Document:

Exhibit 10.40

 

CONTRACT #WDF FY09-19453

 

LOAN

AGREEMENT

BETWEEN THE

WISCONSIN DEPARTMENT OF COMMERCE

AND

EXACT SCIENCES CORPORATION

 

This Agreement is entered
into by and between the Wisconsin Department of Commerce  (“Department”)
and Exact Sciences Corporation, (“Borrower”).

 

WITNESSETH

 

WHEREAS, the Board is
authorized to award loan funds, for the purpose of economic development
pursuant to Section 560.61 Wis. Stats.; and

 

WHEREAS, on June 16,
2009, the Board, relying upon representations in the Borrower’s Application,
agreed to lend up to One Million and 00/100 Dollars ($1,000,000.00) to the  Borrower to be
utilized in accordance with the terms and conditions of this Agreement.

 

NOW,
THEREFORE, for valid consideration, the receipt of which is
hereby acknowledged, and in consideration for the promises and covenants in
this Agreement, the Department and Borrower agree as follows:

 

1.                                       DISBURSEMENT OF LOAN PROCEEDS. Loan disbursements to the
Borrower hereunder for Eligible Project Costs (defined in Exhibit A) shall
be made on a periodic basis  upon the Department’s
receipt and approval of a completed Request for Disbursement Form  (attached as Exhibit C)
and required supporting documentation.

 

a) Prior to the disbursement
of any Loan funds, the Borrower shall execute and deliver to  the Department:

 

(i) A borrowing
resolution.

(ii) A written
Affirmative Action Plan in form and substance reasonably acceptable to the  Department.

(iii) All other
documents that reasonably may be required by the Department to effect the  terms and
conditions of this Agreement.

 

b) Disbursements by the
Department to the Company shall be made after a nonrefundable origination fee
of $20,000.00, two (2.0) percent of the award amount, is paid to the
Department.

 

2.                                       BORROWER’S LOAN PAYMENTS. This Loan shall be repaid in
accordance with the  terms of the Promissory Note (Attached as Exhibit D).

 

3.                                       TAXES AND FEES. Except as otherwise provided in this
Agreement, the Borrower shall  keep the Collateral free and
clear of all judgments, levies, liens, security interests and  encumbrances
and shall pay all federal, state and local fees, assessments and taxes which  may be assessed
upon the ownership, possession or use of the Collateral.

 

 

4.                                       INSURANCE. The Borrower covenants that it will maintain insurance
in such amounts  and against such liabilities and hazards as
customarily is maintained by other companies  operating similar
businesses.

 

5.                                       “EVENT OF DEFAULT” DEFINED. The occurrence of any one or
more of the following  events shall constitute an “Event of Default”
for the purposes of this Agreement:

 

a) The Borrower’s failure to
pay, within ten (10) calendar days of the due date, any of the  principal
payments or interest due under the Promissory Note (Attached as Exhibit D);

 

b) The Borrower’s failure to
comply with or perform any of its obligations under this  Agreement;
provided that the Borrower’s failure to comply with the terms and conditions  of Exhibit A,
Section 3. a) hereunder shall not be considered an “Event of Default”.

 

c) Any assignment for the
benefit of the Borrower’s creditors or commission of any other  act amounting
to a business failure;

 

d) The filing, by or against
the Borrower, of a petition under any chapter of the U.S.  Bankruptcy Code
or for the appointment of a receiver;

 

e) Any default or breach of
the Borrower’s obligations under the terms and conditions of its loan
agreements, leases, or financing arrangements with other creditors;

 

f) Any material
misrepresentation with respect to the Borrower’s warranties and  representations
under this Agreement or the Application; or

 

g) Any other action or
omission by the Borrower, which in the Department’s reasonable  discretion,
jeopardizes the Borrower’s ability to fulfill its obligations under this
Agreement  or otherwise causes the Department to deem itself insecure.

 

6.                                       REMEDIES IN EVENT OF DEFAULT.

 

a) Upon the occurrence of
any Event of Default, the Department shall send a written notice of default to
the Borrower, setting forth with reasonable specificity the nature of the
default. If the Borrower fails to cure the default to the reasonable
satisfaction of the Department within ten (10) calendar days, the
Department may, without further written notice to the Borrower, declare the
Borrower in default, terminate this Agreement effective immediately, and
accelerate the principal balance, accrued interest, and other amounts owed by
the Borrower hereunder.

 

b) Upon the termination of
this Agreement:

 

(i) The Borrower shall
be liable for the full unpaid principal balance together with  interest at the
annual rate of twelve (12) percent from the date of the Event of Default  to the date the
Borrower’s obligations hereunder are paid in full.

(ii) Subject to the
rights of other creditors, the Department shall be entitled to exercise  any and all
remedies available to the Department under this Agreement, related loan
documents, and applicable laws.

 

c) In addition to the rights
and remedies available to the Department at law, in equity, or in bankruptcy,
the Department shall be entitled to recover from the Borrower an amount

 

2

 

equal to the sum of:

 

(i) The unpaid
principal balance, accrued interest, and other amounts owed by the  Borrower
hereunder;

(ii) All court costs
and reasonable attorney’s fees incurred by the Department in the  enforcement of
its rights and remedies under this Agreement, including all costs  incurred in
foreclosing upon, repossessing, storing, repairing, selling, leasing or  otherwise
disposing of the Collateral; and

(iii) Any other damages
arising from the Borrower’s default.

 

d) The Department’s
foreclosure upon, repossession of, and subsequent sale, lease, or  disposition of
the Collateral shall not affect the Department’s right to recover from the
Borrower any and all damages caused by the Borrower’s breach of this Agreement.
The Department’s rights and remedies hereunder shall be cumulative, not
exclusive, and shall be in addition to all other rights and remedies available
at law, in equity or in bankruptcy.

 

7.                                       BORROWER’S WARRANTIES AND REPRESENTATIONS. To induce the
Department  to enter into this Agreement, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Borrower hereby
warrants and represents that:

 

a) The Borrower is duly
organized, validly existing, and authorized to engage in business in the State
of Wisconsin.

 

b) The Borrower is qualified
to engage in business in every jurisdiction where the nature of its business
makes such qualification necessary;

 

c) The Borrower is in
compliance with all laws, regulations, ordinances and orders of public
authorities applicable to it, the violation of which would have a material and
adverse  effect on the Borrower’s financial ability to comply with this
Agreement;

 

d) The Borrower is unaware
of any conditions which could subject it to any damages,  penalties or
clean-up costs under any federal or state environmental laws which would have a
material and adverse effect on the Borrower’s financial ability to comply with
this Agreement;

 

e) This Agreement is valid
and enforceable in accordance with its terms against the  Borrower,
subject only to applicable bankruptcy, insolvency, reorganization or other
similar laws affecting generally the enforceability of the rights of creditors;

 

f) The Borrower is financially
solvent and able to comply with all of the terms and  conditions set forth in the
Agreement and is not in default under the terms and conditions  of any loan
agreements, leases, or financing arrangements with the Borrower’s other
creditors;

 

g) The financial statements
and other information provided by the Borrower to the  Department are
complete and accurate in accordance with Generally Accepted Accounting
Principles, and may be relied upon by the Department in deciding whether to
enter into this Agreement with the Borrower;

 

h) The Borrower has private
Project funds as identified in Exhibit A to fund all other costs  relating to the
Project;

 

i) In making these
warranties and representations, the Borrower has not relied upon any  information
furnished by the Department.

 

3

 

j) The Borrower’s warranties
and representations herein are true and accurate as of the  date of this
Agreement, and shall survive the execution thereof;

 

8.                                       BORROWER COVENANTS.

 

a) Deliverables. The
Borrower shall comply with the terms and conditions set forth in Exhibit A
Section 3. of this agreement. Should the Borrower fail to meet the terms
and conditions set forth in Exhibit A it may be subject to penalties
outlined in Exhibit A.

 

b) Reporting. The Borrower
shall provide the Department with reports, utilizing forms  provided by the
Department, as well as interim and/or fiscal year end financial statements in
accordance with Exhibit B-1 and B-2.

 

c) Inspection.

 

(i) The Department and
its respective agents, shall, at any reasonable time and upon  48 hours
notice, have the right to enter upon the Borrower’s premises to inspect the
Project.

(ii) The Borrower shall
produce for the Department’s inspection, examination, auditing  and copying, upon
reasonable advance notice, any and all records which relate to this Agreement.

 

d) Nondiscrimination in
Employment. During the Term of this Agreement, the Borrower  shall not
discriminate against any employee or applicant for employment because of age, race,
religion, color, handicap, sex, physical condition, developmental disability as
defined in sec. 51.01 (5) Stats., sexual orientation or national origin.
This provision shall include, but not be limited to, the following: employment,
upgrading, demotion or transfer; recruitment or recruitment advertising; layoff
or termination; rates of pay or other forms of compensation; and selection for
training, including apprenticeship. Except with respect to sexual orientation,
the Borrower further agrees to take affirmative action to ensure equal
employment opportunities. The Borrower agrees to post in conspicuous places,
available for employees and applicants for employment, notices to be provided
by the contracting officer setting forth the provisions of the nondiscrimination
clause.

 

e) Notification of Position
Openings. In accordance with sec. 106.16, Stats., the  Borrower shall,
for a period of one year from the Effective Date, provide the Wisconsin  Department of
Workforce Development, local Job Service offices, and the area Workforce
Development Board with prior written notice of any new or vacant Full-Time
Positions that are related to the Project.

 

f) Consolidation or Merger.
During the term of this Agreement, the Borrower shall not  consolidate or
merge with or into any other corporation or business entity without providing
prior written notice to the Department.

 

g) Relocation of Operations.
In accordance with §560.075(2), the Borrower shall not  relocate the
Project, or any Full-Time Positions related thereto, outside of Wisconsin for a
minimum of five years from the date of the award.

 

9.                                       WISCONSIN OPEN RECORDS LAW. Subject to the following
terms, the Department  shall safeguard all of the financial
statements provided to them by the Borrower:

 

4

 

a) Except as otherwise
required or provided by court order, legal process or applicable  Wisconsin law
including, without limitation, the Wisconsin Open Records Law, sec. 19.31,
Stats., et seq, the Department shall not reveal or disclose any financial
information and documents provided by the Borrower to any non-government person
or entity without the prior written consent of the Borrower.

 

b) If the Borrower believes
or contends that any financial statements provided hereunder  qualify as “trade
secrets” exempt from disclosure under the Wisconsin Open Records Law, the
Borrower shall:

 

(i) Fill out a standard
trade secrets designation form to be provided by the Department,  designating
specific information or documents as “ trade secrets” and agreeing to defend
and indemnify the Department, and to hold them harmless in the event of any
future open records request asking for copies of such documents; and

(ii) Provide the
Department with two copies of such information — a clean copy and a copy with
the “trade secret” information redacted—for the Department’s files.

 

10.                                 ENTIRE AGREEMENT. This Agreement and the accompanying loan
documents,  Promissory Note, Guaranties, and exhibits contain the entire Agreement
of the parties  concerning the Borrower’s obligations under
the terms and conditions of this Agreement.  This Agreement may not be
amended, modified or altered except in writing signed by the  Borrower and
the Department.

 

11.                                 CHOICE OF LAW. THIS AGREEMENT IS AND SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF WISCONSIN. If any provisions of the Agreement shall be
prohibited by or invalid under Wisconsin law, such provisions shall be
ineffective only to the extent of such  prohibition or invalidity,
without affecting the validity or enforceability of the remaining provisions
thereof.

 

12.                                 VENUE; JURISDICTION. Any judicial action relating
to the construction, interpretation, or enforcement of this Agreement, or the
recovery of any principal, accrued interest, court  costs, attorney’s fees and
other amounts owed hereunder, shall be brought and venued in  the U.S.
District Court for the Western District of Wisconsin or the Dane County Circuit
Court in Madison, Wisconsin.

 

THE
BORROWER HEREBY CONSENTS TO PERSONAL JURISDICTION IN THOSE WISCONSIN COURTS,
AND WAIVES ANY DEFENSES THAT THE BORROWER OTHERWISE MIGHT HAVE RELATING
THERETO.

 

13. WAIVER OF RIGHT TO JURY TRIAL. THE BORROWER HEREBY
WAIVES ITS RIGHT  TO A JURY
TRIAL IN CONNECTION WITH ANY JUDICIAL ACTION OR PROCEEDING  THAT MAY ARISE BY AND BETWEEN THE DEPARTMENT AND THE BORROWER  CONCERNING THE CONSTRUCTION, INTERPRETATION OR ENFORCEMENT OF THIS  AGREEMENT, OR THE RECOVERY OF ANY PRINCIPAL, ACCRUED INTEREST, COURT
COSTS, ATTORNEY’S FEES AND OTHER AMOUNTS THAT MAY BE OWED BY THE BORROWER
HEREUNDER.

 

14. MISCELLANEOUS.

 

a) Severability. The
invalidity of any provision of this Agreement shall not affect the

 

5

 

validity of the remaining
provisions, which shall remain in full force and effect to govern the parties’
relationship.

 

b) Department Not A Joint
Venturer Or Partner. The Department shall not, under any  circumstances,
be considered or represented to be a partner or joint venturer of the  Borrower or any
beneficiary thereof.

 

c) Documents. All documents
required to be delivered contemporaneously with the  execution and delivery of
this Agreement are expressly made a part of this Agreement  as though
completely herein, and all references to this Agreement herein shall be  deemed to refer
to and include all such documents.

 

d) Agreement Controlling. In
the event of any conflict or inconsistency between the  Agreement and
the exhibits hereto, the terms of this Agreement shall control.

 

15.                                 CAPTIONS. The captions in this Agreement are for convenience
of reference only and  shall not define or limit any of the terms
and conditions set forth herein.

 

16.                                 AUTHORITY TO SIGN DOCUMENT. The person(s) signing
this Agreement on behalf of the Borrower certifies and attests that the
Borrower’s respective Articles of Organization, Articles of Incorporation, By
Laws, Member’s Agreement, Charter, Partnership Agreement,  Corporate or
other Resolutions, and/or other related documents give full and complete  authority to
bind the Borrower, on whose behalf they are executing this document. Borrower
assumes full responsibility and holds the Department harmless for any and all
payments made or any other actions taken by Department in reliance upon the
above representation. Further, Borrower agrees to indemnify Department against any
and all claims, demands, losses, costs, damages or expenses suffered or
incurred by Department resulting from or arising out of any such payment or
other action, including reasonable attorneys’ fees and legal expenses. The
Borrower has read, fully understands, and agrees to all of the terms and
conditions in this Agreement and the related loan documents;

 

IN WITNESS
WHEREOF, the Department and the Borrower have executed and delivered this  Agreement
effective the date set forth next to the Department’s signature below.

 

WISCONSIN
DEPARTMENT OF COMMERCE

 

	
  By:

  	
  /s/ Mary Gage

  	
   

  	
   

  
	
  Mary Gage, Bureau Director

  	
   

  	
  Date  November 10,
  2009

  

 

EXACT
SCIENCES CORPORATION

 

	
  By:

  	
  /s/ Kevin T.
  Conroy

  	
   

  	
   

  
	
  Kevin T. Conroy,
  President & CEO

  	
   

  	
  Date  November 10,
  2009

  

 

6

 

EXHIBIT A

(PROJECT DESCRIPTION/DELIVERABLES)

Wisconsin Development Fund

Contact:# WDF FY09-19453

 

1.                                       PROJECT SUMMARY:

 

EXACT Sciences Corp.
(Nasdaq: EXAS) is a molecular diagnostics company focused on colorectal cancer.
The company has exclusive intellectual property protecting its non-invasive, molecular
screening technology for the detection of colorectal cancer. Stool-based DNA
technology is included in the colorectal cancer screening guidelines of the
American Cancer  Society and the U.S. Multi-Society Task Force
on Colorectal Cancer.

 

EXACT Sciences Corporation
is requesting financial assistance from the Wisconsin Development Fund. The
funds will be used by the company for working capital and equipment  to relocate the
company headquarters and establish lab operations in Madison, WI. The company
expects to create up to 187 full-time positions within five years.

 

2.                                       ELIGIBLE PROJECT COSTS:

 

Eligible Project Costs are as follows:

 

	
   

  	
   

  	
   

  	
   

  	
  SOURCES

  	
   

  	
   

  	
   

  
	
  Code

  	
   

  	
  USES

  	
   

  	
  State

  	
   

  	
  Federal

  	
   

  	
  Investors

  	
   

  	
  TOTAL

  	
   

  
	
   

  	
   

  	
  Working Capital

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
  $1 million

  	
   

  	
  TBD

  	
   

  	
  $20-30 million

  	
   

  	
  $30 million

  	
   

  

 

Project costs will be
incurred between 5/18/2009 and 6/30/2011.

 

3.                                       DELIVERABLES:

 

a) Create One Hundred Eighty
Five (185) new full-time positions with an average wage of $60.00 per hour in
Madison, Wisconsin by June 30, 2015.

 

b) Job Penalty (Interest
Escalation). If the Department, in its reasonable discretion,  determines that
the Borrower has failed to create at least 68 new Full-Time Positions in  accordance with
Paragraph 3. a) of this Exhibit A, then for each new Full-Time position  less than 185
that the Borrower fails to keep, create or maintain, whichever the case may be,
the annual interest rate charged on the Department’s loan hereunder shall be
increased retroactive to the date of disbursement, 2.16 basis points within
thirty (30) days of the Department’s determination of nonperformance. For the
purposes of this Agreement the term “basis point” shall mean one-hundredth of
one percent. The maximum penalty under this section shall be four (4.0)
percent.

 

c) The Borrower agreeing
that the majority of research to be performed under this Project shall be
conducted in Wisconsin to the extent practical and commercially justified.

 

d) The Borrower agreeing
that the product or products developed as a result of this Project shall be
produced or cause to be produced in Wisconsin to the extent practical and  commercially
justified.

 

4.                                       COLLATERAL: Full faith and credit of the Borrower

 

7

 

EXHIBIT B-1

REPORTING

Wisconsin Development Fund

Contact:# WDF FY09-19453

 

1.                                       REPORTING REQUIREMENT. The Borrower shall provide
the Department with reports,  utilizing forms provided by
the Department, as well as interim and/or fiscal year end financial  statements in
accordance with the following table, or as otherwise requested by the  Department:

 

REPORTING
REQUIREMENTS

 

	
   

  	
   

  	
  Documentation
  Required

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Financial Statements

  	
   

  	
   

  	
   

  
	
  Period

  	
   

  	
   

  	
   

  	
  Interim

  	
   

  	
  Fiscal Year

  	
   

  	
  Due

  	
   

  
	
  Covered

  	
   

  	
  Report

  	
   

  	
  As of:

  	
   

  	
  Ended:

  	
   

  	
  Date

  	
   

  
	
  5/18/2009 – 12/31/2009

  	
   

  	
  Annual

  	
   

  	
   

  	
   

  	
  12/31/2009

  	
   

  	
  3/31/2010

  	
   

  
	
  1/1/2010 – 12/31/2010

  	
   

  	
  Annual

  	
   

  	
   

  	
   

  	
  12/31/2010

  	
   

  	
  3/31/2011

  	
   

  
	
  1/1/2011 – 12/31/2011

  	
   

  	
  Annual

  	
   

  	
   

  	
   

  	
  12/31/2011

  	
   

  	
  3/31/2012

  	
   

  
	
  1/1/2012 – 12/31/2012

  	
   

  	
  Annual

  	
   

  	
   

  	
   

  	
  12/31/2012

  	
   

  	
  3/31/2013

  	
   

  
	
  1/1/2013 – 12/31/2013

  	
   

  	
  Annual

  	
   

  	
   

  	
   

  	
  12/31/2013

  	
   

  	
  3/31/2014

  	
   

  
	
  1/1/2014 – 12/31/2014

  	
   

  	
  Annual

  	
   

  	
   

  	
   

  	
  12/31/2014

  	
   

  	
  3/31/2015

  	
   

  
	
  1/1/2015 – 12/31/2015

  	
   

  	
  Annual

  	
   

  	
   

  	
   

  	
  12/31/2015

  	
   

  	
  3/31/2016

  	
   

  
	
  1/1/2016 – 12/31/2016

  	
   

  	
  Annual

  	
   

  	
   

  	
   

  	
  12/31/2016

  	
   

  	
  3/31/2017

  	
   

  
	
  1/1/2017 – 12/31/2017

  	
   

  	
  Annual

  	
   

  	
   

  	
   

  	
  12/31/2017

  	
   

  	
  3/31/2018

  	
   

  
	
  1/1/2018 – 12/31/2018

  	
   

  	
  Annual

  	
   

  	
   

  	
   

  	
  12/31/2018

  	
   

  	
  3/31/2019

  	
   

  

 

2.                                       PROJECT RECORDS. The Borrower shall prepare, keep and maintain
such records as may be reasonably required by the Department to show:

 

a) The number of Employees
Created or Maintained by the Borrower pursuant to this Agreement.

 

b) The amount and
disposition of funds provided and disbursed under this Agreement; and

 

c) The total cost of the
Project.

 

3.                                       FINANCIAL RECORDS. All of the Borrower’s financial records shall
be prepared, kept and maintained in accordance with Generally Accepted
Accounting Principles. The Borrower shall provide such records to the
Department during the Term of the Agreement as may be requested. Such materials
shall be retained by the Borrower for a period of at least three (3) years
after the Project End Date.

 

a) The financial statements
and other information provided by the Borrower to the Department are complete
and accurate in accordance with Generally Accepted Accounting Principles, and
may be relied upon by the Department in deciding whether to enter into this
Agreement with the Borrower;

 

4.                                       AUDIT REPORT. Within (90) days after the Project End Date, or upon
the request of the

 

8

 

Department, the Borrower
shall provide the Department with an audited financial report, in form and
substance reasonably satisfactory to the Department, documenting that the funds
were expended in accordance with this Agreement.

 

9

 

EXHIBIT D

PROMISSORY NOTE

 

Amount: $1,000,000.00

 

FOR VALID
CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, and in consideration for the terms and conditions set forth in
the Wisconsin  Development Fund Agreement between the
Wisconsin Department of Commerce (“Department”) and Exact Sciences Corporation
(“Borrower”) also identified as Contract #WDF  FY09-19453, the Borrower
promises to pay the Department the principal sum of One Million and  00/100 Dollars
($1,000,000.00), or so much thereof as may be advanced by the Department,  together with
interest, in accordance with the terms and conditions hereinafter set forth.

 

1.                                       DEFINITIONS. Terms used in this Promissory Note shall have the
same meanings as in  the Agreement.

 

2.                                       INTEREST RATE. Except as otherwise provided herein, this
Promissory Note shall bear  interest on the unpaid
principal balance at the annual rate of Two (2) percent, from the date of
actual disbursement of the funds, or any portion thereof, to the Borrower until
this Promissory Note is paid in full. Interest shall be computed based upon a
365-day year.

 

3.                                       TERM. The term of this Note shall commence on the
Effective Date with all principal,  accrued interest and other
amounts owed hereunder being due and payable not later than October 1,
2019.

 

4.                                       DEFERRAL PERIOD. The Borrower’s payments of principal and
interest hereunder shall be deferred until October 31, 2014. All interest
from the date of the Department’s first  disbursement shall be paid
in accordance with the terms of Paragraph 5.

 

5.                                       PAYMENT. Commencing on November 1, 2014 and continuing
on the first day of each  consecutive month thereafter through and
including September 1, 2019, the Borrower shall pay this Promissory Note
in 59 equal monthly installments of $19,280.00 each; followed by a final
installment on October 1, 2019 which shall include all remaining
principal, accrued interest and other amounts owed by the Borrower hereunder.
Payments shall be applied first to interest accrued to date of receipt, and the
balance, if any, to principal.

 

6.                                       PERFORMANCE BASED REDUCTIONS IN PRINCIPAL. Provided the
Borrower can  document the creation of a minimum of 100
new, Full-Time positions, as of June 30, 2015, and subject to the Borrower’s
strict compliance with the terms and conditions of the Agreement, it is
understood and agreed that the principal balance owed by the Borrower hereunder
shall be eligible for forgiveness. The principal balance shall be subject to
forgiveness at a rate equal to $5,405.00 for each position retained and
created. Said forgiveness shall be retroactive to the date of the award with a
maximum forgiveness of $1,000,000.00 plus any accrued interest.

 

7.                                       BORROWER OBLIGATIONS IF TECHNOLOGY IS NOT COMMERCIALIZED: If the  Borrower
determines it cannot successfully market any products resulting from the
pursuit of  activities defined in Exhibit A of the Agreement, within the first
five years from the loan closing, then the Borrower shall sell the equipment
and the Department will receive all proceeds, and will assign all proprietary
rights to the Intellectual Property, and at which time the Borrower may request
formal forgiveness of the remaining amount outstanding due to the Department,
and shall provide the Department with evidence supporting such request. Based
upon the 

 

 

satisfactory review of such
evidence, the Department, in its sole discretion, may forgive the balance of
this Promissory Note.

 

8.                                       TERMS OF PAYMENT.

 

a) Time shall be of the
essence as to the Borrower’s payment of all principal, accrued  interest, and
other amounts owed hereunder, which shall be delivered to the Department at the
following address, or such other place or places as the Department may
designate, prior to the close of business on the due dates set forth above:

 

State of Wisconsin

Dept. of Commerce -
Administrative

P.O. Box 78257

Milwaukee, WI 53293-0257

Attn: Contract WDF
FY09-19453

 

b) If the Borrower fails to
pay any amounts owed within ten (10) calendar days of the date when due,
then, from the date of default until such delinquent payment is paid in full,
the  Borrower shall pay the Department interest on the delinquent payment at
an annual rate of twelve (12) percent. The accrual and collection of such
interest shall be in addition to and not in lieu of any other rights and
remedies that the Department may have under the Agreement, the Promissory Note,
other loan documents, and applicable federal and state laws.

 

c) The Borrower shall bear
the entire risk of loss, theft, damage, destruction, or seizure of the Collateral.
The Borrower shall be obligated to pay the principal, interest, and other
amounts owed hereunder even if the Borrower is unable to use the Collateral or
any portion thereof, because of loss, theft, damage, destruction, seizure,
nonrepair, lack of maintenance, or any other reason.

 

d) All principal payments,
interest and other amounts owed hereunder shall be paid by the Borrower
regardless of any set off, counterclaim, recoupment, defense, or other rights  which the
Borrower may have against the Department, the sellers of the Collateral, the
contractors and subcontractors involved in making improvements to the
Collateral, or any other party.

 

9.                                       “EVENT OF DEFAULT” DEFINED. The term “Event
of Default” shall have the meaning set forth in the Agreement.

 

10.                                 REMEDIES IN EVENT OF DEFAULT. Upon the occurrence of an
Event of Default, the Department shall have the remedies set forth in the
Agreement.

 

11.                                 NO PREPAYMENT PENALTY. The Borrower shall have the
right to prepay this Promissory Note, in whole or in part, at any time without
penalty.

 

12.                                 CHOICE OF LAW. THIS PROMISSORY NOTE IS AND SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF WISCONSIN. If any provisions of this
Promissory Note shall be prohibited by or invalid under Wisconsin law, such
provisions shall be ineffective only to the  extent of such prohibition
or invalidity, without affecting the validity or enforceability of the
remaining provisions thereof.

 

2

 

13.                                 VENUE; JURISDICTION. Any judicial action relating to the
construction, interpretation, or enforcement of this Promissory Note, or the
recovery of any principal, accrued interest, court  costs, attorney’s fees and
other amounts owed hereunder, shall be brought and venued in the U.S. District
Court for the Western District of Wisconsin or the Dane County Circuit Court in
Madison, Wisconsin.

 

THE
BORROWER HEREBY CONSENTS TO PERSONAL JURISDICTION IN THOSE WISCONSIN COURTS,
AND WAIVES ANY DEFENSES THAT MAKER OTHERWISE MIGHT HAVE RELATING THERETO.

 

14.                                 CAPTIONS. The captions in this Promissory Note are for
convenience of reference only  and shall not define or
limit any of the terms and conditions set forth herein.

 

15.                                 WAIVER. The Department’s failure to declare this Promissory
Note in default or to otherwise enforce any of their respective rights or
remedies shall not be deemed a waiver of  its right to declare this
Promissory Note in default and enforce its rights and remedies upon  the occurrence
of a future Event of Default. Nor shall the Department’s receipt and acceptance
of any payment on this Promissory Note after the occurrence of an Event of
Default constitute or be construed as a waiver of the default or the Department’s
rights and remedies as a result of that default. No covenant, condition, or
provision of this Promissory Note may be waived except with the Department’s
express written consent.

 

16.                                 AGREEMENT INCORPORATED BY REFERENCE. This Promissory Note is
subject to  all of the terms, conditions, covenants and promises set forth in the
Agreement which is  hereby incorporated by reference as if fully
set forth herein.

 

17.                                 AUTHORITY TO SIGN DOCUMENT. The person(s) signing
this Promissory Note on behalf of the Borrower certifies and attests that the
Borrower’s respective Articles of Organization, Articles of Incorporation, By
Laws, Member’s Agreement, Charter, Partnership Agreement, Corporate or other
Resolutions, and/or other related documents give full and complete authority to
bind the Borrower, on whose behalf they are executing this document.  Borrower
assumes full responsibility and holds the Department harmless for any and all  payments made
or any other actions taken by Department in reliance upon the above  representation.
Further, Borrower agrees to indemnify Department against any and all claims,
demands, losses, costs, damages or expenses suffered or incurred by Department
resulting from or arising out of any such payment or other action, including
reasonable attorneys’ fees and legal expenses.

 

IN WITNESS
WHEREOF, the undersigned Borrower has executed and delivered
this Promissory Note as of the dates set forth below.

 

EXACT
SCIENCES CORPORATION

 

	
  By:

  	
   

  
	
  Kevin T. Conroy,
  President & CEO

  	
  Date

  

 

3Exhibit
10.41

 

LEASE
AGREEMENT

 

	
  LANDLORD:

  	
  UNIVERSITY RESEARCH PARK,
  INCORPORATED

  
	
   

  	
   

  
	
  TENANT:

  	
  EXACT SCIENCES CORPORATION

  
	
   

  	
   

  
	
  PROPERTY:

  	
  441 Charmany Drive, 2nd Floor

  
	
   

  	
  Madison, Wisconsin 53719

  
	
   

  	
   

  
	
  DATE:

  	
  November 1, 2009

  

 

 

UNIVERSITY
RESEARCH PARK

 

LEASE AGREEMENT

 

This Lease is made by and
between University Research Park, Incorporated, a Wisconsin non-stock
corporation (hereinafter referred to as “Landlord”), and Exact Sciences
Corporation, a Delaware corporation (hereinafter referred to as “Tenant”), as of
November 1, 2009.

 

W I T N E S S E T H
:

 

IT IS HEREBY AGREED, by
and between the parties hereto, in consideration of the covenants and
agreements set forth in this Lease, as follows:

 

1.  PREMISES AND TERM

 

1.1.         Leased Premises. 
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
on the terms and provisions and subject to the conditions hereinafter set forth
in this Lease, the following described premises:

 

The second floor of the
building (the “Building”) located at 441 Charmany Drive, Madison, Dane County,
Wisconsin, consisting of approximately 17,500 rentable square feet of space
(herein referred to as the “Leased Premises”) and all Common Area (defined
below) situated upon the property described in Exhibit A attached hereto
(the Property described in Exhibit A is referred to herein as the “Landlord’s
Property”). The location of the Leased Premises on the Landlord’s Property is
indicated on the map attached hereto as Exhibit B-1, and the floor plan
attached hereto as Exhibit B-2.

 

1.2.         Term of Lease. 
The term of this Lease (“the Term”) shall begin on November 1, 2009
(“the Commencement Date”) and, unless otherwise terminated in accordance with
the terms of this Lease, shall end at midnight on October 31, 2014 and, as
applicable, shall include the Extended Term (as hereinafter defined).  In addition, Tenant shall have one (1) option
to extend the Term for a period of five (5) years (the “Extended Term”).  If Tenant exercises its option, the resulting
Extended Term shall begin upon the expiration of the original Term, and all
terms, covenants and provisions of this Lease shall apply during the Extended
Term with the exception that (i) Tenant shall not have any further option
to extend the Term; and (ii) base rent shall be due and payable as
provided in Section 2.1 below.  If
Tenant elects to exercise its option to extend, provided this Lease is in full
force and effect and Tenant has performed all of the terms, covenants and
provisions hereof on Tenant’s part to be performed, Tenant shall do so only by
giving Landlord notice in writing of its intention to exercise its option to
extend not later than six (6) months prior to the expiration of the
original Term.  If at any time during the
Term, Tenant vacates the Leased Premises, Tenant shall automatically forfeit
its option to extend the Term as more particularly described herein.

 

1.3.         Condition of Leased Premises. 
Landlord shall deliver, and Tenant shall accept the Leased Premises in
AS-IS, WHERE-IS condition without any representations and/or warranties with
respect to said condition. 
Notwithstanding the foregoing, Landlord shall service, 

 

2

 

as necessary, as of the
Commencement Date, the roof of the Building and the HVAC system, electrical and
plumbing systems exclusively serving the Leased Premises so that same shall be
in good order, condition and repair as of the Commencement Date.  In addition, in order to separate the Leased
Premises from other tenant spaces located within the Building, Landlord shall: (i) install
locks on the doors located at the top of the east and west stairwells serving
the Leased Premises on or before the Commencement Date; and (ii) install
three (3) additional doors in the lobby located on the first floor of the
Building on or before the date that is three (3) months after the
Commencement Date.

 

1.4.         Security Deposit. 
Tenant shall pay to Landlord upon execution of this Lease the sum of
Twenty-One Thousand Eight Hundred Seventy-Five and No/100 Dollars ($21,875.00)
as security for the performance of the obligations hereof by Tenant, payable in
the form of cash or equivalent.  This
security deposit shall be returned to Tenant within thirty (30) days following
the termination of this Lease, less any amount appropriately applied by
Landlord to cure a Tenant default.

 

2.  RENT

 

2.1.         Base Rent. 
Tenant shall pay to Landlord at its office in Madison, Wisconsin, or
such other place as Landlord may designate in writing, and without any
deduction or offset whatsoever, as base rent, the following amounts in advance
on or before the first day of each calendar month during the period indicated:

 

	
   

  	
   

  	
  Rent per

  Square Foot*

  	
   

  	
  Annual

  Amount

  	
   

  	
  Monthly

  Amount

  	
   

  
	
  11/01/09 –
  10/31/10

  	
   

  	
  $

  	
  15.00

  	
   

  	
  $

  	
  262,500.00

  	
   

  	
  $

  	
  21,875.00

  	
   

  
	
  11/01/10 – 10/31/11

  	
   

  	
  $

  	
  15.38

  	
   

  	
  $

  	
  269,062.50

  	
   

  	
  $

  	
  22,421.88

  	
   

  
	
  11/01/11 –
  10/31/12

  	
   

  	
  $

  	
  15.76

  	
   

  	
  $

  	
  275,789.06

  	
   

  	
  $

  	
  22,982.42

  	
   

  
	
  11/01/12 –
  10/31/13

  	
   

  	
  $

  	
  16.15

  	
   

  	
  $

  	
  282,683.79

  	
   

  	
  $

  	
  23,556.98

  	
   

  
	
  11/01/13 –
  10/31/14

  	
   

  	
  $

  	
  16.56

  	
   

  	
  $

  	
  289,750.88

  	
   

  	
  $

  	
  24,145.91

  	
   

  

 

*The base rent listed
above reflects annual increases of two and one-half percent (2.5%)
annually.  The first such annual increase
shall occur on November 1, 2010 and shall occur annually on each November 1
thereafter occurring during the Term, including without limitation, the
Extended Term, if applicable.  If, during
the Term,  Landlord and Tenant agree to
an expansion of the Leased Premises, the base rent  per square foot due and payable with respect
to such expansion of the Leased Premises shall be at the same rate as the base
rent per square foot then due and payable under this Lease.

 

If the Term does not
commence on the first day of a calendar month, the base rent for such
fractional month shall be computed pro rata on the basis of thirty (30) days
per month and paid to Landlord on the first day of the next succeeding calendar
month along with the rent for such succeeding month.

 

3

 

2.2.         Additional Rent. 
During the Term, in addition to base rent, Tenant shall pay as part of
the consideration for this Lease and as additional rent, hereinafter designated
“additional rent,” all additional amounts hereinafter provided for and the same
shall be payable upon Landlord’s demand except as otherwise expressly provided,
including, but not limited to Tenant’s Proportionate Share, as defined in Section 5.6.
of real estate taxes, Common Area charges, and Tenant’s Proportionate Share of
Landlord’s insurance and utilities. 
Landlord reserves the right to deviate from the estimates so that the
amounts due as additional rent for the Leased Premises are consistent with the
amounts due as additional rent as determined by the more detailed provisions
pertaining thereto within this Lease. 
Consistent with the forgoing, Tenant agrees to pay those amounts, if
any, in excess of the estimates set forth above.

 

2.3.         Past Due Rent. 
If Tenant shall fail to pay when due any base rent or additional rent,
and such amount shall not be paid within ten (10) days after the date when
due, such unpaid amounts shall bear interest from the due date thereof to the
date of payment at the rate of ten percent (10%) per annum or the prime
interest rate then charged by the U.S. Bank National Association or its
successors or assigns, whichever is greater.

 

2.4.         Real Estate Taxes. 
Landlord shall pay all general taxes on Landlord’s Property, including
all general real estate taxes, personal property taxes on Landlord’s personal
property located at Landlord’s Property and installments for special
assessments arising during the Term. 
Tenant agrees to reimburse Landlord for Tenant’s Proportionate Share of
such taxes and assessments.

 

Tenant’s obligation for
each tax described in this section shall be further prorated for the first year
of this Lease between Landlord and Tenant as of the Commencement Date of this
Lease. Tenant’s obligation for each tax described in this section shall be
further prorated for the last year of the Term as of the last day of the Term.

 

Tenant shall, upon notice
from Landlord, pay in escrow to Landlord one-twelfth (1/12) its Proportionate
Share of the estimated annual real estate taxes, personal property taxes and
installments for special assessments for Landlord’s Property on the first day
of each month after such request, provided, however, that if the sum of such
installments shall be less than the total amount of Tenant’s Proportionate
Share of such taxes, Tenant shall pay such deficiency at least ten (10) days
in advance of the due date of such taxes, taking into account any installment
payment arrangements offered by the taxing authority without the imposition of
any finance charge, penalty or other cost. 
Tenant’s escrow payment shall be applied by Landlord to the payment of
the taxes on the Landlord’s Property.  At
the termination of this Lease, Tenant shall promptly pay Landlord for Tenant’s
Proportionate Share of the estimated taxes based upon that portion of the
termination year that exceeds the amount of tax payments from Tenant then held
in escrow.  Such estimate shall be based
upon the taxes for the preceding year. 
Any payment by Tenant in excess of its Proportionate Share of taxes for
any tax year shall be refunded to Tenant within ninety (90) days after the
expiration of such tax year.

 

For the purpose of this Section 2.4,
Tenant’s Proportionate Share shall be calculated by dividing the rentable
square footage of the Leased Premises by the rentable square footage of all
buildings located from time to time on Landlord’s Property.

 

4

 

3.  INSTALLATIONS, REPAIRS AND

MAINTENANCE
OF LEASED PREMISES

 

3.1.         Maintenance by Tenant. 
Tenant shall at all times keep the Leased Premises and all partitions,
doors, fixtures, equipment and appurtenances thereof (including but not limited
to electrical, lighting, HVAC, and plumbing equipment, lines and fixtures
servicing only the Leased Premises) in good order, condition and repair,
reasonable wear and tear excepted. If Tenant refuses or neglects to repair
property as required hereunder and to the reasonable satisfaction of Landlord
as soon as reasonably possible after written demand, Landlord may make such
repairs without liability to Tenant for any loss or damage that may accrue to
Tenant’s property or to Tenant’s business by reason thereof and upon completion
thereof, Tenant shall pay Landlord’s costs for making such repairs plus twenty
percent (20%) for overhead, upon presentation of bill therefor, as additional
rent. When used in this section, the term “repairs” shall include replacements
and renewals when necessary and all such repairs shall be equal in quality and
class of original work.

 

3.2.         Maintenance by Landlord. 
Landlord shall keep foundations, exterior walls, roof and all other
interior and exterior structural members of the Leased Premises and all Common
Areas including, shared use equipment and any electrical, HVAC, and plumbing
lines and equipment not exclusively servicing the Leased Premises (all of which
shall be considered as part of the Common Areas) in good repair and shall have
access to the Leased Premises for such purpose, but Landlord shall not be
required to make any such repairs which become necessary or desirable by reason
of the negligence of Tenant, its agents, servants, employees or customers.  Landlord shall enter into service contracts
on all heating, ventilating and air conditioning units, including but not
limited to changing filters, checking belts and oiling of units.  Tenant shall pay its Proportionate Share of
the cost of such contracts as a Common Area charge pursuant to Section 5.5.

 

3.3.         Signs.  Upon
completion of the multi-tenant monument sign located immediately adjacent to
the Building (the “Monument Sign”), Tenant shall, subject to the terms and
conditions of this Section 3.3, have the right to install its sign panel
on the Monument Sign in the location designated by Landlord.  Landlord shall make available suite number
signage and lobby directory signage.  All
exterior signs to be installed by Tenant shall be approved in advance in
writing by the Design Review Board appointed by the Board of Regents of the
University of Wisconsin System. All signs to be installed by Landlord shall be
approved in advance in writing by the Design Review Board.

 

Tenant shall remove all
signs installed by Tenant at the termination of this Lease. Such installations
and removals shall be made in such a manner as to avoid injury, defacement or
any other damages to the buildings and improvements. The cost of repairing any
damage to the building caused by the installation, removal, or maintenance of
the sign shall be borne by the Tenant.

 

The cost of all signs,
other than those furnished by Landlord, including the installation,
maintenance, and removal thereof, shall be the responsibility of the Tenant.

 

5

 

3.4.         Alterations, Changes and Installations
by Tenant.  Tenant shall not make or cause to be made any
alterations, additions or improvements (collectively, “Alterations”) to the
Leased Premises, or cause to be installed any fixtures, interior or exterior
lighting, plumbing equipment or mechanical equipment within the Leased Premises
or any Common Areas without the prior written consent of Landlord, not to be
unreasonably withheld, conditioned or delayed. 
Any such Alterations shall be made by Tenant, at Tenant’s sole cost and
expense, using a competitive bid process. 
With respect to the making of any such Alterations, Tenant, at Tenant’s
sole cost and expense, shall hire a general contractor, which general
contractor shall be subject to Landlord’s approval, not to be unreasonably
withheld, conditioned or delayed.

 

3.5.         Fixtures and Equipment. 
Subject to Section 3.4, Tenant may, at its own expense, furnish and
install such business and trade fixtures in and on the Leased Premises as may
be necessary or desirable for Tenant’s business. Upon expiration of this Lease,
Tenant may remove such business and trade fixtures provided that Tenant shall
promptly repair any damage caused by their removal.  Landlord and Tenant acknowledge that all business
and trade fixtures located within the Leased Premises prior to the Commencement
Date that are not installed by Tenant are the property of the Landlord.  Tenant may, at its own expense, install
equipment within the Leased Premises and such equipment shall remain the
property of Tenant and shall be removed by Tenant upon the termination of this
Lease.

 

3.6.         Liens and Obligations. 
Tenant agrees not to create or to permit others to create any lien or
obligations against Landlord or the Leased Premises in making alterations,
repairs or in installing materials, fixtures or equipment.  If a lien or obligation is claimed against
Landlord or the Leased Premises, Tenant shall either (a) provide Landlord
with a bond in the amount of that claim, or (b) cause that claim to be
released.  Tenant further agrees to hold
Landlord harmless from all claims and demands by any third party in any manner
connected with such alterations, repairs or installations or with Tenant’s
occupancy for such purpose.  Tenant shall
comply with all laws and all directions, rules and regulations of all
governmental regulatory bodies or officials having jurisdiction over such
alterations, repairs or installations, except that Tenant shall not be required
to comply with any laws, regulations or orders by governmental authority necessitating
structural alterations, changes, repairs or additions, unless made necessary by
the act or work performed by Tenant, in which case Tenant shall so comply, at
its own expense, after first procuring the written consent of Landlord.

 

4.  CONDUCT OF BUSINESS

 

4.1.         Business Use. 
It is understood and agreed that the Leased Premises shall be used and
occupied by Tenant for general office, laboratory, and storage purposes. Tenant
shall not use the Leased Premises for any use not identified as a permitted use
by any zoning ordinance or other governmental regulation relating to the Leased
Premises or approved as a conditional use by the governmental bodies having
zoning authority. No use shall be permitted, or acts done, which will cause a
cancellation of any insurance policy covering the Leased Premises. Tenant shall
not sell, permit to be kept, used or sold in or about the Leased Premises any
article which may be prohibited by the standard form of fire insurance policy.
In the event Tenant’s use of the Leased Premises results in an increase in the
cost of any insurance relating to the Landlord’s Property, Tenant shall pay
such additional cost to Landlord upon demand. Tenant shall comply with all
applicable laws, ordinances, regulations, and/or deed and plat restrictions
affecting the 

 

6

 

use and occupancy of the
Leased Premises. Tenant shall not commit, or permit to be committed, any waste
or nuisance on the Leased Premises.

 

4.2.         Utility Charges. 
Landlord shall furnish to the Leased Premises heat, gas, sewer,
electricity and other utilities.  Tenant
shall be solely responsible for and promptly pay all charges for heat, water,
gas, sewer, electricity or any other utility used or consumed in the Leased
Premises, including supplemental heating. In the event utilities are not
separately metered, Tenant shall pay Tenant’s Proportionate Share of utility
costs for the Leased Premises.  For the
purpose of this Section 4.2., Tenant’s Proportionate Share shall be calculated
by dividing the rentable square footage of the Leased Premises by the rentable
square footage of the building in which the Leased Premises is located or
another appropriate allocation method which fairly allocates utility costs
between tenants in the building based on differing usage, e.g. laboratory
versus office use.  In addition, during
those portions of the Term in which the first floor of the Building (the “First
Floor”) is leased to EMD Chemicals Inc. (“EMD”) but is not occupied, Landlord
and Tenant hereby acknowledge and agree that (i) Landlord shall have the
right to allocate the utility costs of the Building as Landlord deems
reasonably appropriate based upon those portions of the Building that are
then-currently occupied; and (ii) in no event shall the utility costs
allocated to the unoccupied portion of the First Floor exceed $1.25 per square
foot per annum.  In no event shall
Landlord be liable for an interruption or failure in the supply of any such
utilities to the Leased Premises.

 

4.3.         Taxes on Leasehold. 
Tenant shall be responsible for and shall pay before delinquency all
municipal, county, state, or other taxes assessed during the Term against any
leasehold interest or personal property of any kind, owned by or placed in,
upon or about Leased Premises by Tenant.

 

4.4.         Assignment or Subletting. 
Tenant shall have the right to assign this Lease to (a) any
affiliate of Tenant; (b) to the entity resulting from any corporate
reorganization to which Tenant is a party; (c) any entity resulting from a
merger; or (d) to an entity purchasing substantially all of the assets of
Tenant, provided such an assignment shall not release Tenant from the covenant
to pay rent or any other covenant owed by Tenant to Landlord under this
Lease.  Except as provided in (a), (b), (c) and
(d) preceding, Tenant agrees not to sell, assign, mortgage, pledge or in
any manner transfer this Lease or any estate or interest thereunder and not to
sublet the Leased Premises or any part or parts thereof without the prior written
consent of Landlord in each instance which consent shall not be unreasonably
withheld, conditioned or delayed. 
Notwithstanding anything to the contrary set forth herein, Landlord
hereby grants its consent to a sublease (the “Aldevron Sublease”) of all or
any portion of the Leased Premises by Tenant, as sublessor, to Aldevron LLC, as
sublessee.  Landlord’s consent to the
Aldevron Sublease does not constitute a consent to any subsequent subletting or
assignment and does not relieve Tenant or any person claiming under or through
Tenant of the obligation to obtain the consent of Landlord with respect to any
future assignment or sublease.  One hundred percent (100%) of any
consideration paid to Tenant for a sublease or assignment that exceeds the
amount Tenant must pay Landlord under this Lease (the “Excess Consideration”)
shall be paid to Landlord.  Where a part
of the Leased Premises is subleased or assigned, there shall be a prorating of
the rent payable under this Lease and the rent payable under the assignment or
the sublease to determine whether Excess Consideration is payable to
Landlord.  Excess Consideration shall
exclude reasonable leasing commissions paid by Tenant, payments 

 

7

 

attributable to the amortization
of the cost of Tenant improvements made to the Leased Premises at Tenant’s cost
for the assignee or subtenant, and other reasonable, actual cash out-of-pocket
costs paid by Tenant, such as attorneys’ fees directly related to Tenant’s
obtaining an assignee or sublease. 
Tenant shall pay this Excess Consideration to Landlord at the end of
each calendar year during which Tenant collects any Excess Consideration.  Each payment shall be sent with a detailed
statement showing the total consideration paid by the subtenant or assignee and
any exclusions from consideration permitted by this section.

 

Consent by Landlord to
one assignment of this Lease or to one licensing or subletting of the Leased
Premises shall not be a waiver of Landlord’s rights hereunder as to subsequent
assignment or subletting, or act to release any guaranty of this Lease,
Landlord’s rights to assign this Lease are and shall remain unqualified.  Furthermore, Landlord’s consent to any
assignment or sublease shall not, in the absence of language to the contrary
contained within said assignment or sublease, release Tenant from the covenant
to pay rent or any other covenant owed by Tenant to Landlord under this Lease.

 

4.5.         Corporate Ownership. 
If the Tenant is a corporation and if at any time during the Term any
part or all of the corporate shares of said corporation shall be transferred by
sale, assignment, operation or law or other disposition (except transfers by
gift, bequest or inheritance) so that the result of such transfer would be the
loss of voting control of said corporation by the person or persons owning a
majority of said corporate shares at the date of this Lease, the Tenant shall
notify the Landlord in writing of such changes in voting control and Landlord
may terminate this Lease by giving Tenant written notice of such termination
within ninety (90) days after receipt of Tenant’s notice. This section,
however, shall not apply if on the date this Lease is executed the Tenant is a
corporation, the outstanding common stock of which is listed on a recognized
security exchange, or if at least eighty percent (80%) of the Tenant’s stock is
owned by another corporation, the common stock of which is so listed.

 

4.6.         Rules and Regulations. 
The rules and regulations appended to this Lease as Exhibit C
are hereby made a part of this Lease. 
The rules and regulations adopted by the Landlord shall be in
writing and provided to Tenant in order to be effective.  Tenant agrees to comply with and observe the rules and
regulations. Tenant’s failure to keep and observe said rules and
regulations shall constitute a breach of the terms of this Lease in the manner
as if the same were contained herein as covenants. Landlord reserves the right
from time to time to amend or supplement said rules and regulations and to
adopt and promulgate additional rules and regulations applicable to Leased
Premises, and the property described in Exhibit A, provided that such
additional rules and regulations apply equally to all lessees with the
project and do not unreasonably interfere with Tenant’s use and enjoyment of
the Leased Premises. Any such additional rules and regulations, and
amendments and supplements, if any, shall be given to Tenant in writing, and
Tenant agrees thereupon to comply with and observe all such rules and
regulations and amendments thereto and supplements thereof.

 

4.7.         Surrender. 
On the last day of the Term, including any option term, or upon the
sooner termination thereof, Tenant shall peaceably and quietly surrender the
Leased Premises and all improvements thereon in the same condition as at the
commencement of this Lease, in good order, condition and repair, fire and other
unavoidable casualty, and reasonable wear and tear excepted. All alterations,
additions, and improvements other than business and trade fixtures 

 

8

 

which may be made or
installed by either Landlord or Tenant upon the Leased Premises or in common
areas including business and trade fixtures installed by Tenant pursuant to Section 3.5,
shall remain the property of Landlord and shall remain upon and be surrendered
without disturbance, molestation or injury at the termination of the Term,
whether by the elapse of time or otherwise, all without compensation or credit
to Tenant. Tenant shall remove all equipment and personal property and shall
repair any damage occasioned by such removal. 
Any personal property not removed by Tenant shall be deemed abandoned
and shall become the property of Landlord; provided, that the Landlord shall
have the option to effect said removals and Tenant shall pay Landlord, on
demand, the cost of removal thereof, with interest at the rate of ten (10%)
percent per annum from the date of such removal by Landlord, or the prime
interest rate established by U.S. Bank National Association or its successors
or assigns, whichever is higher.

 

The delivery to Landlord
at the place then fixed for the payment of rent of the keys to the Leased
Premises shall constitute surrender of the premises by Tenant and acceptance of
the keys by Landlord shall constitute acceptance by Landlord of such surrender.
Such acceptance by Landlord shall not constitute a waiver of any rights to
recover damages under terms of this Lease. This method of surrender shall not
be exclusive and shall be in addition to all other methods of surrender.

 

Anything in this section
to the contrary notwithstanding, at any termination of this Lease, Landlord
shall have a lien upon all of the property of Tenant then located in or upon
the Leased Premises to secure the payment of any amounts due from Tenant to
Landlord by reason of this Lease or to secure the payment of damages, and
Landlord may retain possession of such property until payment in full of said
amounts. Said lien shall not be defeated by placing such property in storage.
If Tenant has not redeemed said property within ninety (90) days after the
termination of said Lease, Landlord may sell such property at public or private
sale without further notice to Tenant, and shall apply in a reasonable manner
determined by Landlord the proceeds of sale to reduce the amounts then owed
from Tenant to Landlord.

 

5.  COMMON USE AREAS AND FACILITIES

 

5.1.         Common Area. 
As used herein, “Common Area” shall include those improvements on and
all areas within Landlord’s Property which are designed for common use and
benefit, exclusive of space in buildings (or any additional buildings) designed
for rental to tenants as the same may exist from time to time. Landlord
reserves the right to change building perimeters, add additional buildings,
drives, or other structures and to make other changes desired, provided that
reasonable access to and use of the Leased Premises is provided and Landlord
uses reasonable measures to minimize any disruption or interruption to the conduct
of Tenant’s business operations at the Premises.

 

5.2.         Use of Common Area. 
Landlord hereby grants to Tenant, its employees, agents, customers and
invitees, the nonexclusive right during the Term to use the Common Areas and
all equipment and fixtures therein as the same may exist from time to time,
such use to be in common with Landlord and all tenants of Landlord from time to
time, its and their employees, agents, customers and invitees, except when the
same are being repaired.

 

9

 

5.3.         Operation and Maintenance. 
The Common Area shall at all times be subject to the exclusive control
and management of Landlord and Landlord shall manage, operate, repair and
maintain the Common Area and its facilities in a clean and sightly condition.
The manner in which such area and facilities shall be maintained and the
expenditures therefor shall be at the Landlord’s sole discretion.  Landlord reserves the right to add and remove
equipment and fixtures from the Common Areas in its sole discretion.

 

5.4.         Preventing Public Rights. 
If Landlord deems it necessary in order to prevent the acquisition of
special rights, Landlord may from time to time close all or any portion of the
Common Area or take such action as shall be reasonably appropriate for that
purpose.

 

5.5.         Charge for Common Area and Facilities. 
During the Term, Tenant shall pay to Landlord an annual charge which
shall be Tenant’s Proportionate Share of the Landlord’s actual cost of
operating, repairing, and maintaining the Common Area and other facilities
which shall include, but shall not be limited to common conference rooms,
kitchen areas, hallways and lobbies, driveways, parking areas, landscaped and
vacant areas, area-ways, walks, curbs, corridors, gardens, sanitary and storm
sewers, signs, public facilities such as washrooms, drinking fountains,
toilets, the cost of operating, repairing, lighting, heating, air conditioning,
cleaning, painting, removing of snow, ice and debris, policing and inspecting,
insurance for hazards and other risks, maintenance including but not limited to
such repair of paving, curbs, walkways, driveways, landscaping and drainage and
lighting facilities as may be necessary from time to time to keep the same in
good condition and repair, a reasonable allowance for the depreciation of
maintenance equipment, a reasonable allowance for Landlord’s overhead costs in
conjunction with the foregoing, and all costs and expenses other than those of
a capital nature, but excluding legal fees recovered by Tenant from Landlord in
any litigation relating to this Lease. Landlord reserves the right to charge
separate and reasonable user fees for certain equipment and fixtures located in
the Common Areas.  Landlord shall provide
Tenant with an itemized statement of Common Area costs and user fees.

 

Tenant shall have the
right, upon not less than ten business days notice, to audit Landlord’s records
regarding the Common Area Costs provided (i) the audit is conducted at
Landlord’s home office during Landlord’s normal business hours; and (ii) the
audit is done at Tenant’s sole cost and expense.  Tenant shall deliver to Landlord a copy of
the results of the audit within ten days of its receipt by Tenant.

 

5.6.         Formula For Proportionate Share. 
The annual charge for Common Area maintenance and facilities shall be
computed on the basis of twelve (12) consecutive calendar months commencing and
ending on dates designated by the Landlord and shall be paid in advance in
monthly installments on the first day of each calendar month in an amount
estimated by Landlord. Within sixty (60) days after the end of each such twelve
(12) month period, Landlord shall determine and furnish to Tenant a computation
of the actual amount charged for such period; and the amounts so estimated and
paid during such period shall be adjusted promptly (including adjustments on a
pro rata basis for any partial such period at either end of the Term) by one
party’s paying to the other whatever amount is necessary to effectuate such
adjustment.  Tenant, at Tenant’s sole
cost and expense, shall have the right to conduct an audit of Common Area
maintenance and facilities charges.  Any
such audit shall be limited to the current year and the two (2) previous
years.  In the event the audit reveals a
discrepancy, Landlord and 

 

10

 

Tenant shall work
together diligently to resolve such discrepancy in a timely and equitable
manner.

 

The Tenant’s
Proportionate Share of the Landlord’s actual costs defined in this Article which
are applicable to all tenants occupying space on Landlord’s Property shall be
that proportion which the rentable area in the Leased Premises bears to the
total rentable area in the buildings located from time to time on the Landlord’s
Property.  If Landlord restricts use of
certain Common Areas or equipment and fixtures within Common Areas to Tenant’s
dwelling or buildings in which such Common Areas are located, the expenses of
such Common Areas shall be allocated among tenants of that particular building
or buildings, not all buildings on Landlord’s Property.  In that case, Tenant’s Proportionate Share
shall be that portion which the rentable area in the Leased Premises bears to
the total rentable area in the building or buildings to which the costs being
allocated apply.

 

5.7.         Basis For Changes. 
Changes in any particular floor area occurring during any calendar month
shall be effective on the first day of the next succeeding calendar month and
the amounts of any floor area in effect for the whole of any year shall be the
average of the total amounts in effect on the first day of each calendar month
in such year.

 

5.8.         Hazardous Materials. 
Landlord represents and warrants that, as of Commencement Date there are
no Hazardous Materials (as hereinafter defined) present in the Leased Premises
or in, on or under Landlord’s Property. 
Landlord agrees that the remediation, removal or neutralization, if and
to the extent required by Environmental Regulations (as hereinafter defined),
of any Hazardous Materials in the Leased Premises or in, on or under the
Landlord’s Property shall be done by Landlord, at its sole cost and expense, if
such Hazardous Materials discovered were not introduced in the Leased Premises
or in, on or under the Landlord’s Property by Tenant, its agents, employees or
contractors.  Tenant agrees that the
remediation, removal or neutralization, if and to the extent required by
Environmental Regulations, of any Hazardous Materials in the Leased Premises or
in, on or under the Landlord’s Property shall be done by Tenant, at its sole
cost and expense, if such Hazardous Materials discovered were introduced in the
Leased Premises or in, on or under the Landlord’s Property by Tenant, its
agents, employees or contractors.  “Hazardous
Materials” shall mean (i) any waste, material or substance (whether in the
form of a liquid, a solid, or a gas and whether or not air-borne) which is
deemed to be a pollutant or a contaminant, or to be hazardous, toxic,
ignitable, reactive, infectious, explosive, corrosive, dangerous, harmful or
injurious to public health or to the environment, and which is now or becomes
regulated in the future by or under the authority of any applicable local,
state or federal laws, judgments, ordinances, orders, rules, regulations, codes
or other governmental restrictions or requirements, any amendments or successor(s) thereto,
replacements thereof or publications promulgated pursuant thereto, relating to
environmental quality, health, safety, contamination and clean-up (collectively
“Environmental Regulations”, and individually, “Environmental Regulation”); (ii) petroleum;
(iii) asbestos and asbestos containing materials; (iv) any
polychlorinated biphenyl; and (v) any radioactive material. Landlord and
Tenant each agree that neither Landlord nor Tenant shall cause any Hazardous
Materials to exist on, or to escape, seep, leak, spill or be discharged,
emitted or released from Landlord’s Property during the Term in violation of
any applicable Environmental Regulation.

 

11

 

5.9.         Landlord’s Indemnity.  Landlord hereby
indemnifies Tenant, its successors and assigns, and their respective agents,
contractors, employees, members, partners, officers, and directors (“Tenant
Indemnified Parties”), and agrees to hold Tenant Indemnified Parties harmless
from and against any and all losses, liabilities, damages, injuries, penalties,
fines, costs, expenses and claims of any and every kind whatsoever, including
reasonable attorney’s fees and costs (collectively “Environmental Liabilities”)
paid, incurred or suffered by, or asserted against, Tenant Indemnified Parties
with respect to, or as a direct or indirect result of, the presence on or
under, or the escape, seepage, leakage, spillage, discharge, emission or
release from Landlord’s Property of any Hazardous Materials which was brought
in to Landlord’s Property by Landlord, its agents, employees, or their
respective predecessors-in-interest, or caused by breach by Landlord, its
agents, employees or their respective predecessors-in-interest of any
Environmental Regulation to which Landlord is subject, and/or which was located
upon the Leased Premises or Landlord’s Property prior to the Commencement
Date.  This indemnity shall survive the
termination of this Lease.

 

5.10.       Tenant’s Indemnity.  Tenant hereby indemnifies
Landlord, its successors and assigns, and their respective agents, contractors,
employees, members, partners, officers, and directors (“Landlord Indemnified
Parties”), and agrees to hold Landlord Indemnified Parties harmless from and
against any and all Environmental Liabilities paid, incurred or suffered by, or
asserted against, Landlord Indemnified Parties with respect to, or as a direct
or indirect result of, the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission or release from the Leased Premises or
Landlord’s Property of any Hazardous Materials which was brought in to the
Leased Premises or Landlord’s Property by Tenant, its agents or employees, or
caused by breach by Tenant of any Environmental Regulation to which Tenant is
subject.  This indemnity shall survive
the termination of this Lease.

 

5.11.       Remediation.  In the event
Hazardous Materials are or become present at Landlord’s Property as the result
of any cause whatsoever (other than Hazardous Material which were brought in to
the Leased Premises by Tenant, its agents, employees or invitees), and such
presence of Hazardous Materials renders the Leased Premises Unusable (as
hereinafter defined), then all rent shall be abated with respect to the portion
of the Leased Premises so damaged until such time as the portion(s) of the
Leased Premises so damaged are no longer rendered Unusable.  For the purpose of this subsection, “Unusable”
means that the Tenant does not have access to all or any portion of the Leased
Premises because of the enforcement of any Environmental Regulation or the need
to use all or any portion of the Leased Premises for remediation of any
Hazardous Materials, or because the use of the Leased Premises would represent
a risk to the health or safety of Tenant, Tenant’s employees, agents or
invitees.

 

6. INSURANCE

 

6.1.         Casualty Insurance. 
Landlord shall at all times during the Term keep all improvements which
are now or hereafter located on the Landlord’s Property insured against loss or
damage by fire and the extended coverage hazards at full insurance value with
loss payable to Landlord, Landlord’s mortgagee and such other parties as
Landlord may designate, as their interests may appear.

 

12

 

Tenant agrees to
reimburse Landlord for Tenant’s Proportionate Share of the cost of such
insurance. Tenant’s Proportionate Share under this Section 6.1 shall be
that proportion which the rentable area in the Leased Premises bears to the
total rentable area in the buildings located from time to time on the Landlord’s
Property.  Each month Tenant shall pay to
Landlord an amount equal to one-twelfth (1/12) of its Proportionate Share of
the estimated annual casualty insurance premium. Upon Landlord’s receipt of any
premium notice, Tenant shall upon demand make up any deficiency to the extent
of its Proportionate Share of the estimated annual casualty insurance premium.

 

6.2.         Public Liability Insurance. 
Landlord shall at all times during the Term keep in full force and
effect a policy of public liability and property damage insurance with respect
to the Landlord’s Property and all business operated thereon, with limits of
public liability not less than One Million and No/100 ($1,000,000.00) Dollars
for injury or death in any one occurrence, and property damage liability
insurance in the amount of One Hundred Thousand and No/100 ($100,000.00)
Dollars. The policies shall name Landlord, Tenant and Landlord’s mortgagees as
co-insureds as their interests may appear. Upon written request by Tenant,
Landlord shall provide the Tenant with evidence of such insurance, including
identification of the Tenant as a co-insured. Landlord may from time to time
during the Term increase the above stated coverage in its discretion. Tenant
shall reimburse Landlord for its Proportionate Share of the cost of such
insurance in the same manner as provided in Section 6.1 regarding casualty
insurance.

 

6.3.         Tenant’s Contents. 
Tenant shall be responsible for obtaining such insurance as it may deem
advisable for all property located in the Leased Premises and in common areas.
It is understood that the insurance carried by Landlord does not cover the risk
of loss or damage to Tenant’s property. Tenant waives any claim against
Landlord and shall save Landlord harmless from any claim for loss or damage to
contents, merchandise, fixtures, equipment or work done by Tenant regardless of
the cause of any such damage or loss.

 

6.4.         Increase in Fire Insurance. 
Tenant agrees that it will not keep or use, in or upon the Leased
Premises any article which may be prohibited by the standard form fire
insurance policy. If Tenant’s use or occupancy causes any increase in premiums
for fire or casualty insurance on the Landlord’s Property, or the Leased
Premises, or any part thereof, above the rate of the least hazardous type of
occupancy legally permitted in the Leased Premises, Tenant shall pay the
additional premium on such insurance. No part of such additional premium
resulting from the use or occupancy of another tenant shall be charged to
Tenant under Sections 6.1 and/or 6.2 of this Lease. The Tenant shall also pay
in such event any additional premium on any rent insurance policy that may be
carried by the Landlord for its protection against rent loss through fire or
other casualty. Bills for such additional premiums shall be rendered by
Landlord to Tenant at such times as Landlord may elect, and shall be due and
payable by Tenant when rendered, and the amount thereof shall be deemed to be,
and be paid as, additional rent.

 

6.5.         Hold Harmless. 
Landlord shall not be liable for any loss, injury, death, or damage to
persons or property which at any time may be suffered or sustained by Tenant or
by any person whosoever may at any time be using or occupying or visiting the
Landlord’s Property or be in, on, or about the same, whether such loss, injury,
death, or damage shall be caused by or in any way result from or arise out of
any act, omission, or negligence of Tenant or of any occupant, subtenant,
visitor, or user of any portion of the Landlord’s Property, or shall result 

 

13

 

from or be caused by any
other matter or thing whether of the same kind as or of a different kind than
the matters or things above set forth, and Tenant shall indemnify Landlord
against all claims, liability, loss or damage whatsoever on account of any such
loss, injury, death, or damage. Tenant shall indemnify Landlord against all
claims, liability, loss or damage arising by reason of the negligence or
misconduct of Tenant, its agents or employees. Tenant hereby waives all claims
against Landlord for damages to the building and improvements that are now on
or hereafter placed or built on the Landlord’s Property and to the property of
Tenant in, on, or about the Landlord’s Property, and for injuries to persons or
property in or about the Landlord’s Property, from any cause arising at any
time. The preceding sentences shall not apply to loss, injury, death, or damage
arising by reason of the negligence or misconduct of Landlord, its agents, or
employees.

 

6.6.         Waiver of Subrogation. 
Landlord and Tenant hereby release each other from any and all liability
or responsibility to the other (or to anyone claiming through or under them by
way of subrogation or otherwise) for any loss or damage to property caused by
fire or any of the extended coverage or supplementary insurance contract
casualties, even if such fire or other casualty shall have been caused by the
fault or negligence of the party or anyone for whom such party may be
responsible, provided, however, that this release shall be applicable and in
force and effect only in respect to loss or damage occurring during such time
as the releaser’s policies shall contain a clause or endorsement to the effect
that any such release shall not adversely affect or impair or prejudice the
right of the releaser to recover thereunder. Landlord and Tenant each agree
that their policies will include such a clause or endorsement so long as the same
is obtainable and if not obtainable, shall so advise the other in writing and
such notice shall release both parties from the obligation to obtain such a
clause or endorsement.

 

7.  DESTRUCTION OF LEASED PREMISES

 

7.1.         Destruction of Leased Premises.  If the building which includes the Leased
Premises is damaged or partially destroyed by fire or other casualty to the
extent of less than one-quarter (1/4) of the then cost of replacement thereof
above foundation, the same shall be repaired as quickly as is practicable, by
Landlord, except that the obligation of Landlord to rebuild shall be limited to
repairing or rebuilding of Landlord’s improvements. If the building, which
includes the Leased Premises is so destroyed or damaged to the extent of
one-quarter (1/4) or more of the then replacement cost thereof, then either (i) Landlord
may elect not to repair or rebuild by giving notice in writing terminating this
Lease, or (ii) Tenant may elect to terminate this Lease in which either
event this Lease shall be terminated as of the date of such notice.

 

7.2.         Rebuilding by Landlord. 
If Landlord shall undertake to restore or repair the building which
includes the Leased Premises, it shall initiate and pursue the necessary work
with all reasonable dispatch, in a manner consistent with sound construction
methods.

 

7.3.         Abatement of Rent Upon Destruction of
Premises.  If such damage or partial destruction renders
the Leased Premises wholly untenantable, the base rent shall abate until the
Leased Premises have been restored and rendered tenantable. If such damage or
partial destruction renders the Leased Premises untenantable only in part, the
base rent shall abate proportionately as to the portion of the Leased Premises
rendered untenantable. Rent shall not 

 

14

 

abate under this section
if the damage or destruction is caused by the negligence or misconduct of
Tenant, its agents, employees, customers or invitees.

 

8.  EFFECT
OF CONDEMNATION

 

8.1.         Total Condemnation. 
In the event that the Leased Premises or such part of the Leased
Premises as will render the remainder untenantable, shall be appropriated or
taken under the power of eminent domain by any public or quasi-public
authority, this Lease shall terminate and expire as of the date of taking.

 

8.2.         Partial Condemnation. 
In the event of any other partial condemnation, Tenant shall have the
option of terminating this Lease on the effective date of such condemnation by
written notice to Landlord prior to such effective date, unless Landlord shall
provide to Tenant within a reasonable time after such effective date reasonably
comparable space to that taken.  For
purposes of this Section, reasonably comparable space shall mean space which is
in the same general area as that condemned, is in a similar type of building
and contains a similar floor plan, and is leased on similar economic and other
terms as this Lease.

 

8.3.         Landlord’s Damages. 
In the event of any condemnation or taking, whether whole or partial,
the Tenant shall not be entitled to any part of the award paid for such
condemnation and Landlord is to receive the full amount of such award. The
Tenant hereby expressly waives any rights or claim to any part thereof.

 

8.4.         Tenant’s Damages. 
Although all damages in the event of any condemnation are to belong to
the Landlord whether such damages are awarded as compensation for diminution in
value of the leasehold or to the fee of the Leased Premises, Tenant shall have
the right to claim and recover from the condemning authority, but not from
Landlord, such compensation as may be separately awarded or recoverable by
Tenant in Tenant’s own right on account of any and all damage to Tenant’s
business by reason of the condemnation, and for or on account of any cost or
loss to which Tenant might be put in removing Tenant’s property.

 

9.  REMEDIES

 

9.1.         Events of Default by Tenant. 
Upon the failure by Tenant to pay rent when due, Landlord may terminate
this Lease or Tenant’s right to use and occupy the Leased Premises by ten (10) days’
written notice to Tenant unless Tenant within such ten (10) days pays all
rent due. Upon the happening of any one or more of the following events: (a) the
levying of a writ of execution or attachment on or against the property of
Tenant; (b) the taking of any action for the voluntary dissolution of
Tenant; (c) the commencement of a mechanic’s lien foreclosure action
against Tenant as a result of a mechanic’s lien or claim therefor against the
land or building of which the Leased Premises are a part; (d) the failure
of Tenant to perform any other of the terms, provisions, and covenants of this
Lease, Landlord may terminate this Lease or Tenant’s right to use and occupy
the Leased Premises by thirty (30) days’ written notice to Tenant unless
Tenant, within such thirty (30) day period, cures the specified default or, if
the default is of a character which cannot be cured within thirty (30) days,
the Tenant commences and diligently pursues the cure of such default within
thirty (30) days.

 

15

 

9.2.         Re-Entry by Landlord. 
Upon such termination of the Lease or termination of Tenant’s right to
use and occupy the Leased Premises as aforesaid, or if Tenant at any time
during the Term vacates the Leased Premises or ceases operating said business
in the entire or any appreciable part of the Leased Premises, except for causes
beyond its control, Landlord may reenter the Leased Premises.

 

9.3.         Right to Relet. 
Should Landlord elect to reenter, as herein provided, or should it take
possession pursuant to legal proceedings or pursuant to any notice provided for
by law, it may either terminate this Lease or it may from time to time without
terminating this Lease, make such alterations and repairs as may be necessary in
order to relet the Leased Premises, and relet the Leased Premises or any part
thereof for such term or terms (which may be for a term extending beyond the
Term) and at such rental or rentals upon such other terms and conditions as
Landlord in its sole discretion may deem advisable upon each such reletting.
All rentals received by the Landlord from such reletting shall be applied,
first, to the payment of any indebtedness other than rent due hereunder from
Tenant to Landlord; second, to the payment of any costs of such alterations and
repairs; third, to the payment of rent due and unpaid future rent as the same
may become due and payable hereunder. If such rentals received from such
reletting during the month be less than that to be paid during that month by Tenant
hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency
shall be calculated and paid monthly. No such re-entry or taking possession of
said Leased Premises by Landlord shall be construed as an election in its part
to terminate this Lease unless a written notice of such intention be given to
Tenant or unless the termination thereof be decreed by a court of competent
jurisdiction. Notwithstanding any such reletting without termination, Landlord
may at any time thereafter elect to terminate this Lease for such previous
breach. Should Landlord at any time reenter or terminate this Lease for any
breach, in addition to any other remedies it may have, it may recover from
Tenant all damages it may incur by reason of such breach, including the cost of
recovering the Leased Premises and reasonable attorney’s fees. All which
amounts shall be immediately due and payable from Tenant to Landlord.

 

9.4.         Parties May Remedy Defaults. 
In the event of any breach hereunder by either party, and in lieu of
Landlord’s terminating this Lease as herein provided, Landlord or Tenant
respectively may immediately or at any time thereafter, after having given the
other party the requisite notice to correct the same and that time for such
correction having elapsed, cure such breach for the account and at the expense
of the other party. If Landlord or Tenant at any time, by reason of such
breach, is compelled to pay, or elects to pay, any sum of money or do any act
which will require the payment of any sum of money, or incurs any expense,
including reasonable attorney’s fees, in instituting or prosecuting any action
or proceeding to enforce such party’s rights hereunder, the sum or sums so paid
or incurred by such party, if paid or incurred by Landlord, shall be deemed to
be additional rent hereunder and shall be due from Tenant to Landlord on the
first day of the month following the payment of such respective sums, and if
paid or incurred by Tenant, shall be due and payable by Landlord on demand with
interest at the rate provided in Section 4.7 hereof. This option is given
to the parties is intended for their protection and its existence shall not
release the parties from the obligation to perform the terms and covenants
herein provided to be performed by the respective parties or deprive Landlord
of any legal rights which it may have by reason of any default of Tenant.

 

16

 

9.5.         Landlord’s Remedies:  Liquidated Damages. 
In the event that at any time, whether before or after the commencement
of the Term hereof, a bankruptcy petition shall be filed by Tenant or against
Tenant and Tenant shall thereafter be adjudicated a bankrupt, or such petition
shall be approved by the court, in any court or pursuant to any statute either
of the United States or of any State, whether in bankruptcy, insolvency, for
reorganization under Chapter XI or XIII of the Bankruptcy Act or under any
other provisions of the Bankruptcy Act, or under the provisions of any law of
like impact, for the appointment of a receiver or trustee of Tenant or for the
property of Tenant, or if Tenant shall make an assignment of Tenant’s property
for the benefit of its creditors, or if proceedings are instituted in a court
of competent jurisdiction for the reorganization, liquidation or involuntary
dissolution of Tenant, then immediately upon the happening of any such event,
and without any entry or other act by Landlord, this Lease and the Term and
estate hereby granted (whether or not the Term shall therefore have commenced)
shall expire, terminate and come to an end in the same manner and with the same
force and effect as if the date of such occurrence were the date hereinbefore
fixed for the expiration of the Term hereof. In the event of the termination of
the Term hereof by the happening of any such event, Landlord shall forthwith
upon such termination, and any other provisions of this Lease to the contrary
notwithstanding, become entitled to recover as and for liquidated damages
caused by such breach of the provisions of this Lease an amount equal to the
difference between the then cash value of the rent reserved hereunder for the
unexpired portion of the demised Term and the then cash rental value of the
Leased Premises for such unexpired portion of the Term hereby demised unless
the statute which governs or shall govern the proceeding in which such damages
are to be provided limits or shall be entitled to prove as and for liquidated
damages an amount equal to that allowed by or under such statute. The provision
of this section shall be without prejudice to Landlord’s right to prove in full
damages for rent accrued prior to the termination of this Lease but not paid.
This provision of this Lease shall be without prejudice of any rights given
Landlord by any pertinent statute to prove any amounts allowed thereby. In
making such computation, the then cash rental value of the Leased Premises
shall be deemed prima facie to be the rent realized upon any reletting, if such
reletting can be accomplished by Landlord within a reasonable time after such a
termination of this Lease.

 

9.6.         Expenses of Landlord. 
Upon the occurrence of an event of default by Tenant, notwithstanding
anything herein to the contrary and whether or not Landlord terminates this
Lease, Tenant shall promptly, upon request, reimburse Landlord for all costs
and expenses reasonably incurred in enforcing this Lease, including reasonable
attorneys’ fees.

 

9.7.         Waiver of Redemption. 
Tenant hereby expressly waives any and all rights of redemption granted
by or under any present or future laws in the event of Tenant’s being evicted
or dispossessed for any cause, or in the event of Landlord’s obtaining
possession of the Leased Premises, by reason for the violation by Tenant of any
of the covenants or conditions of this Lease, or otherwise.

 

9.8.         Defaults of Landlord. 
Should Landlord be in default under the terms of this Lease, Landlord
shall cure such default within thirty (30) days after written notice of such
default from Tenant, or in the event such default is of such a character as to
require more than thirty (30) days to cure, Landlord shall use due diligence to
cure such default.

 

17

 

9.9.         Rights Cumulative. 
All rights and remedies of Landlord and Tenant herein enumerated shall
be cumulative and none shall exclude any other right or remedy allowed by law,
and said rights and remedies may be exercised and enforced concurrently and
whenever and as often as occasion therefor arises.

 

10.  MISCELLANEOUS

 

10.1.       Subordination. 
At Landlord’s option, this Lease shall be subordinated to any existing
mortgages covering the Leased Premises, any extension or renewal thereof, or to
any new mortgages which may be placed thereon from time to time, provided,
however, anything to the contrary contained herein notwithstanding, every such
mortgage shall contain a provision that the mortgagee shall recognize the
validity of this Lease in the event of foreclosure of the Landlord’s interest
so long as Tenant shall not be in default under the terms of this Lease. Tenant
shall execute whatever instruments may be required to effect such
subordination.

 

10.2.       Sale of Property.  Landlord shall have the right at any time to
sell, transfer or convey its interest in all or any portion(s) of Landlord’s Property, improvements and buildings of
which the Leased Premises are a part to any person, firm or corporation
whatsoever, and upon any such sale, transfer or conveyances, Landlord shall
cease to be liable under any covenant, condition or obligation imposed upon it
by this Lease, or any of the terms and provisions thereof; provided, however,
that any such sale, transfer or conveyance shall be subject to this Lease and that
all of the Landlord’s covenants and obligations contained herein shall be
binding upon the subsequent owner or owners thereof; and provided further that
such transferee from Landlord shall in writing assume the obligations of
Landlord hereunder.

 

10.3.       Offset Statement. 
Within ten (10) days after request therefor by Landlord, or in the
event that upon any sale, assignment or hypothecation of the Leased Premises
and/or all or any portion(s) of the Landlord’s Property by Landlord an
offset statement shall be required by Tenant; Tenant agrees to deliver in
recordable form a certificate to any proposed mortgagee or purchaser, or to
Landlord, certifying (if such be the case) that this Lease is in full force and
effect and that there are no defenses or offsets thereto, or stating those
claimed by Tenant.

 

10.4.       Attornment.  Tenant shall,
in the event any proceedings are brought for the foreclosure of, or in the
event of exercise of the power or sale under any mortgage made by the Landlord
covering the Leased Premises, attorn to the purchaser upon any such foreclosure
or sale and recognize such purchaser as the Landlord under this Lease.

 

10.5.       Recording.  Tenant shall
not record this Lease without the written consent of Landlord; however, upon
the request of either party hereto the other party shall join in the execution
of memorandum or so called “short form” of this Lease for the purpose of
recordation. Said memorandum or short form of this Lease shall describe the
parties, the Leased Premises and the Term and shall incorporate this Lease by
reference.

 

10.6.       Excavations. 
In case any excavation shall be made for buildings or improvements or
for any other purpose upon the land adjacent to or near the Leased Premises,
Tenant will afford to Landlord, or the person or persons, firms or corporations
causing or making such excavation, license to enter upon the Leased Premises
for the purpose of doing such work 

 

18

 

as Landlord or such
person or persons, firms or corporations shall deem to be necessary to preserve
the walls or structures of the building from injury, and to protect the
building by proper securing of foundations. Insofar as Landlord may have
control over the same, all such work shall be done in a manner as will not
materially interfere with the operation of Tenant’s business in the Leased
Premises.

 

10.7.       Access to Leased Premises. 
Tenant shall permit Landlord, its agents and employees, upon reasonable
prior notice, to enter the Leased Premises at all reasonable times, for the
purpose of making repairs, additions or alterations to the building in which
the Leased Premises are located, or for the purpose of inspecting (including
without limitation inspections for determining the compliance by any laboratory
and animal operations with minimum health and safety requirements or standards)
or for the purpose of posting notices of availability for rent without any
rebate or abatement of rent and without any liability for any loss of
occupation or quiet enjoyment of the Leased Premises.  For purposes of this section, the standards
set forth in the Guide for the Care and Use of Laboratory Animals (which
outlines the rules and regulations of the Animal Welfare Act and the
Public Health Service Policy on Human Care and Use of Laboratory Animals) shall
constitute such minimum standards.  In
addition, upon the request of Landlord, Tenant will promptly, within ten (10) days
of Landlord’s request, furnish to Landlord copies of all reports, filings and
records required to be maintained by Tenant with respect to hazardous materials
located or used in the Leased Premises, including all “Material Safety Data
Sheets.”  The exercise by Landlord of any
of its rights under this provision shall not be deemed an eviction or disturbance
of Tenant’s use and possession of the Leased Premises.

 

10.8.       Quiet Enjoyment. 
If and so long as Tenant pays the rent reserved by this Lease and
performs and observes all of the covenants and provisions hereof, Tenant shall
quietly enjoy the Leased Premises, subject, however, to the terms of this
Lease.

 

10.9.       Notices.  Any notice
required or permitted under this Lease shall be deemed sufficiently given or
served if sent by certified mail to Tenant at the address of the Leased
Premises, and to Landlord at its office or such other place as it may designate
in writing, and either party may by like written notice at any time and from
time to time designate a different address to which notices shall subsequently
be sent. Notices given in accordance with these provisions shall be deemed
received when mailed.

 

10.10.     Holding Over.  In the event
Tenant remains in possession of the Leased Premises after the expiration of
this Lease and without the execution of a new Lease, it shall be deemed to be
occupying said Leased Premises as a Tenant from month-to-month, subject to all
conditions, provisions and obligations of this Lease insofar as the same are
applicable to a month-to-month tenancy. Nothing in this section shall operate
to preclude Landlord from removing Tenant from the Leased Premises upon the
expiration of this Lease.

 

10.11.     Consents by Landlord. 
Whenever under this Lease provision is made for Tenant securing the
written consent or approval of Landlord, such consent or approval will not be
unreasonably withheld.

 

10.12.     Successors and Assigns. 
The terms, covenants and conditions hereof shall be binding upon and
inure to the successors in interest and assigns of the parties hereto.

 

19

 

10.13.     Governmental Regulations. 
Tenant shall, at Tenant’s sole cost and expense, materially comply with
all of the requirements of all city, county, municipal, state, federal and
other applicable governmental authorities, now in force, or which may hereafter
be in force, pertaining to signs, installations, repairs and business
operations in the Leased Premises and shall faithfully observe all statutes now
in force or which may hereafter be in force. 
At any time during the Term that Tenant is required to obtain a license
from any local, state or federal regulatory body, for the use of hazardous
materials, Tenant shall notify Landlord of the existence of such license and
provide Landlord with a copy of such license. 
Upon termination of this Lease and prior to vacation of the Leased
Premises, Tenant shall fully comply with all terms of such license and to the
extent applicable, obtain a closure letter or similar written confirmation of
compliance with all license terms and provide a copy of such letter or
confirmation to Landlord.

 

10.14.     Certain Expenses of Landlord. 
Any out-of-pocket expenses reasonably incurred by Landlord for purposes
of considering or acting upon any request for consent or waiver under, or
modification of, any of the provisions of this Lease, including reasonable
attorney’s fees, shall be promptly reimbursed by Tenant upon Landlord’s
request.

 

10.15.     Force Majeure. 
In the event that either Landlord or Tenant shall be delayed or hindered
in or prevented from the performance of any act required hereunder by reason of
strikes, lock outs, labor disputes, inability to procure materials, failure of
power, restrictive governmental laws or regulations, riots, insurrection, war
or other reason of a like nature not attributable to the negligence or fault of
the party delayed in performing work or doing acts required under the terms of
this Lease, then performance of such act shall be excused for the period of the
unavoidable delay and the period for the performance of any such act shall be
extended for an equivalent period. Provided, however, that this provision shall
not operate to excuse Tenant from the timely payment of rent and other payments
required by the terms of this Lease.

 

10.16.     General.  Nothing
contained in this Lease shall be deemed or construed by the parties hereto or
by any third party to create the relationship of principal and agent or of
partnership or of joint venture or of any association between Landlord and
Tenant, it being expressly understood and agreed that neither the method of
computation of rent nor any other provisions contained in this Lease nor any
acts of the parties hereto shall be deemed to create any relationship between
Landlord and Tenant other than the relationship of landlord and tenant. No
waiver of any default of Tenant or Landlord hereunder shall be implied from any
omission by Landlord or Tenant any action on account of such default if such
default persists or is repeated, and no express waiver shall affect any default
other than the default specified in the express waiver and that only for the
time and to the extent therein stated. One or more waivers of any covenant,
term or condition of this Lease by Landlord or Tenant shall not be construed as
a waiver of a subsequent breach of the same covenant, term or conditions. The consent
or approval by Landlord to or of any act by Tenant requiring the Landlord’s
consent or approval shall not be deemed to waive or render unnecessary Landlord’s
consent or approval to or of any subsequent similar act by Tenant. The
invalidity or unenforceability of any provision hereof shall not affect or
impair any provision. The plural sense where there is more than one tenant and
to either corporations, associations, partnership or individuals, male or
females, shall in all instances be assumed as though in each case fully
expressed. The laws of the State of Wisconsin shall govern the validity,
performance and enforcement of this Lease. The submission of this Lease for 

 

20

 

examination does not
constitute a reservation of or option for the Leased Premises and this Lease
becomes effective as a Lease only upon execution and delivery thereof by
Landlord and by Tenant. The headings contained herein are for convenience only
and do not define, limit or construe the contents of the provisions hereof. All
negotiations, representations and understandings between the parties are
incorporated herein and may be modified or altered only by agreement in writing
between the parties.

 

10.17.     Broker. 
Landlord and Tenant represent to each other that no broker or person is
entitled to any commission by reason of the negotiation and execution of this
Lease other than Siegel-Gallagher, Inc. (“Broker”), and Landlord agrees
that Landlord shall be solely responsible for the fees and commissions of the
Brokers pursuant to separate agreement(s). 
Landlord and Tenant agree to indemnify, defend and hold
each other harmless against any and all claims by any other person for
brokerage commissions or fees arising out of any conversation, negotiations or
other dealings held by the other party with any other broker regarding this
Lease.

 

10.18.     Landlord’s Contingency.  Notwithstanding anything to the contrary set
forth herein, Landlord and Tenant hereby acknowledge and agree that (i) as
of the date of this Lease, the Leased Premises are leased to EMD; and (ii) Landlord’s
obligations under this Lease are contingent upon Landlord entering into a lease
amendment with EMD wherein EMD agrees to release its rights with respect to the
Leased Premises (the “EMD Amendment”). 
In the event EMD fails to execute the EMD Amendment, Landlord shall so
notify Tenant in writing, and this Lease shall automatically terminate as of
the date seven (7) days after the date upon which Landlord so notifies
Tenant.  Landlord and Tenant further
acknowledge and agree that Landlord shall have no liability to Tenant in the
event this Lease is terminated by Landlord pursuant to this Section 10.18.  Landlord shall use good faith efforts and due
diligence to cause the full execution of the EMD Amendment.

 

10.19.  Attachments.  The following are attached hereto and made a
part hereof with the same force and effect as if set forth in full herein:

 

	
  (a)

  	
  Exhibit A:

  	
  Legal
  Description of Landlord’s Property.

  
	
  (b)

  	
  Exhibit B-1:

  	
  Location
  of Leased Premises.

  
	
  (c)

  	
  Exhibit B-2:

  	
  Floor Plan.

  
	
  (d)

  	
  Exhibit C:

  	
  Rules and
  Regulations.

  

 

IN WITNESS WHEREOF,
Landlord and Tenant have executed this Lease and affixed their respective seals
as of the day, month and year set forth below.

 

	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
  UNIVERSITY
  RESEARCH PARK,

  	
   

  	
  EXACT SCIENCES
  CORPORATION

  
	
  INCORPORATED

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Mark D. Bugher

  	
   

  	
  By:

  	
  /s/ Kevin T. Conroy

  
	
   

  	
  Mark D. Bugher

  	
   

  	
  Name:

  	
  Kevin T. Conroy

  
	
   

  	
  Assistant
  Secretary/Treasurer

  	
   

  	
  Title:

  	
  Pres. / CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  11/10/2009

  	
   

  	
  Date:

  	
  11/10/2009

  

 

21

 

EXHIBIT C

 

RULES AND
REGULATIONS

 

The Premises shall be a
smoke-free environment.  No smoking shall
be permitted anywhere in the building or in or around the main entrance
(fronting Science Drive) to the building.

 

22

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