Exhibit
10.6


LICENSE AGREEMENT


THIS LICENSE
AGREEMENT (the “Agreement”) effective as of March 25, 1999 (the “Effective Date”)
is by and between Genzyme Corporation, a Massachusetts corporation having its
principal offices at One Kendall Square, Cambridge, MA 02139 (“Genzyme”),
through Genzyme’s Molecular Oncology Division, and EXACT Laboratories, Inc., a
Delaware corporation having its principal offices at 63 Great Road, Maynard, MA
01754 (“EXACT”).


WITNESSETH:


WHEREAS, Genzyme
is the licensee of certain patent rights relating to the Field (as defined
herein) under the JHU License Agreement (as defined herein) and is willing to
grant to EXACT a worldwide, nonexclusive, royalty-bearing sublicense to use
such patent rights for the development and commercialization of Diagnostic
Services, Licensed Reagents and Kits (each as defined herein) in the Field upon
the terms and conditions set forth herein; and


WHEREAS, EXACT
desires to obtain a worldwide, nonexclusive, royalty-bearing sublicense to use
such patent rights for the development and commercialization of Diagnostic
Services, Licensed Reagents and Kits in the Field on the terms and conditions
set forth herein; and


WHEREAS, Genzyme
is willing to grant EXACT such a sublicense on the terms and conditions set
forth herein in light of the relationship between EXACT and JHU (as defined
herein) and the relationship between Genzyme and JHU;


NOW THEREFORE, in
consideration of the mutual covenants herein contained and intending to be
legally bound hereby, the parties hereto agree 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                                 “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.


1.3                                 “Field”
shall mean the determination, in stool or samples prepared from stool, of the
presence of, absence of or variation(s) within a nucleic acid of interest, or
differences between a nucleic acid of interest and a reference standard or
sample, including but not limited to screening, diagnosis, prognosis and
monitoring tests, for the purpose of detecting changes associated with
colorectal cancer.













1.4                                 “First
Commercial Sale” shall mean (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.


1.5                                 “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.


1.6                                 “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.


1.7                                 “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.


1.8                                 “Kit”
shall mean a collection of one or more Reagents, including at least one
Licensed Reagent, packaged in the form of a kit.


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


1.10                           “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).



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1.11                           (a)           “Net Sales” shall mean the adjusted
gross sales of Licensed Reagents and Kits by EXACT less
eight percent (8%) 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 fifty percent (50%).  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.


(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 1.11 (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.


1.12                           (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 



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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 1.12(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 1.12(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 1.12(a)
above but applied to the 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 1.12(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.



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


1.14                           “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.


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


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


ARTICLE 2.  LICENSE GRANT


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.


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 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 



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unable to resolve the dispute within such thirty (30) day period, the
dispute shall be referred to arbitration pursuant to Article 11 hereof.


ARTICLE 3.  DUE 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 date this Agreement is signed on behalf of EXACT 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 execution of
this Agreement, EXACT agrees to pay Genzyme one hundred and fifty thousand
dollars($150,000), which amount shall not be creditable against any other
amounts payable by EXACT to Genzyme hereunder.


4.2                                 EXACT
shall pay to Genzyme during the term of this Agreement a royalty amounting
to(a) three percent (3%) of Net Service Revenues worldwide and (b) three
percent (3%) of Net Sales worldwide.



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4.3                                 (a)
EXACT shall pay Genzyme a minimum royalty of twenty thousand dollars($20,000)
per year payable within thirty (30) days of the date this Agreement is signed
on behalf of EXACT for 1999 and on January 1 of each year thereafter 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.


(b)           EXACT shall pay
Genzyme a minimum royalty of twenty thousand dollars($20,000) per year payable
on January 1, 2004 and on January 1 of each year thereafter 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.


(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 five
(5) years after the Effective Date, EXACT shall pay Genzyme an annual
maintenance fee of one hundred thousand dollars ($100,000) payable on each
anniversary of the Effective Date commencing with the fifth (5th) 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 five(5) year period 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, to
extend said five (5) year 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 seven (7)
years 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 one hundred thousand
dollars ($100,000) payable on each anniversary of the Effective Date commencing
with the 



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seventh (7th) 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 within said
seven (7) year period 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, to extend said seven (7) year 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                                 EXACT
shall pay Genzyme a milestone payment in the amount of two hundred and fifty
thousand dollars ($250,000) within thirty (30) days after the first receipt by
EXACT of 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.  Such
amount shall not be creditable against any royalties or other payments due
under this Article 4.


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 



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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 (a) two percent
(2%) plus (b) the prime interest rate quoted
by BankBoston N.A.  on the date said
payment is due, the interest being compounded on 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                           Genzyme
hereby agrees that if, after the Effective Date, (a) Genzyme grants a license(“Subsequent
Comparable License”) to another person or entity (other than a wholly-owned
subsidiary of Genzyme) conveying rights to (i) practice Diagnostic Services in
the Field, (ii) make, use, offer to sell, sell and import Licensed Reagents for
use in the Field, or (iii) make, use, offer to sell, sell and import Kits for
use in the Field, (b) such person or entity intends to sell Diagnostic
Services, Licensed Reagents or Kits, as applicable, other than for research
purposes and (c) such Subsequent Comparable License has financial terms which,
taken as a whole, are more favorable to such person or entity than those set
forth herein, Genzyme shall promptly deliver written notice to EXACT of the
grant of such Subsequent Comparable License and EXACT shall thereafter have
sixty (60) days in which to elect to substitute into this Agreement all the
financial terms and conditions of such Subsequent Comparable License by
delivering written notice of such election to Genzyme within said sixty (60)
day period.


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 



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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 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 1.11 and 1.12 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.



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(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


(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 one hundred and eighty (180) days 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) seven million five hundred thousand dollars
($7,500,000) 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
four (4) completed and immediately preceding calendar quarters) or (y) fifteen
percent (15%) 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
four (4) completed and immediately preceding calendar quarters), whichever is
greater,


then, after making such a demonstration, EXACT may withhold up to fifty
percent (50%) 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 one hundred percent (100%) 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 



 11
 









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 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 



 12
 









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 six (6) months
with no plan to resume such business within the following three (3) months,
then (b) Genzyme shall have the right to terminate this 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
six(6) months 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
six (6) month 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
six (6) months.  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 sixty (60) 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 two (2) years 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.



 13
 









(b)           If
no royalties have been paid by EXACT with respect to any Licensed Reagent
within two (2) years 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) within five(5) years after the
Effective Date, 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 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 ten million dollars ($10,000,000) or more within four (4) years
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 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 



 14
 









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 made by EXACT pursuant to Section
4.4(a) hereof on the anniversary of the 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 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 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.



 15
 









ARTICLE 8.  INDENCVIFICATION 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”) 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 



 16
 









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.


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 two million dollars ($2,000,000)
per incident and two million dollars ($2,000,000) 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 two hundred and
fifty thousand dollars ($250,000) 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 two million dollars
($2,000,000) per incident and two million dollars ($2,000,000) 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 



 17
 









Genzyme elects to self-insure all or part of the limits described above
(including deductibles or retentions that are in excess of two hundred and
fifty thousand dollars($250,000) annual aggregate) such self-insurance program
must be acceptable to EXACT.  The minimum
amounts of insurance coverage required under this Section 8.4(a) 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 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.


(b)           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.



 18
 









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 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:



 19
 









President,
Molecular Oncology Division


Genzyme
Corporation


One Mountain Road


P.O.  Box 9322


Framingham, MA
01701-9322


Facsimile: (508) 271-2604


with a copy to


Chief Legal
Officer


Genzyme
Corporation


One Kendall Square


Cambridge, MA
02139


Facsimile: (617) 252-7553


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:


President


EXACT Laboratories,
Inc.


63 Great Road


Maynard, MA 01754


Facsimile: (978) 897-3481


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 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.



 20
 









(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 (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.



 21
 









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.


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 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.



 22
 









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 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 



 23
 









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 two (2) years 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 execution of this Agreement shall affect or modify
any of the terms or obligations herein contained.


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.



 24
 









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 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]



 25
 









IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective duly authorized representatives as of the date first above written.


	
  

  	
   

  
	
  GENZYME CORPORATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Peter Wirth

  	
   

  	
   

  
	
   

  	
   

  
	
  Name: Peter
  Wirth

  	
   

  
	
   

  	
   

  
	
  Title: Executive
  Vice President

  	
   

  
	
   

  	
   

  
	
  Date: Mach 25,
  1999

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EXACT
  LABORATORIES, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Donna K. Hazard

  	
   

  	
   

  
	
   

  	
   

  
	
  Name: Donna K.
  Hazard

  	
   

  
	
   

  	
   

  
	
  Title: VP,
  Business Development

  	
   

  
	
   

  	
   

  
	
  Date: March 23,
  1999

  	
   

  
							




 26
 









Appendix A


Gene Patent Rights


	
  U.S. Patent No. 5,352,775

  	
   

  
	
   

  	
   

  
	
  AU9213669

  	
  Patent Application No. W092/13103

  
	
  GB 91000962

  	
  US Patent No. 5,648,212 (Div. of `775)

  
	
  GB 91000963

  	
  US Patent No. 5,691,454 (Div. of `775)

  
	
  GB 91000974

  	
  US Patent No. 5,783,666 (Div. of `775)

  
	
  GB 9100975

  	
   

  
	
  EP 569527

  	
   

  
	
  JP 7500241

  	
   

  
	
   

  	
   

  
	
  U.S. Patent No.
  5,527,676

  	
   

  
	
   

  	
   

  
	
  EP 390323

  	
   

  
	
  JP 4004898

  	
   

  
			



 



 27
 









Appendix B


Methodology Patent Rights


 


Patent Application No. 
W093/20235 (detecting mammalian nucleic acids from stool)


EP 672181


JP 8504081


U.S.  Patent Application No.  08/861,910



 28