LICENSE AGREEMENT

Exhibit 10.6

LICENSE AGREEMENT

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

WITNESSETH:

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

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

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

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

ARTICLE 1.  DEFINITIONS

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

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

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

     

     

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

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

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

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

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

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

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

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• • 1.11                            (a)           "Net Sales" shall mean the adjusted gross sales of Licensed Reagents and Kits by EXACT less eight percent (8%) of adjusted gross sales in lieu of items such as custom duties, inbound transportation, insurance costs, agent’s commission, bad debts, etc.  The adjusted gross sales shall mean the actual gross sales price of a Licensed Reagent or Kit billed by EXACT (not including miscellaneous items on the invoice such as taxes, etc.) less chargebacks, cash discounts, credits or allowances (not including miscellaneous items credited such as taxes, etc.) including those incurred or granted on account of price adjustments, rejections, returns, rebates or recalls of Licensed Reagents or Kits previously sold.  "Net Sales" does not include "no charge" samples to the extent customary in the trade.

    (b)           In the event that EXACT decides to sell a Kit which combines Licensed Reagents with ingredients or components which are not Licensed Reagents (such other ingredients or components being "Other Items"), then (i) EXACT shall notify Genzyme in writing of its intent to offer such combination, (ii) Genzyme and EXACT shall, within thirty (30) days after Genzyme’s receipt of such notification, initiate good-faith negotiations on the value of the Licensed Reagents which shall be used as the basis to calculate Net Sales pursuant to this clause (b) and (iii) if the parties can not reach agreement within thirty (30) days after the commencement of such negotiations, such dispute shall be referred to arbitration pursuant to Article 11 hereof.  However, in no event shall the royalty rates on Net Sales be reduced by more than fifty percent (50%).  The term "Other Items" does not include solvents, diluents, carriers, excipients, enzymes used in amplification for diagnostic use, or the like used in formulating a product.

    (c)           In the event that a Licensed Reagent or Kit is sold for non-monetary consideration in addition to or in lieu of money, the value of such consideration to the extent that it can be reasonably determined by EXACT shall be added to Net Sales in accordance with Sections 1.11 (a) and (b) hereof.

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

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

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

    (b)             If a Diagnostic Service(s) is offered in combination with another diagnostic or other service(s) (such as patient counseling) provided by EXACT (such other services being referred to as "Other Services" and such Diagnostic Service(s) and Other Services collectively being referred to as "Combination Services"), Net Service Revenues for

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• • purposes of determining royalties on the Diagnostic Service(s) shall be calculated as provided below:

    • • • • (i)                                      If the Diagnostic Service(s) and the Other Services are sold or provided separately, Net Service Revenues shall be calculated by multiplying the Net Service Revenues of the Combination Service (as determined in accordance with Section 1.12(a) above but applied to the Combination Service), by the fraction A/(A+B), where "A" is the invoice price of the Diagnostic Service(s) and "B" is the invoice price of the Other Services in the Combination Service if sold or provided separately.

            (ii)                                   If the Diagnostic Service(s) are sold or provided separately but the Other Services are not, Net Service Revenues shall be calculated by multiplying the Net Service Revenues of the Combination Service (as determined in accordance with Section 1.12(a) above but applied to the Combination Service), by the fraction A/C, where "A" is the invoice price of the Diagnostic Service(s) and "C" is the invoice price of the Combination Service.

            (iii)                                If the Diagnostic Service(s) and the Other Services in the combination are not sold or provided separately, Net Service Revenues for purpose of determining royalties on the Diagnostic Service(s) shall be calculated by multiplying Net Service Revenues of the Combination Service (as determined in accordance with Section 1.12(a) above but applied to the Combination Service) by the fraction E/(E+D), where "E" is the value of the Diagnostic Service(s) and "D" is the reasonably estimated value (using accepted diagnostic industry standards) of the Other Services based at least in part on the value of the other active component or components used in the Combination Service; provided, that (A) EXACT shall notify Genzyme in writing of its intent to offer such Combination Services, (B) Genzyme and EXACT shall, within thirty (30) days after Genzyme’s receipt of such notification, initiate good-faith negotiations on the value of the Diagnostic Service(s) and Other Services which shall be used as the basis to calculate Net Service Revenues pursuant to this clause (iii) and (C) if the parties can not reach agreement within thirty (30) days after the commencement of such negotiations, such dispute shall be referred to arbitration pursuant to Article 11 hereof.

    (c)           In the event that a Diagnostic Service is provided for non-monetary consideration in addition to or in lieu of money, the value of such non-monetary consideration to the extent that it can be reasonably determined by EXACT shall be added to Net Service Revenues in accordance with Sections 1.12(a) and (b) hereof.

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

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• • 1.13                            "Patent Rights" shall mean collectively the Gene Patent Rights and the Methodology Patent Rights.

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

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

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

ARTICLE 2.  LICENSE GRANT

• • 2.1                                  Genzyme hereby grants to EXACT, subject to all the terms and conditions of this Agreement, a worldwide, nonexclusive right and license (without the right to grant sublicenses) under the Patent Rights to: (a) use, offer to sell, sell and practice Diagnostic Services in the Field; (b) make, have made, use, offer to sell, sell and import Licensed Reagents in the Field; and (c) make, have made, use, offer to sell, sell and import Kits in the Field.

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

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

ARTICLE 3.  DUE DILIGENCE

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

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

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

ARTICLE 4.  PAYMENTS

• • 4.1                                  In partial consideration for the license granted hereunder, and upon execution of this Agreement, EXACT agrees to pay Genzyme one hundred and fifty thousand dollars($150,000), which amount shall not be creditable against any other amounts payable by EXACT to Genzyme hereunder.

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

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• • 4.3                                  (a) EXACT shall pay Genzyme a minimum royalty of twenty thousand dollars($20,000) per year payable within thirty (30) days of the date this Agreement is signed on behalf of EXACT for 1999 and on January 1 of each year thereafter with respect to the licenses granted for Diagnostic Services; provided, however, that the minimum royalty for a given year shall be creditable against any royalties subsequently due during said year under Section 4.2.

    (b)           EXACT shall pay Genzyme a minimum royalty of twenty thousand dollars($20,000) per year payable on January 1, 2004 and on January 1 of each year thereafter with respect to the licenses granted for Licensed Reagents and Kits ; provided, however, that the minimum royalty for a given year shall be creditable against any royalties subsequently due during said year under Section 4.2.

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

    4.4                                  (a)           In the event that the First Commercial Sale of a Diagnostic Service by EXACT has not occurred within five (5) years after the Effective Date, EXACT shall pay Genzyme an annual maintenance fee of one hundred thousand dollars ($100,000) payable on each anniversary of the Effective Date commencing with the fifth (5th) anniversary of the Effective Date; provided, however, that if EXACT has submitted a bona fide application to the U.S.  Food and Drug Administration or the equivalent authority at that time ("FDA") to obtain final marketing approval for a Diagnostic Service within said five(5) year period and EXACT’s failure to make such First Commercial Sale is due to delays in obtaining such approval that are caused by the FDA and are not related to a substantial deficit in said application, then Genzyme may elect, in its sole discretion, to extend said five (5) year period and shall notify EXACT in writing of any such determination and election and of the amount of time by which such period has been extended; provided further that if the parties disagree as to whether said application contained a substantial deficit and the time for resolution of such deficit, the dispute shall be referred to arbitration pursuant to Article 11 hereof and, until final resolution of the dispute, EXACT shall deposit any amounts otherwise due and payable to Genzyme under this Section4.4(a) into an escrow account established by EXACT exclusively for such purpose in a recognized commercial banking institution reasonably selected by EXACT and promptly identified by written notice from EXACT to Genzyme.  If the arbitrator resolves the dispute in favor of Genzyme, then the amounts held in escrow plus all interest accrued thereon shall be promptly paid to Genzyme in same day funds.  Amount payable under this Section 4.4(a) shall not be creditable against any royalties or other payments due during said year under this Article 4.  Waiver or deferral of any maintenance fee by Genzyme shall not be construed as waiver or deferral of any such subsequent payment.

    (b)           In the event that the First Commercial Sale of a Kit by EXACT has not occurred within seven (7) years after the Effective Date and the license granted pursuant to Section 2.1 (c) hereof has not been terminated by Genzyme pursuant to Section 7.7 hereof, EXACT shall pay Genzyme an annual maintenance fee of one hundred thousand dollars ($100,000) payable on each anniversary of the Effective Date commencing with the

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• • seventh (7th) anniversary of the Effective Date; provided, however, that if EXACT has submitted a bona fide application to the FDA to obtain final marketing approval for a Kit within said seven (7) year period and EXACT’s failure to make such First Commercial Sale is due to delays in obtaining such approval that are caused by the FDA and are not related to a substantial deficit in said application, then Genzyme may elect, in its sole discretion, to extend said seven (7) year period and shall notify EXACT in writing of any such determination and election and of the amount of time by which such period has been extended; p rovided further that if the parties disagree as to whether said application contained a substantial deficit and the time for resolution of such deficit, the dispute shall be referred to arbitration pursuant to Article 11 hereof and, until final resolution of the dispute, EXACT shall deposit any amounts otherwise due and payable to Genzyme under this Section 4.4(b) into an escrow account established by EXACT exclusively for such purpose in a recognized commercial banking institution reasonably selected by EXACT and promptly identified by written notice from EXACT to Genzyme.  If the arbitrator resolves the dispute in favor of Genzyme, then the amounts held in escrow plus all interest accrued thereon shall be promptly paid to Genzyme in same day funds.  Amount payable under this Section 4.4(b) shall not be creditable against any royalties or other payments due during said year under this Article 4.  Waiver or deferral of any maintenance fee by Genzyme shall not be construed as waiver or deferral of any such subsequent payment.

    4.5                                  EXACT shall pay Genzyme a milestone payment in the amount of two hundred and fifty thousand dollars ($250,000) within thirty (30) days after the first receipt by EXACT of either 510(k) clearance or approval of a Pre-Marketing Authorization application("PMA") (or the equivalent of such submissions required at such time) for a Kit from the FDA.  Such amount shall not be creditable against any royalties or other payments due under this Article 4.

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

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

    4.8                                  All payments to be made under this Article 4 shall be paid in United States dollars, in Boston, Massachusetts or at such other place and in such other way as Genzyme may reasonably designate in writing, without deduction of exchange, collection or other charges.  Conversion of foreign currency into United States dollars shall be calculated using the applicable exchange rate as published in The Wall Street Journal on the date that the payment is first due and payable.  If by law, regulation or fiscal policy of a particular country, conversion into United States dollars or transfers of funds of a convertible currency to the Untied States is restricted or forbidden, EXACT shall give

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• • Genzyme prompt written notice of such restriction or prohibition, which notice shall satisfy the forty-five (45) day payment deadline set forth in Section 4.6.  EXACT shall pay any amounts due to Genzyme through whatever lawful methods Genzyme reasonably designates in writing; provided, however, that if Genzyme fails to designate such payment method within thirty (30) days after Genzyme is notified of the restriction, EXACT may deposit such payment in local currency to the credit of Genzyme in a recognized commercial banking institution reasonably selected by EXACT and promptly identified by written notice from EXACT to Genzyme, and such deposit shall fulfill all obligations of EXACT to Genzyme with respect to such payment.

    4.9                                  In the event that any payment due hereunder is not made when due, the payment shall accrue interest beginning on the first day following the due date as herein specified, calculated at the annual rate of the sum of (a) two percent (2%) plus (b) the prime interest rate quoted by BankBoston N.A.  on the date said payment is due, the interest being compounded on the last day of each calendar quarter; provided, that in no event shall said annual rate exceed the maximum legal interest rate in Massachusetts.  The payment of such interest shall not foreclose Genzyme from exercising any other rights it may have as a consequence of the lateness of any payment.

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

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

ARTICLE 5.  REPORTS AND RECORDS

• • 5.1                                  EXACT shall maintain true, accurate and complete books of account, records and files containing an accurate record of all data reasonably necessary for the full computation and verification of sales and the determination of the amounts payable under Article 4 hereof for a period of at least four (4) years following the period of each report required by Section 5.2 below.  Said books and records shall be kept at EXACT’s principal place of business and shall be in accordance with generally accepted accounting principles, consistently applied.  Said books and records, to the extent not previously audited, shall be available for inspection by an independent certified public accountant selected by

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• • Genzyme (or its licensor of the Patent Rights) and reasonably acceptable to EXACT, upon ten (10) business days advance written notice and during regular business hours, for three (3) years following the end of the calendar year to which they pertain in order to enable Genzyme (or its licensor of the Patent Rights) to ascertain the correctness of any report and/or payment made under this Agreement.  Such inspections may be conducted no more than once in any twelve (12) month period and, except as provided below, shall be conducted at the expense of Genzyme (or its licensor, as the case may be).  If such examination reveals that royalties have been misstated, any adjustment shall be promptly refunded or paid, as appropriate.  Genzyme (or its licensor, as the case may be) shall pay the fees and expenses of the accountant engaged to perform the audit, unless such audit reveals an underpayment of five percent (5%) or more for the period examined, in which case EXACT shall pay all reasonable costs and expenses incurred by Genzyme (or its licensor, as the case may be) in the course of making such determination, including without limitation the fees and expenses of the accountant.

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

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

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

    (c)           the calculation of Net Service Revenues and Net Sales on a country-by-country basis for the applicable period, including a detailed listing of the applicable deductions permitted under Sections 1.11 and 1.12 hereof on an item-by-item basis and a detailed explanation of the calculation of Net Service Revenues and Net Sales of any Combination Services or combination products; and

    (d)