Exhibit 10.3

 

 

AMENDED AND RESTATED LICENSE AGREEMENT

 

by and between

 

GENZYME CORPORATION

 

and

 

EXACT SCIENCES CORPORATION

 

(formerly EXACT LABORATORIES, INC.)

 

January 27, 2009

 

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

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TABLE OF CONTENTS

 

 

Page

 

 

ARTICLE 1. DEFINITIONS

1

 

 

ARTICLE 2. LICENSE GRANT AND WAIVER

6

 

 

ARTICLE 3. DILIGENCE

7

 

 

ARTICLE 4. PAYMENTS

7

 

 

ARTICLE 5. REPORTS AND RECORDS

12

 

 

ARTICLE 6. PATENT PROSECUTION; INFRINGEMENT

13

 

 

ARTICLE 7. TERM AND TERMINATION

15

 

 

ARTICLE 8. INDEMNIFICATION AND INSURANCE

18

 

 

ARTICLE 9. REPRESENTATIONS, WARRANTIES AND DISCLAIMERS

21

 

 

ARTICLE 10. NOTICES

22

 

 

ARTICLE 11. ARBITRATION

23

 

 

ARTICLE 12. RESTRICTIONS ON USE OF NAMES

25

 

 

ARTICLE 13. CONFIDENTIALITY

25

 

 

ARTICLE 14. PATENT MARKING

26

 

 

ARTICLE 15. INDEPENDENT CONTRACTOR

26

 

 

ARTICLE 16. SEVERABILITY

27

 

 

ARTICLE 17. NON-ASSIGNABILITY

27

 

 

ARTICLE 18. NON-SOLICITATION

27

 

 

ARTICLE 19. ENTIRE AGREEMENT

27

 

 

ARTICLE 20. MODIFICATIONS IN WRITING

28

 

 

ARTICLE 21. GOVERNING LAW

28

 

 

ARTICLE 22. CAPTIONS

28

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

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ARTICLE 23. CONSTRUCTION

28

 

 

ARTICLE 24. COUNTERPARTS

28

 

 

ARTICLE 25. BINDING EFFECT

28

 

 

ARTICLE 26. FORCE MAJEURE

28

 

 

ARTICLE 27. JHU LICENSE AGREEMENT

29

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

iii

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AMENDED AND RESTATED LICENSE AGREEMENT

 

THIS AMENDED AND RESTATED LICENSE AGREEMENT effective as of the Closing Date
(defined below) (the “Effective Date”) is by and between Genzyme Corporation, a
Massachusetts corporation having its principal offices at 500 Kendall Street,
Cambridge, MA 02142 (“Genzyme”), through Genzyme’s Genetics Division (formerly
through its Molecular Oncology Division), and EXACT Sciences Corporation
(formerly EXACT Laboratories, Inc.), a Delaware corporation having its principal
offices at 100 Campus Drive, Marlborough, MA 01752 (“EXACT”).

 

WITNESSETH:

 

WHEREAS, the parties have entered into a License Agreement effective as of
March 25, 1999 (the “License Agreement”) under which Genzyme granted to EXACT a
license to certain patent rights;

 

WHEREAS, the parties expect to enter into a Collaboration, License and Purchase
Agreement (the “CLP Agreement”) contemporaneously with entering into this
Agreement, and the parties acknowledge that the execution of the CLP Agreement
is a precondition for the parties to be bound to this Agreement;

 

WHEREAS, Genzyme desires to waive any and all breaches of the License Agreement
by EXACT that may have occurred (including any and all amounts due Genzyme
thereunder), and release EXACT from any liability arising therefrom;

 

WHEREAS, the parties desire to amend and restate the License Agreement,
effective as of the Effective Date;

 

NOW THEREFORE, in consideration of the mutual covenants herein contained and
intending to be legally bound hereby, the parties hereto agree to amend and
restate the License Agreement to read in its entirety as follows:

 

ARTICLE 1.  DEFINITIONS

 

1.1.                             “Affiliate” shall mean any corporation or other
entity which controls, is controlled by, or is under common control with EXACT.
A corporation or other entity shall be regarded as in control of another
corporation or entity if it owns or directly or indirectly 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
direct or cause the direction of the management and policies of the corporation
or other entity or the power to elect or appoint more than fifty percent (50%)
of the members of the governing body of the corporation or other entity.

 

1.2.                             “Agreement” shall mean this Amended and
Restated License Agreement, together with all Appendices, Schedules and other
attachments hereto.

 

1.3.                             “Change of Control of EXACT” has meaning given
to it in the CLP Agreement.

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

1

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1.4.                             “Closing Date” has the meaning given to it in
the CLP Agreement.

 

1.5.                             “Diagnostic Service(s)” shall mean the
performance of laboratory-based assays covered in whole or in part by a Valid
Claim of the Patent Rights.

 

1.6.                             “FDA Approval” means either 510(k) clearance or
approval of a Pre-Marketing Authorization application (“PMA”) (or the equivalent
of such submissions required at such time) for a Kit from the FDA or any
equivalent foreign regulatory agency or body. “FDA Approved” has the correlative
meaning.

 

1.7.                             “Field” shall mean (a) stool-based detection of
any disease or condition (including pre-cancers, staging and monitoring of the
foregoing, and therapeutic response) for research and development, Clinical
Laboratory Improvement Amendments (CLIA) testing services (and their foreign
equivalents), and FDA Approved Kits; and (b) a screening assay (regardless of
other uses to which such assay is put) for colorectal cancer in any type of
patient samples, excluding tests solely for staging and/or monitoring of
colorectal cancer which do not obsolete or adversely impact such screening
assay.

 

1.8.                             “First Commercial Sale” shall mean, after the
Effective Date, (a) the first performance for consideration of a Diagnostic
Service in the Field or (b) the first sale for consideration of a Licensed
Reagent or Kit for use in the Field, as applicable. Any performance of a
Diagnostic Service or transfer of Licensed Reagents or Kits by EXACT solely for
purposes of performing Research shall not be deemed to constitute a First
Commercial Sale.

 

1.9.                             “Gene Patent Rights” shall mean the United
States and foreign patents and patent applications relating to the APC gene
and/or the p53 gene and licensed (with the right to grant sublicenses) to
Genzyme pursuant to the JHU License Agreement together with patents arising
therefrom and any extensions, registrations, confirmations, reissues, divisions,
continuations or continuations-in-part, re-examinations or renewals thereof,
including without limitation the patents and patent applications listed in
Appendix A hereto (which may be updated from time to time to include such
additional patents and patent application that may arise therefrom); provided,
however, that Gene Patent Rights expressly excludes any claims of such patents
and patent applications that fall outside of the Field, including, without
limitation, claims to antibodies, to the treatment, prevention or remedying of a
gene deficiency, to purified proteins, or to DNA sequences other than those
sequences that correspond to the p53 gene and the APC gene; provided further
that DNA sequences which are (i) immediately adjacent to the p53 or APC genes
and (ii) necessary to the use of the p53 or APC genes, respectively, in the
Field shall be considered within the Gene Patent Rights.

 

1.10.                       “Instrument” shall mean any instrument, apparatus,
appliance, automated system or computer software that is covered in whole or in
part by a Valid Claim of the Patent Rights and is useful or necessary for
performing laboratory-based assays.

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

2

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1.11.                       “JHU License Agreement” shall mean the License
Agreement dated as of February 5, 1992 by and between Genzyme (as successor to
PharmaGenics, Inc.), The Johns Hopkins University (“JHU”) and Hoffman-La Roche
Inc. (“Roche”), as amended from time to time.

 

1.12.                       “Kit” shall mean a collection of one or more
Reagents, including at least one Licensed Reagent, packaged in the form of a kit
(including an FDA Approved kit).

 

1.13.                       “Licensed Reagent” shall mean any Reagent covered in
whole or in part by a Valid Claim of the Patent Rights.

 

1.14.                       “Methodology Patent Rights” shall mean the United
States and foreign patents and patent applications relating to methods of
detecting mammalian nucleic acids isolated from stool specimens and reagents
therefor and licensed (with the right to grant sublicenses) to Genzyme pursuant
to the JHU License Agreement together with patents resulting therefrom and any
extensions, registrations, confirmations, reissues, divisions, continuations or
continuations-in-part, re-examinations or renewals thereof, including without
limitation the patents and patent application listed in Appendix B hereto (which
may be updated from time to time to include such additional patents and patent
applications that may arise therefrom).

 

1.15.                       (a)                                   “Net Sales”
shall mean the adjusted gross sales of Licensed Reagents and Kits by EXACT less
[********] of adjusted gross sales in lieu of items such as custom duties,
inbound transportation, insurance costs, agent’s commission, bad debts, etc. The
adjusted gross sales shall mean the actual gross sales price of a Licensed
Reagent or Kit billed by EXACT (not including miscellaneous items on the invoice
such as taxes, etc.) less chargebacks, cash discounts, credits or allowances
(not including miscellaneous items credited such as taxes, etc.) including those
incurred or granted on account of price adjustments, rejections, returns,
rebates or recalls of Licensed Reagents or Kits previously sold. “Net Sales”
does not include “no charge” samples to the extent customary in the trade.

 

(b)                                 In the event that EXACT decides to sell a
Kit which combines Licensed Reagents with ingredients or components which are
not Licensed Reagents (such other ingredients or components being “Other
Items”), then (i) EXACT shall notify Genzyme in writing of its intent to offer
such combination, (ii) Genzyme and EXACT shall, within thirty (30) days after
Genzyme’s receipt of such notification, initiate good-faith negotiations on the
value of the Licensed Reagents which shall be used as the basis to calculate Net
Sales pursuant to this clause (b) and (iii) if the parties can not reach
agreement within thirty (30) days after the commencement of such negotiations,
such dispute shall be referred to arbitration pursuant to Article 11 hereof.
However, in no event shall the royalty rates on Net Sales be reduced by more
than [********]. The term “Other Items” does not include solvents, diluents,
carriers, excipients, enzymes used in amplification for diagnostic use, or the
like used in formulating a product.

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

3

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(c)                                  In the event that a Licensed Reagent or Kit
is sold for non-monetary consideration in addition to or in lieu of money, the
value of such consideration to the extent that it can be reasonably determined
by EXACT shall be added to Net Sales in accordance with Sections 1.15 (a) and
(b) hereof.

 

(d)                                 No deductions shall be made for commissions
paid to individuals whether they be with independent sales agencies or regularly
employed by EXACT and on its payroll, or for cost of collections.

 

(e)                                  Net Sales expressly excludes transfers or
dispositions of Licensed Reagents or Kits at cost or less than cost for the sole
purpose of conducting Research.

 

1.16.                        (a)                                 “Net Service
Revenues” shall mean actual billings by EXACT for the performance of Diagnostic
Services less the following deductions to the extent that they are applicable
and are not already deducted in the actual billings: (i) discounts allowed and
taken, in amounts customary in the trade; (ii) sales and/or use taxes and/or
duties imposed upon and with specific reference to particular sales.

 

(b)                                 If a Diagnostic Service(s) is offered in
combination with another diagnostic or other service(s) (such as patient
counseling) provided by EXACT (such other services being referred to as “Other
Services” and such Diagnostic Service(s) and Other Services collectively being
referred to as “Combination Services”), Net Service Revenues for purposes of
determining royalties on the Diagnostic Service(s) shall be calculated as
provided below:

 

(i)                                    If the Diagnostic Service(s) and the
Other Services are sold or provided separately, Net Service Revenues shall be
calculated by multiplying the Net Service Revenues of the Combination Service
(as determined in accordance with Section 1.16(a) above but applied to the
Combination Service), by the fraction A/(A+B), where “A” is the invoice price of
the Diagnostic Service(s) and “B” is the invoice price of the Other Services in
the Combination Service if sold or provided separately.

 

(ii)                                 If the Diagnostic Service(s) are sold or
provided separately but the Other Services are not, Net Service Revenues shall
be calculated by multiplying the Net Service Revenues of the Combination Service
(as determined in accordance with Section 1.16(a) above but applied to the
Combination Service), by the fraction A/C, where “A” is the invoice price of the
Diagnostic Service(s) and “C” is the invoice price of the Combination Service.

 

(iii)                              If the Diagnostic Service(s) and the Other
Services in the combination are not sold or provided separately, Net Service
Revenues for purpose of determining royalties on the Diagnostic Service(s) shall
be calculated by multiplying Net Service Revenues of the Combination Service (as
determined in accordance with Section 1.16(a) above but applied to the

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

4

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Combination Service) by the fraction E/(E+D), where “E” is the value of the
Diagnostic Service(s) and “D” is the reasonably estimated value (using accepted
diagnostic industry standards) of the Other Services based at least in part on
the value of the other active component or components used in the Combination
Service; provided, that (A) EXACT shall notify Genzyme in writing of its intent
to offer such Combination Services, (B) Genzyme and EXACT shall, within thirty
(30) days after Genzyme’s receipt of such notification, initiate good-faith
negotiations on the value of the Diagnostic Service(s) and Other Services which
shall be used as the basis to calculate Net Service Revenues pursuant to this
clause (iii) and (C) if the parties can not reach agreement within thirty (30)
days after the commencement of such negotiations, such dispute shall be referred
to arbitration pursuant to Article 11 hereof.

 

(c)                                  In the event that a Diagnostic Service is
provided for non-monetary consideration in addition to or in lieu of money, the
value of such non-monetary consideration to the extent that it can be reasonably
determined by EXACT shall be added to Net Service Revenues in accordance with
Sections 1.16(a) and (b) hereof.

 

(d)                                 Net Service Revenues expressly excludes the
use or performance of Diagnostic Services at cost or less than cost for the sole
purpose of conducting Research.

 

1.17.                       “Original Effective Date” shall mean March 25, 1999.

 

1.18.                       “Patent Rights” shall mean collectively the Gene
Patent Rights and the Methodology Patent Rights.

 

1.19.                       “Reagents” shall mean reagents useful in or
necessary to the performance of laboratory-based assays, whether used
individually or sold or used as one or more component(s) of a kit.

 

1.20.                       “Research” shall mean pre-clinical, clinical and
regulatory activities conducted by or on behalf of EXACT to develop, evaluate,
and obtain regulatory approvals of, products or services utilizing the Patent
Rights licensed to EXACT hereunder.

 

1.21.                       “Triggering Event” means [********].

 

1.22.                       “Valid Claim” shall mean an issued claim of an
unexpired patent, or a claim of a pending patent application, which shall not
have been withdrawn, canceled or disclaimed, or held invalid or unenforceable by
a court of competent jurisdiction in an unappealed or unappealable decision.
Notwithstanding the foregoing to the contrary, a claim of a pending patent
application, divisional application, or continuation-in-part application, or the
foreign equivalents thereof, shall cease to be a Valid Claim if no patent has
issued on such claim on or prior to the fifth (5th) anniversary of the date of
filing such patent application (or, in the case of a continuation application or
foreign equivalent thereof, the date of filing of the earliest parent
application), provided that such claim shall once again

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

5

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become a Valid Claim on the issue date of a patent that subsequently issues and
includes such claim.

 

ARTICLE 2.  LICENSE GRANT AND WAIVER

 

2.1.                             Genzyme hereby grants to EXACT, subject to all
the terms and conditions of this Agreement, a worldwide, nonexclusive right and
license (without the right to grant sublicenses) under the Patent Rights to:
(a) use, offer to sell, sell and practice Diagnostic Services in the Field;
(b) make, have made, use, offer to sell, sell and import Licensed Reagents in
the Field; and (c) make, have made, use, offer to sell, sell and import Kits in
the Field. Notwithstanding the foregoing, Genzyme hereby grants to EXACT the
worldwide, non-exclusive right to convey to the end-user (purchaser) of FDA
Approved Kits manufactured by EXACT the right to perform Diagnostic Services
solely in conjunction with the use of FDA Approved Kits manufactured by or on
behalf of EXACT (without the right to grant sublicenses).

 

2.2.                             The license granted hereunder shall not extend
to Instruments. In the event that Genzyme becomes aware of any Instruments,
Genzyme shall deliver written notice thereof to EXACT. In the event that after
the Original Effective Date EXACT decides in good faith to develop Instruments
for use in the Field and delivers written notice of such decision to Genzyme,
Genzyme and EXACT shall, within thirty (30) days after Genzyme’s receipt of such
notification from EXACT, enter into good faith negotiations for a worldwide,
non-exclusive license (without the right to grant sublicenses) to be granted by
Genzyme to EXACT under the Patent Rights to make, use, offer to sell, sell and
import Instruments in the Field. Any such license shall include commercially
reasonable terms and conditions. In the event that Genzyme and EXACT are unable
to reach agreement on the terms of any such license within ninety (90) days
after the date Genzyme and EXACT commence negotiations for such license, then
the dispute shall be immediately referred to one (1) executive officer of each
party, chosen at the sole discretion of that party, who shall negotiate in good
faith with each other to resolve the dispute during the period ending thirty
(30) days after the date of such referral. If the designated officers of the
parties are unable to resolve the dispute within such thirty (30) day period,
the dispute shall be referred to arbitration pursuant to Article 11 hereof.

 

2.3.                             Each party (the “Granting Party”) hereby grants
to the other party (the “Recipient”) a one-time waiver of any and all rights the
Granting Party may have based on any breaches of the License Agreement by the
Recipient that occurred prior to the Effective Date of this Agreement, including
any and all amounts due to the Granting Party under the License Agreement, and
further including any and all obligations of the Recipient that may be
interpreted to have accrued under this Agreement prior to the Effective Date, in
each case whether or not known to the Granting Party. In the case of a breach by
the Recipient that first occurred prior to the Effective Date, but such breach
continues after the Effective Date, the waiver and release granted in the prior
sentence will only apply to the extent that the breach occurred prior to the
Effective Date, provided that such waiver and release shall apply in connection
with the disclosure by EXACT of the terms of the License Agreement with the
Securities and Exchange Commission prior to the Effective Date as a result of
the expiration of the confidential treatment request filed with the Securities
and Exchange Commission for the License Agreement. The Granting Party will not
assert any, and hereby releases the Recipient and its Affiliates, and their
officers, directors, employees, agents, trustees, successors and assigns, from
any and all, claims,

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

6

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rights, demands, actions, causes of action, suits, damages, losses, liabilities,
obligations, matters and issues arising from any such breaches.  This
Section 2.3 shall apply to the Granting Party, the Granting Party’s Affiliates
and their successors and assigns.

 

ARTICLE 3.  DILIGENCE

 

3.1.                             EXACT agrees to use commercially reasonable
efforts to make (i) Diagnostic Services,(ii) Licensed Reagents and (iii) Kits
available for the benefit of the general public consistent with regulatory
compliance and public safety.

 

3.2.                             EXACT’s material failure to perform in
accordance with any subsection of Section 3.1 above shall be grounds for Genzyme
to terminate the license under Section 2.1 above with respect to Diagnostic
Services, Licensed Reagents or Kits, as applicable, pursuant to Section 7.8
hereof by delivering written notice of its intention to terminate to EXACT. If
EXACT disputes Genzyme’s determination, (i) EXACT shall deliver written notice
of such dispute within ten (10) business days after its receipt of notice from
Genzyme of its intent to terminate, (ii) the matter shall be referred to
arbitration pursuant to Article 11hereof and (iii) EXACT’s license under
Section 2.1 above to the Diagnostic Services, Licensed Reagents or Kits, as
applicable, and EXACT’s obligations with respect thereto shall continue in full
force and effect until the resolution of such arbitration.

 

3.3.                             Within thirty (30) days after the Original
Effective Date and subsequently no later than May 1 and November 1 of each year,
commencing on November 1, 1999, EXACT shall provide a written report to Genzyme
on its research, development and commercialization efforts with respect to
(i) Diagnostic Services, (ii)Licensed Reagents and (iii) Kits (each
individually), which report shall cite specific goals and objectives in
researching, developing and commercializing the licensed technology and
methodology and progress in meeting these goals and objectives. If Genzyme does
not receive any such report(s) in a timely manner, it shall notify EXACT of such
delinquency in writing. EXACT shall have thirty (30) days from its receipt of
such notice to provide Genzyme with any and all overdue report(s). Failure by
EXACT to provide such overdue report(s) within said thirty (30) day period may
constitute grounds for termination of this Agreement by Genzyme as provided for
in Section 7.5 hereof; provided, however, that the number of days elapsed since
EXACT first received notice from Genzyme of the delinquent reports shall be
counted for purposes of determining the sixty (60) day period described in
Section 7.5 hereof.

 

ARTICLE 4.  PAYMENTS

 

4.1.                             In partial consideration for the license
granted hereunder, and upon the Original Effective Date, EXACT agrees to pay
Genzyme [********], which amount shall not be creditable against any other
amounts payable by EXACT to Genzyme hereunder. Such [********] payment has been
made and no further upfront payment is due upon the Effective Date.

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

7

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4.2.                              EXACT shall pay to Genzyme during the term of
this Agreement a royalty calculated as follows:

 

(a)                                  before a total of [********] tests on
individual patient samples in the aggregate have been sold by EXACT, whether
sold by EXACT as Diagnostic Services or sold by or on behalf of EXACT as part of
Licensed Reagents or Kits manufactured by or on behalf of EXACT,

 

(i)                                     if the average gross sale price of such
Diagnostic Services, Licensed Reagents or Kits is equal to or greater than
[********], then the royalty shall be (i) the greater of [********] of Net
Service Revenue worldwide or [********] per Diagnostic Service sold by EXACT,
plus (ii) the greater of [********] of Net Sales worldwide or [********] per
test included in the Licensed Reagent or Kit sold by or on behalf of EXACT; and

 

(ii)                                  if the average gross sale price of such
Diagnostic Services, Licensed Reagents or Kits is less than [********], then the
royalty shall be (i) [********] per Diagnostic Service sold by EXACT, plus (ii)
[********] per test included in the Licensed Reagent or Kit sold by or on behalf
of EXACT.

 

(b)                                 after [********] tests on individual patient
samples in the aggregate have been sold by EXACT, whether sold by EXACT as
Diagnostic Services or sold by or on behalf of EXACT as part of Licensed
Reagents or Kits manufactured by or on behalf of EXACT,

 

(i)                                     if the average gross sale price of such
Diagnostic Services, Licensed Reagents or Kits is equal to or greater than
[********], then the royalty shall be (i) the greater of [********] of Net
Service Revenue worldwide or [********] per Diagnostic Service sold by EXACT,
plus (ii) the greater of [********] of Net Sales worldwide or [********] per
test included in the Licensed Reagent or Kit sold by or on behalf of EXACT; and

 

(ii)                                  if the average gross sale price of such
Diagnostic Services, Licensed Reagents or Kits is less than [********], then the
royalty shall be (i) [********] per Diagnostic Service sold by EXACT, plus (ii)
[********] per test included in the Licensed Reagent or Kit sold by or on behalf
of EXACT.

 

(c)                                  for revenue, other than Net Sales and Net
Services Revenue, generated by EXACT by exploiting the rights granted by Genzyme
under this Agreement, [********] of such revenue.

 

For clarity, (i) the foregoing royalties and the milestones set forth in
Section 4.5 that are applicable to Diagnostic Services shall only apply to
Diagnostic Services performed by EXACT and not by end-users (purchasers) and
(ii) for purposes of this Section 4.2, the

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

8

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average gross sales price of Licensed Reagents and Kits shall be calculated over
the applicable calendar quarter for which royalties are payable.

 

4.3.                              (a)                                  With
respect to the licenses granted for Diagnostic Services, EXACT shall pay Genzyme
a minimum royalty of, (i) before a Triggering Event has occurred, [********] per
year, (ii) if a Triggering Event has occurred at any time prior to the
[********] anniversary of the Effective Date of this Agreement, [********] per
year, (iii) if a Triggering Event has occurred at any time on or after the
[********] anniversary of the Effective Date and prior to the [********]
anniversary of the Effective Date, [********] per year, and (iv) if a Triggering
Event has occurred at any time on or after the [********] anniversary of the
Effective Date, [********] per year.  In each case, the minimum royalty will be
payable on January 1 of each year with respect to the licenses granted for
Diagnostic Services; provided, however, that the minimum royalty for a given
year shall be creditable against any royalties subsequently due during said year
under Section 4.2.  For clarity, if a Triggering Event occurs in such a year,
the applicable minimum royalty described in clauses (ii) through (iv) in this
Section 4.3(a) shall not apply until January 1 of the year following the
occurrence of such Triggering Event, unless such Triggering Event occurs on
January 1 of a year.

 

(b)                                 With respect to the licenses granted for
Licensed Reagents and Kits, EXACT shall pay Genzyme a minimum royalty of,
(i) before a Triggering Event has occurred, [********] per year, (ii) if a
Triggering Event has occurred at any time prior to the [********] anniversary of
the Effective Date of this Agreement, [********] per year, (iii) if a Triggering
Event has occurred at any time on or after the [********] anniversary of the
Effective Date and prior to the [********] anniversary of the Effective Date,
[********] per year, and (iv) if a Triggering Event has occurred at any time on
or after the [********] anniversary of the Effective Date, [********] per year. 
In each case, the minimum royalty will be payable on January 1 of each year with
respect to the licenses granted for Licensed Reagents and Kits; provided,
however, that the minimum royalty for a given year shall be creditable against
any royalties subsequently due during said year under Section 4.2.  For clarity,
if a Triggering Event occurs in such a year, the applicable minimum royalty
described in clauses (ii) through (iv) in this Section 4.3(b) shall not apply
until January 1 of the year following the occurrence of such Triggering Event,
unless such Triggering Event occurs on January 1 of a year.

 

(c)                                  Waiver or deferral of any minimum royalty
payment by Genzyme shall not be construed as waiver or deferral of any such
subsequent payment.

 

4.4.                              (a)                                  In the
event that the First Commercial Sale of a Diagnostic Service by EXACT has not
occurred within [********] after the Effective Date, EXACT shall pay Genzyme an
annual maintenance fee of [********] payable on each anniversary of the
Effective Date commencing with the [********] anniversary of the Effective Date;
provided, however, that if EXACT has submitted a bona fide application to the
U.S. Food and Drug Administration or the equivalent authority at that time
(“FDA”) to obtain final marketing approval for a Diagnostic Service within said
[********] period and EXACT’s failure to make such First Commercial Sale is due
to delays in obtaining such approval that are

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

9

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caused by the FDA and are not related to a substantial deficit in said
application, then Genzyme may elect, in its sole discretion, acting reasonably,
to extend said [********] period and shall notify EXACT in writing of any such
determination and election and of the amount of time by which such period has
been extended; provided further that if the parties disagree as to whether said
application contained a substantial deficit and the time for resolution of such
deficit, the dispute shall be referred to arbitration pursuant to Article 11
hereof and, until final resolution of the dispute, EXACT shall deposit any
amounts otherwise due and payable to Genzyme under this Section4.4(a) into an
escrow account established by EXACT exclusively for such purpose in a recognized
commercial banking institution reasonably selected by EXACT and promptly
identified by written notice from EXACT to Genzyme. If the arbitrator resolves
the dispute in favor of Genzyme, then the amounts held in escrow plus all
interest accrued thereon shall be promptly paid to Genzyme in same day funds.
Amount payable under this Section 4.4(a) shall not be creditable against any
royalties or other payments due during said year under this Article 4. Waiver or
deferral of any maintenance fee by Genzyme shall not be construed as waiver or
deferral of any such subsequent payment.

 

(b)                                 In the event that the First Commercial Sale
of a Kit by EXACT has not occurred within [********] after the Effective Date
and the license granted pursuant to Section 2.1 (c) hereof has not been
terminated by Genzyme pursuant to Section 7.7 hereof, EXACT shall pay Genzyme an
annual maintenance fee of [********] payable on each anniversary of the
Effective Date commencing with the [********] anniversary of the Effective Date;
provided, however, that if EXACT has submitted a bona fide application to the
FDA to obtain final marketing approval for a Kit prior to [********] and EXACT’s
failure to make such First Commercial Sale is due to delays in obtaining such
approval that are caused by the FDA and are not related to a substantial deficit
in said application, then Genzyme may elect, in its sole discretion, acting
reasonably, to extend said [********] period and shall notify EXACT in writing
of any such determination and election and of the amount of time by which such
period has been extended; provided further that if the parties disagree as to
whether said application contained a substantial deficit and the time for
resolution of such deficit, the dispute shall be referred to arbitration
pursuant to Article 11 hereof and, until final resolution of the dispute, EXACT
shall deposit any amounts otherwise due and payable to Genzyme under this
Section 4.4(b) into an escrow account established by EXACT exclusively for such
purpose in a recognized commercial banking institution reasonably selected by
EXACT and promptly identified by written notice from EXACT to Genzyme. If the
arbitrator resolves the dispute in favor of Genzyme, then the amounts held in
escrow plus all interest accrued thereon shall be promptly paid to Genzyme in
same day funds. Amount payable under this Section 4.4(b) shall not be creditable
against any royalties or other payments due during said year under this
Article 4. Waiver or deferral of any maintenance fee by Genzyme shall not be
construed as waiver or deferral of any such subsequent payment.

 

4.5.                              (a)                                  EXACT
shall pay Genzyme a one-time milestone payment in the amount of [********]
within [********] after first receiving FDA Approval. Such amount shall not be
creditable against any royalties or other payments due under this Article 4.

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

10

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(b)                                 EXACT shall pay Genzyme a one-time milestone
payment in the amount of [********] within [********] after EXACT has sold
[********] tests on individual patient samples in the aggregate, whether sold as
Diagnostic Services or as part of Licensed Reagents or Kits.

 

(c)                                  EXACT shall pay Genzyme a one-time
milestone payment in the amount of [********] within [********] after EXACT has
sold [********] tests on individual patient samples in the aggregate, whether
sold as Diagnostic Services or as part of Licensed Reagents or Kits.

 

(d)                                 For clarification, once EXACT has made any
particular milestone payment under this Section 4.5, EXACT will not be obligated
to make any payment under this Section 4.5 with respect to the reoccurrence of
the same milestone.

 

4.6.                              Payment of royalties specified in Section 4.2
shall be made by EXACT to Genzyme within forty-five (45) days after March 31,
June 30, September 30 and December 31 each year during the term of this
Agreement covering Net Sales and Net Service Revenues during the preceding
calendar quarter. The last such payment shall be made within forty-five (45)
days after the expiration or earlier termination of this Agreement.

 

4.7.                              No multiple royalties shall be payable on any
Diagnostic Service, Licensed Reagent or Kit because such Diagnostic Service,
Licensed Reagent or Kit or its practice, manufacture, use, importation or sale
is or shall be covered by more than one of the Patent Rights.

 

4.8.                              All payments to be made under this Article 4
shall be paid in United States dollars, in Boston, Massachusetts or at such
other place and in such other way as Genzyme may reasonably designate in
writing, without deduction of exchange, collection or other charges. Conversion
of foreign currency into United States dollars shall be calculated using the
applicable exchange rate as published in The Wall Street Journal on the date
that the payment is first due and payable. If by law, regulation or fiscal
policy of a particular country, conversion into United States dollars or
transfers of funds of a convertible currency to the Untied States is restricted
or forbidden, EXACT shall give Genzyme prompt written notice of such restriction
or prohibition, which notice shall satisfy the forty-five (45) day payment
deadline set forth in Section 4.6. EXACT shall pay any amounts due to Genzyme
through whatever lawful methods Genzyme reasonably designates in writing;
provided, however, that if Genzyme fails to designate such payment method within
thirty (30) days after Genzyme is notified of the restriction, EXACT may deposit
such payment in local currency to the credit of Genzyme in a recognized
commercial banking institution reasonably selected by EXACT and promptly
identified by written notice from EXACT to Genzyme, and such deposit shall
fulfill all obligations of EXACT to Genzyme with respect to such payment.

 

4.9.                              In the event that any payment due hereunder is
not made when due, the payment shall accrue interest beginning on the first day
following the due date as herein specified, calculated at the annual rate of the
sum of [********], the interest being compounded on

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

11

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the last day of each calendar quarter; provided, that in no event shall said
annual rate exceed the maximum legal interest rate in Massachusetts. The payment
of such interest shall not foreclose Genzyme from exercising any other rights it
may have as a consequence of the lateness of any payment.

 

4.10.                        Royalty payments and other payments due to Genzyme
under this Agreement shall not be reduced by reason of any withholding or
similar taxes applicable to such payments to Genzyme.

 

4.11.                        [********]

 

ARTICLE 5.  REPORTS AND RECORDS

 

5.1.                              EXACT shall maintain true, accurate and
complete books of account, records and files containing an accurate record of
all data reasonably necessary for the full computation and verification of sales
and the determination of the amounts payable under Article 4 hereof for a period
of at least four (4) years following the period of each report required by
Section 5.2 below. Said books and records shall be kept at EXACT’s principal
place of business and shall be in accordance with generally accepted accounting
principles, consistently applied. Said books and records, to the extent not
previously audited, shall be available for inspection by an independent
certified public accountant selected by Genzyme (or its licensor of the Patent
Rights) and reasonably acceptable to EXACT, upon ten (10) business days advance
written notice and during regular business hours, for three (3) years following
the end of the calendar year to which they pertain in order to enable Genzyme
(or its licensor of the Patent Rights) to ascertain the correctness of any
report and/or payment made under this Agreement. Such inspections may be
conducted no more than once in any twelve (12) month period and, except as
provided below, shall be conducted at the expense of Genzyme (or its licensor,
as the case may be). If such examination reveals that royalties have been
misstated, any adjustment shall be promptly refunded or paid, as appropriate.
Genzyme (or its licensor, as the case may be) shall pay the fees and expenses of
the accountant engaged to perform the audit, unless such audit reveals an
underpayment of five percent (5%) or more for the period examined, in which case
EXACT shall pay all reasonable costs and expenses incurred by Genzyme (or its

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

12

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

 

licensor, as the case may be) in the course of making such determination,
including without limitation the fees and expenses of the accountant.

 

5.2.                              Within forty-five (45) days after March 31,
June 30, September 30 and December 31, of each year in which this Agreement is
in effect, EXACT shall deliver to Genzyme full, true and accurate reports of its
activities relating to this Agreement during the preceding three month period.
These reports shall include at least the following:

 

(a)                                  the total actual billings for Diagnostic
Services on a country-by-country basis during the applicable period;

 

(b)                                 the total gross sales of Licensed Reagents
and Kits, each individually, on a country-by-country basis during the applicable
period;

 

(c)                                  the calculation of Net Service Revenues and
Net Sales on a country-by-country basis for the applicable period, including a
detailed listing of the applicable deductions permitted under Sections 1.15 and
1.16 hereof on an item-by-item basis and a detailed explanation of the
calculation of Net Service Revenues and Net Sales of any Combination Services or
combination products; and

 

(d)                                 the calculation of total royalties due in
U.S. dollars, together with the exchange rates used for conversion, to the
extent applicable.

 

5.3.                              With each such report, EXACT shall pay to
Genzyme the royalties due and payable as provided for in Section 4.2. To the
extent that royalties for the applicable period are creditable against minimum
royalties paid pursuant to Section 4.3 hereof, EXACT shall so report. If no
royalties are due, EXACT shall so report.

 

ARTICLE 6.  PATENT PROSECUTION; INFRINGEMENT

 

6.1.                              The prosecution, filing and maintenance of all
patents and the expense thereof shall be the responsibility of Genzyme (and/or
its licensor of the Patent Rights).

 

6.2.                              (a)                                  EXACT
agrees to provide Genzyme with prompt written notice after becoming aware of any
infringement of any of the Patent Rights.

 

(b)                                 Genzyme (or its licensor, as the case may
be) shall have the right, under its control and at its expense, to prosecute any
third party infringement of the Patent Rights or to defend the Patent Rights in
any declaratory judgment action brought by a third party which alleges the
invalidity, unenforceability or non-infringement of any Patent Right. EXACT
agrees to cooperate fully in any action under this Section 6.2, provided that
Genzyme (or its licensor, as the case may be) reimburses EXACT for its
reasonable costs and expenses incurred in connection with providing such
assistance.

 

(c)                                  In the event that

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

13

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

 

(i)                                    EXACT notifies Genzyme that a third party
is conducting activities in the Field that infringe the Patent Rights in any
country,

 

(ii)                                 said third party continues to infringe for
[********] after receipt by Genzyme of such notice and does not obtain a license
from Genzyme under the applicable Patent Rights within such period, and

 

(iii)                              EXACT can demonstrate to Genzyme’s reasonable
satisfaction through written documentation that (A) EXACT has Net Sales or Net
Service Revenues in one or more countries in which there is any Valid Claim
within the Patent Rights, and (B) the infringing activities of said third party
have resulted in annualized income to said third party equal to or greater than
(x) [********] worldwide in countries in which there is any Valid Claim within
the Patent Rights (determined based on Net Sales or Net Service Revenues of the
[********]) or (y) [********] of EXACT’s annualized Net Sales or Net Service
Revenues (as applicable) worldwide in countries in which there is any Valid
Claim within the Patent Rights (determined based on Net Sales or Net Service
Revenues of the [********]), whichever is greater,

 

then, after making such a demonstration, EXACT may withhold up to [********] of
the royalty payments that would otherwise be payable to Genzyme on Net Services
Revenues from Diagnostic Services covered in whole or in part by the infringed
Patent Rights or on Net Sales of Licensed Reagents or Kits covered in whole or
in part by the infringed Patent Rights, as applicable, in such countries until
such time as the infringement is abated; provided, however, that in the event
that Genzyme (or its licensor, as the case may be) either (A) fails to use good
faith efforts to undertake the prosecution of such third party infringement or
otherwise Resolve such infringement within two hundred and forty (240) days
after receipt by Genzyme of the notice delivered by EXACT pursuant to clause
(c)(i) above or (B) delivers written notice to EXACT that Genzyme (or its
licensor, as the case may be) does not intend to undertake the prosecution of
such third party infringement, then EXACT may withhold [********] of the
aforementioned royalty payments; provided further that, if EXACT withholds such
royalty payments and Genzyme (or its licensor, as the case may be) either
successfully Resolves such infringement or undertakes the prosecution of such
third party infringement and obtains a favorable judgment, settlement, consent
judgment or other final disposition of the suit, EXACT shall resume full payment
of the aforementioned royalties due under this Agreement on Net Service Revenues
and Net Sales in such countries upon receipt of either written notice of the
successful abatement of such infringement by prosecution or Resolution signed by
an officer of Genzyme or a copy of an official, written evidence of such
favorable judgment, settlement, consent judgment or other final disposition;
provided further that in the event that Genzyme (or its licensor, as the case
may be) undertakes the prosecution of such infringement and obtains a favorable
settlement, an order to dismiss shall constitute adequate official written
evidence for purposes of this sentence. For purposes of this clause (c),
“Resolve(s)” or “Resolution” means the cessation of such third party
infringement other than as a result of prosecution, including

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

14

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

 

without limitation the grant of a nonexclusive license under the Patent Rights
or the discontinuance by such third party of the infringing activities.

 

(d)                                 If Genzyme notifies EXACT in writing within
ten (10) days of receiving written documentation pursuant to
Section 6.2(c)(iii) above that Genzyme is not reasonably satisfied that EXACT
has demonstrated conditions sufficient to justify the withholding of royalty
payments under Section 6.2(c) above, then, until final resolution of the
dispute, EXACT shall deposit all withheld royalty payments otherwise due and
payable to Genzyme into an escrow account established by EXACT exclusively for
such purpose in a recognized commercial banking institution reasonably selected
by EXACT and promptly identified by written notice from EXACT to Genzyme. If the
parties are unable to resolve the dispute within thirty (30) days after EXACT’s
receipt of Genzyme’s notice, then the dispute shall immediately be referred to
one (1) executive officer of each party, chosen in the sole discretion of that
party, who shall negotiate with each other in good faith to resolve the dispute
during the period ending thirty (30) days after the date of such referral. If
the designated officers of the parties are unable to resolve the dispute within
such thirty (30) day period, the dispute shall be referred to arbitration
pursuant to Article 11 hereof. If such officers or the arbitrator, as
applicable, resolves the dispute in favor of Genzyme, then the amounts held in
escrow plus all interest accrued thereon shall be promptly paid to Genzyme in
same day funds and EXACT shall resume full payment of royalties under this
Agreement.

 

(e)                                  In the event that EXACT withholds royalty
payments pursuant to Section 6.2(c), EXACT shall include the amount of such
withheld royalties and the basis for the calculation thereof on a
country-by-country basis in the reports deliverable by EXACT to Genzyme pursuant
to Section 5.2 hereof as distinct line items.

 

(f)                                    EXACT hereby acknowledges and agrees that
Roche has rights under the Patent Rights under an agreement with JHU and,
therefore, activities by Roche in accordance with such agreement with JHU will
not be subject to this Section 6.2.

 

ARTICLE 7.  TERM AND TERMINATION

 

7.1.                              Unless earlier terminated as hereinafter
provided, this Agreement shall remain in full force and effect until the
expiration of the last to expire Patent Rights. Royalties on Net Service
Revenues from Diagnostic Services and on Net Sales of Licensed Reagents and Kits
covered by the Gene Patent Rights shall cease upon the expiration of the last to
expire Gene Patent Right. Royalties on Net Service Revenues of Diagnostic
Services and on Net Sales of Licensed Reagents and Kits covered by the
Methodology Patent Rights shall cease upon the expiration of the last to expire
Methodology Patent Right.

 

7.2.                              If (a) Genzyme, acting reasonably, determines
that EXACT has ceased to carry on its business with respect to the performance
of Diagnostic Services in the Field and/or the provision of Licensed Reagents
and/or Kits in the Field in any country in North America or Europe for a period
of more than [********] with no plan to resume such business within the
following [********], then (b) Genzyme shall have the right to terminate this

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

15

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

 

Agreement and all rights, privileges and license hereunder granted with respect
to such Diagnostic Services and/or Licensed Reagents and/or Kits, as applicable,
upon [********] prior written notice to EXACT; provided, however, that if EXACT
is temporarily unable to carry on such business due to a corporate
reorganization or restructuring of EXACT, then the [********] time period set
forth in clause (a) of this Section 7.2 shall be reasonably extended to
accommodate such corporate circumstance by a period to be mutually agreed upon
by the parties, which extension period shall not exceed [********]. Such
termination shall become effective immediately upon the conclusion of such
notice period unless EXACT shall have resumed such business in good faith prior
to the expiration of such notice period.

 

7.3.                              Should EXACT fail to pay Genzyme any amounts
as are due and payable hereunder, Genzyme shall have the right to terminate this
Agreement upon forty-five (45) days prior written notice, unless EXACT shall pay
Genzyme within said forty-five (45) day period such delinquent amounts and all
interest due and payable thereon. If EXACT shall not have paid all such
delinquent amounts and interest due and payable thereon within said period,
Genzyme, at its sole option, may immediately terminate this Agreement and all
rights, privileges and license hereunder granted.

 

7.4.                              EXACT shall have the right to terminate this
Agreement and all rights, privileges and license hereunder granted at any time
upon one hundred eighty (180) days prior written notice to Genzyme.

 

7.5.                              Upon any material breach or default of this
Agreement by EXACT, other than those delineated in Sections 7.2 and 7.3, which
shall always take precedence in that order over any material breach or default
referred to in this Section 7.5, Genzyme shall have the right to terminate this
Agreement and the rights, privileges and license hereunder granted upon sixty
(60) days prior written notice to EXACT. Such termination shall become effective
immediately at the conclusion of such notice period unless EXACT shall have
cured any such breach or default prior to the expiration of said sixty (60) day
period.

 

7.6.                              (a)                                  If no
royalties have been paid by EXACT with respect to any Diagnostic Service within
[********] after the First Commercial Sale by EXACT of a Diagnostic Service, the
rights, privileges and license granted under this Agreement to EXACT under
Section2.1 (a) hereof shall automatically terminate.

 

(b)                                 If no royalties have been paid by EXACT with
respect to any Licensed Reagent within [********] after the First Commercial
Sale of a Licensed Reagent, the rights, privileges and license granted under
this Agreement to EXACT under Section 2.1 (b) hereof shall automatically
terminate.

 

7.7.                              (a)                                  If EXACT
fails to make a 510(k) or PMA submission for a Kit to the FDA (or the equivalent
of such submissions as may be required by the FDA at such time) on or before
[********], Genzyme may, in its sole discretion, elect to terminate the rights,
privileges and license granted under Section 2.1 (c) hereof in any or each
country in which

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

16

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Genzyme has Patent Rights unless such license grant is sooner terminated
according to the terms of this Agreement.

 

(b)                                 If EXACT fails to achieve annual Net Sales
of Licensed Reagents and Kits for use in the Field of [********] or more within
[********] after the First Commercial Sale of a Kit, Genzyme may, in its sole
discretion, elect to terminate the rights, privileges and license granted under
Section 2.1 (c) hereof in any and each country in which Genzyme has Patent
Rights unless such license grant is sooner terminated according to the terms of
this Agreement.

 

7.8.                              If EXACT materially fails to perform in
accordance with clauses (i), (ii) or (iii) of Section 3.1 hereof, Genzyme may
elect to terminate the rights, privileges and license granted under Section 2.1
with respect to the subject matter of the clause or clauses of Section 3.1 under
which EXACT has materially failed to perform, as set forth in Section 3.2,
hereof upon thirty (30) days prior written notice to EXACT. Notwithstanding the
foregoing, any termination of the license granted under any one clause of
Section 2.1 pursuant to this Section 7.8 will be effective only with respect to
the subject matter of the clause of Section 3.1 under which EXACT has materially
failed to perform, and the remaining clauses of Section 3.1 and the remaining
rights granted under 2.1 shall be unaffected by such termination.

 

7.9.                              Upon any termination of this Agreement in its
entirety or any of the rights, privileges and licenses granted under Section 2.1
hereof, EXACT shall be entitled to finish any work-in-progress and to sell any
completed inventory of Licensed Reagents or Kits, as applicable, which remain on
hand as of the date of the termination provided that EXACT pays Genzyme the
royalties applicable to said subsequent sales in accordance with the terms and
conditions set forth in this Agreement.

 

7.10.                        (a)                                  In the event
that Genzyme terminates this Agreement and the rights, privileges and licenses
hereunder granted pursuant to Section 7.2 above, then Genzyme shall refund to
EXACT the pro rata share of the amount equal to the sum of (i) any payment made
by EXACT pursuant to Section 4.3 hereof on January 1 of the calendar year in
which the effective date of such termination falls plus (ii) any payment made by
EXACT pursuant to Section 4.4 hereof on the anniversary of the Original
Effective Date immediately preceding the effective date of such termination plus
(iii) one-half of any payment made by EXACT pursuant to Section 4.5 hereof if
the license granted under Section 2.1 (c) is being terminated and if such
payment was made by EXACT within the six (6) month period immediately preceding
the effective date of such termination less (iv) the aggregate amount of any
payments made by Genzyme to JHU in that Year under the JHU License Agreement
based on the payments described in clauses (i), (ii) and (iii) above.

 

(b)                                 In the event that Genzyme terminates the
license granted under Section 2.1 (a) hereof with respect to Diagnostic Services
pursuant to Section 7.6 or 7.8 hereof, then Genzyme shall refund to EXACT the
pro rata share of the amount equal to the sum of (i) any payment made by EXACT
pursuant to Section 4.3(a) hereof on January 1 of the calendar year in which the
effective date of such termination falls plus (ii) any payment

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

17

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made by EXACT pursuant to Section 4.4(a) hereof on the anniversary of the
Original Effective Date immediately preceding the effective date of such
termination less (iii) the amount of any payment made by Genzyme to JHU in that
Year based on the payments described in clauses (i) and (ii) above.

 

(c)                                  In the event that Genzyme terminates the
rights, privileges and license granted under Section 2.1 (b) or (c) hereof with
respect to Licensed Reagents and Kits pursuant to Sections 7.7 or 7.8 hereof,
then Genzyme shall refund to EXACT the pro rata share of the amount equal to the
sum of (i) any payment by EXACT to Genzyme pursuant to Section 4.3(b) hereof on
January 1 in which the calendar year of the effective date of such termination
falls plus (ii) any payment made by EXACT pursuant to Section 4.4(b) hereof on
the anniversary of the Original Effective Date immediately preceding the
effective date of such termination plus (iii) one-half of any payment made by
EXACT pursuant Section 4.5 hereof to if the license granted under Section 2.1
(c) is being terminated and if such payment was made to Genzyme within six
(6) months immediately preceding the effective date of such termination less
(iv) the aggregate amount of any payments made by Genzyme to JHU in that Year
based on the payments described in clauses (i), (ii) and (iii) above.

 

(d)                                 The pro rata share of any amounts to be
refunded by Genzyme pursuant to this Section 7.10 shall be determined based on
either (i) the portion of the twelve (12) month period after said anniversary of
the Original Effective Date or (ii) the portion of said calendar year, as
applicable, during which this Agreement shall not be in effect. In no event
shall any amounts be refundable by Genzyme to the extent they have been credited
by Genzyme against royalties payable by EXACT in accordance with Sections 4.3
and/or 4.4 hereof. Interest paid to Genzyme pursuant to Section 4.9 hereof or on
any amounts held in escrow during the pendency of a dispute shall not be
included in the calculation of any amounts refundable by Genzyme.

 

(e)                                  Any and all amounts refundable by Genzyme
to EXACT pursuant to this Section 7.10 shall be paid to EXACT within thirty (30)
days after the applicable effective date of the termination.

 

7.11.                        Upon the expiration or the earlier termination of
this Agreement for any reason, nothing herein shall be construed to release
either party from any obligation that matured prior to the effective date of
such expiration or the termination. The provisions of Articles 5, 8, 10, 11, 13,
18 and 21, Section 4.6, 7.9, 7.10 and this Section 7.11 shall survive the
expiration or earlier termination of this Agreement.

 

ARTICLE 8.  INDEMNIFICATION AND INSURANCE

 

8.1.                              (a)                                  Subject
to the provisions of Section 8.3 hereof, EXACT shall indemnify, defend and hold
harmless Genzyme, JHU, The John Hopkins Health System (“JHHS”) and their
respective present and former officers, directors, trustees, employees,
consultants, agents, students, faculty, treating and consulting physicians,
inventors of the Patent Rights, subsidiaries, successors, heirs and assigns
(collectively, the “Genzyme Indemnitees”)

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

18

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

 

against any liability, damage, loss or expense (including reasonable attorneys’
fees and expenses of litigation) incurred by or imposed upon the Genzyme
Indemnitees, or any one of them, in connection with any claims, suits, actions,
demands or judgments arising out of (i) the design, sale, use, manufacture or
promotion by EXACT and its officers, directors, employees, representatives and
agents, of any process, service or product relating to, or developed,
manufactured, used or commercialized pursuant to, this Agreement and (ii) the
practice and use of the Patent Rights by EXACT and its officers, directors,
employees, representatives and agents.

 

(b)                                 EXACT’s indemnification under this
Section 8.1 shall not apply to any liability, damage, loss or expense to the
extent that it is directly attributable to the negligence, reckless misconduct
or intentional misconduct of the Genzyme Indemnitees.

 

(c)                                  EXACT agrees, at its own expense, to
provide attorneys to defend against any actions brought or filed against any
Genzyme Indemnitee with respect to the subject of indemnity contained herein,
whether or not such actions are rightfully brought, such attorneys to be
reasonably acceptable to Genzyme and not to be subject to any conflict of
interest in representing any of the Genzyme Indemnitees nor to have been deemed
within the preceding ten (10) years by any Genzyme Indemnitee to have provided
unsatisfactory legal representation of such Genzyme Indemnitee.

 

8.2.                              (a)                                  Subject
to the provisions of Section 8.3 hereof Genzyme shall indemnify, defend and hold
harmless EXACT and its present and former officers, directors, employees,
agents, consultants, successors, heirs and assigns (collectively, the “EXACT
Indemnitees”) against any liability, damage, loss or expense (including
reasonable attorney’s fees and expenses of litigation) incurred by or imposed
upon the EXACT Indemnitees, or anyone of them, in connection with any claims,
suits, actions, demands or judgments arising out of (i) the design, sale, use,
manufacture or promotion by Genzyme and its officers, directors, employees,
representatives and agents, of any process, service or product utilizing the
Patent Rights in the Field and (ii) the practice and use of the Patent Rights in
the Field by Genzyme and its officers, directors, employees, representatives and
agents.

 

(b)                                 Genzyme’s indemnification under this
Section 8.2 shall not apply to any liability, damage, loss or expense to the
extent it is directly attributable to the negligence, reckless misconduct or
intentional misconduct of the EXACT Indemnitees.

 

(c)                                  Genzyme agrees, at its own expenses to
provide attorneys to defend against any actions brought or filed against any
EXACT Indemnitee with respect to the subject of indemnity contained herein,
whether or not such actions are rightfully brought, such attorneys to be
reasonably acceptable to EXACT and not to be subject to any conflict of interest
in representing any of the EXACT Indemnitees not to have been deemed within the
preceding ten (10) years by any EXACT Indemnitee to have provided unsatisfactory
legal representation of such EXACT Indemnitee.

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

19

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8.3.          In the event any such action is commenced or claim made or
threatened against an indemnified party covered by Section 8.1 or 8.2 hereof,
the indemnified party shall promptly notify the indemnifying party in writing of
such event. The failure of indemnified party to deliver notice to the
indemnifying party within a reasonable time after the commencement of any such
action, if materially prejudicial to the ability of the indemnifying party to
defend such action, shall relieve the indemnifying party of any liability to the
indemnified party under this Article 8 solely with respect to such action, but
the failure to deliver notice to the indemnifying party will not relieve it of
any liability with respect to such action that it may have to the indemnified
party otherwise than under this Article 8. The indemnifying party shall assume,
with the reasonable cooperation of the indemnified party, the investigation and
defense of, and may settle that part of, any such claim or action commenced or
made against the indemnified party which relates to the indemnifying party’s
indemnification and the indemnifying party may take such other steps as may be
necessary to protect itself. The indemnifying party shall not be liable to
indemnified party on account of any settlement of any such claim or litigation
affected without the indemnifying party’s express written consent, which consent
shall not be unreasonably withheld or delayed. The right of the indemnifying
party to assume the defense of any action shall be limited to that part of the
action commenced against an indemnified party which relates to the indemnifying
party’s obligation of indemnification and holding harmless.

 

8.4.          (a)           Beginning at such time as any Diagnostic Service,
Licensed Reagent or Kit relating to, or developed pursuant to, this Agreement is
being made available (other than for the purpose of obtaining regulatory
approvals) by EXACT, EXACT shall, at its sole cost and expense, procure and
maintain commercial general liability insurance, applicable worldwide, in
amounts not less than [********] per incident and [********] annual aggregate
and naming Indemnitees as additional insureds. Such commercial general liability
insurance shall provide (i) product liability coverage and (ii) contractual
liability coverage for EXACT’s indemnification under Section 8.1 of this
Agreement. If EXACT elects to self-insure all or part of the limits described
above (including deductibles or retentions that are in excess of [********]
annual aggregate) such self-insurance program must be acceptable to Genzyme. The
minimum amounts of insurance coverage required under this Section 8.4(a) shall
not be construed to create a limit of EXACT’s liability with respect to its
indemnification obligation under Section 8.1 of this Agreement.

 

(b)           Genzyme shall, at its sole cost and expense, procure and maintain
commercial general liability insurance, applicable worldwide, in amounts not
less than [********] per incident and [********] annual aggregate and naming the
EXACT Indemnitees as additional insureds. Such commercial general liability
insurance shall provide (i) product liability coverage and (ii) contractual
liability coverage for Genzyme’s indemnification under Section 8.2 of this
Agreement. If Genzyme elects to self-insure all or part of the limits described
above (including deductibles or retentions that are in excess of [********]
annual aggregate) such self-insurance program must be acceptable to EXACT. The
minimum amounts of insurance coverage required under this Section 8.4(a) 

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

20

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shall not be construed to create a limit of Genzyme’s liability with respect to
its indemnification obligation under Section 8.2 of this Agreement.

 

(c)           Each party shall provide the other with written evidence of such
insurance upon request of the other party. Each party shall provide the other
with written notice at least thirty (30) days prior to the cancellation,
non-renewal or material change in such insurance. If such party does not obtain
replacement insurance providing comparable coverage within such thirty (30) day
period, the other party shall have the right to terminate this Agreement and the
rights, privileges and license granted hereunder effective at the end of such
thirty (30) day period without any notice or additional waiting periods.

 

(d)           Each party shall maintain such comprehensive general liability
insurance beyond the expiration or termination of this Agreement during (a) the
period that any process, service or product relating to, or developed pursuant
to, this Agreement is being made available (other than for the purpose of
obtaining regulatory approvals) by EXACT and (b) a reasonable period after the
period referred to in clause (a) above which in no event shall be less than
fifteen (15) years.

 

ARTICLE 9.  REPRESENTATIONS, WARRANTIES AND DISCLAIMERS

 

9.1.          (a)           Genzyme hereby represents and warrants to EXACT that
it has the right and power to enter into this Agreement, to extend the rights
and licenses granted herein and to perform its obligations hereunder, and that
this Agreement is a valid and binding agreement, enforceable in accordance with
its terms.

 

(b)           Genzyme further represents and warrants to EXACT that Genzyme is
not in material breach of the JHU License Agreement as of the Original Effective
Date, and that Genzyme will use commercially reasonable and diligent efforts to
comply with all of its material obligations and duties with regard to the Patent
Rights under the JHU License Agreement, including without limitation any
provisions of the JHU Agreement as may be reasonably necessary to maintain in
effect this Agreement or preserve EXACT’s rights under this Agreement, including
without limitation the preservation of EXACT’s rights hereunder in the event
that Genzyme shall breach or default on its obligations under the JHU License
Agreement.

 

(c)           EXACT hereby represents and warrants to Genzyme that it has the
right and power to enter into this Agreement and to perform its obligations
hereunder, and that this Agreement is a valid and binding agreement, enforceable
in accordance with its terms. EXACT agrees that it shall comply with all
applicable local, state, Federal and international laws and regulations relating
to the development, design, manufacture, sale, use in commerce and promotion of
Diagnostic Services, Licensed Reagents and Kits.

 

9.2.          EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTION 9.1, GENZYME
MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR OF

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

21

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FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO ANY PATENT, TRADEMARK,
SOFTWARE, NONPUBLIC OR OTHER INFORMATION, OR TANGIBLE RESEARCH PROPERTY,
LICENSED OR OTHERWISE PROVIDED TO EXACT HEREUNDER AND HEREBY DISCLAIMS THE SAME.

 

9.3.          GENZYME DOES NOT WARRANT THE VALIDITY OF THE PATENT RIGHTS
LICENSED HEREUNDER AND MAKES NO REPRESENTATION WHATSOEVER WITH REGARD TO THE
SCOPE OF THE LICENSED PATENT RIGHTS OR THAT SUCH PATENT RIGHTS MAY BE EXPLOITED
BY EXACT WITHOUT INFRINGING OTHER PATENTS.

 

9.4.          NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, EACH OF THE
PARTIES HERETO DISCLAIMS ALL OBLIGATIONS ON THE PART OF SUCH PARTY FOR DAMAGES,
INCLUDING BUT NOT LIMITED TO DIRECT, INDIRECT, SPECIAL AND CONSEQUENTIAL
DAMAGES, ATTORNEYS’ AND EXPERTS’ FEES AND EXPENSES, AND COURT COSTS (EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE PROBABILITY OF SUCH DAMAGES, FEES, EXPENSES
AND COSTS) ARISING OUT OF OR IN CONNECTION WITH THE MANUFACTURE, USE, SALE OR
PROVISION OF THE LICENSED REAGENTS, DIAGNOSTIC SERVICES UTILIZING THE LICENSED
PROCESSES AND KITS BY THE OTHER PARTY. EXACT ASSUMES ALL RESPONSIBILITY AND
LIABILITY FOR ANY LOSS OR DAMAGES CAUSED BY A LICENSED REAGENT, DIAGNOSTIC
SERVICE OR KIT MANUFACTURED, USED, SOLD OR PROVIDED BY EXACT. GENZYME ASSUMES
ALL RESPONSIBILITY AND LIABILITY FOR ANY LOSS OR DAMAGES CAUSED BY A LICENSED
REAGENT, DIAGNOSTIC SERVICE OR KIT MANUFACTURED, USED, SOLD OR PROVIDED BY
GENZYME.

 

ARTICLE 10.  NOTICES

 

10.1.        Any consent, notice or report required or permitted to be given or
made under this Agreement shall be in writing, delivered (i) by certified or
registered mail (postage prepaid, return receipt requested), (ii) by facsimile
(and promptly confirmed by personal delivery, courier or next business day
service of a nationally recognized courier service of good repute), (iii) by a
next business day service of a nationally recognized courier service of good
repute (with evidence of delivery) or (iv) by courier (postage prepaid and
signature required), and in any case addressed to the other party at its address
set forth in this Article 10, and shall be effective upon receipt by the
addressee.

 

10.2.        Reports, notices and other communications from EXACT to Genzyme as
provided hereunder shall be sent to:

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

22

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

 

 

Genzyme Genetics

 

 

1700 West Park Drive

 

 

Westborough, Massachusetts 01581

 

 

Attn:

Sr. Vice President & General Manager

 

Fax:

(508) 870-7504

 

Phone:

(508) 870-5232

 

 

 

 

with a copy to:

 

 

 

 

 

Genzyme Corporation

 

 

500 Kendall Street

 

 

Cambridge, Massachusetts 02142

 

 

Attn:

General Counsel

 

Fax:

(617) 252-7553

 

Phone:

(617) 252-7500

 

or to such other individual or address as shall hereafter be furnished by
written notice to EXACT in accordance with this Article 10.

 

10.3.        Reports, notices and other communications from Genzyme to EXACT as
provided hereunder shall be sent to:

 

 

EXACT Sciences Corporation

 

100 Campus Drive

 

Marlborough, Massachusetts 01752

 

Attn:

Chief Executive Officer

 

Fax:

(508) 683-1201

 

Phone:

(508) 683-1200

 

 

 

 

with a copy to:

 

 

 

 

 

Goodwin|Procter LLP

 

 

53 State Street

 

 

Boston, Massachusetts 02109

 

 

Attn:

Edward A. King, Esq. & Kingsley L. Taft, Esq.

 

Fax:

(617) 523-1231

 

Phone:

(617) 570-1000

 

or to such other individual or address as shall hereafter be furnished by
written notice to Genzyme in accordance with this Article 10.

 

ARTICLE 11.  ARBITRATION

 

11.1.        Any controversy or claim arising out of, or relating to any
provisions of this Agreement or the breach thereof which cannot otherwise be
resolved by good faith negotiations between the parties, or by any form of
Alternate Dispute Resolution other than arbitration

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

23

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which may be mutually acceptable to the parties, shall be resolved by final and
binding arbitration in Boston, Massachusetts under the rules of the American
Arbitration Association, or the Patent Arbitration Rules if applicable, then
obtaining.

 

The arbitration shall be subject to the following terms:

 

(a)           The number of arbitrators shall be one (1).

 

(b)           The arbitrator shall be an independent, impartial third party
having no direct or indirect personal or financial relationship to any of the
parties to the dispute, who has agreed to accept the appointment as arbitrator
on the terms set out in this Section 11.1.

 

(c)           The arbitrator shall be an active or retired attorney, law
professor, or judicial officer with at least five (5) years experience in the
biotechnology or pharmaceuticals industries and a familiarity with the laws
governing proprietary rights in intellectual property.

 

(d)           The arbitrator shall be selected as follows:

 

(i)            Each party shall submit a description of the matter to be
arbitrated to the American Arbitration Association at its Regional Office in
Boston, Massachusetts. Said Association shall submit to the parties a list of
the arbitrators available to arbitrate any dispute between them. Thereafter,
each party shall select, in numerical order, those persons on said list
acceptable as arbitrators and return the same to the Association. The first
arbitrator acceptable to both parties shall be deemed the selected arbitrator
with respect to the dispute then at issue under this Agreement. In the event of
a failure to select a mutually agreeable arbitrator, the Association shall be
requested to submit as many subsequent lists of arbitrators as shall be
necessary to effect a mutual selection.

 

(ii)           If the method of selection set out in paragraph (d)(i) above
fails for any reason, then either party may petition any state or federal court
in Massachusetts having jurisdiction for appointment of the arbitrator in
accordance with applicable law, provided that the arbitrator must satisfy the
requirements of paragraphs (b) and (c) above.

 

(e)           The arbitrator shall announce the decision and/or award in writing
accompanied by written findings explaining the facts determined in support of
the decision and/or award, and any relevant conclusions of law.

 

(f)            Unless otherwise provided in this Section 11.1 or extended by
agreement of the parties, each party shall submit an initial request for
designation of an arbitrator within thirty (30) days after receipt of the first
list of available arbitrators pursuant to Section 11.1 (d) of this Agreement,
the dispute shall be submitted to the arbitrator within ninety

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

24

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

 

(90) days after the arbitrator is selected, and a decision shall be rendered
within thirty (30) days after the dispute is submitted.

 

(g)           The fees of the arbitrator and any other costs and fees associated
with the arbitration shall be paid in accordance with the decision of the
arbitrator.

 

(h)           The arbitrator shall have no power to add to, subtract from, or
modify any of the terms or conditions of this Agreement. Any award rendered in
such arbitration may be enforced by either party in either the courts of the
Commonwealth of Massachusetts, or in the United States District Court for the
District of Massachusetts, to whose jurisdiction for such purposes Genzyme and
EXACT each hereby irrevocably consents and submits.

 

11.2.        Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any obligations existing
under this Agreement.

 

ARTICLE 12.  RESTRICTIONS ON USE OF NAMES

 

12.1.        EXACT shall not use the name of Genzyme or its divisions, JHU, JHHS
or their respective directors, officers, trustees, affiliates, employees,
faculty, students and the inventor(s) of the Patent Rights or any adaptations or
contractions thereof in any advertising, promotional or sales literature without
the prior written consent of Genzyme or JHU in each case, as applicable;
provided, however, that EXACT (a) may refer to publications by employees of
Genzyme in the scientific literature and (b) may state that a license from
Genzyme has been granted as herein provided. With respect to reports to public
agencies that are required by law, EXACT shall provide Genzyme with a reasonable
opportunity to review the use of its name in each such report reasonably in
advance of its submission.

 

12.2.        EXACT shall not disclose this Agreement or any of the terms or
conditions of this Agreement to any third party without the prior written
consent of Genzyme except and to the extent required to comply with applicable
laws or regulations; provided, that EXACT delivers prior written notice to
Genzyme of any disclosure required by applicable laws or regulations and takes
all reasonable and lawful actions to obtain confidential treatment for such
disclosure and, if possible, to minimize the extent of such disclosure.

 

ARTICLE 13.  CONFIDENTIALITY

 

13.1.        During the term of this Agreement, each party (the “Disclosing
Party”) may communicate to the other party (the “Receiving Party”) information
which it considers to be confidential (“Confidential Information”). All
Confidential Information shall be specifically designated as confidential. Such
Confidential Information may include, without limitation, trade secrets,
know-how, inventions, technical data or specifications, testing methods,
business or financial information, research and development activities, product
and marketing plans, and customer and supplier information. Confidential
Information that is disclosed in writing shall be marked with a legend
indicating its confidential status. Confidential Information that is disclosed
orally or visually shall be

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

25

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

 

documented in a written notice prepared by the Disclosing Party and delivered to
the Receiving Party within thirty (30) days of the date of disclosure; such
notice shall summarize the Confidential Information disclosed to the Receiving
Party and reference the time and place of disclosure.

 

13.2.        The Receiving Party agrees that it shall: (a) maintain all
Confidential Information in strict confidence, except that the Receiving Party
may disclose or permit the disclosure of any Confidential Information to its
directors, officers, employees, consultants and advisors who are obligated to
maintain the confidential nature of such Confidential Information and who need
to know such Confidential Information for the purposes set forth in this
Agreement; (b) use all Confidential Information solely for the purposes set
forth in this Agreement; and (c) allow its directors, officers, employees,
consultants and advisors to reproduce the Confidential Information only to the
extent necessary to effect the purposes set forth in this Agreement, with all
such reproductions being considered Confidential Information.

 

13.3.        The obligations of the Receiving Party under Section 13.2 above
shall not apply to the extent that the Receiving Party can demonstrate that
certain Confidential Information: (a) was in the public domain prior to the time
of its disclosure under this Agreement; (b) entered the public domain after the
time of its disclosure under this Agreement through means other than an
unauthorized disclosure resulting from an act or omission by the Receiving
Party; (c) was independently developed or discovered by the Receiving Party
without use of the Confidential Information; (d) is or was disclosed to the
Receiving Party at any time, whether prior to or after the time of its
disclosure under this Agreement, by a third party having no fiduciary
relationship with the Disclosing Party and having no obligation of
confidentiality with respect to such Confidential Information; or (e) is
required to be disclosed to comply with applicable laws or regulations, or with
a court or administrative order, provided, that the Disclosing Party receives
prior written notice of such disclosure and that the Receiving Party takes all
reasonable and lawful actions to obtain confidential treatment for such
disclosure and, if possible, to minimize the extent of such disclosure.

 

13.4.        The obligations set forth in this Article 13 shall remain in effect
for a period of five (5) years after the expiration or the earlier termination
of this Agreement.

 

ARTICLE 14.  PATENT MARKING

 

14.           EXACT agrees to mark any Kits, Licensed Reagents or promotional
materials, technical literature and the like that describe Kits, Licensed
Reagents or Diagnostic Services with all applicable patent numbers, and to
indicate “Patent Pending” status in accordance with each applicable country’s
patent laws.

 

ARTICLE 15.  INDEPENDENT CONTRACTOR

 

15.           For the purpose of this Agreement and all services to be provided
hereunder, both parties shall be, and shall be deemed to be, independent
contractors and not agents or employees

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

26

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

 

of the other. Neither party shall have authority to make any statements,
representations or commitments of any kind, or to take any action, that will be
binding on the other party.

 

ARTICLE 16.  SEVERABILITY

 

16.           If any one or more of the provisions of this Agreement shall be
held to be invalid, illegal or unenforceable, the validity, legality or
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby unless the invalid provisions are of such
essential importance to this Agreement that it is to be reasonably assumed that
the parties would not have entered into this Agreement without the invalid
provisions.

 

ARTICLE 17.  NON-ASSIGNABILITY

 

17.           Neither this Agreement nor any part hereof shall be assignable by
either party without the express prior written consent of the other, which shall
not be unreasonably withheld. Any attempted assignment without such consent
shall be void. Notwithstanding the foregoing, such consent shall not be required
for the assignment of this Agreement (i) by EXACT in connection with the sale or
transfer of all or substantially all of the business or assets of EXACT however
structured, or (ii) by Genzyme in conjunction with the transfer of all or
substantially all of the business or assets of Genzyme or all or substantially
all of the business or assets allocated to its Molecular Oncology Division
however structured; provided, in any such case, that the assignor promptly
notifies the other party hereto of such assignment and the assignee assumes all
of the assignor’s obligations hereunder in writing, with a copy of such written
assumption (which may be redacted to the extent reasonably necessary to protect
confidential information) to be promptly delivered to the other party hereto.

 

ARTICLE 18.  NON-SOLICITATION

 

18.           During the term of this Agreement and during the period ending
[********] after the expiration or earlier termination of this Agreement,
neither party shall, without the prior written consent of the other, solicit the
employment of, or employ, any person in any capacity who, at any time during the
term of this Agreement, shall have been an employee of the other party.

 

ARTICLE 19.  ENTIRE AGREEMENT

 

19.           This Agreement constitutes the entire agreement between the
parties with respect to the subject matter and supersedes any prior agreements
and understandings between the parties relating to the subject matter hereof. No
oral agreement, conversation or representation between any officers, agents or
employees of the parties hereto either before or after the Effective Date of
this Agreement shall affect or modify any of the terms or obligations herein
contained.

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

27

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ARTICLE 20.  MODIFICATIONS IN WRITING

 

20.                               No change, modification, extension,
termination or waiver of this Agreement, or any of the provisions herein
contained, shall be valid unless made in writing and signed by a duly authorized
representative of each party.

 

ARTICLE 21.  GOVERNING LAW

 

21.                               The validity and interpretation of this
Agreement and the legal relations of the parties to it shall be governed by the
laws of the Commonwealth of Massachusetts without regard to the conflict of laws
provisions thereunder.

 

ARTICLE 22.  CAPTIONS

 

22.                               The captions are provided for convenience and
are not to be used in construing this Agreement.

 

ARTICLE 23.  CONSTRUCTION

 

23.                               Each of the parties agree that this Agreement
is the result of mutual negotiation and therefore the language herein shall not
be presumptively construed against either of them.  The term “including” as used
herein shall mean including, without limiting the generality of any description
preceding such term.

 

ARTICLE 24.  COUNTERPARTS

 

24.                               This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.

 

ARTICLE 25.  BINDING EFFECT

 

25.                               This Agreement shall be binding upon and inure
to the benefit of the parties and their respective permitted successors and
permitted assigns.

 

ARTICLE 26.  FORCE MAJEURE

 

26.                               Neither party shall be deemed to be in breach
of this Agreement due to, or liable to the other party for damages or loss
occasioned by failure of performance by the defaulting party if the failure is
occasioned by war, fire, explosion, flood, acts of God, strike or lockout,
embargo, or any similar cause beyond the control of the defaulting party;
provided that the party claiming this exception has exerted all commercially
reasonable and diligent efforts to avoid or remedy such event and that such
event does not extend for more than nine (9) months; provided further that such
party provides the other party with prompt written notice of any delay or
failure to perform that occurs by reason of force majeure and continues
performance hereunder with reasonable dispatch whenever such causes are removed.
The parties shall mutually seek a resolution of the delay or failure to

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

28

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perform in good faith if a force majeure event extends for more than nine
(9) months, which resolution may be termination of this Agreement.

 

ARTICLE 27.  JHU LICENSE AGREEMENT

 

27.                               In the event that Genzyme’s license to the
Patent Rights under the JHU License Agreement is terminated, this Agreement
shall remain in effect pursuant to the terms of the JHU License Agreement
provided that at such time EXACT is not in material breach of the provisions of
this Agreement and agrees to be bound to JHU as a licensor under the terms and
conditions of this Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

29

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized representatives as of the Effective Date.

 

 

GENZYME CORPORATION

EXACT SCIENCES CORPORATION

 

 

By:

/s/ Earl M. Collier, Jr.

 

By:

/s/ Jeffrey R. Luber

 

 

 

 

 

Name

Earl M. Collier, Jr.

 

Name

Jeffrey R. Luber

 

 

 

 

 

Title:

Executive Vice President

 

Title:

President and Chief Executive Officer

 

 

 

 

 

Date:

January 27, 2009

 

Date:

January 27, 2009

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

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

 

Appendix A

 

Gene Patent Rights

 

[********]

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

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Appendix B

 

Methodology Patent Rights

 

[********]

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Company’s application requesting
confidential treatment under Rule 24b-2 of the Exchange Act; [*] denotes
omissions.

 

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