Exhibit 10.2

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT (this “Agreement”) is entered into as of December 15, 2017
by and between MB FINANCIAL BANK, N.A. (“Lender”) and CG GROWTH, LLC, a
Wisconsin limited liability company (“Borrower”).

 

RECITAL:

 

Borrower desires to obtain and Lender is willing to provide Borrower, subject to
the terms and conditions set forth in this Agreement, a construction loan in the
stated principal amount of Twenty-Five Million Six Hundred Forty-Six Thousand
and 00/100 Dollars ($25,646,000.00) (the “Construction Loan”) to finance the
construction of a 137,000 square foot research/diagnostic lab/office building in
Madison, Wisconsin as legally described on the attached Exhibit A (the
“Property”).

 

AGREEMENT:

 

NOW THEREFORE, in consideration of the approval and granting of the loans by
Lender to Borrower pursuant to this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Borrower and Lender agree as follows:

 

1.                                      DEFINITIONS.  In this Agreement:

 

(a)                                 “Assignment of Leases” means that certain
Assignment of Rents and Leases dated as of the date hereof executed by Borrower
in favor of Lender.

 

(b)                                 “Assignment of Contracts” means the
Assignment of Contracts, Permits, Plans and Specifications dated as of the date
hereof executed by Borrower in favor of Lender.

 

(c)                                  “Borrower’s Deposit” means to the extent
the costs of Construction (as defined below) exceed the principal sum of the
Construction Note, Borrower shall deposit with Lender a sum equal to the
difference.

 

(d)                                 “Borrower’s Equity Contribution” means
Eighteen Million Nine Hundred Twenty-Eight Thousand Six Hundred Ninety-One and
00/100 Dollars consisting of:  (A) cash in the amount of Sixteen Million Four
Hundred Twenty-Eight Thousand Six Hundred Ninety-One and 00/100 Dollars
($16,428,691.00), and (B) tax increment financing from the City of Madison in
the amount of Two Million Five Hundred Thousand and 00/100 Dollars
($2,500,000.00) (the “TIF Funds”).  Lender acknowledges that the TIF Funds will
not be available until after disbursement of certain of the proceeds of the
Construction Loan.

 

(e)                                  “Borrower’s Loan Account” means the account
established under Section 3 of this Agreement.

 

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(f)                                   “Completion Date” means July 1, 2019.

 

(g)                                  “Construction” includes, without
limitation, the design, planning, excavation, installation and completion of
improvements to the Property and the purchase of all labor and materials related
thereto, as set forth in the Plans and Specifications and the Project Budget.

 

(h)                                 “Construction Note” means the Note dated
December 15, 2017 executed by Borrower in favor of Lender in the original
principal amount of Twenty-Five Million Six Hundred Forty-Six Thousand and
00/100 Dollars ($25,646,000.00).

 

(i)                                     “Disbursing Agreement” means a
Disbursing Agreement executed by Borrower, Lender and First American Title
Insurance Company or its authorized agent in the form attached as Exhibit B.

 

(j)                                    “Draw Request” means a draw request made
under the Disbursing Agreement.

 

(k)                                 “EBITDA” means, as to any Person and for any
period as to which such amount is being determined, the sum of (a) net income,
(b) interest expense, (c) payment or provision for all applicable income taxes
(d) depreciation and amortization expense and (e) non-cash stock based
compensation, all as determined without duplication for the Person and its
consolidated subsidiaries.

 

(l)                                     “Environmental Indemnity Agreement”
means the Environmental Indemnity Agreement dated as of the date of this
Agreement executed by Borrower and Guarantor in favor of Lender.

 

(m)                             “ESC” means Exact Sciences Corporation, a
Delaware corporation.

 

(n)                                 “ESC Loan Agreement” means that certain Loan
Agreement dated as of the date hereof among ESC, Exact Sciences Laboratories,
LLC, a Delaware limited liability company, and Lender, as the same may be
amended, revised, supplemented or restated from time to time.

 

(o)                                 “Event of Default” shall have the meaning
set forth in Section 9 hereof.

 

(p)                                 “Guarantor” means, until such time as the
Lease is executed and delivered to Lender and the Project is completed, Exact
Sciences Corporation, a Delaware corporation.

 

(q)                                 “Guaranty” means, collectively, the Guaranty
Agreement dated as of the date of this Agreement executed by the Guarantor in
favor of Lender securing the obligations of Borrower to Lender under the Loan
Documents and any other agreement from

 

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the Guarantor to Lender pursuant to which such Person guarantees the payment or
performance of the Construction Loan.

 

(r)                                    “Hedging Agreement” (and, collectively,
“Hedging Agreements”) shall mean (i) any transaction now existing or hereafter
entered into between Borrower and Lender which is a rate swap, basis swap,
commodity swap, equity or equity index swap, foreign exchange transaction,
currency or cross-currency rate swap, or any similar transaction or any
combination thereof (including any option, cap, collar, floor or forward with
respect to any of the foregoing), whether linked to one or more interest rates,
foreign currencies, commodity prices, equity prices or other financial measures,
and any other agreement or arrangement designed to protect against fluctuations
in interest rates, currency exchange rates or commodity prices, (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing, and (iii) any agreement, confirmation or other document with respect
thereto, and (iv) all debts, obligations and liabilities of Borrower to Lender
with respect to any of the foregoing.  In addition, notwithstanding anything to
the contrary herein, obligations under Hedging Agreements shall only be
accelerated or terminated in accordance with the respective Hedging Agreement.

 

(s)                                   “Interest Reserve” means an interest
reserve established by Borrower, out of the Loan Proceeds, in the amount of
Seven Hundred Forty Thousand Eight Hundred Fifty and 00/100 Dollars
($740,850.00).

 

(t)                                    “Lease” means that certain Lease
Agreement dated as of the date of this Agreement between CG Growth, as landlord,
and ESC, as tenant, with respect to the real estate commonly known as 650
Forward Drive, Madison, Wisconsin, together with an approximately 137,000 square
foot building and all other improvements located thereon.

 

(u)                                 “Letter of Credit Documents” means,
collectively, those certain documents which govern that certain Irrevocable
Standby Letter of Credit in the amount of Six Hundred Forty-Six Thousand and
00/100 Dollars ($646,000.00) dated November 8, 2017 (No. 10012401236) issued by
Lender (on behalf of Borrower) in favor of the City of Madison, Wisconsin (the
“Letter of Credit”), including, that certain Continuing Agreement for Standby
Letter of Credit between Borrower and Lender dated November 8, 2017.

 

(v)                                 “Lien” means any security interest,
mortgage, deed of trust, pledge, hypothecation, assignment, charge or deposit
arrangement, encumbrance, lien (statutory or otherwise) or charge of any kind
including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement or any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction (or other similar recording or notice statute, and any lease in the
nature thereof), except a filing for precautionary purposes made with respect to
a true lease or other true bailment.

 

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(w)                               “Loan Documents” means collectively the Note,
Mortgage, Hedging Agreements, Letter of Credit Documents, this Agreement, the
Guaranty, the Assignment of Leases and Rents and the Assignment of Contracts.

 

(x)                                 “Loan Proceeds” means proceeds of the
Construction Loan, and does not include funds disbursed from Borrower’s Deposit.

 

(y)                                 “Maturity Date” means, December 10, 2022,
unless sooner terminated or extended as provided in this Agreement and the
applicable Note.

 

(z)                                  “Mortgage” means the Construction Mortgage,
Security Agreement and Fixture Financing Statement on the Property, executed by
Borrower, as mortgagor, in favor of Lender and securing repayment of the
Construction Note.

 

(aa)                          “Note” means the Construction Note.

 

(bb)                          “Permitted Liens” means:

 

(1)                                 The Mortgage and other liens securing the
Notes;

 

(2)                                 A lien of general taxes which are not yet
due or payable;

 

(3)                                 Such liens and encumbrances contained on the
title insurance policy accepted by the Lender;

 

(4)                                 Liens on the property of Borrower securing
(a) the non-delinquent performance of bids, trade contracts (other than for
borrowed money), leases and statutory obligations, (b) contingent obligations on
surety, performance and appeal bonds, and (c) other non-delinquent obligations
of a like nature; in each case incurred in the ordinary course of business and
treating as non-delinquent any delinquency which is being contested in good
faith and by appropriate action, which action has the effect of preventing the
forfeiture or sale of the property subject thereto;

 

(5)                                 Liens arising in the ordinary course of
business (such as Liens of carriers, warehouseman, landlords, materialmen,
repairmen and mechanics and other similar liens imposed by law) which secure
payment of obligations not more than ninety (90) days past due or which are
being contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside;

 

(6)                                 Purchase money Liens on any equipment or
fixture acquired after the date hereof to be used by the Borrower in the normal
course of its business, and created or incurred simultaneously with the
acquisition of such equipment or fixture, if such Lien is limited to the
property so acquired and the indebtedness secured by Lien does not exceed the
purchase price of such property and any ancillary costs associated therewith;

 

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(7)                                 The mortgage in favor of the City of Madison
to secure the Borrower’s obligations under the TIF Documents;

 

(8)                                 Such other liens or encumbrances arising
after the date hereof that are approved by Lender in writing; and

 

(9)                                 Any easements, restrictions, minor title
irregularities and/or  encumbrances, other than liens or encumbrances securing
monetary obligations of any kind and/or any other material obligations,
including, without limitation, maintenance obligations, which Borrower may enter
into subsequent to the date hereof in the ordinary course of developing the
Project, e.g. utility easements and which have no material adverse effect as a
practical matter upon the ownership or use of the Property by the Borrower or
ESC.

 

(cc)                         “Person” means any natural person, corporation,
limited liability company, joint venture, limited liability partnership,
partnership, association, trust or other entity or any governmental authority.

 

(dd)                          “Plans and Specifications” means the plans and
specifications previously delivered to Lender and approved by Lender in
connection with the Construction, including such changes as may provided to and
approved by Lender.

 

(ee)                            “Project” means the Property, the existing
improvements, and the improvements to be constructed or acquired pursuant to the
Plans and Specifications and Project Budget.

 

(ff)                              “Project Budget” means the budget for
Construction of the Project submitted by Borrower and approved by Lender as set
forth in the attached Exhibit C, as amended from time to time, with the approval
of Lender in accordance with this Agreement.

 

(gg)                         “Tangible Net Worth” means, as to any Person, as of
any determination date, the total of all assets which would appear on the
consolidated balance sheet of such Person and its subsidiaries, less the sum of
the following:

 

(i)                                     the book amount of all such assets which
would be treated as intangibles, including all such items as goodwill,
trademarks, trademark rights, trade names, trade name rights, brands,
copyrights, patents, patent rights, licenses, deferred charges and unamortized
debt discount and expense;

 

(ii)                                  any write-up in the book value of any such
assets resulting from a revaluation thereof subsequent to the date of the most
recent financial statements delivered to Lender;

 

(iii)                               all reserves, including reserves for
depreciation, obsolescence, depletion, insurance and inventory valuation, but
excluding contingency reserves not allocated for any particular purpose and not
deducted from assets;

 

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(iv)                              the amount, if any, at which any Equity
Interests of the Person or any of its subsidiaries appear on the asset side of
such consolidated balance sheet;

 

(v)                                 the Total Liabilities of the Person; and

 

(vi)                              all investments in foreign Affiliates of the
Person and unconsolidated domestic Affiliates of the Person;

 

all as calculated for ESC and its Subsidiaries on a consolidated basis.

 

(hh)                          “TIF Documents” means, collectively, those certain
documents which govern the tax increment financing facility between Borrower and
the City of Madison which are to be entered into after the date of this
Agreement in form and substance reasonably satisfactory to Lender.

 

(ii)                                  “Total Liabilities” means, as to any
Person, all items which would be classified as liabilities on the consolidated
balance sheet of such Person and its Consolidated Subsidiaries, calculated for
ESC and its Subsidiaries on a consolidated basis.

 

2.                                      CONSTRUCTION LOAN

 

(a)                                 Agreement to Lend and Borrow.  Subject to
the terms and conditions of this Agreement, Lender agrees to lend to Borrower,
and Borrower agrees to borrow from Lender, a sum not to exceed the principal
amount of the Construction Note minus the face amount of the Letter of Credit,
during the term of this Agreement and the Construction Note; and Borrower agrees
to make payments in accordance with the terms of the Construction Note and this
Agreement.

 

(b)                                 Purpose.  Subject to the terms and
conditions of this Agreement, upon execution of the Loan Documents, Borrower is
authorized to request advances of the Construction Loan to fund the costs of
Construction of the Project.  All requests for advances shall be in accordance
with the Project Budget.  Borrower shall complete Construction of the Project in
substantial accordance with the Plans and Specifications and will be solely
responsible for such completion.

 

(c)                                  Payments.  Borrower will commence payment
of monthly installments of interest and, if required under the Construction
Note, principal, at the time such payments are scheduled to commence under the
Construction Note, notwithstanding the fact that undisbursed Loan Proceeds may
be retained in Borrower’s Loan Account at that time.  Borrower and Lender agree
that monthly payments of interest due under the Construction Note shall be paid
from the Interest Reserve so long as there are sufficient funds therein.  At
such time as the Interest Reserve is at $0, interest due under the Construction
Note shall be paid as set forth therein.

 

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(d)                                 Additional Funding Requirements.  In
addition to all other conditions to funding set forth in this Agreement and
other Loan Documents, Lender shall have no obligation to fund any costs of
Construction until (1) Lender and/or its consultants have reviewed and approved
all Plans and Specifications, construction contracts, builder’s risk insurance,
the Project Budget and environmental testing and related reports concerning the
Project, and (2) Borrower’s Equity Contribution (excluding the TIF Funds) has
been fully used to fund the acquisition of the Property and costs of
Construction in accordance with the Project Budget.

 

3.                                      BORROWER’S LOAN ACCOUNT.

 

(a)                                 Deposit of Funds to Borrower’s Loan
Account.  Upon execution of this Agreement and as a condition to Lender’s
initial advance of Loan Proceeds, Borrower shall satisfy Borrower’s Equity
Contribution by (1) depositing funds with Lender, or (2) providing Lender with
written evidence of the costs of acquisition and Construction (as approved by
Lender) paid by Borrower and evidence of availability of the TIF Funds.  The
cash component of Borrower’s Equity Contribution will be disbursed before any of
the Loan Proceeds.

 

(b)                                 Security for Due Performance.  Subject to
the provisions of this Agreement, Borrower irrevocably assigns to Lender, as
security for the obligations secured by the Mortgage and Borrower’s due
performance of this Agreement and for any other obligations of Borrower to
Lender, Borrower’s Loan Account and all moneys placed in that account, including
but not limited to amounts that may be subsequently deposited in the account by
Borrower or Lender.

 

(c)                                  Charges to Loan Account.  All Loan Proceeds
disbursed or paid from Borrower’s Loan Account will be charged to Borrower’s
Loan Account and will bear interest at the rate provided in the Construction
Note as of the date disbursed or paid.

 

(d)                                 Deductions from Loan Account;
Reimbursement.  Lender may, but shall not be required to, deduct unpaid monthly
interest payments and any unpaid escrow payments from Borrower’s Loan Account. 
Lender may bill Borrower for amounts so deducted, and Borrower shall reimburse
Borrower’s Loan Account within ten (10) days after that billing. 
Notwithstanding the foregoing, until such time as the Interest Reserve is at $0,
interest payments due under the Construction Note shall be paid from the
Interest Reserve.

 

(e)                                  Supplemental Payments to Loan Account.  If
Lender reasonably determines that the remaining Loan Proceeds are insufficient
to fully pay all of the unpaid costs of Construction as set forth in the Project
Budget and estimated expenses of completion, including all soft costs, Borrower
shall deposit with Lender in Borrower’s Loan Account, within thirty (30) days
after Lender’s demand, sufficient funds as reasonably determined by Lender to
permit Lender to pay these costs and expenses.  At no time shall the outstanding
principal balance of the Construction Loan exceed 80% of the costs of
Construction.

 

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4.                                      REPRESENTATIONS AND WARRANTIES.  In
order to induce Lender to make advances of the Construction Loan, Borrower
represents and warrants to Lender that:

 

(a)                                 Organization of Borrower.  Borrower is a
limited liability company duly organized and validly existing under the laws of
the State of Wisconsin and is duly qualified to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership of its properties requires such qualification, except where the
failure to be so qualified and in good standing could not reasonably be expected
to have a material adverse effect on the financial condition or business
operations of Borrower.  Borrower has no subsidiaries.

 

(b)                                 Authorization and Binding Effect as to
Borrower.  The execution and delivery to Lender of the Loan Documents to which
Borrower is a party, and the performance by Borrower of its obligations
thereunder, are within its power and have been duly authorized by proper
corporate or limited liability company action, as the case may be, on the part
of Borrower, are not in violation of any existing law, rule or regulation of any
governmental agency or authority, any order or decision of any court, the
organizational documents of Borrower, or the terms of any agreement, restriction
or undertaking to which Borrower is a party or by which it is bound, and do not
require the approval or consent of any governmental body, agency or authority or
any other person or entity, except, as to all statements above, where any such
violation or failure to obtain approvals or consents could not reasonably be
expected to have a material adverse effect on the financial condition or
business operations of Borrower.  The Loan Documents to which Borrower is a
party, when executed and delivered to Lender, will constitute the legal, valid
and binding obligations of Borrower enforceable in accordance with their terms,
except as limited by bankruptcy, insolvency or similar laws of general
application affecting the enforcement of creditor’s rights.

 

(c)                                  [Intentionally Omitted].

 

(d)                                 Litigation.  Except as previously disclosed
in writing to Lender, there is no legal or regulatory proceeding or
investigation pending or, to the knowledge of Borrower, threatened (or any basis
therefor) against Borrower, Guarantor, the Property or the Project, which, when
and however decided, could have a material adverse effect on the condition or
business of Borrower, Guarantor or their respective ability to perform their
obligations under the Loan Documents.

 

(e)                                  No Burdensome Agreements.  Borrower is not
a party to or bound by any agreement, instrument or undertaking, or subject to
any other restriction (1) which materially adversely affects or, with the
passage of time or providing of notice, or both, so affect the Property (taken
in the aggregate), financial condition or business operations of Borrower, or
(2) under or pursuant to which Borrower is or will be required to place (or
under which any other person has the current right to place) a lien upon any of
its properties securing indebtedness to Lender either upon demand or upon the
happening of a condition, with or without such demand, other than agreements for
construction work on the Project

 

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which result in a statutory right to file a lien against the Project pursuant to
any applicable construction lien laws.

 

(f)                                   Ownership of Property.  Borrower is the
owner in fee simple of the Property and the Project and said ownership is not
and will not be subject to any mortgage, charge, encumbrance, lien or claim for
lien of any kind or nature whatsoever except for Permitted Liens.

 

(g)                                  Utilities.  All utility services and
facilities (whether public or private) necessary for the construction and
operation of the Project, including, without limitation, electric, gas, sewer,
water and telephone are available or will be available prior to completion of
Construction of the Project.

 

(h)                                 Access.  All streets adjacent to the
Property have been completed, are serviceable and are adequate to serve the
Project and all streets to be dedicated have been dedicated and accepted.

 

(i)                                     Compliance.  The Property, the
Construction of the Project, the Project and the use of the Project for its
intended use are and will remain in compliance with all applicable zoning,
building, subdivision, health, traffic, environmental, safety and other laws,
regulations and ordinances and any private covenants and restrictions applicable
to the Property and the Project.  Borrower has or will have and maintain all
permits and licenses necessary or required for the Construction and use of the
Project and the Property.

 

(j)                                    Plans and Specifications.  The Plans and
Specifications provided or to be provided by Borrower to Lender pursuant to
Section 6(b)(1) of this Agreement, are (or will be at the time provided to
Lender) accurate and complete in all material respects for the then contemplated
stages of construction and adequate for the then contemplated stages of
construction of the Project.

 

(k)                                 Construction of Improvements.  The entire
Project will be constructed within, and on property contiguous, to the site
boundaries of the Property.  The Project will be constructed in compliance with,
and without encroaching upon, any easements, setbacks or other restrictions
affecting the Property.

 

(l)                                     Financial Statements and Projections. 
All projections and budgets, including the Project Budget, provided by Borrower
and Guarantor to Lender were prepared in good faith based on reasonable
assumptions for which Borrower has no knowledge that would render such
assumptions unreasonable.  All financial statements provided to Lender were
prepared in accordance with industry standard accounting principles,
consistently applied, subject to normal year-end and adjustments, and accurately
reflect in all material respects the financial condition of Borrower and
Guarantor, respectively, as of the date thereof and for the period ended as of
such date.

 

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(m)                             No Insolvency or Bankruptcy.  No insolvency or
bankruptcy proceeding is pending against Borrower or Guarantor, and to
Borrower’s knowledge, no Event of Default exists under the terms of this
Agreement or any other Loan Document and no event or act has occurred, or
condition exists, which with the giving of notice or the passage of time would
constitute an Event of Default under the terms of this Agreement or any other
Loan Document.

 

(n)                                 No Material Adverse Change.  No material
adverse change has occurred with respect to the Project or the Property, or in
the business condition or financial prospects of Borrower or Guarantor since the
date of the latest financial statements delivered by Borrower or Guarantor,
respectively, to Lender.

 

(o)                                 No Casualty.  No fire, vandalism or other
casualty resulting in damage in excess of $500,000 to the Project or the
Property has occurred.

 

(p)                                 USA Freedom Act.  Neither Borrower nor
Guarantor is in violation of the USA Freedom Act—Public Law 114-23 nor any other
statutes and orders, rules and regulations of the United States government and
its various executive departments, agencies and offices related to the subject
matter of such act.

 

(q)                                 Representations and Warranties Continuous. 
The foregoing representations and warranties, as well as the facts contained in
the Recitals, shall be continuing in nature and shall be true and correct as of
the date made, at the date of the initial advance and at the dates of all
subsequent advances of Loan Proceeds.

 

5.                                      LETTER OF CREDIT.  Subject to the terms
of this Agreement, Lender has issued the Letter of Credit upon the following
conditions:

 

(a)                                 The Letter of Credit Documents shall be a
part of the Loan Documents;

 

(b)                                 Each draft paid by Lender under the Letter
of Credit shall be deemed an advance which shall be repaid by Borrower in
accordance with the provisions of the Letter of Credit Documents;

 

(c)                                  In connection with the Letter of Credit,
Borrower shall pay all fees as Lender may from time to time customarily charge
in accordance with Lender’s published schedule of fees in effect from time to
time, which fees shall be due and payable on demand by Lender;

 

(d)                                 In the event of a conflict between the terms
of the Letter of Credit Documents and the Loan Documents, the Loan Documents
shall control;

 

(e)                                  Notwithstanding any provision contained in
this Agreement or any Letter of Credit Document to the contrary, upon the
occurrence and during the continuance

 

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of any Event of Default under this Agreement, at Lender’s option and without
demand or further notice to Borrower, an amount equal to the aggregate undrawn
face amount of all Letters of Credit then outstanding shall be deemed (as
between Lender and Borrower) to have been paid or disbursed by Lender
(notwithstanding that such amounts may not in fact have been so paid or
disbursed by Lender) under the Construction Note, which shall be immediately due
and payable.  In lieu of the foregoing, at the election of Lender, Borrower
shall, upon Lender’s demand, deliver to Lender cash, or other collateral
acceptable to Lender in its sole and absolute discretion, having a value equal
to 105% of the aggregate undrawn face amounts of all outstanding Letters of
Credit.  Any such collateral and/or any amounts received by Lender shall be held
by Lender in a separate account at Lender appropriately designated as a cash
collateral account in relation to this Agreement and the Letters of Credit and
retained by Lender as collateral security for the payment of the Construction
Loan, and Borrower hereby grants a security interest to Lender in such cash
collateral account.  Such amounts shall not be used by Lender to pay any amounts
drawn or paid under or pursuant to any Letter of Credit, but may be applied to
reimburse Lender for drawings or payments under or pursuant to the Letters of
Credit which Lender has paid, or if no such reimbursement is required to the
payment of the Construction Loan as Lender shall determine.  Any amounts
remaining in any cash collateral account established pursuant hereto after the
payment in full of all of the indebtedness under the Construction Loan and the
expiration or cancellation of all of the Letters of Credit shall be returned to
Borrower (after deduction of Lender’s expenses, if any); and

 

(f)                                   The face amount of the Letter of Credit
shall reduce, dollar for dollar, the amount available for borrowing under the
Construction Loan.

 

6.                                      CONDITIONS OF BORROWING.

 

(a)                                 Conditions Precedent.  In addition to any
other conditions set forth in this Agreement, Lender will not be required to
make advances of Loan Proceeds unless the conditions set forth in this Section 6
have been completed to the satisfaction of Lender.  Lender may, in its
discretion, make advances before any such condition is met without waiving its
right to require that condition be met before any additional advance is made.

 

(b)                                 Items to be Furnished by Borrower.  Prior to
the initial funding of the Construction Loan (unless otherwise noted), Borrower
must furnish to Lender, in form and substance acceptable to Lender:

 

(1)                                 Plans and Specifications for the first stage
of Construction on the Property.  The Plans and Specifications must be executed
by Borrower, the architect or engineer responsible for the same, and the general
contractor.

 

(2)                                 A fully executed copy of the Lease, and a
fully executed Subordination Agreement between Borrower, Lender and Tenant.

 

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(3)                                 An executed copy of the architect’s
agreement between Borrower and its architect.

 

(4)                                 An executed copy of a stipulated sum or
guaranteed maximum price contract between Borrower and its general contractor
and a copy of the Project Budget submitted to and approved by Lender.

 

(5)                                 Borrower’s or general contractor’s
affidavit, setting forth:  the name and address of each contractor,
subcontractor, person, firm, corporation, or other entity furnishing materials
or performing labor in the Construction that have been retained as of the date
of such affidavit; and the amount of each subcontract entered into in connection
with the Construction.  Borrower agrees to supplement such statement on a per
draw basis, as additional subcontractors or other parties are retained to
furnish materials or perform labor in the Construction.

 

(6)                                 A current ALTA survey of the Property,
certified by a registered surveyor acceptable to Lender, in a form satisfactory
to Lender, showing:  (i) the perimeters of the Property and the bearing and
dimensions of such perimeters, the location of all improvements on the Property,
the distance of the improvements from the perimeters, the location of all
easements and other matters of record affecting the Property, and the location
of adjacent streets and of adjacent property with access to the Property; and
(ii) such other documentation as may be necessary to cause the company issuing
the title policy under Subsection 6(b)(9) below to remove standard survey
exceptions from its title commitment or issue any endorsement requested by
Lender.

 

(7)                                 Satisfactory evidence, in Lender’s
reasonable determination, of compliance, with respect to both present and
contemplated future uses to the extent available, with all applicable zoning
laws, regulations, ordinances and codes.

 

(8)                                 A policy or policies of title insurance on
the Property written by a title insurance company acceptable to Lender on a
current ALTA form in the total face amount equal to the principal amount of the
Construction Loan, insuring Lender that the Mortgage is a first lien on the
marketable fee simple title to the Property subject only to Permitted Liens. 
The policy shall provide that the title insurance company will warrant the
Property insured to be free and clear of mechanic’s liens before each
construction draw.  Lender may require endorsement of the policy in connection
with any disbursement subsequent to the original disbursement.

 

(9)                                 An MAI appraisal issued by an appraiser
approved by Lender and in form and content acceptable to Lender, with an
“as-completed” fair market value of the Property acceptable to Lender and
evidencing that the loan-to-value ratio is not greater than 101%.

 

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(10)                          The Loan Documents duly and validly executed and
delivered by Borrower or such other person or entity as may be appropriate, in
recordable form where appropriate.  The Loan Documents consist of the following:

 

(a)                                 This Agreement;

 

(b)                                 Note;

 

(c)                                  Mortgage;

 

(d)                                 Disbursing Agreement;

 

(e)                                  Assignment of Contracts;

 

(f)                                   Environmental Indemnity Agreement;

 

(g)                                  Hedging Agreements (if applicable);

 

(h)                                 Assignment of Leases;

 

(i)                                     Letter of Credit Documents; and

 

(j)                                    The Guaranty.

 

(11)                          All insurance policies and endorsements required
by this Agreement or any other Loan Document, accompanied by evidence of payment
of the premiums for such policies.

 

(12)                          An environmental report, in form and substance
reasonably acceptable to Lender, from an environmental engineer or company
satisfactory to Lender.

 

(13)                          A copy of Borrower’s and Guarantor’s
organizational documents and consent resolutions authorizing, in the case of
Borrower, the Construction Loan and in the case of the Guarantor, the Guaranty.

 

(14)                          The loan commitment fee in the amount of One
Hundred Twenty-Five Thousand and 00/100 Dollars ($125,000.00) payable upon
execution of this Agreement.

 

(15)                          Such other documentation as Lender may deem
reasonably necessary or appropriate to evidence the intent or effectuate the
purpose of this Agreement.

 

7.                                      DISBURSEMENTS OF CONSTRUCTION LOAN.

 

(a)                                 Advances.  Loan Proceeds will be disbursed
in several advances in accordance with this Agreement and the terms, conditions
and procedures contained in the

 

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Disbursing Agreement attached as Exhibit B to this Agreement; provided, however,
at Lender’s discretion and at Borrower’s expense, an inspector hired by Lender
shall certify to Lender upon inspection (which inspections shall occur no more
frequently than one per each Draw Request) that (i) Construction is in
accordance in all material respects with the Plans and Specifications, and
(ii) the anticipated cost of Construction is consistent with the statements of
costs of Construction set forth in the Project Budget.  Borrower agrees that: 
(1) all of the Loan Proceeds disbursed by Lender (including amounts payable to
and deducted by Lender) will constitute part of the Construction Loan evidenced
by the Note; and (2) interest will be computed on the Loan Proceeds as
prescribed by the Note from the date Borrower’s Loan Account is charged with the
amount of the Loan Proceeds advanced, whether or not the advance is fully
disbursed or is withheld in part as provided under this Agreement.

 

(b)                                 Right to Withhold Payment of Draw Requests. 
If Lender reasonably determines that the quality or value of the work performed
or the material furnished as represented by a Draw Request delivered to Lender
does not correspond, in any material respect, with the actual work performed or
the materials actually furnished, Lender will notify Borrower of its objection
to such payment and may withhold payment of the Draw Request until the objection
is corrected to the reasonable satisfaction of Lender; provided, that Lender may
not raise an objection if the work performed or the materials provided are in
compliance in all material respects with the Plans and Specifications as
provided to Lender to date.  If the objection is not corrected within ten
(10) days after the date that Borrower is notified of Lender’s objection, the
funds withheld may be credited to Borrower’s Loan Account and the payment
thereof deleted from the Draw Request.

 

(c)                                  Permits.  A copy of each building permit or
other approval or agreement required by any governmental authority to commence
the then contemplated stage of the Construction in accordance with the Plans and
Specifications, including but not limited to the foundation permit and the
erosion control permit, or evidence acceptable to Lender assuring that all
necessary permits and approvals will be obtained when required without delaying
completion shall be provided prior to the first draw of hard construction costs
pursuant to the Disbursing Agreement.  Further, a final building permit shall
have been provided to Lender on or before April 30, 2018.

 

(d)                                 Items to be Provided Before Final
Disbursement.  Before the final disbursement of Loan Proceeds, Lender must be
satisfied that Construction was completed in compliance with the Plans and
Specifications in all material respects, and Borrower must submit to Lender:

 

(1)                                 All permits necessary for use of the
Project;

 

(2)                                 Issuance of a date down endorsement by the
Title Company in form and substance reasonably satisfactory to Lender and that
no change of record title has occurred;

 

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(3)                                 A certificate from Borrower’s architect or
engineer satisfactory to Lender indicating that Construction has been completed
as provided for in the Plans and Specifications in all material respects;

 

(4)                                 A statement, certified by Borrower showing
the total costs of Construction;

 

(5)                                 An “as-built” survey of the Project,
certified by a registered surveyor acceptable to Lender, in a form satisfactory
to Lender, showing (i) the location of all improvements on the site of the
Project, and (ii) shows all information required by Section 6(b)(7) of this
Agreement.

 

(e)                                  Notice of Changes.  Borrower will deliver
to Lender revised statements of estimated costs of Construction showing changes
in or variations from the original estimate, with the next Draw Request after
those changes are known to Borrower.  However, revised statements are only
required to cover changes involving amounts that individually exceed One Hundred
Thousand and 00/100 Dollars ($100,000.00) or, in the aggregate, Five Hundred
Thousand Dollars ($500,000.00), and Borrower may reallocate cost savings under
One Hundred Thousand Dollars ($100,000) from any budget line item to another
line item without the prior consent of Lender.

 

8.                                      COVENANTS OF BORROWER.  Borrower agrees
and promises that:

 

(a)                                 Expeditious Completion.  Except as permitted
by Section 7(a) above, Borrower will expeditiously complete the Construction in
a good and workmanlike manner, in accordance with the Plans and Specifications
and all applicable statutes ordinances and regulations in all material respects,
and any restrictions of record.  Borrower shall promptly correct any material
defects in the Construction which deviate in any material respect from the Plans
and Specifications, which the Lender, in its sole discretion, reasonably
requires.

 

(b)                                 No Material Changes Without Consent.  Once
the complete and final Plans and Specification are provided to Lender, Borrower
will not make or consent to any material modifications in the Plans and
Specifications, without the prior express written consent of Lender, Lender
acknowledging that the Plans and Specifications will evolve and change during
the initial stages of Construction and will not be deemed final and complete
until Borrower and Lender mutually agree.  Borrower shall not, without the prior
consent of Lender, make or consent to any material modifications in the terms of
the primary construction contract with the general contractor relating to
Construction after the contract has been submitted to Lender.  In addition,
Borrower may make such changes to the Plans and Specifications (in accordance
with this Loan Agreement) as required under the Lease.

 

(c)                                  Discharge of Claims.  Borrower will
discharge all claims for labor performed and materials, equipment, and services
furnished in connection with the Construction to the extent they are not paid
from the Loan Proceeds; provided that Borrower is not required to discharge
claims if Borrower diligently contests such claims in good faith

 

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and by appropriate proceedings and provides adequate reserves for the payment of
same on its books.

 

(d)                                 Avoidance of Liens.  Borrower will take all
reasonable steps to forestall any lien claims against:  (1) the Property, any
part thereof, or any right or interest appurtenant thereto; (2) any personal
property and fixtures located or used in connection with the Property and owned
by Borrower; and/or (3) the Loan Proceeds.  Upon demand by Lender, Borrower will
make such demand or claims upon laborers, materialmen, subcontractors, or other
persons who have furnished or claimed to have furnished labor, services or
materials in connection with Construction as Lender may reasonably require. 
However, nothing in this Agreement requires Borrower to pay any claim for labor,
services or materials that Borrower in good faith disputes and that Borrower, at
its own expense, is currently and diligently contesting; provided, however, that
if required by Lender, Borrower will, after the filing of any claim of lien that
is disputed or contested by Borrower and prior to any subsequent disbursement or
advance of the Construction Loan, obtain and record a surety bond sufficient to
release said claim of lien.

 

(e)                                  Insurance Coverage.  Borrower shall
maintain or cause to be maintained in effect and furnish Lender with insurance
policies and proof of payment of the following insurance coverages:

 

(1)                                 Prior to the commencement of construction of
vertical improvements and at all times during the process of construction of
vertical improvements, a policy of builder’s risk and/or property insurance on a
completed value non-reporting form of fire, extended coverage, vandalism and
malicious mischief hazard insurance (including flood insurance if the Property
is in a flood plain), covering the Project in at least the amount of the
Construction Note, with loss payable endorsements in favor of Lender or its
assigns, with such other or special coverages as Lender, in its discretion may
reasonably require, including but not limited to contractor’s multiple perils
and commercial general liability coverages.  Borrower shall provide Lender with
immediate written notice if the foregoing coverage is terminated or threatened
to be terminated.

 

(2)                                 Upon completion of Construction of the
Project, fire, extended coverage, and vandalism and malicious mischief hazard
insurance (including flood insurance), in an amount equal to the replacement
value of the Project, with loss payable endorsements in favor of Lender or
assigns, and such other or special coverages (including commercial general
liability coverage) as Lender may in its discretion reasonably require. 
Borrower shall provide Lender with immediate written notice if the foregoing
coverage is terminated or threatened to be terminated.

 

(3)                                 Commercial general liability insurance
against claims for bodily injury or death to property suffered by others
occurring in or about the Property to afford protection to the limit of not less
than One Million Dollars ($1,000,000.00) per occurrence primary coverage and Two
Million Dollars ($2,000,000.00) umbrella policy.

 

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(4)                                 All other insurance coverages relating to
the Property and the Project as required by this Agreement, the Loan Documents
or as otherwise reasonably requested by Lender.

 

(f)                                   Payment and Escrow of Taxes and
Assessments.  Borrower shall pay and discharge, or cause to be paid and
discharged, when due, all taxes, assessments and other governmental charges upon
the Project as well as claims for labor and materials which, if unpaid, might
become a lien or charge upon the Property.  However, a tax, assessment,
government charge or construction lien claim need not be paid as long as both: 
(1) Borrower is contesting such payment in good faith by appropriate proceedings
which will avoid foreclosure of liens securing such items; and (2) sufficient
funds are deposited with Lender to assure prompt disposition of such claims and
protection of Lender’s interests.  At the request of Lender, upon the occurrence
of an Event of Default, or as otherwise set forth herein, Borrower shall pay, or
shall cause Guarantor to pay, to Lender in escrow an amount (in monthly
fractional payments), which Lender estimates to be sufficient to enable Lender
to pay at least thirty (30) days before they become due all taxes, assessments,
and other similar charges levied against the Property.  In such event, upon
demand, Borrower will pay, or cause Guarantor to pay, to  Lender such additional
amounts as are necessary to enable Lender to pay these items in full when due. 
Lender may commingle escrowed funds with Lender’s general funds.  No interest
will be paid on escrowed funds.  Lender shall not be obliged to make a payment
for each purpose more than once a year.  Lender may make such payments by
delivering a check to Borrower that is made payable to the order of the
appropriate tax collecting authority or official or insurer.  Borrower will pay
or cause Guarantor to pay any amount by which the actual taxes or assessments
exceed the amount collected in escrow by Lender.  Lender will have no liability
for under-estimating any such amounts.

 

(g)                                  Interest Reserve.  Lender and Borrower
agree that the Interest Reserve shall be established and funded from time to
time with Loan Proceeds.  Monthly payments of interest due under the
Construction Note shall be paid from the Interest Reserve.  To the extent the
Interest Reserve is insufficient to pay any required interest payment, Borrower
shall make such monthly payment of interest (as required under the Construction
Note).

 

(h)                                 Use of Proceeds.  Borrower will use the
proceeds of all disbursements from Borrower’s Loan Account solely for payment of
costs incurred in connection with the acquisition, construction and development
of the Project, as shown on the statements of estimated costs in the Project
Budget delivered to and approved by Lender.

 

(i)                                     Annual Financial Statements.  Borrower
shall cause ESC to make available to Lender on an annual basis, within 90 days
after the end of each fiscal year, commencing with the fiscal year ending
December 31, 2017, a balance sheet of ESC as of the close of such fiscal year
and related statements of income, retained earnings and cash flows for such
year, setting forth in each case in comparative form corresponding figures from
the preceding annual audit, all in reasonable detail and satisfactory in scope
to Lender, prepared by a firm of independent certified public accountants
selected by ESC and satisfactory to

 

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Lender, Lender hereby agreeing that the accounting firm of BDO is satisfactory
to Lender.  ESC’s annual statements will be available on ESC’s website after
they are filed with the Securities and Exchange Commission.  Such annual
statements shall be accompanied by the unqualified opinion of such accountants
to the effect that such audited financial statements were prepared in accordance
with GAAP and fairly present the financial condition and results from operations
of the Company as of such date and for such fiscal year.  ESC shall prepare
computations which will show whether or not Borrower is in compliance with the
financial covenants contained in subsections 8(o) and 8(p) of this Agreement. 
All such financial statements, and the financial statements described in
subsection (j) below, shall be made available in consolidated and consolidating
form for ESC and all consolidated subsidiaries which it may at the time have.

 

(j)                                    Interim Financial Statements.  ESC shall
furnish to Lender within 40 days after the end of each fiscal quarter of each
fiscal year a balance sheet of ESC as of the end of each such period and related
statements of income, retained earnings and cash flows for the period from the
beginning of the fiscal year through the end of such fiscal quarter, prepared in
the manner set forth in subsection (i) hereof for the annual statements,
reviewed by a firm of independent certified public accountants selected by ESC
and satisfactory to Lender, Lender hereby agreeing that the accounting firm of
BDO is satisfactory to Lender.  ESC’s quarterly statements will be available on
ESC’s website after they are filed with the Securities and Exchange Commission.

 

(k)                                 [Intentionally Omitted].

 

(l)                                     Projections.  ESC shall furnish to
Lender, no later than 90 days after the last day of each fiscal year, the annual
projections for ESC and its consolidated subsidiaries (on a consolidated and
consolidating basis) for the next fiscal year in form and detail reasonably
satisfactory to Lender.

 

(m)                             Other Indebtedness.  Except as set forth on
Schedule 8(m), Borrower shall not assume, incur or permit to exist any
indebtedness for borrowed money or the deferred purchase price of property,
excluding trade credit which is not more than ninety (90) days past due and
obligations under the TIF Documents.

 

(n)                                 No Guaranties.  Except as set forth on
Schedule 8(n), Borrower shall not assume or guarantee the payment of any
indebtedness or other obligation of any other person or entity to any
third-party, other than guaranties in favor of Lender and obligation under the
TIF Documents.

 

(o)                                 Minimum Tangible Net Worth.  Borrower shall
not permit Tangible Net Worth, on a consolidated basis for ESC and its
consolidated subsidiaries, to be less than $225,000,000 as of the last day of
any fiscal quarter.

 

(p)                                 Minimum Liquidity.  ESC shall, as of the end
of each fiscal quarter, maintain cash, marketable securities, mutual funds,
money market accounts, and managed

 

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investment accounts containing long positions in marketable stocks, rated
corporate and municipal bonds, in each case which are owned (legally and
beneficially) by Borrower and/or ESC free and clear of all liens, charges, and
encumbrances equal to or greater than 50% of ESC’s consolidated negative EBITDA
for the trailing twelve-month period ending on the last day of such fiscal
quarter. Notwithstanding the foregoing, Borrower and Lender agree that the
covenant set forth in this subsection (p) shall not be tested at the end of any
fiscal quarter in which ESC’s consolidated EBITDA is greater than $0 on a
trailing twelve month basis.

 

(q)                                 Deposit Accounts.  Borrower shall have
established, and shall at all times during the term of the Construction Loan
maintain its primary deposit accounts with Lender.  To secure Borrower’s
obligations under the Construction Note, Borrower grants Lender a security
interest in all of its accounts maintained with Lender.

 

(r)                                    Distributions, Loans and Advances. 
Borrower shall not make any distribution, loan or advance to a member,
shareholder or third party without the prior written consent of Lender;
provided,  however, with the prior written consent of Lender and subject to
subsection (s) below, Borrower may make loans and advances and distributions on
account of any of its membership interests so long as no Event of Default exists
or would be created by the making of any such payment.

 

(s)                                   Capital Contribution.  Borrower has
contributed capital to the Project in the form of cash or unencumbered readily
marketable assets (or had paid development expenses out of pocket) of at least
fifteen percent (15%) of the Project’s appraised “as completed” value (the
“Capital Contribution”), and the Capital Contribution was made prior to any
advance hereunder.  Borrower agrees that the Capital Contribution by Borrower or
all capital internally generated by the Project, must remain in the Project
until the loan is converted to permanent financing or is sold or paid in full.

 

(t)                                    Liens.  Borrower shall not create, assume
or permit to exist any Lien  upon any of its property or assets in which Lender
has a Lien, whether now owned or hereafter acquired, except Permitted Liens.

 

9.                                      DEFAULT.

 

(a)                                 Events of Default.  Occurrence of any of the
following events is an “Event of Default” for purposes of this Agreement:

 

(1)                                 Default in Payment.  Borrower shall fail to
pay (a) any principal or interest due on the Construction Note when due
thereunder and such failure continues for five (5) days or (b) any other amount
payable hereunder or under any other Loan Document and such failure continues
for five (5) days after written notice from Lender to Borrower.

 

(2)                                 Default in Performance of Other Agreements. 
Except as otherwise provided in this Agreement, (a) a default by Borrower in the
performance or

 

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observance of any of the agreements, covenants, conditions, provisions or terms
set forth in Subsections 8(a), 8(b), 8(g) or 8(l) of this Agreement and such
failure continues for thirty (30) days after written notice of such default from
Lender to Borrower; and (b) a default by Borrower in the performance or
observance of any of the other agreements, covenants, conditions, provisions or
terms set forth in this Agreement or any other Loan Document and such failure
continues for thirty (30) days; provided, however, in the event such failure
takes longer than thirty (30) days to cure, and so long as Borrower is pursuing
such cure, Borrower shall have up to sixty (60) days to cure such default.

 

(3)                                 Representations or Statements False.  Any
representation or warranty made by Borrower in this Agreement or in any
certificate or credit or security instrument delivered pursuant hereto, or any
financial statement delivered to Lender, shall prove to have been false in any
material respect as of the time when made or given and Borrower knew or should
have known that the representation was false.

 

(4)                                 Default on Other Obligations.  (a) an “Event
of Default” (as defined therein) occurs under the ESC Loan Agreement or (b) to
the extent applicable, Borrower shall fail to pay all or any part any rentals
due under any lease or sublease, and such default shall not be cured within the
period or periods of grace, if any, specified in the instruments governing such
obligations, which failure to pay has a material adverse impact upon the
financial condition of Borrower, unless the failure to pay is being contested in
good faith.

 

(5)                                 Judgments.  (a) a final non-appealable
judgment shall be entered against Borrower in excess of the sum of One Hundred
Thousand Dollars ($100,000.00) and shall remain outstanding and unsatisfied,
unbonded, or unstayed after sixty (60) days after the date of entry of the
judgment or (b) a final non-appealable judgment shall be entered against ESC and
shall remain outstanding and unsatisfied, unbonded, or unstayed after sixty
(60) days after the date of entry of the judgment, which after taking into
account any payment made with respect thereto, shall cause the Borrower to be in
violation of Section 8(o) hereof.

 

(6)                                 Bankruptcy; Insolvency.  Borrower or
Guarantor (subject to replacement as described in Section 9(a)(12) below) shall
(i) become insolvent; or (ii) be unable, or admit in writing its inability to
pay its debts as they mature; or (iii) make a general assignment for the benefit
of creditors or to an agent authorized to liquidate any substantial amount of
its property; or (iv) become the subject of an “order for relief” within the
meaning of the United States Bankruptcy Code, which is not released or dismissed
within ninety (90) days; or (v) file an answer to a creditor’s petition
(admitting the material allegations thereof) for liquidation, reorganization, or
to effect a plan or other arrangement with creditors; or (vi) apply to a court
for the appointment of a receiver for any of its assets; or (vii) have a
receiver appointed for any of its material assets (with or without its consent);
or (viii) otherwise become the subject of any insolvency or debtor relief
proceedings under federal or state law which is not released or dismissed in
ninety (90) days.

 

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(7)                                 Validity.  This Agreement, the Note, a
Guaranty or any other Loan Document shall, at any time after their respective
execution and delivery, and for any reason, cease to be in full force and effect
or shall be declared null and void by any entity other than Lender, or be
revoked or terminated by any party other than Lender, or the validity or
enforceability thereof or hereof shall be contested by Borrower, Guarantor or
any member thereof.

 

(8)                                 Default by Guarantor.  Guarantor shall be in
default in the performance or observance of obligations Guarantor owes to Lender
under its Guaranty and the default shall not be cured within the period or
periods of grace, if any, specified in the Guaranty.

 

(9)                                 Abandonment of Work.  Work on the Project is
substantially abandoned, unreasonably delayed, or discontinued for a period of
thirty (30) days for reasons other than those beyond the control of Borrower or
in any event a delay in the construction of the Project so that the same, in
Lender’s reasonable judgment, could not reasonably be expected to be completed
on or before the Completion Date, other than a delay resulting from strikes,
acts of God, adverse weather conditions or other occurrences beyond the control
of Borrower (it being understood that a delay caused by an insufficiency of
funds shall not be deemed to be beyond the control of Borrower).

 

(10)                          Insufficient Funds.  Subject to Section 3(e),
Lender reasonably determines that the remaining Loan Proceeds of the
Construction Loan are insufficient to fully pay all of the unpaid costs of
Construction of the Project, and Borrower fails to deposit with Lender, within
fifteen (15) days after demand, sufficient funds as determined by Lender to
permit Lender to pay those costs.

 

(11)                          Injunctions.  Borrower, the Construction or the
Project become the subject of any restraining order or injunction which is not
dismissed within sixty (60) days of the issuance thereof.

 

(12)                          Dissolution.  Borrower is dissolved.

 

(13)                          Disapproval.  The failure of Borrower to commence
correction of any material defects in the Construction which deviate in any
material respect from the Plans and Specifications to the reasonable
satisfaction of Lender within 30 days after written notice from Lender and
diligently complete the same.

 

(14)                          Termination of Contracts.  The termination of the
construction contract with the general contractor or the termination of the
architect’s agreement, in each case without the prior written consent of Lender
and such contract or agreement is not replaced with an agreement acceptable to
Lender in its reasonable discretion with 45 days of such termination.

 

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(b)                                 Recourse Available to Lender.  Without
limiting the rights and remedies of Lender in the Note, Mortgage or other Loan
Documents, Lender may, at its option during the continuance of an Event of
Default, do any or all of the following, unless the Event of Default is
subsequently waived in writing by Lender:

 

(1)                                 Without further notice to Borrower, suspend
its obligation to make advances under this Agreement.

 

(2)                                 Without further notice to or demand on
Borrower, terminate its obligation to make advances under this Agreement and
declare the entire unpaid principal balance of the advances made under this
Agreement immediately due and payable, together with accrued and unpaid interest
on such advances and any other amounts due Lender in connection with the
Construction Loan.

 

(3)                                 Exercise all other enforcement remedies
specified in the Loan Documents, including, but not limited to, the right to
foreclose the Mortgage.

 

(c)                                  Completion of Project.  If an Event of
Default occurs, or if Borrower for any reason discontinues Construction under
this Agreement for a period in excess of 30 consecutive days, Lender may (but
shall not be obligated to) take over and complete Construction in accordance
with Plans and Specifications with such changes as Lender reasonably deems
appropriate, all at the risk, cost and expense of Borrower.  In that event,
Lender may, in its reasonable judgment:  (1) assume or reject any contract
entered into by Borrower in connection with the Construction; (2) enter into
additional or different contracts for services, labor and materials it deems
necessary to complete the Construction; and (3) pay, compromise and settle all
claims in connection with the Construction.  All sums (including reasonable
attorneys’ fees, charges or fees for supervision and inspection of the
Construction and for any other necessary purpose in the discretion of Lender)
expended by Lender in completing the Construction (whether aggregating more or
less than the amount of the Construction Note) shall be deemed advances made by
Lender to Borrower, and Borrower shall be liable to Lender for the repayment of
such sums, together with interest on such amounts from the date of their
expenditure at the interest rate specified in the Construction Note.  In its
reasonable discretion, Lender may at any time abandon construction after having
commenced such work, and may recommence such work at any time, it being
understood that nothing in this Subsection (c) shall impose any obligation on
Lender to either complete or not complete Construction.  For the purpose of
carrying out the provisions of this Subsection, Borrower irrevocably appoints
Lender its attorney-in-fact with full power of substitution, to execute and
deliver all such documents, pay and receive such funds, and take such action as
Lender may deem necessary to complete the Construction.

 

10.                               LOAN SALES AND PARTICIPATIONS.  At all times
after completion of Construction, Borrower agrees that Lender may elect, at any
time, at Lender’s sole cost and expense and upon prior notice to Borrowers
(which notice shall not be required while an Event of Default exists), to sell,
assign, or grant participations in all or any portion of its rights and
obligations under the Loan Documents and this Agreement, and that any such sale,

 

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assignment or participation may be to one or more financial institutions,
private investors, and/or other entities, at Lender’s sole discretion.  Borrower
further agrees that Lender may disseminate to any such actual or potential
purchaser(s), assignee(s) or participant(s) all documents and information
(including, without limitation, all financial information) which has been or is
hereafter provided to or known to Lender with respect to:  (a) the Project and
its operation; and (b) any party connected with the Construction Loan or the
Revolving Loan (including, without limitation, Guarantor, Borrower, any
constituent partner, shareholder, member or manager of Borrower, any other
guarantor, any indemnitor and any non-borrower mortgagor).  In the event of any
such sale, assignment or participation, Lender shall remain fully liable to
Borrower to perform the obligations of Lender as set forth in the Loan
Documents.  In connection with any such sale, assignment or participation,
Borrower further agrees that the Loan Documents shall be sufficient evidence of
the obligations of Borrower to each purchaser, assignee, or participant, and
upon written request by Lender, Borrower shall consent to such amendments or
modifications to the Loan Documents as may be reasonably required in order to
evidence any such sale, assignment, or participation.  Anything in this
Agreement to the contrary notwithstanding, and without the need to comply with
any of the formal or procedural requirements of this Agreement, including this
Section, Lender may at any time and from time to time pledge and assign all or
any portion of its rights under all or any of the Loan Documents to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from its obligations thereunder and Lender shall at all times remain in
control of decision making under the Loan Documents.

 

11.                               MISCELLANEOUS.

 

(a)                                 Right to Inspect.  Lender or its agents may,
upon reasonable prior notice to Borrower (or upon no notice while an Event of
Default exists) at Borrower’s sole cost and expense, inspect the Project at any
time during Construction, but are in no way obligated to do so and, during any
such inspection, shall adhere to all safety rules and requirements as required
by the Contractor.  Any inspection conducted by Lender or its agent shall be
deemed to have been for Lender’s own benefit and shall in no way be construed to
be for the benefit of or on behalf of Borrower.  Borrower will not have, and
hereby specifically waives, any right to rely in any way upon such appraisals,
inspections or determinations of Lender.

 

(b)                                 Use of Consultants.

 

(1)                                 At any time during the term of this
Agreement, Lender may retain any consulting engineer, architect, inspector
and/or other consultant to perform inspections for Lender in connection with the
Project, including:  (i) advising Lender whether, in the opinion of the
consultant, the Plans and Specifications are satisfactory for the intended
purposes thereof; (ii) making periodic inspections to assure that Construction
is in accordance with the Plans and Specifications and that Borrower’s
requisitions are consistent with the obligations of Borrower under this
Agreement; (iii) advising Lender of the anticipated cost of Construction, the
time for the completion of Construction, and the

 

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adequacy of reserves and contingencies related thereto; (iv) reviewing any
proposed changes in the Plans and Specifications, and advising Lender in
connection with those changes; and (v) reviewing all subcontracts entered into
by Borrower or the general contractor in connection with the construction of the
Project.

 

(2)                                 Borrower will pay the reasonable fees of any
consultant retained under this subsection or reimburse Lender for any such fees
paid by Lender, promptly upon being billed for such fees.  Neither Lender nor
any consultant shall have any liability to Borrower arising out of: 
(i) services performed by the consultant; (ii) any neglect or failure on the
part of the consultant to properly perform its services; or (iii) any approval
by the consultant of work on the Project.

 

(c)                                  Responsibility of Lender.  Until Lender
takes title and possession of the Property, it is expressly understood and
agreed that Lender assumes no liability or responsibility for the satisfactory
completion of the Construction, for the adequacy of funds advanced by it
pursuant to this Agreement to complete the Construction, or for inspection
during Construction, or for any other act on the part of Borrower or persons
performing the Construction.  Borrower hereby acknowledges that Lender is acting
only as a lender in this transaction and is in no way:  (1) acting as a
principal in the matter of the purchase or construction of the security pledged
in the Mortgage; or (2) responsible for Construction.  Lender shall not be
considered a principal with respect to the purchase of any goods or materials
and shall not be responsible for any aspect of the Construction or procurement
of lien waivers, licenses, or permits of any kind.  Lender shall have no
obligation or liability to any contractor, subcontractor, laborer, materialman,
or other person or lien claimant furnishing goods or services for payment under
any circumstances, it being intended and agreed that such persons are not, and
shall not, become beneficiaries of this Agreement in any respect.

 

(d)                                 Condominium Documentation.  After the date
of this Agreement, Borrower, ESC and/or their affiliates (collectively, the
“Borrower Parties”) intend to enter into such documents and agreements as may be
necessary or desirable to subject the Property to a condominium creating two or
more condominium units during the term of this Agreement (the “Condominium
Transaction”).  All documents and instruments relating to the Condominium
Transaction shall be in form and substance reasonably acceptable to Lender. 
Prior to the completion of the Condominium Transaction, Lender agrees (a) to
release Parcel B (as set forth on the survey attached hereto as Exhibit D upon
repayment by the Borrower of the Loan in an amount equal to $23,000,000 and
(b) to release Parcel A (as set forth on the survey attached hereto as Exhibit D
upon repayment by the Borrower of the Loan in an amount equal to $118,750 per
acre to be released.  Following the completion of the Condominium Transaction,
Lender agrees from time to time upon written request by Borrower, to release
condominium units from the Lien of the Mortgage if, at the time of any such
release, the ratio of then outstanding principal balance of the Loan to the
appraised value (as determined by an appraisal acceptable to Lender in its
reasonable discretion) of the remaining Property subject to the Lien of the
Mortgage is equal to or less than 100%.

 

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(f)                                   Indemnification of Lender.  Borrower shall
indemnify and hold Lender harmless against any and all claims, liabilities and
causes of action arising in whole or in part out of any action taken by Lender
in good faith under the Loan Documents, except for Lender’s recklessness or
willful misconduct.

 

(g)                                  Availability of Remedies.  All remedies of
Lender provided for in this Agreement are cumulative and shall be in addition to
any and all other rights and remedies provided in the Loan Documents or by law
or in equity.  The exercise of any remedy under this Agreement shall not in any
way constitute a cure or waiver of default hereunder or elsewhere, invalidate
any act done pursuant to any notice of default, or prejudice Lender in the
exercise of any of its rights under this Agreement, unless Lender shall have
realized all amounts owed to it under the Note and Mortgage.  No delay on the
part of Lender in exercising any right, power or privilege shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege constitute such waiver.

 

(h)                                 Benefit of this Agreement.  The provisions
of this Agreement shall inure to the benefit of and be binding upon Borrower and
Lender, and their respective heirs, legal representatives, successors and
assigns.  However, neither this Agreement nor the Loan Proceeds may be assigned
by Borrower without the prior written consent of Lender.  This Agreement is
solely for the benefit of Lender, its participants, successors and assigns, and
Borrower.  Nothing in this Agreement shall confer upon anyone other than
Borrower or Lender, its participants, successors and assigns, any right to
insist upon or to enforce the performance or observance of any of the
obligations contained herein.  All conditions to the obligations of Lender to
advance the Loan Proceeds and the Revolving Loan are imposed solely and
exclusively for the benefit of Lender, its participants, successors and
assigns.  No other person or entity shall have standing to require satisfaction
of such conditions in accordance with their terms, and no other person or entity
shall under any circumstances be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender at any time if, in
Lender’s sole discretion, Lender deems it advisable or desirable to do so.

 

(i)                                     Survival.  All agreements,
representations, and warranties made in this Agreement shall:  (1) survive
execution of this Agreement, the making of the advances by Lender, and the
execution of the Note, Mortgage and other Loan Documents; and (2) continue until
Lender receives payment in full for all indebtedness of Borrower incurred under
the Loan Documents.

 

(j)                                    Applicable Law.  This Agreement shall be
governed by the laws of the State of Wisconsin.

 

(k)                                 Time of the Essence.  Time is hereby
expressly made of the essence in this Agreement.

 

(l)                                     Expenses and Attorneys’ Fees.  Borrower
shall be responsible for the payment of all reasonable fees (including
attorneys’ fees) and out-of-pocket disbursements

 

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incurred by Lender (1) in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents; (2) in connection with
enforcing, protecting or obtaining advice concerning its rights under the Loan
Documents (including all attorneys’ fees and costs incurred in connection with
bankruptcy or insolvency proceedings affecting Borrower); and (3) in connection
with any collection relating to the Loan Documents.  The foregoing covenant
shall be enforceable without regard to whether or not any loan is made hereunder
or is then outstanding hereunder.

 

(m)                             Counterparts; Amendments.  This Agreement may be
executed in several counterparts, each of which shall be deemed to be an
original and all of which together shall constitute one instrument.  This
Agreement may only be amended by written agreement signed by all parties to this
Agreement.

 

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

 

(o)                                 Notices.  All notices given under this
Agreement shall be in writing and sent by hand delivery, registered or certified
mail, postage prepaid, return receipt requested, or by Federal Express or other
nationally recognized overnight courier addressed to the party to be so notified
at its address set forth below, or to such other address as such party may
hereafter specify in accordance with the provisions of this Section.  Any Notice
shall be deemed to have been received:  (i) if hand delivered, when delivered,
(ii) three (3) days after the date such Notice is mailed, or (iii) on the next
Business Day if sent by an overnight commercial courier:

 

(1)                                 To Borrower:

 

Kyle Stacey, CPA

Vice President and Controller

Exact Sciences Corporation

441 Charmany Drive

Madison, Wisconsin 53719

 

(2)                                 With copies to:

 

Mr. David Weiss

General Capital Group

6938 N. Santa Monica Blvd

Fox Point, Wisconsin 53217

 

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Sarah O. Jelencic, Esq.

Foley & Lardner LLP

777 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

 

(3)                                 To Lender:

 

Andrea Bukacek, Vice President

MB Financial Bank, N.A.

250 E. Wisconsin Avenue

Suite 1550

Milwaukee, Wisconsin 53202

 

(4)                                 With a copy to:

 

John H. Wink, Esq.

Reinhart Boerner Van Deuren s.c.

1000 North Water Street, Suite 1700

Milwaukee, Wisconsin 53202

 

(p)                                 Jurisdiction; Venue.  TO THE MAXIMUM EXTENT
PERMITTED BY LAW, BORROWER HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING
DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL
BE TRIED AND DETERMINED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE
COUNTY OF DANE, STATE OF WISCONSIN OR, AT THE SOLE OPTION OF LENDER, IN ANY
OTHER COURT IN WHICH LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER AND CONTROVERSY.  TO THE
MAXIMUM EXTENT PERMITTED BY LAW, BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT
BORROWER MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NONCONVENIENCE OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.

 

(q)                                 Waiver of Jury Trial.  LENDER AND BORROWER,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS ANY OF THEM MAY HAVE
TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, ANY LOAN DOCUMENT OR ANY OTHER RELATED INSTRUMENT OR AGREEMENT, OR
ANY OF THE TRANSACTIONS CONTEMPLATED BY THE FOREGOING, OR ANY COURSE OF CONDUCT,
DEALING, STATEMENT (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY OF THEM. 
NEITHER THE LENDER NOR BORROWER SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR
OTHERWISE, ANY ACTION IN

 

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WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
HAS NOT BEEN WAIVED, UNLESS A JURY TRIAL IN SUCH OTHER ACTION CANNOT BE
WAIVED, IN WHICH CASE SUCH ACTIONS MAY BE CONSOLIDATED.  THESE PROVISIONS SHALL
NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE LENDER
OR BORROWER EXCEPT BY WRITTEN INSTRUMENT EXECUTED BY EACH RELEVANT PARTY.

 

(r)                                    Publicity.  Subject to compliance with
applicable laws, Borrower agrees that Lender shall have the right to erect and
maintain a sign (which shall be subject to Borrower’s reasonable approval) at
the Project in a prominent location for the duration of the term of the Loan
stating that Lender is providing the financing for construction of the Project. 
The sign shall be furnished by Lender and the sign shall be located in a place
selected by Lender, provided that such location does not interfere with
performance of the construction of the Project.

 

[Signature Page Follows]

 

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SIGNATURE PAGE TO CONSTRUCTION LOAN AGREEMENT

 

Borrower and Lender have executed this Agreement as of the date first set forth
above.

 

 

BORROWER:

 

 

 

CG GROWTH, LLC, a Wisconsin limited liability company

 

 

 

By:

 /s/ Jeff Elliott

 

Name:

 Jeff Elliott 

 

Title:

Chief Financial Officer

 

 

 

LENDER:

 

 

 

MB FINANCIAL BANK, N.A.

 

 

 

By:

 /s/ Andrea Bukacek

 

 

 Andrea Bukacek, Vice President

 

Exhibits:

 

A.                                    Legal Description

B.                                    Disbursing Agreement

C.                                    Project Budget

D                                       Survey

 

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