Document:

Exhibit 10.1

 

AMENDED
AND RESTATED

 

LICENSE
AGREEMENT

 

BETWEEN

 

THE JOHNS
HOPKINS UNIVERSITY

 

&

 

EXACT
SCIENCES CORPORATION

 

JHU Ref:
DM — 3562

 

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

 

 

AMENDED
AND RESTATED

LICENSE AGREEMENT

 

THIS AMENDED
AND RESTATED LICENSE AGREEMENT (the “Agreement”) is entered into this         
day of
            , 2003
(the “Effective Date”) by and between THE JOHNS HOPKINS UNIVERSITY, a Maryland
corporation having an address at 111 Market Place, Suite 906, Baltimore,
MD 21202 (“JHU”), and EXACT SCIENCES CORPORATION, a Delaware corporation having
an address at 63 Great Road, Maynard, MA 01754 (hereinafter “EXACT” or the “COMPANY”),
with respect to the following:

 

RECITALS

 

WHEREAS,
inventions identified by name and JHU reference numbers on Exhibit A
attached hereto and incorporated herein by this reference were developed during
the course of research by Drs. Bert Vogelstein (an employee of the Howard
Hughes Medical Institute, hereinafter “HHMI”), Kenneth W.  Kinzler and C. Giovanni Traverso (all
hereinafter “Inventors”); and

 

WHEREAS, JHU has
acquired through assignment all rights, title and interest, with the exception
of certain retained rights by the United States government and HHMI, in said
inventions; and

 

WHEREAS, the
COMPANY and JHU entered into a License Agreement effective as of January 3,
2001 (the “PRIOR LICENSE AGREEMENT”) with regard to certain patent rights
related to JHU Ref.  No.  DM-3562;

 

WHEREAS, the
parties now desire to amend and restate the PRIOR LICENSE AGREEMENT in order
to, among other things, modify and amend the terms applicable to the license
grant in respect of the patent application identified by JHU Ref. No. DM-3562,
to grant and establish the terms of a license in respect of additional patent
applications, and generally to establish incentives and to memorialize the
terms and conditions applicable to a long-term relationship between the
respective parties hereto.

 

NOW THEREFORE,
in consideration of the premises and the mutual promises and covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

 

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

 

 

ARTICLE
1

DEFINITIONS

 

All references
to Exhibits, Articles and Paragraphs shall mean the Exhibits to, and Articles
and Paragraphs of, this Agreement, unless otherwise specified.  For the purposes of this Agreement the
following words and phrases shall have the following meanings in either
singular or plural form:

 

1.1          “AFFILIATED COMPANY”
shall mean any corporation, company, partnership, joint venture or other person
or entity which controls, is controlled by or under common control with, the
COMPANY.  For purposes of this Paragraph
1.1, control shall mean the direct or indirect ownership of at least fifty
percent (50%) of the voting or economic interest in the entity.  “AFFILIATE”
shall have the correlative meaning. 
Subject to Paragraph 10.18 hereof, all references to COMPANY or EXACT
herein shall be deemed to include its’ AFFILIATES.

 

1.2          “FECAL-BASED TEST”
shall mean an assay on a stool sample, for diagnosing colorectal
neoplasia.  In no event shall an assay
that is performed for RESEARCH PURPOSES be a FECAL-BASED TEST.

 

1.3          “PRODUCTS” shall
mean any material, compositions, oligonucleotide, reagent, INSTRUMENT (as
defined below), or other product, the manufacture, use or sale of which would
constitute, but for the license granted to COMPANY pursuant to this Agreement,
an INFRINGEMENT of a VALID CLAIM of the PATENT RIGHTS.

 

1.4          “OTHER ITEMS” shall
mean any PRODUCT or SERVICE, other than, and in any event excluding, any
FECAL-BASED TEST.  In no event shall a
PRODUCT or SERVICE that is used for RESEARCH PURPOSES be an OTHER ITEM.

 

1.5          “FIRST COMMERCIAL SALE”
shall mean the initial sale of a FECAL-BASED TEST by or on behalf of the
COMPANY or any SUBLICENSEE, in exchange for the payment of money.  Transfer for RESEARCH PURPOSES shall not
constitute a FIRST COMMERCIAL SALE.

 

1.6          “SUBLICENSEE” shall
mean any person or entity, other than an AFFILIATED COMPANY, to which COMPANY
has granted a sublicense of the PATENT RIGHTS under this Agreement.

 

1.7          “MOLECULAR GENETICS LAB”
shall mean the laboratory at The Johns Hopkins University operated by Bert
Vogelstein, Kenneth Kinzler, or both, or operated by a successor of either Bert
Vogelstein or Kenneth Kinzler as mutually agreed to by COMPANY and JHU.

 

1.8          “TECHNOLOGY” shall
mean any MOLECULAR GENETICS LAB technology that is useful in a FECAL BASED TEST
(where technology shall be considered “useful in a FECAL BASED TEST” if a
patent application or a peer-reviewed publication from JHU states that the
technology is or may be useful in a FECAL BASED TEST, or provides data
indicating such use) and which JHU owns or in which JHU maintains rights or an
ownership

 

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

 

 

interest but is not prohibited from licensing
to COMPANY by virtue of either (i) an agreement executed prior to the
Effective Date of this Agreement and as the same may be renewed, modified (but
not to include a scope of work specific to a FECAL BASED TEST) or extended from
time to time, or (ii) any MATERIAL TRANSFER AGREEMENT now or hereafter
existing and to which JHU is a party “TECHNOLOGIES” shall have the correlative
meaning.

 

1.9          “COMPANY SALES”
shall mean gross revenues received by COMPANY or any AFFILIATED COMPANY, less
trade discounts allowed, refunds, returns and recalls, and sales and use
taxes.  In the event that COMPANY or any
AFFILIATED COMPANY sells any PRODUCT or SERVICE in combination with other
active ingredients or substances, or with other services or as part of a kit,
the manufacture, use, sale or importation of which ingredients or substances,
or the performance of which services, in each case comprising a portion of the
combination or kit, would be NON-INFRINGING (collectively, “OTHER ELEMENTS”),
the COMPANY SALES attributable to such other PRODUCT or SERVICE shall be calculated
as follows:

 

(a)                                  If
all OTHER ELEMENTS and all PRODUCTS and/or SERVICES with which the same are
combined or kitted are available separately, the COMPANY SALES applicable
thereto will be calculated by [********].

 

(b)                                 If
the combination or kit at issue includes OTHER ELEMENTS which are not sold
separately (but all of the PRODUCTS and/or SERVICES contained in the
combination or kit at issue are available separately), the COMPANY SALES for
purposes of royalty payments will be calculated by [********].

 

(c)                                  If
the PRODUCT and/or SERVICE contained in the combination are not sold
separately, the COMPANY SALES for such combination shall be COMPANY SALES of
such combination as defined in the first sentence of this Paragraph 1.9,
reduced, however by an amount negotiated and agreed to in good faith by the
parties hereto to reflect the relative fair values that the PRODUCT and/or
SERVICE, on the one hand, and the OTHER ELEMENTS, on the other, as included in
the combination or kit at issue, contributes to the overall value thereof, but
in no event shall the COMPANY SALES attributable to such combination or kit be
reduced by greater than [********].

 

The term “OTHER ELEMENTS” does not include
solvents, diluents, carriers, excipients, buffers (other than an EXACT patented
buffer, as identified by U.S. Patent Numbers 6268136, 6406857) or the like used
in formulating or delivery of a PRODUCT, SERVICE or OTHER ITEM.

 

1.10        “SUBLICENSEE SALES”
shall mean gross revenues received by SUBLICENSEES from the sale or performance
of OTHER ITEMS, less trade discounts allowed, refunds, returns and recalls, and
sales and use taxes.  In the event that
SUBLICENSEE sells OTHER ITEMS in combination with OTHER ELEMENTS, the
SUBLICENSEE SALES attributable to such OTHER ITEMS shall be calculated as
follows:

 

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

 

2

 

(a)                                  If
all OTHER ELEMENTS and all OTHER ITEMS with which the same are combined or
kitted are available separately, the SUBLICENSEE SALES will be calculated by
[********].

 

(b)                                 If
the combination or kit at issue includes OTHER ELEMENTS which are not sold
separately (but all of the OTHER ITEMS contained in the combination or kit at
issue are available separately), the SUBLICENSEE SALES will be calculated by
[********].

 

(c)                                  If
the OTHER ITEMS contained in the combination are not sold separately, the
SUBLICENSEE SALES for such combination shall be SUBLICENSEE SALES of such
combination as defined in the first sentence of this Paragraph 1.10, reduced,
however by an amount negotiated and agreed to in good faith by the parties
hereto to reflect the relative fair values that the OTHER ITEM, on the one
hand, and the OTHER ELEMENTS, on the other, as included in the combination or
kit at issue, contributes to the overall value thereof, but in no event shall
the SUBLICENSEE SALES attributable to such combination or kit be reduced by
greater than [********].

 

1.11        “COMPANY ROYALTIES”
shall mean gross royalties received by COMPANY from SUB LICENSEES from the sale
or performance of FECAL BASED TESTS (other than and excluding OTHER
ITEMS).  For the avoidance of doubt,
COMPANY ROYALTIES shall not include any payments other than royalty payments
received by COMPANY and COMPANY ROYALTIES shall expressly exclude all other
payments of any kind and nature including, without limitation, sublicense issue
fees, milestone payments, maintenance fees, etc.

 

1.12        “ANNUAL LICENSE FEE”
shall mean the following:

 

1.12.1                  Initially,
“ANNUAL LICENSE FEE” shall mean
the greater of:

 

(a)                                  [********];
and

 

(b)                                 the
sum of:

 

(i)                                     the
combination of:

 

(1)                                  the
greater of [********] of COMPANY SALES, or [********] per test, attributable to
the sale of INFRINGING FECAL BASED TESTS that are sold as a PRODUCT, PLUS

 

(2)                                  the
greater of [********] of COMPANY SALES, or [********] per test, attributable to
the sale of INFRINGING FECAL BASED TESTS that are sold as a SERVICE, PLUS

 

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

 

3

 

(3)                                  the
greater of [********] of COMPANY ROYALTIES, or [********] per test,
attributable to the sale of INFRINGING FECAL BASED TESTS that are sold as a
PRODUCT, PLUS

 

(4)                                  the
greater of [********] of COMPANY ROYALTIES, or [********] per test,
attributable to the sale of INFRINGING FECAL BASED TESTS that are sold as a
SERVICE,

 

PLUS

 

(ii)                                  the
combination of:

 

(1)                                  [********]
of COMPANY SALES attributable to the sale of NON-INFRINGING FECAL BASED TESTS
that are sold as a SERVICE, PLUS

 

(2)                                  the
greater of (x) [********] of COMPANY ROYALTIES attributable to the sale of
NON-INFRINGING FECAL BASED TESTS that are sold as a SERVICE, and (y) [********]
of COMPANY ROYALTIES attributable to the sale of NON-INFRINGING FECAL BASED
TESTS that are sold as a PRODUCT,

 

PLUS

 

(iii)                               [********]
of COMPANY SALES and SUBLICENSEE SALES attributable to the sale of OTHER ITEMS
that are sold as PRODUCTS or SERVICES.

 

For the avoidance of confusion, and by way of
example, if the resulting calculations from 1.12.1(b)i.1-4, 1.12.1(b) ii.1
and 2, and 1.12.1(b)iii, above are [********], respectively, then the ANNUAL
FEE under this section 1.12.1 for such year would equal [********].  Conversely, if the resulting calculations
from 1.12.1(b)i.1-4, 1.12.1(h) ii.1 and 2, and 1.12.1(b)iii, above are
[********], respectively, then the ANNUAL FEE under this section 1.12.1 for
such year would equal [********] (the amounts due pursuant to 1.12.1(a)).

 

1.12.2                 Provided, however, that,
notwithstanding 1.12.1, if in any calendar year EXACT or SUBLICENSEE sells two
or more FECAL BASED TESTS simultaneously for a period exceeding ninety (90)
days (as evidenced by regular and ordinary shipments or performance over such
ninety (90) day period), the sale of at least one of which FECAL BASED TEST
would be INFRINGING and the sale of at least one of which FECAL BASED TESTS is
NON-INFRINGING, then the “ANNUAL LICENSE FEE” for that calendar year shall
instead mean the greater of:

 

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

 

4

 

(a)                                  [********];
and

 

(b)                                 the
greater of (i) and (ii), immediately below, plus (iii):

 

(i)                                     the
combination of:

 

(1)                                  the
greater of [********] of COMPANY SALES, or [********] per test, attributable to
the sale of INFRINGING FECAL BASED TESTS that are sold as a PRODUCT, PLUS

 

(2)                                  the
greater of [********] of COMPANY SALES, or [********] per test, attributable to
the sale or performance of INFRINGING FECAL BASED TESTS that are sold as a
SERVICE, PLUS

 

(3)                                  the
greater of [********] of COMPANY ROYALTIES, or [********] per test,
attributable to the sale of INFRINGING FECAL BASED TESTS that are sold as a
PRODUCT, PLUS

 

(4)                                  the
greater of [********] of COMPANY ROYALTIES, or [********] per test,
attributable to the sale of INFRINGING FECAL BASED TESTS that are sold as a
SERVICE, and

 

(ii)                                  the
combination of:

 

(1)                                  [********]
of COMPANY SALES attributable to the sale of NON-INFRINGING FECAL BASED TESTS
that are sold as a SERVICE, PLUS

 

(2)                                  the
greater of (x) [********] of COMPANY ROYALTIES attributable to the sale of
NON-INFRINGING FECAL BASED TESTS that are sold as a SERVICE, and (y) [********]
of COMPANY ROYALTIES attributable to the sale of NON-INFRINGING FECAL BASED
TESTS that are sold as a PRODUCT

 

PLUS

 

(iii)                               [********]
of COMPANY SALES and SUBLICENSEE SALES attributable to the sale of OTHER ITEMS
that are sold as PRODUCTS or SERVICES.

 

For the avoidance of confusion, and by way of
example, if the resulting calculations from 1.12.2(b)i.1-4, 1.12.2(b)ii.1 and 2,
and 1.12.2(b)iii., above are [********], respectively, then the 

 

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

 

5

 

ANNUAL FEE under this section 1.12.2 for such
year would equal [********].  Conversely,
if the resulting calculations from 1.12.2(b)i.1-4, 1.12.2(b)ii.1 and 2, and
1.12.2(b)iii., above are [********], respectively, then the ANNUAL FEE under
this section 1.12.1 for such year would equal [********] (the amounts due
pursuant to 1.12.1(a)).

 

1.13        “PATENT RIGHTS” shall
mean: those patents and patent applications identified in Exhibit A
attached hereto and the inventions disclosed and claimed therein; any U.S.
patents issued from the applications listed in Exhibit A, and all
continuations, divisions, re-exams and reissues based on any of the foregoing;
claims of continuation-in-part applications, patents and other intellectual
property rights which are directed to subject matter specifically described in
the applications listed in Exhibit A; and claims of all foreign (x) patent
applications, (y) patents, and (z) other intellectual property
rights, which in the case of each of (x), (y) and (z) above are
directed to subject matter specifically described in the United States patents
and/or patent applications listed in Exhibit A.  For the avoidance of confusion, PATENT RIGHTS
includes the EXACT OVERSEEN PATENT RIGHTS and the JHU OVERSEEN PATENT RIGHTS.

 

1.14        “RESEARCH PURPOSES”
shall mean use of any assay or other product or process, in basic and applied
research, or clinical trials, whether or not performed in connection with the
commercialization of any product or service, regardless of the setting in which
such research is conducted.

 

1.15        “FIELD” shall mean all
fields of use or endeavor without any limitation whatsoever.

 

1.16        “EXACT OVERSEEN PATENT
RIGHTS” shall mean all new continuations and divisions, foreign and
domestic, that, in each case, are filed subsequent to the EFFECTIVE DATE and
relate to those patents and patent applications included among the PATENT
RIGHTS existing as of the EFFECTIVE DATE, any corresponding re-exams and
re-issues based on any of the foregoing, and claims of continuations in part
applications domestic and, if any, foreign directed to the subject matter
specifically described in those patents and patent applications described in
PATENT RIGHTS existing as of the EFFECTIVE DATE.

 

1.17        “JHU OVERSEEN PATENT
RIGHTS” shall mean all of the PATENT RIGHTS other than and in any event
excluding the EXACT OVERSEEN PATENT RIGHTS.

 

1.18        “MATERIAL TRANSFER
AGREEMENT” shall mean an agreement which sets forth the terms and
conditions, including, without limitation, terms relative to intellectual
property rights and ownership, on the basis of which JHU, and the MOLECULAR
GENETICS LAB specifically, agree to receive and accept biological and other
materials from third parties for use in furtherance of research and development
work undertaken or performed from time to time.

 

1.19        “VALID CLAIM” shall
mean a claim of an issued and unexpired patent included in the PATENT RIGHTS
which has not been held unenforceable, unpatentable or invalid by a decision of
a court or governmental agency of competent jurisdiction, unappealable or
unappealed within the time set forth for appeal, and which has not been
admitted to be invalid or 

 

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

 

6

 

unenforceable through reexamination, reissue,
disclaimer or similar proceedings or is not subject to restriction by
injunction.

 

1.20        “INSTRUMENT” shall
mean devices (which may or may not be patentable) developed by or for COMPANY
for use in research and diagnostic testing, and which device employs one or
more FECAL BASED TEST or employs one or more OTHER ITEM.

 

1.21        “SERVICE” shall mean
the performance by or on behalf of a third party of any method or the
manufacture of any product or the use of any product or composition which would
constitute, but for the license granted to the COMPANY pursuant to this
Agreement, an INFRINGEMENT of a VALID CLAIM under the PATENT RIGHTS.

 

1.22        “INFRINGING” shall
mean that, but for this Agreement, the product or service referred to would
infringe a VALID CLAIM of the PATENT RIGHTS (and shall include, but not be
limited to, direct infringement, contributory infringement and inducement to
infringe).  “INFRINGE” and “INFRINGEMENT”
shall have correlative meanings.

 

1.23        “NON-INFRINGING” shall
mean that, in the absence of this Agreement, the product or service referred to
would not INFRINGE a VALID CLAIM of the PATENT RIGHTS.

 

1.24        “REMAINING YEARS” (i) during
the first ten (10) years of this Agreement’s term, shall mean twenty (20)
years, minus the number of whole years that this Agreement has been in effect
as of the date of the relevant calculation, and (ii) following the tenth
year after the Effective Date of this Agreement shall mean ten (10) years.  Payments being made to JHU during the
REMAINING YEARS shall not cease because this Agreement’s term shall expire (x) in
accordance with Paragraph 9.1, or, (y) in accordance with Paragraph 9.2(a) prior
to COMPANY’s completion of all payments due over the REMAINING YEARS.

 

ARTICLE 2

LICENSE GRANT, PRIOR AGREEMENT

 

2.1          Grant.  Subject to the terms and conditions of this
Agreement, and expressly subject to Article 2.3 herein, JHU hereby grants
to COMPANY an exclusive license under the PATENT RIGHTS in the FIELD to make,
have made, use, have used, sell, have sold, import, and have imported any
method or product worldwide.

 

2.2          Sublicense.  COMPANY may sublicense others under this
Agreement so long as such sublicense includes provisions for the benefit of JHU
and HHMI materially consistent with the following sections of this Agreement:
Paragraph 2.3, 5.2, 6.1, 7.1, Article 8, 9.4, 10.1, 10.4 and 10.19.  JHU shall have the right to review all such
sublicenses, prior to execution, for a period of up to ten (10) days (the “Review
Period”) of receipt of the sublicense from COMPANY to confirm that the
sublicense contains the provisions referenced above and COMPANY shall consider
JHU’s comments, if any, regarding the content and scope of the sublicense as
drafted.  Notwithstanding the foregoing,
although Company will not enter into any Sublicense prior to the expiration of
the Review Period, COMPANY’s right to grant sublicenses under the PATENT RIGHTS
shall not be contingent upon COMPANY’s receipt of JHU’s prior 

 

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

 

7

 

approval. 
COMPANY agrees to provide JHU with a copy of each executed sublicense
agreement promptly upon its execution (and in any event within ten (10) days
thereafter).  Each sublicense shall
specifically reference and give recognition to this Agreement and shall in any
event not conflict with the terms of this Agreement nor exceed the scope of
sublicensing authority granted to COMPANY, under this Agreement.

 

2.3          Retained Rights.  The right and license granted hereunder in
respect of the PATENT RIGHTS and otherwise, shall be and is, anything herein to
the contrary notwithstanding, granted and made subject to rights retained by
the United States government in accordance with P.L. 96-517, as amended by P.L.
98-620, and HHMI’s paid-up, non-exclusive, irrevocable license to use the
PATENT RIGHTS for HHMI’s non-commercial purposes, but with no right to assign
or sublicense.  The right and license
granted hereunder in respect of the PATENT RIGHTS and otherwise, shall be and
is, further subject to the retained right of JHU to use the PATENT RIGHTS and
to make, have made, provide and use FECAL BASED TESTS, and PRODUCTS and
SERVICES for its and only the Johns Hopkins Health Systems’ internal,
non-profit, non-commercial purposes, including the ability to distribute any
biological material covered under any PATENT RIGHT for non-profit academic
research use to non-commercial entities as is customary in the scientific
academic community; and subject to any additional limitations, conditions or
restrictions, included or otherwise referred to herein.

 

2.4          Prior License Agreement.  This Agreement amends and restates in its
entirety the PRIOR LICENSE AGREEMENT; provided, however such amendment and
restatement shall not render null or void the PRIOR LICENSE AGREEMENT as
respects obligations accruing under the PRIOR LICENSE AGREEMENT prior to the
EFFECTIVE DATE.  EXACT represents and
warrants that, as of the EFFECTIVE DATE, no sublicenses have been granted by
EXACT under the PRIOR LICENSE AGREEMENT or under the PATENT RIGHTS covered
thereby.  EXACT and JHU represent and
warrant that as of the EFFECTIVE DATE all license fees, royalties, milestone
payments, similar amounts and maintenance fees (the “Fees”) required to be paid
from EXACT to JHU under the PRIOR LICENSE AGREEMENT have been paid in full and
no additional Fees are due JHU from EXACT relating to the PRIOR LICENSE
AGREEMENT.

 

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

 

8

 

ARTICLE 3

FEES AND PAYMENTS

 

3.1          Initial
License Fee.  Upon
execution of this Agreement, COMPANY shall become obligated to make payment to
JHU of an initial license fee in the amount of [********] (the “Initial License
Fee”).  JHU will not submit an invoice
for the Initial License Fee, which is non-refundable and shall not be credited
against any royalties or other fees otherwise arising or becoming due under the
terms of this Agreement.  Payment of the
Initial License Fee as contemplated by the immediately preceding sentences
shall be made in four (4) equal installments of [********] each, the first
of which shall be due and payable on or before March 31, 2003, the second
of which on or before June 30, 2003, the third of which on or before October 30,
2003, and the fourth and final of which will be due and payable on or before December 31,
2003.

 

3.2          Calculation
of Payments Due.  COMPANY
hereby agrees to pay the ANNUAL LICENSE FEE to JHU, in accordance with the
payment schedule in Paragraph 3.3 below, for each calendar year in which this
Agreement is in effect.

 

3.3          Payment
Schedule.  Payments
accruing from COMPANY to JHU pursuant to Paragraph 3.2 shall be payable in the
calendar year following the close of the calendar year which serves as the
measurement year in respect thereof, and such payments shall be made in two (2) equal
installments, which shall be due and payable thirty (30) days after each of June 30
and December 31, respectively.  For
avoidance of doubt, the first payment under Paragraph 3.2 will be due and
payable thirty (30) days after June 30, 2004.  The ANNUAL LICENSE FEE shall be
non-refundable and shall not be credited against royalties or other fees
accruing under this AGREEMENT.

 

3.4          Amendment
of the ANNUAL LICENSE FEE. 
Notwithstanding anything to the contrary herein, at such time as:

 

(a)                                  cumulative
payments made pursuant to Paragraph 4.9 below (the “Defense Costs”), and made
to JHU pursuant to Paragraphs 1.12.1(a) and 1.12.2(a) (the “Minimum
JHU Payments”), and 1.12.1(b)(ii), 1.12.2(b)(ii) (the “Primary JHU
Payments”), together reach [********] (the “Cumulative Cap”), the ANNUAL
LICENSE FEE will thereafter be calculated using only Paragraphs 1.12.1(a),
1.12.1 (b)(i) 1-4, 1.12.1(b)(iii), 1.12.2(a), 1.12.2(b)(i)1-4, and
1.12.2(b)(iii) above, as applicable (the payments accruing under
Paragraphs 1.12.1(a), 1.12.1 (b)(i) 1-4, 1.12.1(b)(iii) 1.12.2(a),
1.12.2(b)(i)1-4, and 1.12.2(b)(iii), as applicable, being collectively referred
to herein as the “Secondary JHU Payments”).

 

and
the term ANNUAL LICENSE FEE shall then be deemed amended accordingly;

 

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

 

9

 

(b)                                 EXACT has paid
[********] in Defense Costs (as defined in Paragraph 4.9 below), the ANNUAL
LICENSE FEE will be calculated as an amount equal to:

 

(i)                                     the Cumulative
Cap, minus [********], minus the Minimum JHU Payments and the Primary JHU
Payments then paid to date, with the result of this calculation then divided by
the REMAINING YEARS, plus

 

(ii)                                  if and as
arising, the Secondary JHU Payments for the balance of the term of this
Agreement (except that payments to JHU under paragraphs 1.12.1(a) and
1.12.2(a) shall not again accrue or be due JHU until all amounts due JHU
under 3.4(b)(i) above have been paid in full), unless, based on
circumstances arising prior to this Agreement’s expiration, an alternate
section under this Paragraph 3.4 becomes applicable, at which time such
applicable section shall then govern,

 

and
the term “ANNUAL LICENSE FEE” shall be deemed amended accordingly;

 

(c)                                  EXACT has paid
Defense Costs in an amount less than [********] and EXACT and its SUBLICENSEE(S) are
permanently enjoined in all of the United States (and all rights of appeal have
expired or been exhausted) from selling all INFRINGING FECAL BASED TESTS and
OTHER ITEMS, which EXACT or an AFFILIATED COMPANY or SUBLICENSEE was selling
prior to being enjoined therefrom, then the ANNUAL LICENSE FEE shall be
calculated as an amount equal to:

 

(i)                                     [********],
minus the sum of the Minimum JHU Payments and Primary JHU Payments then paid to
date, all divided by the REMAINING YEARS, with no additional amounts accruing
to JHU under this Agreement,

 

and
the term “ANNUAL LICENSE FEE” shall be deemed amended accordingly,

 

unless and until such time thereafter as additional
TECHNOLOGY (which is not subject to enjoinment) is included among the PATENT
RIGHTS as contemplated by Paragraph 9.3 hereof, or EXACT or an AFFILIATED
COMPANY or SUBLICENSEE again commence to sell any INFRINGING FECAL BASED TEST
or OTHER ITEM, whereupon the ANNUAL LICENSE FEE shall be calculated as an
amount equal to:

 

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

 

10

 

(ii)                                  the unpaid
amounts described in Paragraph 3.4(c)(i) above which shall continue to be
paid over the REMAINING YEARS (in lieu of further Minimum Payments), plus

 

(iii)                               the Primary JHU
Payments, until such time as the aggregate of Defense Costs paid, Primary JHU
Payments paid, and all amounts for which EXACT is then obligated to make
payment in the future pursuant to Paragraphs 3.4(b)(i) and 3.4(c)(i) above,
equal the Cumulative Cap, whereupon payments under the Primary JHU Payments
will cease; plus

 

(iv)                              the Secondary
JHU Payments for the balance of the term of this Agreement, except that
payments to JHU under paragraphs 1.12.1(a) and 1.12.2(a) shall not
again accrue or be due JHU until all amounts due JHU under 3.4(c)(i) above
have been paid in full.

 

and
the term “ANNUAL LICENSE FEE” shall be deemed amended accordingly;

 

(d)                                 EXACT has paid
Defense Costs in an amount equal to less than [********] and EXACT, its
AFFILIATED COMPANIES and SUBLICENSEE(S) are temporarily enjoined in all of the United States for a period
of time (the “Restrained Period”) from selling all INFRINGING FECAL BASED TESTS
and OTHER ITEMS which EXACT or an AFFILIATED COMPANY or SUBLICENSEE were
selling prior to being temporarily enjoined therefrom, then the ANNUAL LICENSE
FEE shall be calculated as an amount equal to:

 

(i)                                     [********] per
year with no additional amounts due JHU under this Agreement (including the
cessation of any amounts then being paid to JHU under Paragraph 3.4(c)(i) or
3.4(b)(i) above),

 

and
the term “ANNUAL LICENSE FEE” shall be deemed amended accordingly,

 

unless and until at any time thereafter:

 

(ii)                                  the temporary
injunction becomes permanent (and
all rights of appeal have expired or been exhausted) in all of the United
States, in which case the provisions of Paragraph 3.4(c) above shall
govern and replace any amounts then being paid to JHU under Paragraph 3.4(d)(i) above;
or

 

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

 

11

 

(iii)                               the temporary
injunction lapses or is lifted or removed and EXACT or any AFFILIATED COMPANY
or SUBLICENSEE is again lawfully able to sell in the United States the
INFRINGING FECAL BASED TESTS and OTHER ITEMS that EXACT, its AFFILIATED COMPANY
and SUBLICENSEE were selling prior to issuance of the temporary injunction, at
which time the obligations to make payment of the ANNUAL LICENSE FEE shall
recommence as though the temporary injunction had never been issued, except
that EXACT shall then be obligated to pay JHU, in accordance with the payment
schedule set forth in section 3.3 hereof, an additional one time payment in an
amount necessary to make JHU whole for any payments suspended during the
Restriction Period, and any unaccrued Defense Costs less than [********] shall
thereafter remain available for accrual against the Cumulative Cap for purposes
of any subsequent application of the terms and provisions of this Paragraph
3.4,

 

and
the ANNUAL LICENSE FEE shall be deemed amended accordingly;

 

(e)                                  the MOLECULAR
GENETICS LAB should cease to operate for any reason (including the failure of
COMPANY and JHU to choose a mutually agreed upon successor to Drs. Bert
Vogelstein and Kenneth Kinzler subsequent to such time as neither Dr. Vogelstein
nor Dr. Kinzler continued to operate the lab), EXACT shall only have
continuing payment obligations to JHU under Paragraphs 1.12.1(a), 1.12.1(b)i,
and 1.12.1(b)iii,

 

and the ANNUAL LICENSE FEE shall be deemed amended
accordingly.

 

Anything herein to the contrary notwithstanding, if
the events giving rise to the adjustments to the ANNUAL LICENSE FEE pursuant to
this Paragraph 3.4 occur or arise during any given calendar year, as opposed to
at the end of the calendar year, then the adjustment and the application
thereof will be appropriately and equitably apportioned as between the period
of the calendar year prior to the occurrence (as to which period the ANNUAL
LICENSE FEE as applicable prior to the occurrence will apply) and the period
subsequent to the occurrence (as to which period the ANNUAL LICENSE FEE as so
adjusted will apply), in order to assure an equitable result and application of
the ANNUAL LICENSE FEE and all adjustments thereto.

 

For the avoidance of confusion, and by way of
example only, should more than one permanent injunction issue at different
times relating to different JHU TECHNOLOGIES, JHU shall not be entitled to
payment pursuant to Paragraphs 3.4(b)(i) or 3.4(c)(i), above, in an amount
exceeding [********] in the aggregate.

 

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

 

12

 

3.5          Form of
Payment.  All payments under this
Agreement shall be made in U.S. 
Dollars.  Checks are to be made
payable to “The Johns Hopkins University”. 
Wire transfers may be made through:

 

[********]

 

COMPANY shall be responsible
for any and all costs associated with wire transfers.

 

3.6          Late
Payments.  In the
event that the COMPANY fails to make any payment due hereunder within thirty
(30) days after the relevant due date, interest shall accrue under this
Paragraph 3.6 at the annual rate of the sum of (a) [********] plus (b) [********],
provided however, that in no event shall said annual interest rate exceed the
maximum legal interest rate for corporations. 
Said interest and the payment and acceptance thereof shall not negate or
waive the right of JHU to seek any other remedy, legal or equitable, to which
it may be entitled because of the delinquency of any payment including, but not
limited to termination of this Agreement as set forth in Paragraph 9.2 below.

 

3.7          No Multiple
Royalties.  No multiple
royalties shall be payable because any FECAL BASED TEST or OTHER ITEM is
covered by more than one VALID CLAIM of the PATENT RIGHTS.  For the avoidance of confusion, and by way of
example, if EXACT’s SUBLICENSEE is selling a FECAL BASED TEST as a PRODUCT for
which COMPANY is obligated to pay JHU [********] of COMPANY ROYALTIES, and JHU
subsequently licenses additional technology (the “New Technology”) to COMPANY
pursuant to this Agreement, COMPANY shall be free to sublicense the New
Technology to SUBLICENSEE for use in connection with the FECAL BASED TEST sold
as a PRODUCT with COMPANY’s payment obligation to JHU remaining at [********]
of total COMPANY ROYALTIES related to SUBLICENSEE’s FECAL BASED TEST PRODUCT
sales.  Additionally, in no event shall
revenue that is received by COMPANY for a FECAL BASED TEST or OTHER ITEM that
is performed for RESEARCH PURPOSES be included in the ANNUAL LICENSE FEE.

 

Additionally, under no circumstances shall multiple
royalties be applied:

 

(i)            where EXACT generates
COMPANY ROYALTIES relating to a SUBLICENSEE’S sale of a PRODUCT and said
SUBLICENSEE sells the PRODUCT to another SUBLICENSEE for that SUBLICENSEE’s use
of the PRODUCT in connection with a FECAL BASED TEST offered as a SERVICE.  Under such circumstances, EXACT shall be
obligated to pay JHU the greater of the amounts described in subsections
1.12.1(b)(i)3 and 4 above, and, as applicable, the greater of the amounts
described in subsections 1.12.2(b)(i)3 and 4, rather than such subsections
being additive.

 

(ii)           where EXACT generates
COMPANY SALES relating to EXACT’s PRODUCT sale to a SUBLICENSEE for the
SUBLICENSEE’s use of the PRODUCT in connection with a FECAL BASED TEST offered
as a SERVICE.  Under such circumstances,
EXACT shall be obligated to pay JHU the greater of the amounts described in
subsections 1.12.1(b)(i)1 and 4 above, and, as applicable, the greater of the
amounts described in subsections 1.12.2(b)(i)1 and 4, rather than such
subsections being additive.

 

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

 

13

 

3.8          Third Party
Royalties.  In the event
that, after the EFFECTIVE DATE, COMPANY or SUBLICENSEE, is required to make
payment of royalties to non-AFFILIATES in order to obtain a license or similar
rights from such non-AFFILIATES, in the absence of which license or rights the
COMPANY could not practice under the PATENT RIGHTS, and which rights are (in
the reasonable opinion of COMPANY’s or SUBLICENSEE’s counsel) necessary in
order for the COMPANY or SUBLICENSEE to sell or perform INFRINGING FECAL BASED
TESTS or OTHER ITEMS, then [********] of the amount of any such third party
payments shall be credited against amounts otherwise payable to JHU hereunder
(only in such circumstances where COMPANY could not practice the PATENT
RIGHTS); provided, however, that in no event shall any such credit be applied
to reduce the amount payable hereunder in respect of any such INFRINGING FECAL
BASED TEST or OTHER ITEM to less than [********] of that amount which would
otherwise have been paid or payable to JHU in respect thereof in accordance
with the terms of this Agreement and prior to any credit otherwise available
under this Paragraph 3.8.

 

ARTICLE 4           

PATENT PROSECUTION

 

4.1          Prosecution &
Maintenance - General. 
Subject to and in accordance with the terms and conditions of this
Agreement, including this Article 4, the parties shall prepare, file,
prosecute and maintain the PATENT RIGHTS. 
Title to all patent and patent applications constituting or comprising
the PATENT RIGHTS shall in any event reside with JHU, but shall continue to be
licensed to the COMPANY as and to the extent herein provided.  Pursuant to the provisions of this Article 4,
the parties desire to establish reasonable and appropriate procedures for the
making of any and all determinations necessary in respect of the preparation,
filing, prosecuting and maintaining of the PATENT RIGHTS, and for the making of
decisions with respect thereto.  In that
regard, the parties shall exercise best efforts to keep each other informed on
the progress of all patents and patent applications related to the PATENT
RIGHTS for which the respective parties maintain responsibility under this
Agreement, as herein below provided.  At
all times during which this Agreement remains in effect, all costs and expenses
incurred in connection with the prosecution, filing or maintenance of the
PATENT RIGHTS, including costs and expenses of counsel employed by EXACT or JHU
in respect of either the EXACT OVERSEEN PATENT RIGHTS or the JHU OVERSEEN
PATENT RIGHTS, whether in a primary or oversight role as described further
below, shall be borne solely by EXACT, and EXACT shall promptly reimburse JHU
for any expenses incurred and paid out-of-pocket by JHU in respect thereof.

 

4.2          Prosecution,
Maintenance — EXACT Overseen Patent Rights.  Following the EFFECTIVE DATE, EXACT shall, at
its sole cost and expense, be primarily responsible for decisions relating to,
and oversight and management of, the preparation, filing, prosecution and
maintenance of the EXACT OVERSEEN PATENT RIGHTS, including, without limitation,
the selection and retention of patent counsel to prepare, file, prosecute and
maintain the EXACT OVERSEEN PATENT RIGHTS, all subject, however, to the terms
and conditions of this Article 4. 
EXACT shall exercise its best efforts to keep JHU informed of the
progress of all patents and patent applications included among the EXACT
OVERSEEN PATENT RIGHTS, and in any event, before taking or authorizing or
allowing the taking of any material action 

 

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

 

14

 

(verbally, orally or otherwise) with respect to the EXACT OVERSEEN
PATENT RIGHTS with the United States Patent and Trademark Office or any foreign
equivalents thereof, or otherwise, EXACT will, and will cause its patent
counsel to, disclose to JHU and its designated patent counsel, in reasonable
detail, the action or actions so proposed and will provide JHU, for a period of
thirty (30) days (the “Review Period”), with reasonable opportunity to provide
comment to COMPANY, and to otherwise discuss with COMPANY the selection and/or
the content and scope of claims, patent filings, patent strategy and other
matters reasonably related to the action or actions proposed to be taken.  EXACT agrees that it will cooperate with JHU
during the Review Period and allow JHU and its representatives and JHU’s own
patent counsel to provide its or their insight, opinion, views and positions to
COMPANY and COMPANY’ s patent counsel during the Review Period, and any and all
bases therefor and that EXACT will, and will cause its patent counsel to,
reasonably and appropriately consider and engage in meaningful dialogue with
JHU and its designated patent counsel during the Review Period regarding the
same, before making any final decision in respect of the action or actions
proposed.  EXACT agrees that it will, if
COMPANY deems it reasonable and appropriate, incorporate JHU’s reasonable and
appropriate comments into patent filings and, if COMPANY deems it reasonable
and appropriate, accept JHU’s reasonable requests or suggestions or employ JHU’s
reasonably recommended prosecution strategy, as respects the EXACT OVERSEEN
PATENT RIGHTS, unless in either case EXACT determines, after consideration of
the positions discussed and raised by JHU during the Review Period, that so
doing would, in EXACT’s reasonable opinion, be materially inconsistent with
EXACT’s business strategy or objectives, in which case EXACT shall, following
the Review Period, make whatever decisions, and take whatever actions, COMPANY
deems appropriate with respect to the EXACT OVERSEEN PATENT RIGHTS; provided,
however, before proceeding further and in a manner inconsistent with the
positions voiced by JHU or its patent counsel, EXACT agrees to, and to cause
its patent counsel to, engage in an additional thirty (30) day period of
discussion and negotiation (the “Subsequent Review Period”) with JHU and its
patent counsel in an effort to resolve the differences then existing as between
the parties with respect to the EXACT OVERSEEN PATENT RIGHTS and the action or
actions so proposed.  If, after negotiating
with diligence and in good faith during the Subsequent Review Period, the
parties still cannot agree or come to some reasonable consensus or compromise
as to the their differences, then, with respect to the EXACT OVERSEEN PATENT
RIGHTS, EXACT shall be free to make the ultimate decision(s) as to the
action or actions to be taken, and to take such action(s), with respect to the
EXACT OVERSEEN PATENT RIGHTS and JHU shall cooperate and lend reasonable
assistance to COMPANY with respect thereto.

 

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

 

15

 

4.3          Prosecution,
Maintenance — JHU Overseen Patent Rights.  Following the EFFECTIVE DATE, JHU shall be
primarily responsible for decisions relating to, and oversight and management
of the preparation, filing, prosecution and maintenance of the JHU OVERSEEN PATENT
RIGHTS, including, without limitation, the selection and retention of patent
counsel to prepare, file, prosecute and maintain the JHU OVERSEEN PATENT
RIGHTS, all subject, however, to the terms and conditions of this Article 4.  JHU shall exercise its best efforts to keep
EXACT informed of the progress of all patents and patent applications included
among the JHU OVERSEEN PATENT RIGHTS, and in any event, before taking or
authorizing the taking of any material action (verbally, orally or otherwise)
with respect to the JHU OVERSEEN PATENT RIGHTS with the United States Patent
and Trademark Office or any foreign equivalents thereof, or otherwise, JHU
will, and will cause its patent counsel to, disclose to EXACT and its patent
counsel, in reasonable detail, the action or actions so proposed and will
provide EXACT, for a period of thirty (30) days (the “Review Period”), with
reasonable opportunity provided, to provide comment to JHU and to otherwise
discuss with JHU the selection and/or the content and scope of claims, patent
filings, patent strategy and other matters reasonably related to the action or
actions proposed to be taken.  JHU agrees
that it will cooperate with EXACT during the Review Period and allow EXACT and its
representatives and EXACT’s own patent counsel to provide its or their insight,
opinion, views and positions to JHU and JHU’s patent counsel during the Review
Period, and any and all bases therefor, and that JHU will, and will cause its
patent counsel to, reasonably and appropriately consider and engage in
meaningful dialogue with EXACT and its designated patent counsel during the
Review Period regarding the same before making any final decision in respect of
the action or actions proposed.  JHU
agrees that it will, if JHU deems it reasonable and appropriate, incorporate
EXACT’s reasonable and appropriate comments into patent filings and, if JHU
deems it reasonable and appropriate, accept EXACT’s reasonable requests or
suggestions or employ EXACT’s reasonably recommended prosecution strategy, as
respects the JHU OVERSEEN PATENT RIGHTS, unless JHU determines, after
consideration of the positions discussed and raised by EXACT during the Review
Period, that so doing would , or could be likely to in JHU’s reasonable
opinion, be materially inconsistent with JHU’s commercialization strategy or
policy or mission, in which case JHU shall, following the Review Period, make
whatever decisions, and take whatever actions, JHU deems appropriate with
respect to the JHU OVERSEEN PATENT RIGHTS; provided, however, before proceeding
further and in a manner inconsistent with the positions voiced by EXACT or its
patent counsel, JHU agrees to, and to cause its patent counsel to, engage in an
additional thirty (30) day period of discussion and negotiation (the “Subsequent
Review Period”) with EXACT and its patent counsel in an effort to resolve the
differences then existing as between the parties with respect to the JHU
OVERSEEN PATENT RIGHTS and the action or actions so proposed.  If, after negotiating with diligence and in
good faith during the Subsequent Review Period, the parties still cannot agree
or come to some reasonable consensus or compromise as to the their differences,
then, with respect to the JHU OVERSEEN PATENT RIGHTS, JHU shall be free to make
the ultimate decision(s) as to the action or actions to be taken, and to
take such action(s), with respect to the JHU OVERSEEN PATENT RIGHTS and EXACT
shall cooperate and lend reasonable assistance to JHU with respect
thereto.  For the avoidance of doubt,
while this Agreement remains in effect, EXACT shall be responsible for all
costs and expenses of JHU’s patent counsel, and any other amounts or expenses
associated with the preparation, filing, prosecution and maintenance of any
patent applications or patents included among the JHU OVERSEEN PATENT RIGHTS.

 

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

 

16

 

4.4          Election
Not to Prosecute or Maintain.  EXACT may elect not to prepare, file,
prosecute or maintain a patent or patent application under the EXACT OVERSEEN
PATENT RIGHTS by providing written notice to JHU.  Upon such notification by EXACT, which shall
be irrevocable with respect to the scope of the election, JHU may, at its sole
discretion, assume responsibility for the preparation, filing, prosecution and
maintenance of the specific patent or patent applications referenced in EXACT’s
notice to JHU, without regard to the procedures set forth in Paragraph 4.3
above, and JHU shall provide EXACT with prompt written notification of such
assumption.  Any patent or patent
application for which JHU assumes responsibility under this Paragraph 4.4 shall
not remain part of the PATENT RIGHTS hereunder. 
EXACT shall not be responsible for any costs and expenses of JHU’s
patent counsel or any other amounts or expenses associated with the preparation,
filing, prosecution and maintenance of any patent applications or patents, on a
then going forward basis for which EXACT elects not to prepare, file, prosecute
or maintain or for which JHU assumes responsibility under this paragraph.

 

4.5          Infringement
Notification.  If either
party becomes aware that a third party may be infringing or threatening to
infringe any of the patents under the PATENT RIGHTS, that party shall provide
prompt written notification of such infringement or threat to the other party
(the “Infringement Notification”).

 

4.6          Infringement.  Except as specifically provided otherwise
under this Paragraph 4.6, COMPANY shall initially have the sole and exclusive
right, but not the obligation to initiate and carry on legal proceedings, at
COMPANY’s sole expense and in JHU’s and HHMI’s name, if so required by law,
against any infringer or alleged infringer of any patent or patent application
within PATENT RIGHTS.  Such right shall
include the right to bring suit and collect damages for past infringement of
any patent within the PATENT RIGHTS. 
COMPANY shall control all aspects of any such proceeding, including,
without limitation, the strategy, defense, and settlement of such proceeding,
and shall do so in a manner consistent with the terms and provisions
hereof.  Subject to Paragraph 4.8, any
damage, cost, award, fee, recovery, or compensation paid by any third party in
connection with any proceeding initiated or carried on at COMPANY’S expense
(whether by way of settlement or otherwise) shall be retained by the
COMPANY.  The COMPANY shall not enter
into any settlement, consent judgment, or any other voluntary final disposition
of any infringement action under this Paragraph 4.6 without the prior written
consent of JHU, which shall not be unreasonably withheld, conditioned or
delayed.  Company’s right to sue for
infringement hereunder shall not be used in an arbitrary or capricious manner.

 

If COMPANY elects not to
enforce any patent within the PATENT RIGHTS, then it shall so notify JHU in writing
within ninety (90) days of EXACT’s receipt of a notice of infringement pursuant
to Paragraph 4.5, whereupon the right to initiate and carry on legal
proceedings in respect of the particular infringement shall then vest solely in
JHU, and JHU may, in its sole judgment and at its own expense, in Company’s or
its AFFILIATES name if so required by law, initiate and carry on legal
proceedings to enforce any patent and control, settle, and defend such
proceeding in a manner consistent with the terms and provisions hereof, and
recover, for its own account, any damages, awards or settlements resulting
therefrom.  JHU shall not enter into any
settlement, consent judgment, or any other voluntary final disposition of any
infringement action under this Paragraph 4.6 without the prior written consent
of the 

 

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

 

17

 

COMPANY, which shall not be
unreasonably withheld, conditioned or delayed. 
JHU’s right to sue for infringement hereunder shall not be used in an
arbitrary or capricious manner.

 

4.7          Cooperation.  In the event that either party desires to
initiate, initiates, or carries on any legal proceedings under Paragraph 4.6 to
enforce or protect any patent under the PATENT RIGHTS, the other party shall
fully cooperate with and shall supply all assistance reasonably required by the
initiating party.  To that end, each
party waives all of its rights to oppose joinder as a party to any legal action
initiated or carried on pursuant to Paragraph 4.6 in which the other is a named
party.  In any event, any party
initiating or carrying on any such legal proceedings under Paragraph 4.6 (the “INITIATING
PARTY”) shall have sole control of the action and shall bear reasonable
expenses (excluding legal fees) incurred by the other party (the “NON-INITIATING
PARTY”) in cooperating with or providing any assistance to the INITIATING
PARTY.  The NON-INITIATING PARTY shall
have the right to participate in any actions initiated or carried on by the
INITIATING PARTY with counsel selected by it, but at its own expense.  The INITIATING PARTY shall, at all times,
keep the NON-INITIATING PARTY reasonably informed of the status of any action
taken under Paragraph 4.6.

 

4.8          Recovery.  Any recovery by COMPANY, less all legal fees
and costs, under Paragraph 4.6 shall be deemed to reflect loss of commercial
sales, and Company shall pay to JHU [********] of the balance of the recovery
net of all reasonable costs and expenses associated with each suit or
settlement.  If the cost and expenses
exceed the recovery, then [********] of the excess shall be credited against
ANNUAL FEES payable by Company to JHU hereunder and attributable to sales in
the country of such legal proceedings, provided, however, that any such credit
under this Paragraph shall not exceed [********] of the ANNUAL FEES otherwise
payable to JHU with regard to sales in the country of such action in any one
calendar year, with any excess credit being carried forward to future calendar
years.

 

4.9          Third Party
Actions.  In the event that a third
party (a) commences legal action against EXACT, its AFFILIATES or its
SUBLICENSEE(S) relating to the PATENT RIGHTS, or (b) seeks to enjoin
EXACT, its AFFILIATES or its SUBLICENSEES from making, selling, performing,
using, or otherwise commercializing in any way, an INFRINGING FECAL BASED TEST
or OTHER ITEM, (a.  and b.  above shall be referred to herein as the “Legal
Action”), COMPANY shall be obligated to vigorously defend the Legal Action
until the sooner of (i) COMPANY incurs [********] in legal fees and/or
expenses (the “Defense Costs”) (including, but not limited to, settlement
amounts, judgments, damage awards, etc.), (ii) notwithstanding its
vigorous and reasonable defense (i.e.  “reasonable”
given the time available to mount such a defense prior to injunction issuance),
COMPANY and its AFFILIATED COMPANIES and SUBLICENSEES are permanently enjoined
(and all rights of appeal have expired or been exhausted) in the United States
from selling all such PRODUCTS and performing all such SERVICES that COMPANY,
any AFFILIATED COMPANY or SUBLICENSEE were selling or providing prior to
issuance of the injunction, or (iii) JHU provides written notice to
COMPANY, authorizing the COMPANY to cease defending the Legal Action (although,
following receipt of such notice from JHU, COMPANY shall be entitled (though
not obligated) to continue defending the Legal Action at COMPANY’S sole cost
and expense).  Notwithstanding the
foregoing, all amounts incurred by COMPANY relating to the Defense Costs, up to
but not exceeding the [********] amount, will be applied against the

 

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

 

18

 

Cumulative Cap as described in Paragraph 3.4
above.  Any recovery of damages by
COMPANY for each such suit shall be applied first in satisfaction of any
unreimbursed Defense Costs of COMPANY relating to such Legal Action (and which
shall be applied to reinstate the Cumulative Cap by an equivalent amount) and
next toward reimbursement of JHU for any ANNUAL FEE AMOUNTS to which JHU would
be entitled under Paragraph 3.4 of this Agreement.

 

4.10        Sublicense of Infringers.  COMPANY shall during the term of this Agreement
have the sole right subject to the terms and conditions hereof to sublicense
any alleged infringer under the PATENT RIGHTS, subject, however, to the
provisions of Paragraph 2.2 hereof.

 

4.11        Current Patent Expenses.  Within thirty (30) days after the execution
of this Agreement, EXACT will make payment to JHU in the amount of
Twenty-Thousand Dollars ($20,000.00) for all previously unreimbursed costs and
expenses incurred by JHU on or prior to the Effective Date in connection with
the prosecution, filing or maintenance of the PATENT RIGHTS.

 

ARTICLE 5

OBLIGATIONS OF THE PARTIES

 

5.1          Reports.  COMPANY shall provide to JHU within thirty
(30) days after the end of each March 31st, June 30th, September 30th
and December 31st following the EFFECTIVE DATE of this Agreement, a
written report as respects the preceding three (3) month period providing
detail reasonably satisfactory to JHU to capture the amounts due JHU
hereunder.  JHU and COMPANY will work
together to put in place a reporting structure that is mutually acceptable to
the parties and each party agrees to work with the other to modify the
reporting structure, from time to time, as necessary to better meet the
reporting requirements of the parties hereunder.

 

In addition,
EXACT shall provide such other and additional information, data and reports as
may be reasonably necessary in order to allow for a full determination by JHU
of the sums due and owing to JHU hereunder.

 

5.2          Records.  COMPANY shall make and retain, for a period
of three (3) years following the period of each report required by
Paragraph 5.1, true and accurate records, files and books of account containing
all data and information reasonably required for full determination of the
information required in Paragraph 5.1 above. 
COMPANY shall permit the inspection and copying of such records, files
and books of account by JHU or its agents during regular business hours upon
ten (10) business days written notice to COMPANY.  Absent reasonably sufficient and articulable
reason therefor, such inspection shall not be made more than once each calendar
year.  All costs of such inspection and
copying shall be paid by JHU, provided that if any such inspection shall reveal
that an error has been made in the amount equal to [********] or more of such
payment, such costs shall be borne by COMPANY. 
Insofar as is necessary to allow for the delivery to JHU by the COMPANY
of the information required to be included in the Reports described in
Paragraph 5.1 above, COMPANY shall require of its AFFILIATED COMPANIES that
they retain records and provide to the COMPANY any and all 

 

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

 

19

 

such information and data, and the COMPANY
shall include in any and all agreements with such AFFILIATED COMPANIES a
provision to that effect and allowing for the inspection by JHU of such
records.

 

5.3          Commercial Efforts.  COMPANY shall exercise commercially
reasonable efforts to develop and introduce FECAL BASED TESTS that use the
PATENT RIGHTS into the commercial market as soon as practicable, consistent
with sound and reasonable business practice and judgment.  COMPANY shall also exercise commercially
reasonable efforts to develop OTHER ITEMS as soon and as broadly as
practicable, consistent with sound and reasonable business practice and judgment,
the sole remedy for the COMPANY’S failure in so doing to be termination of the
license granted hereon in a particular market as contemplated by the last
sentence of Paragraph 5.4 below.

 

5.4          Other Products.  After JHU provides COMPANY with objective evidence
(the “Notification”) that demonstrates the commercial practicality of
application of the PATENT RIGHTS in a clearly defined product or market segment
(e.g.  other cancers beyond colorectal)
(the “Market”) which, as of the date of Notification, is not being developed or
commercialized by COMPANY, its AFFILIATES or its SUBLICENSEE, COMPANY shall
either (i) provide JHU with a reasonable development plan and start
development, or (ii) sublicense the particular technology to a third
party, for application in the particular Market.  If within two (2) years after COMPANY’s
receipt of the Notification, COMPANY has not (a) initiated such
development efforts, or (b) sublicensed the particular Market described in
the Notification (with such sublicense agreement containing contractual
assurances that the sublicensee will exercise reasonable efforts to pursue the
particular Market), then JHU may terminate the license granted hereunder for
the particular Market.

 

5.5          Patent Acknowledgement.  COMPANY agrees to mark all applicable
products or services sold by COMPANY with the number of the applicable patent(s) licensed
hereunder in accordance with each country’s patent laws.

 

ARTICLE 6

REPRESENTATIONS

 

6.1          Representations by JHU.  JHU WARRANTS THAT IT HAS GOOD AND MARKETABLE
TITLE TO ITS INTEREST IN THE INVENTIONS CLAIMED IN THE PATENT RIGHTS WITH THE
EXCEPTION OF CERTAIN RETAINED RIGHTS OF THE UNITED STATES GOVERNMENT AND/OR
HHMI, BUT DOES NOT WARRANT THE VALIDITY OF ANY PATENTS OR THAT PRACTICE UNDER
SUCH PATENTS SHALL BE FREE OF INFRINGEMENT. 
COMPANY AGREES, AND WILL CAUSE ALL AFFILIATED COMPANIES AND ANY AND ALL
SUBLICENSEES TO AGREE FOR THE BENEFIT OF JHU, AND OTHERS THAT THE PATENT RIGHTS
ARE PROVIDED “AS IS”, AND JHU MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT
TO THE PERFORMANCE OF ANY PRODUCT OR SERVICE, INCLUDING WITH RESPECT TO SAFETY,
EFFECTIVENESS, OR COMMERCIAL VIABILITY. 
JHU DISCLAIMS ALL WARRANTIES WITH REGARD TO THE PATENT RIGHTS AND WITH
REGARD TO ANY AND ALL PRODUCTS, PROCESSES, METHODS OR SERVICES EMBODYING OR 

 

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

 

20

 

RELYING UPON THE PATENT RIGHTS, INCLUDING,
BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY AND
FITNESS FOR ANY PARTICULAR PURPOSE. 
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, JHU ADDITIONALLY
DISCLAIMS ALL OBLIGATIONS AND LIABILITIES ON THE PART OF JHU AND
INVENTORS, FOR DAMAGES, INCLUDING, BUT NOT LIMITED TO, DIRECT, INDIRECT,
SPECIAL, AND CONSEQUENTIAL DAMAGES, ATTORNEY’S AND EXPERT FEES AND COURT COSTS
(EVEN IF JHU HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, FEES OR
COSTS), ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE PATENT RIGHTS OR
ANY AND ALL PRODUCTS, PROCESSES, METHODS OR SERVICES EMBODYING OR RELYING
THEREUPON.  COMPANY ASSUMES, AND WITHOUT LIMITING
COMPANY’S OBLIGATIONS HEREUNDER, WILL CAUSE ALL AFFILIATED COMPANIES AND ANY
AND ALL SUBLICENSEES TO ASSUME, ALL RESPONSIBILITY AND LIABILITY FOR LOSS OR
DAMAGE CAUSED BY A PRODUCT, PROCESS, METHOD OR SERVICE MANUFACTURED, USED, OR
SOLD BY COMPANY, ITS SUBLICENSEE OR ANY AFFILIATED COMPANIES OR EMBODYING OR
RELYING UPON THE PATENT RIGHTS WHICH ARE THE SUBJECT OF THIS AGREEMENT.

 

ARTICLE 7

INDEMNIFICATION

 

7.1          Indemnification.  JHU and the Inventors will not, under any of
the provisions of this Agreement, or otherwise, have control over the manner in
which COMPANY, or its AFFILIATED COMPANIES or its SUBLICENSEES, or those
operating for its account, or third parties who purchase FECAL BASED TESTS or
OTHER ITEMS from any of the foregoing entities, practice the inventions of the
PATENT RIGHTS licensed hereunder, or practice or make use of the FECAL BASED
TESTS or OTHER ITEMS.  COMPANY and its
AFFILIATES shall, and COMPANY shall cause its SUBLICENSEES and AFFILIATES who
obtain any right or interest in respect of the PATENT RIGHTS to, defend and
hold JHU, The Johns Hopkins Health Systems, Inc., HHMI, their present and
former trustees, officers, the Inventors of PATENT RIGHTS, agents, faculty,
employees and students, harmless as against any judgment, fees, expenses or
other costs arising from or incidental to any product liability or other
lawsuit, claim, demand, or other action, brought as a consequence of the
practice of said inventions or any PATENT RIGHTS against any of the foregoing
indemnities, whether JHU or said Inventors, or other indemnities, either
jointly or severally, is or are named as a party to any such lawsuit.  Practice of the inventions covered by the
PATENT RIGHTS by an AFFILIATED COMPANY or agent or SUBLICENSEE, or a third
party on behalf of or for account of COMPANY, or by a third party who purchases
any product or service from the COMPANY, shall also be considered the COMPANY’s
practice of said inventions for purposes of this Paragraph 7.1.  HHMI and its trustees, officers, employees,
and agents (collectively, “HHMI Indemnitees”), will be indemnified, defended by
counsel acceptable to HHMI, and held harmless by COMPANY from and against any
claim, liability, cost, expense, damage, deficiency, loss, or obligation, of
any kind or nature (including, without limitation, reasonable attorneys’ fees
and other costs and expenses of defense) (collectively, “Claims”), based upon,
arising out of, or otherwise relating to this Agreement, including without
limitation any cause of action relating to product liability.  

 

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

 

21

 

The obligation of COMPANY to defend and
indemnify as set out in this Paragraph 7.1 shall survive the termination of
this Agreement.

 

ARTICLE 8

CONFIDENTIALITY

 

8.1          Confidentiality.  During the term of this Agreement, the
parties may exchange information, which they consider to be confidential.  “CONFIDENTIAL INFORMATION” hereunder shall,
subject to Paragraph 8.2, mean any information or materials which are disclosed
by one party (the “DISCLOSER”) to the other party (the “RECIPIENT”), whether
orally, visually, or in tangible form, and all copies thereof.  Tangible materials that disclose or embody
CONFIDENTIAL INFORMATION shall be marked by DISCLOSER as “Confidential”, “Proprietary”
or the substantial equivalent thereof. 
CONFIDENTIAL INFORMATION that is disclosed orally or visually shall be
identified by DISCLOSER as confidential at the time of disclosure and reduced
to a written summary by DISCLOSER, which shall mark such summary as “Confidential”,
“Proprietary” or the substantial equivalent thereof, and deliver it to
RECIPIENT by the end of the month following the month in which disclosure
occurs.  Such information shall be
treated as CONFIDENTIAL INFORMATION pending receipt of such summary.  Notwithstanding the foregoing, this Agreement
and the terms of this Agreement shall be considered CONFIDENTIAL INFORMATION of
each party hereto (with the exception that JHU may disclose the terms of this
Agreement in confidence to HHMI), and each party shall be deemed both a
DISCLOSER and RECIPIENT thereof; and the reports and other information
delivered pursuant to Paragraphs 5.1 and/or 5.2 hereof shall also be
CONFIDENTIAL INFORMATION.  The RECIPIENT
shall employ all reasonable efforts to maintain the secrecy and confidentiality
of CONFIDENTIAL INFORMATION received by it, such efforts to be no less than the
degree of care employed by the RECIPIENT to preserve and safeguard its own
confidential information.  The
CONFIDENTIAL INFORMATION shall not be disclosed or revealed to anyone except
employees of the RECIPIENT who have a need to know the information and who have
entered into a secrecy agreement with the RECIPIENT under which such employees
are required to maintain confidential the proprietary information of the RECIPIENT
and such employees shall be advised by the RECIPIENT of the confidential nature
of the information and that the information shall be treated accordingly.

 

8.2          Exceptions.  The RECIPIENT may disclose CONFIDENTIAL
INFORMATION only to the extent required by law (as reasonably determined by the
RECIPIENT’s counsel), government regulation or court order and after
consultation with, and the agreement of the DISCLOSER (which will not be
unreasonably withheld, conditioned or delayed). 
The RECIPIENT’s obligations under Paragraph 8.1 shall not extend to any
part of the information:

 

(a)                                  that
is demonstrated to have been in the public domain or publicly known prior to
the date of the disclosure; or

 

(b)                                 that
is demonstrated, based upon the RECIPIENT’S contemporaneous written records to
have been in the RECIPIENT’S possession from a source not under obligation of
secrecy to the DISCLOSER prior to the disclosure; or

 

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

 

22

 

(c)                                  that
becomes part of the public domain or publicly known by publication or
otherwise, not due to any unauthorized act by the RECIPIENT; or

 

(d)                                 that
is demonstrated from contemporaneous written records to have been developed by
or for the RECIPIENT without reference to confidential information disclosed by
the DISCLOSER.

 

8.3          Injunction.  In view of the difficulties of placing a
monetary value on the CONFIDENTIAL INFORMATION, in the event of a breach of
this Article 8, the DISCLOSER shall be entitled to a preliminary and final
injunction without the necessity of posting any bond or undertaking in
connection therewith to prevent further breach of this Article 8 or
further unauthorized use of its CONFIDENTIAL INFORMATION.  This remedy is separate from any other remedy
the DISCLOSER may have.

 

8.4          Return of CONFIDENTIAL
INFORMATION.  Upon the expiration or
termination, for any reason, of this Agreement, RECIPIENT shall return promptly
to DISCLOSER or destroy, at DISCLOSER’s option, all tangible materials that
disclose or embody CONFIDENTIAL INFORMATION of the DISCLOSER.

 

8.5          Right to Publish.  Prior to submission for publication of a
manuscript describing PATENT RIGHTS, JHU shall send the COMPANY a copy of such
manuscript, and shall allow the COMPANY sixty (60) days from the date of
receipt of such mailing to, at its sole discretion, comment on the manuscript,
remove the COMPANY’s CONFIDENTIAL INFORMATION and file patent applications on
any inventions related to the PATENT RIGHTS and disclosed therein.  In no case may JHU publish COMPANY
CONFIDENTIAL INFORMATION without the express, written consent of COMPANY.

 

ARTICLE 9

TERM & TERMINATION

 

9.1          Term.  Subject to earlier termination as herein
provided, the term of this Agreement shall commence on the EFFECTIVE DATE and
shall continue until the later to occur of (i) the twenty (20) year
anniversary of the EFFECTIVE DATE, and (ii) the date of expiration of the
last to expire patent included within PATENT RIGHTS.

 

9.2          Termination by Either
Party.  This Agreement may be
terminated by either party, in the event that the other party (a) files or
has filed against it a petition under the Bankruptcy Act, makes an assignment
for the benefit of creditors, has a receiver appointed for it or a substantial
part of its assets, or otherwise takes advantage of any statute or law designed
for relief of debtors or (b) fails to materially perform or otherwise
materially breaches its obligations hereunder, if, following the giving of
notice by the terminating party of its intent to terminate and stating the
grounds therefor, the party receiving such notice shall not have cured the
failure or breach within sixty (60) days of receipt of notice (the “Cure Period”),
or, if the breach is incapable of being cured within the Cure Period, the
breaching party must, during the Cure Period, commence diligent efforts to cure
said breach which must then be cured within ninety 

 

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

 

23

 

(90) days following the Cure Period in order
to prevent termination by the non-breaching party.  In no event, however, shall such notice or
intention to terminate be deemed to waive any rights to damages or any other
remedy which the party giving notice of breach may have as a consequence of
such failure or breach.

 

9.3          Termination by Company.  JHU, through the MOLECULAR GENETICS LAB, may
discover a new TECHNOLOGY during the term of this Agreement.  JHU may, upon giving written notice to EXACT,
cause this Agreement to be amended to include any patent application or patent
embodying the new TECHNOLOGY among the PATENT RIGHTS and to extend the term of
this Agreement to the date of expiration of any patent issued thereon, provided
that (i) the right and license granted to EXACT on the new TECHNOLOGY
shall be exclusive and limited to the field described as FECAL BASED TESTS,
that is, a screening assay conducted on a stool sample for the purpose of
diagnosing colorectal neoplasia, and (ii) EXACT and JHU agree to negotiate
in good faith on a reasonable increase to the amounts in paragraphs 1.12.1(a) and
1.12.2(a).  EXACT shall then have the
right and option, exercisable within thirty (30) days of such notice, to reject
such amendment and the inclusion hereunder of such new TECHNOLOGY among the
PATENT RIGHTS.  In the event that JHU
does not cause this Agreement to be so amended and, in lieu thereof, licenses
rights to such new TECHNOLOGY in a field that includes FECAL BASED TESTS for
commercial and other than solely RESEARCH PURPOSES to a party other than EXACT,
then EXACT, at its sole discretion, shall have the right and option,
exercisable by written notice given by EXACT to JHU within sixty (60) days
after the consummation by JHU of the third party license (the consummation of
which JHU shall immediately notify EXACT), either (a) to terminate this
Agreement immediately and without recourse by JHU, and with no further payments
due from EXACT to JHU under Article 3 hereof following the date of
termination, or (b) to elect not to terminate this Agreement and for this
Agreement to instead be deemed amended to become a perpetual, exclusive,
royalty-free license to the PATENT RIGHTS then existing in the field of FECAL
BASED TESTS, to EXACT, whereupon all the payment obligations of EXACT to JHU
under Article 3 shall terminate, except that EXACT shall pay JHU a license
maintenance fee of [********] per calendar year, payable within thirty (30)
days after December 31 of each year during which this Agreement is in
effect.  Notwithstanding the foregoing,
if this Agreement is converted into a perpetual, royalty-free, exclusive
license under the provisions of this Paragraph 9.3, all provisions of this
Agreement, except for the payment provisions contained in Article 3
hereof, shall remain in full force and effect to the extent they are not
inconsistent with this Section 9.3, and EXACT shall pay all amounts
currently due prior to the date of such conversion.  For the avoidance of doubt, in the event
EXACT elects to proceed under clause (b) above, EXACT shall no longer be
required to pay JHU any amounts (other than the [********] per year maintenance
fee) which would have otherwise accrued prospectively to JHU had EXACT not so
elected.  For the further avoidance of
doubt, this Paragraph 9.3 shall not be construed as a right of first refusal or
first option or exclusive negotiation between JHU and EXACT; instead this
Paragraph 9.3 obliges JHU to make new TECHNOLOGY available to EXACT on at least
an equal basis with all other parties, or failing that, gives EXACT the right
to proceed under clause (a) or (b) of this Paragraph 9.3.

 

9.4          Obligations and Duties
upon Termination.  If this Agreement
is terminated, both parties shall be released from all obligations and duties
imposed or assumed hereunder to the extent so terminated, except as expressly
provided to the contrary in this Agreement. 

 

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

 

24

 

Termination of this Agreement, for whatever
reason, shall not affect the obligation of either party to make any payments
for which it is liable prior to or upon such termination and which were
originally intended to be paid prior to the termination (i.e.  any flat fee amounts that are being paid to
JHU pursuant to Article 3 shall immediately cease with no further amounts
due JHU hereunder).  Termination shall
not affect JHU’s right to recover amounts for which payment is past due
(including reimbursement for patent expenses incurred pursuant to Article 4
prior to termination).  Upon termination,
COMPANY shall submit a final royalty report to JHU to confirm the amounts due
JHU as of the date of termination and payment of such amounts shall be due to
JHU no later than thirty (30) days of the date of termination.  Furthermore, upon termination of this
Agreement for any reason, all rights in and to the PATENT RIGHTS shall revert
immediately to JHU, at no cost to JHU, provided, however, that, in the event
this Agreement terminates due to EXACT’s dissolution, all COMPANY sublicenses
under the PATENT RIGHTS existing as of the date of termination shall continue
in full force and effect, as a direct license between JHU and such SUBLICENSEE,
provided that JHU’s obligations and said SUBLICENSEE’ s obligations under such
sublicenses are no greater than currently existing under this Agreement and the
sublicense agreement, respectively.  In
the event this Agreement should terminate for reasons other than EXACT’s
dissolution, then such sublicenses entered into prior to this Agreement’s
termination shall remain in full force and effect and COMPANY and JHU shall
continue to honor their obligations to each other, as such obligations existed
as of the date of such termination, only with respect to such sublicensees.

 

ARTICLE 10

MISCELLANEOUS

 

10.1        Use of Name.  Neither party shall use the name of the
other, or the other’s AFFILIATES or SUBLICENSEES (where “other” in the case of
JHU means and includes not only JHU but also the Howard Hughes Medical
Institute, The Johns Hopkins University or The Johns Hopkins Health System and
any of their or its constituent parts, such as the Johns Hopkins Hospital or
any contraction thereof, as well as the name of the Inventors of PATENT
RIGHTS), in any advertising, promotional, sales literature, press releases or
fundraising documents without prior written consent from an officer of said
party.  Furthermore, neither party shall
use the name of the other, or the other’s AFFILIATES or SUBLICENSEES (where “other”
in the case of JHU means and includes not only JHU but also the Howard Hughes
Medical Institute, The Johns Hopkins University or The Johns Hopkins Health
System and any of their or its constituent parts, such as the Johns Hopkins
Hospital or any contraction thereof, as well as the name of the Inventors of
PATENT RIGHTS), in any advertising, promotional, sales literature, press
releases or fundraising documents disclosing TECHNOLOGY that the parties have
participated in, developed or have otherwise collaborated on, without prior
written consent from an officer of said party. 
Each party shall allow at least seven (7) business days notice of
any proposed public disclosure for JHU’s or EXACT’s review and comment or to
provide written consent which shall not be unreasonably withheld.  For purposes of this paragraph, notice to
EXACT shall be delivered as indicated in Section 10.6 hereof and notice to
HHMI shall be delivered as follows: Howard Hughes Medical Institute, 4000 Jones
Bridge Road, Chevy Chase, Maryland 20815, Attn: Office of the General Counsel;
or to such other address as HHMI shall give notice of from time to time.

 

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

 

25

 

10.2        No Partnership.  Nothing in this Agreement shall be construed
to create any agency, employment, partnership, joint venture or similar
relationship between the parties other than that of a licensor/licensee.  Except as expressly provided herein, neither
party shall have any right or authority whatsoever to incur any liability or
obligation (express or implied) or otherwise act in any manner in the name or
on the behalf of the other, or to make any promise, warranty or representation
binding on the other.

 

10.3        Notice of Claim.  Each party shall give the other or its
representative immediately notice of any suit or action filed, or prompt notice
of any claim made, against them arising out of the performance of this
Agreement.

 

10.4        Product Liability.  Prior to initial human testing or first
commercial sale of any FECAL BASED TEST that use PATENT RIGHTS or OTHER ITEM as
the case may be in any particular country, COMPANY shall establish and
maintain, in each country in which COMPANY or SUBLICENSEE shall test or sell
FECAL BASED TEST that use PATENT RIGHTS or OTHER ITEMS, product liability or
other appropriate insurance coverage in the minimum amount of [********] per
claim and will annually present evidence to JHU that such coverage is being
maintained.  Upon JHU’s request, COMPANY
will furnish JHU with a Certificate of Insurance of each product liability insurance
policy obtained.  JHU and HHMI shall be
listed as an additional insured in COMPANY’s said insurance policies.  If such Product Liability insurance is
underwritten on a ‘claims made’ basis, COMPANY agrees that any change in
underwriters during the term of this Agreement will require the purchase of
`prior acts’ coverage to ensure that coverage will be continuous throughout the
term of this Agreement.

 

10.5        Governing Law.  This Agreement shall be construed in
accordance with the laws of the State of Delaware without giving effect to the
principles of conflicts of laws.

 

10.6        Notice.  All notices or communication required or
permitted to be given by either party hereunder shall be deemed sufficiently
given if mailed by registered mail or certified mail or sent by overnight
courier, such as Federal Express, to the other party at its respective address
set forth below or to such other address as one party shall give notice of to
the other from time to time hereunder. 
Mailed notices shall be deemed to be received on the third business day
following the date of mailing.  Notices
sent by overnight courier shall be deemed received the following business day.

 

	
  If to
  Company:

  	
   

  	
  Exact
  Sciences Corporation 

  63 Great Road

  Maynard, MA 01754

  Attn: President

  
	
   

  	
   

  	
   

  
	
  If to JHU

  	
   

  	
  Office of
  Technology Licensing

  The Johns Hopkins University School of Medicine

  111 Market Place, Suite 906

  Baltimore, MD 21202

  Attn: Director

  

 

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

 

26

 

10.7        Compliance with All Laws.  In all activities undertaken pursuant to this
Agreement, both JHU and COMPANY covenant and agree that each will in all
material respects comply with such Federal, state and local laws and statutes,
as may be in effect at the time of performance and all valid rules, regulations
and orders thereof regulating such activities.

 

10.8        Successors and Assigns.  Neither this Agreement nor any of the rights
or obligations created herein, except for the right to receive any remuneration
hereunder, may be assigned by either party, in whole or in part, without the
prior written consent of the other party. 
Notwithstanding the preceding sentence, JHU and COMPANY shall be free to
assign this Agreement in connection with any sale of substantially all of such
party’s assets without the consent of the other party hereunder, and COMPANY
and JHU shall be free to assign this Agreement or otherwise to transfer all of
their respective rights and obligations under this Agreement to a successor by
merger upon the prior written consent of the other hereunder, which consent
shall not be unreasonably withheld, conditioned or delayed.  This Agreement shall bind and inure to the
benefit of the successors and permitted assigns of the parties hereto.

 

10.9        No Waivers; Severability.  No waiver of any breach of this Agreement
shall constitute a waiver of any other breach of the same or other provision of
this Agreement, and no waiver shall be effective unless made in writing.  Any provision hereof prohibited by or
unenforceable under any applicable law of any jurisdiction shall as to such
jurisdiction be deemed ineffective and deleted herefrom without affecting any
other provision of this Agreement.  It is
the desire of the parties hereto that this Agreement be enforced to the maximum
extent permitted by law, and should any provision contained herein be held by
any governmental agency or court of competent jurisdiction to be void, illegal
and unenforceable, the parties shall negotiate in good faith for a substitute
term or provision which carries out the original intent of the parties.

 

10.10      Entire Agreement; Amendment.  COMPANY and JHU acknowledge that they have
read this entire Agreement and that this Agreement, including the attached
Exhibits constitutes the entire understanding and contract between the parties
hereto and supersedes any and all prior or contemporaneous oral or written
communications with respect to the subject matter hereof (including the PRIOR
LICENSE AGREEMENT) and (except as specifically contemplated by Paragraph 3.4
and 9.3 hereof) this Agreement shall not be modified, amended or in any way
altered except by an instrument in writing signed by both of the parties
hereto.

 

10.11      Delays or Omissions.  Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party
hereto, shall impair any such right, power or remedy to such party nor shall it
be construed to be a waiver of any such breach or default, or an acquiescence
therein, or in any similar breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of
any kind or character on the part of any party of any breach or default under
this Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in 

 

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

 

27

 

such writing.  All remedies either under this Agreement or
by law or otherwise afforded to any party, shall be cumulative and not
alternative.

 

10.12      Force Majeure.  If either party fails to fulfill its
obligations hereunder (other than an obligation for the payment of money), when
such failure is due to an act of God, or other circumstances beyond its
reasonable control, including but not limited to fire, flood, civil commotion,
riot, war (declared and undeclared), acts of terrorism, revolution, or
embargoes, then said failure shall be excused for the duration of such event
and for such a time thereafter as is reasonable to enable the parties to resume
performance under this Agreement.

 

10.13      Further Assurances.  Each party shall, at any time, and from time
to time, during the term of this Agreement, at reasonable request of the other
party, execute and deliver to the other such instruments and documents and
shall take such actions as may be required to implement the terms of this
Agreement.

 

10.14      Survival.  Articles 1, 6, 7, 8, 9, and 10, and Paragraphs
2.4, 5.1 and 5.2, shall survive any expiration or termination of this
Agreement.

 

10.15      No Third Party Beneficiaries.  Except as otherwise expressly provided herein
to the contrary, nothing in this Agreement shall be construed as giving any
person, firm, corporation or other entity, other than the parties hereto and
their successors and permitted assigns, any right, remedy or claim under or in
respect of this Agreement or any provision hereof.

 

10.16      Headings.  Article headings are for convenient
reference and not a part of this Agreement. 
All Exhibits are incorporated herein by this reference.

 

10.17      Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which when
taken together shall be deemed but one instrument.

 

10.18      AFFILIATE Rights and Obligations.  The license granted hereunder shall extend to
all AFFILIATES of EXACT Sciences Corporation (but not, in turn, to their
AFFILIATES, and shall extend to an AFFILIATE for only so long as the AFFILIATE
remains an AFFILIATE) who notify JHU in writing that they accept the terms,
including the obligations, of this Agreement as binding upon them jointly and
severally with EXACT Sciences Corporation and its other AFFILIATES so
accepting; provided, however, that (i) in no event shall any such
AFFILIATE have any right to sublicense under Paragraph 2.2 hereof; (ii) in
no event shall any such AFFILIATE have any right to assign or transfer any
rights inuring to it hereunder, as otherwise contemplated by Paragraph 10.8
hereof; and (iii) any and all communications or notices to be given, or
elections made or to be made, under or in respect of this Agreement shall be
made only by EXACT Sciences Corporation on its own behalf, and if and when
appropriate, on behalf of its AFFILIATES.

 

10.19      Howard Hughes Medical Institute (HHMI).  HHMI is not a party to this Agreement and has
no liability to EXACT, any SUBLICENSEE, any AFFILIATED COMPANY or user of any
thing or matter covered by this Agreement, but HHMI is an intended 

 

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

 

28

 

third party beneficiary of this
Agreement and certain of the provisions hereof are for the benefit of HHMI and
shall be enforceable by HHMI in its own name.

 

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

 

29

 

IN WITNESS WHEREOF, this
Agreement shall take effect as of the EFFECTIVE DATE when it has been executed
below by the duly authorized representatives of the parties.

 

	
  THE
  JOHNS HOPKINS UNIVERSITY

  	
  EXACT
  SCIENCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  : 
  /s/ William P. Tew

  	
   

  	
  By

  	
  : 

  	
  /s Don
  Hardison

  
	
  Name: 

  	
  William
  P. Tew, Ph.D.

  	
   

  	
  Name:
  Don Hardison

  
	
  Title:

  	
  Assistant
  Dean and Executive

  	
   

  	
  Title:
  President and CEO

  
	
   

  	
  Director
  Division of Licensing and

  	
   

  
	
   

  	
  Business
  Development, School of

  	
   

  
	
   

  	
  Medicine

  	
   

  
	
   

  	
   

  
	
  3/25/03

  	
   

  	
  3/21/03

  
	
  (Date)

  	
  (Date)

  
							

 

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

 

30

 

INVENTOR’S
ACKNOWLEDGEMENT

 

I have read and give to abide
by the terms of the within Agreement:

 

 

	
  By:

  	
    /s/
  Bert Vogelstein

  	
   

  	
  By:

  	
    /s/
  Kenneth Kinzler

  
	
   

  	
    Dr. Bert
  Vogelstein

  	
   

  	
   

  	
    Kenneth
  Kinzler, Ph.D.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
      3/24/03

  	
   

  	
  Date:

  	
      3/24/03

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ C. Giovanni Traverso

  	
   

  	
   

  
	
   

  	
  C. Giovanni
  Traverso, Ph.D.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
    March 24,
  2003

  	
   

  	
   

  
							

 

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

 

31

 

EXHIBIT A

PATENT RIGHTS

 

[********]

 

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

 

 

SECOND
AMENDMENT TO LICENSE AGREEMENT BETWEEN

EXACT
SCIENCES CORPORATION

AND

THE JOHNS
HOPKINS UNIVERSITY

 

This Second
Amendment (this “Amendment”) is made and effective as of November 9, 2004
by and between The Johns Hopkins University (“JHU”) and EXACT Sciences
Corporation (“EXACT”).

 

WHEREAS, JHU
and EXACT entered into an amended and restated license agreement (the “Agreement”)
having a final signature date of March, 25, 2003 (the “EFFECTIVE DATE”); and

 

WHEREAS, the
parties desire to amend certain provisions of the Agreement.

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties agree to the following amendments to the Agreement, to be
effective as of the date of execution of this Amendment:

 

1.                                       Sections
1.12.1(a) and 1.12.2(a) of the Agreement are hereby replaced in their
entirety with the following:

 

“[********]; and”

 

The parties hereby agree that all references, express or implied, to
the [********] minimum license fee set fort in the Agreement shall, instead, be
amended to reference [********] and any calculations set forth in the
Agreement, for purposes of example, shall be deemed illustrative only to the
extent appropriate based on the change in minimum annual fee from [********] to
[********] as set forth above.

 

2.                                       The
patent application identified below is hereby deemed included in Exhibit A
of the Agreement:

 

[********]

 

3.                                       The
Field, for purposes of the above patent only, shall be FECAL BASED TESTS, that
is, a screening assay conducted on a stool sample for the purpose of diagnosing
colorectal neoplasia.

 

4.                                       Section 10.6
of the Agreement is hereby replaced in its entirety with the following:

 

10.6        Notice.  All notices or communication required or
permitted to be given by either party hereunder shall be deemed sufficiently
given if mailed by registered mail or certified mail or sent by overnight
courier, such as Federal Express, to the other party at its respective address
set forth below or to such other address as one party shall give notice of to
the other from

 

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

 

 

time to time hereunder.  Mailed notices shall be deemed to be received
on the third business day following the date of mailing.  Notices sent by overnight courier shall be
deemed received the following business day.

 

	
  If to
  Company:

  	
   

  	
  Exact
  Sciences Corporation

  100 Campus Drive

  Marlborough, MA 01752

  Attn: President

  
	
   

  	
   

  	
   

  
	
  If to JHU:

  	
   

  	
  Licensing and Technology Development

  Johns Hopkins University

  100 N. Charles Street\

  5th Floor

  Baltimore, MD 21201 Attn: Director

  

 

5.                                       Except
as expressly modified herein, the Agreement and all of its terms and conditions
shall continue in full force and effect.

 

IN WITNESS
WHEREOF, the duly authorized representatives of the parties have executed this
Amendment as of the date first above written.

 

	
  EXACT
  Sciences Corporation

  	
   

  	
  The
  Johns Hopkins University

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Don
  Hardison

  	
   

  	
  By:

  	
  /s/ R. Keith
  Baker

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed
  Name:

  	
  Don Hardison

  	
   

  	
  Printed
  Name:

  	
  R. Keith
  Baker

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President
  and CEO

  	
   

  	
  Title:

  	
  Director

  
									

 

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

 

2

 

THIRD
AMENDMENT TO LICENSE AGREEMENT BETWEEN

EXACT
SCIENCES CORPORATION

AND

THE JOHNS HOPKINS UNIVERSITY

 

This Third
Amendment (this “Amendment”) is made and effective as of May 11, 2006, by
and between The Johns Hopkins University (“JHU”) and EXACT Sciences Corporation
(“EXACT”).

 

WHEREAS, JHU
and EXACT entered into an amended and restated license agreement (the “Agreement”)
having a final signature date of March 25, 2003 (the “EFFECTIVE DATE”);

 

WHEREAS, JHU
and EXACT amended the Agreement on November 9, 2004; and

 

WHEREAS, the
parties desire to further amend certain provisions of the Agreement.

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties agree to the following amendments to the Agreement, to be
effective as of the date of execution of this Amendment:

 

1.                                       Sections
1.12.1(a) and 1.12.2(a) of the Agreement are hereby replaced in their
entirety with the following:

 

“[********]; and”

 

The parties hereby agree that all references, express or implied, to
the [********] minimum license fee set fort in the Agreement shall, instead, be
amended to reference [********] and any calculations set forth in the
Agreement, for purposes of example, shall be deemed illustrative only to the
extent appropriate based on the change in minimum annual fee from [********] to
[********] as set forth above.

 

2.                                       The
patent applications identified below (hereinafter the “BEAMING PATENT RIGHTS”)
are hereby deemed included in Exhibit A of the Agreement:

 

[********]

 

3.                                       BEAMING
EXCLUSIVE FIELD, for purposes of the BEAMING PATENT RIGHTS only, shall mean a
screening assay on a stool sample for the purpose of diagnosing colorectal
neoplasia.

 

4.                                       BEAMING
NONEXCLUSIVE FIELD, for purposes of the BEAMING PATENT RIGHTS only, shall mean
a screening assay on a blood sample for the purpose of detecting colorectal
neoplasia.

 

5.                                       The
following Sections 2.1.1.  and
2.1.2.  are hereby deemed a part of the
Agreement:

 

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

 

 

2.1.1. 
Grant. 
Subject to the terms and conditions of the Agreement, and expressly
subject to Article 2.3 therein, JIM hereby grants to COMPANY an exclusive
license under the BEAMING PATENT RIGHTS in the BEAMING EXCLUSIVE FIELD to make,
have made, use, have used, sell, have sold, import, and have imported any
method, service or product worldwide.

 

2.1.2. 
Grant. 
Subject to the terms and conditions of the Agreement, and expressly
subject to Article 2.3 therein, JHU hereby grants to COMPANY a
non-exclusive license under the BEAMING PATENT RIGHTS in the BEAMING
NONEXCLUSIVE FIELD to make, have made, use, have used, sell, have sold, import,
and have imported any method, service or product worldwide.

 

6.                                       COMPANY
shall initially have the sole and exclusive right, but not the obligation to
initiate and carry on legal proceedings, at COMPANY’s sole expense and in JHU’s
and HHMI’s name, if so required by law, against any infringer or alleged
infringer of any patent or patent application within BEAMING PATENT RIGHTS
within the BEAMING EXCLUSIVE FIELD only. 
Such right shall include the right to bring suit and collect damages for
past infringement of any patent within the BEAMING PATENT RIGHTS in the BEAMING
EXCLUSIVE FIELD.  COMPANY shall control
all aspects of any such proceeding, including, without limitation, the
strategy, defense, and settlement of such proceeding, and shall do so in a manner
consistent with the terms and provisions hereof.

 

Subject to Paragraph 4.8, any damage, cost, award, fee, recovery, or
compensation paid by any third party in connection with any proceeding
initiated or carried on at COMPANY’S expense (whether by way of settlement or
otherwise) shall be retained by the COMPANY. 
The COMPANY shall not enter into any settlement, consent judgment, or
any other voluntary final disposition of any infringement action under this
Paragraph without the prior written consent of JHU, which shall not be
unreasonably withheld, conditioned or delayed. 
Company’s right to sue for infringement hereunder shall not be used in
an arbitrary or capricious manner.

 

7.                                       The
following Section 9.5 is hereby deemed a part of the Agreement:

 

9.5 Termination of License to BEAMING PATENT
RIGHTS Only. 
EXACT may, at its discretion, terminate its license with respect to the
BEAMING PATENT RIGHTS only, upon thirty (30) days written notice to JHU.  Under such circumstances, EXACT shall no
longer be responsible for patent prosecution and maintenance costs related to
the BEAMING PATENT RIGHTS and the Annual License Fee due from EXACT to JHU
shall be reduced by [********] as of the immediately upcoming annual payment
date.  EXACT shall not be entitled to a refund
of any amounts previously owed to JHU, regardless of when EXACT exercises its
rights under this provision.

 

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

 

2

 

8.                                       Except
as expressly modified herein, the Agreement and all of its terms and conditions
shall continue in full force and effect.

 

IN WITNESS
WHEREOF, the duly authorized representatives of the parties have executed this
Amendment as of the date first above written.

 

	
  EXACT
  Sciences Corporation

  	
   

  	
  The
  Johns Hopkins University

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Don Hardison

  	
   

  	
  By:

  	
  /s/ Jill A. Tarzian Sorensen

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
  Don Hardison

  	
   

  	
  Printed Name:

  	
  Jill A. Tarzian Sorensen

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President and CEO

  	
   

  	
  Title:

  	
  Executive Director 

  
	
   

  	
   

  	
   

  	
   

  	
  Johns Hopkins Technology Transfer

  
										

 

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

 

3

 

FOURTH
AMENDMENT TO LICENSE AGREEMENT BETWEEN

EXACT
SCIENCES CORPORATION

AND

THE
JOHNS HOPKINS UNIVERSITY

 

This Fourth Amendment (this “Amendment”)
is made and effective as of March 19, 2007, by and between The Johns
Hopkins University (“JHU”) and EXACT Sciences Corporation (“EXACT”).

 

WHEREAS, JHU and EXACT entered into an amended and restated license
agreement (the “Agreement”) having a final signature date of March, 25, 2003
(the “EFFECTIVE DATE”);

 

WHEREAS, JHU and EXACT amended the Agreement on November 9, 2004
and again on May 11, 2006; and

 

WHEREAS, the parties desire to further amend certain provisions of the
Agreement.

 

NOW, THEREFORE, in consideration of the
mutual covenants and agreements contained herein, the parties agree to the
following amendments to the Agreement, to be effective as of the date of
execution of this Amendment:

 

1.     The first sentence of Section 3.3 of the
Agreement is hereby amended as follows:

 

3.3              Payment
Schedule.  Payments accruing from
COMPANY to JHU pursuant to Paragraph 3.2 shall be payable in the calendar year
following the close of the calendar year which serves as the measurement year
in respect thereof, and such payment shall be made in two (2) equal
installments, which shall be due and payable thirty (30) days after each of June 30
and December 31, respectively, except that the payment due thirty (30)
days after June 30, 2007 shall be due thirty (30) days after May 31,
2007.

 

2.     Section 3.5 of the Agreement is hereby replaced
in its entirety with the following:

 

3.5              Form of
Payment.  Except as provided below,
all payments under this Agreement shall be made in U.S. Dollars.  The parties agree that the [********] license
fee amount due for the period ending December 31, 2006, shall be paid to
JHU in the form of EXACT unregistered common stock (the “Shares”) in an amount
equal to $158,125.00 by March 23, 2007 or on such date when all JHU
approvals are complete.  All cash
payments made pursuant to this agreement shall be made payable to “The Johns
Hopkins University”.  Wire transfers may
be made through:

 

[********]

 

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

 

 

COMPANY shall be responsible for any and all
costs associated with wire transfers.

 

The
parties hereby agree that all references, express or implied, to requiring that
payment be made only in cash  shall,
instead, be amended to reference EXACT’s ability to make certain license fee
payments in EXACT common stock, upon mutual agreement of the parties.

 

3.     Section 6.2 below is hereby incorporated into
the Agreement:

 

6.2          Investment
Representation.  JHU represents,
warrants and acknowledges that: (i) (A) JHU is an “accredited
investor” as defined in Regulation D under the Securities Act and is
knowledgeable, sophisticated and experienced in making, and is qualified to
make decisions with respect to investments in shares presenting an investment
decision like that involved in EXACT, including investments in securities
issued by EXACT and investments in comparable companies, and has requested,
received, reviewed and considered all information it deemed relevant in making
an informed decision to invest in EXACT and (B) EXACT has made available
to JHU, prior to the date hereof, the opportunity to ask questions of and
receive complete and correct answers from representatives of EXACT concerning
the terms and conditions of the Shares and to obtain any additional information
relating to the financial condition and business of EXACT and JHU has such
knowledge and experience in financial and business matters that JHU is capable
of evaluating the merits and risks of the investment in the Shares; (ii) JHU
is acquiring the Shares for its own account for investment only and with no
present intention of distributing any of the Shares or any arrangement or
understanding with any other persons regarding the distribution of the Shares; (iii) JHU
will not, directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise acquire or take
a pledge of) any of the Shares except in compliance with this Agreement, the
Securities Act, applicable state securities laws and the respective rules and
regulations promulgated thereunder, and acknowledges that certificates
evidencing the Shares will be imprinted with a legend that prohibits their
transfer except in accordance therewith; and (iv) JHU has, in connection
with its decision to invest in EXACT relied only upon the SEC Documents and the
representations and warranties of EXACT contained herein. JHU understands that
its acquisition of the Shares has not been registered under the Securities Act
or registered or qualified under any state securities law in reliance on
specific exemptions therefrom, which exemptions may depend upon, among other
things, the bona fide nature of each investor’s investment intent as expressed
herein.

 

4.               Except
as expressly modified herein, the Agreement and all of its terms and conditions
shall continue in full force and effect and both parties agree and acknowledge
that as of the date of signature below both parties are in compliance with the
terms of the Agreement.

 

IN WITNESS WHEREOF, the duly authorized representatives of the parties
have executed this Amendment as of the date first above written.

 

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

 

 

	
  EXACT Sciences Corporation

  	
   

  	
  The Johns Hopkins University

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Don Hardison

  	
   

  	
  By:

  	
   /s/ Glen L. Steinbach

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
  Don Hardison

  	
   

  	
  Printed Name:

  	
  Glen L. Steinbach

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President and CEO

  	
   

  	
  Title:

  	
  Senior Director, Admin.

  
									

 

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

 

 

FIFTH
AMENDMENT TO LICENSE AGREEMENT BETWEEN

EXACT
SCIENCES CORPORATION

AND

THE
JOHNS HOPKINS UNIVERSITY

 

This Fifth Amendment (this “Amendment”)
is made effective as of October 17, 2008, by and between The Johns Hopkins
University (“JHU”) and EXACT Sciences Corporation (“EXACT”).

 

WHEREAS, JHU and EXACT entered into an amended and restated license
agreement (the “Agreement”) having a final signature date of March, 25, 2003
(the “EFFECTIVE DATE”);

 

WHEREAS, JHU and EXACT amended the Agreement on November 9, 2004, May 11,
2006 and March 19, 2007; and

 

WHEREAS, the parties desire to further amend certain provisions of the
Agreement.

 

NOW, THEREFORE, in consideration of the
mutual covenants and agreements contained herein, the parties agree to the
following amendments to the Agreement, to be effective as of the date of
execution of this Amendment:

 

1.               Sections 1.12.1(a) and
1.12.2(a) of the Agreement are hereby replaced in their entirety with the
following:

 

“[********]; and”

 

The parties hereby agree that
all references, express or implied, to the [********] minimum license fee set
fort in the Agreement shall, instead, be amended to reference [********] and
any calculations set forth in the Agreement, for purposes of example, shall be
deemed illustrative only to the extent appropriate based on the change in
minimum annual fee from [********] to [********] as set forth above.   In the event the BEAMING OPTION is
exercised, an additional [********] shall be included in the annual license
fee.

 

2.               JHU hereby grants to EXACT an
exclusive option (the “BEAMING OPTION”) to an exclusive license in the SECOND
BEAMING EXCLUSIVE FIELD for the minimum annual fee set forth in this
Agreement.  The BEAMING OPTION shall
expire, if not exercised, [********]from the date of this Amendment.   EXACT may exercise the BEAMING OPTION
granted hereunder by providing to JHU, prior to the end of the option period: (a) written
Notice of its intent, and, (b) a written statement satisfactory to JHU, of
its plans and capabilities, including specific diligence milestones, to develop
a 

 

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

 

 

product or service in the SECOND BEAMING EXCLUSIVE FIELD for public use
or benefit.

 

3.               The patent applications
identified below  (hereinafter the “BEAMING
PATENT RIGHTS”) are hereby deemed included in Exhibit A of the Agreement:

 

[********]

 

4.               BEAMING EXCLUSIVE FIELD, for
purposes of the BEAMING PATENT RIGHTS only, shall mean a screening assay on a
stool sample for the purpose of diagnosing or monitoring colorectal neoplasia
or precancerous adenomas of the colon or rectum.

 

5.               BEAMING NONEXCLUSIVE FIELD,
for purposes of the BEAMING PATENT RIGHTS only, shall mean a screening assay on
a blood sample for the purpose of detecting colorectal neoplasia or
precancerous adenomas of the colon or rectum.

 

6.               SECOND BEAMING EXCLUSIVE FIELD,
for purposes of the BEAMING PATENT RIGHTS only, shall mean a test on plasma,
serum or a blood sample for the purpose of detecting fetal trisomy 21 and fetal
trisomy 18.

 

7.               The following Sections 2.1.1.
and  2.1.2. are hereby deemed a part of
the Agreement:

 

2.1.1. Grant.  Subject to the terms and conditions of the
Agreement, and expressly subject to Article 2.3 therein, JHU hereby grants
to COMPANY an exclusive license under the BEAMING PATENT RIGHTS in the BEAMING
EXCLUSIVE FIELD to make, have made, use, have used, sell, have sold, import,
and have imported any method, service or product worldwide.

 

2.1.2. Grant.  Subject to the terms and conditions of the
Agreement, and expressly subject to Article 2.3 therein, JHU hereby grants
to COMPANY a non-exclusive license under the BEAMING PATENT RIGHTS in the
BEAMING NONEXCLUSIVE FIELD to make, have made, use, have used, sell, have sold,
import, and have imported any method, service or product worldwide.

 

8.               COMPANY shall initially have the sole and exclusive right,
but not the obligation to initiate and carry on legal proceedings, at COMPANY’s
sole expense and in JHU’s and HHMI’s name, if so required by law, against any
infringer or alleged infringer of any patent or patent application within
BEAMING PATENT RIGHTS within the BEAMING EXCLUSIVE FIELD only.  Such right shall include the right to bring
suit and collect damages for past infringement of any patent within the BEAMING
PATENT RIGHTS in the BEAMING EXCLUSIVE FIELD. COMPANY shall control all aspects
of any such proceeding, including, without limitation, the strategy, defense,
and settlement of such proceeding, and shall do so in a manner consistent with
the terms and provisions hereof.  

 

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

 

 

Subject to Paragraph 4.8, any
damage, cost, award, fee, recovery, or compensation paid by any third party in
connection with any proceeding initiated or carried on at COMPANY’S expense
(whether by way of settlement or otherwise) shall be retained by the COMPANY.
The COMPANY shall not enter into any settlement, consent judgment, or any other
voluntary final disposition of any infringement action under this
Paragraph  without the prior written
consent of JHU, which shall not be unreasonably withheld, conditioned or
delayed.  Company’s right to sue for
infringement hereunder shall not be used in an arbitrary or capricious manner.

 

9.               The following Section 9.5 is hereby deemed a part of
the Agreement:

 

9.5  Termination of License to BEAMING PATENT
RIGHTS Only.   EXACT may, at its discretion, terminate its license
with respect to the BEAMING PATENT RIGHTS only, upon thirty (30) days written
notice to JHU.  Under such circumstances,
EXACT shall no longer be responsible for patent prosecution and maintenance
costs related to the BEAMING PATENT RIGHTS and the Annual License Fee due from
EXACT to JHU shall be reduced by [********] ([********] if the SECOND BEAMING
EXCLUSIVE FIELD is included in the license) as of the immediately upcoming
annual payment date.  EXACT shall not be
entitled to a refund of any amounts previously owed to JHU, regardless of when
EXACT exercises its rights under this provision.

 

10.         Except as expressly modified herein, the
Agreement and all of its terms and conditions shall continue in full force and
effect.

 

IN WITNESS WHEREOF, the duly authorized
representatives of the parties have executed this Amendment as of the date
first above written.

 

	
  EXACT Sciences Corporation

  	
   

  	
  The Johns Hopkins University

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey R. Luber

  	
   

  	
  By:

  	
  /s/ Wesley D. Blakeslee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
  Jeffrey R. Luber

  	
   

  	
  Printed Name:

  	
  Wesley D. Blakeslee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President and CEO

  	
   

  	
  Title:

  	
  Executive Director

  
									

 

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

 

 

SIXTH
AMENDMENT TO LICENSE AGREEMENT BETWEEN

EXACT
SCIENCES CORPORATION

AND

THE
JOHNS HOPKINS UNIVERSITY

 

This Sixth Amendment (this “Amendment”)
is made effective as of October 30, 2008, by and between The Johns Hopkins
University (“JHU”) and EXACT Sciences Corporation (“EXACT”).

 

WHEREAS, JHU and EXACT entered into an amended and restated license
agreement (the “Agreement”) having a final signature date of March 25,
2003 (the “EFFECTIVE DATE”); and

 

WHEREAS, JHU and EXACT amended the Agreement on November 9, 2004, May 11,
2006, March 19, 2007, and October 17, 2008; and

 

WHEREAS, the parties desire to amend certain provisions of the
Agreement.

 

NOW, THEREFORE, in consideration of the
mutual covenants and agreements contained herein, the parties agree to the
following amendments to the Agreement, to be effective as of the date of
execution of this Amendment:

 

1.               Sections 1.12.1(a) and
1.12.2(a) of the Agreement are hereby replaced in their entirety with the
following:

 

“[********]; and”

 

The parties hereby agree that
all references, express or implied, to the [********] minimum license fee set
fort in the Agreement shall, instead, be amended to reference [********] and
any calculations set forth in the Agreement, for purposes of example, shall be
deemed illustrative only to the extent appropriate based on the change in
minimum annual fee from [********] to [********] as set forth above.  The minimum annual fee shall be reduced to
[********].  Thereafter, the minimum
annual fee shall be [********] ([********]if the SECOND BEAMING OPTION has been
exercised).

 

2.               The patent applications
identified below are hereby deemed included in Exhibit A of the Agreement:

 

[********]

 

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

 

 

3.               The Field, for purposes of
the above patents only, shall be FECAL BASED
TESTS, that is, a screening assay conducted on a stool sample for the purpose
of diagnosing colorectal neoplasia.

 

4.               Section 10.6 of the
Agreement is hereby replaced in its entirety with the following:

 

10.6                Notice.  All notices or communication required or permitted to
be given by either party hereunder shall be deemed sufficiently given if mailed
by registered mail or certified mail or sent by overnight courier, such as
Federal Express, to the other party at its respective address set forth below
or to such other address as one party shall give notice of to the other from
time to time hereunder.  Mailed notices
shall be deemed to be received on the third business day following the date of
mailing.  Notices sent by overnight
courier shall be deemed received the following business day.

 

	
  If to Company:

  	
   

  	
  Exact Sciences Corporation

  
	
   

  	
   

  	
  100 Campus Drive

  
	
   

  	
   

  	
  Marlborough, MA  01752

  
	
   

  	
   

  	
  Attn: President

  
	
   

  	
   

  	
   

  
	
  If to JHU:

  	
   

  	
  Johns Hopkins Technology Transfer

  
	
   

  	
   

  	
  The Johns Hopkins University

  
	
   

  	
   

  	
  100 N. Charles Street

  
	
   

  	
   

  	
  5th Floor

  
	
   

  	
   

  	
  Baltimore, MD 21201

  
	
   

  	
   

  	
  Attn: Director

  

 

5.               Except as expressly modified herein, the
Agreement and all of its terms and conditions shall continue in full force and
effect.

 

IN WITNESS WHEREOF, the duly authorized
representatives of the parties have executed this Amendment as of the date
first above written.

 

	
  EXACT Sciences Corporation

  	
   

  	
  The Johns Hopkins University

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey R. Luber

  	
   

  	
  By:

  	
  /s/ Wesley D. Blakeslee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name:

  	
  Jeffrey R. Luber

  	
   

  	
  Printed Name:

  	
  Wesley D. Blakeslee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President and CEO

  	
   

  	
  Title:

  	
  Executive Director

  
									

 

Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the
Exchange Act; [*] denotes omissions.Exhibit 4.1

 

ATLANTIC SOUTHERN
FINANCIAL GROUP, INC.

 

Form of Atlantic Southern Bank Fixed Rate
Subordinated Debenture

 

THIS NOTE
IS NOT A DEPOSIT AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY GOVERNMENT AGENCY, AND IS NOT SECURED

 

THIS NOTE
HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933 OR ANY STATE OR
OTHER JURISDICTION’S SECURITIES OR BLUE SKY LAWS.  NO SUCH SECURITIES NOR ANY INTEREST THEREIN
SHALL BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED OR
DISPOSED OF ABSENT SUCH REGISTRATION, OR RECEIPT OF AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE BORROWER, SUCH REGISTRATION IS NOT REQUIRED.

 

	
  Registered

  	
  Principal

  	
   

  
	
   

  	
   

  	
   

  
	
  No.

  	
  Amount:

  	
  $

  
	
   

  	
   

  	
   

  
	
   

  	
  CUSIP:

  	
   

  

 

ATLANTIC SOUTHERN
BANK

Fixed Rate
Subordinated Note due September 30, 2018

 

1.        Payment.

 

(a)       ATLANTIC SOUTHERN BANK, a Georgia
state-chartered bank (the “Issuer”), for value received, hereby promises
to pay to
                                      ,
or its registered assigns, the principal sum of
                                          
Dollars (U.S.)
($                          )
on September 30, 2018 (the “Maturity Date”) and to pay interest
thereon from September 30, 2008, or from the most recent Interest Payment
Date (as defined below) to which interest has been paid or duly provided for,
semi-annually in arrears on June 30 and December 31 of each year
(each, an “Interest Payment Date”), commencing on the Interest Payment
Date in December 2008, at an annual rate equal to 12% (the “Interest
Rate”) will be applied to the principal amount hereof, until the principal
hereof is paid or duly provided for or made available for payment, and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment
of interest at the Interest Rate in effect for each applicable period,
compounded semi-annually, from the dates such amounts are due until they are
paid or made available for payment.  The
amount of interest payable for any period will be computed on the basis of the
actual number of days in the Distribution Period concerned divided by 360.

 

On or before December 31, 2008, the Issuer may,
in its sole discretion and without consent of the Noteholders (as defined
below), increase retroactive to September 30, 2008 the Interest Rate to be
paid on the Notes (as defined below) to an annual rate not to exceed 12.5% by
sending notice to the holder in whose name this Note is registered on the
Security Register as of the date of such increase.  In no event may the Issuer decrease the
Interest Rate without the consent of Noteholders as required by Section 16
hereof.

 

(b)      Any payment of
principal of or interest on this Note that would otherwise become due and payable
on a day which is not a Business Day shall become due and payable on the next
succeeding Business Day, with the same force and effect as if made on the date
for payment of such principal or interest, and no interest shall accrue in
respect of such payment for the period after such day.  The term “Business Day” means any day
that is not a Saturday or Sunday and that is not a day on which banks in the
Cities of New York, New York and Wilmington, Delaware or the State of Georgia
are generally authorized or required by law or executive order to be closed.

 

2.        Notes, Noteholders, Fiscal and Paying
Agency Agreement.  This Note is one
of a duly authorized issue of notes of the Issuer designated as Fixed Rate
Notes due September 30, 2018 (herein called the “Notes”), initially
limited in aggregate principal amount to $10,000,000.  The Issuer intends to act as its own paying
agent;

 

 

ATLANTIC SOUTHERN FINANCIAL GROUP, INC.

 

Form of Atlantic Southern
Bank Fixed Rate Subordinated Debenture

 

however, the Bank may, for the
benefit of the holders of the Notes (collectively, the “Noteholders”),
enter into a Fiscal and Paying Agency Agreement (the “Fiscal and Paying
Agency Agreement”) between the Issuer and a Fiscal and Paying Agent.  In the event the Issuer enters into a Fiscal
and Paying Agency Agreement, Issuer shall provide notice to the registered
holder of the Notes within 60 day of entering into such agreement, and copies
of such Fiscal and Paying Agency Agreement shall be kept on file and available
for inspection during normal business hours at the offices of the Fiscal and
Paying Agent, or at such other place or places as the Fiscal and Paying Agent
shall designate by notice to the holder in whose name this Note is registered
on the Security Register (as defined in Section 10 of this Note).  Such Fiscal and Paying Agency Agreement may
provide for further rights of the Noteholders and the further rights,
limitations of rights, duties and indemnities thereunder of the Issuer and the
Fiscal and Paying Agent and of the terms upon which the Notes are, and are to
be, authenticated and delivered.

 

3.        Optional Redemption.  Beginning on September 30, 2013, the
Issuer may, at its option and subject to obtaining prior approval of the
Federal Deposit Insurance Corporation (the “FDIC”), redeem some or all
of the Notes on any Interest Payment Date at a redemption price of 100% of the
principal amount of the redeemed Notes, plus any accrued but unpaid interest.

 

The
Issuer will notify the registered holders of the Notes to be redeemed at least
30 but not more than 60 days before the Issuer redeems the Notes.  If the Issuer redeems only some of the Notes,
it will select the Notes to be redeemed on principal amounts of $100,000 or any
amount in excess thereof which is an integral multiple of $1,000 by lot, pro rata or by another method the Issuer considers fair and
appropriate.  All Notes that remain
outstanding after any partial redemption must have a principal amount of
$100,000 or any amount in excess thereof which is an integral multiple of
$1,000.

 

The Notes, which have
been called for redemption, shall cease to be outstanding from and after the
redemption date.

 

4.        Subordination.  The indebtedness of the Issuer evidenced by
the Notes, including the principal and interest on this Note, shall be
subordinate and junior in right of payment to the Issuer’s obligations to its
depositors, its obligations under bankers’ acceptances and letters of credit,
and its other obligations to its general and secured creditors, including, but
not limited to, its obligations to the Federal Reserve Bank of Atlanta, the
FDIC and any rights acquired by the FDIC as a result of loans made by the FDIC
to the Issuer or the purchase or guarantee of any of its assets by the FDIC,
pursuant to the provisions of 12 U.S.C. 1823 (c), (d) or (e) whether
now outstanding or hereafter incurred (except any other obligations which rank
on a parity with or subordinate to the Notes). 
In the event of any insolvency, receivership, conservatorship,
reorganization, readjustment of debt, marshalling of assets and liabilities or
similar proceedings or any liquidation or winding up of or relating to the
Issuer, whether voluntary or involuntary, all obligations of the Issuer (except
any other obligations which rank on a parity with or subordinate to the Notes)
shall be entitled to be paid in full before any payment shall be made on
account of the principal of or interest on the Notes, including this Note.  In the event of any such proceeding, after
payment in full of all sums owing with respect to such prior obligations, the
Noteholders, together with the holders of any obligations of the Issuer ranking
on a parity with the Notes, shall be entitled to be paid from the remaining
assets of the Issuer the unpaid principal thereof, and the unpaid interest
thereon, before any payment or other distribution, whether in cash, property or
otherwise, shall be made on account of any capital stock or any obligations of
the Issuer ranking junior to the Notes.

 

Nothing
herein shall impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of and interest on this Note in accordance
with its terms.

 

5.        Consolidation, Merger and Sale of
Assets.  The Issuer shall not
consolidate with or merge into another entity or convey, transfer or lease its
properties and assets substantially as an entirety to any person, unless:

 

(a)       the continuing
entity formed by such consolidation or into which the Issuer is merged or the
person which acquires by conveyance or transfer or which leases the properties
and assets of the Issuer substantially as an entirety shall be a corporation,
association or general partnership or other legal entity organized and existing
under

 

 

ATLANTIC SOUTHERN FINANCIAL GROUP, INC.

 

Form of Atlantic Southern
Bank Fixed Rate Subordinated Debenture

 

the laws of the United States of America, any State thereof
or the District of Columbia, shall expressly assume, by a supplemental
agreement executed and delivered to the Issuer in a satisfactory form, the due
and punctual payment of the principal of and any premium and interest on the
Notes, according to their terms, and the due and punctual performance of all
covenants and conditions hereof on the part of the Issuer to be performed or
observed; and

 

(b)      immediately
after giving effect to such transaction, no Event of Default (as defined
below), and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing.

 

6.        Events of Default; Acceleration; Compliance
Certificate.  If any of the following
events shall occur and be continuing it shall constitute an event of default
(each an “Event of Default”):

 

(a)       the Issuer shall consent to the
appointment of a receiver, liquidator, trustee or other similar official in any
liquidation, insolvency or similar proceeding with respect to the Issuer or all
or substantially all of its property; or

 

(b)      a court or
other governmental agency or body having jurisdiction on the premises shall
enter a decree or order for the appointment of a receiver, liquidator, trustee
or other similar official in any liquidation, insolvency or similar proceeding
with respect to the Issuer or all or substantially all of the property of the
Issuer, or for the winding up of the affairs or business of the Issuer and such
decree or order shall have remained in force for 60 days; then, and in each
such case, unless the principal of this Note already shall have become due and
payable, the holder of this Note, by notice in writing to the Issuer, may
declare the principal amount of this Note to be due and payable immediately
and, upon any such declaration the same shall become and shall be immediately
due and payable.  The Issuer may waive demand, presentment for payment, notice of
nonpayment, notice of protest, and all other notices.

 

The
Issuer, promptly after the receipt of written notice from the source of the
occurrence of an Event of Default with respect to this Note, shall mail to all
Noteholders, at their addresses shown on the Security Register, such written
notice of the Event of Default, unless such Event of Default shall have been
cured or waived before the giving of such notice.  Prior to any acceleration of this Note, the
Noteholders holding 66 2/3% in aggregate principal amount of the outstanding
Notes may waive any past Event of Default. 
In addition, the Noteholders holding 66 2/3% in aggregate principal
amount of the outstanding Notes may rescind a declaration of acceleration of
this Note before any judgment has been obtained if (i) the Issuer pays all
matured installments of principal of and interest on this Note (other than
installments due by reason of acceleration) and interest on the overdue
installments and (ii) all other Events of Default with respect to this
Note have been cured or waived.

 

THIS
NOTE MAY NOT BE REPAID PRIOR TO THE MATURITY DATE, WHETHER PURSUANT TO AN
ACCELERATION UPON AN EVENT OF DEFAULT OR OTHERWISE, WITHOUT THE PRIOR WRITTEN
APPROVAL OF THE FDIC.

 

7.        Failure to Make Payment.  In the event of failure by the Issuer to make
any payment of principal of or interest on this Note (and, in the case of
payment of interest, such failure to pay shall have continued for 30 days), the
Issuer will, upon demand of the holder, pay to the holder the whole amount then
due and payable on this Note for principal and interest (without acceleration),
with interest on the overdue principal and interest at the rate borne by this
Note, to the extent permitted by applicable law.  If the Issuer fails to pay such amount upon
such demand, the holder may, among other things, institute a judicial
proceeding for the collection of the sums so due and unpaid, may prosecute such
proceeding to judgment or final decree and may enforce the same against the
Issuer and collect the amounts adjudged or decreed to be payable in the manner
provided by law out of the property of the Issuer.

 

8.        Payment Procedures.  Payment of the principal and interest payable
on the Maturity Date will be made by check or wire transfer in immediately
available funds to a bank account in the United States designated by the holder
of this Note, upon presentation and surrender of this Note at the main office
of the Issuer in Macon, Georgia, or at such other place or places as the Issuer
shall designate by notice to the Noteholders, provided that this

 

 

ATLANTIC SOUTHERN FINANCIAL GROUP, INC.

 

Form of Atlantic Southern
Bank Fixed Rate Subordinated Debenture

 

Note is presented to the Issuer
in time for it to make such payments in such funds in accordance with its
normal procedures.  Payments of interest
(other than interest payable on the Maturity Date) shall be made by wire
transfer or by check mailed to the person entitled thereto, as such person’s
address appears on the Security Register. 
Interest payable on any Interest Payment Date shall be payable to the
holder in whose name this Note is registered at the close of business on the 15th
of the month next in which the relevant Interest Payment Date is scheduled to
fall, whether or not a Business Day (such date being referred to herein as the “Regular
Record Date”), except that interest not so punctually paid will be paid to
the holder in whose name this Note is registered at the close of business on a
special record date fixed by the Issuer (a “Special Record Date”),
notice of which shall be given to the holder not less than ten calendar days
prior to such Special Record Date (the Regular Record Date and Special Record
Date are referred to herein collectively as the “Record Dates”).  To the extent permitted by applicable law, interest
shall accrue at the Interest Rate on any amount of principal of or interest on
this Note not paid when due.  All
payments on this Note shall be applied first to accrued interest and then the
balance, if any, to principal.

 

9.        Form of Payment, Maintenance of
Payment Office.  Payments of
principal of and interest on this Note shall be made in such coin or currency
of the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts. 
Until the date on which all of the Notes shall have been surrendered or
delivered to the Issuer for cancellation or destruction, or become due and
payable and a sum sufficient to pay the principal of and interest on all of the
Notes have been paid or returned to the Issuer as provided herein.  The Issuer shall at all times maintain an
office or agency in the City of Macon, Georgia where Notes may be presented or
surrendered for payment.

 

10.      Registration of Transfer, Security
Register.  Except as otherwise
provided on the first page hereof, this Note is transferable in whole or
in part, and may be exchanged for a like aggregate principal amount of Notes of
other authorized denominations, by the holder in person, or by his attorney
duly authorized in writing, at the office of the Issuer in the City of Macon,
Georgia.  The Issuer shall maintain a
register providing for the registration of the Notes and any exchange or
transfer thereof (the “Security Register”).  Upon surrender or presentation of this Note
for exchange or registration of transfer, the Issuer shall execute and shall
authenticate and deliver in exchange therefor a Note or Notes of like aggregate
principal amount, each in a denomination of $100,000 or any amount in excess
thereof which is an integral multiple of $1,000 (and, in the absence of an
opinion of counsel satisfactory to the Issuer to the contrary, bearing the
restrictive legend(s) called for by the Offering Memorandum), and that is
or are registered in such name or names requested by the holder.  Any Note presented or surrendered for
registration of transfer or for exchange shall (if so required by the Issuer)
be duly endorsed, or accompanied by a written instrument of transfer in
satisfactory form with such evidence of due authorization and guarantee of
signature as may reasonably be required by the Issuer, duly executed by the
holder or his attorney duly authorized in writing, with such tax identification
number or other information for each person in whose name a Note is to be
issued, and accompanied by evidence of compliance with any restrictive legend(s) appearing
on such Note or Notes as the Issuer may reasonably request to comply with
applicable law.  No exchange or
registration of transfer of this Note shall be made on or after the fifteenth
day immediately preceding the Maturity Date.

 

11.      Charges and Transfer Taxes.  No service charge, excluding any cost of
delivery, shall be imposed for any exchange or registration of transfer of this
Note, but the Issuer may require the payment of a sum sufficient to cover any
stamp or other tax or governmental charge that may be imposed in connection
therewith (or presentation of evidence that such tax or charge has been paid).

 

12.      Ownership.  Prior to due presentment of this Note for
registration of transfer, the Issuer may treat the holder in whose name this
Note is registered in the Security Register as the absolute owner of this Note
for the purpose of receiving payments of principal of and interest on this Note
and for all other purposes whatsoever, whether or not this Note be overdue, and
the Issuer shall not be affected by any notice to the contrary.

 

13.      Priority.  The Notes rank pari passu
among themselves and pari passu, in
the event of any insolvency proceeding, receivership, conservatorship, reorganization,
readjustment of debt, marshalling of assets and liabilities or similar
proceeding or any liquidation or winding up of the Issuer, with all other
present or future

 

 

ATLANTIC SOUTHERN FINANCIAL GROUP, INC.

 

Form of Atlantic Southern
Bank Fixed Rate Subordinated Debenture

 

unsecured subordinated debt
obligations of the Issuer, except any unsecured subordinated debt which may be
expressly stated to be senior to or subordinate to the Notes.

 

14.      Notices.  All notices to the Issuer under this Note
shall be in writing and addressed to the Issuer at 1701 Bass Road, Macon,
Georgia 31210, Attention:  Chief
Financial Officer, or to such other address as the Issuer may notify to the
holder.  All notices to the Noteholders
shall be in writing and sent by first-class mail to each Noteholder at his or
its address as set forth in the Security Register.

 

15.      Denominations.  The Notes are issuable only as fully
registered Notes without interest coupons in denominations of $100,000 or any
amount in excess thereof which is a whole multiple of $1,000.

 

16.      Modification.  Except as set forth in Section 1 hereof,
the Issuer may not amend or modify the rights and obligations of the Issuer and
the rights of the holders without the consent of the Noteholders holding
66 2/3% in aggregate principal amount of the Notes at the time
outstanding.  If there is an Event of
Default, Noteholders holding 66 2/3% in aggregate principal amount of the Notes
at the time outstanding, on behalf of all Noteholders, may waive Issuer
compliance.  The Issuer shall not enter
into any agreement for the purpose of changing the Maturity Date or the terms
of subordination of any Note unless the FDIC has consented to such agreement.

 

17.      Absolute and Unconditional Obligation
of the Issuer.  No provisions of this
Note shall alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of and interest on this Note at the times,
places and rate, and in the coin or currency, herein prescribed.

 

18.      Waiver and Consent.  (a) Any consent or waiver given by the
holder of this Note shall be conclusive and binding upon such holder and upon
all future holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.

 

(b)      No delay or omission of the holder to
exercise any right or remedy accruing upon any Event of Default shall impair
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein.

 

(c)       Any insured depository institution which
shall be a holder of this Note or which otherwise shall have any beneficial
ownership interest in this Note shall, by its acceptance of such Note (or
beneficial interest therein), be deemed to have waived any right of offset with
respect to the indebtedness evidenced thereby.

 

20.      Loans by Issuer.  This Note is ineligible as collateral for a
loan by the Issuer.

 

21.      Further Issues.  The Issuer may, without the consent of the
holders of the Notes, create and issue additional notes having the same terms
and conditions of the Notes (except for the issue date and issue price) .  Such further notes shall be consolidated and
form a single series with the Notes.  Any
such issuance shall be made pursuant to another offering document and will
either be registered or issued pursuant to an exemption from registration under
the Securities Act of 1933, as amended, or similar laws or regulations issued
by the applicable banking agency.

 

22.      Governing Law.  This Note shall be governed by and construed
in accordance with applicable federal law and the laws of the State of Georgia.

 

 

ATLANTIC SOUTHERN FINANCIAL GROUP, INC.

 

Form of Atlantic Southern
Bank Fixed Rate Subordinated Debenture

 

IN
WITNESS WHEREOF, the undersigned has caused this Note to be duly executed and
its corporate seal to be hereunto affixed and attested.

 

	
   

  	
   

  	
  ATLANTIC SOUTHERN BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   Name

  
	
   

  	
   

  	
   

  	
   Title:

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Corporate Seal)

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