Document:

Exhibit

Exhibit 10.23
    

THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of February 27, 2020 (the “Amendment Effective Date”), is made among GenMark Diagnostics, Inc., a Delaware corporation (“GenMark”), Clinical Micro Sensors, Inc., a Delaware corporation (“CMS”), and Osmetech Inc., a Delaware corporation (“Osmetech”, and together with GenMark and CMS, individually and collectively, jointly and severally, “Borrower”), Solar Capital Ltd., a Maryland corporation (“Solar”), in its capacity as collateral agent (in such capacity, “Collateral Agent”) and the Lenders listed on Schedule 1.1 of the Loan and Security Agreement (as defined below) or otherwise a party hereto from time to time including Solar in its capacity as a Lender (each a “Lender” and collectively, the “Lenders”).
Borrower, the Lenders and Collateral Agent are parties to a Loan and Security Agreement dated as of February 1, 2019 (as amended by that certain First Amendment to Loan and Security Agreement dated as of October 29, 2019 (the “First Amendment”), as further amended by that certain Second Amendment to Loan and Security Agreement dated as of December 16, 2019, and as further amended, restated or modified from time to time, the “Loan and Security Agreement”).  Borrower has requested that the Lenders agree to certain amendments to the Loan and Security Agreement.  The Lenders have agreed to such request, subject to the terms and conditions hereof.
Accordingly, the parties hereto agree as follows:
		
	SECTION 1
	Definitions; Interpretation.

(a)Terms Defined in Loan and Security Agreement.  All capitalized terms used in this Amendment (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan and Security Agreement.

(b)Interpretation.  The rules of interpretation set forth in Section 1.1 of the Loan and Security Agreement shall be applicable to this Amendment and are incorporated herein by this reference.

SECTION 2Amendments to the Loan and Security Agreement.  

(a)Effective as of the Amendment Effective Date, the Loan and Security Agreement shall be amended by amending and restating the following definitions as follows:

(i)“Amortization Date” is, March 1, 2021; provided that if the Interest Only Extension Conditions are satisfied and the Borrower so elects in writing, then March 1, 2022.  

(ii)“Interest Only Extension Conditions” are satisfaction of each of the following: (a) no Default or Event of Default shall have occurred and is continuing and (b) Borrower shall have provided evidence to Collateral Agent satisfactory to Collateral Agent in its reasonable discretion that Borrower has achieved product revenues (as determined under GAAP) of greater than or equal to $[***] on a trailing six-month basis for the period ending March 31, 2020.

(b)References Within Loan and Security Agreement.  Each reference in the Loan and Security Agreement to “this Agreement” and the words “hereof,” “herein,” “hereunder,” or words of like import, shall mean and be a reference to the Loan and Security Agreement as amended by this Amendment.

SECTION 3Conditions of Effectiveness.  The effectiveness of Section 2 of this Amendment shall be subject to the satisfaction of each of the following conditions precedent:

Certain identified information has been omitted from this document because it is both not material and would be competitively harmful if publicly disclosed, and has been marked with "[***]" to indicate where omissions have been made.

(a)Fees and Expenses.  Borrower shall have paid (i) to Collateral Agent a fully-earned, non-refundable amendment closing fee in the amount of $[***], to be shared between the Lenders in accordance with their respective Pro Rata Shares, (ii) all invoiced costs and expenses then due in accordance with Section 5(d), and (iii) all other fees, costs and expenses, if any, due and payable as of the Amendment Effective Date under the Loan and Security Agreement.

(b)This Amendment.  Collateral Agent shall have received this Amendment, executed by Collateral Agent, the Lenders and Borrower.

(c)Representations and Warranties; No Default.  On the Amendment Effective Date, after giving effect to the amendment of the Loan and Security Agreement contemplated hereby:

(i)The representations and warranties contained in Section 4 shall be true and correct on and as of the Amendment Effective Date as though made on and as of such date; and

(ii)There exist no Events of Default or events that with the passage of time would result in an Event of Default.
(iii)

SECTION 4Representations and Warranties.  To induce the Lenders to enter into this Amendment, Borrower hereby confirms, as of the date hereof, (a) that the representations and warranties made by it in Section 5 of the Loan and Security Agreement and in the other Loan Documents are true and correct in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof, provided, further, that to the extent such representations and warranties by their terms expressly relate only to a prior date such representations and warranties shall be true and correct as of such prior date; (b) that there has not been and there does not exist a Material Adverse Change; (c) that the information included in the Perfection Certificate delivered to Collateral Agent on the Effective Date, as updated by Exhibit A attached to the First Amendment, and as further updated by Exhibit A attached hereto, is true and correct; (d) Lender has and shall continue to have valid, enforceable and perfected first-priority liens, subject only to Permitted Liens, on and security interests in the Collateral and all other collateral heretofore granted by Borrower to Lender, pursuant to the Loan Documents or otherwise granted to or held by Lender; (e) the agreements and obligations of Borrower contained in the Loan Documents and in this Amendment constitute the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights or by the application of general principles of equity; and (f) the execution, delivery and performance of this Amendment by Borrower will not violate any law, rule, regulation, order, contractual obligation or organizational document of Borrower and will not result in, or require, the creation or imposition of any lien, claim or encumbrance of any kind on any of its properties or revenues.  For the purposes of this Section 4, each reference in Section 5 of the Loan and Security Agreement to “this Agreement,” and the words “hereof,” “herein,” “hereunder,” or words of like import in such Section, shall mean and be a reference to the Loan and Security Agreement as amended by this Amendment.

SECTION 5Miscellaneous.

(a)Loan Documents Otherwise Not Affected; Reaffirmation; No Novation.  

(i)Except as expressly amended pursuant hereto or referenced herein, the Loan and Security Agreement and the other Loan Documents shall remain unchanged and in full force and effect and are hereby ratified and confirmed in all respects.  The Lenders’ and Collateral Agent’s execution and delivery of, or acceptance of, this Amendment shall not be deemed to create a course of dealing or otherwise create any express or implied duty by any of them to provide any other or further amendments, consents or waivers in the future.  

(ii)Borrower hereby expressly (1) reaffirms, ratifies and confirms its Obligations under the Loan and Security Agreement and the other Loan Documents, (2) reaffirms, ratifies and confirms the grant of security under Section 4.1 of the Loan and Security Agreement, (3) reaffirms that such grant of security in the Collateral secures all Obligations under the Loan and Security Agreement, and with effect from (and including) the Amendment Effective Date, such grant of security in the Collateral: (x) remains in full force and effect notwithstanding the amendments expressly referenced herein; and (y) secures all Obligations under the Loan and Security Agreement, as amended by this Amendment, and the other Loan Documents, (4) agrees that this Amendment shall be a “Loan Document” under the Loan and Security Agreement and (5) agrees that the Loan and Security Agreement and each other Loan Document shall remain in full force and effect following any action contemplated in connection herewith.

(iii)This Amendment is not a novation and the terms and conditions of this Amendment shall be in addition to and supplemental to all terms and conditions set forth in the Loan Documents. Nothing in this Amendment is intended, or shall be construed, to constitute an accord and satisfaction of Borrower’s Obligations under or in connection with the Loan and Security Agreement and any other Loan Document or to modify, affect or impair the perfection or continuity of Collateral Agent’s security interest in, (on behalf of itself and the Lenders) security titles to or other liens on any Collateral for the Obligations.

(b)Conditions.  For purposes of determining compliance with the conditions specified in Section 3, each Lender that has signed this Amendment shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Collateral Agent shall have received notice from such Lender prior to the Amendment Effective Date specifying its objection thereto.

(c)No Reliance.  Borrower hereby acknowledges and confirms to Collateral Agent and the Lenders that Borrower is executing this Amendment on the basis of its own investigation and for its own reasons without reliance upon any agreement, representation, understanding or communication by or on behalf of any other Person.

(d)Costs and Expenses.  Borrower agrees to pay to Collateral Agent within ten (10) days of its receipt of an invoice (or on the Amendment Effective Date to the extent invoiced on or prior to the Amendment Effective Date), the reasonable, documented out-of-pocket costs and expenses of Collateral Agent and the Lenders party hereto, and the reasonable, documented fees and disbursements of counsel to Collateral Agent and the Lenders party hereto, in connection with the negotiation, preparation, execution and delivery of this Amendment and any other documents to be delivered in connection herewith on the Amendment Effective Date or after such date.

(e)Binding Effect.  This Amendment binds and is for the benefit of the successors and permitted assigns of each party.  

(f)Governing Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES that would result in the application of any laws other than the laws OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE COLLATERAL.

(g)Complete Agreement; Amendments.  This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements with respect to such subject matter.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.  

(h)Severability of Provisions.  Each provision of this Amendment is severable from every other provision in determining the enforceability of any provision.

(i)Counterparts.  This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Amendment.  Delivery of an executed counterpart of a signature page of this Amendment by facsimile, portable document format (.pdf) or other electronic transmission will be as effective as delivery of a manually executed counterpart hereof.

(j)Loan Documents. This Amendment and the documents related thereto shall constitute Loan Documents.

[Balance of Page Intentionally Left Blank; Signature Pages Follow] 

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of the date first above written.
BORROWER:

GENMARK DIAGNOSTICS, INC.,
as Borrower

By: /s/ Johnny Ek    
Name: Johnny Ek
Title:   CFO

CLINICAL MICRO SENSORS, INC.,
as Borrower

By: /s/ Johnny Ek    
Name: Johnny Ek
Title:   CFO

OSMETECH INC.,
as Borrower

By: /s/ Johnny Ek    
Name: Johnny Ek
Title:   CFO

|
COLLATERAL AGENT AND LENDERS:

SOLAR CAPITAL LTD.,
as Collateral Agent and a Lender

By:  /s/ Anthony J. Storino    
Name: Anthony J. Storino
Title:   Authorized Signatory

SUNS SPV LLC,
as a Lender

By:  /s/ Anthony J. Storino    
Name: Anthony J. Storino
Title:   Authorized Signatory

SCP PRIVATE CREDIT INCOME FUND SPV LLC,
as a Lender

By:  /s/ Anthony J. Storino    
Name: Anthony J. Storino
Title:   Authorized Signatory

Exhibit A
[Intentionally Omitted]Exhibit

Exhibit 10.37
	
			
	

                  
	 
	

5964 La Place Court
Carlsbad, CA 92008
www.genmarkdx.com

October 12, 2016

Brian Mitchell
[ADDRESS]

Dear Brian:

Clinical Micro Sensors, Inc. d.b.a. GenMark Diagnostics ("GenMark Dx") is pleased to offer you employment in the position of VP, Operations, reporting to Hany Massarany, with a start date of Monday, November 7, 2016.

Your annual gross salary will be $240,000 to be paid on a bi-weekly basis in keeping with GenMark Dx's standard payroll practices and procedures. In addition, you will be eligible to participate in the GenMark Dx performance incentive bonus program with a potential variable earning opportunity of 40% of your base salary beginning with the performance period of January 1, 2017 to December 31, 2017. 

We are also pleased to inform you that the Company will recommend for you to be granted 30,0000 GenMark Diagnostics, Inc. Restricted Shares subject to board approval and blackout windows. The shares will be granted at the closing price on the date of the grant. The Restricted Shares vesting schedule would be a 25% cliff vest at the one year anniversary of the date of grant and the remaining 75% in equal quarterly installments for three years thereafter. 

Additionally, as a member of the GenMark Dx Senior Leadership Team, you will also be eligible for accelerated vesting upon a  Change in Control, per GenMark Dx's "Amendment of Stock Option Agreement."

The Company will also provide you with a signing bonus of $25,000 payable as soon as practicable following your start date. In the event that you terminate voluntarily from the company within one (1) year of employment, GenMark may seek a pro-rated reimbursement of your signing bonus.

You will also be entitled to participate in the benefit plans offered by GenMark Dx, subject to the eligibility requirements, terms and conditions of those plans. The benefits offered at this time include 15 vacation days, 10 sick days, holiday pay, life insurance, health insurance, disability insurance, Employee Stock Purchase Plan, and a 401k plan, in accordance with GenMark Dx policies and subject to the company's right to modify, add, and delete any benefit plan. 

You understand and agree that during your employment you are required to comply with GenMark Dx's policies and procedures. In making you this offer, we relied on your representation that you are not bound by any non-compete or non-solicitation provision that would prevent or restrict you from carrying out your job responsibilities for GenMark Dx. You also promise and represent that you will not bring with you to GenMark Dx, or use while employed by the Company, any confidential or trade secret information of a previous employer.

In addition, as a condition of accepting this offer, you are also agreeing that you have reviewed and signed the enclosed Confidentiality and Invention Assignment Agreement.

Employment with GenMark Dx is "employment at will." This means that your employment is not for a designated period of time and that either you or GenMark Dx can terminate the employment at any time, with or without cause. The at-will nature of this employment relationship cannot be changed except by an express written agreement signed by the Chairman of GenMark Dx. The other terms of this offer of employment may not be amended without an express written agreement signed by both parties. 

This job offer is also contingent upon successful completion of a post offer, pre-employment background check and drug screen. 

Please sign the acceptance below and sign the enclosed Confidentiality and Invention Assignment Agreement to formally accept this offer of employment. This offer will expire by Friday, October 14, 2016 if not accepted beforehand.

Congratulations and we look forward to welcoming you to the GenMark Dx team during this very exciting phase of our company's transition.

Sincerely,

	
	
	/s/  Jennifer Williams

	Jennifer Williams

	SVP, Human Resources

By accepting, I agree to all terms of this offer and the Confidentiality and Invention Assignment Agreement. 

	
	
	/s/  Brian Mitchell

	October 13, 2016

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