Document:

Exhibit 4.2

 

Warrant
No. W-2

 

THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE
ACQUIRED UPON EXERCISE HEREUNDER, SOLD, TRANSFERRED, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS (i) A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME
EFFECTIVE WITH REGARD THERETO, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN
CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.

 

COMMON STOCK PURCHASE WARRANT

 

To Purchase Shares of Common
Stock of

 

EXACT
SCIENCES CORPORATION

 

THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, MAYO
Foundation for Medical Education and Research (“Mayo”, and together with
any other registered holder(s) hereunder, the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, to subscribe for and purchase from EXACT
Sciences Corporation, a Delaware corporation (the “Company”), up to Two
Hundred Fifty Thousand (250,000) shares (the “Warrant Shares”) of Common
Stock, par value $0.01 per share, of the Company (the “Common Stock”).  The purchase price of one share of Common
Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.               License
Agreement.  This Warrant is being
issued in connection with that certain License Agreement (the “License
Agreement”), dated June 11, 2009, between the Company and Mayo, as
consideration for the Know-How (as defined in the License Agreement) as
services provided to the Company thereunder.

 

Section 2.               Exercise.

 

a)             Exercise of
Warrant.

 

i.              Vesting. 
The Warrant Shares shall vest, and the Holder shall be entitled to
exercise this Warrant with respect to such Warrant Shares, according to the
following schedule (in each case subject to share adjustment pursuant to Section 3):  (A) 62,500 Warrant Shares shall vest on
the first anniversary of the date hereof; (B) 62,500 Warrant Shares shall
vest on the second anniversary of the date hereof; (C) 62,500 Warrant
Shares shall vest on the third anniversary of the date hereof; and (D) 62,500
Warrant Shares shall vest on the fourth anniversary of the date hereof, with
each such vesting date becoming the “Initial Exercise Date” for such
Warrant Shares vesting on such date. 
Once the Warrant Shares have vested pursuant to this Section 2(a)(i),
the Holder may exercise this 

 

 

Warrant with respect to such Warrant Shares
at any time on or after the Initial Exercise Date for such Warrant Shares up
until the close of business on the six-year anniversary of such Initial
Exercise Date (each such six-year anniversary date being a “Termination Date”)
but not thereafter.  This Warrant shall
become void and shall cease to be exercisable following the Termination Date
for the Warrant Shares vesting on the fourth anniversary of the date hereof, or
June 11, 2019 (such date, subject to adjustment pursuant to Section 3(b),
the “Final Termination Date”).  As
used in this Warrant, the terms “Initial Exercise Date” and “Termination Date”
shall mean the Initial Exercise Date and Termination Dates, respectively, as
may be applicable to each of the four vesting dates for the Warrant Shares.

 

ii.             Exercise. 
Subject to compliance with applicable securities laws, exercise of the
purchase rights represented by this Warrant may be made, in whole or in part,
at any time or times on or after the applicable Initial Exercise Date and on or
before the applicable Termination Date by delivery to the Company of a duly
executed facsimile copy of the Notice of Exercise Form annexed hereto (or
such other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder appearing on the
books of the Company); provided, however, within five Trading
Days (as defined below) of the date said Notice of Exercise is delivered to the
Company, if this Warrant is exercised in full, the Holder shall have
surrendered this Warrant to the Company and the Company shall have received
payment of the aggregate Exercise Price of the Warrant Shares thereby purchased
by wire transfer or cashier’s check drawn on a United States bank.  Notwithstanding anything herein to the
contrary, the Holder shall not be required to physically surrender this Warrant
to the Company until the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full.  Partial exercises of this Warrant resulting
in purchases of a portion of the total number of Warrant Shares available
hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable number of
Warrant Shares purchased.  The Holder and
the Company shall maintain records showing the number of Warrant Shares
purchased and the date of such purchases. 
The Company shall deliver any objection to any Notice of Exercise Form within
five Business Days (as defined below) of receipt of such notice.  In the event of any dispute or discrepancy,
the records of the Company shall be controlling and determinative in the
absence of manifest error.  The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof.  As used in this Warrant, “Trading
Day” means a day on which the Common Stock is traded on one of the
following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the Nasdaq Capital Market, the American
Stock Exchange, the New York Stock Exchange, the Nasdaq Global Market, the
Nasdaq Global Select Market or the OTC Bulletin Board (each, a “Trading
Market”).  If for any period prior to
the Final Termination Date the Common Stock ceases to trade on a Trading
Market, the term “Business Day”, meaning any day other than a Saturday,
Sunday or legal holiday, shall replace the term “Trading Day” in this Warrant
for such period.

 

2

 

b)            Exercise Price.  The per share exercise price of the Common
Stock under this Warrant shall be $1.90, subject to adjustment hereunder (the “Exercise
Price”).

 

c)             Cashless
Exercise.  This Warrant may also be
exercised at any time in whole or in part by means of a “cashless exercise” in
which the Holder shall be entitled to receive a certificate for the number of
Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:

 

(A)                              = the VWAP on
the Trading Day immediately preceding the date of such election;

 

(B)                                = the Exercise
Price of this Warrant, as adjusted; and

 

(X)                               = the number of
Warrant Shares for which the cashless exercise is elected that are issuable
upon exercise of this Warrant in accordance with the terms of this Warrant by
means of a cash exercise rather than a cashless exercise.

 

For the purposes of this Section 2(c),
“VWAP” means, for any date, the price determined by the first of the
following clauses that applies:  (i) if
the Common Stock is then listed or quoted on a Trading Market, the daily volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted for trading as reported by Bloomberg L.P. (based on a Trading Day
from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time); (ii) if the Common Stock is not then quoted for trading on a
Trading Market and if prices for the Common Stock are then reported in the “Pink
Sheets” published by Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported; or (iii) in all other cases, the
fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith and paid for by the Company and reasonably
acceptable to the Holder.

 

d)            Mechanics
of Exercise.

 

i.              Authorization of Warrant Shares.  The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by
this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).

 

ii.             Delivery of Certificates Upon
Exercise.  Certificates for shares
purchased hereunder shall be transmitted by the transfer agent of the Company
to the Holder by crediting the account of the Holder’s prime broker with the
Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”)
system if the Company is a participant in such system, and otherwise by
physical delivery to the address specified by the Holder in the Notice of
Exercise within three Trading Days from the delivery to the Company of the
Notice of Exercise Form, surrender of this Warrant (if required) and payment of
the aggregate Exercise Price as set forth above (“Warrant Share Delivery
Date”).  This Warrant shall be deemed
to have been exercised on the date the Exercise Price is received by the
Company.  The Warrant Shares shall be
deemed to have been 

 

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issued, and Holder or any
other person so designated to be named therein shall be deemed to have become a
holder of record of such shares for all purposes, as of the date the Warrant
has been exercised by payment to the Company of the Exercise Price.

 

iii.            Restrictive Legend. The
Holder understands that unless Warrant Shares may be sold pursuant to Rule 144
under the Securities Act or another exemption from registration under the
Securities Act without any restriction as to the number of securities as of a
particular date that can then be immediately sold, the Warrant Shares may bear
a restrictive legend in substantially the form included on this Warrant (and a
stop-transfer order may be placed against transfer of the certificates for such
securities).

 

iv.            Delivery of New Warrants Upon
Exercise.  If this Warrant shall have
been exercised in part, the Company shall, at the request of a Holder and upon
surrender of this Warrant certificate, at the time of delivery of the certificate
or certificates representing Warrant Shares, deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased Warrant Shares
called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

 

v.             No Fractional Shares or Scrip.  No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which Holder
would otherwise be entitled to purchase upon such exercise, the Company shall
pay a cash adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price.

 

Section 3.               Certain Adjustments.

 

a)             Stock Dividends and Splits.  If the Company, at any time while this Warrant
is outstanding:  (A) pays a stock
dividend or otherwise make a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company pursuant to this Warrant or the
other Warrants), (B) subdivides outstanding shares of Common Stock into a
larger number of shares, (C) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or (D) issues
by reclassification of shares of the Common Stock any shares of capital stock
of the Company, then in each case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted.  Any adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

 

b)            Sale of Assets and Mergers.  Upon the sale by the Company of all or
substantially all of its assets, or the merger or consolidation of the Company
with or into another entity in a transaction where the shares of Common Stock
outstanding immediately prior to the closing of 

 

4

 

such merger or consolidation
represent or are converted into or exchanged for shares that represent less
than a majority of the shares of capital stock of the resulting or surviving
entity outstanding immediately after the closing of such merger or
consolidation (each, a “Business Event”), this Warrant shall be deemed
exercised pursuant to a cashless exercise, with VWAP meaning the fair market
value of a share of Common Stock based on such Business Event, and with all
unvested Warrant Shares vested and exercisable as part of such cashless
exercise.

 

c)             Calculations.  All calculations under this Section 3
shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be.  For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of
a given date shall be the sum of the number of shares of Common Stock
(excluding treasury shares, if any) issued and outstanding.

 

Section 4.               Transfer of Warrant.

 

a)             Transferability.  Subject to the Securities Act and any other
restrictions set forth herein, this Warrant and all rights hereunder are
transferable (but only with all related obligations) with the prior written
consent of the Company and upon surrender of the Warrant with a properly
executed assignment, reasonably satisfactory to the Company, at the principal
office of the Company or such other office or agency as the Company may
designate.  Each Holder (i) acknowledges
that this Warrant and the Warrant Shares have not been registered under the
Securities Act, and (ii) agrees not to sell, pledge, distribute, offer for
sale, transfer or otherwise dispose of this Warrant or any Warrant Shares in
the absence of (A) an effective registration statement under the
Securities Act as to this Warrant or the Warrant Shares and registration or
qualification of this Warrant or the Warrant Shares under any applicable blue
sky or state securities law then in effect, or (B) an opinion of counsel,
reasonably satisfactory to the Company, that such registration and
qualification are not required.

 

b)            New Warrants.  This Warrant may be divided or combined with
other Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued, signed by the Holder or its agent or
attorney.  Subject to compliance with Section 4(a),
as to any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with such notice.

 

c)             Warrant Register.  The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes,
absent actual notice to the contrary.

 

Section 5.               Notice of Certain Events.  In case at any time or from time to time:

 

a)             the
Company shall take a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or 

 

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other distribution, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right;

 

b)            the
Company shall declare a dividend (or any other distribution) on the shares of
Common Stock or other equity interests, if any, of the Company;

 

c)             the
Company shall authorize the granting to the holders of the shares of Common
Stock or other equity interests, if any, of the Company of rights or warrants
to subscribe for or purchase any equity interests of any class or of any other
rights or warrants;

 

d)            there
shall be any reclassification of the shares of Common Stock or other equity
interests, if any, of the Company, or any consolidation or merger to which the
Company is a party and for which approval of any holders of shares of Common
Stock of the Company is required, or any sale or other disposition of all or
substantially all of the assets of the Company; or

 

e)             of
the voluntary or involuntary dissolution, liquidation or winding up of the
Company;

 

then the Company shall mail
to Holder at the last address of the Holder appearing on the books of the
Company, as promptly as possible but in any event at least twenty days prior to
the applicable date hereinafter specified, a notice stating (i) the date
on which a record is to be taken for the purpose of such dividend, distribution
or rights or warrants or, if a record is not to be taken, the date as of which
the holders of shares of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined, (ii) the date of
the distribution, together with a description of the property to be
distributed, (iii) the date of such issuance, together with a description
of the security so issued and the consideration received by the Company
therefor, and (iv) the date on which such reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up is expected to
become effective, the time, if any such time is to be fixed, as of which the
holders of record of Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for the securities
or other property deliverable upon such reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up, and a
description in reasonable detail of the transaction.  Such notice shall be mailed at least twenty
days prior to the date or expected date therein specified.

 

Section 6.               Miscellaneous.

 

a)             No Rights as Stockholder Until
Exercise.  This Warrant does not
entitle the Holder to any voting rights or other rights as a stockholder of the
Company prior to the exercise hereof. 
Upon the surrender of this Warrant and the payment of the aggregate
Exercise Price (or by means of a cashless exercise), the Warrant Shares so
purchased shall be and be deemed to be issued to such Holder as the record
owner of such shares as of the close of business on the later of the date of
such surrender or payment.

 

b)            Loss, Theft, Destruction or
Mutilation of Warrant.  The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, 

 

6

 

and in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to it (which,
in the case of the Warrant, shall not include the posting of any bond), and
upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate
of like tenor and dated as of such cancellation, in lieu of such Warrant or
stock certificate.

 

c)             Business Days.  If the last or appointed day for the taking
of any action or the expiration of any right required or granted herein shall
not be a Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.

 

d)            Authorized Shares.

 

The Company covenants that
during the period the Warrant is outstanding, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant.  The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant.  The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or regulation.

 

Except and to the extent as
waived or consented to by the Holder, the Company shall not by any action,
including, without limitation, amending its certificate of incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant
against impairment.  Without limiting the
generality of the foregoing, the Company will (a) not increase the par
value of any Warrant Shares above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (b) take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant, and (c) use commercially reasonable efforts to
obtain all such authorizations, exemptions or consents from any public
regulatory body having jurisdiction thereof as may be necessary to enable the
Company to perform its obligations under this Warrant.

 

Before taking any action
which would result in an adjustment in the number of Warrant Shares for which
this Warrant is exercisable or in the Exercise Price, the Company shall obtain
all such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction
thereof.

 

e)             Governing Law.  This Warrant shall be governed by and
construed in accordance with Delaware law without regard for its conflicts of
law principals.

 

f)             Nonwaiver and Expenses.  No course of dealing or any delay or failure
to exercise any right hereunder on the part of Holder shall operate as a waiver
of such right or otherwise 

 

7

 

prejudice Holder’s rights,
powers or remedies, notwithstanding the fact that all rights hereunder
terminate on the Final Termination Date. 
If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover
any costs and expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by Holder in
collecting any amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.

 

g)            Notices.  Any notice, request or other document
required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the License
Agreement.

 

h)            Successors and Assigns.  Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder.  The
provisions of this Warrant are intended to be for the benefit of all Holders from
time to time of this Warrant and shall be enforceable by any such Holder or
holder of Warrant Shares.

 

i)              Amendment.  This Warrant may be modified or amended or
the provisions hereof waived with the written consent of the Company and the
Holder.

 

j)              Severability.  Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

 

k)             Headings.  The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

 

8

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly
authorized.

 

Dated:  June 11, 2009

 

	
   

  	
  EXACT SCIENCES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kevin T. Conroy

  
	
   

  	
   

  	
  Name:

  	
  Kevin
  T. Conroy

  
	
   

  	
   

  	
  Title:

  	
  CEO
  and President

  

 

9

 

NOTICE OF EXERCISE

 

TO:         EXACT Sciences Corporation

 

(1)                                  The undersigned
hereby elects to purchase
            
Warrant Shares of the Company pursuant to the terms of the attached Warrant,
and tenders herewith payment of the exercise price, together with all
applicable transfer taxes, if any, in accordance with paragraph (2) below.

 

(2)                                  Payment shall
take the form of (check applicable box):

 

o            $                                    
in lawful money of the United States; or

 

o            the cancellation of such number of Warrant Shares as
is necessary, in accordance with the formula set forth in subsection 2(c), to
exercise this Warrant with respect to the number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3)                                  Please issue a
certificate or certificates representing said Warrant Shares in the name of the
undersigned or in such other name as is specified below:

 

 

The Warrant Shares shall be
delivered to the following:Exhibit 10.2

 

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

 

MAYO FOUNDATION FOR MEDICAL EDUCATION AND RESEARCH

LICENSE AGREEMENT

 

This patent license
agreement (“Agreement”) is by and between  MAYO
Foundation for Medical Education and Research, a Minnesota charitable
corporation, located at 200 First Street SW, Rochester, Minnesota 55905-0001 (“MAYO”),
and Exact Sciences, Inc., a for-profit company located at 100 Campus Drive,
Marlborough, MA 01752 (“EXACT”).

 

WHEREAS, MAYO desires
to make its intellectual property rights available for the development and
commercialization of products, methods and processes for public use and
benefit;

 

WHEREAS, EXACT
represents itself as being knowledgeable in developing and commercializing stool based tests for the detection of
colorectal cancer; and

 

WHEREAS, MAYO is
willing to grant and EXACT is willing to accept an exclusive license under such rights for the purpose of
developing such diagnostic tests.

 

NOW THEREFORE, in
consideration of the foregoing and the terms and conditions set forth below,
the parties hereby agree as follows:

 

Article 1.00 — Definitions

 

For purposes of this Agreement, the terms
defined in this Article will have the meaning specified and will be applicable
both to the singular and plural forms:

 

1.01                        For MAYO, “Affiliate”:  any corporation or other entity within the
same “controlled group of corporations” as MAYO or its parent Mayo Clinic.  For purposes of this definition, the term “controlled
group of corporations” will have the same definition as Section 1563 of the
Internal Revenue Code as of November 10, 1998, but will include corporations or
other entities which, if not a stock corporation, more than 50% of the board of
directors or other governing body of such corporation or other entity is
controlled by a corporation within the controlled group of corporations of MAYO
or Mayo Clinic.  MAYO’s
Affiliates include, but are not limited to: Mayo Clinic; Mayo Collaborative
Services, Inc.; Rochester Methodist Hospital; Saint Marys Hospital; Mayo Clinic Rochester; Mayo Clinic Florida; Mayo Clinic Arizona; and its Mayo Health System
entities.

 

For
EXACT, “Affiliate”: any corporation or other entity that controls, is
controlled by, or is under common control with, EXACT. For purposes of this
definition, “control” means ownership of: (a) at least 50% of the outstanding
voting securities of such entity; or (b) at least 50% of the decision-making
authority of such entity.

 

1.02                        “Confidential Information”: any information or material disclosed
by one party, the disclosing party, to the other, the receiving party,
identified in writing as confidential at the time of disclosure or, if first
disclosed orally, identified as confidential and confirmed in writing

 

 

within forty-five days.  Confidential Information expressly includes
Know How and data and inventions generated in connection with the Sponsored
Research Agreement.  Confidential
Information does not include any information or material that the receiving
party evidences is: (a) already known to the receiving party at the time of
disclosure (other than from the disclosing party); (b) publicly known other
than through acts or omissions of the receiving party; (c) disclosed to the
receiving party by a third party who was not and is not under any obligation of
confidentiality; or (d) independently developed by employees of the receiving
party without knowledge of or access to the Confidential Information.

 

1.03                        “Effective Date”:  June 12,
2009.

 

1.04                        “Field”: stool or blood based cancer screening, excluding use of a proteomic target (Mayo files #2007-207 and
2007-212 and patent applications “Removing Polypeptides from Stool”, U.S.
application # 60/989,578 and PCT application # PCT/US2008/084278).  For one year from the Effective Date, EXACT
shall have an exclusive option to expand the Field to include the use of a
proteomic target Such option may be exercised by EXACT by providing thirty (30)
days written notice to MAYO.

 

1.05                        “Know-How”:

 

(a)                                  research and development information,
materials, technical data, unpatented
inventions, know-how and
supportive information of Dr. Ahlquist and his laboratory as of the Effective
Date to the extent it is necessary for the development or manufacture of a
Licensed Product.  As of the Effective
Date, such Know-How includes the Invention and Assignment Records in Exhibit B
hereto;

 

(b)                                 research and development information,
technical data, unpatented inventions, know-how and supportive
information developed by Dr. Ahlquist as a result of his activities pursuant to
Section 2.06 to the extent it is necessary for the development or manufacture
of a Licensed Product; and

 

(c)                                  research and development information,
technical data, unpatented inventions, know-how and supportive
information developed by MAYO as a result of MAYO’s activities under the work
plans that are part of the Sponsored Research Agreement to the extent it is
necessary for the development or manufacture of a Licensed Product.

 

1.06                        “Licensed Product”:  any
product or process:  (a) described by a
pending claim of the Patent Rights; (b) infringing an issued claim of the
Patent Rights, or that would infringe but for the exception in 35 U.S.C.
§271(e)(1), or similar exception in the United States or other countries;
and/or (c) the development, manufacture, use, sale, offer for sale or
importation of which incorporates, uses, was derived from, identified by,
validated, or developed in whole or in part using the Know-How or Materials.

 

1.07                        “Materials”: Biological specimens of human origin,
including without limitation tissues, blood, plasma, urine, stool and
derivatives thereof used by MAYO pursuant to work in Dr. 

 

2

 

Ahlquist’s laboratory or provided by MAYO (i.e. Dr.
Ahlquist) to EXACT.

 

1.08                        “Net Sales”: the amount invoiced by EXACT or Sublicensee for the transfer of a
Licensed Product to a third party less documented: (a) sales, excise or use
taxes shown on the face of the invoice, excluding value-added tax; (b) credits
for defective or returned Licensed Products actually given; and (c) regular
trade and discount allowances given. 
Leasing, lending, consigning or any other activity by means of which a
third party acquires the right to possess or use a Licensed Product is a
transfer for the purpose of determining Net Sales.  Net Sales on Licensed Products transferred as
part of a non-cash exchange or other than to third parties shall be calculated
at the then-current customary sales price invoiced to third parties or fair
market value if there are no current invoices to third parties.  Net Sales accrues with the first of delivery
or invoice

 

1.09                        “Patent Rights”:

 

(a)                                  U.S. patents and applications listed in Exhibit
A hereto, together with divisionals, continuations, and continuations-in-part (but only for subject matter supported pursuant to
35 U.S.C. §112 by the foregoing) therefrom, patents issuing thereon,
re-examinations and re-issues thereof, as well as extensions and supplementary
protection certificates and any foreign counterpart of any of the foregoing;

 

(b)                                 Any patent applications filed as a result
of Dr. Ahlquist’s activities pursuant to Section 2.06 hereto, together with
divisionals, continuations, and continuations-in-part
(but only for subject matter supported pursuant to 35 U.S.C. §112 by the
foregoing) therefrom, patents issuing thereon, re-examinations and
re-issues thereof, as well as extensions and supplementary protection
certificates and any foreign counterpart of any of the foregoing; and

 

(c)                                  Any patent applications filed with MAYO
inventors as a result of activities performed by MAYO under the work plans that
are part of the Sponsored Research Agreement, together with divisionals,
continuations, and continuations-in-part
(but only for subject matter supported pursuant to 35 U.S.C. §112 by the
foregoing) therefrom, patents issuing thereon, re-examinations and
re-issues thereof, as well as extensions and supplementary protection
certificates and any foreign counterpart of any of the foregoing.

 

1.10                        “Sponsored Research Agreement” 
the agreement outlining the research to be funded by EXACT and performed
at MAYO, as agreed upon by the parties in accordance with this Agreement.

 

1.11                        “Sublicensee”: any third
party or any Affiliate to whom EXACT has conveyed rights or the forbearance of
suit under the Patent Rights, Know-How & Materials.

 

1.12                        “Term”: begins on the Effective Date and ends,
subject to Article 10, upon the date of the last to expire of the Patent
Rights, unless the Know-How or Materials are still in use in a manner
generating Net Sales, in which case upon the earlier of five (5) years
following the last to expire of the Patent Rights or the date upon which EXACT
ceases such use of the Know-How or 

 

3

 

Materials.

 

1.13                        “Territory”:  worldwide

 

Article 2.00 - Grant of Rights

 

2.0l                           GRANT. 
Subject to the terms and conditions of this Agreement, MAYO grants to
EXACT: (a) an exclusive license with the right to sublicense, within the Field and Territory, under
the Patent Rights to make, have made,
use, offer for sale, sell, and import Licensed Products; and (b) a
nonexclusive license with the right to
sublicense, within the Field and Territory, to use the Know-How to
develop, make, have made, use, offer
for sale, sell, and import Licensed Products.

 

2.02                        RESERVATION OF RIGHTS.  All rights herein are subject to (a) the rights
and obligations to and requirements of the U.S. government, if any have arisen
or may arise, regarding the Patent Rights, including as set forth in 35 U.S.C.
§§200 et al., 37 C.F.R. Part 401 et al. (“Bayh Dole Act”); and (b) MAYO’s and
its Affiliates’ reserved, irrevocable right to practice and have practiced the
Patent Rights in connection with MAYO’s and its Affiliates’ educational,
research and clinical programs, including MAYO’s reference laboratory, Mayo
Collaborative Services, Inc.  EXACT
agrees to comply with the provisions of the Bayh-Dole Act, to the extent such
act applies, including promptly providing to MAYO with information requested to
enable MAYO to meet its compliance requirements and substantially manufacturing
Licensed Product in the U.S.

 

2.03                        NO OTHER RIGHTS GRANTED.  This Agreement does not grant any right, title
or interest in or to any tangible or intangible property right of MAYO or its
Affiliates, including any improvements thereon, or to any Patent Rights or Know-How & Materials outside the Field or
Territory that is not expressly stated in Section 2.01.  All such rights, titles and interests are
expressly reserved by MAYO and EXACT agrees that in no event will this
Agreement be construed as a sale, an assignment, or an implied license by MAYO
or its Affiliates to EXACT of any such tangible or intangible property rights.

 

2.04                        SUBLICENSES.  Any sublicense by
EXACT shall be to a Sublicensee that agrees in writing to be bound by
substantially the same terms and conditions as EXACT herein, and with the
financial terms and conditions at least as favorable to MAYO as set forth in
the Agreement, or such sublicense shall be null and void.  Sublicenses granted hereunder shall not be
transferable, including by further sublicensing, delegatable or assignable
without the prior written approval of MAYO. 
EXACT will provide MAYO with a copy of each sublicense agreement
promptly after execution.  EXACT is
responsible for the performance of all Sublicensees as if such performance were
carried out by EXACT itself, including the payment of any royalties or other
payments provided for hereunder triggered by Sublicensee, regardless of whether
the terms of any sublicense require that Sublicensee pay such amounts (such as
in a fully paid-up license), or that such amounts be paid by the Sublicensee
directly to MAYO.  Each sublicense
agreement shall name MAYO as a third party beneficiary and unless MAYO has
provided written consent, all rights of Sublicensees shall terminate when EXACT’s
rights terminate.

 

4

 

2.05                        USE OF
MATERIALS.

 

(a)                                  Use of the
Materials by MAYO or EXACT shall be subject to the prior approvals of MAYO’s
Institutional Review Board and the Mayo Clinic Research Biospecimen
Subcommittee.

 

(b)                                 Materials are
owned by MAYO and any transfer of such Materials to EXACT under the terms of
this Agreement shall not affect MAYO’s ownership interest therein.  MAYO shall clearly mark and identify all
Materials transferred to EXACT.  All Materials
will be maintained by EXACT so that such Materials are readily identifiable.  The transfer of Materials to EXACT gives
EXACT no rights in such Materials other than those specifically set forth in
this Agreement.  EXACT agrees to use the
Materials solely for research purposes and shall not transfer, deliver or
otherwise release such Materials to a third party without the express prior
written consent of MAYO.  Upon expiration
of a project and at the instructions of MAYO, EXACT shall either return to MAYO
or destroy all unused Materials.

 

(c)                                  EXACT agrees to
use the Materials in accordance with the rights granted to EXACT under this
Agreement.  All research conducted using
the Materials shall be conducted in accordance with all applicable state and
federal laws regarding such research.

 

(d)                                 Nothing in this
Agreement provides EXACT the right to transfer nucleic acids or any other
material extracted from Materials to any third  party.

 

2.06                        AHLQUIST COMMITMENT TO CONFER.

 

(a)                                  Subject to MAYO approval and for so long
as Dr. Ahlquist is an employee of MAYO, Dr. Ahlquist will confer on EXACT
product development efforts, as a special advisor to the EXACT board of
directors and senior management.  EXACT
will confer with Dr. Ahlquist in person in Rochester, MN, Madison, WI or as
mutually agreed, or by telephone.  All
travel expenses incurred by Dr. Ahlquist in this role as advisor shall be paid
by EXACT.  Dr. Ahlquist shall contribute
on average seventy five percent (75%) of his time (i.e.
approximately 3.75 days per week) during the first six months of this
Agreement.  Should the parties agree that
Dr. Ahlquist will continue to work with EXACT in this capacity, the percent
time contributed by Dr. Ahlquist in a following period will be mutually
determined no later than three (3) months prior to the beginning of such
period.  Except as provided in Section 3.01
or in the Sponsored Research Agreement, MAYO shall be solely responsible for
compensating Dr. Ahlquist and his staff, provided, however, that in
consideration of the services provided under this Section 2.06(a), EXACT shall
pay MAYO the amounts set forth in Section 3.05.

 

(b)                                 Notwithstanding EXACT’s rights to
sublicense pursuant to Section 2.01 hereto, EXACT shall not have the right to
sublicense any obligation of Dr. Ahlquist to confer.

 

5

 

Article 3.00 - Royalties

 

3.01                        UP-FRONT.

 

(a)                                  Within thirty days of the Effective Date,
EXACT will make a nonrefundable and noncreditable up-front payment to MAYO of
EIGHTY THOUSAND DOLLARS (US $80,000).

 

(b)                                 Within thirty
(30) days of the Effective Date, EXACT will issue to MAYO the following
nonrefundable and noncreditable warrants:

 

(i)                                   1,000,000
warrants (as consideration for the licenses granted hereunder) under the terms
and conditions of the warrant agreement attached hereto as Exhibit C; and

 

(ii)                                250,000
warrants (as partial consideration for the Know-How services provided pursuant
to Section 2.06) with a four-year vesting schedule under the terms and
conditions of the warrant agreement attached hereto as Exhibit D.

 

The strike price of the
warrants will be based on an average of the daily closing price of EXACT shares
for the two weeks prior to the Effective Date of this Agreement.  The warrant agreements shall include a
cashless exercise provision and a six year term extending from the date of issuance
of the warrant or, in the case of warrants subject to vesting, the date the
warrants vest.

 

3.02                        MILESTONE FEES. 
EXACT will pay the following nonrefundable and noncreditable milestone
fees to MAYO for the first Licensed Product developed by EXACT upon the first achievement of the following
events:

 

(a)                                  TWO HUNDRED FIFTY THOUSAND DOLLARS (US
$250,000) on the commencement of patient enrollment in the human cancer
screening clinical trial, in support of a 510k or PMA; and

 

(b)                                 FIVE HUNDRED THOUSAND DOLLARS (US
$500,000) upon FDA approval.

 

3.03                        EARNED ROYALTIES. 
EXACT will make nonrefundable and noncreditable earned royalty payments
to MAYO of [***]
of Net Sales of
Licensed Products (“Earned Royalties”). 
The Earned Royalties are payable as described in Section 4.01.   Licensed Products transferred to MAYO or its
Affiliates are not considered transfers for purposes of determining Net Sales
or for calculating Earned Royalties.  No
Earned Royalties are due MAYO on transfers to MAYO or MAYO Affiliates.

 

3.04                        MINIMUM ROYALTIES.  EXACT will pre-pay to MAYO minimum, annual,
nonrefundable, noncreditable royalties of  TEN THOUSAND DOLLARS (US $10,000) on the
third anniversary of the Effective Date, and TWENTY-FIVE THOUSAND DOLLARS (US $
25,000) on the fourth anniversary of the Effective Date and on each anniversary
thereafter.  Ongoing royalty
payments in the year following the third anniversary of the Effective Date are
due only on Net Sales of Licensed Product greater than SIX HUNDRED SIXTY-SIX
THOUSAND, SIX HUNDRED SIXTY-SEVEN DOLLARS (US $666,667).  Ongoing royalty 

 

6

 

payments in the year following the fourth
anniversary of the Effective Date and in each year thereafter are due only on
Net Sales of Licensed Product greater than ONE MILLION, SIX HUNDRED SIXTY-SIX
THOUSAND, SIX HUNDRED SIXTY-SEVEN DOLLARS (US $1,666,667).

 

3.05                        COMPENSATION TO MAYO FOR AHLQUIST
KNOW-HOW.  EXACT will pay MAYO [***].  This amount will be payable monthly,
following receipt by EXACT of an invoice from MAYO.

 

3.06                        SPONSORED RESEARCH FUNDING.

 

(a)                                  The parties shall negotiate in good faith
the terms of the Sponsored Research Agreement with the goal of executing such
agreement no later than thirty (30) days following the Effective Date.

 

(b)                                 EXACT agrees to support research in the
laboratory of Dr. Ahlquist during the first year after the Effective Date at a
minimum level of FIVE HUNDRED THOUSAND DOLLARS (US $500,000), subject to
mutually agreed upon work plans and budgets and the execution of the Sponsored
Research Agreement.  Such funding is
contingent upon the continued availability of Dr. Ahlquist pursuant to Section 2.06.  Failure to provide this minimum level of
funding in the first year after the Effective Date shall be considered a material
breach of this Agreement.

 

(c)                                  The degree of financial support to be
provided by EXACT for research in the second year and any following years will
be determined no later than three (3) months before the expiration of the
Sponsored Research Agreement, and will be subject to mutually agreed upon work
plans and budgets.

 

3.07                        TAXES. 
EXACT is responsible for all taxes, duties, import deposits,
assessments, and other governmental charges, however designated, which are now
or hereafter imposed by any authority on EXACT: (a) by reason of the
performance by MAYO of its obligations under this Agreement, or the payment of
any amounts by EXACT to MAYO under this Agreement; (b) based on the Patent
Rights; or (c) related to use, sale or import of the Licensed Product.  Any withholding taxes which EXACT is required
by law to withhold on remittance of the royalty payments shall be deducted from
the royalty paid and EXACT shall promptly furnish MAYO with original copies of
all official receipts for such taxes. 
EXACT will obtain, or assist MAYO in obtaining, any tax reduction
(including avoidance of double taxation), tax refund or tax exemption available
to MAYO by treaty or otherwise. 
Notwithstanding the foregoing, MAYO shall be responsible for paying and
withholding all employment related taxes with respect to the services of Dr. Ahlquist
and his laboratory staff.

 

3.08                        U.S. CURRENCY. 
All payments to MAYO under this Agreement will be made by draft drawn on
a U.S. bank, and payable in U.S. dollars. 
In the event that conversion from foreign 

 

7

 

currency is required in calculating a payment
under this Agreement, the exchange rate used shall be the Interbank rate quoted
by Citibank at the end of the last business day of the quarter in which the
payment accrued.

 

3.09                        OVERDUE PAYMENTS. 
If overdue, the payments due under this Agreement shall bear interest
until paid at a per annum rate 2% above the prime rate in effect at Citibank on
the due date and MAYO shall be entitled to recover, in addition to all other
remedies, reasonable attorneys’ fees and costs related to the administration or
enforcement of this Agreement, including collection of payments, following such
failure to pay.  The acceptance of any
payment, including of such interest shall not foreclose MAYO from exercising
any other right or seeking any other remedy that it may have as a consequence
of the failure of EXACT to make any payment when due.

 

Article 4.00 - Accounting and Reports

 

4.01                        REPORTS AND PAYMENT.  EXACT will deliver to MAYO on or before the
following dates: 1 February, 1 May, 1 August, and 1 November, a written report
setting forth a full accounting showing how any amounts due to MAYO for the
preceding calendar quarter have been calculated as provided in this Agreement,
including an accounting of total Net Sales with a reporting of any applicable
foreign exchange rates, deductions, allowances, and charges.  If no Licensed Product transfers have
occurred and no other amounts are due to MAYO, EXACT will submit a report so
stating. Each such report will be accompanied by the payment of all amounts due
for such calendar quarter.

 

4.02                        ACCOUNTING. 
EXACT will keep complete, continuous, true, and accurate books of
accounts and records sufficient to support and verify diligence and the
calculation of Net Sales, all royalties and any other amount believed due and
payable to MAYO under this Agreement. 
Such books and records will be kept at EXACT’s principal place of
business for at least three years after the end of the calendar year to which
they pertain, and will be open at all reasonable times for inspection by a
representative of MAYO for verification of royalty statements or compliance
with other aspects of this Agreement. 
The MAYO representative will treat as confidential all relevant matters
and will be a person or firm reasonably acceptable to EXACT.  In the event such audit reveals an
underpayment by EXACT, EXACT will within thirty (30) days pay the royalty due
in excess of the royalty actually paid. 
In the event the audit reveals an underpayment by EXACT of more than
five percent (5%) of the amount due, EXACT will pay interest on the royalty due
in excess of the royalty actually paid at a per annum rate two per cent (2%)
above the prime rate in effect at Citibank on the date notice of the deficiency
is provided to EXACT, and EXACT will pay all of MAYO’s costs in conducting the
audit.

 

Article 5.00 -  Diligence

 

5.01                        DEVELOPMENT PLAN. 
EXACT will make commercially reasonable efforts to bring Licensed Products
to market.

 

5.02                        DEVELOPMENT MILESTONES. 
In partial satisfaction of its obligations to bring

 

8

 

Licensed Products to market, EXACT will provide
MAYO with development milestones within six (6) months of the Effective
Date.  EXACT will promptly notify MAYO
upon the achievement each of the development milestones, identify whether EXACT
or a Sublicensee is responsible for the achievement of such milestone, and the
actual date of such achievement.

 

5.03                        DILIGENCE REPORTS.             EXACT will provide MAYO with annual
reports within thirty (30)days of each anniversary of the Effective Date
describing in detail: (a) as of that reporting period, all development and
marketing activities for each Licensed Product and the names of all Sublicensees, including which of the Sublicensees
are Affiliates; and (b) an updated development plan for the next annual
period.  MAYO shall have the right to
audit EXACT’s records relating to development of Licensed Products as provided
in Section 4.02.

 

Article 6.00 — Intellectual Property Management

 

6.01 CONTROL.

 

(a)                                  EXACT shall diligently prosecute and
maintain the United States and foreign patents and patent applications covering
Patent Rights as it deems appropriate, at EXACT’s expense, using counsel of its
choice and after due consultation with MAYO. 
EXACT shall provide MAYO with copies of all relevant documentation so
that MAYO may be informed and apprised of the continuing prosecution and MAYO
agrees to keep this documentation confidential. 
EXACT shall also notify MAYO of its intention to not apply for patent
protection for any invention with a MAYO inventor or to abandon the prosecution
of any patent within the Patent Rights thirty (30) days prior to any applicable
deadlines affecting such application or abandonment.  Following such written notification and
discussion between the parties, MAYO shall be entitled to take over prosecution
of such patent, at its own expense, of those patents within the Patent Rights
that EXACT has elected not to pursue and EXACT shall then have no further
rights to any patent that issues under such prosecution.

 

(b)                                 The parties shall take commercially reasonable steps to
ensure that the Know-How & Materials remain confidential in accordance with
Article 8.

 

6.02                        PATENT TERM EXTENSION. 
EXACT shall consult with MAYO in selecting the patent covering each
Licensed Product for term extension for or supplementary protection certificate
under in accordance with the applicable laws of any country.  Each party agrees to execute any documents
and to take any additional actions as the other party may reasonably request in
connection therewith.

 

6.03                        PATENT MARKING.  To the extent commercially feasible, EXACT will
mark all Licensed Products that are manufactured or sold under this Agreement
with the number of each issued patent within the Patent Rights that cover such
Licensed Product(s).  Any such marking
will be in conformance with the patent laws and other laws of the country of
manufacture or sale.

 

6.04                        ENFORCEMENT. 
EXACT shall promptly inform MAYO in writing of any alleged or threatened
infringement of any of the Patent Rights and/or Know-How & Materials and
provide

 

9

 

MAYO with any available evidence of such infringement.

 

(a)                                  First Right. 
EXACT shall have the first right, but not the obligation, to enforce the
Patent Rights so long as MAYO is kept fully informed and given the right and
opportunity to advise and comment.  MAYO
shall reasonably cooperate in any such action at EXACT’s expense but shall not be required to join such action
unless: (i) it has agreed to do so in writing prior to commencement thereof, or
(ii) EXACT determines that MAYO is a necessary party in the action.  EXACT shall pay to MAYO twenty-five percent
(25%) of the any recovery or damages, net of all reasonable costs and expenses
associated with each suit or settlement.

 

(b)                                 Non-Election to
Enforce.  If EXACT elects not to enforce the Patent
Rights, it shall so notify MAYO in writing within ninety (90) days of receiving
notice that an infringement may exist, and MAYO may, in its sole judgment and
without any obligation, enforce, settle, and defend the Patent Rights and keep
for its own account any recovery and damages. 
EXACT shall reasonably cooperate in any such actions if requested to do
so by MAYO, at MAYO’s expense.

 

6.05                        DEFENSE.  
EXACT will have the first  right, but not the obligation, to
take any measures deemed appropriate by EXACT in consultation with MAYO,
regarding challenges to the Patent Rights, Know-How or Materials brought
(including interferences in the U.S. Patent and Trademark Office and
oppositions in foreign jurisdictions) and defense of the Patent Rights,
Know-How or Materials required (including declaratory judgment actions).  MAYO shall reasonably cooperate in any such
measures if requested to do so by EXACT at EXACT’S expense, but shall not be required to join any action
unless: (i) it has agreed to do so in writing prior to commencement thereof, or
(ii) the court determines that MAYO is a necessary party in the action.  EXACT shall be entitled to retain any related
recovery, provided that all costs of MAYO related to such action have been
fully paid by EXACT.  If EXACT elects not
to defend the Patent Rights, it shall so notify MAYO in writing within ninety
(90) days of receiving notice that a challenge has been made, and MAYO may, in
its sole judgment and without any obligation, enforce, settle, and defend the
Patent Rights and keep for its own account any related recovery.  EXACT shall reasonably cooperate in any such
actions if requested to do so by MAYO, at MAYO’s expense.

 

6.06                        THIRD PARTY LITIGATION. 
In the event a third party institutes a suit against EXACT for patent
infringement involving a Licensed Product, EXACT will promptly inform MAYO and
keep MAYO regularly informed of the proceedings.

 

Article 7.00 — Use of Name

 

7.01                        USE OF NAME AND LOGO. 
EXACT will not use for publicity, promotion, or otherwise, any logo,
name, trade name, service mark, or trademark of MAYO or its Affiliates,
including, but not limited to, the terms “MAYO®,” “MAYO Clinic®,” and the
triple shield MAYO logo, or any simulation, abbreviation, or adaptation of the
same, or the name of any MAYO employee or agent, without MAYO’s prior, written,
express consent.  MAYO may withhold such
consent in MAYO’s absolute discretion. 
With regard to the use of MAYO’s name, all requests for approval
pursuant to this Section must be submitted to the Mayo Clinic

 

10

 

 Public Affairs Business Relations Group, at
the following e-mail address: PublicAffairsBR@MAYO.edu at least five (5) business
days prior to the date on which a response is needed.

 

Article 8.00 - Confidentiality

 

8.01                        TREATMENT OF CONFIDENTIAL INFORMATION. 
Except as provided for in Section 8.02, neither party will disclose, use
or otherwise make available the other’s Confidential Information during Term or
for three years thereafter and will use the same degree of care it employs to
protect its own confidential information.

 

8.02                        RIGHT TO DISCLOSE.

 

(a)                                  To the extent it is reasonably necessary
or appropriate to fulfill its obligations or exercise its rights under this
Agreement; a party may use or disclose Confidential Information to its Sublicensees, consultants, and outside
contractors on the condition that each such entity agrees to obligations of
confidentiality and non-use at least as stringent as those therein.

 

(b)                                 If a party is required by law, regulation
or court order to disclose any of the Confidential Information, it will have
the right to do so, provided it: (i) promptly notifies the disclosing party;
and (ii) reasonably assists the disclosing party to obtain a protective order
or other remedy of disclosing party’s election and at disclosing party’s
expense.

 

8.03                        CONFIDENTIALITY OF AGREEMENTS. 
Except as otherwise required by law, the specific terms and conditions
of this Agreement shall be Confidential Information but the existence and Field of this Agreement will not be Confidential Information
and the parties may state that EXACT is licensed under the Patent
Rights.  Notwithstanding the foregoing, a
party may disclose the contents of this Agreement to its actual or prospective
investors, professional advisors, and as required by law or the rules of any
applicable securities exchange.

 

Article 9.00 — Warranties, Representations, Disclaimers and
Indemnification

 

9.01                        REPRESENTATIONS AND WARRANTIES
OF EXACT.  EXACT warrants and represents to MAYO that:

 

(a)                                  it is experienced in the development,
production, quality control, service, manufacture, marketing, and sales of
products similar to the subject matter of the Patent Rights, and that it will
commit itself to a thorough, vigorous, and diligent program of developing and
marketing the Licensed Products;

 

(b)                                 it has independently evaluated the Patent
Rights, Know-How, Materials and Confidential Information, if any, their
applicability or utility in EXACT’s activities, is entering into this Agreement
on the basis of its own evaluation and not in reliance of any representation by
MAYO, and assumes all risk and liability in connection with such determination;

 

11

 

(c)                                  the execution and delivery of this
Agreement has been duly authorized and no further approval, corporate or
otherwise, is required in order to execute this binding Agreement;

 

(d)                                 it shall comply and require its Sublicensees to comply with all applicable
international, national, and state laws, ordinances and regulations in its
performance under this Agreement; and

 

(e)                                  its rights and obligations under this
Agreement do not conflict with any contractual obligation or court or
administrative order by which it is bound.

 

9.02                        REPRESENTATIONS AND WARRANTIES
OF MAYO.  MAYO warrants and represents to EXACT that:

 

(a)                                  it is the owner of the Patent Rights and
has full power and authority to grant the licenses which are provided for in
this Agreement;

 

(b)                                 the execution and delivery of this
Agreement has been duly authorized and no further approval, corporate or
otherwise, is required in order to execute this binding Agreement;

 

(c)                                  to the best of its internal counsel’s
knowledge, its rights and obligations under this Agreement do not conflict with
any contractual obligation or court or administrative order by which it is
bound;

 

(d)                                 no claim, suit or action has been made or
initiated alleging that the Patent Rights are invalid or that the practice of
the Patent Rights will infringe the rights of any third party; and

 

(e)                                  to the best of its internal counsel’s
knowledge the Patent Rights are valid and subsisting.

 

9.02                        DISCLAIMERS.

 

(a)                                  EXCEPT AS EXPRESSLY SET FORTH HEREIN,
NEITHER PARTY HAS MADE ANY PROMISES, COVENANTS, GUARANTEES, REPRESENTATIONS OR
WARRANTIES OF ANY NATURE, DIRECTLY OR INDIRECTLY, EXPRESS, STATUTORY OR
IMPLIED, INCLUDING WITHOUT LIMITATION, MERCHANTABILITY, OR FITNESS FOR A
PARTICULAR PURPOSE, SUITABILITY, DURABILITY, CONDITION, QUALITY, OR ANY OTHER
CHARACTERISTIC OF THE LICENSED PRODUCT, KNOW-HOW, MATERIALS OR PATENT RIGHTS.

 

(b)                                 KNOW-HOW, MATERIALS, CONFIDENTIAL
INFORMATION AND PATENT RIGHTS ARE PROVIDED “AS IS,” “WITH ALL FAULTS,” AND “WITH
ALL DEFECTS,” AND EXACT EXPRESSLY WAIVES ALL RIGHTS TO MAKE ANY CLAIM
WHATSOEVER AGAINST MAYO FOR MISREPRESENTATION OR FOR BREACH OF 

 

12

 

PROMISE, GUARANTEE, REPRESENTATION OR WARRANTY
OF ANY KIND RELATING TO THE LICENSED PRODUCTS, KNOW-HOW, MATERIALS, CONFIDENTIAL
INFORMATION OR PATENT RIGHTS, EXCEPT AS EXPRESSLY SET FORTH HEREIN.  MAYO EXPRESSLY DISCLAIMS ANY IMPLIED
WARRANTIES ARISING FROM ANY COURSE OF DEALING, USAGE, OR TRADE PRACTICE, WITH
RESPECT TO: THE SCOPE, VALIDITY OR ENFORCEABILITY OF THE PATENT RIGHTS,
KNOW-HOW, OR MATERIALS; THAT ANY PATENT WILL ISSUE BASED UPON ANY OF PENDING
PATENT APPLICATION; OR THAT THE MANUFACTURE, USE, SALE, OFFER FOR SALE OR
IMPORTATION OF THE LICENSED PRODUCTS WILL NOT INFRINGE OTHER INTELLECTUAL
PROPERTY RIGHTS.  NOTHING IN THIS
AGREEMENT WILL BE CONSTRUED AS AN OBLIGATION FOR MAYO TO BRING, PROSECUTE OR
DEFEND ACTIONS REGARDING THE PATENT RIGHTS, KNOW-HOW OR MATERIALS.

 

(c)                                  EXACT AGREES THAT MAYO AND ITS AFFILIATES
WILL NOT BE LIABLE FOR ANY LOSS OR DAMAGE CAUSED BY OR ARISING OUT OF ANY
RIGHTS GRANTED OR PERFORMANCE MADE UNDER THIS AGREEMENT, WHETHER TO OR BY
EXACT, A SUBLICENSEE OR A THIRD
PARTY.  IN NO EVENT WILL MAYO’S LIABILITY
OF ANY KIND INCLUDE ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR
PUNITIVE LOSSES OR DAMAGES, EVEN IF MAYO HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES, OR EXCEED THE TOTAL AMOUNT OF ROYALTIES WHICH HAVE ACTUALLY BEEN
PAID TO MAYO BY EXACT AS OF THE DATE OF FILING AN ACTION AGAINST MAYO WHICH
RESULTS IN THE SETTLEMENT OR AWARD OF DAMAGES TO EXACT.

 

9.03                        INDEMNIFICATION AND INSURANCE.

 

(a)                                  EXACT will defend, indemnify, and hold
harmless MAYO, MAYO’s Affiliates and their respective trustees, officers,
agents, independent contractors and employees (“MAYO Indemnitees”) from any and
all claims, actions, demands, judgments, losses, costs, expenses, damages and
liabilities (including attorneys’ fees, court costs and other expenses of
litigation), regardless of the legal theory asserted, arising out of or
connected with: (a) the practice or exercise of any rights granted hereunder by
or on behalf of EXACT or any
Sublicensee; (b) research, development, design, manufacture,
distribution, use, sale, importation, exportation or other disposition of
Licensed Products; and (c) any act or omission of EXACT or any Sublicensee hereunder, including the negligence or willful
misconduct thereof.  MAYO and MAYO
Affiliates shall have no obligation to indemnify EXACT hereunder.  Notwithstanding the foregoing, the indemnity
obligations of EXACT shall not apply with respect to any claims,
actions, demands, judgments, losses, costs, expenses, damages and liabilities
which arise due to a breach of this Agreement by MAYO or the gross negligence
or willful misconduct of MAYO or its agents or employees.

 

(b)                                 The parties agree that this indemnity
should be construed and applied in favor of maximum indemnification of MAYO
Indemnitees.

 

13

 

(c)           Commencing on the date of first
commercial sale of a Licensed Product by EXACT, EXACT will continuously carry
occurrence-based liability insurance, including products liability and
contractual liability, in an amount and for a time period sufficient to cover
the liability assumed by EXACT hereunder during the Term and after, such amount
being at least THREE MILLION DOLLARS (US $3,000,000).  In addition, such policy will name MAYO and
its Affiliates as additional-named insureds.

 

9.04        PROHIBITION AGAINST INCONSISTENT
STATEMENTS.  EXACT shall not make any statements,
representations or warranties, or accept any liabilities or responsibilities
whatsoever which are inconsistent with any disclaimer or limitation included in
this section or any other provision of this Agreement.  EXACT shall not settle any matter that will
incur liability for MAYO or require MAYO to make any admission of liability
without MAYO’s prior written consent.

 

Article 10.00 - Term and Termination

 

10.01      TERM.  This
Agreement will expire at the end of the Term.

 

10.02      TERMINATION FOR BREACH.      If
EXACT commits a material breach of this Agreement, including without
limitation, the failure to make any required royalty or fee payments hereunder,
MAYO will notify EXACT in writing of such breach and EXACT will have thirty
(30) days after such notice to cure such breach to MAYO’s satisfaction.   If EXACT fails to cure such breach, MAYO
may, at its sole option, terminate this Agreement in whole or in part by
sending EXACT written notice of termination.

 

10.03      TERMINATION FOR SUIT. MAYO does not license entities that
bring suit against MAYO or its Affiliates and as such, MAYO may immediately
terminate this Agreement if EXACT or any Sublicensee directly or indirectly
bring any action or proceeding against MAYO or its Affiliates, except for an
uncured material breach of this Agreement by MAYO.

 

10.04      TERMINATION BY EXACT.  Subject to the terms
of the Sponsored Research Agreement, EXACT may without cause terminate this
Agreement at any time following payment and delivery of the compensation
provided for in Section 3.01, upon written notice to MAYO.

 

10.05      INSOLVENCY OF EXACT. 
This Agreement terminates immediately without an obligation of notice of
termination to EXACT in the event EXACT ceases conducting business in the
normal course, becomes insolvent or bankrupt, makes a general assignment for
the benefit of creditors, admits in writing its inability to pay its debts as
they are due, permits the appointment of a receiver for its business or assets,
or avails itself of or becomes subject to any proceeding under any statute of
any governing authority relating to insolvency or the protection of rights of
creditors.

 

10.05      SURVIVAL.  The
termination or expiration of this Agreement does not relieve either party of
its rights and obligations that have previously accrued.  After the Term, all rights granted
immediately revert to MAYO.  All
Confidential Information of the other party shall be returned

 

14

 

or destruction certified, at the disclosing
party’s election.  Rights and obligations
that by their nature prescribe continuing rights and obligations shall survive
the termination or expiration of this Agreement including Sections 4.02, 9.03,
10.5 and Articles 7, 8 and 11.  EXACT  and
its Sublicensees shall provide an accounting for and pay, within thirty
(30) days of termination or expiration, of all amounts due hereunder.  Upon any termination of this Agreement, the
licenses granted hereunder shall cease. 
Upon expiration of this Agreement, the licenses granted hereunder shall
become fully paid up.

 

Article 11.00 - General
Provisions

 

11.01      ASSIGNMENT AND TRANSFER. 
Each party is strictly prohibited from assigning, delegating or
otherwise transferring any of its obligations or rights under this Agreement
without the other party’s prior, express and written consent, which shall not
be unreasonably withheld.  Any
assignment, delegation or transfer in contravention hereof is null and void.  Notwithstanding the foregoing, either party
may assign this Agreement without approval in connection with a sale, merger or
other transaction which involves the transfer of substantially all of the
assets of a party used in connection with the business of such party that relates
to this Agreement.  Any assignment shall
not in any manner relieve the assignor from liability for the performance of
this Agreement by its assignee.  The
assignor shall provide prompt notice to the other party upon making such
assignment.

 

11.02      WAIVER. 
No
part of this Agreement may be waived except by the further written agreement of
the party granting such waiver. 
Forbearance in any form from demanding the performance of a duty owed
under this Agreement is not a waiver of that duty.  Until complete performance of a duty owed
under this Agreement is accomplished, the party to which that duty is owed may
invoke any remedy under this Agreement or under law, despite its past
forbearance in demanding performance of that duty.

 

11.03      GOVERNING LAW AND JURISDICTION. 
This Agreement is made and performed in Minnesota.  The terms and conditions of this Agreement,
as well as all disputes arising under or relating to this Agreement, shall be
governed by Minnesota law, specifically excluding its choice-of-law principles,
except that the interpretation, validity and enforceability of the Patent
Rights will be governed by the patent laws of the country in which the patent
application is pending or issued.  This
is not an Agreement for the sale of goods and as such Article 2 of the Uniform
Commercial Code as enacted in Minnesota does not apply.

 

11.04      HEADINGS. 
The
headings of articles and sections used in this document are for convenience of
reference only.

 

11.05      NOTICES.  Any
notice required to be given under this Agreement is properly provided if in
writing and sent to the party at its address or facsimile number below, or as
otherwise designated by the party in accordance with this provision, and duly
given or made: (a) on the date delivered in person; (b) on the date transmitted
by facsimile, if confirmation is received; (c) three (3) days after deposit in
the mail if sent by certified U.S. mail postage prepaid, return receipt
requested; and (d) one (1) day after deposit with a nationally recognized
overnight carrier service

 

15

 

with charges prepaid.

 

	
  For MAYO:

  	
   

  	
  Mayo Foundation for Medical Education and Research

  
	
   

  	
   

  	
  Office of Intellectual Property — MCHS — BB4

  
	
   

  	
   

  	
  200 First Street SW

  
	
   

  	
   

  	
  Rochester, Minnesota 55905-0001

  
	
   

  	
   

  	
   

  
	
  For EXACT:

  	
   

  	
  EXACT Sciences Corporation

  
	
   

  	
   

  	
  100 Campus Drive

  
	
   

  	
   

  	
  Marlborough, MA 01752

  
	
   

  	
   

  	
  Attn:

  	
  Maneesh Arora

  
	
   

  	
   

  	
  Phone:

  	
  508-683-1200

  
	
   

  	
   

  	
  Fax:

  	
  508-683-1201

  
	
   

  	
   

  	
  Email:

  	
  marora@exactsciences.com

  

 

11.06      LIMITATION OF RIGHTS CREATED. 
This Agreement is personal to the parties and shall be binding on and
inure to the sole benefit of the parties and their permitted successors and
assigns and shall not be construed as conferring any rights to any third
party.  Specifically, no interests are
intended to be created for any customer, patient, research subjects, or other
persons (or their relatives, heirs, dependents, or personal representatives) by
or upon whom the Licensed Products may be used.

 

11.07      INDEPENDENT CONTRACTORS. 
EXACT and any Sublicensee
is an independent contractor not an agent, employee, partner, joint venturer or
servant of MAYO and has no right to obligate or bind MAYO in any manner.

 

11.08      ENTIRE AGREEMENT. 
This Agreement states the entire agreement and understanding between the
parties about its subject matter.  All
past and contemporaneous discussions, writings, agreements, proposals,
promises, covenants, warranties, representations, guarantees, correspondence,
and understandings, whether oral or written, formal or informal, are entirely
superseded by this Agreement, with the exception of
(a) the material transfer agreement for 200 stool and tissue samples, effective
9 November 2000 and attached hereto as Exhibit E (Mayo agreement # 1683); and (b)
the material transfer agreement for 80 blood samples, effective 9 November 2000
and attached hereto as Exhibit F (Mayo agreement # 1684).  For the avoidance of doubt,
(a) the letter to Don Hardison regarding prosecution of joint intellectual
property, dated 3 January 2003 and attached hereto as Exhibit G (Mayo agreement
#1685); and (b) the confidentiality agreement effective 16 February 2009 and
attached hereto as Exhibit H (Mayo agreement #6049) are entirely superseded by
this Agreement.

 

11.09      SEVERABILITY. 
If any terms or conditions of this Agreement are or become in 

 

16

 

conflict with the laws, regulations or court
order of any jurisdiction or any governmental entity having jurisdiction over
the parties or this Agreement, those terms and conditions shall be deemed
automatically deleted in such jurisdiction(s) only, and the remaining terms and
conditions of this Agreement shall remain in full force and effect.  If such a deletion is not so allowed in a
given jurisdiction or if such a deletion leaves terms and conditions thereby
made clearly illogical or inappropriate in effect, the parties agree to
substitute new terms and conditions as similar in effect to the present terms
of this Agreement as may be allowed under the applicable laws, regulations or
court order of such jurisdiction.  The
parties desire the terms and conditions herein to be valid and enforced to the
maximum extent not prohibited by law, regulation or court order in a given
jurisdiction.

 

11.10      CHANGES TO AGREEMENT. 
No terms or conditions of this Agreement may be changed except in
writing, through another document signed by both parties, and expressly
referencing this Agreement.

 

11.11      CONSTRUCTION.  Each party acknowledges that it was provided an
opportunity to seek advice of counsel and as such this Agreement shall not be
construed for or against either party.

 

11.12      REGISTRATION OF LICENSES. 
EXACT will register and give required notice concerning this Agreement,
at its expense, in each country in the Territory where an obligation under law
exists to so register or give notice.

 

11.13      EXPORT CONTROL. 
MAYO is subject to U.S. laws and regulations controlling the export of
technical data, computer software, laboratory prototypes, and other commodities
that may require a license from the applicable agency of the United States
government and/or may require written assurances by EXACT that it will not
export data or commodities to certain foreign countries without prior approval
of such agency.  MAYO neither represents
that a license is required, nor that, if required, it will be issued.

 

17

 

The
parties execute this Agreement in one or more counterparts, each of which shall
be deemed an original but all of which taken together constitute one and the same
instrument, as of the Effective Date.

 

MAYO FOUNDATION FOR MEDICAL EDUCATION AND RESEARCH:

 

	
  Signed: 

  	
  /s/ Steven P. VanNurden

  	
   

  	
  June 10, 2009

  
	
   

  	
  Steven P. VanNurden

  	
   

  	
  Date

  
	
   

  	
  Assistant Treasurer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXACT SCIENCES CORPORATION:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signed: 

  	
  /s/ Maneesh K. Arora

  	
   

  	
  June 11, 2009

  
	
   

  	
  Name: 

  	
  Maneesh K. Arora

  	
   

  	
  Date

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  	
   

  

 

18

 

EXHIBIT A

LICENSED
PATENTS

 

MAYO
OWNED IP

 

	
  Appln
  No.

  	
   

  	
  Domain

  	
   

  	
  Patent Title

  	
   

  	
  Filing Date

  	
   

  	
  Mayo File #

  
	
  12/018,273

  	
   

  	
  USA

  	
   

  	
  Detecting
  Methylated Mammalian Nucleic Acid in Stool

  	
   

  	
  1/23/2008

  	
   

  	
  2006-274

  
	
  60/886,278

  	
   

  	
  USA

  	
   

  	
   

  	
   

  	
  1/23/2007

  	
   

  	
   

  
	
  61/029,221

  	
   

  	
  USA

  	
   

  	
  Detecting
  Neoplasm

  	
   

  	
  2/15/2008

  	
   

  	
  2007-208

  2007-210

  2007-211

  2007-212

  2007-213

  
	
  PCT/US2009/033793

  	
   

  	
  USA

  	
   

  	
   

  	
   

  	
  2/11/2009

  	
   

  	
   

  
	
  61/094,770

  	
   

  	
  USA

  	
   

  	
  Collecting
  and Processing Complex Macromolecular Mixtures

  	
   

  	
  9/5/2008

  	
   

  	
  2007-211

  2008-147

  2008-199

  

 

JOINTLY
(MAYO & EXACT) OWNED IP

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Filing
  Date

  	
   

  	
   

  
	
  Pat App # or

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  or

  	
   

  	
   

  
	
  Patent #

  	
   

  	
  Domain

  	
   

  	
  Patent
  Title

  	
   

  	
  Issue
  Date

  	
   

  	
  Mayo
  file #

  
	
  12/042,988

  	
   

  	
  USA

  	
   

  	
  Supracolonic
  Aerodigestive Neoplasm Detection

  	
   

  	
  3/5/2008

  	
   

  	
  2000-026

  
	
  2,394,921

  	
   

  	
  Canada

  	
   

  	
   

  	
   

  	
  12/7/2000

  	
   

  	
   

  
	
  992876.3

  	
   

  	
  Europe - EPO

  	
   

  	
   

  	
   

  	
  12/7/2000

  	
   

  	
   

  
	
  2001-544020

  	
   

  	
  Japan

  	
   

  	
   

  	
   

  	
  12/7/2000

  	
   

  	
   

  
	
  PCT/US2000/042683

  	
   

  	
  USA

  	
   

  	
   

  	
   

  	
  12/7/2000

  	
   

  	
   

  
	
  7,368,233

  	
   

  	
  USA

  	
   

  	
  Methods
  of Screening for Lung Neoplasm Based on Stool Samples Containing a Nucleic
  Acid Marker Indicative of a Neoplasm

  	
   

  	
  5/6/2008

  	
   

  	
   

  

 

19

 

EXHIBIT B

LICENSED
KNOW-HOW

 

	
  MAYO FILE #

  	
   

  	
  TITLE

  	
   

  	
  DISCLOSURE
  DATE

  
	
  2009-128

  	
   

  	
  Method
  to Enrich Genomic DNA in Stool

  	
   

  	
  4/27/2009

  
	
  2009-130

  	
   

  	
  In
  Vivo Approaches to Improve Fecal Recovery of Nucleic Acids Exfoliated for
  Aerodigestive Neoplasms

  	
   

  	
  4/27/2009

  
	
  2009-133

  	
   

  	
  Combination
  of Epithelial and Blood Markers in Stool for Detection of Colorectal and Gastrointestinal
  Neoplasms

  	
   

  	
  4/25/2009

  
	
  2009-134

  	
   

  	
  Stool
  DNA Marker Panel for Detection of Colorectal Neoplasia

  	
   

  	
  4/27/2009

  

 

20

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