTICLE 9:

  	
  CONFIDENTIALITY

  	
  42

  
	
  9.1

  	
  Nondisclosure Obligations

  	
  42

  
	
  9.2

  	
  Exceptions

  	
  43

  
	
  9.3

  	
  Disclosures Required by Law

  	
  43

  
	
  9.4

  	
  Disclosure of Agreement; Use of Name

  	
  44

  
	
  9.5

  	
  Publications

  	
  44

  
	
  ARTICLE 10:

  	
  REPRESENTATIONS AND WARRANTIES

  	
  45

  
	
  10.1

  	
  Representations of the Parties

  	
  45

  
	
  10.2

  	
  Additional Representations of Osiris

  	
  45

  
	
  ARTICLE 11:

  	
  INDEMNITY AND INSURANCE

  	
  46

  
	
  11.1

  	
  Indemnification by Genzyme

  	
  46

  
	
  11.2

  	
  Indemnification by Osiris

  	
  47

  
	
  11.3

  	
  Indemnification Procedure

  	
  47

  
	
  11.4

  	
  Limitation of Liability

  	
  48

  
	
  11.5

  	
  Insurance

  	
  48

  
	
  ARTICLE 12:

  	
  TERM AND TERMINATION

  	
  48

  
	
  12.1

  	
  Term of Agreement

  	
  48

  
	
  12.2

  	
  Termination

  	
  48

  
	
  12.3

  	
  Effect of Termination by Osiris for Breach
  by Genzyme or at Genzyme’s Election

  	
  49

  
	
  12.4

  	
  Effect of Material Breach by Osiris

  	
  50

  
	
  12.5

  	
  Effects of Bankruptcy

  	
  50

  
	
  12.6

  	
  Effects of Termination upon Mutual
  Agreement

  	
  51

  
	
  12.7

  	
  Effects of Termination Generally

  	
  51

  
	
  ARTICLE 13:

  	
  MISCELLANEOUS

  	
  51

  
	
  13.1

  	
  Interpretation

  	
  51

  
	
  13.2

  	
  Force Majeure

  	
  51

  
	
  13.3

  	
  Successors in Interest

  	
  52

  
	
  13.4

  	
  Severability

  	
  52

  
	
  13.5

  	
  Notices

  	
  53

  
	
  13.6

  	
  Applicable Law

  	
  53

  
	
  13.7

  	
  Compliance with Applicable Laws

  	
  53

  
	
  13.8

  	
  Dispute Resolution

  	
  53

  
	
  13.9

  	
  Entire Agreement

  	
  56

  
	
  13.10

  	
  Independent Contractors

  	
  56

  
	
  13.11

  	
  Waiver

  	
  56

  
	
  13.12

  	
  Counterparts

  	
  56

  
	
  13.13

  	
  Further Assurances

  	
  56

  

 

2

 

COLLABORATION
AGREEMENT

 

THIS COLLABORATION AGREEMENT (the “Agreement”) dated this 31st day of
October, 2008 (the “Effective Date”) is made by and between Genzyme
Corporation, a Massachusetts corporation having its principal place of business
at 500 Kendall Street, Cambridge, Massachusetts 02142 (“Genzyme”) and Osiris
Therapeutics, Inc., a Delaware corporation having its principal place of
business at 7015 Albert Einstein Drive, Columbia, Maryland 21046 (“Osiris”).

 

RECITALS

 

A.                                 Osiris
is a recognized stem cell therapeutic leader focused on developing and
marketing products to treat medical conditions and possesses broad scientific
and clinical leadership in the field of human mesenchymal stem cells (“MSCs”)
and know-how, expertise and intellectual property rights pertaining to MSCs,
including its Prochymal product and Chondrogen product.

 

B.                                   Genzyme
is a recognized biotechnology industry leader with broad scientific
capabilities, including but not limited to expertise in the area of cell
therapy, and commercial expertise engaged in the research, development,
marketing, manufacturing and distribution of bio-pharmaceutical products.

 

C.                                   Genzyme
and Osiris desire to collaborate to develop and commercialize Prochymal and
Chondrogen, subject to the terms and conditions set forth below.

 

NOW THEREFORE, in consideration of the promises and of the covenants
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereto mutually
agree as follows:

 

ARTICLE 1:  DEFINITIONS

 

For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below, whether used in their singular or plural
form:

 

1.1                               “Accepted
Indication” shall have the meaning set forth in Section 3.1.4(b).

 

1.2                               “Additional
Clinical Trial” shall have the meaning set forth in Section  3.1.3.

 

1.3                               “Additional
Rights” shall have the meaning set forth in Section 7.3.

 

1.4                               “Affiliate”
shall mean any corporation or other entity which controls, is controlled by, or
is under common control with a Party to this Agreement.  A corporation or other entity shall be
regarded as in control of another corporation or entity if it directly or
indirectly owns or controls more than fifty percent (50%) of the voting stock
or other ownership interest of the other corporation or entity, or if it
possesses, directly or indirectly, the power to elect or appoint more than
fifty percent (50%) of the members of the governing body of the corporation or
other entity.

 

 

1.5                               “Articulating
Orthopedic Indication” shall mean the use of Chondrogen for preventing or
treating diseases, defects or conditions of articulating joints, including
cartilage and meniscus repair, osteoarthritis, osteochondral defect repair, and
the treatment of acute and chronic orthopedic pain within an articulating
joint.  For clarity, the term
Articulating Orthopedic Indication shall not include indications for bone
growth such as fracture repair and fusion procedures.

 

1.6                               “At-Risk
Indication” shall have the meaning set forth in Section 3.1.4(c).

 

1.7                               “Audited
Party” shall have the meaning set forth in Section 6.8.

 

1.8                               “Bankruptcy
Code” shall mean Title 11 of the United States Code, as amended from time to
time.

 

1.9                               “BLA”
shall mean a biologics license application (or any successor application) filed
with the FDA after completion of human clinical trials to obtain Marketing
Approval of a Product for an Indication in the United States.

 

1.10                         “Business
Day” shall mean each day of the week excluding Saturday, Sunday and U.S.
federal holidays.

 

1.11                         “Cardiac
Indication” shall mean the use of Prochymal to treat or prevent acute
myocardial infarction.

 

1.12                         “Chairperson”
shall have the meaning set forth in Section 2.1.1.

 

1.13                         “Change
of Control” means, with respect to a Party: (a) a merger, reorganization
or consolidation involving such Party in which the stockholders of such Party
immediately prior to such transaction cease to own collectively a majority of
the voting equity securities of the successor entity; (b) a Person or
group of Persons acting in concert acquires more than fifty percent (50%) of
the voting equity securities of such Party, where “Person” means any natural
person, corporation, firm, business trust, joint venture, association,
organization, company, partnership, or other business entity; or (c) the
sale of all or substantially all of the assets of such Party.

 

1.14                         “Chondrogen”
shall mean (a) any formulation, dosage form or delivery system that
contains culturally expanded, undifferentiated, unmodified human MSCs for local
delivery for the Articulating Orthopedic Indication and (b) any
Improvements thereto.

 

1.15                         “Chondrogen
Development Milestone Payment” shall have the meaning set forth in Section 6.4.

 

1.16                         “Chondrogen
Sales Milestone Payment” shall have the meaning set forth in Section 6.5.

 

1.17                         “Chondrogen
Trial” shall have the meaning set forth in Section 3.2.2(a).

 

2

 

1.18                         “Collaboration”
shall mean generally the activities approved by the Steering Committee to
execute the Development Plans.

 

1.19                         “Combination
Product” shall mean a product that contains a Product as one component and at
least one other functional (whether it be drug, biologic or device) component.

 

1.20                         “Commercial
Manufacturing Cost” shall mean (a) where a Party is manufacturing Product
on its own behalf or on behalf of the other Party, all costs actually incurred
by a Party for activities associated with the manufacture of a Product
including, without limitation, technology transfer costs and any royalties,
fees or other consideration payable to a Third Party for a license of
technology attributable to the manufacture of the Product; provided that  Manufacturing Costs shall not exceed the
actual manufacturing costs that could be obtained by a Third Party manufacturer
in an arms-length transaction under similar terms and conditions, or (b) where
a Third Party is manufacturing Product on behalf of a Party, the costs actually
paid by such Party to such Third Party for the manufacture of Product under the
relevant manufacturing agreement.  All
such cost determinations shall be made in accordance with GAAP.

 

1.21                         “Commercial
Post-Marketing Study” shall mean any study of a Product for an Indication
conducted after receipt of Marketing Approval for that Indication which is not
a Phase IV Study.

 

1.22                         “Confidential
Information” shall have the meaning set forth in Section 9.1.

 

1.23                         “Control”
or “Controlled by” shall mean, in the context of a license to or ownership of
intellectual property, possession of the ability on the part of a Party to
grant access to or a license or sublicense as provided for herein without
violating the terms of any agreement or other arrangement with any Third Party
existing at the time such Party would be required hereunder to grant the other
Party such access or license or sublicense.

 

1.24                         “COPD
Indication” shall mean the use of Prochymal to treat chronic obstructive
pulmonary disease.

 

1.25                         “Cost of
Goods Sold Percentage” or “COGS%” shall mean the per unit Commercial
Manufacturing Cost (FOB shipping point) of a Product for an Indication divided
by the per unit Net Sales of a Product for that same Indication.  Further, Commercial Manufacturing Cost shall
be computed under GAAP and shall be lowest cost per unit to produce the Product
for an Indication of the commercially available Product.

 

1.26                         “Crohn’s
Indication” shall mean the use of Prochymal to treat Crohn’s disease.

 

1.27                         “Crohn’s
Indication Clinical Trials” shall have the meaning set forth in Section 3.1.2(b).

 

1.28                         “Development
Costs” shall mean all costs and expenses (including accruals legitimately
chargeable against profits) actually incurred by a Party or a Third Party in
connection with the research, development and manufacture of any Product for an
Indication (all in accordance with GAAP), including without limitation the
following costs and expenses to the extent such items are customary under
industry practices:

 

3

 

(a)                                  costs
and expenses for research and development activities;

 

(b)                                 manufacturing
costs for a Product for an Indication;

 

(c)                                  all
royalties and other fees paid after the Effective Date to any Third Party;

 

(d)                                 G&A
Costs as reasonably required to support the activities of the Parties
hereunder; provided that during the Term, with respect to any activity for
which the Parties are sharing Development Costs pursuant to Sections 3.4.5 or
3.4.8, both Parties will charge G&A Costs at the rate reasonably charged by
Osiris; and

 

(e)                                  other
expenses agreed to by the Steering Committee during the Term.

 

1.29                         “Development
Plan” shall have the meaning set forth in Section 3.3.1.

 

1.30                         “Development
Plan Budget” shall have the meaning set forth in Section 3.4.1.

 

1.31                         “Development
Plan Term” shall mean, with respect to each Indication, the period commencing
on the date a Development Plan for that Indication is developed pursuant to Section 3.3.1
and ending upon the earliest to occur of (a) last commercial sale with
respect to the relevant Indication, (b) the termination by the Steering
Committee or otherwise by mutual agreement of the Parties of the Development
Plan with respect to such Indication, and (c) the termination of this
Agreement.

 

1.32                         “Diabetes
Indication” shall mean the use of Prochymal for the prevention or treatment of
Type I diabetes.

 

1.33                         “Disclosing
Party” shall have the meaning set forth in Section 9.1.

 

1.34                         “Disease
Modification” shall mean a clinically meaningful delay in structural
progression of a disease or condition for which treatment is indicated over a
period of at least one year.  The
progression must be determined by a measurement tool recognized by regulatory
agencies (FDA and/or EMEA).  Disease
Modification would be independent of whether or not the delay in structural progression
is accompanied by significant symptom relief; provided
that if a patient experienced a Statistically Significant worsening of
symptoms, then the delay in structural progression shall not constitute Disease
Modification.

 

1.35                         “EMEA”
shall mean the European Medicines Agency or any successor agency with
responsibilities comparable to those of the European Medicines Agency.

 

1.36                         “Enforcing
Party” shall have the meaning set forth in Section 8.2.1(c).

 

1.37                         “FDA”
shall mean the United States Food and Drug Administration or any successor
agency with responsibilities comparable to those of the United States Food and
Drug Administration.

 

1.38                         “Field”
shall mean (a) with respect to Prochymal, all applications for the
prevention or treatment of diseases, defects, or conditions in humans, and (b) with
respect to Chondrogen, the Articulating Orthopedic Indication.

 

4

 

1.39                         “First
Commercial Sale” of any Product shall mean the first sale for financial
consideration of such Product in a country or territory after Marketing
Approval and, if required for commercial sale, Pricing Approval, has been
granted by the governing health authority of such country.

 

1.40                         “FIN 46”
shall have the meaning set forth in Section 6.11.

 

1.41                         “G&A
Costs” shall mean any corporate overhead expenses of a Party, including without
limitation expenses for general administration, business development, executive
management, investor relations, legal, payroll, and general, corporate
supervisory services.

 

1.42                         “GAAP”
shall mean the current United States generally accepted accounting principles,
consistently applied.

 

1.43                         “Genzyme
Indemnitees” shall have the meaning set forth in Section 11.2.

 

1.44                         “Genzyme
Intellectual Property” shall mean collectively the Genzyme Patent Rights and
the Genzyme Technology.

 

1.45                         “Genzyme
Opt-In Right” shall have the meaning set forth in Section 3.1.4(d).

 

1.46                         “Genzyme
Patent Rights” shall mean any and all Patent Rights (other than Joint Patent
Rights) Controlled by Genzyme, its Affiliates or their respective successors,
as of the Effective Date or at any time during the Term, that include a Valid
Claim and are necessary or useful to make, have made, use, sell, offer to sell
or import Product or any component thereof for an Indication.

 

1.47                         “Genzyme
Technology” shall mean any and all Technology (other than Joint Technology)
Controlled by Genzyme, its Affiliates or their respective successors, as of the
Effective Date or at any time during the Term, that relates to, or is useful
for any component, method or aspect of the research, development, manufacture,
use or commercialization of a Product for an Indication.

 

1.48                         “Genzyme Territory” shall mean all
countries and territories worldwide, but excluding (i) the Osiris
Territory and, (ii) with respect to the GvHD Indication, Japan, unless
Japan is added pursuant to Section 7.1.3.

 

1.49                         “GvHD Indication” shall mean the use
of Prochymal to treat or prevent graft versus host disease.

 

1.50                         “Improvements” shall mean modifications
to a Product where the resulting Product contains culturally expanded, undifferentiated,
unmodified human MSCs.  Illustrative examples of modifications that
are not Improvements include deliberate genetic modifications, deliberate
modifications to the cell membrane, deliberate modifications that cause
significant over-expression of a specific cytokine growth factor, or other
secreted factor, and other development strategies designed to deliberately
change the characteristics such that the resulting Product no longer contains undifferentiated,
unmodified human MSCs.  Illustrative examples of modifications that
are Improvements include modifications in dosage size, substitution or 

 

5

 

addition of one or more excipients, the inclusion of a second active
agent, and the identification, isolation or culture of subpopulations of the
cell types found in Prochymal and Chondrogen. 
For clarity, if an improvement or modification results from a change in
the manufacturing process for a Product, it shall constitute an Improvement,
even if the resulting Product would be deemed sufficiently different by a
Regulatory Agency to require additional clinical trials prior to receipt of
Marketing Approval.  If the Steering Committee
cannot agree as to whether an improvement of modification to a Product
constitutes an Improvement, the dispute will be resolved in accordance with Section 2.2.2,
except that any arbitration resulting from the Steering Committee failing to
agree shall be resolved under the arbitration provisions of Section 13.8.2
instead of the Baseball Arbitration provisions of Section 13.8.3.

 

1.51                         “IND” shall mean  an
investigational new drug application, as defined in Title 21, Part 312,
of the Code of Federal Regulations, filed with the FDA and/or any other similar application filed with an
appropriate Regulatory Agency in a country or group of countries other than the
United States.

 

1.52                         “Indemnified
Party” shall have the meaning set forth in Section 11.3.

 

1.53                         “Indemnifying
Party” shall have the meaning set forth in Section 11.3.

 

1.54                         “Indication”
shall mean (a) with respect to Prochymal, the GvHD Indication, all Major
Indications and all Other Indications treated via Vascular Administration and (b) with
respect to Chondrogen, the Articulating Orthopedic Indication.  For clarity, the term Indication shall not
include an At-Risk Indication unless and until either (i) Genzyme is the
Pursuing Party pursuant to Section 3.1.4(c), or (ii) Genzyme
exercises the Genzyme Opt-In Right pursuant to Section 3.1.4(d).

 

1.55                         “Investigator
Sponsored Trial” shall mean a clinical trial conducted by one or more Third
Party investigators.

 

1.56                         “Joint
Patent Rights” shall mean any and all Patent Rights claiming any Joint
Technology.

 

1.57                         “Joint
Program Data” shall mean data generated from conducting development activities
under a Development Plan.

 

1.58                         “Joint
Technology” shall mean any and all (a) Technology that is discovered,
made, conceived or reduced to practice jointly by employees, agents or
consultants of Osiris and Genzyme as a result of the performance of a
Development Plan and (b) Joint Program Data.

 

1.59                         “Launch
Period” shall have the meaning set forth in Section 5.1.2.

 

1.60                         “Launch
Support Services” shall have the meaning set forth in Section 5.1.2.

 

1.61                         “Legal
Requirements” shall mean any applicable present and future national, state,
local, foreign or similar laws (whether under statute, rule, regulation or
otherwise); applicable requirements under permits, orders, decrees, judgments
or directives, and requirements of applicable Regulatory Agencies (including,
without limitation, current good 

 

6

 

manufacturing
practices); and applicable regulations pertaining to INDs (as amended or
revised from time to time).

 

1.62                         “Losses”
shall have the meaning in Section 11.1.

 

1.63                         “Major
Indication” shall mean the following indications for Prochymal (a) Crohn’s
Indication, (b) Ulcerative Colitis Indication, (c) Diabetes
Indication, (d) COPD Indication, (e) Cardiac Indication, and (f) any
Accepted Indication which the Steering Committee determines to have a worldwide
market potential for Net Sales of Prochymal in a calendar year that could
reasonably be expected to equal or exceed Five Hundred Million Dollars (US
$500,000,000) on an annual basis.  Each
Major Indication shall be listed on Exhibit D, which shall be updated by
the Parties during the Term pursuant to a written document signed by both
Parties.

 

1.64                         “Market
Exclusivity” in a designated country shall mean the possession of a right
granted by any Regulatory Agency providing the holder of such right the
exclusive right to market and sell a Product for one or more Indications in
that designated country, including, without limitation, data exclusivity, or
the existence of a Legal Requirement in connection with a Product which
precludes the Regulatory Agency in that designated country from granting
Marketing Approval for another product because the application for the other
product  contains the same active
ingredient as that which is contained in the applicable Product.

 

1.65                         “Marketing
Approval” shall mean the receipt of all approvals, licenses, registrations or
authorizations of any federal, state or local Regulatory Agency, department,
bureau or other governmental entity, necessary for the sale of a Product for an
Indication in a country or region.

 

1.66                         “Mesenchymal
Stem Cells” or “MSCs” shall mean the human formative pluripotential blast cells
found inter alia in bone marrow, blood, dermis and periosteum that are capable
of differentiating into any of the specific types of mesenchymal or connective
tissues.

 

1.67                         “Negotiation
Period” shall have the meaning set forth in Section 5.1.3(b).

 

1.68                         “Net
Sales” shall mean the gross invoiced sales amount billed by Genzyme, its
Affiliates licensees or sub-licensees or Osiris or its Affiliates or Third
Party licensees or Third Party sub-licensees to Third Party customers,
including Third Party distributors, as applicable, in each case less the
following items (“Net Sales Adjustments”) to the extent such items are actually
taken or incurred and customary under industry practices:

 

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

 

(b)                                 invoiced
freight, postage, shipping and insurance, handling and other transportation
costs actually incurred;

 

(c)                                  taxes
(including without limitation sales, value-added or excise taxes, but excluding
withholding taxes), tariffs, customs duties, surcharges and other governmental
charges

 

7

 

incurred in connection with the production, sale, transportation,
delivery, use, exportation or importation of Product that are incurred at time
of commercial sale or are directly related to the commercial sale;

 

(d)                                 allowances
for bad debt;

 

(e)                                  quantity
discounts, standard and customary cash discounts in the ordinary course of
business, or other
trade discounts, refunds, rebates, charge backs, fees, credits or allowances,
including without limitation amounts incurred in connection with
government-mandated rebate and discount programs, and distribution fees to
Third Parties, invoiced or incurred and which effectively reduce the selling
price.

 

All in
accordance with standard allocation procedures, allowance methodologies and
accounting methods consistently applied in accordance with GAAP.

 

The transfer of any Product by
a distributor or one of its Affiliates to another Affiliate of a distributor
shall not be considered a sale; in such cases, Net Sales shall be determined
based on the gross invoiced sales price by the Affiliate to its customer, less
the deductions allowed under this Section.

 

In the case of Combination Products, Net Sales means the gross amount
billed or invoiced on sales of such a Combination Product less the deductions
set forth above, multiplied by a proration factor.  The prorated component value shall be
mutually agreed upon by the Parties in writing prior to product launch of such
a Combination Product.  If all components
of the Combination Product were sold separately during the same or immediately
preceding royalty period, the proration factor shall be determined by the
following formula: A / (A+B), where A is the aggregate gross sales price of all
royalty-bearing Product components during such period when sold separately from
the other essential functional components, and B is the aggregate gross sales
price of the other essential functional components during such period when sold
separately from the royalty-bearing Product components.

 

1.69                         “Non-Program
Data” shall have the meaning set forth in Section 7.5.

 

1.70                         “No
Participation Decision” shall have the meaning set forth in Section 3.2.2(a).

 

1.71                         “Osiris
Collaborator” shall have the meaning set forth in Section 7.2.

 

1.72                         “Osiris
Event” shall have the meaning set forth in Section 7.8.1.

 

1.73                         “Osiris
Funded Trials” shall have the meaning set forth in Section 3.1.2.

 

1.74                         “Osiris
Indemnitees” shall have the meaning set forth in Section 11.1.

 

1.75                         “Osiris
Intellectual Property” shall mean, collectively, the Osiris Patent Rights and
Osiris Technology.

 

1.76                         “Osiris
Opt-In Right” shall have the meaning set forth in Section 3.1.4(e).

 

8

 

1.77                         “Osiris
Patent Challenge” shall have the meaning set forth in Section 8.1.5.

 

1.78                         “Osiris
Patent Rights” shall mean any and all Patent Rights (other than Joint Patent
Rights) Controlled by Osiris, its Affiliates and their respective successors,
as of the Effective Date or at any time during the Term, that include a Valid
Claim and are necessary or useful to make, have made, use, sell, offer to sell,
or import Product or any component thereof for an Indication.

 

1.79                         “Osiris
Technology” shall mean any and all Technology (other than Joint Technology)
Controlled by Osiris, its Affiliates and their respective successors, as of the
Effective Date or at any time during the Term, that relates to, or is useful
for, any component, method or aspect of the research, development, manufacture,
use or commercialization of a Product for an Indication.

 

1.80                         “Osiris Territory” shall mean the
United States and Canada, and their respective territories and possessions.

 

1.81                         “Other
Indication” shall mean any Accepted Indication which the Steering Committee
determines to have worldwide market potential for Net Sales of Prochymal in a
calendar year that could reasonably be expected to be less than Five Hundred
Million Dollars (US $500,000,000) on an annual basis.  The term Other Indication shall not include
the GvHD Indication or any Major Indication. 
Each Other Indication shall be listed on Exhibit E, which shall be
updated by the Parties during the Term pursuant to a written document signed by
both Parties.

 

1.82                         “Pain
Therapeutic” shall mean use of Chondrogen for the mitigation or relief of
orthopedic pain with a Statistically Significant duration of relief of at least
one (1) year.

 

1.83                         “Participation
Decision” shall have the meaning set forth in Section 3.2.2(a).

 

1.84                         “Party” shall mean Osiris or Genzyme.

 

1.85                         “Patent
Rights” shall mean any United States or foreign patent applications,
provisional patent applications, and any patents issuing therefrom anywhere in
the world, together with any extensions, registrations, confirmations,
reissues, continuations, divisions, continuations-in-part, reexamination
certificates, certificates of invention and applications for certificates of
invention, revalidations, renewals, substitutions, supplementary protection
certificates, additions, or term restorations thereof.

 

1.86                         “Phase II
Clinical Trial” shall mean a clinical trial as defined in 21 C.F.R. 312.21(b),
as may be amended from time to time, or any foreign equivalent thereto.  Unless otherwise agreed by the Steering
Committee, a Phase I/II clinical trial shall not be considered a Phase II
Clinical Trial.

 

1.87                         “Phase
III Clinical Trial” shall mean a clinical trial as defined in 21 C.F.R.
312.21(c), as may be amended from time to time, or any foreign equivalent
thereto, that is designed to seek Marketing Approval.

 

9

 

1.88                         “Phase IV
Study” shall have the meaning set forth in 21 C.F.R. 312.85, as may be amended
from time-to-time, or any foreign equivalent thereto.  For clarity, any post-marketing study that is
not conducted at the request of, and with the agreement of, a Regulatory Agency
shall be a “Commercial Post-Marketing Study” and not a “Phase IV Study”.

 

1.89                         “Pricing
Approval” shall mean, with respect to any country in which the price at which
Genzyme or its Affiliate or sublicensee sells Product must be approved by a
governmental or Regulatory Agency for reimbursement or payment purposes, the
receipt of the approval by the applicable authority with respect to such price.

 

1.90                         “Primary
Contact Person” shall have the meaning set forth in Section 3.6.

 

1.91                         “Prochymal”
shall mean (a) any formulation, dosage form or delivery system suitable
for Vascular Administration that contains culturally expanded,
undifferentiated, unmodified human MSCs , and (b) any Improvements
thereto.

 

1.92                         “Prochymal
Development Milestone Payment” shall have the meaning set forth in Section 6.2.1.

 

1.93                         “Prochymal
Sales Milestone Payment” shall have the meaning set forth in Section 6.3.

 

1.94                         “Product”
shall mean, collectively and individually, Prochymal and Chondrogen.

 

1.95                         “Proposal
Notice” shall have the meaning set forth in Section 7.8.2.

 

1.96                         “Proposed
Indication” shall have the meaning set forth in Section 3.1.4(a).

 

1.97                         “Proposing
Party” shall have the meaning set forth in Section 3.1.4(a).

 

1.98                         “Publishing
Party” shall have the meaning set forth in Section 9.5.

 

1.99                         “Pursuing
Party” shall have the meaning set forth in Section 3.1.4(c).

 

1.100                   “Receiving
Party” shall have the meaning set forth in Section 9.1.

 

1.101                   “Regulatory
Agency” shall mean, with respect to the United States, the FDA, and, in the
case of a country other than the United States, such other appropriate
regulatory agency or authority with similar responsibilities, including,
without limitation, the EMEA.

 

1.102                   “Regulatory
Approval” shall mean any approval from Regulatory Agencies in any country or
region required to lawfully conduct clinical trials or to manufacture and
market a Product for an Indication in such country or region, including,
without limitation, any approved IND or Marketing Approval.

 

1.103                   “Regulatory
Expenses” shall mean all costs and expenses actually incurred by a Party in
direct connection with obtaining Marketing Approval or in connection with
conducting any Commercial Post-Marketing Study. 
Regulatory Expenses shall not include any Development Costs.

 

10

 

1.104                   “Response
Period” shall have the meaning set forth in Section 5.1.3(a).

 

1.105                   “Reviewing
Party” shall have the meaning set forth in Section 9.5.

 

1.106                   “Right of
Negotiation” shall have the meaning set forth in Section 5.1.3(b).

 

1.107                   “Right of
Notification” shall have the meaning set forth in Section 7.8.1.

 

1.108                   “Secretary”
shall have the meaning set forth in Section 2.1.1.

 

1.109                   “Statistical
Significance” shall mean, with respect to (i) each of the Osiris Funded
Trials and the Chondrogen Trial, the achievement of the endpoint(s) set
forth next to each such clinical trial’s name on Exhibit C hereto, and (ii) each
Additional Clinical Trial, the achievement of each mutually agreed upon  endpoint from a Phase II Clinical Trial or
Phase III Clinical Trial, as applicable, in each case at a significance level
of p<0.05 as determined under a statistical analysis plan prepared by the
Parties and deemed acceptable by the FDA, and in both (i) and (ii) above,
the absence of any clinical event that FDA determines would preclude initiation
of the next phase of development.

 

1.110                   “Steering
Committee” shall mean the body organized and acting pursuant to Section 2.1
hereof.

 

1.111                   “Technology”
shall mean any and all ideas, trade secrets, information, know-how, data
(including preclinical and clinical data), research results, writings,
inventions, discoveries, modifications, improvements and other technology
(including without limitation any proprietary biological or other materials,
compounds or reagents and computer software), whether or not patentable or
copyrightable and any intellectual property rights therein (other than Patent
Rights).

 

1.112                   “Term” shall
have the meaning set forth in Section 12.1.

 

1.113                   “Territory”
shall mean the Genzyme Territory with respect to Genzyme and the Osiris
Territory with respect to Osiris.

 

1.114                   “Third Party”
shall mean any entity other than Osiris, Genzyme or their respective
Affiliates.

 

1.115                   “Ulcerative
Colitis Indication” shall mean the use of Prochymal for the treatment or
prevention of ulcerative colitis.

 

1.116                   “Valid
Claim” shall mean a claim of (a) an issued and unexpired patent which has
not been withdrawn, cancelled, abandoned, disclaimed, or held revoked,
unenforceable or invalid by a final decision of a court or other governmental
agency of competent jurisdiction and which has not been admitted to be invalid
or unenforceable through reissue or disclaimer or otherwise, or (b) any
patent application which shall not have been cancelled, withdrawn, or
abandoned, or been pending for more than six (6) years from the priority
date from which such claim takes priority, unless and until such claim becomes
an issued claim of an issued patent.  For the avoidance of doubt, any issued or granted claim which is
revoked or held invalid or 

 

11

 

unenforceable, or any patent application which is pending for more than
six (6) years, shall cease to be a Valid Claim, unless and until such holding
is reversed or such claim is reinstated on appeal, or until such patent
application becomes an issued patent.  If
any such issued or granted claim which is revoked or held invalid or
unenforceable is thereafter reinstated on judicial appeal, back royalties, if
any, shall become due upon such reinstatement.

 

1.117                   “Vascular
Administration” shall mean (a) administration by any means to the
circulatory system, or (b) administration by any means through vasculature
to an organ.

 

1.118                   “Verifying
Party” shall have the meaning set forth in Section 6.8.

 

ARTICLE 2:  GOVERNANCE
OF THE PROGRAM

 

2.1                               Steering
Committee.

 

2.1.1                      Establishment
of Steering Committee.  The Parties shall
establish a Steering Committee to oversee, review and coordinate each Party’s
responsibilities pursuant to the Development Plans.  The Steering Committee shall consist of a
total of six (6) members, with three (3) members from each Party, two
of the members shall be designated by the applicable Party as the chairperson (“Chairperson”)
and the secretary (“Secretary”).  The
initial members of the Steering Committee are set forth on Exhibit A
attached hereto and incorporated herein by reference.  Members of the Steering Committee may be
represented at any meeting by a designee appointed by such member for such
meeting; provided that any person
attending the Steering Committee (whether a member, designee, employee or
contractor of a Party) shall be subject to written obligations of
confidentiality at least as stringent as those set forth in Section 9.1 of
this Agreement; and provided further
that any non-employee designee of either Party must be pre-approved in writing
by the other Party (such pre-approval not to be unreasonably withheld, delayed
or conditioned).  For the first year, the
Chairperson shall be a person designated by Osiris and identified on Exhibit A.  Thereafter, the Chairperson shall alternate
every calendar year, beginning with a person designated by Genzyme.  The Chairperson shall have the rights and
responsibilities as set forth in Section 2.1.2.  For the first year, the Secretary shall be a
person designated by Genzyme and identified on Exhibit A.  Thereafter, the Secretary shall alternate
every calendar year, beginning with a person designated by Osiris.  Each Party shall be free to change its
members, on prior written notice to the other Party.  Each Party may, in its discretion, invite
non-Steering Committee employees of such Party to attend any Steering Committee
meeting.  The Steering Committee may, in
its discretion, establish subcommittees consisting of individuals from Genzyme
and Osiris with expertise in particular areas relevant to the development of a
Product for an Indication.  Each Party
shall have the right to have at least one (1) representative serve on any
subcommittee that is formed.  The
Steering Committee shall remain in place until the expiration or termination of
its responsibilities under any Development Plan.

 

2.1.2                      Responsibilities
of the Chairperson.  The Chairperson of
the Steering Committee shall have the following roles and
responsibilities:  (a) to call
meetings of the Steering Committee, send notice of each such meeting and
designate the time, date and place of each such meeting, subject to the right
of either Party to call a meeting; (b) to convene or poll the members of
the Steering Committee by other permitted means; (c) to establish the
agenda for 

 

12

 

each meeting
of the Steering Committee, subject to the right of any member of the Steering
Committee to add additional agenda items at any meeting; (d) to prepare
comments to the draft minutes prepared by the Secretary of the Steering
Committee and communicate with the Secretary to finalize the draft minutes
prior to circulation to all members of the Steering Committee; and (e) to
execute, along with the Secretary of the Steering Committee, the final minutes
of the meetings of the Steering Committee.

 

2.1.3                      Responsibilities
of the Steering Committee.  In addition
to the responsibilities expressly described elsewhere in this Agreement, the
Steering Committee shall:

 

(a)                                  design,
prepare and finalize Development Plans for development of a Product for an
Indication, including formulating the clinical development strategy, designing
each clinical trial protocol and any modification thereto and agreeing upon the
primary and secondary endpoints for all clinical trials of Product for all
Indications conducted as part of the Collaboration;

 

(b)                                 on
an annual basis during any Development Plan Term, no later than October 1
of the relevant calendar year, review, amend, and approve each Development Plan
and respective budget;

 

(c)                                  oversee
and monitor each Development Plan and coordinate and direct the strategy and
management of the Development Plans;

 

(d)                                 review
and evaluate progress under any Development Plan; provided that the Steering
Committee shall not have the authority to make any determination that either
Party is in breach of its obligations under the Development Plan;

 

(e)                                  serve
as the initial forum for discussion of and resolution of any dispute or
disagreement between the Parties relating to any Development Plan that is
unresolved by the Primary Contact Persons;

 

(f)                                    except
with respect to intellectual property matters set forth in Article 8,
decide how the Parties shall resolve or defend against disputes or claims of
any kind with Third Parties relating to the Collaboration;

 

(g)                                 establish
any subcommittees pursuant to Section 2.1.1 and resolve any dispute or
disagreement arising in any such subcommittee; and

 

(h)                                 perform
any other activities related to the Collaboration as the Parties may agree from
time to time, other than deciding that a Party is in breach of an obligation
under this Agreement.

 

2.1.4                      Meetings.  During a Development Plan Term, the Steering
Committee shall meet at least quarterly, and more frequently as the Parties
mutually agree is appropriate.  At least
two of the four quarterly meeting shall be in person, alternating between the
offices of the Parties unless the Parties otherwise agree.  All meetings shall be on such dates and at
such times as the Parties shall agree. 
Either Party may call a meeting of the Steering Committee upon
reasonable notice to the other Party. 
The Chairperson shall, if practicable, send notice of all 

 

13

 

meetings to
all members of the Steering Committee no less than ten (10) Business Days
before the date of the meeting (or such other times as the Parties may
agree).  The Steering Committee may also
convene or be polled or consulted from time to time by means of
telecommunications, video conferences or correspondence, as deemed necessary or
appropriate in order to fulfill its obligations under this Agreement.

 

2.2                               Decisions.

 

2.2.1                      Voting.  The Steering Committee shall decide by vote
on any subject matter within the Steering Committee’s decision-making
authority.  Each Party shall have only
one (1) vote on matters voted on in the Steering Committee.  Such decisions shall require that at least
two (2) members of each Party are present (in person or by phone) at such
meeting.  Subject to Section 2.2.2
below, all decisions of the Steering Committee must be made by the unanimous
vote of the Parties and each Party’s vote shall be cast by the member(s) (or
their designee(s)) present at any meeting. 
The Parties shall use their commercially reasonable efforts to make
decisions related to the Collaboration (including on the Steering Committee)
promptly.  In the event that a proposing
Party has put a matter to the other Party in writing for a decision, and the
other Party does not provide a decision within thirty (30) days of receipt,
then the matter shall be deemed to have been approved in the manner proposed.

 

2.2.2                      Dispute
Resolution.  If after good faith
discussion, the Steering Committee is unable to reach a unanimous decision on
any matter that is subject to the Steering Committee’s decision-making
authority within thirty (30) days after the Steering Committee first fails to
reach consensus regarding such matter (or such later date as may be mutually
acceptable to the Parties), then such matter shall be resolved in accordance
with the provisions of Section 13.8. 
Notwithstanding the foregoing, the Parties agree that Osiris shall make
the final determination, and such determination shall be binding upon both
Parties, in the event of any disagreement regarding (a) the design or
modification of, or conduct of activities under, an Osiris Funded Trial or an
At-Risk Trial where Osiris is the Pursuing Party, and (b) the conduct of
activities under all clinical trial protocols for Prochymal except At-Risk
Trials where Genzyme is the Pursuing Party and for Chondrogen until a
Participation Decision; provided,
however, that in no event shall Osiris make a final determination that
increases the Development Plan Budget when the Parties are sharing Development
Costs pursuant to Sections 3.4.5 or 3.4.8; such dispute shall be resolved in
accordance with the provisions of Section 13.8.  For clarity, Osiris shall not have the final
determination under this Section in the event of any disagreement
regarding the design or significant modification of any clinical trial protocol
for a Product for an Indication other than the protocols used in conducting the
Osiris Funded Trials, including, but not limited to, a modification of an end
point or a significant modification in the scope of a trial.

 

2.2.3                      Reports to
Steering Committee.  Each Party shall
provide the Steering Committee with quarterly written reports within twenty
(20) Business Days after the end of each calendar quarter regarding the status
of its activities under each Development Plan. 
Each Party shall provide the other Party with a final written report of
its activities under each Development Plan within twenty (20) Business Days
after expiration of a Development Plan Term, or expiration or termination of
this Agreement.

 

14

 

2.2.4                      Minutes.  Promptly after each Steering Committee
meeting, the Secretary of the Steering Committee shall prepare and distribute
to the Chairperson draft minutes of the meeting, which shall provide a
description in reasonable detail of the discussions conducted at the meeting
and a list of any actions, and decisions or determinations made by the Steering
Committee.  The Chairperson may then
comment on the draft minutes.  The
Secretary shall discuss with the Chairperson any comments of the Chairperson
and circulate a draft of the minutes to all members of the Steering Committee
within ten (10) Business Days of the meeting.  The draft minutes will be submitted for
comment and approval of the members of the Steering Committee at the following
Steering Committee meeting.  The
Secretary and Chairperson shall each sign and date the final minutes.  The signature of the Chairperson and the
Secretary on the final minutes shall indicate each Party’s assent to the
minutes.

 

2.2.5                      Expenses.  Each Party shall be responsible for all
travel and related costs and expenses for its members, designees and
non-Steering Committee invitees to attend meetings of, and otherwise
participate on, the Steering Committee.

 

ARTICLE 3:  DEVELOPMENT
ACTIVITIES

 

3.1                               Prochymal
Development Activities.

 

3.1.1                      Clinical
Trials.  Unless otherwise agreed by the
Steering Committee, Osiris will coordinate and conduct all clinical trials of
Prochymal for the GvHD Indication, Major Indications, Other Indications, and
At-Risk Indications elected by Osiris, including the Osiris Funded Trials, as
provided herein.  Any clinical trial for
Prochymal for any Indication that will form the basis of an application for
Marketing Approval will be designed to support registration for Prochymal for
such Indication on a global basis, and Osiris shall use its commercially
reasonable and diligent efforts to include clinical trial sites located in
Genzyme’s Territory for (a) clinical trials that have not commenced as of
the Effective Date, and (b) any extension of an Osiris Funded Trial; provided that if the inclusion of trial
sites in the Genzyme Territory  would
substantially increase Osiris’s costs (as provided for the relevant Development
Budget) then Genzyme shall be responsible for one hundred percent (100%) of
those incremental excess costs; and provided
further that if the inclusion of the trial sites in the Genzyme
Territory would substantially increase the estimated date of completion of the
U.S. clinical trial (as provided for in the relevant Development Plan) then
such sites need not be included.  Genzyme
shall provide assistance to ensure the adequacy of clinical trial design in the
Genzyme Territory as well as efficient execution of clinical trials conducted
at sites within the Genzyme Territory. 
If Osiris requests, and Genzyme agrees, expenses incurred by Genzyme on
behalf of Osiris in providing such assistance shall be reimbursed by Osiris.

 

3.1.2                      Certain
Prochymal Clinical Trials.  Osiris shall
be solely responsible for conducting the clinical trials described in Sections
3.1.2(a) through (e) below (the “Osiris Funded Trials”) and agrees to
fund one hundred percent (100%) of the Development Costs of such clinical
trials through completion; provided
that Osiris shall consider in good faith any input provided by Genzyme with
respect to such clinical trials:

 

(a)                                the
ongoing Phase III Clinical Trials of Prochymal for the GvHD Indication entitled
“A Phase III, Randomized, Double-Blind, Placebo-Controlled Study to 

 

15

 

Evaluate the
Efficacy and Safety of Prochymal® (Ex-vivo
Cultured Adult Human Mesenchymal Stem Cells) Infusion for the Treatment of
newly diagnosed Acute GVHD” (265) and entitled “A Phase III, Randomized, Double
Blind, Placebo-Controlled Study to Evaluate the Efficacy and Safety of
Prochymal® (Ex-vivo Cultured
Adult Human Mesenchymal Stem Cells) Infusion for the Treatment of Patients Who
Have Failed to Respond to Steroid Treatment for acute GvHD”  (280) that were initiated by Osiris prior to
the Effective Date, through completion of such clinical trial and completion of
any commercially reasonable additional extension studies or modified studies
necessary to file for Marketing Approval with the FDA for the GvHD Indication;

 

(b)                               the
ongoing Phase III Clinical Trials of Prochymal for the Crohn’s Indication
entitled “A Phase III, multicenter, placebo-controlled, randomized, double-blind
study to evaluate the safety and efficacy of PROCHYMAL® (ex vivo cultured adult
human mesenchymal stem cells) intravenous infusion for the induction of
remission in subjects experiencing treatment-refractory moderate-to-severe
Crohn’s disease” (603) and entitled “A Phase III, multicenter,
placebo-controlled, randomized, double-blind retreatment study to evaluate the
safety and efficacy of PROCHYMAL® (ex vivo cultured adult human mesenchymal
stem cells) intravenous infusion for the re-induction of remission in subjects
experiencing treatment-refractory moderate-to-severe Crohn’s disease” (610)
that were initiated by Osiris prior to the Effective Date, and any commercially
reasonable additional extension studies or modified studies necessary to file
for Marketing Approval with the FDA for the Crohn’s Indication (the “Crohn’s
Indication Clinical Trials”);

 

(c)                                the
ongoing Phase II Clinical Trial of Prochymal for the COPD Indication entitled “A
Phase II, multicenter, randomized, double-blind, placebo-controlled study to
evaluate the safety and efficacy of PROCHYMAL® (ex vivo cultured adult human
mesenchymal stem cells) intravenous infusion for the treatment of subjects with
moderate to severe Chronic Obstructive Pulmonary Disease (COPD)” (801), through
completion;

 

(d)                               the
ongoing Phase II Clinical Trial of Prochymal for the Diabetes Indication
entitled “A Phase II, multicenter, randomized, double-blind, placebo-controlled
study to evaluate the safety and efficacy of PROCHYMAL® (ex vivo cultured adult
human mesenchymal stem cells) for the treatment of recently diagnosed type 1
diabetes mellitus (T1DM)” (901) through completion; and

 

(e)                                the
proposed Phase II Clinical Trial of Prochymal for the Cardiac Indication
entitled “A Phase II, multi-center, randomized, double-blind,
placebo-controlled study to evaluate the safety and efficacy of PROCHYMAL® (ex
vivo cultured adult human mesenchymal stem cells) intravenous infusion
following acute myocardial infarction” through completion.

 

Notwithstanding any provision in this Agreement to the contrary, Osiris
shall have the right to suspend or terminate any clinical trial because of (i) any
significant trend relating to any serious adverse event, (ii) any request
from a Regulatory Agency to suspend or terminate such trial, (iii) triggering
the stopping rules for the study as defined in the Indication’s protocol,
or (iv) upon receipt of data or results that fail to demonstrate the
Product’s potential to be safe or effective for the applicable Indication.  Premature stopping of a Clinical Trial will
be performed 

 

16

 

in compliance with current Good Clinical
Practices as codified in 21 C.F.R. 312, as amended from time to time.

 

3.1.3                      Additional
Clinical Trials.  The Steering Committee
shall determine whether to allow any Investigator Sponsored Trials or conduct
any Phase II Clinical Trials, Phase III Clinical Trials, or Phase IV Studies of
Prochymal for the GvHD Indication, Major Indications and Other Indications in
addition to the Osiris Funded Trials (each an “Additional Clinical Trial”) that
have not been initiated prior to the Effective Date; provided that in the event Genzyme makes a Prochymal
Development Milestone Payment for the achievement of Statistical Significance
for Prochymal for a particular Indication, then any Phase III Clinical Trial
and Phase IV Study reasonably required to obtain Marketing Approval for
Prochymal for such Indication shall be conducted by Osiris; and provided further that if the Steering Committee
has determined to initiate any Additional Clinical Trial (other than an
Investigator Sponsored Trial), such trial shall be conducted by Osiris and
shall be subject to agreement by the Steering Committee on the clinical
strategy and protocol design.  Nothing in
this Section 3.1.3 shall prohibit a Party from pursuing an At-Risk
Indication.  All Commercial
Post-Marketing Studies will be one hundred percent (100%) funded by the Party
conducting such Studies.

 

3.1.4                      Additional
Indications for Prochymal.

 

(a)                                Proposed
Indications.  Either Party (the “Proposing
Party”) may propose to the Steering Committee that one or more indications
(other than the GvHD Indication, Crohn’s Indication, Ulcerative Colitis
Indication, COPD Indication, Diabetes Indication and Cardiac Indication) for
Prochymal (each, a “Proposed Indication”) be considered for development
activities as part of a Development Plan. 
The Steering Committee may request such additional information or
research with respect to such Proposed Indication as is reasonably required to
evaluate such Proposed Indication and the Proposing Party shall be solely
responsible for the costs associated with such additional information or
research other than as set forth in Section 3.1.4(f).  The Steering Committee shall determine in
good faith whether (i) the Proposed Indication, if accepted, is a Major
Indication or an Other Indication, and (ii) development activities for
such Proposed Indication shall be developed pursuant to a Development Plan.

 

(b)                               Accepted
Indications.  In the event the Steering
Committee agrees upon a clinical trial strategy and determines to proceed with
development activities for Prochymal for a Proposed Indication (each, an “Accepted
Indication”) as part of the Collaboration, then the Steering Committee shall
determine whether the Accepted Indication is a Major Indication or an Other
Indication and shall approve a Development Plan.  The Development Plan shall include a
description of the activities to be conducted by each Party during the time period
covered by such Development Plan, a budget for the relevant period and timeline
for the performance of activities.  The
Development Costs for any development work for Prochymal for the Accepted
Indication shall be the responsibility of Osiris or the Parties in accordance
with Section 3.4.3, 3.4.4 or 3.4.5, as applicable.

 

(c)                                At-Risk
Indication.  In the event the Steering
Committee does not agree upon a clinical trial strategy and declines to
recommend acceptance of any Proposed Indication for Prochymal as part of a
Development Plan, then either Party (the “Pursuing Party”) may pursue the
development of Prochymal for such Proposed Indication (each, an “At-Risk

 

17

 

Indication”) in its Territory. 
The Pursuing Party shall be responsible for one hundred percent (100%)
of (i) the Development Costs incurred in developing Prochymal for the
At-Risk Indication, and (ii) the Regulatory Expenses in obtaining
Marketing Approval in its Territory for Prochymal for the At-Risk
Indication.  In the event Genzyme is the
Pursuing Party for any At-Risk Indication, such At-Risk Indication shall be
considered an Indication for purposes of Articles 7 and 8 of this Agreement; provided that, Genzyme shall have no
obligation to make any Prochymal Development Milestone Payment with respect to
such Indication.

 

(d)                                 Genzyme
Opt-In Right.  In the event Osiris is the
Pursuing Party under Section 3.1.4(c) and obtains Marketing Approval
from a Regulatory Agency in the Osiris Territory for Prochymal for any At-Risk
Indication, Genzyme shall have the right (“Genzyme Opt-In Right”), at its
discretion, to seek an expanded label for Prochymal for such At-Risk Indication
with one or more Regulatory Agencies in the Genzyme Territory.  At Genzyme’s request, Osiris shall provide to
Genzyme full access to the data associated with Osiris obtaining Marketing
Approval for the At-Risk Indication. 
After receipt of such data, Genzyme shall notify Osiris in writing of
its decision to seek an expanded label. 
In the event Genzyme obtains such label expansion for Prochymal for the
At-Risk Indication in the Genzyme Territory, then such At-Risk Indication shall
be considered an Indication and Genzyme shall commercialize Prochymal for such
Indication in the Genzyme Territory as set forth in this Agreement, and shall
make the payments to Osiris as set forth in Sections 3.4.6 and 6.2.2.

 

(e)                                  Osiris
Opt-In Right.  In the event Genzyme is
the Pursuing Party under Section 3.1.4(c) and obtains Marketing
Approval from a Regulatory Agency in the Genzyme Territory for Prochymal for
any At-Risk Indication, Osiris shall have the right (“Osiris Opt-In Right”), at
its discretion, to seek an expanded label for Prochymal for such At-Risk Indication
with one or more Regulatory Agencies in the Osiris Territory.  At Osiris’s request, Genzyme shall provide to
Osiris full access to the data associated with Genzyme obtaining Marketing
Approval for the At-Risk Indication. 
After receipt of such data, Osiris shall notify Genzyme in writing of
its decision to seek an expanded label. 
In the event Osiris obtains such label expansion for Prochymal for the
At-Risk Indication in the Osiris Territory, then such At-Risk Indication shall
be considered an Indication and Osiris shall commercialize Prochymal for such
Indication in the Osiris Territory as set forth in this Agreement, and shall
make the payments to Genzyme as set forth in Section 3.4.7.

 

(f)                                    Pre-Clinical
Trials.  Osiris shall be responsible for conducting
all pre-clinical safety and toxicology trials necessary for the initiation of
clinical trials for Indications.  Osiris
shall be responsible for one hundred percent (100%) of the costs associated
therewith; provided that if the
preclinical safety and toxicology trials are for an Accepted Indication, Osiris
shall be responsible for sixty percent (60%) of the costs associated therewith
and Genzyme shall be responsible for forty percent (40%) of the costs
associated therewith; provided further,
that Genzyme shall reimburse Osiris for the incremental additional costs
associated with Osiris’s performance of pre-clinical studies conducted to
fulfill regulatory requirements in the Genzyme Territory beyond those required
in the Osiris Territory.

 

18

 

3.2                               Chondrogen
Development Activities.

 

3.2.1                        Clinical
Trials.  Unless otherwise agreed by the
Steering Committee, Osiris will coordinate and conduct all clinical trials of
Chondrogen.  Any clinical trial for Chondrogen
that will form the basis of an application for Marketing Approval will be
designed to support registration of Chondrogen on a global basis.  Genzyme shall provide assistance to ensure
the adequacy of trial design in the Genzyme Territory as well as efficient
execution of clinical trials conducted at sites within the Genzyme
Territory.  Expenses incurred by Genzyme
on behalf of Osiris in providing such assistance and approved in advance by
Osiris shall be reimbursed by Osiris.

 

3.2.2                      Chondrogen
Participation Decision.

 

(a)                                  Results.  Upon completion of the two-year study report
for the ongoing Phase II/III clinical trial for the Articulating Orthopedic
Indication (560) entitled “A Phase II/III, multicenter, randomized,
double-blind, placebo-controlled study to evaluate the safety and efficacy of
CHONDROGEN® (ex vivo cultured adult human mesenchymal stem cells) delivered by
intra-articular injection for the treatment of subjects with moderate to severe
osteoarthritis of the knee” (the “Chondrogen Trial”), Osiris shall promptly
provide all data, results and analysis from such Chondrogen Trial to
Genzyme.  Within sixty (60) days of
receipt of all data, results and analysis from the Chondrogen Trial, Genzyme
shall, in its sole discretion, elect to either (i) participate in the
further development of Chondrogen (a “Participation Decision”), or (ii) not
participate in the further development of Chondrogen (a “No Participation
Decision”).

 

(b)                                 Participation
Decision.  If Genzyme makes the
Participation Decision, then Genzyme shall make Chondrogen Development
Milestone Payments due under Section 6.4 and shall be responsible for
Development Costs in accordance with Section 3.4.8.

 

(c)                                  No
Participation Decision.  If Genzyme makes
the No Participation Decision, Genzyme shall so notify Osiris in writing and,
from the date of receipt of such notice by Osiris (or the expiration of the
sixty (60) day period set forth in Section 3.2.2(a) if Genzyme fails
to notify Osiris of its decision), the Parties agree that (i) Genzyme
shall have no obligation to make any Chondrogen Development Milestone Payments
under Section 6.4, and (ii) all rights under Osiris Intellectual
Property to make, use, sell, and import Chondrogen in the Genzyme Territory
shall revert to Osiris, with no further payment obligation by either Party to
the other Party.

 

3.3                               Development
Plans.

 

3.3.1                        Development
Plans.  The Steering Committee shall
design a comprehensive plan for the conduct of development and pre-clinical and
clinical research of the Product for each Indication, including the design of
protocols for clinical studies (the “Development Plan”).  The Development Plan shall include, without
limitation, (a) a description of the activities to be conducted by each
Party and any Third Party during the time period covered by such Development
Plan, which description shall take into consideration the responsibilities and
obligations of the Parties set forth in this Agreement, (b) a Development
Plan Budget for the relevant period, (c) an estimated timeline for the
performance of activities, in each case to be agreed in good faith, and (d) an
allocation of responsibility among the Parties and any Third Party for each of
the activities described therein.  In
addition to designing the Development Plan, the Steering Committee shall be
responsible for monitoring the work being performed 

 

19

 

under the
Development Plan.  Notwithstanding
anything in this Agreement to the contrary, the Steering Committee shall accept
the design and plan for the Osiris Funded Trials and shall not cause such
trials to be revised without the consent of Osiris.

 

3.3.2                        Initial
Development Plan.  The initial
Development Plan is attached to this Agreement as Exhibit F.

 

3.3.3                        Development
Plan Updates.  Following the initiation
of a Development Plan for a Product for an Indication, the Development Plan
shall be amended or updated on at least an annual basis no later than October 1
of the relevant calendar year, and more often as the Steering Committee may
reasonably determine, during a Development Plan Term.  Each amended or updated Development Plan
shall cover the three (3) calendar year period following its approval by
the Steering Committee.  All updated or
amended Development Plans shall be filed with the minutes of the Steering
Committee upon approval by the Steering Committee.  Until a new or amended Development Plan is
approved by the Steering Committee, the previous Development Plan shall remain
in effect.

 

3.4                               Development
Costs.

 

3.4.1                        Development
Plan Budget.  Each Development Plan shall
include a budget (the “Development Plan Budget”) specifically including, but
not limited to Development Costs.  With
respect to any Development Plan Budget under which the Parties are sharing
Development Costs pursuant to Sections 3.4.5 or 3.4.8, the Development Plan
Budget shall be agreed upon by the Steering Committee.  Each Development Plan Budget shall, on an
accrual basis, include an estimate of the Development Costs expected to be
incurred to complete activities by each of Osiris, Genzyme and any Third Party,
respectively, during the period covered by such Development Plan.

 

3.4.2                        Amendments;
Projected Overruns.  At any time during a
Development Plan Term, the Steering Committee may amend the Development Plan,
including the Development Plan Budget. 
The Development Plan Budget will be reviewed quarterly at the Steering
Committee meetings.  At the quarterly
Steering Committee meeting, if the Development Plan Budget for any activity for
which the Parties are sharing or will seek reimbursement for Development Costs
pursuant to Sections 3.4.5 or 3.4.8, is expected to exceed one hundred and ten
percent (110%) of the amounts allocated to it under the relevant Development
Plan Budget, a revised Development Plan Budget must be approved in writing by
the Steering Committee for the sharing of the excess 10% of Development Costs
to be in effect.

 

3.4.3                        Osiris.  Osiris shall be responsible for one hundred
percent (100%) of the Development Costs incurred in accordance with a
Development Plan in the conduct of (a) the Osiris Funded Trials, (b) any
clinical trial of Prochymal for any Indication up to the commencement of a
Phase III Clinical Trial (in addition to the Osiris Funded Trials), (c) subject
to Section 3.4.8, the Chondrogen Trial, and (d) any Commercial
Post-Marketing Study of a Product for an Indication in the Osiris
Territory.  Osiris shall also be
responsible for one hundred percent (100%) of the Development Costs incurred in
connection with any clinical trial of Prochymal for an At-Risk Indication where
Osiris is the Pursuing Party.

 

20

 

3.4.4                        Genzyme.  Genzyme shall be responsible for one hundred
percent (100%) of the Development Costs incurred in accordance with a
Development Plan in the conduct of (a) clinical trials specifically
required to obtain Marketing Approval in the Genzyme Territory that are not
required to obtain Marketing Approval in the Osiris Territory, and (b) any
Commercial Post-Marketing Study of a Product for an Indication in the Genzyme
Territory.  Genzyme shall also be
responsible for one hundred percent (100%) of the Development Costs incurred in
connection with any clinical trial of Prochymal for an At-Risk Indication where
Genzyme is the Pursuing Party.

 

3.4.5                        The
Parties.  With the exception of the
Development Costs incurred in connection with the trials set forth in Sections
3.4.3(a) and 3.4.4(a), upon agreement of the Steering Committee to conduct
an Additional Trial, the Parties shall share the Development Costs incurred in
accordance with a Development Plan for any Phase III Clinical Trial of
Prochymal and for any Phase IV Study for Prochymal for any Indication, as
follows: Osiris shall be responsible for sixty percent (60%) of such Development
Costs and Genzyme responsible for forty percent (40%) of such Development
Costs.

 

3.4.6                        Genzyme
Opt-In Right.  In the event that Genzyme
exercises the Genzyme Opt-In Right pursuant to Section 3.1.4(d) and
Genzyme determines to seek a label expansion for Prochymal for the relevant
At-Risk Indication in the Genzyme Territory, then Genzyme shall pay Osiris (a) twenty-five
percent (25%) of the Development Costs actually incurred by Osiris in
developing Prochymal for the At-Risk Indication in the Osiris Territory within
thirty (30) days after Genzyme’s Opt In Right Notice, and (b) the
remaining seventy-five percent (75%) of the Development Costs actually incurred
by Osiris in developing Prochymal for the At-Risk Indication in the Osiris
Territory within thirty (30) days after Genzyme obtains the label expansion for
Prochymal for the relevant Indication.

 

3.4.7                        Osiris
Opt-In Right.  In the event that Osiris
exercises the Osiris Opt-In Right pursuant to Section 3.1.4(e) and
Osiris determines to seek a label expansion for Prochymal for the relevant
At-Risk Indication in the Osiris Territory, then Osiris shall pay Genzyme (a) twenty-five
percent (25%) of the Development Costs actually incurred by Genzyme in
developing Prochymal for the At-Risk Indication in the Genzyme Territory within
thirty (30) days after Osiris’s Opt In Right Notice, and (b) the remaining
seventy-five percent (75%) of the Development Costs actually incurred by
Genzyme in developing Prochymal for the At-Risk Indication in the Genzyme
Territory within thirty (30) days after Osiris obtains the label expansion for
Prochymal for the relevant Indication.

 

3.4.8                        Participation
Decision.  In the event Genzyme makes the
Participation Decision as set forth in Section 3.2.2(a), the Parties shall
share the Development Costs incurred in accordance with a Development Plan for
any Phase III Clinical Trial of Chondrogen and for any Phase IV Study for
Chondrogen for any Indication, as follows: Osiris shall be responsible for
sixty percent (60%) of such Development Costs and Genzyme responsible for forty
percent (40%) of such Development Costs in the development of Chondrogen.  In addition, if Genzyme’s Participation
Decision occurs after Osiris has begun a Phase III Clinical Trial of
Chondrogen, then Genzyme shall be responsible for reimbursing Osiris for 40% of
the Development Costs incurred by Osiris in connection with that Phase III
Clinical Trial prior to the date of the Participation Decision.

 

21

 

3.4.9                        Quarterly
Reporting.  Commencing with the Effective
Date and ending with the quarter in which no further obligations exist for
either Party under any Development Plan, each Party shall report to the other
Party (with a copy to the Steering Committee) within fifteen (15) Business Days
(or as the Parties may otherwise agree) after the end of each quarter a
detailed itemization of the actual Development Costs incurred by such Party
(only to the extent consistent with a Development Plan approved by the Steering
Committee) and a detailed update of all activities performed under each
Development Plan.  If a Party’s actual
costs are not available within the fifteen (15) Business Day period, the then
current approved Development Plan Budget(s) may be used as an estimate,
but each subsequent quarterly report shall reconcile any estimated amounts from
the previous month (e.g. a 2Q report shall reconcile any estimates included in
the 1Q report).  Unless otherwise
delegated by the Steering Committee, the Parties agree that Genzyme shall be
responsible for issuing a written report to the Steering Committee and to
Genzyme within twenty-five (25) Business Days (or as the Parties may otherwise
agree) after the end of each quarter reconciling all Development Costs.

 

3.5                               Consideration
of Resources.  The Parties shall be the
providers of first choice for any development activities under a Development
Plan the Steering Committee deems appropriate based on each Party’s capacity to
perform the activities; provided
that if a Third Party can perform a development activity on terms that are more
favorable than either Party’s terms, or the Steering Committee determines, in
good faith, that the Party responsible for an activity is better served
utilizing a Third Party, such responsible Party shall have the option of using
such Third Party.

 

3.6                               Primary
Contact Persons.  Each Party shall
designate a qualified employee (each, a “Primary Contact Person”) who will
serve as a Primary Contact Person.  As of
the Effective Date, the initial Primary Contact Persons are set forth in Exhibit B
attached hereto and incorporated herein by reference.  Each Party may change its Primary Contact
Person upon written notice to the other Party. 
The Primary Contact Persons shall initially attempt to resolve any disputes
that arise during and in connection with any Development Plan.  If the Primary Contact Persons cannot resolve
any such dispute within thirty (30) days (or such longer reasonable period of
time as they may agree in writing) after their initial discussion of such
issue, the dispute shall be submitted to the Steering Committee for resolution
in accordance with Section 2.2 hereof. 
Nothing in the foregoing shall limit a Party’s ability to designate one
or more additional contact persons to interact with the other Party that are
not the Primary Contact Person.

 

3.7                               Visit
of Facilities.  Each of Genzyme and
Osiris shall permit, and shall require its Affiliates and subcontractors to
permit, to the extent reasonably required for purposes of this Agreement, the other
or the representatives of the other to visit, upon reasonable notice specifying
the context of such visit and at reasonably acceptable times, their respective
facilities where the Development Plans is being conducted, and consult
informally, during such visits and by telephone, facsimile and email, with
their respective personnel performing work on the Development Plans.  Any costs and expenses associated with the
visits contemplated by this Section 3.7 shall not be considered a
Development Cost and shall be borne by the visiting Party.  Each Party shall maintain information
obtained in such visit in confidence in accordance with Article 9 hereof
and shall use such information only to the extent permitted by this Agreement.

 

22

 

3.8                               Records.  The Parties will make available and disclose
to one another all results of the work conducted pursuant to any Development
Plan and shall keep such records as described in this Section 3.8 or
elsewhere in this Agreement; provided
that each Party shall maintain such results and records of the other Party in
confidence in accordance with Article 9 hereof and shall use such results
or records only to the extent permitted by this Agreement.  The Parties shall maintain records of the
results in sufficient detail and in good scientific manner appropriate for
patent purposes and as will properly reflect all work done and results achieved
in the performance of a Development Plan (including all data in the form
required to be maintained under any applicable governmental regulations).  Such records shall include books, records,
reports, research notes, charts, graphs, comments, computations, analyses,
recordings, photographs, computer programs and documentation thereof, computer
information storage means, samples of materials and other graphic or written
data generated in connection with a Development Plan.  Each Party shall retain such records in
accordance with the terms of its internal records retention policy, if any, but
in any event no less than required under applicable laws and regulations.  Each Party hereby grants the other Party the
right to inspect and copy such records during the Term to the extent reasonably
required by the other Party for purposes of this Agreement.

 

3.9                               Ownership
and Use of Data.  The Parties shall
jointly own all Joint Program Data and such data shall constitute the
Confidential Information of each Party under Article 9.  Each Party shall have the right to use the
Joint Program Data in connection with the development of a Product for an
Indication under a Development Plan and commercializing such Product for such
Indication in its Territory.

 

ARTICLE 4:  REGULATORY
AND MANUFACTURING

 

4.1                               Regulatory.  The Parties agree to collaborate in the
efforts required to obtain and maintain the necessary Regulatory Approvals for
a Product developed for an Indication pursuant to the Development Plan.  The Parties jointly will create a common
registration dossier, which shall include a “common technical document” (“CTD”)
meeting applicable Legal Requirements and containing all applicable data
generated through performance of the Development Plan for an Indication, which
shall serve as a basis for all regulatory filings in each country or region
worldwide.  The Parties agree to use
commercially reasonable best efforts to draft the common technical document so
as to be acceptable to both the EMEA and FDA. 
The Parties further agree that:

 

(a)                                  Osiris
will be the sponsor of pre-clinical and clinical trials of a Product for an
Indication in the Osiris Territory and shall be responsible for holding and
managing the IND, but shall reasonably consult with Genzyme on strategic
planning matters related thereto;

 

(b)                                 Genzyme
will be Osiris’s legal representative within the meaning of Directive
2001/20/EC of pre-clinical and clinical trials of a Product for an Indication
in the Genzyme Territory and shall be responsible for holding and managing all
regulatory filings, but shall reasonably consult with Osiris on strategic
planning matters related thereto;

 

(c)                                  Osiris
will be responsible for filing the BLA and CTD supporting marketing
authorization for a Product for an Indication with the appropriate Regulatory
Agencies 

 

23

 

in the Osiris
Territory; but shall reasonably consult with Genzyme on strategic planning
matters related to such filings.  Osiris
shall have the right to use all data related to a Product for an Indication, to
reference the CTD and to incorporate by reference any and all parts of
regulatory submissions made by Genzyme for any Indication;

 

(d)                                 Genzyme
will be responsible for filing the BLA and CTD supporting marketing
authorization for a Product for an Indication with the appropriate Regulatory
Agencies in the Genzyme Territory, but shall reasonably consult with Osiris on
strategic planning matters related to such filings.  Genzyme shall have the right to use all data
related to a Product for an Indication, to reference the CTD and to incorporate
by reference any and all parts of regulatory submissions made by Osiris for any
Indication;

 

(e)                                  The
Parties shall be jointly involved in the strategic planning and in the review
of all written and meeting related regulatory communications concerning the
Products.  For clarity, this shall not
include review of SAE reporting, which is governed by Section 4.3.  Each Party shall use its commercially
reasonable efforts to permit the other Party to attend and participate in all
planned meetings or discussions with Regulatory Agencies pertaining to a
Product for an Indication and such other Party shall receive written notice as
soon as reasonably possible after notification of the meeting or discussion,
but in any event sufficiently in advance of any such meetings or discussions so
that each Party may attend and participate. 
The applicable Party shall circulate to the other Party within five (5) Business
Days draft minutes of such meeting.  Each
Party shall provide any written correspondence received from a Regulatory
Agency related to a Product to the other Party within seventy-two (72) hours
after receipt;

 

(f)                                    The
Parties will collaborate wherever possible to utilize the services and
expertise of the other Party in developing all written and meeting related
regulatory submissions to any Regulatory Agency.  Each Party shall provide the opportunity to
the other Party to review any written and meeting related Regulatory Agency
communications related to a Development Plan and all material Regulatory Agency
communications following Regulatory Approval and shall consider incorporating
any reasonable comments with regard to such correspondence; and

 

(g)                                 Each
Party will maintain all records, including without limitation batch records and
supporting documentation, required by Regulatory Agencies with respect to a
Product developed pursuant to a Development Plan for the periods of time
required by such authorities and shall provide a copy of all such records to
the other Party.

 

4.2                               Regulatory
Expenses.  Osiris shall be responsible
for Regulatory Expenses for Product in all Indications in the Osiris
Territory.  To the extent regulatory
activities are required in the Genzyme Territory (beyond the regulatory
activities required for the FDA), Genzyme shall be responsible for those
incremental costs.  If Genzyme requests,
and Osiris agrees, expenses incurred by Osiris on behalf of Genzyme in
providing such assistance shall be reimbursed by Genzyme.

 

4.3                               Safety
Reporting.  Each Party shall notify the
other Party’s Primary Contact Person of (a) any serious adverse event
information deemed reasonably likely to be related to the Product and relevant
to the overall safety of the Product as determined by Osiris’s external safety
monitor, (b) any information, regardless of source, reasonably sufficient
to consider changes to an Indication or use or administration thereof, or (c) information
from in vitro or animal studies 

 

24

 

demonstrating
that the Product presents a significant and unexpected hazard to humans.  Each of the Parties shall, through its
Primary Contact Person, promptly (but no later than twenty-four (24) hours
after such Party becomes aware of the serious adverse event and as necessary
for compliance with regulatory requirements) notify the other Party’s Primary
Contact Person of all such serious adverse event information.  Expeditable events will be handled in
accordance with the applicable United States regulations (21 C.F.R. 312, 314,
600) and/or any controlling foreign equivalent Regulatory Agency regulations,
as applicable.  Osiris shall be
responsible for filing all safety reports with the appropriate Regulatory
Agency in the Osiris Territory, and shall furnish copies to Genzyme in advance
of filing to the extent practicable in compliance with applicable laws and
regulations.  Genzyme shall be
responsible for filing all safety reports with the appropriate Regulatory
Agency in the Genzyme Territory, and shall furnish copies to Osiris in advance
of filing to the extent practicable in compliance with applicable laws and
regulations.

 

4.4                               Product
Supply.

 

4.4.1                       Clinical
Supplies.  Osiris shall be responsible
for manufacturing or procuring sufficient quantities of Product for use in
preclinical or clinical trials in the Osiris Territory and the Genzyme Territory.  In the event non-human MSCs are required for
pre-clinical trials or scientific experiments, Genzyme shall assist Osiris in
identifying a suitable source for such MSCs.

 

4.4.2                       Commercial
Supplies.

 

(a)                                  Osiris
Territory.  Osiris shall be responsible
for manufacturing or procuring sufficient quantities of Product for commercial
sale in the Osiris Territory.  If Osiris
engages a Third Party manufacturer, it shall enter into a commercially
reasonable confidentiality agreement with such Third Party manufacturer, which
confidentiality agreement shall contain terms and conditions no less stringent
than those set forth in Article 9 of this Agreement.

 

(b)                                  Genzyme
Territory.  Genzyme shall be responsible
for manufacturing or procuring sufficient quantities of Product for commercial
sale in the Genzyme Territory.  Upon
request of Genzyme, Osiris shall use commercially reasonable efforts to
facilitate the supply of Product to Genzyme under the terms of the supply
agreement existing as of the Effective Date between Osiris and Osiris’ Third
Party manufacturer, Lonza Group Ltd., or any other Third Party manufacturer
that Osiris has engaged to produce Product during the Term.  In the event that Osiris is producing Product
for use in the Osiris Territory, at Genzyme’s request, Osiris shall negotiate
with Genzyme in good faith to manufacture and supply Product for commercial
sale in Genzyme’s Territory.  At Genzyme’s
request, Osiris shall provide to Genzyme, at Genzyme’s cost, all information,
technology, training and assistance as is reasonably necessary for Genzyme to
manufacture Product for commercial sale in the Genzyme Territory.  Genzyme shall enter into commercially
reasonable confidentiality agreements with such Third Party manufacturers
containing terms no less stringent than those set forth in Article 9 of
this Agreement.

 

(c)                                   Additional
Capacity.  If either Party requires
access to additional manufacturing capacity for Product, the other Party will
have the first right to supply Product; provided
that the terms for such supply are at least as favorable to such Party as the
terms offered by any Third Party.

 

25

 

ARTICLE 5:  COMMERCIALIZATION

 

5.1                               Osiris
Territory.

 

5.1.1                       Osiris
Responsibilities in the Osiris Territory. 
Osiris will have sole responsibility for sales, marketing, manufacturing
and distribution activities for Prochymal and Chondrogen in the Osiris
Territory and will book all revenues resulting from such sales in the Osiris
Territory.  Subject to Section 5.1.2,
Osiris shall also have sole responsibility for deploying a sales force in the
Osiris Territory.

 

5.1.2                       U.S. Launch
Support for Prochymal.  Notwithstanding Section 5.1.1,
for a period commencing six (6) months prior to the anticipated date of
Marketing Approval by the FDA for Prochymal for the first Indication and continuing
until the date that is **** (the “Launch Period”) (as such Launch Period may be
modified as agreed by the Parties), at Osiris’s request Genzyme shall provide
commercially reasonable and customary support for the launch of Prochymal in
the Osiris Territory consisting of the following resources ****

 

5.1.3                       Genzyme
Right of Negotiation For Commercialization Rights.

 

(a)                                   Notice
to Genzyme.  In the event Osiris
determines to enter into discussions with any Third Party, regardless of
whether initiated by Osiris or the Third Party, regarding a transaction that
would include a license, sale, transfer or disposal of rights to (i) Prochymal
or Chondrogen in the Osiris Territory, or (ii) Chondrogen in the Genzyme
Territory if Genzyme has made a No Participation Decision, in each case
provided that the discussion is other than for a Change of Control of Osiris,
then prior to Osiris entering into any discussions with any Third Party, Osiris
shall first notify Genzyme in writing of the proposed transaction.  Such notice shall be accompanied by a summary
of all material data and information then available to Osiris (and not subject
to contractual or legal restrictions on disclosure to Genzyme) that is
reasonably necessary for Genzyme to make a preliminary evaluation of its
interest in such transaction. **** Nothing in this Section 5.1.3 shall
prevent Osiris from entering into any agreement with a Third Party that does
not involve Prochymal or Chondrogen.

 

(b)                                  Right
of Negotiation.  If Genzyme provides
Osiris with written notification during the Response Period of its intent to
pursue a transaction falling within Section 5.1.3(a), then Genzyme shall
have (i) with respect to Prochymal, the non-exclusive right, (ii) with
respect to Chondrogen unless and until Genzyme has made a No Participation
Decision, the exclusive right, and (iii) with respect to Chondrogen if
Genzyme has made a No Participation Decision, the non-exclusive right to
negotiate with Osiris for such transaction (the “Right of Negotiation”), Osiris
shall continue to make itself and its agents available for the conduct of due
diligence by Genzyme and the Parties shall negotiate in good faith with the
objective of 

 

	
  ****

  	
  Portions of this page have been
  omitted pursuant to a request for Confidential Treatment filed separately
  with the Commission.

  

 

26

 

executing a
definitive written agreement memorializing such transaction.  Osiris’ obligation to negotiate with Genzyme
shall terminate ****

 

(c)                                  Genzyme
Not Interested.  If (i) Genzyme
fails to notify Osiris during the Response Period of its interest in pursuing a
transaction, or (ii) Genzyme notifies Osiris that Genzyme is not
interested in pursuing a transaction during the Response Period, then Osiris
shall have no obligation to negotiate with Genzyme pursuant to this Section 5.1.3
with respect to such transaction and shall thereafter be free to enter into a
transaction falling within Section 5.1.3(a)with any Third Party at any
time; provided, that Genzyme’s
Right of Negotiation shall recommence if Osiris does not enter into an
agreement for a transaction with a Third Party ****

 

5.2                                 Genzyme’s
Notification Right Regarding Distribution Outsourcing.  In the event Osiris determines to enter into
discussion with any Third Party regarding the distribution of Prochymal or
Chondrogen in the Osiris Territory that does not involve a transaction of the
type contemplated in Section 5.1.3(a), including procuring a distribution
agent or contract sales force, Osiris shall first notify Genzyme in writing of
the proposed transaction and the Parties will discuss in good faith whether
Genzyme could provide such services on mutually agreeable terms.

 

5.3                                 Genzyme
Responsibilities in the Genzyme Territory. 
Genzyme shall: (i) have sole responsibility for sales, marketing
and distribution activities for Product in the Genzyme Territory; (ii) exercise
commercially reasonable efforts to sell, market and distribute Prochymal for
Indications that have received Marketing Approval in the Genzyme Territory; (iii) exercise
commercially reasonable efforts to sell, market and distribute Chondrogen after
a Genzyme Participation Decision and after receipt of Marketing Approval in the
Genzyme Territory; and (iv) book all revenues resulting from such sales in
the Genzyme Territory.  Genzyme shall
also have sole responsibility for deploying a sales force in the Genzyme
Territory.

 

ARTICLE 6:  CONSIDERATION

 

6.1                               Upfront
Payments.  In partial consideration of
the rights and licenses granted to Genzyme hereunder, Genzyme shall make the
following one-time, non-refundable, non-creditable payments to Osiris:

 

(a)                                  Seventy-Five
Million Dollars (US $75,000,000) within fifteen (15) Business Days after the
Effective Date; and

 

(b)                                 Fifty-Five
Million Dollars (US $55,000,000) on July 1, 2009.

 

6.2                               Prochymal
Development Milestones.

 

6.2.1                        Payments
to Osiris.  As further consideration for
the rights and licenses granted to Genzyme hereunder with respect to Prochymal
and subject to Sections 3.1.4(c) and 6.2.3, Genzyme shall make the
following non-refundable, non-creditable, one-time payments

 

	
  ****

  	
  Portions of this page have been omitted pursuant to a request for
  Confidential Treatment filed separately with the Commission.

  

 

27

 

(each, a “Prochymal Development Milestone Payment”) to Osiris for the
achievement of each of the following milestone events.  Each Prochymal Development Milestone Payment
shall be made within thirty (30) days after the date Osiris provides written
documentation to Genzyme of the achievement of each milestone event.

 

(a)                                  GvHD
Indication.

 

(i)                                     Twenty-Five
Million Dollars (US $25,000,000) upon Marketing Approval by the FDA of
Prochymal for the GvHD Indication; and

 

(ii)                                  Twenty-Five
Million Dollars (US $25,000,000) upon Marketing Approval by the EMEA of
Prochymal for the GvHD Indication.

 

(b)                                 Crohn’s
Indication.

 

(i)                                     Fifty
Million Dollars (US $50,000,000) upon demonstration in (y) the Crohn’s
Indication Clinical Trials or (z) any other double blinded, placebo controlled
Phase II Clinical Trial or Phase III Clinical Trial conducted and funded by
Osiris, of Statistical Significance of the primary endpoint(s) of either a
100 point reduction in the Crohn’s disease activity index (“CDAI”) or remission
as evidenced by a CDAI of less than 150; and

 

(ii)                                  One
Hundred Million Dollars (US $100,000,000) upon Marketing Approval by the EMEA
of Prochymal for the Crohn’s Indication.

 

(c)                                  Ulcerative
Colitis Indication

 

(i)                                     Ten
Million Dollars (US $10,000,000) upon demonstration of the achievement of
Statistical Significance of a mutually agreed upon endpoint(s) (as
previously set by the Steering Committee) in a Phase II Clinical Trial or Phase
III Clinical Trial of Prochymal for the Ulcerative Colitis Indication; and

 

(ii)                                  Twenty
Million Dollars ($20,000,000) upon Marketing Approval by the EMEA of Prochymal
for the Ulcerative Colitis Indication.

 

(d)                                 COPD Indication

 

(i)                                     Forty
Million Dollars (US $40,000,000) upon Marketing Approval by the EMEA of
Prochymal for the COPD Indication.

 

(e)                                  Each
Additional Major Indication.  With
respect to each Major Indication (other than the Crohn’s Indication, the
Ulcerative Colitis Indication and the COPD Indication, which are separately
addressed in (b), (c) and (d) above):

 

(i)                                     Twenty
Million Dollars (US $20,000,000) upon demonstration of Statistical Significance
of a mutually agreed upon endpoint(s) (as previously set by the Steering
Committee) in a Phase II Clinical Trial or a Phase III Clinical Trial of
Prochymal for such Major Indication; and

 

28

 

(ii)                                  Forty
Million Dollars (US $40,000,000) upon Marketing Approval by the EMEA of
Prochymal for such Major Indication.

 

(f)                                    Each
Other Indication.

 

(i)                                     Five
Million Dollars (US $5,000,000) upon demonstration of Statistical Significance
of a mutually agreed upon endpoint(s) (as previously set by the Steering
Committee) in a Phase II or III Clinical Trial of Prochymal for each Other
Indication; and

 

(ii)                                  Fifteen
Million Dollars (US $15,000,000) upon Marketing Approval by the EMEA of
Prochymal for each Other Indication.

 

For clarity, if any particular milestone
specified in this Section 6.2.1 is achieved in both a Phase II and a Phase
III trial for the same Indication, that milestone shall only be paid once.

 

6.2.2                        Genzyme
Opt-In Right.  Subject to the cap set
forth in Section 6.2.3, if Genzyme exercises the Genzyme Opt-In Right
pursuant to Section 3.1.4(d) for Prochymal for a Major Indication
(other than the Crohn’s Indication, Ulcerative Colitis Indication, Diabetes
Indication, COPD Indication and Cardiac Indication) or an Other Indication,
then Genzyme shall  pay to Osiris an
amount equal to two (2) times the amount of Prochymal Development
Milestone Payment that Genzyme would have otherwise owed had Genzyme and Osiris
pursued such Major Indication or Other Indication as an Accepted Indication
pursuant to Section 3.1.4(b).  Such
amount will be owed for each Indication with respect to which Genzyme exercises
the Genzyme Opt-in Right.

 

6.2.3                        Cap on
Prochymal Development Milestone Payments. 
In no event shall Genzyme be obligated to make Prochymal Development
Milestone Payments to Osiris under Section 6.2.1 and 6.2.2 which in the
aggregate exceed Five Hundred Million Dollars (US $500,000,000), regardless of the
number of Indications developed for Prochymal. 
Once the total Prochymal Development Milestone Payments to Osiris equal
Five Hundred Million Dollars, Genzyme shall have no further obligation to make
Prochymal Development Milestone Payments to Osiris even if additional milestone
events occur.  For clarity, the Prochymal
Sales Milestone Payments are excluded from the calculation of the cap on
Prochymal Development Milestone Payments.

 

6.3                                 Prochymal
Sales Milestones.  As further
consideration for the rights and licenses granted to Genzyme hereunder with
respect to Prochymal, Genzyme shall make the following non-refundable,
non-creditable, one-time payments (each, a “Prochymal Sales Milestone Payment”)
to Osiris for the achievement of each of the following milestone events.  For clarity, (a) each payment shall be
made one time only (regardless of the number of calendar years in which each
such sales milestone is achieved), and (b) each payment shall be based on
the total Net Sales for Prochymal in the Genzyme Territory in a calendar year
(i.e., shall not be based on cumulative Net Sales from the date of First
Commercial Sale), recognizing that multiple milestone payments can be earned in
the same calendar year.  Each Prochymal
Sales Milestone Payment shall be made within thirty (30) days after achievement
of each milestone event.

 

29

 

	
  Aggregate Annual Net Sales of 

  Prochymal in the Genzyme Territory in

  a Calendar Year

  	
   

  	
  Payment

  
	
  Equal to or greater than Five Hundred
  Million Dollars (US $500,000,000)

  	
   

  	
  One Hundred Million Dollars (US
  $100,000,000)

  
	
   

  	
   

  	
   

  
	
  Equal to or greater than One Billion
  Dollars (US $1,000,000,000)

  	
   

  	
  One Hundred Fifty Million Dollars (US
  $150,000,000)

  

 

6.4                                 Chondrogen
Development Milestones.  As further
consideration for the rights and licenses granted to Genzyme hereunder with
respect to Chondrogen and subject to Genzyme making a Participation Decision
pursuant to Section 3.2.2(b), Genzyme shall make the following
non-refundable, non-creditable, one-time payments (each, a “Chondrogen
Development Milestone Payment”) to Osiris for the achievement of each of the
following milestone events by Osiris or its Affiliates or licensees.  Each Chondrogen Development Milestone Payment
shall be made within thirty (30) days after the achievement of each milestone
event.

 

6.4.1                        Phase II
Clinical Trial or Phase III Clinical Trial.

 

(a)                                  Ten
Million Dollars (US $10,000,000) upon Genzyme making a Participation Decision
pursuant to Section 3.2.2(b); and

 

(b)                                 Ten
Million Dollars (US $10,000,000) upon demonstration of Statistical Significance
of Disease Modification in a Phase II Clinical Trial or Phase III Clinical
Trial (including a clinical trial designated as a Phase II/III Clinical Trial)
of Chondrogen.

 

(c)                                  For
clarity, if Genzyme makes a Participation Decision and a Phase II Clinical
Trial, Phase II/III Clinical Trial or a Phase III Clinical Trial demonstrates
Chondrogen’s Disease Modification characteristics, then both payments in
Sections 6.4.1(a) and 6.4.1(b) shall be payable by Genzyme.

 

6.4.2                        Marketing
Approval.

 

(a)                                  Forty
Million Dollars (US $40,000,000) upon Marketing Approval by the FDA or EMEA of
Chondrogen with a label that allows Chondrogen to be marketed as a Pain
Therapeutic; and

 

(b)                                 Forty
Million Dollars (US $40,000,000) upon Marketing Approval by the FDA or EMEA of
Chondrogen with a label that allows Chondrogen to be marketed for Disease
Modification.

 

(c)                                  For
clarity, if the FDA or EMEA grants Marketing Approval that allows Chondrogen to
be marketed both as a Pain Therapeutic and for Disease Modification, then both
payments in Sections 6.4.2(a) and (b) above shall be payable by
Genzyme to Osiris.

 

30

 

6.5                                 Chondrogen
Sales Milestones.  As further
consideration for the rights and licenses granted to Genzyme hereunder with
respect to Chondrogen, Genzyme shall make the following non-refundable,
non-creditable, one-time payments (each, a “Chondrogen Sales Milestone Payment”)
to Osiris for the achievement of each of the following milestone events in the
event Genzyme has made a Participation Decision pursuant to Section 3.2.2(b).  For clarity, (a) each payment shall be
made one time only (regardless of the number of calendar years in which each
such sales milestone is achieved), and (b) each payment shall be based on
the total Net Sales for Chondrogen made by Genzyme, its Affiliates and
sublicensees in the Genzyme Territory in a calendar year (i.e., shall not be
based on cumulative Net Sales from the date of First Commercial Sale),
recognizing that multiple payments can be earned in the same calendar
year.  Each Chondrogen Sales Milestone
Payment shall be made within thirty (30) days after achievement of each
milestone event.

 

	
  Aggregate Annual Net Sales of

  Chondrogen in the Genzyme Territory

  in a Calendar Year

  	
   

  	
  Payment

  
	
  Equal to or greater than Five Hundred
  Million Dollars (US $500,000,000)

  	
   

  	
  One Hundred Million Dollars (US
  $100,000,000)

  
	
   

  	
   

  	
   

  
	
  Equal to or greater than One Billion
  Dollars (US $1,000,000,000)

  	
   

  	
  One Hundred Fifty Million Dollars (US
  $150,000,000)

  
	
   

  	
   

  	
   

  
	
  Equal to or greater than Two Billion
  Dollars (US $2,000,000,000)

  	
   

  	
  One Hundred Fifty Million Dollars (US
  $150,000,000)

  

 

6.6                                 Royalties
Payable to Osiris.

 

6.6.1                        Royalty
Rates.  As further consideration for the
rights and licenses granted by Osiris to Genzyme for the Products, and subject
to Sections 6.6.2, 6.6.3 and 6.6.4, Genzyme shall pay royalties to Osiris on
Net Sales of Product in the Genzyme Territory at the rates set forth in the
table below for the duration (on a country-by-country basis) set forth in Section 6.6.3:

 

	
  Aggregate Annual Net Sales per

  Calendar Year of Product in the

  Genzyme Territory

  	
   

  	
  Royalty
  Rate

  
	
  Annual Net
  Sales less than ****

  	
   

  	
  ****

  
	
   

  	
   

  	
   

  
	
  Annual Net
  Sales equal to or greater than ****

  	
   

  	
  ****

  

 

	
  ****

  	
   

  	
  Portions of
  this page have been omitted pursuant to a request for Confidential
  Treatment filed separately with the Commission

  

 

31

 

6.6.2                        Royalty
Calculation.  The Parties agree that
royalties payable under Section 6.6.1 for Product shall be calculated as
follows:

 

(a)                                  ****

 

(b)                                 Adjustment.  In the event that the Parties assume under Section 6.6.2(a) that
annual aggregate Net Sales of Product in the Genzyme Territory shall equal or
exceed **** for any
subsequent calendar year, and if, despite Genzyme’s commercially reasonable
efforts to commercialize Products in the Genzyme Territory, the annual
aggregate Net Sales of Product in the Genzyme Territory fail to reach **** for
any subsequent calendar year, then the Parties shall true-up the royalty
payments to Osiris as follows: royalties shall be calculated based on actual
annual aggregate Net Sales of Product in the Genzyme Territory using the
appropriate rate for each portion of sales in the table set forth in Section 6.6.1
and the amount of any overpayment of royalties by Genzyme for the calendar year
shall be offset against future royalty payments due to Osiris in the next
calendar year.  In the event no future
royalty payments are due to Osiris, then Osiris shall reimburse Genzyme for the
amount of such overpayment within thirty (30) days of the date that such
overpayment amount has been determined.

 

(c)                                  ****

 

6.6.3                        Royalty
Duration.

 

(a)                                  Prochymal.  Royalties shall be payable with respect to
Net Sales of Prochymal in the Genzyme Territory by Genzyme, its Affiliates and
sublicensees hereunder on a country-by-country basis commencing upon the First
Commercial Sale of Prochymal in any country in the Genzyme Territory and
continuing until the later of ****.

 

(b)                                 Chondrogen.  Royalties shall be payable with respect to
Net Sales of Chondrogen in the Genzyme Territory by Genzyme, its Affiliates and
sublicensees hereunder on a country-by-country basis commencing upon the First
Commercial Sale of Chondrogen in any country in the Genzyme Territory and
continuing until the later of ****.

 

6.6.4                        Royalty
Payments; Reports.  Royalties will be
paid by Genzyme on Net Sales of Product in the Genzyme Territory no later than
forty-five (45) days after the end of each calendar quarter in which such Net
Sales are made.  Such payments will be
accompanied by a report setting out the details necessary to calculate the
amounts actually due hereunder with respect to Net Sales of Product made in
that calendar quarter, including gross sales of Product in the calendar quarter
sold on a country-by-country basis, all relevant deductions, and all relevant
exchange rate conversions.  If no earned
royalties are due for a calendar quarter after Marketing Approval in the
Genzyme Territory, Genzyme will so report. 
Genzyme will require each Affiliate and sublicensee to make appropriate
reports to Genzyme in a timely manner to enable Genzyme to comply with this Section 6.6.4.  If Net Sales in one or more territories in
the Genzyme Territory are unavailable or cannot be calculated during the 45 day
period, then 

 

	
  ****

  	
   

  	
  Portions of
  this page have been omitted pursuant to a request for Confidential
  Treatment filed separately with the Commission

  

 

32

 

Genzyme may
use an estimate of Net Sales and Net Sales Adjustments in such territory or
territories based on the Net Sales in the applicable territory during the
previous calendar quarter.  Each
subsequent quarterly report shall reconcile any estimates included in a
previous report.

 

6.7                                 Royalties
Payable to Genzyme.

 

6.7.1                        Royalty
Rates.  As consideration for the launch
support provided by Genzyme to Osiris for Prochymal in the Osiris Territory
pursuant to Section 5.1.2, Osiris shall pay royalties to Genzyme on Net
Sales by Osiris, its Affiliates and licensees of Prochymal for all Indications
in the Osiris Territory at the following rates:

 

(a)                                  ****

 

(b)                                 ****

 

6.7.2                        Royalty
Payments; Reports.  Royalties will be
paid by Osiris on Net Sales of Prochymal in the Osiris Territory no later than
sixty (60) days after the end of each calendar quarter in which such Net Sales
are made.  Such payments will be
accompanied by a report setting out the details necessary to calculate the
amounts actually due hereunder with respect to Net Sales of Prochymal made in
that calendar quarter, including gross sales of Prochymal in the calendar
quarter sold on a country-by-country basis, all relevant deductions, and all
relevant exchange rate conversions.  If
no earned royalties are due for a calendar quarter after Marketing Approval in
the Osiris Territory, Osiris will so report. 
Osiris will require each Affiliate and licensee to make appropriate
reports to Osiris in a timely manner to enable Osiris to comply with this Section 6.7.2.

 

6.8                                 Records;
Audits.  Each Party shall keep, and shall
cause its Affiliates and Third Party sublicensees to keep, full and accurate
records and books of account containing all particulars that may be necessary
for the purpose of calculating Development Costs and Net Sales of a Product for
an Indication to be received or borne by the Parties pursuant to this
Agreement, including without limitation, inventory, purchase and invoice
records, manufacturing records, sales analysis, general ledgers, financial
statements, and tax returns.  Such books
of account, with all necessary supporting data, shall be kept by such Party at
its place of business for the six (6) years next following the end of the
calendar year to which each shall pertain. 
Each Party (the “Audited Party”) shall permit an independent accounting
firm selected by the other Party (the “Verifying Party”) and reasonably
acceptable to the Audited Party, which acceptance shall not be unreasonably
withheld or delayed, to have access during normal business hours to such
records as may be reasonably necessary to verify the accuracy of the Audited
Party’s reports of Development Costs and Net Sales of a Product for an
Indication as provided herein.  All such
verifications shall be conducted at the expense of the Verifying Party and not
more than once in each calendar year.  In
the event such audit concludes that adjustments should be made in the Verifying
Party’s favor, then any appropriate payments **** shall be paid by the Audited Party within twenty (20)
Business Days after the Audited Party receives the Verifying Party’s accounting
firm’s written report so concluding, unless the Audited Party shall have a good
faith 

 

	
  ****

  	
   

  	
  Portions of
  this page have been omitted pursuant to a request for Confidential
  Treatment filed separately with the Commission

  

 

33

 

dispute as to the conclusions set forth in such written report, in
which case the audited Party shall provide written notice to the Verifying
Party within such twenty (20) Business Day period of the nature of its
disagreement with such written report. 
The Parties shall thereafter, for a period of forty (40) Business Days,
attempt in good faith to resolve such dispute and if they are unable to do so
then the matter will be submitted to dispute resolution in accordance with Section 2.2.2
hereof.  The fees charged by such
accounting firm shall be paid by the Verifying Party unless the audit discloses
that adjustments in favor of the Verifying Party for the period ****

 

6.9                                 Calculation
of Payment.  With respect to amounts due
by one Party to the other Party resulting from Net Sales earned or expenses
incurred in U.S. dollars, the Net Sales or expense amounts shall be expressed
in U.S. dollars.  With respect to amounts
due by one Party to the other Party resulting from Net Sales earned or expenses
incurred in a currency other than U.S. dollars, the Net Sales or expense shall
be expressed in the currency in which such Net Sales were earned or expenses
incurred together with the U.S. dollars equivalent, translated in accordance
with GAAP, using the average foreign exchange rate for such currency for the
month in which such sale or expense is reported, as published by Bloomberg.

 

6.10                           Late
Payments.  Any payments owed by Genzyme
or Osiris under this Agreement that are not paid on or before the date such
payments are due shall accrue daily interest, to the extent permitted by law,
at the rate equal to ****

 

6.11                           FIN 46
Cooperation.  The Parties agree to
cooperate with each other in good faith to meet any necessary compliance,
disclosure or financial reporting obligations under Financial Accounting
Standards Board (“FASB”) Interpretation No. 46R (“FIN 46”) or any
successor FASB interpretation pertaining to the consolidation of variable
interest entities.  To the extent
reasonably allowed under FIN 46, communications between the Parties under this Section 6.11
shall be subject to the confidentiality provisions of Article 9.

 

ARTICLE 7:  GRANT OF
RIGHTS

 

7.1                                 License
to Genzyme.

 

7.1.1                        License
Grant.  Subject to and conditioned upon
Genzyme’s compliance with, the terms of this Agreement Osiris hereby grants
Genzyme (a) an exclusive (even as to Osiris, except as required for Osiris
to meet its development and supply obligations hereunder), royalty-bearing
right and license, with the right to sublicense (subject to Section 7.1.2),
during the Term of this Agreement under the Osiris Intellectual Property and
Osiris’s interest in any Joint Patent Rights and Joint Technology solely to
research, develop, make, have made, use, sell, offer for sale and import
Products in the Field in the Genzyme Territory, and (b) a non-exclusive
right and license, with the right to sublicense, during the Term of this
Agreement under the Osiris Intellectual Property to research, make, have made,
use and export Products in the Field in North America.  In addition, Osiris shall provide Genzyme
with reasonable quantities of the Product sufficient for Genzyme’s research
purposes in connection with its obligations under any 

 

	
  ****

  	
   

  	
  Portions of
  this page have been omitted pursuant to a request for Confidential
  Treatment filed separately with the Commission

  

 

34

 

Development Plan.  After
expiration of all royalty obligations under Section 6.6 to Osiris for any
Product in a country in the Genzyme Territory, (i) no further royalties
shall be payable in respect of sales of such Product on a country-by-country
basis, and (ii) all licenses granted to Genzyme pursuant to this Section 7.1
with respect to such Product shall become fully paid-up, perpetual,
irrevocable, royalty-free, non-exclusive, worldwide licenses.

 

7.1.2                        Sublicenses.  Genzyme shall have the right to sublicense
its rights under this Agreement upon the written consent of Osiris which shall
not be unreasonably withheld, conditioned or delayed.  Any sublicense by Genzyme of the rights
granted in this Section 7.1 shall be consistent with the terms of this
Agreement.  In the event Genzyme grants a
sublicense of the rights granted herein, Genzyme shall promptly provide a copy
of such sublicense to Osiris. 
Furthermore, Genzyme shall notify Osiris in writing if any sublicensee
fails to reasonably comply with the material provisions of this Agreement.  Genzyme shall assume the same responsibility
for the activities of its sublicensees as if the activities were directly those
of Genzyme.  If this Agreement is
terminated and a given sublicense granted by Genzyme is in force and effect on
the date of such termination, such sublicense shall survive, provided that (a) such sublicensee
will continue to make all reports and payments due and owing under its
sublicense to Osiris rather than Genzyme and (b) Osiris will not be deemed
to have assumed any obligations broader in scope than it has under this
Agreement.

 

7.1.3                        Japanese
Rights for Prochymal for GvHD Indication. 
In the event that, at
any time during the Term, the license under the Osiris Intellectual Property
for the development and commercialization of Prochymal for the GvHD Indication
granted by Osiris prior to the Effective Date to a Third Party in Japan expires
or terminates for any reason, Osiris shall promptly notify Genzyme and, subject
to the last sentence of this Section 7.1.3, if requested by Genzyme in
writing, the Genzyme Territory shall be automatically amended to include
Japan.  After such extension of the
Genzyme Territory, Genzyme shall be responsible for paying the contractual
milestones payments set forth in the License Agreement by and between JCR Pharmaceuticals
Co., Ltd. and Osiris Acquisitions II, Inc. executed 26 August 2003,
as amended from time to time.  For
clarity, Genzyme shall not be liable for paying any milestones or other
payments due and unpaid by JCR Pharmaceuticals prior to the extension of
Genzyme’s Territory to include Japan.

 

7.2                                 Covenant
Not to Sue Osiris.  During the Term,
Genzyme covenants not to enforce against Osiris or an Osiris Collaborator any
rights under the Genzyme Intellectual Property, and shall not initiate any
action asserting a claim of infringement under the Genzyme Patent Rights
against Osiris or an Osiris Collaborator, solely to the extent Osiris and an
Osiris Collaborator are making, using, selling, offering for sale or importing
Product for an Indication in the Osiris Territory or researching, developing,
making, having made or using Product in the Osiris Territory for an Indication
in accordance with the terms of this Agreement; provided that Genzyme does not covenant not to sue Osiris or
an Osiris Collaborator under the Genzyme Intellectual Property if it is
restricted from doing so by law.  The
Parties agree that the foregoing covenant is (a) personal to Osiris and,
if applicable, an Osiris Collaborator, and cannot be assigned or transferred
and (b) does not constitute a release or waiver of past, present or future
infringement of any Genzyme Intellectual Property by Osiris or any third Party
(including an Osiris Collaborator) acting outside the scope of this
Agreement.  As used herein, an “Osiris
Collaborator” shall mean any Third Party that is a (a) licensee under the
Osiris Intellectual 

 

35

 

Property (subject to Osiris’ compliance with Section 5.1.3) that
is researching, developing, making, having made, using or selling Product for
an Indication in the Osiris Territory or (b) subcontractor of Osiris that
is conducting development activities in the Osiris Territory in accordance with
the terms of this Agreement.

 

7.3                                 Additional
Rights.  In the event that the Parties determine
that a license to the intellectual property rights or technology of any Third
Party is necessary for the development, manufacture, use or sale of a Product
for an Indication in the Genzyme Territory or Osiris Territory (“Additional
Rights”), then Osiris shall use commercially reasonable efforts to acquire a
license under such Additional Rights from the Third Party.  Osiris will use commercially reasonable
efforts to obtain the right to sublicense such Additional Rights to Genzyme as
Osiris Intellectual Property under Section 7.1, under terms to be
negotiated by the Parties in good faith. 
In the event Osiris is unable to obtain the right to sublicense such
Additional Rights to Genzyme, Genzyme shall have the right to obtain a license
under such Additional Rights from the Third Party in the Genzyme Territory, and
offset royalties to such Third Party as set forth in the last sentence of this Section 7.3.  In the event that Osiris does not agree with
Genzyme’s assessment that a license to the intellectual property rights or
technology of a Third Party is reasonable or necessary to (a) develop,
manufacture, use, sell or offer for sale Product for an Indication in the
Genzyme Territory, or (b) make, have made, use or export Product for an
Indication in North America, then the matter shall be resolved by submission to
an independent registered U.S. patent attorney mutually agreed to by the
Parties.  In the event that a license
from a Third Party is reasonable or necessary, Genzyme shall be entitled to
offset against royalties otherwise payable for Product to Osiris ****

 

7.4                                 No
Other Rights.  Any rights of a Party not
expressly granted to the other Party, or otherwise expressly restricted or
limited, under this Agreement shall be retained by such Party.  No license shall be deemed to be granted by
implication, estoppel, course of dealing, or otherwise.

 

7.5                                 Rights
to Exploit Intellectual Property Outside of Collaboration.  The Parties shall be free to exploit and
license their respective Intellectual Property outside the Collaboration.  Both Parties recognize that the other intends
to continue research and development activities beyond the scope of this
Agreement.  Each Party shall own all
preclinical and clinical data generated in the performance of its own activities
outside the Collaboration (“Non-Program Data”) and such data shall constitute
Confidential Information of that Party under Article 9.

 

7.6                                 Rights
to Exploit Joint Patent Rights and Joint Technology.  With respect to any Joint Patent Rights and
Joint Technology, and subject to all other terms and conditions of this
Agreement, including Section 8.1.4, the Parties agree that each Party
shall be free to exploit the Joint Patent Rights and Joint Technology.

 

7.7                                 Exclusivity.
**** Notwithstanding
the restrictions set forth in the preceding two sentences, if Genzyme makes a
No Participation Decision as set forth in Section 3.2.2, Osiris shall not
be restricted from developing, manufacturing, marketing, selling or
distributing 

 

	
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36

 

Chondrogen.  During the Term, in
no event shall Genzyme, itself or through a Third Party, commercialize any
Product in the Field in the Osiris Territory. 
****

 

7.8                                 Right
of Notification.

 

7.8.1                        Osiris
Events.  Genzyme shall have the right to
be notified by Osiris (the “Right of Notification”) in writing within ten (10) Business
Days following the earlier of (a) the receipt of a bona fide written term
sheet or bona fide written offer from any Third Party regarding a transaction
involving a Change of Control of Osiris, or (b) Osiris’s decision to seek
a strategic alternative that could result in a Change of Control (each of such
written term sheet, offer or event, an “Osiris Event”).  A term sheet or offer will be considered “bona
fide” for purposes of this Section 7.8.1 in the reasonable, good faith
judgment of the Osiris Board of Directors.

 

7.8.2                        Notice to
Genzyme.  Osiris shall communicate the
Osiris Event in writing to Genzyme within the ten (10) Business Day period
referenced in Section 7.8.1 above (such notice being a “Proposal Notice”).  For avoidance of doubt, the Proposal Notice
must be delivered within ten (10) days of the occurrence of an Osiris
Event.  Osiris shall not consummate or
enter into a letter of intent, term sheet or definitive agreement which binds
Osiris to negotiate or consummate a transaction described above with any Third
Party for a period of ten (10) days after the date Genzyme receives the
Proposal Notice.  After the expiration of
such ten (10) day period, Osiris shall be free to consummate a binding
transaction with a Third Party with respect to such rights.

 

7.8.3                        Termination
of Right of Notification. 
Notwithstanding any of the foregoing, the Right of Notification shall
terminate upon the earlier to occur of (a) a Change of Control of either
Party (provided that prior to such Change of Control of Osiris, Osiris shall
have fully complied with its obligations under this Section 7.8.3), or (b) the
termination or expiration of this Agreement. 
Osiris shall provide Genzyme with written notice of a Change of Control
promptly following the closing of the relevant transaction.

 

ARTICLE 8:  INTELLECTUAL
PROPERTY RIGHTS

 

8.1                                 Ownership
of Technology and Patent Rights; Prosecution of Patent Rights.

 

8.1.1                        Disclosure
of Technology.  During the Term, (a) each
Party shall promptly disclose to the other Party all Joint Technology, (b) Genzyme
shall promptly disclose to Osiris all Genzyme Technology under its Control that
is necessary to develop the Product for an Indication under a Development Plan,
and (c) Osiris shall promptly disclose to Genzyme all Osiris Technology
under its Control that is necessary to develop a Product for an Indication
under a Development Plan.

 

	
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37

 

8.1.2                        Ownership
of Osiris Technology and Patent Rights. 
All right, title and interest in all Osiris Technology owned or
Controlled by Osiris, together with all Osiris Patent Rights that claim the
foregoing, shall remain the sole and exclusive property of Osiris.

 

8.1.3                        Ownership
of Genzyme Technology and Patent Rights. 
All right, title and interest in all Genzyme Technology owned or
Controlled by Genzyme, together with all Genzyme Patent Rights that claim the
foregoing, shall remain the sole and exclusive property of Genzyme.

 

8.1.4                        Joint
Technology and Joint Patent Rights. 
After consultation with Genzyme, and using mutually acceptable patent
counsel, Osiris shall have the responsibility to prepare and file all U.S.
provisional and U.S. patent applications. 
After consultation with Osiris, and using mutually acceptable patent
counsel, Genzyme shall have the responsibility to prepare and file all PCT
applications.  Upon national phase entry
into the Osiris Territory, all right, title and interest in all Joint
Technology and Joint Patent Rights shall be assigned to Osiris in the Osiris
Territory and Osiris shall grant Genzyme a non-exclusive, fully paid up,
non-royalty bearing license to the Joint Technology and Joint Patent Rights in
the Osiris Territory.  Upon national
phase entry into the Genzyme Territory, all 
right, title and interest in all Joint Technology and Joint Patent
Rights shall be assigned to Genzyme in the Genzyme Territory and Genzyme shall
grant to Osiris a non-exclusive, fully paid up, non-royalty bearing license to
the Joint Technology and Joint Patent Rights in the Genzyme Territory.  The Parties agree to use commercially
reasonable efforts to protect any Joint Technology and Joint Patent Rights.  If the practice of the Joint Technology or
Joint Patent Rights occurs outside of the Collaboration and (a) requires
Osiris Intellectual Property, Genzyme shall be required to seek a license from
Osiris to use such Osiris Intellectual Property, such license to be granted or
withheld at Osiris’s sole discretion, or (b) requires Genzyme Intellectual
Property, Osiris shall be required to seek a license from Genzyme to use such
Genzyme Intellectual Property, such license to be granted or withheld at
Genzyme’s sole discretion.  Upon
termination or expiration of this Agreement, both Parties agree to
non-exclusively license to each other all Joint Patent Rights and further agree
that such licenses shall be worldwide and include the right to sublicense.

 

8.1.5                        Osiris
Patent Challenge.  If Genzyme or any of its
affiliates commences any action of proceeding (including any patent opposition,
interference or reexamination proceeding), or otherwise asserts in writing any
claim, challenging or denying the validity of the Osiris Patent Rights or
assists any other party in bringing or prosecuting any such action or
proceeding (except in response to a duly issued subpoena) (“Osiris Patent
Challenge”), then Osiris may, at Osiris’ sole option, increase the Royalty
payable ****.  In the event that Osiris
elects to increase the Royalty rate, then Genzyme shall fully compensate Osiris
for its reasonable legal fees and expenses in the event that the claims are
unchanged as a result of the challenge and Osiris shall fully compensate
Genzyme for its reasonable legal fees and expenses and the additional royalty
in the event that the claims of the challenged Osiris Patent Right are changed
as a result of the challenge.  For the
avoidance of doubt, statements by Genzyme or its affiliates about any Joint
Patent Rights or Genzyme Patent Rights or any Osiris Patent Rights in 

 

	
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38

 

connection with the prosecution, enforcement or defense of any Patent
Rights which are not Osiris Patent Rights shall not be considered to be an
Osiris Patent Challenge.

 

8.1.6                        Cooperation
of Third Parties.  Each Party represents
and agrees that all of its employees and all of its Affiliates’ employees
acting under its or its Affiliates’ authority in the performance of a
Development Plan or pursuant to the licenses or covenants granted under Section 7.1
and 7.2 hereof shall be obligated under a binding written agreement or established
corporate policy to assign to such Party, all Technology and Patent Rights
discovered, made, conceived or reduced to practice by such employee as a result
of such employee’s employment.  In the
case of all others acting in the performance of a Development Plan or pursuant
to the licenses or covenants granted under Section 7.1 and 7.2 hereof,
such as consultants, subcontractors, licensees, sublicensees, outside
contractors, clinical investigators, agents, or non-employees working for
non-profit academic institutions, such others shall also be obligated under an
agreement that meets the criteria of the preceding sentence, unless otherwise
approved by the Steering Committee.  The
Parties agree to undertake to enforce the agreements referenced in this Section (including,
where appropriate, by legal action) considering, among other things, the
commercial value of such Technology and Patent Rights.

 

8.1.7                        No
Encumbrances.  Except as expressly
provided in this Agreement, neither Party shall sell, transfer, assign,
mortgage, pledge, lease, grant a security interest in (e.g., as collateral for
a loan or other financing) or otherwise encumber any Genzyme Intellectual
Property, Osiris Intellectual Property, Joint Patent Rights or Joint Technology
necessary or useful for the research, development, manufacture or
commercialization of a Product for an Indication without the prior written
consent of the other Party; provided,
however, that nothing contained in this Section 8.1.7 shall prohibit an
assignment permitted by Section 13.3 hereof.

 

8.2                                 Filing,
Prosecution, Maintenance and Enforcement of Patent Rights.

 

8.2.1                        Osiris
Intellectual Property.

 

(a)                                  Osiris
(or its licensors) shall have sole responsibility for and control over the
filing, prosecution, maintenance, defense and enforcement of the Osiris
Intellectual Property and Osiris shall be responsible for all costs and
expenses associated with such filing, prosecution, maintenance, defense and
enforcement.

 

(b)                                 If
Osiris fails to file any application, other than a provisional patent
application, or intends to abandon (other than in favor of a continuing or
related patent application) any Osiris Patent Right in the Genzyme Territory,
then Osiris will provide written notice of such intention to Genzyme within
sufficient time for Genzyme to undertake or continue the preparation of any
filing, prosecution or maintenance of such Osiris Patent Right and Genzyme will
thereafter have the right, but not the obligation, at its sole expense, to
prepare, file, prosecute and maintain such Osiris Patent Right in Osiris’ name,
and Osiris shall provide reasonable assistance to Genzyme with respect to such
Osiris Patent Rights, at the sole expense of Genzyme.  Upon Osiris’ election not to prepare, file,
prosecute or maintain or to abandon any Osiris Patent Rights in any country in
the Genzyme Territory previously requested by Genzyme, such Osiris Patent
Rights in such country shall not be considered in determining the applicable
royalty rate for Net Sales of Product in such country pursuant to Section 6.6.

 

39

 

(c)                                  If
Osiris fails to use commercially reasonable efforts to initiate a suit or take
other appropriate action with respect to a suspected infringement of the Osiris
Patent Rights or Joint Patent Rights in the Genzyme Territory within ninety
(90) days after becoming aware of the basis for such suit or action, then
Genzyme may, in its discretion, provide Osiris with written notice of Genzyme’s
intent to initiate a suit or take other appropriate action.  If Genzyme provides such notice and Osiris
fails to use commercially reasonable efforts to initiate a suit or take such
other appropriate action within thirty (30) days after receipt of such notice
from Genzyme, then Genzyme shall have the right to initiate a suit or take
other appropriate action that it believes is reasonably required to protect the
Osiris Patent Rights covering a Product in the Field in the Genzyme Territory,
and Osiris hereby consents to be joined as a named party in such suit or
action, if required by law.  The Party
actually initiating suit or taking other appropriate action under this Section 8.2.1
shall be referred to as the “Enforcing Party.” In the event that Genzyme does
not have standing as an Enforcing Party to initiate a suit or take other
appropriate action with respect to suspected infringement of an Osiris Patent
Right or Joint Patent Rights, then Osiris agrees to cooperate by initiating
suit pursuant to decisions made by the Steering Committee.  Any recovery obtained by any Enforcing Party
as a result of any proceeding described in this Section 8.2.1, by
settlement or otherwise, shall be applied in the following order of priority: (i) first,
to reimburse each Party for all litigation costs in connection with such
proceeding paid by that Party and not otherwise recovered (on a pro rata basis
based on each Party’s respective litigation costs, to the extent the recovery
was less than all such litigation costs); and (ii) second, (A) as to
recoveries based on lost profits, Osiris will receive an amount commensurate
with the royalty it would have received if Genzyme had earned such profits
through the sale of Products in the Genzyme Territory and Genzyme shall retain
the balance; and (B) as to recoveries based on other than lost profits,
the recovery shall be split 50:50 between the Parties.

 

During the
preparation and pendency of any proceedings pursuant to this Section 8.2.1
the Enforcing Party will: (i) keep the other Party reasonably informed as
to the status of such proceeding, including providing copies of all documents
filed in, and written communications, depositions and hearing transcripts
relating to, such proceeding to the extent the interests of Osiris and Genzyme
are not adverse; and (ii) consult with the other Party regarding the
strategy for, and status of, such proceeding, including providing the other
Party with an opportunity to make suggestions and comments regarding such
proceeding, which the Enforcing Party shall consider in good faith.  Each of the foregoing obligations will be
subject to each Party’s desire or need to preserve any attorney-client
privilege, or work-product privilege, which will take precedence.

 

8.2.2                        Genzyme
Intellectual Property.  Genzyme (or its
licensors) shall have sole responsibility for and control over the filing,
prosecution, maintenance, defense and enforcement of the Genzyme Intellectual
Property and Genzyme shall be responsible for all costs and expenses associated
with such filing, prosecution, maintenance, defense and enforcement.

 

8.2.3                        Joint
Patent Rights.  Subject to Section 8.1.4,
Genzyme shall have primary responsibility for the preparation, filing,
prosecution and maintenance of any Joint Patent Rights in the Genzyme
Territory.  Osiris shall have primary
responsibility for the preparation, filing prosecution and maintenance of any
Joint Patent Rights in the Osiris Territory. 
The Parties shall share equally the reasonable patent costs associated
with the preparation, filing, prosecution and 

 

40

 

maintenance of the Joint Patent Rights. 
The Party responsible for preparation, filing, prosecution and
maintenance of any Joint Patent Rights agrees to furnish the other Party with
copies of all documents relevant to such filing, prosecution and maintenance
with respect to such Joint Patent Rights in sufficient time to allow for review
by such other Party, to incorporate in good faith the comments of the other
Party prior to taking any action to implement such decisions and to otherwise
keep the other Party reasonably informed of the status of the preparation,
filing, prosecution and maintenance of such Joint Patent Rights in the Genzyme
Territory or Osiris Territory, as applicable. 
Notwithstanding the foregoing, in the event that the Party responsible
for such preparation, filing, prosecution and maintenance elects to abandon or
not to prosecute or maintain any Joint Patent Right in any country (other than
in favor of a continuing patent application and except in the event the Parties
mutually decide to abandon or not to maintain or enforce such Joint Patent
Right), the other Party may elect to assume responsibility for preparation,
filing, prosecuting and maintaining such Joint Patent Right in such country, at
its sole discretion and expense, in which case, all rights in such Joint Patent
Right in such country shall be promptly assigned to that Party.  Either Party may choose at any time not to
continue to pay patent costs with respect to any Joint Patent Right, and shall
thereafter assign all of its rights in such Joint Patent Right to the other
Party and the other Party shall pay all future patent costs for rights it
pursues in its sole discretion.  In the
event that a Party elects, at any time, not to participate in the filing and
prosecution of any Joint Patent Right, such Party shall provide reasonable
assistance to the other Party, and shall be reimbursed by the other Party for
its reasonable cost of providing said assistance.

 

8.2.4                        Enforcement
of Joint Patent Rights.  Osiris and
Genzyme shall each promptly notify the other in writing of any alleged or
threatened infringement of the Joint Patent Rights of which they become
aware.  Osiris and Genzyme shall then
confer and may agree jointly to prosecute any such infringement, with the
Enforcing Party being the Party in whose Territory the enforcement action is
brought.  In the event an Enforcing Party
brings an infringement action, the other Party shall cooperate reasonably at
the Enforcing Party’s expense, including providing good faith testimony.  The other Party shall have the right, at its
own expense, to retain its own counsel to monitor such litigation and the costs
associated with such monitoring shall not be considered Development Costs.  Neither Party shall have the right to settle
any patent infringement litigation under Section 8.2 in a manner that
diminishes the rights or interests of the other Party without the express
written consent of such other Party. 
Except as otherwise agreed to by the Parties as part of a cost sharing
arrangement, any recovery realized as a result of such litigation (whether by
way of settlement or otherwise) shall be shared by the Parties pursuant to
8.2.1(c) herein, once legal fees actually incurred by the Enforcing Party
have been paid.  Neither Party may
enforce the Joint Patent Rights in the other Party’s Territory without the
prior written consent of the Party in whose Territory the enforcement action is
to be taken.

 

8.2.5                        Patent
Term Extension or Restoration.  The
Parties shall jointly determine whether to seek patent term extension or
restoration (or its equivalent) with respect to any Joint Patent Right and any
expenses associated therewith shall be shared equally.  In the event that a Party elects not to seek
patent term extension or restoration (or its equivalent) with respect to any
Joint Patent Right or any of its Patent Rights, upon prior written consent of
the non-electing Party, the other Party shall have the right, but not the
obligation, to seek patent term extension or restoration (or its equivalent)
for such Patent Right at its own expense. 
In the event that either 

 

41

 

Party elects to seek patent term extension or restoration (or its
equivalent) for any Patent Right as provided in this Section, the Parties shall
reasonably cooperate with each other in obtaining such patent term extension or
restoration (or its equivalent) which cooperation shall include, without
limitation, providing information, executing those documents that may be
necessary for the Party to seek and obtain such patent term extension or
restoration (or its equivalent), and seeking patent term extension or
restoration of a Patent Right if requested.

 

8.2.6                        Infringement
Claims.  If the manufacture, use, offer
for sale, sale, import or export of a Product for an Indication results in any
claim, suit or proceeding lodged by a Third Party alleging intellectual
property infringement against a Party (or their respective Affiliates,
subcontractors, consultants, licensees or Third Party sub-licensees), such
Party shall promptly notify the other Party hereto in writing.  The Party against whom suit is brought shall
be the controlling Party, provided
that (a) if both Parties are sued, the Party in whose Territory the action
is brought shall be the controlling Party; and (b) in no event shall the
controlling Party enter into any settlement or make any admission which admits
or concedes that any Patent Rights of the other Party are invalid or
unenforceable, or adversely affects their scope without the prior written
consent of the other Party.  The
controlling Party shall keep the other Party reasonably informed of all
material developments in connection with any such claim, suit or proceeding and
the other Party shall cooperate fully.

 

8.2.7                        Marking.  Genzyme agrees to, and to cause Affiliates
and sub-licensees to, mark in a conspicuous location the containers and
packaging of all Products with the word “Patents” and the patent number of all
applicable patents required by law or regulation of any jurisdiction in the
territory in which that Product will be marketed.

 

ARTICLE 9:  CONFIDENTIALITY

 

9.1                                 Nondisclosure
Obligations.  Except as otherwise
provided in this Article 9, during the Term of this Agreement and for a
period of five (5) years thereafter, each Party (“Receiving Party”) shall
maintain Confidential Information of the other Party (the “Disclosing Party”)
in confidence and shall not disclose such Confidential Information to any Third
Party or use such Confidential Information except as specifically authorized in
this Article 9 or as specifically agreed in writing by the Disclosing
Party; provided, however, with
respect to any Confidential Information that is designated in writing as a
trade secret (as determined under Delaware law), such restrictions on
disclosure and/or use shall survive the termination or expiration of this
Agreement for as long as such Confidential Information remains a trade secret
but, subject to the exceptions set forth in this Article 9, in no event
shall such restrictions on disclosure and/or use cease prior to the expiration
of five (5) years following the termination or expiration of the Term of
this Agreement; further provided,
that the comparative use of Confidential Information of the Disclosing Party in
the course of internal technology evaluations and/or data shall not be
considered a violation of this Article so long as the obligations of
nondisclosure to a Third Party are maintained. 
The term “Confidential Information” shall mean (i) with respect to
a Party, any written, electronic, visual, verbal or other form of technical or
business information and data received by the Receiving Party including without
limitation, with respect to Genzyme, the Joint Program Data and with respect to
Osiris, the Joint Program Data, and (ii) the terms and 

 

42

 

conditions of this Agreement (including information contained in any Exhibit or
Schedule hereto).

 

The Receiving Party or its Third Party licensees may disclose the
Confidential Information of the Disclosing Party to its subcontractors,
Affiliates, Third Party licensees, sublicensees, consultants, legal counsel,
outside contractors and clinical investigators, on a need-to-know basis to the
extent it is reasonably necessary or appropriate to fulfill its obligations or
exercise its rights under this Agreement on condition that such entities or
persons agree in writing, prior to the disclosure, to keep the Confidential
Information confidential for the same time periods and to the same extent as
the Receiving Party is required to keep the Confidential Information
confidential.

 

The confidentiality provisions set forth herein shall be applied in
conjunction with the confidentiality provisions of that certain Collaboration
Agreement by and between the Parties dated July 25, 2007, and shall
supersede and replace any other previous confidentiality and non-disclosure
agreements between the Parties with respect to the subject matter hereof and
shall be deemed to cover all information disclosed or obtained by a Party under
any other previous confidentiality or non-disclosure agreements, including
without limitation the Confidential Disclosure Agreement between the Parties
dated August 6, 2008.  As to the
treatment of trade secrets and disclosures to government or other regulatory
agencies, Section 9.1 herein shall control and the Parties agree to amend
the July 25, 2007 Collaboration Agreement to make it consistent herewith.

 

Upon the termination of this Agreement, the Receiving Party shall, at
the request of the Disclosing Party, return or destroy the Confidential
Information of the Disclosing Party, retaining only one copy thereof for
purposes of compliance with this Agreement. 
An officer of the Receiving Party shall certify its compliance with this
provision in writing upon the request of the Disclosing Party.

 

9.2                                 Exceptions.  The obligation not to disclose or use
Confidential Information shall not apply to any part of such Confidential
Information that can be shown by written evidence: (a) is or becomes
patented, published or otherwise part of the public domain other than by acts
of the Receiving Party or its Affiliates or Third Party licensees or
sub-licensees in contravention of this Agreement; (b) is disclosed to the
Receiving Party or its Affiliates or Third Party licensees or sublicensees by a
Third Party, provided such
Confidential Information was not obtained by such Third Party directly or
indirectly from the Disclosing Party under this Agreement under an obligation
to keep such Confidential Information confidential; (c) prior to
disclosure under this Agreement, was already in the possession of the Receiving
Party or its Affiliates or Third Party licensees or sublicensees; or (d) is
independently developed by the Receiving Party or its Affiliates without breach
of any of the provisions of this Agreement as demonstrated by applicable
detailed and complete documentation. 
Neither Party shall disclose to the other Party any Confidential
Information of a Third Party that the disclosing Party is prohibited from
disclosing by a contract with such Third Party.

 

9.3                                 Disclosures
Required by Law.  In addition, the
Receiving Party may make disclosures of Confidential Information of the other
Party to the extent required to comply with applicable laws and regulations or
a court or administrative order, provided
that the Party who is 

 

43

 

required to make such disclosure (a) provides the other Party with
prior written notice (unless prohibited by law) and (b) takes all
reasonable and lawful actions to obtain confidential treatment for such
disclosure and, if possible, to minimize the extent of such disclosure.

 

9.4                                 Disclosure
of Agreement; Use of Name.  Except as
required by an order from a court or governmental body, applicable law or
regulation (including, without limitation, any SEC filings or any nationally
recognized securities exchange, quotation system or over-the-counter market on
which such Party has its securities listed or trade), and except as used in
connection with the execution of a Development Plan as approved by the Steering
Committee, neither Party shall use the name of the other Party in any publicity
or advertising without the prior written approval of the other Party, except
that either Party may disclose the existence, but not the terms or conditions
(including information contained in any Exhibit or Schedule hereto), of
this Agreement.  Notwithstanding the
foregoing, in the event that either Party seeks to disclose the terms of this
Agreement in an SEC filing, such Party shall provide prompt prior written
notice to the other Party and cooperate with the other Party to maintain the
confidential treatment of the material terms of this Agreement to the extent reasonably
possible.  The Parties agree that the
information contained in a press release mutually agreed by the Parties may be
used to describe the nature of this transaction, and the Parties may disclose
such information, as modified by mutual agreement from time to time, without
the other Party’s consent.  In addition
to the foregoing, a Party may disclose the terms of this Agreement (but not
other Confidential Information of the other Party) (i) in confidence to
accountants, banks, investors and other financing sources and their respective
advisors, and (ii) in confidence to the other party (and its affiliates,
attorneys, accountants, stockholders, investment bankers, advisors or other
consultants) in a merger, acquisition, license or proposed merger, acquisition
or license, or the like, provided
that such disclosure is only to the extent reasonably necessary and limited to
those entities obliged to keep the information confidential under terms no less
stringent the terms of this Article 9 and individuals who are bound by an
obligation of confidentiality to their respective employers and who have a need
to know such terms in the course of the performance of their duties.

 

9.5                                 Publications.  Osiris and Genzyme each acknowledge the other
Party’s interest in publishing certain of the results of a Development Plan to
obtain recognition within the scientific community and to advance the state of
scientific knowledge.  Each Party also
recognizes the mutual interest in obtaining valid patent protection.  Consequently, either Party, its employees or
consultants wishing to make a publication (including any oral disclosure made
without obligation of confidentiality) relating to work performed as part of a
Development Plan (the “Publishing Party”) shall transmit to the other Party
(the “Reviewing Party”) a copy of the proposed written publication or a written
detailed description of the proposed oral disclosure at least sixty (60) days
prior to submission or disclosure.  The
Reviewing Party shall have the right (a) to propose modifications to the
publication for accuracy or to allow for the preparation of a patent
application, and (b) to request a delay in publication or presentation in
order to protect patentable information or maintain trade secrets.

 

If the Reviewing Party requests such a delay, the Publishing Party
shall delay submission or presentation of the publication for a period not to
exceed sixty (60) days from the date of such request to enable patent
applications protecting each Party’s rights in such information to be filed
and/or to allow the Parties to agree to a modification of the publication so as
not to disclose the 

 

44

 

Reviewing Party’s Confidential Information.  Upon the expiration of sixty (60) days from
the transmission to the Reviewing Party of a proposed written disclosure or an
abstract of a proposed oral disclosure, the Publishing Party shall be free to
proceed with the written publication or the oral presentation, unless the
Reviewing Party has requested the delay described above.

 

ARTICLE 10:  REPRESENTATIONS
AND WARRANTIES

 

10.1                           Representations
of the Parties.  Each Party represents
and warrants to the other that (a) it is a validly existing corporation in
good standing in its state of incorporation, (b) it has the legal right
and power to enter into this Agreement, to extend the rights and licenses
granted or to be granted to the other in this Agreement, and to fully perform
its obligations hereunder, (c) it has not made and it covenants it will
not make any commitments to others in conflict with such rights or this
Agreement, (d) it is not aware of any legal obstacles as of the Effective
Date which could prevent it from carrying out the provisions of this Agreement,
(e) it has obtained all necessary corporate approvals to enter into this
Agreement and no other consent, approval, or agreement of any person, party,
consultant, court, government or entity is required to be obtained by it in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, (f) this Agreement
is a legal and valid obligation binding upon it and is enforceable in
accordance with its terms, subject to applicable limitations on such
enforcement based on bankruptcy laws and other debtors’ rights, and (g) the
execution, delivery and performance of this Agreement will not conflict with
its charter documents or any agreements, contracts, or other arrangements to
which it is or becomes a party or by which it is or becomes bound, nor violate
any law or regulation in effect as of the Effective Date of any court,
governmental body or administrative or other agency having authority over it.

 

10.2                           Additional
Representations of Osiris.  Osiris hereby
represents and warrants to Genzyme that as of the Effective Date:

 

(a)                                  (i) the
Osiris Patent Rights exist and, to its knowledge, are not invalid or
unenforceable, in whole or in part, (ii) Osiris is (a) the sole owner
of all right, title and interest in and to; or, (b) with respect to U.S.
Patent numbers 5,226,914; 5,197,985; 5,486,359; 5,733,542; 5,811,094;
5,837,539; 6,010,696; 6,087,113; 5,591,625; 5,643,736; 5,736,396; 5,855,619;
5,908,784; 5,942,225; 6,174,333; 6,482,231; 6,835,377, and all foreign
counterparts has the right to sublicense the Osiris Patent Rights that are
licensed to Genzyme hereunder, and (iii) to Osiris’ knowledge, the
development, manufacture, use, offer for sale, sale, or import of Prochymal for
the GvHD Indication or any Major Indication (as of the Effective Date) or
Chondrogen in the Genzyme Territory does not infringe any valid and enforceable
Third Party patents issued as of the Effective Date or any pending claim of a
Third Party patent application published as of the Effective Date were such
claim to issue in substantially its published form;

 

(b)                                 except
for the oppositions of EP 0592521 and EP 01007631, Osiris has not received
notice of any interference or opposition proceeding relating to the Osiris
Patent Rights;

 

(c)                                  the
Osiris Intellectual Property licensed to Genzyme hereunder is free and clear of
any liens, charges, encumbrances and rights of any Third Party, contingent or
otherwise;

 

45

 

(d)                                 all
Osiris Intellectual Property licensed to Genzyme hereunder that is subject to
the rights of the U.S. Government under 35 U.S.C § 202 et seq and the
regulations pertaining thereto is listed on Exhibit H;

 

(e)                                  there
are no claims, judgments or settlements against or owed by Osiris or any of its
Affiliates or, to its knowledge, pending or threatened claims or litigation
against Osiris or any of its Affiliates, in either case relating to the Osiris
Intellectual Property licensed to Genzyme hereunder;

 

(f)                                    there
are no agreements between Osiris and any Affiliate or Third Party with respect
to the Osiris Intellectual Property licensed to Genzyme hereunder that would
prevent Osiris from granting to Genzyme the licenses in Section 7.1;

 

(g)                                 there
are no agreements between Osiris and any Affiliate or Third Party that obligate
or under which Osiris is liable for the payment of any royalties, fees or other
payments with respect to any of the Osiris Intellectual Property licensed to
Genzyme hereunder;

 

(h)                                 other
than the Osiris Patent Rights, Osiris and its Affiliates do not own or have any
license or other right to any Patent Rights that are necessary for Genzyme, its
Affiliates or sublicensees to exercise the rights granted to Genzyme hereunder
to develop, make, have made, use, offer to sell, sell and import Prochymal for
the Major Indications and Chondrogen in the Genzyme Territory;

 

(i)                                     to
its knowledge, Osiris has made available to Genzyme all data, results or other
information derived from or regarding any preclinical or clinical study which
would be reasonably expected to be relevant to an evaluation of any safety
risks associated with Prochymal and Chondrogen; and

 

(j)                                     “Prochymal”
and “Chondrogen” (Collectively, the “Trademarks”) are validly existing,
trademarks allowed by the U.S. Patent & Trademark Office under the
Intent to Use provisions solely owned by Osiris and Osiris has the right to
grant to Genzyme the right to use, such trademarks.  Osiris shall have the right to exercise
quality control over Genzyme’s use of the Trademarks and Licensed Products to a
degree reasonably necessary to maintain the validity of and to protect the
goodwill associated with the Trademarks. 
In order to verify compliance with this Section, Osiris may from time to
time require Genzyme to submit samples of use of the Trademarks including Product,
Product packaging and marketing and promotional materials bearing the
Trademarks.

 

ARTICLE 11:  INDEMNITY
AND INSURANCE

 

11.1                           Indemnification
by Genzyme.  Genzyme will indemnify,
defend and hold harmless Osiris and its Affiliates and their respective directors,
officers, employees, consultants and agents (the “Osiris Indemnitees”) from and
against any and all claims, damages, liabilities, losses, costs (including
reasonable attorneys’ fees and expenses) and expenses (collectively, “Losses”)
arising from: (a) any Third Party claim arising from a breach by Genzyme
of any representation or warranty expressly made by Genzyme under this
Agreement; or (b) any Third Party claim arising or commenced on or after
the Effective Date that the practice of the Genzyme 

 

46

 

Intellectual Property licensed to Osiris hereunder infringes any
intellectual property rights or other proprietary rights of a Third Party or (c) any
Third Party claim of death, bodily injury or property damage arising from (i) the
development, manufacture, use, distribution or sale of a Product for an
Indication by Genzyme, its Affiliates, sublicensees, employees, consultants or
agents or (ii) the negligence or willful misconduct of Genzyme or its Affiliates,
sublicensees, employees or agents; provided,
however, that such indemnification shall not apply to any Losses to the extent
such Losses arise from a breach by Osiris of any representation or warranty
expressly made by Osiris under this Agreement or the negligence or willful
misconduct of any Osiris Indemnitee.

 

11.2                           Indemnification
by Osiris.  Osiris will indemnify, defend
and hold harmless Genzyme and its Affiliates and their respective directors,
officers, employees and agents (the “Genzyme Indemnitees”) from and against all
Losses arising from: (a) any Third Party claim arising from a breach by
Osiris of any representation or warranty expressly made by Osiris under this
Agreement; (b) any Third Party claim arising or commenced on or after the
Effective Date that the practice of the Osiris Intellectual Property licensed
to Genzyme hereunder infringes any intellectual property rights or other
proprietary rights of a Third Party; (c) any Third Party claim of death,
bodily injury or property damage arising from (i) the development,
manufacture, use, distribution or sale of a Product for an Indication by
Osiris, its Affiliates, licensees (other than Genzyme, its Affiliates,
sublicensees, employees, consultants or agents), employees or agents, or (ii) the
negligence or willful misconduct of Osiris or its Affiliates, sublicensees,
employees, consultants or agents, or (d) any Third Party claim based on,
relating to, or in connection with Genzyme’s obligations or responsibilities
under this Agreement in its capacity as Osiris’s legal representative within
the meaning of Directive 2001/20/EC; provided
however, that such indemnification shall not apply to any Losses to the extent
such Losses arise from a breach by Genzyme of any representation or warranty
expressly made by Genzyme under this Agreement or the negligence or willful
misconduct of any Genzyme Indemnitee

 

11.3                           Indemnification
Procedure.  As a condition precedent to a
Party’s (the “Indemnifying Party”) obligations to indemnify, defend and hold
harmless any Osiris Indemnitee or Genzyme Indemnitee (collectively, an “Indemnified
Party”) pursuant to Section 11.1 or 11.2 above, the Indemnified Party
shall immediately notify in writing, and provide a copy to, the Indemnifying
Party of any complaint, summons or other written or verbal notice that the
Indemnified Party receives of any claim that may be subject to such
obligations.  An Indemnified Party’s
failure to deliver written notice, only to the extent prejudicial to the
Indemnifying Party’s ability to defend such claim, shall relieve the
Indemnifying Party of liability to the Indemnified Party under Section 11.1
or 11.2 hereof, as applicable.  The
Indemnified Party shall allow the Indemnifying Party the control of the defense
and settlement thereof, and assist in such defense and settlement as the
Indemnifying Party may reasonably request in connection with the defense and
settlement of the claim (at the Indemnifying Party’s sole cost and expense),
and the Indemnified Party shall assume the defense thereof with counsel
mutually satisfactory to the Parties; provided,
that the Indemnified Party shall have the right to participate in any such
proceeding with counsel of its choosing at its own expense.  No Indemnified Party may settle a claim or
action covered by this Article 11 without the prior written consent of the
Indemnifying Party (which consent shall not be unreasonably withheld, delayed
or conditioned).  Any payment made by an
Indemnified Party in violation of this Section 11.3 to settle any such
claim or action shall be at its own cost and expense.

 

47

 

11.4                           Limitation
of Liability.  EXCEPT FOR (A) THE
OBLIGATIONS SET FORTH IN THIS ARTICLE 11, (B) VIOLATIONS OF ARTICLE 9
(CONFIDENTIALITY), OR (C) AS A RESULT OF FRAUD OR WILLFUL MISCONDUCT, AND
UNLESS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, IN NO EVENT WILL EITHER
PARTY BE LIABLE TO THE OTHER FOR LOST REVENUE, LOST PROFITS, OR LOST SAVINGS OR
ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL EXEMPLARY, PUNITIVE OR INDIRECT DAMAGES
TO THE OTHER PARTY, HOWEVER CAUSED, IN CONNECTION WITH THIS AGREEMENT, EVEN IF THE
PARTY HAS NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.

 

11.5                           Insurance.

 

11.5.1                  Comprehensive
General Liability.  Each Party shall
maintain at such Party’s sole expense, comprehensive general liability
insurance coverage in amounts reasonably determined by the Parties from time to
time but at least appropriate to the risk involved in developing, producing,
manufacturing, storing, transporting, selling or marketing a Product for an
Indication, provided, however,
that unless agreed to by the Parties, in no event shall a Party maintain less
than **** of such liability insurance (per occurrence), which can include a
combination of general liability insurance and umbrella policy.  Such insurance shall be in effect as of the
Effective Date; provided that Genzyme reserves the right to satisfy its
obligations under this Section 11.5.1 through self-insurance.

 

11.5.2                  Product
Liability.  Osiris and Genzyme shall each
establish and maintain as of First Commercial Sale of Product in each Party’s
respective Territory, product liability insurance (including clinical trial
liability) or other appropriate insurance in the minimum amount of **** per
claim; provided that Genzyme reserves the right to satisfy its obligations
under this Section 11.5.2 through self-insurance.

 

ARTICLE 12:  TERM AND
TERMINATION

 

12.1                           Term of
Agreement.  The term of this Agreement
will commence on the Effective Date and, unless terminated earlier pursuant to
the terms of this Article 12, this Agreement shall remain in force until
the last to occur of: (a) the completion of all activities under the last
Development Plan and (b) expiration of the last to expire payment
obligation with respect to the last Product on a country-by-country basis under
this Agreement (the “Term”).  Upon the
expiration of the Term of this Agreement and in the absence of any early
Termination due to Genzyme’s non-performance pursuant to Section 12.2.1 or
at Genzyme’s election pursuant to Section 12.2.2, Genzyme shall have a
fully-paid-up, royalty free and fully transferable license to all Osiris
Technology granted hereunder.

 

12.2                           Termination.  This Agreement may be terminated by either
Party under the following circumstances:

 

****                    Portions
of this page have been omitted pursuant to a request for Confidential
Treatment filed separately with the Commission.

 

48

 

12.2.1                  Termination for
Non-Performance.  If one Party materially
breaches this Agreement, such failure is not corrected in sixty (60) days, ****
the other Party may terminate the Agreement by providing written notice of such
termination due to non-performance; provided
that if the alleged material breach is the subject of a dispute resolution
initiated in good faith by the breaching Party prior to the expiration of the sixty
(60) day period, such cure period shall be sixty (60) days from the date the
dispute is resolved pursuant to Section 13.8; and provided further that in the event the
non-performance is not susceptible to cure in such sixty (60) day period and
the non-performing Party has used diligent efforts to cure such
non-performance, the cure period will be automatically extended to one hundred
and twenty (120) days (other than a payment breach, which may not be so
extended).  If one Party materially
breaches this Agreement and such failure is not cured within the timeframes set
forth above ****, then the non-breaching Party shall not have the right to
terminate this Agreement for the other Party’s non-performance, but shall have
the right to seek all remedies available to it at law and in equity, including
injunctive relief, specific performance and recovery of monetary damages.

 

12.2.2                  Termination At
Genzyme’s Election.  At any time after July 1,
2009, Genzyme may terminate this Agreement at any time without cause by giving
Osiris ninety (90) days prior written notice of Genzyme’s election to
terminate.

 

12.2.3                  Termination Upon
Insolvency.  Either Party may terminate
this Agreement immediately by providing written notice, if the other Party: (a) applies
for or consents to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its assets, (b) makes
a general assignment for the benefit of its creditors, (c) is dissolved or
liquidated in full or in substantial part, (d) commences a voluntary case
under Chapter 7 (or “Chapter 7 Case”) of the Bankruptcy Code or consents to any
such relief or to the appointment of or taking possession of its property by
any official in such an involuntary case or such other proceeding commenced
against it, (e) takes any corporate action for the purpose of effecting
any of the foregoing, (f) a case under Chapter 11 of the Bankruptcy Code
in respect of such Party is converted to a Chapter 7 case, or (g) becomes
the subject of an involuntary Chapter 7 case or other proceeding seeking
liquidation with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect that is not
dismissed within sixty (60) Business Days of commencement.

 

12.2.4                  Termination by
Mutual Agreement.  The Parties may
mutually agree, in writing, to terminate this Agreement at any time and for any
reason.

 

12.3                           Effect
of Termination by Osiris for Material Breach by Genzyme or at Genzyme’s
Election.  In the event that (i) Osiris
terminates this Agreement for uncured material breach by Genzyme under Section 12.2.1
(for which Osiris shall retain all legal remedies) ****, or (ii) Genzyme
terminates this Agreement pursuant to Section 12.2.2, then the following
consequences shall apply:

 

****                    Portions
of this page have been omitted pursuant to a request for Confidential
Treatment filed separately with the Commission.

 

49

 

(a)                                  the
license under Osiris Intellectual Property granted to Genzyme under Section 7.1
shall terminate, except as necessary to exercise its surviving rights and
fulfill its surviving obligations under Section 12.7.2;

 

(b)                                 the
covenant not to sue granted to Osiris under Section 7.2 shall terminate
and Genzyme agrees to grant and hereby grants Osiris an exclusive right and
license, with the right to sublicense, under Genzyme Intellectual Property to
develop, make, have made, use, offer for sale, sell and import Products for
Indications which are being developed or commercialized as of the effective
date of termination.  In the event the
effective date of termination under this Section 12.3 occurs prior to the
date of receipt of the first Marketing Approval for a Product, then the license
to Osiris hereunder shall be royalty-free (except with respect to royalty and
other financial obligations of Genzyme to any Third Party, which obligations
shall be responsibility of Osiris).  In
the event the effective date of termination under this Section 12.3 occurs
on or after the date of receipt of the first Marketing Approval for a Product,
then the license to Osiris hereunder shall be royalty-bearing at a rate of ****

 

(c)                                  Genzyme
shall assign (or exclusively license if an assignment is prohibited) to Osiris
as soon as practicable any applicable Regulatory Approval, applications for
Regulatory Approvals and other filing filed in Genzyme’s name with a Regulatory
Agency as of the effective date of termination; and

 

(d)                                 Genzyme’s
payment obligations that had accrued prior to the effective date of termination
shall survive.

 

12.4                           Effect
of Material Breach by Osiris.  In the
event of material breach of this Agreement by Osiris which is not cured as
provided in Section 12.2.1 above, ****, then Genzyme may elect to either:

 

(a)                                  terminate
this Agreement, in which case ****

 

(b)                                 allow
this Agreement to remain in effect, in which case ****

 

12.5                           Effects
of Bankruptcy.  All licenses granted
under this Agreement are deemed to be, for purposes of Section 365(n) of
the Bankruptcy Code of the United States and any similar provision of the
Bankruptcy Code of Canada, licenses of right to “intellectual property” as
defined in the Bankruptcy Code.  The
Parties agree that the Party not filing for protection under the Bankruptcy
Code (the “Non-Bankrupt Party”) may fully exercise all of its rights and
elections as a licensee under the Bankruptcy Code, including the right to
enforce any exclusivity provision of this Agreement.  The Parties further agree that, in the event the
Non-Bankrupt Party elects to retain its rights as a licensee under the
Bankruptcy Code, that Party shall be entitled to complete access to any Patent
Right or Technology licensed to it hereunder and all embodiments thereof.  Such embodiments of the Patent Rights or
Technology shall be delivered to the Non-Bankrupt Party as soon as practicable
following the Non-Bankrupt Party’s election to retain its rights.

 

****                    Portions
of this page have been omitted pursuant to a request for Confidential
Treatment filed separately with the Commission.

 

50

 

12.6                           Effects
of Termination upon Mutual Agreement.  If
the Agreement is terminated as a result of the mutual agreement of the Parties,
the Parties shall agree upon the effects of such termination.

 

12.7                           Effects
of Termination Generally.  Subject to Section 13.8
below, upon termination of this Agreement, the Parties shall have all remedies
provided to them under applicable law.

 

12.7.1                  Survival.  The following provisions of this Agreement
will survive any expiration or termination of the Agreement: Articles 9, 11,
12, and 13, and the following Sections: 3.8, 3.9, 6.1(a, b), 6.8, 6.11, 7.5,
7.6, 8.1.4, and 8.2.4 and other Sections, Exhibits or definitions referenced
therein.  Subject to this Section 12.7,
with respect to any termination, the rights and obligations (with the exception
of any obligations to perform under a Development Plan) of a Party that accrued
prior to the Termination Date (including accrued payments including payments
due hereunder) shall survive such termination.

 

12.7.2                  Inventory.  Upon termination of the license granted to
Genzyme pursuant to Section 7.1, Genzyme and its Affiliates shall be
permitted to sell any and all of its existing inventory of Product; provided that such sales occur within six (6) months
after such termination; and provided further
that Genzyme remains obligated to pay royalties on, and report to Osiris on,
any Net Sales of any Product under this Section.  Alternatively, Osiris may, at its sole
written election on delivered on or before the effective of termination,
purchase Genzyme’s Product inventory at Genzyme’s cost (as determined in
accordance with GAAP), in which event Genzyme shall no longer have the right to
use or sell Product and shall have no reporting or payment obligations to
Osiris with regards to such inventory.

 

ARTICLE 13:  MISCELLANEOUS

 

13.1                           Interpretation.  If an ambiguity or a question of intent or
interpretation arises with respect to this Agreement, this Agreement shall be
construed as if drafted jointly by the Parties and no presumption or burden of
proof shall arise favoring or disfavoring any Party by virtue of the authorship
of any provisions of this Agreement.  The
following order of precedence shall be followed in resolving any inconsistencies
between the terms of this Agreement and the terms of the Development Plan: (a) first,
the terms of this Agreement; (b) second, the terms of the Development
Plan.

 

13.2                           Force
Majeure.  Neither Party shall be held
liable or responsible to the other Party nor be deemed to have defaulted under
or breached this Agreement for failure or delay in fulfilling or performing any
provision of this Agreement when such failure or delay is caused by or results
from causes beyond the reasonable control of the affected Party, including
without limitation to earthquakes, fire, floods, embargoes, war, acts of war
(whether war is declared or not), pandemics, insurrections, riots, terrorism,
civil commotions, strikes, lockouts or other labor disturbances, acts of God or
acts, omissions or delays in acting by any governmental authority or the other
Party; provided, however, that
the Party so affected shall use reasonable commercial efforts to avoid or
remove such causes of nonperformance, and shall continue to perform hereunder
with reasonable dispatch whenever such causes are removed.  Either Party shall provide the other Party
with prompt written notice of any delay or failure to perform that occurs 

 

51

 

by reason of
force majeure.  The Parties shall
mutually seek a resolution of the delay or the failure to perform as noted
above.

 

13.3                           Successors-in-Interest.

 

13.3.1                  Assignment or
Transfer.  This Agreement may not be
assigned or otherwise transferred by either Party without the prior written
consent of the other Party, which consent shall not be unreasonably withheld,
delayed or conditioned; provided,
however, subject to Section 7.8, each of the Parties may, without such
consent, assign this Agreement and its rights and obligations hereunder to its
Affiliates or in connection with the transfer or sale of all or substantially
all of its business to which this Agreement relates; provided, further that the assigning Party shall deliver
written notice of any such permitted assignment to the other Party, the
assignee shall agree to be bound to the obligations of the assigning Party and
the assigning Party shall remain liable for the performance of all obligations
under this Agreement as if the assignment did not occur, except in the case of
a consolidation or merger where the assigning Party is not the surviving
entity, in which case the assignee shall be solely liable.  Except as provided in Section 13.3.2
below, the rights and obligations of the Party experiencing a Change of Control
or sale of business as described above shall be unaffected and any permitted
assignee shall assume all of the obligations of its assignor under this
Agreement in writing; provided,
however, that in the event the assignee fails to meet its performance obligations
under this Agreement the assignee shall be subject to the terms and conditions
for breach and termination under this Agreement.

 

13.3.2                  Genzyme Change
of Control.  In the event Genzyme
experiences a Change of Control, Genzyme’s successor shall assume all of the
rights and obligations of Genzyme as provided for in Section 13.3.1 above,
including but not limited to: (a) Genzyme’s performance obligations under
any Development Plan during a Development Term, and (b) Genzyme’s
obligations with regards to any Phase IV Clinical Study of a Product for an
Indication in the Genzyme Territory.  In
addition, in the event of a Change of Control of Genzyme prior to First
Commercial Sale of Prochymal for the GvHD Indication in the Genzyme Territory,
Genzyme’s successor shall use its commercially reasonable and diligent efforts
to achieve the First Commercial Sale of Prochymal for the GvHD Indication in
the Genzyme Territory within two (2) years of the First Commercial Sale of
Prochymal for the GvHD Indication in the Osiris Territory, subject to receipt
of appropriate Regulatory Approvals.

 

13.3.3                  Assumption under
Bankruptcy Code.  In the event of
commencement of a case under Title 11 of the United States Code by either
Party, the other Party consents to assumption of this Agreement upon
satisfaction of the conditions for assumption under Title 11, Sec. 365(b).

 

13.4                           Severability.  Should one or more provisions of this
Agreement be or become invalid, the Parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that
it can be reasonably assumed that the Parties would have entered into this
Agreement with such valid provisions.  In
case such valid provisions cannot be agreed upon, the invalidity of one or
several provisions of this Agreement shall not affect the validity of this
Agreement as a whole, unless the invalid provisions are of such essential
importance to this 

 

52

 

Agreement that it is to be reasonably assumed that the Parties would
not have entered into this Agreement without the invalid provisions.

 

13.5                           Notices.  Any consent, notice or report required or
permitted to be given or made under this Agreement by one of the Parties hereto
to the other shall be in writing, delivered personally or by facsimile (and
promptly confirmed by personal delivery or courier) or courier, postage prepaid
(where applicable), addressed to such other Party at its address indicated
below, or to such other address as the addressee shall have last furnished in
writing to the addressor and shall be effective upon receipt by the addressee.

 

	
  If to
  Osiris:

  	
  Osiris
  Therapeutics, Inc.

  
	
   

  	
  7015 Albert
  Einstein Drive

  
	
   

  	
  Columbia,
  Maryland 21046

  
	
   

  	
  Attn: Chief
  Financial Officer

  
	
   

  	
  Fax: (410)
  563-0794

  
	
   

  	
   

  
	
  with a copy
  to:

  	
  McKenna
  Long & Aldridge LLP

  
	
   

  	
  303
  Peachtree Street, Suite 5300

  
	
   

  	
  Atlanta,
  Georgia 30308

  
	
   

  	
  Attn: Michael Cochran, Esq.

  
	
   

  	
  Fax: (404) 527-4198

  
	
   

  	
   

  
	
  If to Genzyme:

  	
  Genzyme
  Corporation

  
	
   

  	
  500 Kendall
  Street

  
	
   

  	
  Cambridge,
  Massachusetts 02142

  
	
   

  	
  Attention:
  Senior Vice President, Corporate Development

  
	
   

  	
  Fax: (617)
  768-9823

  
	
   

  	
   

  
	
  with a copy
  to:

  	
  Genzyme
  Corporation

  
	
   

  	
  500 Kendall
  Street

  
	
   

  	
  Cambridge,
  Massachusetts 02142

  
	
   

  	
  Attention:
  General Counsel

  
	
   

  	
  Fax: (617)
  252-7553

  

 

13.6                           Applicable
Law.  This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to any choice of law principle that would dictate the application of the
laws of another jurisdiction.

 

13.7                           Compliance
with Applicable Laws.  The Parties shall
use commercially reasonable efforts to comply with all provisions of any
applicable laws, regulations, rules and orders relating to the testing,
production, transportation, export, packaging, labeling, sale, reimbursement or
use of Product under this Agreement.  The
Parties shall use commercially reasonable efforts to obtain written assurances
regarding export and re-export of technical data as may be required by the
Office of Export Administration Regulations.

 

13.8                           Dispute
Resolution.  Any disputes, other than
disputes regarding the construction, validity or enforcement of patents,
arising between the Parties in connection with, relating to or 

 

53

 

arising out of (a) any matter that is subject to the Steering
Committee’s decision-making authority (including where a final determination by
Osiris with respect to such matter would have the effect described in Section 2.2.2),
or (b) any matter relating to or arising out of this Agreement that is
outside the Steering Committee’s decision-making authority, shall be submitted
to dispute resolution and shall be resolved as follows:

 

13.8.1                  Notice of
Dispute.  Either Party may provide a
written notice to the other Party that one of the matters referenced in Section 13.8(a) or
(b) above has occurred and requiring that the matter be submitted to
dispute resolution pursuant to this Section 13.8 (a “Dispute Notice”).  The Parties agree that they will endeavor in
good faith to settle any dispute, controversy or claim arising out of or
relating to this Agreement through direct discussions before resorting to any
action under Sections 13.8.2 or 13.8.3 (as applicable).  If the dispute cannot be resolved through
direct discussions between the Parties within thirty (30) days after the
Dispute Notice has been provided, then the dispute shall be referred to each
Party’s Chief Executive Officer, who shall negotiate in good faith to attempt
to resolve the dispute.  If the dispute
cannot be resolved within ten (10) days of being referred to the Chief
Executive Officers, the dispute shall be referred for resolution by binding
arbitration pursuant to Section 13.8.3 for all disputes referred to
dispute resolution pursuant to Section 2.2.2, or to binding arbitration
pursuant to Section 13.8.2 for all other disputes.

 

13.8.2                  Arbitration.  Except as set forth in Section 13.8.4,
if the Parties are not able to settle any dispute, controversy or claim with
respect to a matter referenced in Section 13.8.1 above within forty (40)
days of receipt of a Dispute Notice, the matter shall be settled by arbitration
before a single arbitrator in accordance with the Commercial Arbitration Rules of
the AAA then pertaining (available at www.adr.org), except where those rules conflict
with this provision, in which case this provision controls.  Any court with jurisdiction shall enforce
this Section and enter judgment on any award.  The arbitrator shall be an attorney who has
at least 15 years of experience with a law firm or corporate law department of
over 25 lawyers or who was a judge of a court of general jurisdiction and is
independent of the Parties. 
Additionally, if the issues in dispute involve scientific or technical
matters, any arbitrator chosen hereunder shall have not less than five (5) years
of educational training and/or experience sufficient to demonstrate a
reasonable level of relevant scientific and/or technical knowledge related to
scientific issues or technical matters that are the subject of the
dispute.  The arbitrator shall be
selected within ten (10) days of commencement of the arbitration from the
AAA’s National Roster of Arbitrators  pursuant
to agreement or through selection procedures administered by the AAA.  The arbitration shall be held in the State of
Delaware and in rendering the award the arbitrator must apply the substantive
law of Delaware (except where that law conflicts with this clause), except that
the interpretation and enforcement of this arbitration provision shall be
governed by the Federal Arbitration Act. 
Within forty-five (45) days of initiation of arbitration, the Parties
shall reach agreement upon and thereafter follow procedures assuring that the
arbitration will be concluded and the final award rendered within no more than
eight months from selection of the arbitrator. 
Failing such agreement, the AAA will design and the Parties will follow
procedures that meet such a time schedule. 
A final arbitration decision shall be rendered in writing and shall be
binding on both Parties and not appealable to any court in any
jurisdiction.  The arbitrator shall
render a final decision within eight (8) months of the selection of the
arbitrator as provided above.  Each Party
has the right before or, if the arbitrator cannot hear the matter within an
acceptable period, during the arbitration to seek and obtain from the 

 

54

 

appropriate court provisional remedies such as attachment, preliminary
injunction, replevin, etc., to avoid irreparable harm, maintain the status quo
or preserve the subject matter of the arbitration.  The arbitrator shall not be prohibited from,
in his discretion, awarding the prevailing party with attorneys’ costs and expenses
incurred in connection with the underlying cause for arbitration and the
resulting arbitration procedure.  EXCEPT
AS PROVIDED IN SECTION 11.3, THE ARBITRATOR SHALL NOT AWARD ANY PARTY
PUNITIVE, EXEMPLARY, MULTIPLIED OR CONSEQUENTIAL DAMAGES, AND EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT TO SEEK SUCH DAMAGES.  NO PARTY MAY SEEK OR OBTAIN PREJUDGMENT
INTEREST.

 

13.8.3                Baseball
Arbitration.  A baseball style
arbitration (“Baseball Arbitration”) may only be initiated with respect to
Dispute Notice with respect to a dispute arising under Section 2.2.2.

 

(a)                                  The
Baseball Arbitration shall be held in a location mutually agreeable to the
Parties, or if no such location can be agreed, in New York City, according to
the then-current commercial arbitration rules of the American Arbitration
Association (“AAA”), except to the extent such rules are inconsistent with
this Section 13.8.3;

 

(b)                                 The
Baseball Arbitration will be conducted by one (1) arbitrator who shall be
reasonably acceptable to the Parties and who shall be appointed in accordance
with AAA rules.  If the Parties are
unable to select an arbitrator, then the arbitrator shall be appointed in
accordance with AAA rules.  Any
arbitrator chosen hereunder shall have educational training and industry experience
sufficient to demonstrate a reasonable level of scientific, financial, medical
and industry knowledge relevant to the particular dispute;

 

(c)                                  Within
twenty (20) days after the selection of the arbitrator, each Party shall submit
to the arbitrator and the other Party a proposed resolution of the dispute that
is the subject of the arbitration, together with any relevant evidence in
support thereof (the “Proposals”). 
Within ten (10) Business Days after the delivery of the last
Proposal to the arbitrator, each Party may submit a written rebuttal of the
other Party’s Proposal and may also amend and re-submit its original
Proposal.  The Parties and the arbitrator
shall meet within ten (10) Business Days after the Parties have submitted
their Proposals, at which time each Party shall have one (1) hour to argue
in support of its Proposal.  The Parties
shall not have the right to call any witnesses in support of their arguments,
nor compel any production of documents or take any discovery from the other
Party in preparation for the meeting. 
Within twenty (20) days after such meeting, the arbitrator shall select
one of the Proposals so submitted by one of the Parties as the resolution of
the dispute, but may not alter the terms of either Proposal and may not resolve
the dispute in a manner other than by selection of one of the submitted
Proposals.  If a Party fails to submit a
Proposal within the initial twenty (20) day time frame set forth in the first
sentence of this Section 13.8.3(c), the arbitrator shall select the
Proposal of the other Party as the resolution of the Steering Committee
Dispute.  Any time period set forth in
this Section 13.8.3(c)  may be extended by mutual agreement of the
Parties;

 

(d)                                 No
arbitrator shall have the power to award punitive damages under this Agreement
regardless of whether any such damages are contained in a Proposal, and such
award is expressly prohibited.  The
proceedings and decisions of the arbitrator shall be confidential, 

 

55

 

final and binding on the Parties. 
Judgment on the award so rendered may be entered in a court having
jurisdiction thereof.

 

13.8.4                  Injunctive
Relief.  Notwithstanding the foregoing
provisions of this Section 13.8, either Party will have the right to seek
temporary injunctive relief in any court of competent jurisdiction as may be
available to such Party under the laws and rules applicable in such
jurisdiction.

 

13.9                           Entire
Agreement.  This Agreement, together with
the Exhibits hereto, contains the entire understanding of the Parties with
respect to the subject matter hereof. 
All express or implied agreements and understandings, either oral or
written, heretofore made, are expressly superseded hereby.  In the event of any conflict or inconsistency
between any provision of any Exhibit hereto and any provision of this
Agreement, the provisions of this Agreement shall prevail.  This Agreement may be amended, or any term
hereof modified, only by a written instrument duly executed by both Parties
hereto.  The Parties expressly
acknowledge that the Collaboration Agreement between the Parties dated July 25,
2007, shall remain in full force and effect.

 

13.10                     Independent
Contractors.  It is expressly agreed that
Osiris and Genzyme shall be independent contractors and that the relationship
between the two Parties shall not constitute a partnership, joint venture or
agency.  Neither Osiris nor Genzyme shall
have the authority to make any statements, representations or commitments of
any kind, or to take any action, which shall be binding on the other, without
the prior consent of the other Party to do so.

 

13.11                     Waiver.  The waiver by either Party hereto of any
right hereunder or the failure to perform or of a breach by the other Party
shall not be deemed a waiver of any other right hereunder or of any other
breach or failure by said other Party whether of a similar nature or otherwise.

 

13.12                     Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

13.13                     Further
Assurances.  Each of Osiris and Genzyme
agree to duly execute and deliver, or cause to be duly executed and delivered,
such further instrument and do and cause to be done such further acts and
things, including, without limitation, the filing of such additional
assignments, agreements, documents and instruments, that may be necessary in
order to carry out the purposes and intent of this Agreement.

 

[Signature page follows.]

 

56

 

IN WITNESS WHEREOF, the Parties have executed this Collaboration
Agreement as of the date first set forth above.

 

	
  OSIRIS THERAPEUTICS, INC.

  	
   

  	
  GENZYME CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ C. Randal Mills

  	
   

  	
  By:

  	
  /s/ Henri A. Termeer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  C. RANDAL MILLS, Ph.D.

  	
   

  	
  Name:

  	
  HENRI A. TERMEER

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President & CEO

  	
   

  	
  Title:

  	
  CEO

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