Document:

Exhibit 10.36

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered
into effective as of the 1st day of August, 2009, by and between Barry Berger,
M.D. (“Employee”) and EXACT Sciences Corporation, a Delaware corporation (the “Company”).

 

WHEREAS, the Company currently employs Employee as its
Senior Vice President, Chief Medical Officer;

 

WHEREAS, the Company and Employee are parties to that that
certain Employee Retention Agreement dated April 28, 2008 (the “Retention
Agreement”) and that certain Employee Noncompetition Agreement dated April 2,
1999 (the “Noncompetition Agreement”); and

 

WHEREAS, the Company and Employee desire to enter into this
Agreement, among other reasons, to provide for certain new and/or modified
severance, change of control, bonus, long-term incentive, expense reimbursement
and other benefits for Employee, to modify Employee’s noncompetition,
non-solicitation and other obligations to the Company, and to terminate the
Retention Agreement and the Noncompetition Agreement, which are intended to be
replaced by this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants
and conditions hereinafter set forth, and other good and valuable
consideration, receipt of which is hereby acknowledged, the parties agree as
follows:

 

1.             Employment.  The Company hereby agrees to employ Employee
as the Company’s Senior Vice President, Chief Medical Officer, and Employee
hereby agrees to serve the Company in such position, subject to the terms and
provisions of this Agreement subject to the authority and direction of the
Board of Directors of the Company. 
Employee agrees (a) to devote his full-time professional efforts,
attention and energies to the business of the Company, and (b) shall
faithfully and to the best of his ability perform his duties hereunder.  Employee may serve as a director or committee
member of other corporations, charitable organizations and trade associations
(provided that the Company is notified in advance of all such positions) and
may otherwise engage in charitable and community activities, deliver lectures
and fulfill speaking engagements, and manage personal investments, but only if
such services and activities do not interfere with the performance of his
duties and responsibilities under this Agreement.

 

2.                                       Term of
Employment.  Employee’s
employment (the “Employment Term”) will continue until terminated as provided
in Section 6 below.

 

3.                                       Compensation. During the
Employment Term, Employee shall receive the following compensation.

 

3.1           Base Salary. Employee’s annual base
salary on the date of this Agreement is $230,000, payable in accordance with
the normal payroll practices of the Company (“Base Salary”). Employee’s Base
Salary will be subject to annual review by the Chief Executive Officer (“CEO”),
the Compensation Committee and the Board of Directors of the Company. During
the Employment Term, on each anniversary date of this Agreement, the Company
shall review the Base Salary amount to determine any increases. In no event
shall the Base Salary be less than the Base Salary amount for the immediately
preceding twelve (12) month period other than as permitted in Section 6.1(c) hereunder.

 

3.2           Annual Bonus Compensation. Employee
shall be eligible to receive an annual cash bonus as determined by the Company’s
Chief Executive Officer and the Compensation 

 

 

Committee each calendar year. Employee’s target annual bonus percentage
that he is eligible to earn for each calendar year shall be forty percent (40%)
of his Base Salary as of January 1 of the applicable new calendar year.
Any such bonus shall be based upon the achievement of goals determined by the
Compensation Committee after consultation with the CEO, shall be paid no later
than March 15 following the end of each calendar year, and except as set
forth in Section 7 hereof, Employee shall not be entitled to receive an
annual bonus for any calendar year (including the bonus referenced above)
unless he remains employed with the Company through December 31 of the
applicable calendar year; provided, however, that if Employee is terminated
with Cause or resigns without Good Reason, no bonus will be due.

 

3.3           Long Term Incentive Plan. The Company
shall implement a Long Term Incentive Plan (“LTIP”) as soon as reasonably
practicable.  Employee’s benefits under
the LTIP shall be determined pursuant to the terms of the LTIP, and such
benefits may not be terminated or diminished without the approval of either the
Compensation Committee or the Board of Directors.  Without limiting the foregoing, subject to
the following paragraph, the LTIP shall provide for a cash payout to Employee
upon a Change of Control (as defined in Section 7.2(a)) as follows:  (a) One-half percent (0.5%) of the
equity value of any Change of Control transaction having an equity value
between One Hundred Million Dollars ($100,000,000) and Five Hundred Million
Dollars ($500,000,000); (b) for Change of Control transactions having an
equity value between Five Hundred Million Dollars ($500,000,000) and One
Billion Dollars ($1,000,000,000), the cash payout to Employee would be equal to
the amount calculated in (a) above plus one-quarter percent (0.25%) for
each incremental Fifty Million Dollars ($50,000,000) in equity value over Five
Hundred Million Dollars ($500,000,000); (c) for Change of Control transactions
having an equity value between One Billion Dollars ($1,000,000,000) and Two
Billion Dollars ($2,000,000,000), the cash payout to Employee would be equal to
the amounts calculated in (a) and (b) above plus one-eighth percent
(0.125%) for each incremental Fifty Million Dollars ($50,000,000) in equity
value over One Billion Dollars ($1,000,000,000); and (d) for Change of
Control transactions having an equity value greater than Two Billion Dollars
($2,000,000,000), there would be no further increase in the cash payout to
Employee beyond that calculated under subsections (a), (b) and (c).  For example, in connection with a Change of
Control transaction having an equity value of (i) $600,000,000, Employee
would receive a cash payout of $2,750,000 ($2,500,000 + $125,000 + $125,000)
and (ii) $1,100,000,000, Employee would receive a cash payout of
$3,875,000 ($3,750,000 + $62,500 + $62,500).

 

The Compensation Committee is currently contemplating implementing a
separate LTIP which may be in addition to, or in substitution of, the LTIP
described in the preceding paragraph relating to a Change of Control.  The separate LTIP, if adopted, would provide
for payments based upon the achievement of certain value-creation milestones,
to be defined by the Compensation Committee. 
Employee’s benefits under such separate LTIP would be determined by the
Compensation Committee, provided, however, Employee’s benefits would be
initially established at the same level as the Company’s Chief Financial
Officer and Chief Scientific Officer. 
Employee’s benefits under such separate LTIP would not be terminated or
diminished without the approval of either the Compensation Committee or the
Board of Directors.  Employee agrees that
if such separate LTIP is implemented, the Company may elect not to proceed
with, or may elect to terminate, the LTIP described in the preceding paragraph
without liability to Employee with respect thereto.

 

3.4           Equity
Incentives and Other Long Term Compensation.  The Board of Directors, upon the
recommendation of the Compensation Committee, or the Compensation Committee,
may grant Employee from time to time options to purchase shares of the Company’s
common stock, and/or other equity awards including without limitation
restricted stock, both as a reward

 

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for
past individual and corporate performance, and as an incentive for future
performance.  Such options and/or other
awards, if awarded, will be pursuant to the Company’s then current stock option
plan.

 

4.                                       Benefits.

 

4.1           Benefits. Employee will be entitled
to participate in the sick leave, insurance (including medical, life and
long-term disability), profit-sharing, retirement, and other benefit programs
that are generally provided to employees of the Company similarly situated, all
in accordance with the rules and policies of the Company as to such
matters and the plans established therefore.

 

4.2           Vacation and Personal Time. The Company
will provide Employee with four (4) weeks of paid vacation each calendar
year Employee is employed by the Company, in accordance with Company policy.
The foregoing vacation days shall be in addition to standard paid holiday days
for employees of the Company.

 

4.3           Indemnification. To the fullest extent
permitted by applicable law and as provided for in the Company’s articles of
incorporation and bylaws the Company will, during and after termination of
employment, indemnify Employee (including providing advancement of expenses)
for any judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys’ fees, incurred by Employee in connection with the defense
of any lawsuit or other claim or investigation to which
Employee is made, or threatened to be made, a party or witness by reason of
being or having been an officer, director or employee of the Company or any of
its subsidiaries or affiliates as deemed under the Securities Exchange Act of
1934 (“Affiliates”) or a fiduciary of any of their benefit plans.

 

4.4           Liability Insurance. Both during and after termination
(for any reason) of Employee’s employment, the Company shall cause Employee to
be covered under a directors and officers’ liability insurance policy for his
acts (or non-acts) as an officer of the Company or any of its Affiliates. Such
policy shall be maintained by the Company, at its expense in an amount and on
terms (including the time period of coverage after the Employee’s employment
terminates) at least as favorable to the Employee as policies covering the
Company’s other members of its Board of Directors.

 

5.                                       Business
Expenses. Upon submission of a satisfactory accounting by
Employee, consistent with the policies of the Company, the Company will
reimburse Employee for any reasonable and necessary out-of-pocket expenses
incurred by Employee in the furtherance of the business of the Company.  Without limiting the foregoing, the Company
will reimburse Employee for reasonable and necessary out-of-pocket expenses
associated with travel between Employee’s residence in Massachusetts and the
Company’s office in Wisconsin.

 

6.                                       Termination.

 

6.1           By Employee.

 

(a)           Without Good Reason. Employee may terminate his
employment pursuant to this Agreement at any time without Good Reason (as
defined below) with at least thirty (30) business days’ written notice (the “Employee
Notice Period”) to the Company. Upon termination by Employee under this
section, the Company may, in its sole discretion and at any time during the
Employee Notice Period, suspend 

 

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Employee’s duties for the remainder of the Employee Notice Period, as
long as the Company continues to pay compensation to Employee, including
benefits, throughout the Employee Notice Period.

 

(b)           With Good Reason. Employee may terminate his
employment pursuant to this Agreement with Good Reason (as defined below) at
any time within ninety (90) days after the occurrence of an event constituting
Good Reason.

 

(c)           Good Reason. “Good Reason” shall mean any of the
following: (i) Employee’s Base Salary is reduced (x) in a manner that
is not applied proportionately to other senior executive officers of the
Company or (y) by more than thirty percent (30%) of Employee’s then
current Base Salary; (ii) Employee’s duties, authority or responsibilities
are materially reduced or are materially inconsistent with the scope of
authority, duties and responsibilities of Employee’s position; (iii) the
occurrence of a material breach by the Company of any of its obligations to
Employee under this Agreement or (iv) the Company materially violates or
continues to materially violate any law or regulation contrary to the written
advice of Employee and the Company’s outside counsel to the Board of Directors
and the Company fails to rectify such violation within thirty (30) days of the
written advice that such violations are taking place or (v) Employee is
required to relocate his place of employment with the Company outside a radius
of twenty-five (25) miles of his Notice Address.

 

6.2           By the Company.

 

(a)           With Cause. The Company may terminate Employee’s
employment pursuant to this Agreement for Cause, as defined below, immediately
upon written notice to Employee.

 

(b)           “Cause” shall mean any of the following:

 

	
  (i)

  	
  any willful failure or
  refusal to perform the Employee’s duties which continues for more than ten (10) days
  after written notice from the Company, specifically identifying the manner in
  which the Company believed the Employee had failed or refused to perform his
  duties;

  
	
   

  	
   

  
	
  (ii)

  	
  the commission of any
  fraud or embezzlement by the Employee in connection with the Employee’s
  duties or committed in the course of Employee’s employment;

  
	
   

  	
   

  
	
  (iii)

  	
  any gross negligence or
  willful misconduct of the Employee with regard to the Company or any of its
  subsidiaries resulting in a material economic loss to the Company;

  
	
   

  	
   

  
	
  (iv)

  	
  a conviction of, or plea
  of guilty or nolo contendere to, a felony or other crime involving
  moral turpitude,

  
	
   

  	
   

  
	
  (v)

  	
  the Employee is convicted
  of a misdemeanor the circumstances of which involve fraud, dishonesty or
  moral turpitude and which is substantially related to the circumstances of
  Employee’s job with the Company;

  

 

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  (vi)

  	
  any willful and material
  violation by the Employee of any statutory or common law duty of loyalty to
  the Company or any of its subsidiaries resulting in a material economic loss;
  or

  
	
   

  	
   

  
	
  (vii)

  	
  any material breach by the
  Employee of this Agreement or any of the agreements referenced in Section 8
  of this Agreement.

  

 

(c)           Without Cause.  Subject to Section 7.1, the Company may
terminate Employee’s employment pursuant to this Agreement without Cause upon
at least thirty days’ written notice (“Company Notice Period”) to
Employee.  Upon any termination by the
Company under this Section 6.2(c), the Company may, in its sole discretion
and at any time during the Company Notice Period, suspend Employee’s duties for
the remainder of the Company Notice Period, as long as the Company continues to
pay compensation to Employee, including benefits, throughout the Company Notice
Period.

 

6.3           Death or Disability. Notwithstanding
Section 2, in the event of the death or disability of Employee during the
Employment Term, (i) Employee’s employment and this Agreement shall
immediately and automatically terminate, (ii) the Company shall pay
Employee (or in the case of death, employee’s designated beneficiary) Base
Salary and accrued but unpaid bonuses, in each case up to the date of
termination, and (iii) all equity awards granted to Employee, whether
stock options or stock purchase rights under the Company’s equity compensation
plan, or other equity awards, that are unvested at the time of termination
shall immediately become fully vested and exercisable upon such termination. Neither
Employee, his beneficiary nor estate shall be entitled to any severance
benefits set forth in Section 7 if terminated pursuant to this section. In
the event of the disability of Employee, the parties agree to comply with
applicable federal and state law.

 

6.4           Survival. The Confidential
Information Agreement described in Section 8 hereof and attached hereto as
Schedule A shall survive the termination of this Agreement.

 

7.                                       Severance and
Other Rights Relating to Termination and Change of Control.

 

7.1           Termination of Agreement Pursuant to Section 6.l(b) or
6.2(c). If the Employee terminates his employment for Good Reason pursuant to
Section 6.1(b), or the Company terminates Employee’s employment without
Cause pursuant to Section 6.2(c), subject to the conditions described in Section 7.3
below, the Company will provide Employee the following payments and other
benefits:

 

	
  (a)

  	
  (i) salary
  continuation for a period of fifteen (15) months at Employee’s then current
  Base Salary, which shall commence on the first payroll date which is on or
  immediately follows the 30th day following the termination
  of Employee’s employment, (ii) any accrued but unpaid Base Salary as of
  the termination date; and (iii) any accrued but unpaid bonus, including
  without limitation any performance-based bonus, as of the termination date,
  all on the same terms and at the same times as would have applied had
  Employee’s employment not terminated; provided, that if at the end of the
  applicable period within which Employee’s employment was terminated a target
  bonus, or any other performance-based bonus, is paid to other senior
  executives, a pro-rata target or other performance-based bonus shall also be
  paid to Employee at the same time but no later than March 15 of the
  following year.

  

 

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(b)                                 If Employee elects
COBRA coverage for health and/or dental insurance in a timely manner, the
Company shall pay the monthly premium payments for such timely elected coverage
(consistent with what was in place at the date of termination) when each
premium is due until the earlier of: (i) (12) twelve months from the date
of termination; (ii) the date Employee obtains new employment which offers
health and/or dental insurance that is reasonably comparable to that offered by
the Company; or (iii) the date COBRA continuation coverage would otherwise
terminate in accordance with the provisions of COBRA. Thereafter, health and
dental insurance coverage shall be continued only to the extent required by
COBRA and only to the extent Employee timely pays the premium payments himself.

 

(c)                                  Within thirty
(30) days of the effective date of termination, the Company shall pay Employee
Ten Thousand Dollars ($10,000) towards the cost of an outplacement consulting
package for Employee.

 

(d)                                 The vesting of
the then unvested equity awards granted to Employee, whether stock options,
restricted stock or stock purchase rights under the Company’s equity
compensation plan, or other equity awards, shall immediately accelerate by a
period of 12 months upon such termination or resignation. Employee will be
entitled to exercise such equity awards in accordance with Section 7.6.

 

7.2                                 Change of
Control. The Board of Directors of the Company has determined that it is in
the best interests of the Company and its stockholders to assure that the
Company will have the continued dedication of the Employee, notwithstanding the
possibility, threat or occurrence of a Change of Control (defined in Section 7.2(a) below).
The Board believes it is imperative to diminish the inevitable distraction of
the Employee by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the Employee’s full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the Employee with
compensation and benefits arrangements upon a Change of Control which ensure
that the compensation and benefits expectations of the Employee will be
satisfied and which are competitive with those of other similarly-situated companies.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to include the provisions set forth in this Section 7.2.

 

(a)                                  Change of
Control. “Change of Control” shall mean, and shall be deemed to have occurred
if, on or after the date of this Agreement, (i) any “person” (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) or group acting in concert, other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company acting in such
capacity or a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock
of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of the Company representing
more than 50% of the total voting power represented by the Company’s then
outstanding Voting Securities, (ii) during any 12-month period, individuals who
at the beginning of such period constitute the Board of Directors of the
Company and any new director whose election by the Board of Directors or
nomination for election by the Company’s stockholders was approved by a vote of
at least two thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was 

 

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  previously so approved,
  cease for any reason to constitute a majority thereof, (iii) the
  consummation of a merger or consolidation of the Company with any other
  corporation other than a merger or consolidation which would result in the
  Voting Securities of the Company outstanding immediately prior thereto
  continuing to represent (either by remaining outstanding or by being
  converted into Voting Securities of the surviving entity) at least fifty
  percent (50%) of the total voting power represented by the Voting Securities
  of the Company or such surviving entity outstanding immediately after such
  merger or consolidation, or (iv) the sale or disposition by the Company
  of (in one transaction or a series of related transactions) all or
  substantially all of the Company’s assets.

  
	
   

  	
   

  
	
  (b)

  	
  Acceleration of Vesting of
  Equity Awards. Subject to Employee’s agreement to remain employed by the
  Company (or any successor), if requested, for a period of at least six (6) months
  following such Change of Control at his then current base salary, one hundred percent (100%) of the then
  unvested equity awards granted to Employee, whether stock options, restricted
  stock or stock purchase rights under the Company’s equity compensation plan,
  or other equity awards, shall immediately become fully vested and exercisable
  upon a Change of Control. 
  Employee will be entitled to exercise such vested equity awards in
  accordance with the applicable grant agreements.

  
	
   

  	
   

  
	
  (c)

  	
  LTIP Awards. Any awards
  granted to Employee under the LTIP as of the effective date of the Change of
  Control shall be treated as described in the LTIP.  Without limiting the foregoing, the
  existing LTIP provides (or shall be deemed to provide) that if, in
  anticipation or contemplation of a pending or potential Change of Control or
  while a potential Change of Control is under consideration or being
  negotiated by the Company’s board of directors, the Employee terminates his
  employment for Good Reason pursuant to Section 6.1(b) or the
  Company terminates Employee’s employment without Cause pursuant to Section 6.2(c),
  Employee shall be deemed to remain an employee for purposes of the LTIP as of
  the effective date of such Change of Control and shall receive a full payout
  under the LTIP as described in Section 3.3 of this Agreement as though
  he remained an employee of the Company as of the effective date of such
  Change of Control.

  
	
   

  	
   

  
	
  (d)

  	
  If, within twelve (12)
  months before the effective date of a Change of Control, the Employee
  terminates his employment for Good Reason pursuant to Section 6.1(b) or
  the Company terminates Employee’s employment without Cause pursuant to Section 6.2(c),
  or, if Employee remains employed with the Company on the effective date of a
  Change of Control, subject to the conditions described in Section 7.3
  below, the Employee shall receive a single lump-sum payment on the effective
  date of such Change of Control equal to eighteen (18) months (or, in the
  event of a Change of Control transaction occurring on or prior to September 1,
  2010, which has an equity value of less than $100 million, fifteen (15)
  months) at Employee’s then current Base Salary and pro-rata target bonus
  through the effective date of the Change of Control; provided, however, that
  any payments previously made by the Company to Employee in connection with a
  termination occurring within twelve (12) months before the effective date of
  such Change of Control pursuant to Section 7.1(a) of this Agreement
  shall be credited against the lump-sum payment due Employee pursuant to this Section 7.2(d).

  

 

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7.3           Conditions Precedent to Payment of Severance. The Company’s
obligations to Employee described in Sections 7.1 and 7.2 are contingent on
Employee’s delivery to the Company of a signed waiver and release in a form
reasonably satisfactory to the Company of all claims he may have against the
Company, and his not revoking such release within 21 days after his date of
termination. Moreover, the Employee’s rights to receive ongoing
payments and benefits pursuant to Sections 7.1 and 7.2 (including, without
limitation, the right to ongoing payments under the Company’s equity plans and
LTIPs) are conditioned on the Employee’s ongoing compliance with his
obligations as described in Section 8 hereof.  Any cessation by the Company of any such
payments and benefits shall be in addition to, and not in lieu of, any and all
other remedies available to the Company for Employee’s breach of his
obligations described in Section 8 hereof.

 

7.4           No Severance Benefits. Employee is not entitled
to any severance benefits if this Agreement is terminated pursuant to Sections
6.1(a) or 6.2(a) of this Agreement; provided however, Employee shall
be entitled to (i) Base Salary prorated through the effective date of such
termination; (ii) Bonuses which have been earned and for which the payment
date occurs prior to the effective date of such termination; and (iii) medical
coverage and other benefits required by law and plans (as provided in Section 7.5,
below).

 

7.5           Benefits Required by Law and Plans: Vacation Time
Pay. In the event of the termination of Employee’s employment, Employee
will be entitled to medical and other insurance coverage, if any, as is
required by law and, to the extent not inconsistent with this Agreement, to
receive such additional benefits as Employee may be entitled under the express
terms of applicable benefit plans (other than bonus or severance plans) of the
Company, its subsidiaries and Affiliates.

 

7.6           Exercise Period of Equity Awards after Termination. Unless it
would subject the Employee to adverse tax consequences under Section 885
of the American Jobs Creation Act of 2004, Pub. Law No. 108-357, 118 Stat.
1418 (the Act), which added § 409A to the Internal Revenue Code,
notwithstanding anything contained herein or in the equity grant agreements to
the contrary, in the event of the termination of Employee’s employment with the
Company, Employee’s vested equity awards shall be open for exercise until the
earlier of (i) two (2) years from the date of termination or (ii) the
latest date on which those equity awards expire or are eligible to be exercised
under the grant agreements, determined without regard to such termination or
resignation; provided further that such extended exercise period shall not
apply in the event the Employee resigns without Good Reason or is terminated by
the Company for Cause, in which case, the exercise periods shall continue to be
governed by the terms of the grant agreements.

 

7.7           409A Compliance.  Notwithstanding anything in this Section 7
to the contrary, to the extent that any payments under this Section 7 are
considered deferred compensation subject to Section 409A of the Internal
Revenue Code, such payments shall not be paid for six months following the
Employee’s separation from service (if, and only to the extent, applicable and
required for compliance with Section 409A).  To the extent that any payment is delayed
pursuant to this subsection, it shall be paid on the first day after the end of
such required period.

 

8.                                       Restrictions.

 

8.1           The Confidential Information Agreement. Employee will
enter into and comply with the terms of the Employee Confidentiality and
Assignment Agreement in substantially the form attached hereto as Exhibit A
(the “Confidential Information Agreement”).

 

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8.2           Agreement Not to Compete. In
consideration for all of the payments and benefits that may become due to
Employee under this Agreement, Employee agrees that during Employee’s
employment by the Company and for a period of eighteen (18) months after
termination of his employment for any reason, he will not, directly or
indirectly, without the Company’s prior written consent, (a) perform for a
Competing Entity in any Restricted Area any of the same services or
substantially the same services that he performed for the Company; (b) in
any Restricted Area, advise, assist, participate in, perform services for, or
consult with a Competing Entity regarding the management, operations, business
or financial strategy, marketing or sales functions or products or product
development (including without limitation clinical trials) of the Competing
Entity (the activities in clauses (a) and (b) collectively are, the “Restricted
Activities”); or (c) solicit or divert the business of any Restricted
Customer by offering competitive products or services to such Restricted
Customer to the detriment of the Company. Employee acknowledges that in his
position with the Company he has had and will have access to knowledge of
confidential information about all aspects of the Company that would be of
significant value to the Company’s competitors.

 

8.3           Additional Definitions.

 

(a)           “Customer” means any individual or entity for whom
the Company has provided services or products or made a proposal to perform
services or provide products.

 

(b)           “Restricted Customer” means any Customer with
whom/which Employee had contact on behalf of the Company during the 12 months
preceding the end, for whatever reason, of his employment.

 

(c)           “Competing Entity” means any business entity engaged
in the development, design, manufacture, marketing, distribution or sale of
molecular diagnostic products.

 

(d)           “Restricted Area” means any geographic location
where if Employee were to perform any Restricted Activities for a Competing
Entity in such a location, the effect of such performance would be competitive
to the Company.

 

8.4           Reasonable Restrictions On Competition Are Necessary.  Employee acknowledges that reasonable
restrictions on competition are necessary to protect the interests of the
Company. Employee also acknowledges that he has certain skills necessary to the
success of the Company, and that the Company has provided and will provide to
him certain confidential information that it would not otherwise provide
because he has agreed not to compete with the business of the Company as set forth
in this Agreement.

 

8.5           Restrictions Against Solicitations. Employee
further covenants and agrees that during Employee’s employment by the Company
and for a period of eighteen (18) months following the termination of his
employment with the Company for any reason, he will not, except with the prior
consent of the Company’s Chief Executive Officer, directly or indirectly,
solicit or hire, or encourage the solicitation or hiring of, any person who is
an employee of the Company for any position as an employee, independent
contractor, consultant or otherwise, provided that the foregoing shall not
prevent Employee from serving as a reference.

 

8.6           Affiliates. For purposes of this Section 8,
the term “Company” will be deemed to include the Company and its Affiliates.

 

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8.7           Ability to Obtain Other Employment. Employee
hereby represents that his experience and capabilities are such that in the
event his employment with the Company is terminated, he will be able to obtain
employment if he so chooses during the period of noncompetition following the
termination of employment described above without violating the terms of this
Agreement, and that the enforcement of this Agreement by injunction, as
described below, will not prevent him from becoming so employed.  To assist Employee in obtaining subsequent
employment, the Company agrees to respond within 3 business days to any request
of Employee as to whether a new position would be viewed by the Company as
violation of the restrictions in this Agreement.

 

8.8           Injunctive Relief. Employee understands and
agrees that if he violates any provision of this Section 8, then in any
suit that the Company may bring for that violation, an order may be made
enjoining him from such violation, and an order to that effect may be made
pending litigation or as a final determination of the litigation. Employee
further agrees that the Company’s application for an injunction will be without
prejudice to any other right of action that may accrue to the Company by reason
of the breach of this Section 8.

 

8.9           Severability. In case any provisions (or
portions thereof) contained in this Agreement shall, for any reason, be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect the other provisions of this Agreement,
and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.  If, moreover, any one or more of the
provisions contained in this Section 8 shall for any reason be held to be
excessively broad as to duration, geographical scope, activity or subject, it
shall be construed by limiting and reducing it, so as to be enforceable to the
extent compatible with the applicable law as it shall then appear.

 

8.10         Section 8 Survives Termination. The
provisions of this Section 8 will survive termination of this
Agreement and the termination of the Employee’s employment. Employee
understands that his obligations under this Section 8 will continue in
accordance with its express terms regardless of any changes in title, position,
duties, salary, compensation or benefits or other terms and conditions of
employment.  The Company will have the
right to assign Employee’s obligations under this Section 8 to its
affiliates, successors and assigns. 
Employee expressly consents to be bound by the provisions of this Section 8
for the benefit of the Company or any parent, subsidiary or affiliate to whose
employ Employee may be transferred without the necessity that this Agreement be
re-executed at the time of such transfer.

 

9.             Arbitration. Unless other
arrangements are agreed to by Employee and the Company, any disputes arising
under or in connection with this Agreement, other than a dispute in which the
primary relief sought is an equitable remedy such as an injunction, will be
resolved by binding arbitration to be conducted pursuant to the Agreement for
Arbitration Procedure of Certain Employment Disputes attached as Exhibit B
hereof.

 

10.           Assignments: Transfers:
Effect of Merger. No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company except that such rights
or obligations may be assigned or transferred pursuant to a merger or
consolidation, or pursuant to the sale or transfer of all or substantially all
of the assets of the Company, provided that the assignee or transferee is the
successor to all or substantially all of the assets of the Company. This
Agreement will not be terminated by any merger, consolidation or transfer of
assets of the Company referred to above. In the event of any such merger,
consolidation or transfer of assets, the provisions of this Agreement will be
binding upon the surviving or resulting corporation or the person or entity to
which such assets are transferred. The Company agrees that concurrently with
any merger, consolidation or transfer of assets referred to above, 

 

10

 

it will cause any successor or transferee
unconditionally to assume, either contractually or as a matter of law, all of
the obligations of the Company hereunder in a writing promptly delivered to the
Employee. This Agreement will inure to the benefit of, and be enforceable by or
against, Employee or Employee’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, designees and legatees. None
of Employee’s rights or obligations under this Agreement may be assigned or
transferred by Employee other than Employee’s rights to compensation and
benefits, which may be transferred only by will or operation of law. If
Employee should die while any amounts or benefits have been accrued by Employee
but not yet paid as of the date of Employee’s death and which would be payable
to Employee hereunder had Employee continued to live, all such amounts and
benefits unless otherwise provided herein will be paid or provided in
accordance with the terms of this Agreement to such person or persons appointed
in writing by Employee to receive such amounts or, if no such person is so
appointed, to Employee’s estate.

 

11.           No Set-off. No Mitigation
Required. Except as expressly provided otherwise in this
Agreement, the obligation of the Company to make any payments provided for
hereunder and otherwise to perform its obligations hereunder will not be
affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against Employee or others. In no
event will Employee be obligated to seek other employment or take other action
by way of mitigation of the amounts payable to Employee under any of the
provisions of this Agreement, and such amounts will not be reduced (except as
otherwise specifically provided herein) whether or not Employee obtains other
employment.

 

12.           Taxes. The Company
shall have the right to deduct from any payments made pursuant to this
Agreement any and all federal, state, and local taxes or other amounts required
by law to be withheld.

 

13.           409A Compliance.  The intent of
Employee and the Company is that the severance and other benefits payable to
Employee under this Agreement not be deemed “deferred compensation” under, or
otherwise fail to comply with, Section 409A of the Internal Revenue
Code.  Employee and the Company agree to
use reasonable best efforts to amend the terms of this Agreement from time to
time as may be necessary to avoid the imposition of penalties or additional
taxes under Section 409A of the Internal Revenue Code; provided, however,
any such amendment will provide Employee substantially equivalent economic payments
and benefits as set forth herein and will not in the aggregate, materially
increase the cost to, or liability of, the Company hereunder.

 

14.           Miscellaneous. No amendment,
modification or waiver of any provisions of this Agreement or consent to any departure
thereof shall be effective unless in writing signed by the party against whom
it is sought to be enforced. This Agreement contains the entire Agreement that
exists between Employee and the Company with respect to the subjects herein
contained and replaces and supersedes all prior agreements, oral or written,
between the Company and Employee with respect to the subjects herein contained,
including without limitation the Retention Agreement and the Noncompetition
Agreement, each of which are hereby terminated as of the effective date of this
Agreement.  Nothing herein shall affect
any terms in the Confidential Information Agreement, the Agreement for Arbitration Procedure of
Certain Employment Disputes, the LTIP, and any stock plans or agreements
between Employee and the Company now and hereafter in effect from time to time
(except as and to the extent expressly provided herein). If any provision of
this Agreement is held for any reason to be unenforceable, the remainder of
this Agreement shall remain in full force and effect. Each section is intended
to be a severable and independent section within this Agreement. The headings
in this Agreement are intended solely for convenience of reference and shall be
given no effect in the construction or interpretation of this Agreement. This
Agreement is made in the State of Wisconsin and shall be governed by and
construed in accordance with the laws of said State.

 

11

 

This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument. All notices and all other communications provided for in this
Agreement shall be in writing and shall be considered duly given upon personal
delivery, delivery by nationally reputable overnight courier, or on the third
business day after mailing from within the United States by first class
certified or registered mail, return receipt requested, postage prepaid, all
addressed to the address set forth below each party’s signature. Any party may
change its address by furnishing notice of its new address to the other party
in writing in accordance herewith, except that any notice of change of address
shall be effective only upon receipt.

 

12

 

The
parties hereto have executed this Employment Agreement as of the date first
written above.

 

	
   

  	
  /s/ Barry Berger M.D.

  
	
   

  	
  Barry Berger, M.D.
  (“Employee”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notice Address:

  
	
   

  	
   

  	
  40 Cedar Road

  
	
   

  	
   

  	
  Chestnut Hill, MA 02467

  
	
   

  	
   

  
	
   

  	
  EXACT Sciences Corporation
  (“Company”)

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ 

  	
  Kevin T. Conroy

  
	
   

  	
   

  	
   

  	
  Kevin T. Conroy

  
	
   

  	
   

  	
   

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Notice Address:

  
	
   

  	
   

  	
   

  	
  441 Charmany Drive

  
	
   

  	
   

  	
   

  	
  Madison,
  WI 53719

  

 

[Signature
Page to Berger Employment Agreement]

 

 

EXHIBIT B

 

Agreement for Arbitration Procedure of Certain Employment Disputes

 

[attached]

 

i

 

EXACT SCIENCES CORPORATION

 

AGREEMENT
FOR ARBITRATION PROCEDURES OF

CERTAIN
EMPLOYMENT DISPUTES

 

This Agreement for
Arbitration Procedure of Certain Employment Disputes (this “Agreement”) is made
effective as of August 1, 2009 by and between EXACT Sciences Corporation.,
a Delaware corporation, its subsidiaries, affiliates, successors and assigns
(together, the “Company”) and the Company employee signing below (the “Employee”).  This Agreement is intended to make available
a means for the resolution of certain employment disputes between the Company
and the Employee that is:  (1) timely;
(2) fair; (3) cost effective; (4) created by the parties; (5) responsive
to the parties; (6) marked by maximum decision-maker expertise in
employment matters; and (7) a source of finality for all involved.

 

Now therefore, in
consideration of the foregoing, the mutual covenants and conditions hereinafter
set forth, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.
 Initial Conflict Resolution.  The Employee agrees to use and exhaust the
internal complaint procedures of the Company, with respect to any claim or
controversy that is subject to this Agreement before taking any other action
hereunder.  The Employee also agrees that
in the event s/he is unsatisfied with a resolution under the Company’s internal
procedures, prior to arbitration and if requested by the Company, the parties
will submit their dispute to a neutral mediator to help them negotiate
resolution of their dispute.  The parties
acknowledge that mediation is a non-binding procedure, but agree that any
agreement reached and documented during mediation is binding on the parties and
can be enforced by the courts without arbitration.

 

2.
 Arbitration.  The Employee and the Company agree that they
will submit to private, final, and binding arbitration any of the following
claims or controversies against the Company or any of its employees, officers,
directors, or shareholders:  (i) any
dispute respecting the terms of the Employee’s Employment Agreement with the
Company (“Employment Agreement”); (ii) any dispute respecting the terms of
the Employee’s Employee Confidentiality and Assignment Agreement (the “Confidential
Information Agreement”); (the Employment Agreement and the Confidential
Information Agreement shall be referred to collectively herein as the “Agreements”);
(iii) any dispute arising out of the Employee’s employment or the
cessation thereof; or (iv) any complaint or charge the Employee makes
alleging a violation by the Company of state, federal, or local law concerning
Employee’s status with the Company or his/her cessation of employment.  Any question of arbitrability under this
Agreement shall also be subject to arbitration. 
The binding nature of this Agreement shall survive the termination of
the Employee’s employment with the Company for any reason.

 

	
  (a)

  	
  The
  arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
  §§ 1-16, and judgment upon the award rendered by the arbitrator may be
  entered by any court having jurisdiction thereof.

  
	
   

  	
   

  
	
  (b)

  	
  The
  arbitration shall be administered by JAMS or, if the parties agree in
  writing, be privately administered.  In
  either case, the arbitration shall be conducted in accordance with the rules of
  JAMS, which will be made available by the Company upon request.  In the event that any provision of such rules shall
  conflict with the language of any of the Agreements or this Arbitration
  Agreement, the Agreements and this Arbitration Agreement shall prevail.

  

 

ii

 

3.  Exclusions from Arbitration.  Notwithstanding the foregoing, the parties
agree that each shall have the right to commence a legal action in court for (i) the
purposes of obtaining temporary and/or preliminary injunctive relief that shall
remain in effect until such time as the arbitrator has rendered a decision
regarding the underlying merits of the claims relating to such matter for which
injunctive relief was sought and (ii) the purpose of protecting the
Company’s intellectual property, including, but not limited to, patents,
copyrights and trademarks.  With regard
to any court action commenced by either party, whether pursuant to this
Paragraph 3 or not, both parties agree to submit to personal jurisdiction in the
federal or state court located in Dane County, Wisconsin and not to contest
venue in such courts.

 

4.  Arbitration Procedure.  The place of the arbitration shall be in Dane
County, Wisconsin.  The parties have the
right to be represented by counsel in any arbitration proceeding conducted
pursuant to this Agreement.

 

	
  (a)

  	
  Selection
  of the Arbitrator. 
  Arbitration shall be by a single arbitrator who will be selected
  utilizing the alternative striking method from a list of five (5) neutral
  arbitrators with experience in employment disputes provided by JAMS or, if
  the parties choose private arbitration, from a list provided by the State Bar
  of Wisconsin or other local law association. 
  The party initiating the arbitration has the right to make the first
  strike.

  
	
   

  	
   

  
	
  (b)

  	
  Arbitrator’s
  Powers.  The arbitrator
  can only exercise the powers authorized by this Arbitration Agreement and can
  neither add to nor delete from the provisions of this Arbitration
  Agreement.  At the commencement of the
  arbitration, the parties shall state the issue(s) to be submitted to the
  arbitrator.  The arbitrator can decide
  only the dispute submitted to him or her. 
  Any other dispute is outside the scope of the arbitrator’s
  jurisdiction and any award involving such dispute is subject to a motion to
  vacate.  The arbitrator must decide any
  dispute according to the governing principles of law and equity.  Nothing in this paragraph, however, shall
  be construed to limit the arbitrator’s authority to award remedies or relief
  available to a party under applicable law.

  
	
   

  	
   

  
	
  (c)

  	
  Discovery.  The parties may engage in pre-hearing
  discovery that shall be governed by the Federal Rules of Civil
  Procedure.  All discovery must be
  completed on or before sixty (60) calendar days before the hearing date, or
  as otherwise agreed to by the parties and approved by the arbitrator.

  
	
   

  	
   

  
	
  (d)

  	
  Evidence.  The Federal Rules of Evidence shall
  govern and be applicable to the arbitration proceeding.  Depositions for testimony may be used in
  accordance with the Federal Rules of Civil Procedure.

  
	
   

  	
   

  
	
  (e)

  	
  Motions.  The parties may submit, pursuant to the
  Federal Rules of Civil Procedure, motions, including, but not limited
  to, procedural motions and dispositive motions (including, but not limited
  to, motions to dismiss and motions for summary judgment) for determination by
  the arbitrator.  The arbitrator shall,
  at the request of either party, issue a written decision regarding any such
  motion setting forth the factual and legal reasons supporting the decision.

  
	
   

  	
   

  
	
  (f)

  	
  Post-Hearing
  Brief.  In lieu of closing argument,
  each party shall have the right to present a post-hearing brief.

  
	
   

  	
   

  
	
  (g)

  	
  Decision
  of the Arbitrator.  The
  arbitrator shall issue a written opinion and award, which the arbitrator must
  sign and date setting forth the factual and legal reasons supporting each
  part of the opinion.  The arbitrator’s
  opinion and award must decide all issues submitted.

  

 

iii

 

	
  (h)

  	
  Available
  Remedies.  The
  arbitrator is authorized to fashion remedies that make the prevailing party
  whole for demonstrated losses incurred. 
  The arbitrator may not, however, award consequential, punitive, or
  liquidated damages unless an applicable statute permits or requires such
  damages to be awarded.

  

 

5.  Waiver of Jury Trial.  The parties recognize, understand and agree
that by entering into this Agreement, both are waiving any and all rights to a
trial by jury.  Furthermore, the Employee
understands that s/he is encouraged to have this  Agreement reviewed by an attorney before
signing it.

 

6.  Arbitration Fees.  The party initiating arbitration shall pay a
filing fee of $250 and the Company shall be responsible for the entire
remaining balance of the Arbitrator’s fees. 
If the Employee prevails in the arbitration, he or she shall be entitled
to recoup any filing fee paid by Employee. 
Unless the recovery of attorney’s fees and costs by either party from
the other is afforded under applicable federal or state law as a remedy
relating to the dispute, controversy or claim being resolved by the arbitration
and is, in fact, ordered by the Arbitrator to be paid by one party to the
other, each party shall bear his/her/its own attorneys’ fees and costs.

 

7.  Time Limit for Filing Complaints.  Any claim subject to this Agreement shall be
submitted to arbitration within 300 days of the event giving rise to the claim
or shall be waived.  In the case of
continuing violations under state or federal civil rights laws, the 300 day
timeline shall begin to run on the date of the latest alleged violation.

 

8.  Choice of Law.  The arbitrator shall apply applicable federal
law and the law of the State of Wisconsin, without reference to its conflicts
of laws principles, to any matter arbitrated.

 

9.  Severability.  The provisions of this Agreement are
severable and should be construed independently.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the other provisions.  Moreover, if one or more of the provisions of
this Agreement shall for any reason be held to be excessively broad as to
scope, activity, subject or otherwise so as to be unenforceable at law, such
provision or provisions shall be construed by the appropriate judicial body by
limiting or reducing it or them, so as to be enforceable to the maximum extent
compatible with the applicable law as it shall then appear.  The language of all parts of this Agreement
shall in all cases be construed as a whole according to its fair meaning and
not strictly for or against either of the parties.

 

10.  Modifications.  No change or modification to this Agreement
shall be valid unless it is made in writing and signed by the Employee and the
Company.

 

 

	
   

  	
   

  
	
   

  	
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXACT
  Sciences Corporation.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

ivExhibit 10.39

 

CONFIDENTIAL
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED FOR SUCH PORTIONS. 
ASTERISKS DENOTE OMISSIONS.

 

TECHNOLOGY LICENSE AGREEMENT

 

This TECHNOLOGY LICENSE AGREEMENT (the “Agreement”) is entered into by and between EXACT Sciences Corporation (“ESC”),
with its principal place of business at 505 S. Rosa Rd., Suite 123
Madison, Wisconsin (“ESC”) and
Hologic, Inc., with its principal place of business at 35 Crosby Drive,
Bedford, MA 01730 and Third Wave Technologies, Inc., a wholly-owned
subsidiary of Hologic with its principal place of business at Madison,
Wisconsin.  Hologic, Inc. and Third
Wave Technologies, Inc. shall hereinafter be referred to collectively (or
separately as the context requires) as “Hologic”).  Hereinafter ESC and Hologic may separately be
referred to as a “Party” or
collectively referred to as the “Parties”.

 

RECITALS

 

WHEREAS, Hologic owns or controls all right,
title and interest in and to, or has the right to sublicense, certain patents
and patent applications the claims of which are directed to aspects nucleic
acid amplification and detection, including Hologic’s technology commonly
referred to as Invader, InvaderPlus and qInvader (the “Invader Detection
Technology” as defined below);

 

WHEREAS, ESC is interested in acquiring a
license from Hologic under certain of Hologic’s patents for the purpose of
developing and commercializing an in vitro diagnostic colorectal cancer
screening test;

 

WHEREAS, ESC may improve the licensed technology
and grant back to Hologic such improvements as described herein;

 

WHEREAS, Hologic is willing to grant such
license to ESC upon the terms and conditions set forth below; and

 

NOW THEREFORE, for and in consideration of the
covenants and undertakings hereinafter set forth, ESC and Hologic hereby agree
as follows:

 

1.                                      Definitions

 

For the purpose of this Agreement, and solely for that
purpose, the terms set forth herein shall be defined as follows:

 

1.1                               “Affiliate”
means any corporation, company, partnership, joint venture and/or firm which
controls, is controlled by, or is under common control with a party
hereto.  For purposes of this definition,
“control” shall mean (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the stock or shares
entitled to vote for the election of directors; or (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities.

 

1.2                               “Colorectal Cancer
Diagnostic Field” means any clinical diagnostic purpose relating to
colorectal cancer, including cancer diagnosis, treatment, monitoring, or staging.

 

 

1.3                               “Colorectal Cancer
Screening Field” the detection or identification of colorectal
cancer and pre-cancers (e.g., pre-cursor lesions and polyps) in a human
biological sample (excluding human stool samples), in a screening population.

 

1.4                               “Cleavase Enzyme”
means any cleavage enzyme to the extent actually supplied by Hologic or its
designee to ESC under a Supply Agreement. 
For clarity, the Cleavase Enzyme comprises a FEN endonuclease enzyme
that is used in the Invader Detection Technology.

 

1.5                               “Field” means
the detection or identification of colorectal cancer and pre-cancers (e.g.,
pre-cursor lesions and polyps) in human stool samples in a screening
population.  For avoidance of doubt, this
field excludes diagnostic tests directed to guiding chemotherapy, staging or
monitoring of colorectal cancer.

 

1.6                               “Diagnostic Services”
means a testing service to provide to a Person data, results or interpretations
for purposes of therapy or diagnosis of a human being, including clinical
laboratory services, whether or not a fee is charged for such services.

 

1.7                               “Distributors”
means the distributors performing a bona fide distribution function to which
ESC or any of its Affiliates grants the right to Sell Licensed Products.  ESC’s Affiliates shall not be deemed to be “Distributors”
for purposes of this Agreement.

 

1.8                               “Effective Date”
means the final execution date of this agreement.

 

1.9                               “End User” means
the customer, including doctors, hospitals, testing and research institutions,
clinical or other testing laboratories which perform Diagnostic Services or
testing using a Licensed Product.

 

1.10                        “Europe” means
the countries comprising all European Union Member States plus Switzerland,
Norway, Liechtenstein and Iceland.

 

1.11                        “Hologic Patent Rights”
means the U.S. patent and patent applications set forth in Appendix A,
divisionals, continuations, continuation-in-part applications, of the
foregoing, U.S. patents issuing from the foregoing applications, U.S. patents
resulting from reissues or reexaminations thereof, and extensions thereof, and
foreign patents and patent applications claiming priority to the foregoing U.S.
patent applications.  For the sake of
clarity, the Invader Creator Software is to be considered part of the Hologic
Patent Rights.

 

1.12                        “Hologic Improvements”
means any and all issued claims in patents to inventions made during the Term
claiming an invention which is an improvement, modification, enhancement, or
adaptation of a Cleavase Enzyme or the Invader Detection Technology that are
useful for practicing the Hologic Patent Rights.

 

1.13                        “Invader Creator Software”
means Hologic’s software used in the design of nucleic acid amplification and
assays for the Invader Detection Technology.

 

1.14                        “Invader Detection
Technology” means a biochemical linear signal-amplification system
for direct detection or quantification of a nucleic acid that is dependent upon
coordinate action of at least an Invader probe, a primary probe, and a Cleavase
enzyme that

 

2

 

cleaves an overlap region
formed when an Invader probe and a Primary probe hybridize to the nucleic
acid.  For clarity, the “Invader”
reaction generally denotes the isothermal version of the system; the “InvaderPlus”
reaction generally denotes a PCR reaction followed by an isothermal Invader
reaction; and “qInvader” generally denotes the assay in which the PCR reaction
and the Invader reaction occur simultaneously during a PCR temperature cycle.

 

1.15                        “Licensed Product”
means any product (i) designed and used to perform the Invader Detection
Technology; (ii) the manufacture, use, importation, offer for Sale, Sale
or promotion of which would, but for the licenses and rights granted herein,
infringe a Valid Claim of the Hologic Patent Rights.

 

1.16                        “Person” means a natural person, a corporation, a
partnership, a trust, a joint venture, any governmental authority or any other
entity or organization

 

1.17                        “Reagent Agreement Plan”
or “RAP” means a program (whether known as
a Reagent Agreement Plan, Reagent Rental Plan or other successor or similar
plan) for the Sale of one or more Licensed Products in conjunction with the
supply of an instrument whereby the price for such Licensed Product includes,
all or a part of, the acquisition cost or leasing cost of an instrument, all or
a part of, the cost of servicing such instrument, interest charged for the
financing of such instrument and/or other items of cost recovery in connection
with the supply of such instrument.

 

1.18                        “Rest of World”
or “RoW” means all countries of the world
except Europe and the United States.

 

1.19                        “Royalty Payment Period”
means the period beginning on the Effective Date and ending on the expiration
of the current calendar quarter and each calendar quarterly period thereafter.

 

1.20                        “Sale” means the
act of transferring title to a product by selling, leasing or otherwise placing
such product into the channels of commerce or distributing (including by means
of Reagent Agreement Plans, if applicable) such product.

 

1.21                        “Sell” means to
make or cause to be made a Sale.

 

1.22                        “Sold” means to
have made or caused to be made a Sale.

 

1.23                        “Term” shall
have the meaning assigned to it in Section 6.1 below

 

1.24                        “Territory”
means Worldwide.

 

1.25                        “Third Party”
means any Person that is neither a Party to this Agreement nor an Affiliate of
a Party to this Agreement.

 

1.26                        “United States”
or “U.S.” or “USA”
means the United States of America, its territories and possessions, including
the Commonwealth of Puerto Rico.

 

3

 

1.27                        “Valid Claim”
means the claim of an issued patent which (a) has not expired, (b) has
not been disclaimed, or (c) has not been revoked, held invalid or
otherwise declared unenforceable by a tribunal of competent jurisdiction over
such claim in such country from which no further appeal may
be taken.  Whether a patent claim is a Valid Claim shall
be determined on a country-by-country basis.

 

1.28                        “Worldwide”
means Europe, the United States, and Rest of World.

 

2.                                      License.  Improvements and Enzyme Supply

 

2.1                               Licensed Patents. 
Subject to the terms and conditions of this Agreement, including the
limitations set forth in Section 2.3 and the payment provisions set forth
in Article 5, Hologic hereby grants to ESC and its Affiliates an
exclusive, worldwide, royalty-bearing license in the Field, under the Hologic
Patent Rights and Hologic Improvements for the Term:

 

(a)                                 To manufacture, have manufactured,
import, have imported, use, Sell, offer for Sale and have Sold, Licensed
Products and to convey to End Users the right to use the Licensed Product in
accordance with the label license provided with the purchase of such Licensed
Products as set forth in Article 7 below (the “Label
License”);

 

(b)                                 To practice internally for research,
development, improvement and quality control and quality assurance of Licensed
Products;

 

(c)                                  To provide Diagnostic Services, namely
operating a Clinical Laboratory Improvement Amendments (CLIA) compliant lab
that provides test results to physicians for a colorectal screening test
utilizing the Licensed Product.

 

Subject to the terms and conditions of this Agreement,
Hologic further grants ESC a limited, nonexclusive, royalty-bearing, worldwide
license under the Hologic Patent Rights and Hologic Improvements in the
Colorectal Cancer Screening Field (“Colorectal Screening License”).  Subject to the terms and conditions of this
Agreement Hologic also grants ESC a non-exclusive, royalty-bearing, worldwide
license under the Hologic Patent Rights and Hologic Improvements in the Colorectal
Cancer Diagnostic Field (“Colorectal Diagnostic License”).

 

Hologic also grants ESC the option of converting the
non-exclusive Colorectal Screening License to an exclusive, worldwide,
royalty-bearing license, under the Hologic Patent Rights (“Exclusive Option”).  This Exclusive Option shall vest to ESC upon
commercialization of a Licensed Product developed under this Agreement but
shall only be exercisable for a period of four (4) years from the
execution date of this Agreement.  If ESC
elects to exercise the Exclusive Option, the resulting exclusive license (“Exclusive
Colorectal Screening License”) shall be subject to the same terms, conditions,
and limitations as set forth under this Agreement, except that such Exclusive
Colorectal Screening License shall remain in effect for two (2) years from
the date of the exercise of the Exclusive Option and then shall revert back to
a non-exclusive Colorectal Screening License at the end of such two year
period.

 

2.2                               Invader Creator Software License. 
Hologic grants ESC an end-user license to the Invader Creator Software,
allowing ESC to run the software on its own servers.  This license is

 

4

 

personal to ESC and its Affiliates. 
Any future Hologic or ESC improvements to the Invader Creator Software
will be shared with the other party.

 

2.3                               License Limitations. 
Notwithstanding Section 2.1 or any other term or condition of this
Agreement, ESC understands and agrees that the licenses set forth in this
Agreement to ESC and its Affiliates shall not include the right to:

 

(a)                                 grant sublicenses or to convey any
implied licenses, except to the limited extent expressly provided in Sections
2.1 and in Article 7;

 

(b)                                 have made Cleavase Enzyme, except as
otherwise provided for ill the agreement between ESC and Hologic for the supply
of Cleavase Enzyme.

 

The licenses granted by Hologic herein to ESC and its
Affiliates may be used solely for the purposes expressed in this Article 2.  Nothing in this Agreement shall be construed to
confer any rights upon ESC by implication, estoppel or otherwise beyond the
express licenses granted by Hologic or as to any technology or patent rights of
Hologic or an Affiliate other than the Hologic Patent Rights.

 

2.4                               ESC Improvements. 
ESC shall retain all intellectual property rights (and all other right,
title and interest) in any and all improvements made during the Term that it
develops and obtains a patent thereon, to the Cleavase Enzyme or the Invader
Detection Technology (“ESC Improvements”); provided that Hologic shall be
entitled to a royally-free, non-exclusive and (non-sublicensable) license to
use Improvements outside the Field.  For
purpose of clarity, this license-back to Hologic does not include any
underlying third party or pre-existing ESC intellectual property or the
combination of other technologies with the Cleavase Enzyme or Invader Detection
Technology.  ESC shall promptly disclose
on Hologic’s request in writing to Hologic all ESC Improvements during the Term
that relate to the subject matter disclosed and/or claimed in the Hologic
Patent Rights.

 

2.5                               Enzyme Supply. 
As further consideration of entering into the Agreement, the Parties
mutually agree to enter into an enzyme supply arrangement (“Supply Agreement”)
for Hologic’s Cleavase Enzyme, on a [***] 
The Supply Agreement will include a supply failure provision to allow
ESC to manufacture its own Cleavase Enzyme in the event that Hologic or its
successor fails to supply Cleavase Enzyme to ESC.

 

3.                                      ESC Obligations Relating
to Commercialization

 

3.1                               Diligence Requirements. 
ESC shall use commercially reasonable efforts to develop Licensed
Products and to introduce Licensed Products into the commercial market.  Specifically, ESC shall fulfill the following
obligations:

 

(a)                                 Within two (2) year and six months
of the effective date of the Agreement, ESC shall initiate Clinical Trials of a
Licensed Product.

 

(b)                                 Within three (3) years and six
months of the effective date of the Agreement, ESC shall submit a Licensed
Product for FDA review.

 

5

 

(c)                                  Within four (4) years and six months
of the effective date of the Agreement, ESC shall commercialize a Licensed
Product.

 

If Hologic determines that ESC has not fulfilled its
obligations under Section 3.1, Hologic shall furnish ESC with written
notice of the determination.  Within
sixty (60) days after receipt of the notice, ESC shall either (i) fulfill
the relevant obligation or (ii) negotiate with Hologic a mutually
acceptable schedule of revised diligence obligations, failing which Hologic
may, immediately upon further written notice to ESC, seek termination of this
Agreement as provided for in Section 6.2 of this Agreement.

 

4.                                      Net Sales

 

4.1                               Calculation of Net Sales. 
Subject to Section 4.3, Net Sales with respect to the Sale of
Licensed Products by ESC, its Affiliates or Distributors (“ESC Seller”)
to End Users shall mean the gross invoice price to End Users for such Licensed
Products, less (a) deductions for allowances, discounts, including cash
discounts, and returns all to the extent customarily given in the trade by the
ESC Seller (except that discounts, credits or similar allowances provided to
purchasers of Licensed Products in consideration of the purchaser’s agreement
to purchase non-Licensed Products shall not be deducted), and (b) sales
taxes, and duties and transportation, if separately stated on the invoice.  For avoidance of doubt, kits or components
sold by ESC such as instruments, sample collection devices, and sample
preparation reagents will not be included in the definition of Net Sales or
used to calculate the royalty owing to Hologic unless such kit or component is
covered by a Valid Claim of a Licensed Patent.

 

4.2                               Distributor Net Sales. 
In the event Licensed Products are Sold to Distributors and ESC cannot
obtain accurate and complete End-User Sales figures for such Licensed Products,
then ESC may use the gross invoice price to such Distributors, less the
allowable adjustments as set forth in 4.1 above applicable to such Distributors,
multiplied by 1.67 as the Net Sales for such Licensed Products.

 

4.3                               RAP Sales.  In the case
of the Sale under a Reagent Agreement Plan of a Licensed Product, the Net Sales
of such Licensed Product shall be reduced by a percentage (“RAP Deduction”) to allow for (a) deduction of
instrument charges included in such Net Sales, (b) charges as interest for
the financing of instruments supplied, and (c) the cost of instrument
service.

 

4.4                               Interaffiliate Transfers. 
If ESC transfers any Licensed Products to an Affiliate which becomes the
End User, for purposes other than internal research and development of a
Licensed Product, then the Net Sales of such Licensed Products shall be
determined based on the average Selling price of such Licensed Product to all
Third Party End Users during the Royalty Payment Period or, if no average
Selling price of such Licensed Product is available for such period, at a
reasonable value based upon the average Selling prices of other products
available in the marketplace similar to such Licensed Product.

 

5.                                      Consideration.  Reporting and Payment

 

5.1                               Fees.  In
consideration of the licenses granted in Article 2 of this Agreement, ESC
shall provide to Hologic the following:

 

6

 

(a)                                 Within ten (10) business days of the
Effective Date, a cash payment of Fifty Thousand Dollars ($50,000).

 

(b)                                 Within ten (10) business days of the
commencement of a U.S. Food and Drug Administration (“FDA”)
clinical trial for a Licensed Product, a cash payment of One Hundred Thousand
Dollars ($100,000)).

 

(c)                                  Within ten (10) business days of
final FDA pre-market approval or clearance for a Licensed Product, a cash
payment of One Hundred Thousand Dollars ($100,000).

 

5.2                               Royalty.

 

In consideration of the licenses granted in Article 2
of this Agreement, ESC shall account to and pay to Hologic for each Royalty
Payment Period during the term of this Agreement a royalty equal [***] of the
Net Sales of Licensed Products Sold in the Territory.

 

5.3                               Reporting and Payment.

 

(a)                                 With respect to the royalties required
pursuant to Sections 5.2, ESC shall, within sixty (60) days after the close of
each Royalty Payment Period, provide to Hologic an account of all Net Sales of
such Licensed Products in the Territory, and of the royalty due pursuant to Section 5.2
in respect of the preceding Royalty Payment Period.  Simultaneously, when it delivers such
account, ESC shall make payment of the royalty amount.

 

(b)                                 The royalties due by ESC to Hologic
pursuant to Section 5.2 on the Net Sales by ESC and its Affiliates of all
Licensed Products Sold shall be paid in U.S. Dollars and shall be converted by
ESC from the currency in which the Sales were made, based on the applicable
rate of exchange as quoted by Reuters for the last business day of the
applicable Royalty Payment Period.  If
Reuters does not publish any such rate, a comparable publication shall be
agreed upon from time to time by the Parties, and with respect to each country
for which such rate is not published by Reuters or in a comparable publication,
the Parties shall use the applicable rate for such date as published by the
appropriate governmental agency in such country.

 

5.4                               Books and Records.

 

(a)                                 ESC shall keep a complete and accurate
set of books and records relating to the quantity of Licensed Products shipped
by or for ESC and its Affiliates and the Sales of Licensed Products by ESC and
its Affiliates (including books and records pertaining to ESC’s and its
Affiliates’ Distributor Sales as retained by ESC and its Affiliates).  Such books and records shall contain
sufficient detail to substantiate the computation of the Net Sales of Licensed
Products and the amount of royalties payable under this Article 5 as well
as all other information in the statements of account provided for in Section 5.3
above, and shall be maintained by ESC for a period of not less than three (3) years
from the date of such Sales.

 

(b)                                 Hologic shall be entitled, upon thirty
(30) days notice to ESC, to have such books and records audited by an
independent certified public accounting firm retained by Hologic and reasonably
acceptable to ESC (which acceptance shall not be unreasonably

 

7

 

withheld), provided that any such audit occurs during ESC’s normal
business hours not more than once in any calendar year.  Hologic also shall be entitled to have the
books and records of each of ESC’s Affiliates relating to the quantity of
Licensed Products shipped by or for such Affiliate and such Affiliate’s Sales
of audited, upon reasonable notice to such Affiliate, by an independent
certified public accounting firm retained by Hologic and reasonably acceptable
to such Affiliate (which acceptance shall not be unreasonably withheld),
provided that any such audit occurs during such Affiliate’s normal business
hours not more than once in any calendar year. 
ESC shall cause each such Affiliate to comply with any such audit
request by Hologic.

 

(c)                                  Hologic agrees that all audited
information shall be confidential to ESC and ESC’s Affiliates.  Any Person conducting an audit on behalf of
Hologic will be required to protect the confidentiality of such information by
executing an appropriate confidentiality agreement and shall provide to Hologic
a report only of the ultimate conclusions resulting from such audit.  Except as provided below, ESC shall pay
promptly to Hologic the amount of any royalties which are determined by such an
audit to be outstanding, along with interest accrued up to and including the
date of payment as provided in Section 5.5 below.  The costs of such an audit shall be borne by
Hologic; provided, however, that, if such audit determines that the royalties
paid by ESC for any audited Royalty Payment Period were at least five percent
(5%) less than the royalties otherwise due and payable, then ESC shall
reimburse Hologic for the costs of such audit. 
If such audit determines that ESC bas overpaid the amount of royalties
otherwise due and payable for the audited Royalty Payment Period, then Hologic
shall credit the amount of such overpayment to ESC against future royalties
payable by ESC.

 

5.5                               Past Due Payments. 
If ESC fails to pay any amount specified under this Agreement after the
due date thereof, the amount owed shall bear an interest of one percent (1%)
per month from the due date until paid, provided, however, that if this
interest rate is held to be unenforceable for any reason, the interest rate
shall be the maximum rate allowed by law at the time the payment is made.

 

5.6                               No Multiple Royalties.  At no time shall more than one royalty be
payable by ESC upon the Sale of anyone Licensed Product by ESC or its
Affiliates, regardless of whether the manufacture, use and/or Sale of such
Licensed Product would infringe more than one Valid Claim of one or more the
Licensed Patents regardless of whether such product qualifies as an “Licensed
Product” for purposes of this Agreement under more than one of the criteria for
designating a product to be a “Licensed Product” as provided in Article 1
above.

 

6.                                      Term and Termination

 

6.1                               Upon the execution of this Agreement by
the Parties, the license under this Agreement shall commence on the Effective
Date and, unless terminated sooner as provided herein below or by mutual
agreement, shall remain in effect until the last of Hologic’s Patent Rights
have expired.

 

6.2                               Failures by either Party to this
Agreement to comply with any of the obligations and conditions contained herein
including, bur not limited to, non-payment of royalties or other monies to be
paid, shall entitle the other Party to give the Party in default written notice
requiring it to cure such default.  If
the default is not cured within sixty (60) days after receipt of such

 

8

 

notice, the notifying Party shall be entitled, without prejudice to any
of its other rights conferred on it by this Agreement, to terminate the entire
Agreement by giving notice to take effect immediately.  In the event ESC fails to make full payment
or, as the case may be any installment, of the Fee as set forth in Section 5.1,
which failure remains uncured for sixty (60) days, Hologic may immediately
terminate this Agreement and all sums due including any unpaid portion of the
Fee as set forth in Section 5.1 shall be immediately due and payable along
with Interest as defined herein.

 

6.3                               Either Party may terminate this Agreement
upon thirty (30) days written notice if, at any time, the other Party shall
file a petition in bankruptcy or insolvency before the courts or apply for an
arrangement or for the appointment of a receiver or trustee for all of its
assets or any part thereof, or if the other Party proposes a written agreement
of composition or extension of its debts or if the other Party shall be served
with an involuntary petition against it, filed in any insolvency proceeding,
and such petition shall not be dismissed within sixty (60) days after its
filing, or if the other Party shall propose or be a Party to any dissolution or
liquidation, or if the other Party shall make an assignment for the benefit of
creditors.

 

6.4                               ESC shall have the right to terminate
this Agreement at any time for any reason upon ninety (90) days prior written
notice to Hologic.

 

6.5                               Termination of this Agreement for any
reason shall be without prejudice to any other remedies to which either Party
is or thereafter becomes entitled hereunder and shall not affect any
obligations or rights accrued before termination hereunder, provided however,
that ESC shall be obligated to make all payments required by Section 5.
regardless of the date of any such termination.

 

6.6                               The following provisions shall survive
the expiration or termination of this Agreement:  Article 5, Section 6.5, and
Articles 9, 10, 11, 12, 13, and 14.

 

7.                                      Labeling

 

7.1                               ESC’s right to sublicense under the grant
of Section 2.1 is limited to the right to convey use rights, only to End
Users, and only through the Sale of Licensed Products.  ESC agrees that it shall mark conspicuously
all Licensed Products made by or for it, and shall cause each of its Affiliates
to mark or have marked conspicuously all Licensed Products with the following
legend or such alternative legend as shall be mutually agreed to by the
Parties.  ESC shall include the following
notices or labels on all Licensed Products:

 

THE PURCHASE OF THIS PRODUCT GRANTS THE PURCHASER
RIGHTS UNDER CERTAIN HOLOGIC PATENTS TO USE IT SOLELY FOR PROVIDING HUMAN IN
VITRO DIAGNOSTIC SERVICES.  NO GENERAL
PATENT OR OTHER LICENSE OF ANY KIND OTHER THAN THIS SPECIFIC RIGHT OF USE FROM
PURCHASE IS GRANTED HEREBY.

 

7.2                               Maintenance of Label Licenses by
Distributors.  ESC agrees to use its reasonable efforts to
ensure that the ESC Distributors maintain on all Licensed Products Sold by such
Distributors the legend provided for in this Article 7.

 

9

 

7.3                                 Misuse by End-Users of Licensed Products. 
In the event that Hologic becomes aware that any End-User of any
Licensed Product is misusing the purchased Licensed Product in violation of the
applicable Label License on such Licensed Product and is thereby infringing the
Licensed Patents, Hologic may provide evidence of such misuse to ESC.  Upon receipt of such evidence, ESC shall
notify such End-User of the End-User’s misuse and shall use its reasonable
efforts to obtain a written assurance from such End-User that the End-User
shall not engage in such misuse in the future. 
If the End-User refuses to provide such written assurance, then ESC
shall cease, to the extent permitted by any applicable law or statute, the Sale
to such End-User of the Licensed Product which was being misused until such
time as the End-User provides such written assurance.  If, notwithstanding the End-User’s provision
of such written assurance, the End-User persists in misusing the Licensed
Product, then ESC shall discontinue, to the extent permitted by any applicable
law or statute, the Sale to such End-User of such Licensed Product.

 

7.4                                 Additional Label Licenses. 
In addition to the legend provided for in Section 7.1 above,
Hologic or ESC may request additional or revised legends on Licensed Products
made by or for ESC or its Affiliates. 
The Parties shall negotiate in good faith concerning the need for and/or
the Content of any such additional legends.

 

8.                                      Warranties and Disclaimer

 

8.1                                 ESC warranty. 
ESC represents and warrants that all persons employed by, or serving as
consultants to, ESC who shall have access to Hologic Patent Rights shall have
executed a written agreement requiring each such person to assign to ESC all of
such person’s right, title and interest in and to any intellectual property
rights in improvements prior to having access to Hologic Patent Rights.  In addition, ESC represents and warrants that
the ESC Improvements identified in Section 2.4 of this Agreement will
remain free and clear of all liens, claims, encumbrances or demands of third
parties, including my claims by third parties of any right, title or interest
in or to such improvements, and will not during the Term assign, license or
transfer, any of its rights, title or interest in such improvements to a third
party, and will not during the Term enter into any agreement in Conflict with
this Agreement

 

8.2                                 DISCLAIMER.  EXCEPT AS
EXPRESSLY PROVIDED HEREIN:  (i) ESC
AGREES THAT THE HOLOGIC LICENSE TO ESC TO THE HOLOGIC PATENT RIGHTS ARE GRANTED
“AS IS,” AND (ii) NEITHER PARTY, NOR THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES AND AFFILIATES MAKE ANY REPRESENTATIONS OR EXTEND ANY WARRANTIES OF
ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, TITLE,
VALIDITY OF PATENT RIGHTS CLAMS, ISSUED OR PENDING, AND THE ABSENCE OF LATENT
OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE.

 

9.                                      Confidentiality-Publicity

 

9.1                                 Each Party agrees that any financial,
legal or business information or any technical information disclosed to it (the
“Receiving Party”) by the other (the “Disclosing Party”) in connection with this Agreement shall
be considered confidential and proprietary and

 

10

 

the Receiving Party shall not disclose same to any third party and
shall hold it in confidence for a period of five (5) years and will not
use it other than as permitted under this Agreement provided, however, that any
information, know-how or data which is orally disclosed to the Receiving Party
shall not be considered confidential and proprietary unless such oral
disclosure is reduced to writing and given to the Receiving Party in written
form within thirty (30) days after oral disclosure thereof.  Such confidential and proprietary information
shall include marketing and sales information, commercialization plans and
strategies, research and development work plans, and technical information such
as patent applications, inventions, trade secrets, systems, methods, apparatus,
designs, tangible material, organisms and products and derivatives thereof.

 

9.2                                 The above obligations of confidentiality
shall not be applicable to the extent:

 

(a)                                  such information is general public
knowledge or, after disclosure hereunder, becomes general or public knowledge
through no fault of the Receiving Party; or

 

(b)                                 such information can be shown by the
Receiving Party by its written records to have been in its possession prior to
receipt thereof hereunder; or

 

(c)                                  such information is received by the
Receiving Party from any third party for use or disclosure by the Receiving
Party without any obligation to the Disclosing Party provided, however, that
information received by the Receiving Party from any third party funded by the
Disclosing Party (e.g. consultants, subcontractors, etc.) shall not be released
from confidentiality under this exception; or

 

(d)                                 the disclosure of such information is
required or desirable to comply with or fulfill governmental requirements,
submissions to governmental bodies, or the securing of regulatory approvals.

 

Neither Party nor any of its Affiliates shall make any
public announcement of this Agreement or any of its terms without the prior
written consent of the other Party, except that a Party may disclose such
information as may have entered into the public domain through no fault of the
receiving Party or as required by any applicable law or regulation based upon
the written advice of counsel and then only with prior notice to the other Party
as far in advance as reasonably possible and with reasonable consideration to
the advice of the other Party as to how such disclosure could be modified to
conform with applicable laws and regulations and still protect the
confidentiality interests of the affected Party.  The Parties further agree that in the event
that any Party wishes to prepare and publicly disseminate a press release
announcing the grant of rights referenced herein, such Party shall provide the other
Party a written draft of such release at least fifteen (15) days prior to the
intended date of release, and the other Party shall have the right to make
reasonable modifications to such press release during such fifteen (15) day
review period.

 

10.                               PATENT RIGHTS

 

10.1                           Responsibility. 
Hologic shall he responsible at its sole expense and discretion for the
preparation, filing, prosecution and maintenance of all patent applications and
patents within the Hologic Patent Rights, using legal counsel of Hologic’s
choice.  Hologic shall have no

 

11

 

obligation whatsoever to prepare, file, prosecute, or maintain any
patent application or patent within the Hologic Patent Rights.

 

11.                               INFRINGEMENT

 

11.1                           Notice.  ESC shall
inform Hologic promptly in writing of any alleged or threatened third party
infringement of the Hologic Patent Rights by a third party and of any available
evidence thereof.

 

11.2                           Legal Action. 
Hologic shall have the sole right but not the obligation, and without
ESC’s consent (i) to bring suit or any other necessary and appropriate
legal action at Hologic’s own expense, joining ESC as a party, if so required
by law, to terminate or prevent infringement or potential infringement of any
patent claim included with the Hologic Patent Rights, and (ii) to
negotiate with the alleged infringer and to effect such settlement as deemed
proper.  In any infringement suit that
Hologic may institute to enforce the Hologic Patent Rights, ESC shall, at the
request and expense of Hologic, co-operate reasonably in all respects.

 

12.                               PRODUCT LIABILITY

 

12.1                           ESC Indemnity. 
ESC shall indemnify, hold harmless and defend Hologic, its directors,
officers, employees and Affiliates, against all liabilities, Losses, expenses
or damages (including reasonable attorneys’ fees) incurred by or imposed upon
Hologic in connection with any claims, suits, actions, demands, proceedings,
causes of action or judgments (collectively “Claims”) to the extent that such
Claims concern any Licensed Product made, used, sold or imported pursuant to
any right or license granted under this Agreement; provided that Hologic gives
ESC prompt written notice of any such Claims, reasonable information and
assistance in connection with ESC’s defense of such Claims, and authority to
defend any such Claims.  However, ESC
shall not settle such Claims without Hologic’s prior written consent, such
consent shall not be unreasonably withheld or delayed.  It is agreed and understood that Hologic, at
its own expense, has the right to retain its own counsel in any such matters.

 

12.2                           Insurance.  No less than
thirty (30) days before the earlier date upon which ESC (i) initiates
testing of Licensed Products in a clinical trial involving human subjects or (ii) makes
a first commercial use or sale of any Licensed Product, ESC shall obtain
commercial, general liability insurance, including product liability
insurance.  Such insurance shall be
written by a reputable Insurance company authorized to do business in the
Commonwealth of Massachusetts, shall list Hologic as an additional named
insured thereunder, shall be endorsed to include product liability coverage and
shall require thirty (30) days written notice to be given to Hologic prior to
any cancellation or material change thereof. 
The limits of such insurance shall not be less than One Million Dollars
($1,000,000) per occurrence with an aggregate of Three Million Dollars
($3,000.000) for personal injury including death; and One Million Dollars
($1,000,000) per occurrence with an aggregate of Three Million Dollars
($3,000,000) for property damage.  ESC
shall provide Hologic with Certificates of Insurance evidencing the same prior
to initiation of the clinical trial or first commercial use or sale.  ESC’s policies shall provide primary coverage
for Hologic, and any policies owned by Hologic shall be considered excess
coverage for Hologic.  ESC shall maintain
such commercial general liability insurance during the period that any

 

12

 

Licensed Product or Licensed Process is being used, distributed or sold
and for six (6) years thereafter.

 

13.                               Miscellaneous

 

13.1                           Assignment.  Neither party
may assign this Agreement, or any rights or obligations hereunder, whether by
operation of law or otherwise, except with the express written consent of the
other party.  Notwithstanding the
preceding sentence, either party may, in its sole discretion, delegate or
assign any of its rights or obligations under this Agreement to any of its
Affiliates or in connection with a merger, consolidation or sale of all or
substantially all of its assets (or a its entire product line relating to
colorectal cancer screening) or equity interests.  Any attempted assignment by either party in
violation of this Section shall be void. 
This Agreement contains the entire agreement of the Parties concerning
its subject matter and supersedes all previous agreements or understandings,
whether written or oral, with respect to such subject matter.

 

13.2                           Amendment or Modification. 
No amendment waiver, alteration, modification of any of the provisions
or alterations of this Agreement shall be binding upon either Party unless in
writing and duly signed by the Parties. 
This Agreement (including Appendix A, which is incorporated herein by
reference) constitutes the complete and exclusive statement of the agreement
between the parties, and supersedes all prior agreements, proposals,
negotiations and communications between the parties, both oral and written,
regarding the subject matter hereof.

 

13.3                           Titles.  All titles
and captions in this Agreement are for convenience only and shall not be
interpreted as having any substantive meaning.

 

13.4                           Severability. 
If any provision of this Agreement is held to be illegal, invalid or
unenforceable in a final, unappealable order or judgment or under any present
or future law (such provision to be hereinafter referred to as an “Invalid Provision”), then such Invalid Provision shall be
severed from this Agreement and shall be rendered inoperative.  The Parties shall promptly negotiate in good
faith a lawful, valid and enforceable provision that is as similar in terms to
such Invalid Provision as may be possible while giving effect to the future
benefits and burdens accruing to the Parties hereunder; and the remaining
provisions of this Agreement shall remain binding on the Parties hereto.  It is expressly agreed by the Parties that
amounts previously paid by one Party to the other Party under this Agreement
shall not be recoverable to the paying Party as part of the replacement of an
Invalid Provision unless this Agreement is invalidated within one (1) year
from the Effective Date.

 

13.5                           No Waiver of Rights. 
No failure or delay on the part of either Party in the exercise of any
power or right hereunder shall operate as a waiver thereof.  No single or partial exercise of any right or
power hereunder shall operate as a waiver of such right or of any other right
or power.  The waiver by any Party of a
breach of any provision of this Agreement shall not operate or be construed as
a waiver of any other or subsequent breach hereunder.

 

13.6                           Usage.  Wherever any
provision of this Agreement uses the term “including” (or “includes”), such
term shall be deemed to mean “including without limitation” and “including but
not limited to” (or “includes without limitation” and “includes but is not
limited to”).  Except

 

13

 

where the context otherwise requires, wherever used, the singular shall
include the plural and the word “or” is used in the inclusive sense.

 

13.7                           This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
without regard to conflict of laws principles, and as necessary the laws of the
United States of America.  Each party
agrees that venue for any dispute arising under this Agreement shall be Boston,
Massachusetts, and waives any objection it has or may have in the future with
respect to such venue.

 

13.8                           Independent Contractors. 
The party’s agree that, in the performance of this Agreement they are
and shall be independent contractors. 
Nothing herein shall be construed to constitute either party as the
agent of the other party for any purpose whatsoever, and neither party shall
bind or attempt to bind the other party to any contract or the performance of
any obligation or represent to any third party that it has any right to enter
into any binding obligation on the other party’s behalf.

 

13.9                           Patent Markup. 
ESC shall apply the patent marking notices required by the law of any
country where Licensed Products are made, used, sold or imported.

 

13.10                     Drafting.  Each party
represents that it participated equally with the other in the drafting of this
Agreement This Agreement shall be interpreted without regard to any principle
of construction regarding the drafting, authorship or revision thereof.

 

13.11                     Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

 

14.                               Notices

 

Any notice required or permitted to be given under
this Agreement shall be considered properly given, upon receipt, if sent by
registered mail or personal courier delivery to the respective address of each
Party as follows:

 

	
  If to ESC:

  	
  Exact Sciences
  Corp.

  
	
   

  	
  Madison, WI

  
	
   

  	
  Fax:  (608) 284-5701

  
	
   

  	
  Attention:  Kevin T. Conroy, President and CEO

  
	
   

  	
   

  
	
  If to Hologic:

  	
  Hologic, Inc.

  
	
   

  	
  250 Campus Drive

  
	
   

  	
  Marlborough, MA

  
	
   

  	
  Attention:  General Counsel, Legal Department

  

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized officers effective as of the Effective Date.

 

14

 

	
  HOLOGIC, INC.

  	
  EXACT SCIENCES
  CORPORATION

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
  Title:  Sr. VP GM Diagnostics

  	
  Title:  President & Chief Executive
  Officer

  
	
   

  	
   

  
	
  Date:  10/14/09

  	
  Date:  10/14/09

  
					

 

THIRD WAVE TECHNOLOGIES, INC.

 

 

	
  By:

  	
   

  	
   

  
	
   

  
	
  Title:  President

  
	
   

  
	
  Date:  10/14/09

  

 

15

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