Exhibit 10.5

 
SUBORDINATION AND INTERCREDITOR AGREEMENT
 
THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (as amended, restated,
supplemented or otherwise modified, this “Agreement”) is entered into as of this
February ___, 2018, by and among (i) GPB Debt Holdings II, LLC, a Delaware
limited liability company, in its capacity as collateral agent for each of the
investors listed on Schedule I hereto under and pursuant to the Senior Security
Agreement and the Purchase Agreement (each as hereinafter defined) (in such
capacity, together with its successors and assigns in such capacity, the “Senior
Agent”), (ii) each of the investors listed on Schedule I attached hereto
designated as “Subordinated Creditors” (collectively, the “Subordinated
Creditors”), and (iii) MEDITE Cancer Diagnostics, Inc. (“Borrower”).
 
R E C I T A L S
 
A.           
The Senior Creditor and the Borrower are entering into that certain Securities
Purchase Agreement of even date herewith (as the same may be amended,
supplemented or otherwise modified from time to time as permitted hereunder, the
“Purchase Agreement”), pursuant to which, among other things, the Senior
Creditor has agreed, subject to the terms and conditions set forth in the
Purchase Agreement, to purchase the Note (as defined therein) to be issued by
the Borrower. The Senior Debt of the Borrower under the Purchase Agreement and
Note is secured by security interests in and liens on substantially all of the
assets of the Obligors (as defined herein) pursuant to that certain Security
Agreement, dated as of the date hereof, to be entered into by and among the
Senior Agent as a debtor and collateral agent, the Borrower and the other
Obligors parties thereto (the “Senior Security Agreement”, together with the
other collateral and transaction documents executed and delivered in connection
with the Purchase Agreement and the Note, the “Senior Documents”). Capitalized
terms used but not defined herein shall have the meanings set forth in the
Purchase Agreement.
 
B.           
As an inducement to and as one of the conditions precedent to the agreement of
the Senior Creditor to consummate the transactions contemplated by the Purchase
Agreement, the Senior Creditor has required the execution and delivery of this
Agreement by the Subordinated Creditors and the Company in order to set forth
the relative rights and priorities of the Senior Agent under the Transaction
Documents (as defined below) and the Subordinated Creditors under the
Subordinated Debt Transaction Documents (as defined below).
 
NOW, THEREFORE, in order to induce the Senior Creditor to consummate the
transactions contemplated by the Purchase Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto hereby agree as follows:
 
1.            
Definitions. The following terms shall have the following meanings in this
Agreement:
 
“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended from
time to time and any successor statute and all rules and regulations promulgated
thereunder.
 
“Distribution” means, with respect to any indebtedness or obligation:  (a) any
payment or distribution by any Person of cash, securities (other than (i) Common
Stock issued pursuant to a conversion by the Subordinated Creditors pursuant to
the  12% Secured Convertible Notes or hereunder or (ii) any penalty incurred by
the Company as a result of its failure to timely deliver Common Stock pursuant
to the terms of the 12% Secured Convertible Notes) or other property, by set-off
or otherwise, on account of such indebtedness or obligation; (b) any redemption,
purchase or other acquisition of such indebtedness or obligation by any Person;
or (c) the granting of any lien or security interest to or for the benefit of
the holders of such indebtedness or obligation in or upon any property of any
Person
 
 
 
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“Enforcement Action” shall mean: (a) to take from or for the account of the
Company or any Obligor or any other guarantor of the Subordinated Debt, by
set-off or in any other manner, the whole or any part of any moneys which may
now or hereafter be owing by the Company, any other obligor or or any such
guarantor with respect to the Subordinated Debt; (b) to ask for, demand or sue
for payment of, or to initiate or participate with others in any suit, action or
proceeding against the Company, any other Obligor or any such guarantor to (i)
enforce payment of or to collect the whole or any part of the Subordinated Debt
or (ii) commence judicial enforcement of any of the rights and remedies under
the Subordinated Debt Documents or applicable law with respect to the
Subordinated Debt; (c) to accelerate the Subordinated Debt; (d) to exercise any
put option or to cause the Company, any other Obligor or any such guarantor to
honor any redemption or mandatory prepayment obligation under any Subordinated
Debt Transaction Document; (e) to notify account debtors or directly collect
accounts receivable or other payment rights of the Company, any other Obligor or
any such guarantor; or (f) take any action under the provisions of any state or
federal law, or under any contract or agreement, to enforce, foreclose upon,
take possession of or sell any property or assets of the Company, any other
Obligor or any such guarantor.
 
“Obligor” means each of the Borrower, the Borrower’s direct and indirect
subsidiaries and any other Person that now or hereafter is, or whose assets now
or hereafter are, liable for all or any portion of the Senior Debt.
 
“Paid in Full” of “Payment in Full” means that: (a) all Senior Debt has been
indefeasibly paid in full in cash or converted to shares of Common Stock
pursuant to the terms of the Note (in each case, other than contingent
indemnification obligations for which no claim yet has been asserted in
writing); (b) all commitments to lend or purchase any Note under the Transaction
Documents have been terminated and no Person has any further right to obtain
loans or other extensions of credit under the Transaction Documents; and (c) any
costs, expenses and contingent indemnification obligations which are not yet due
and payable but with respect to which a claim is pending or may reasonably be
expected to be asserted under the Transaction Documents have been paid in full
in cash.
 
“Permitted Refinancing” shall mean any refinancing of the Senior Debt under the
Transaction Documents, provided that the financing documentation entered into by
the Borrower in connection with such Permitted Refinancing constitutes Permitted
Refinancing Senior Debt Documents.
 
“Permitted Refinancing Senior Debt Documents” shall mean any financing
documentation which replaces the Transaction Documents and pursuant to which the
Senior Debt under the Transaction Documents is refinanced, as such financing
documentation may be amended, supplemented or otherwise modified from time to
time in accordance with the terms of this Agreement.
 
“Permitted Subordinated Debt Payments” means the regularly scheduled payments of
principal and interest in respect of the Subordinated Note (as in effect on the
date hereof), provided that no Senior Payment Default, Senior Covenant Default
or Equity Conditions Failure (as defined in the Notes) has occurred and is
continuing.
 
 
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“Person” means any natural person, corporation, general or limited partnership,
limited liability company, firm, trust, association, government, governmental
agency or other entity, whether acting in an individual, fiduciary or other
capacity.
 
“Proceeding” shall mean any voluntary or involuntary insolvency, bankruptcy,
receivership, custodianship, liquidation, dissolution, reorganization,
assignment for the benefit of creditors, appointment of a custodian, receiver,
trustee or other officer with similar powers or any other proceeding for the
liquidation, dissolution or other winding up of a Person.
 
 
“Senior Covenant Default” shall mean any “Event of Default” (other than a Senior
Payment Default) under the Note, or any condition or event that, after notice or
lapse of time or both, would constitute such an Event of Default (other than a
Senior Payment Default) if that condition or event were not cured or removed
within any applicable grace or cure period set forth therein.
 
“Senior Creditor” shall mean the holders of the Senior Debt from time to time
party to the Purchase Agreement.
 
“Senior Debt” shall mean all obligations, liabilities and indebtedness of every
nature of any Obligor or guarantor from time to time owed to the Senior Creditor
and Senior Agent under the Transaction Documents, including, without limitation,
the principal amount of all debts, claims and indebtedness, accrued and unpaid
interest and all fees, costs and expenses, whether primary, secondary, direct,
contingent, fixed or otherwise, heretofore, now and from time to time hereafter
owing, due or payable, whether before or after the filing of a Proceeding under
the Bankruptcy Code together with (a) any amendments, modifications, renewals or
extensions thereof to the extent in accordance with the terms of this Agreement
and (b) any interest accruing thereon after the commencement of a Proceeding,
without regard to whether or not such interest is an allowed claim.
 
“Senior Default” shall mean any Senior Payment Default or Senior Covenant
Default.
 
“Senior Default Notice” shall mean a written notice from the Senior Agent or any
Senior Creditor pursuant to which the Subordinated Creditors are notified of the
occurrence of a Senior Default, which notice incorporates a reasonably detailed
description of such Senior Default.
 
“Senior Payment Default” shall mean any “Event of Default” under the Note
resulting from the failure of the Borrower to pay to any Senior Creditor, on a
timely basis, any principal, interest, fees or other obligations under the
Transaction Documents, including, without limitation, any default in payment of
Senior Debt after acceleration thereof or the delivery of any Redemption Notice
(as defined in the Senior Note) with respect thereto.
 
“Subordinated Debt” shall mean all of the obligations of the Obligors or any
other guarantor to each Subordinated Creditor evidenced by or incurred pursuant
to the Subordinated Debt Transaction Documents.
 
 
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“Subordinated Debt Default” shall mean a default in the payment of the
Subordinated Debt or in the performance of any term, covenant or condition
contained in the Subordinated Debt Transaction Documents (other than the Note)
or any other occurrence permitting the Subordinated Creditors to accelerate the
payment of, put or cause the redemption of all or any portion of the
Subordinated Debt or any Subordinated Debt Transaction Document.
 
“Subordinated Debt Transaction Documents” shall mean the Subordinated Note and
the Subordinated Security Documents.
 
“Subordinated Debt Default Notice” shall mean a written notice from the
Subordinated Creditors or the Company to the Senior Creditor and the Senior
Agent pursuant to which the Senior Creditor and Senior Agent are notified of the
occurrence of a Subordinated Debt Default, which notice incorporates a
reasonably detailed description of such Subordinated Debt Default.
 
“Transaction Documents” shall mean the Purchase Agreement, the Transaction
Documents and all other agreements, documents and instruments executed from time
to time in connection therewith, as the same may be amended, supplemented or
otherwise modified from time to time subject to the terms of this Agreement.
 
2. 
Subordination.
 
2.1           
Subordination of Subordinated Debt to Senior Debt. The Borrower covenants and
agrees, and each Subordinated Creditor by its execution of this Agreement
likewise covenants and agrees, notwithstanding anything to the contrary
contained in any of the Transaction Documents, that the payment of any and all
of the Subordinated Debt shall be subordinate and subject in right and time of
payment, to the extent and in the manner hereinafter set forth, to the prior
Payment in Full of all Senior Debt. Each holder of Senior Debt, whether now
outstanding or hereafter created, incurred, assumed or guaranteed, shall be
deemed to have acquired Senior Debt in reliance upon the provisions contained in
this Agreement.
 
2.2           
Liquidation, Dissolution, Bankruptcy. In the event of any Proceeding involving
the Borrower or any Obligor:
 
(a)           
All Senior Debt shall first be Paid in Full before any Distribution, whether in
cash, securities or other property, shall be made to the Subordinated Creditors
on account of any Subordinated Debt.
 
(b)           
Any Distribution, whether in cash, securities or other property which would
otherwise, but for the terms hereof, be payable or deliverable in respect of the
Subordinated Debt shall be paid or delivered directly to the Senior Agent (for
the benefit of the Senior Creditor and to be applied to the outstanding amount
of Senior Debt held by the Senior Creditor) until all Senior Debt is Paid in
Full. Until the Senior Debt is Paid in Full, (i) each Subordinated Creditor
irrevocably authorizes, empowers and directs any debtor, debtor in possession,
receiver, trustee, liquidator, custodian, conservator or other Person having
authority, to pay or otherwise deliver all such Distributions to the Senior
Agent for the benefit of the Senior Creditor, and (ii) each Subordinated
Creditor also irrevocably authorizes and empowers the Senior Agent, in the name
of Subordinated Creditor, to demand, sue for, collect and receive any and all
such Distributions.
 
 
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(c)            
Each Subordinated Creditor agrees not to initiate, prosecute or participate in
any claim, action or other proceeding challenging the enforceability, validity,
perfection or priority of the Senior Debt or any liens and security interests
securing the Senior Debt.
 
(d)           
Each Subordinated Creditor agrees that the Senior Creditor may consent to the
use of cash collateral or provide financing to the Borrower on such terms and
conditions and in such amounts as the Senior Creditor, in its sole discretion,
may decide. Each Subordinated Creditor agrees not to object to any of the
foregoing. Each Subordinated Creditor agrees that it will: (i) not seek to
provide financing to the Borrower in any Proceeding; (ii) support, and not
object to or oppose, any sale or other disposition of any property under Section
363 of the Bankruptcy Code or any other provision of the Bankruptcy Code or
applicable law if the Senior Creditors have consented to such sale or
disposition; and (iii) not propose, seek and/or support confirmation of any plan
to which the Senior Creditor has not consented in writing; each Subordinated
Creditor agrees to object to and vote to reject confirmation of any plan which
the Senior Creditor has objected to and/or rejected in writing. Each
Subordinated Creditor waives any claim it may now or hereafter have arising out
of the Senior Creditor’s election, in any Proceeding instituted under the
Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy
Code, and/or any borrowing or grant of a security interest under Section 364 of
the Bankruptcy Code by the Borrower, as debtor in possession.
 
(e)           
Each Subordinated Creditor hereby irrevocably authorizes, empowers and appoints
the Senior Agent as its agent and attorney-in-fact to (i) execute, verify,
deliver and file proofs of claim in respect of the Subordinated Debt upon the
failure of any Subordinated Creditor promptly to do so prior to ten (10)
Business Days before the expiration of the time to file any such proof of claim,
and (ii) vote such claim in any such Proceeding upon the failure of any
Subordinated Creditor to do so prior to five (5) Business Days before the
expiration of the time to vote any such claim; provided, however, that the
Senior Agent shall not have any obligation to execute, verify, deliver, file
and/or vote any such proof of claim. In the event that the Senior Agent votes
any claim in accordance with the authority granted hereby, no Subordinated
Creditor shall be entitled to change or withdraw such vote.
 
(f)           
The Senior Debt shall continue to be treated as Senior Debt and the provisions
of this Agreement shall continue to govern the relative rights and priorities of
the Senior Agent (for the benefit of the Senior Creditors) and the Subordinated
Creditors even if all or part of the Senior Debt are subordinated, set aside,
avoided, invalidated or disallowed in connection with any such Proceeding, and
this Agreement shall be reinstated if at any time any payment of any of the
Senior Debt is rescinded or must otherwise be returned by any holder of Senior
Debt or any representative of such holder.
 
 
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2.3 
Subordinated Debt Payment Restrictions.
 
(a)           
Notwithstanding the terms of the Subordinated Debt Transaction Documents, the
Borrower hereby agrees that it may not make, directly or indirectly, and each
Subordinated Creditor hereby agrees that it will not accept, any Distribution
with respect to the Subordinated Debt until the Senior Debt is Paid in Full
other than, subject to the terms of Section 2.2 of this Agreement, Permitted
Subordinated Debt Payments, which shall continue unabated in the absence of a
Senior Default or a Proceeding; provided, however, that the Borrower and each
Subordinated Creditor further agree that no Permitted Subordinated Debt Payment
or any other Distribution may be made by the Borrower, directly or indirectly,
or accepted by such Subordinated Creditor if, at the time of such payment, any
Senior Default exists; provided, further, that, in the event that a Senior
Default exists but a Subordinated Creditor has not received any notice of such
Senior Default and accepts a Permitted Subordinated Debt Payment or any other
Distribution, then and in such event the Subordinated Creditor, upon receiving a
notice of such Senior Default, shall immediately deliver such Permitted
Subordinated Debt Payment or other Distribution, as the case may be, to Senior
Agent as set forth in Section 2.5 of this Agreement.
 
(b)           The Borrower may resume Permitted Subordinated Debt Payments (and
may make any Permitted Subordinated Debt Payments missed due to the application
of paragraph (a) of this Section 2.3) upon the earliest to occur of:
 
(i)           in the case of a Senior Payment Default or a Senior Covenant
Default, as applicable, upon a cure or waiver thereof; or
 
(ii)           all of the Senior Debt being Paid in Full.
 
(c)           No Senior Default shall be deemed to have been waived for purposes
of this Section 2.3 unless and until the Borrower shall have received a written
waiver from the Senior Agent.
 
(d)           Notwithstanding any provisions to the contrary, the failure of the
Borrower to make any payment with respect to the Subordinated Debt by reason of
the operation of Section 2.3 shall not be construed as preventing the occurrence
of a Subordinated Debt Default under the applicable Subordinated Debt Documents.
 
The provisions of this Section 2.3 shall not apply to any payment with respect
to which Section 2.2 would be applicable.
 
2.4           
Subordinated Debt Standstill Provisions. Until the Senior Debt is Paid in Full,
no Subordinated Creditor shall, without the prior written consent of the Senior
Creditor take any Enforcement Action with respect to the Subordinated Debt.
 
2.5           
Incorrect Payments. If any Distribution on account of the Subordinated Debt not
permitted to be made by an Obligor or accepted by any Subordinated Creditor
under this Agreement is made and received by such Subordinated Creditor, such
Distribution shall not be commingled with any of the assets of such Subordinated
Creditor, shall be deemed to be held in trust by such Subordinated Creditor for
the benefit of the Senior Agent and shall be promptly paid over to the Senior
Agent (for the benefit of the Senior Creditor for application pro rata against
the outstanding amount of Senior Debt held by the Senior Creditor) to the
payment of the Senior Debt then remaining unpaid, until all of the Senior Debt
is Paid in Full.
 
 
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2.6            
Seniority of Liens Securing the Senior Debt. Each Subordinated Creditor by its
execution of this Agreement covenants and agrees, notwithstanding anything to
the contrary contained in any of the Subordinated Debt Transaction Documents,
that prior to the Payment in Full of the Senior Debt, each Subordinated
Creditor’s security interest in and Lien (as defined in the Senior Security
Agreement) on the Collateral (as defined in the Senior Security Agreement) to
secure the Subordinated Debt shall be and hereby are subordinate for all
purposes and in all respects to the Senior Agent's security interests in and
Liens on the Collateral to secure the Senior Debt, regardless of the order or
time of attachment, or the order, time or manner of perfection, or the order or
time of filing or recordation of any document or instrument, or other method of
perfecting a Lien. The Lien priorities set forth in the immediately preceding
sentence shall not be altered or otherwise affected by any amendment,
modification, supplement, extension, renewal, restatement, replacement or
refinancing of any of the Senior Debt or the Subordinated Debt, by any failure
to perfect the Senior Agent's security interest in the Collateral, the
subordination of the Senior Agent's Lien on the Collateral, the avoidance or
invalidation of the Senior Agent's Lien or by any other action or inaction which
any Senior Creditor may take or fail to take with respect to the Collateral. The
Subordinated Creditor shall not contest the validity, priority or perfection of
the Senior Creditor’s security interest in any collateral in which the
Subordinated Creditor may also have an interest. For the avoidance of doubt,
notwithstanding anything to the contrary contained in any of the Subordinated
Debt Transaction Documents, the Subordinated Creditors by their execution of
this Agreement consent to the Senior Agent’s filing of Liens (including, without
limitation, UCC-1 financing statements) against the assets of the Obligors. The
Senior Creditor may take action to foreclose or otherwise realize upon, or
protect its interest in, the collateral, in accordance with its agreements with
the Obligors, at any time, without the consent of the Subordinated Creditor, and
the Subordinated Creditor agrees not to interfere in a manner which would defeat
the purpose of this Agreement in connection therewith. So long as any part of
the Senior Debt is outstanding, if the Senior Creditor has agreed to release its
security interest in any of the collateral in connection with the realization of
any of its rights with respect to such collateral in any commercially reasonable
disposition, the Senior Creditor is hereby authorized as the Creditor’s attorney
in fact to execute releases and discharges of the Subordinated Creditor’s liens
and security interests in such collateral.
 
2.7             Sale, Transfer or other Disposition of Subordinated Debt.
 
(a)           
No Subordinated Creditor shall sell, assign, pledge, dispose of or otherwise
transfer all or any portion of the Subordinated Debt held by it or any
Subordinated Debt Transaction Document: (i) without giving prior written notice
of such action to the Senior Agent; and (ii) unless, prior to the consummation
of any such action, the transferee thereof shall execute and deliver to the
Senior Agent an agreement substantially identical to this Agreement, providing
for the continued subordination of the Subordinated Debt to the Senior Debt as
provided herein and for the continued effectiveness of all of the rights of the
Senior Agent and the Senior Creditor arising under this Agreement.
 
(b)           
Notwithstanding the failure of any transferee to execute or deliver an agreement
substantially identical to this Agreement, the subordination effected hereby
shall survive any sale, assignment, pledge, disposition or other transfer of all
or any portion of the Subordinated Debt, and the terms of this Agreement shall
be binding upon the successors and assigns of the Subordinated Creditors, as
provided in Section 10 hereof.
 
 
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2.8            
Legends. Until the termination of this Agreement in accordance with Section 16
hereof, each Subordinated Creditor will cause to be clearly, conspicuously and
prominently inserted on the face of the Subordinated Note, as well as any
renewals or replacements thereof, the following legend:
 
“This instrument and the rights and obligations evidenced hereby are subordinate
in the manner and to the extent set forth in that certain Subordination and
Intercreditor Agreement (the “Subordination Agreement”) dated as of [__],
2018 by and among the holders of Note (as such term is defined in the
Subordination Agreement) (collectively, the “Senior Creditor”) issued by the
Borrower (as defined below) pursuant to that certain Securities Purchase
Agreement dated as of [___], 2018, by and among the Borrower and the Senior
Creditor from time to time party thereto (as the same may be amended,
supplemented or otherwise modified from time to time subject to the terms of the
Subordination Agreement, the “Securities Purchase Agreement”), the holders of
the Subordinated Note (as such term is defined in the Subordination Agreement)
(collectively, the “Subordinated Creditors”), and the Borrower to the
indebtedness (including interest) owed by the Borrower to the Senior Creditor
under the Note and to indebtedness refinancing the indebtedness originally
issued in connection therewith, subject to the terms of the Subordination
Agreement; and each holder of this instrument, by its acceptance hereof,
irrevocably agrees to be bound by the provisions of the Subordination
Agreement.”
 
3.            
Modifications to Transaction Documents; Subordinated Debt Transaction Documents.
The Transaction Documents may be amended, restated, supplemented or otherwise
modified in accordance with, and to the extent permitted by, the terms and
provisions contained in the Transaction Documents. The Subordinated Debt
Transaction Documents may not be amended, restated, supplemented or otherwise
modified without the prior consent of all of the Note holders.
4.            
Waiver of Certain Rights by Subordinated Creditor. Each Subordinated Creditor
hereby waives any rights it may have under applicable law to assert the doctrine
of marshaling or to otherwise require the Senior Agent or the Senior Creditors
to marshal any property of the Borrower or any other Obligor of the Senior Debt
for the benefit of such Subordinated Creditor or to pursue any other remedy in
its power. The Subordinated Creditors waive notice of acceptance of this
Agreement and presentment, demand, protest, notice of protest, dishonor, notice
of dishonor, notice of default, notice of intent to accelerate or demand payment
of any Senior Debt any and all other notices to which the Subordinated Creditor
might otherwise be entitled, and diligence in collecting any Senior Debt, and
agrees that the Senior Creditor may, once or any number of times, modify the
terms of any Senior Debt, compromise, extend, increase, accelerate, renew or
forbear to enforce payment of any or all Senior Debt, , all without notice to
the Subordinated Creditor and without affecting in any manner the unconditional
obligations of the Subordinated Creditor under this Agreement
 
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5.             

Representations and Warranties.
 
5.1           
Representations and Warranties of Each Subordinated Creditor. Each Subordinated
Creditor hereby represents and warrants to the Senior Creditors that as of the
date hereof: (a) if such Subordinated Creditor is a corporation, limited
liability company, limited partnership or partnership, as applicable, it is duly
formed and validly existing under the laws of the state of its organization or
formation; (b) such Subordinated Creditor has the power and authority and, in
the case of any Subordinated Creditor that is a natural person, the legal
capacity, to enter into, execute, deliver and carry out the terms of this
Agreement, all of which have been duly authorized by all proper and necessary
action; (c) the execution of this Agreement by such Subordinated Creditor will
not violate or conflict with the organizational documents of such Subordinated
Creditor, (if other than a natural person) any material agreement binding upon
such Subordinated Creditor or any law, regulation or order or require any
consent or approval which has not been obtained; (d) this Agreement is the
legal, valid and binding obligation of such Subordinated Creditor, enforceable
against such Subordinated Creditor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by equitable principles; (e) such Subordinated
Creditor is the sole owner, beneficially and of record, of the Subordinated Debt
Transaction Documents and the Subordinated Debt; and (f) the Subordinated Debt
is, and at all times prior to the termination of this Agreement shall remain, an
unsecured obligation of the Borrower. The Subordinated Creditors deliver this
Agreement based solely on their independent investigation of (or decision not to
investigate) the financial condition of the Borrower and are not relying on any
information furnished by the Senior Creditor. The Subordinated Creditor assumes
full responsibility for obtaining any further information concerning the
Borrower’s financial condition, the status of the Senior Debt or any other
matter which the Subordinated Creditor may deem necessary or appropriate now or
later.
 
5.2           
Representations and Warranties of Senior Agent. The Senior Agent hereby
represents and warrants to the Subordinated Creditors that as of the date
hereof: (a) the Senior Agent is a limited liability company duly formed and
validly existing under the laws of the state of its organization or formation;
(b) the Senior Agent has the power and authority to enter into, execute, deliver
and carry out the terms of this Agreement, all of which have been duly
authorized by all proper and necessary action; (c) the execution of this
Agreement by Senior Agent will not violate or conflict with the organizational
documents of the Senior Agent, any material agreement binding upon the Senior
Agent or any law, regulation or order or require any consent or approval which
has not been obtained; and (d) this Agreement is the legal, valid and binding
obligation of the Senior Agent, enforceable against the Senior Agent in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally or by equitable
principles.
 
6.            
Subrogation. Until all Senior Debt is Paid in Full, each Subordinated Creditor
shall be subrogated to the rights of the Senior Agent (for the benefit of the
Senior Creditors) to receive Distributions with respect to the Senior Debt until
the Subordinated Debt is paid in full. Each Subordinated Creditor agrees that in
the event that all or any part of a payment made with respect to the Senior Debt
is recovered from the holders of the Senior Debt in a Proceeding or otherwise,
any Distribution received by such Subordinated Creditor with respect to the
Subordinated Debt at any time after the date of the payment that is so
recovered, whether pursuant to the right of subrogation provided for in this
Agreement or otherwise, shall be deemed to have been received by such
Subordinated Creditor in trust as property of the holders of the Senior Debt,
and such Subordinated Creditor shall forthwith deliver the same to the Senior
Agent for application to the Senior Debt until the Senior Debt is Paid in Full.
A Distribution made pursuant to this Agreement to the Senior Agent for the
benefit of the Senior Creditors which otherwise would have been made to the
Subordinated Creditors is not, as between the Borrower and the Subordinated
Creditors, a payment by the Borrower to or on account of the Senior Debt.
 
 
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7.            
Modification. Any modification or waiver of any provision of this Agreement, or
any consent to any departure by any party from the terms hereof, shall not be
effective in any event unless the same is in writing and signed by the Senior
Agent and the Subordinated Creditors, and then such modification, waiver or
consent shall be effective only in the specific instance and for the specific
purpose given. Any notice to or demand on any party hereto in any event not
specifically required hereunder shall not entitle the party receiving such
notice or demand to any other or further notice or demand in the same, similar
or other circumstances unless specifically required hereunder.
 
8.            
Further Assurances. Each party to this Agreement promptly shall execute and
deliver such further instruments and agreements and do such further acts and
things as may be reasonably requested in writing by any other party hereto that
may be necessary or desirable in order to effect fully the purposes of this
Agreement.
 
9.            
Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, if delivered
personally; (ii) when sent, if sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); (iii) when sent, if sent by e-mail (provided that such sent
e-mail is kept on file (whether electronically or otherwise) by the sending
party and the sending party does not receive an automatically generated message
from the recipient’s e-mail server that such e-mail could not be delivered to
such recipient) and (iv) if sent by overnight courier service, one (1) Business
Day after deposit with an overnight courier service with next day delivery
specified, in each case, properly addressed to the party to receive the same.
The addresses, facsimile numbers and e-mail addresses for such communications
shall be:
 
If to the Borrower:
 
______________________
 
______________________
 
______________________
 
______________________
 
 
 
If to the Senior Agent:
 
GPB Debt Holdings II, LLC
535 West 24Th Street, Floor 4
New York, NY 10011
Attn: Evan Myrianthropoulos
Tim Cruetz
 
 
 
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If to a Senior Creditor or a Subordinated Creditor, to its address, facsimile
number set forth on the Schedule I, with copies to such Senior Creditor’s or
Subordinated Creditor’s representatives as set forth on the Schedule of Buyers,
 
with a copy (for informational purposes only) to:
 
Gracin & Marlow, LLP
 
The Chrysler Building
 
405 Lexington Avenue
New York, NY 10174
Telephone: (212) 907-6457
Facsimile: (212) 208-4657
Attention: Leslie Marlow, Esq.
 
or to such other address, facsimile number or e-mail address and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date and recipient facsimile number or (C) provided by an overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from an overnight courier service in accordance with clause (i), (ii)
or (iv) above, respectively. A copy of the e-mail transmission containing the
time, date and recipient e-mail address shall be rebuttable evidence of receipt
by e-mail in accordance with clause (iii) above.
 
10.            
Successors and Assigns. This Agreement shall inure to the benefit of, and shall
be binding upon, the respective successors and permitted assigns of the Senior
Agent, the Subordinated Creditors and the Borrower, in each case to the extent
permitted under this Agreement, the Subordinated Debt Transaction Documents and
the Securities Purchase Transaction Documents. Notwithstanding any such
assignment or transfer, or any subsequent assignment or transfer, the Senior
Debt shall, subject to the terms hereof, be and remain Senior Debt for purposes
of this Agreement, and every permitted assignee or transferee of any of the
Senior Debt or of any interest therein shall, to the extent of the interest of
such permitted assignee or transferee in the Senior Debt, be entitled to rely
upon and be the third party beneficiary of the subordination provided under this
Agreement and shall be entitled to enforce the terms and provisions hereof to
the same extent as if such assignee or transferee were initially a party hereto.
 
11.            
Relative Rights. This Agreement shall define the relative rights of the Senior
Agent (for the benefit of the Senior Creditors) and the Subordinated Creditors.
Nothing in this Agreement shall: (a) impair, as among the Obligors and the
Senior Creditors and as between the Borrower and the Subordinated Creditors, the
obligation of the Obligors with respect to the payment of the Senior Debt and
the obligation of the Borrower with respect to the payment of the Subordinated
Debt in accordance with their respective terms; or (b) affect the relative
rights of the Senior Agent (for the benefit of the Senior Creditor) or the
Subordinated Creditors with respect to any other creditors of the Borrower.
 
12.            
Conflict. In the event of any conflict between any term, covenant or condition
of this Agreement and any term, covenant or condition of any of the Subordinated
Debt Transaction Documents and/or the Transaction Documents, the provisions of
this Agreement shall control and govern.
 
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13.            
Headings. The paragraph headings used in this Agreement are for convenience only
and shall not affect the interpretation of any of the provisions hereof.
 
14.            
Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission or in a pdf or similar electronic file shall
be effective as delivery of a manually executed counterpart hereof.
 
15.            
Severability. In the event that any provision of this Agreement is deemed to be
invalid, illegal or unenforceable by reason of the operation of any law or by
reason of the interpretation placed thereon by any court or governmental
authority, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired thereby, and the
affected provision shall be modified to the minimum extent permitted by law so
as most fully to achieve the intention of this Agreement.
 
16.            
Continuation of Subordination; Termination of Agreement. This Agreement shall
remain in full force and effect until the Senior Debt is Paid in Full after
which this Agreement shall terminate without further action on the part of the
parties hereto.
 
17.            
Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall
be deemed or operate to preclude the Senior Agent or any Subordinated Creditor
from bringing suit or taking other legal action against the Obligors or the
Original Obligors, as the case may be, in any other jurisdiction to collect on
the Obligors or the Senior Obligors’, as the case may be, obligations to such
Senior Agent or Subordinated Creditor or to enforce a judgment or other court
ruling in favor of such Senior Agent or Subordinated Creditor. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
 
[Signatures Immediately Follow]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
 
BORROWER
 
 
 
MEDITE CANCER DIAGNOSTICS, INC.
 
 
 
By:  Name:
       Title:
 

 
 
Signature Page to Subordination and Intercreditor Agreement
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
 
SENIOR AGENT :
GPB DEBT HOLDINGS II, LLC By:
                                                              
Name:
Title:
 
Signature Page to Subordination and Intercreditor Agreement
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
 
SUBORDINATED CREDITORS :
____________________________________
Signature Page to Subordination and Intercreditor Agreement
-15-

 
SCHEDULE I
 
Senior Creditors
 
Name:

Address:

GPB Debt Holdings II, LLC
535 West 24Th Street, Floor 4
New York, NY 10011

 
 
 
Subordinated Creditors
 
Name:

Address and Facsimile Number:

 
 
 
 

 
 
 
 
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