Document:

Ex10-6

Exhibit 10.6

 

SECURITIES PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (as amended, restated, supplemented
or otherwise modified from time to time, this
“Agreement”) is dated as of September 26, 2017, between
Medite Cancer Diagnostics, Inc., a Delaware corporation (the
“Company”), and the purchasers identified on the
signature pages hereto (including its successors and permitted
assigns, the “Purchasers”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to an exemption from the registration requirements of Section 5 of
the Securities Act contained in Section 4(a)(2) thereof and/or Rule
506(b) thereunder, the Company desires to issue and sell to
Purchasers, and Purchasers desire to purchase from the Company,
securities of the Company as more fully described in this
Agreement.

 

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and Purchasers agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

1.1         Definitions.
In addition to the words and terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms
have the meanings set forth in this Section
1.1:

 

“Action”
shall have the meaning ascribed to such term in Section
3.1(j).

 

“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.

 

“Board of
Directors” means the board of directors of the
Company.

 

“Business
Day” means any day except any Saturday, any Sunday, any day
which is a federal legal holiday in the United States or any day on
which banking institutions in the State of New York are authorized
or required by law or other governmental action to
close.

 

“Closing”
means the closing of the purchase and sale of the Securities
pursuant to Section 2.1.

 

“Closing
Date” means the Business Day on which all of the Transaction
Documents have been executed and delivered by the applicable
parties thereto pursuant to Section 2.2(a) and Section 2.2(b), and
all conditions precedent to (i) Purchaser’s obligations to
pay the Subscription Amount as to the and (ii) the Company’s
obligations to deliver the Securities have been satisfied or
waived.

 

“Collateral
Agent” shall have the meaning ascribed in the Security
Agreement.

 

“Common
Stock” means the common stock of the Company, par value
$0.001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.

 

“Common Stock
Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, any debt,
preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or
otherwise entitles the holder thereof to receive, Common
Stock.

 

“Company
Counsel” means Taft Stettinius & Hollister
LLP.

 

“Conversion
Price” shall have the meaning set forth in the
Notes.

 

“Developer”
shall have the meaning ascribed to such term in Section
3.1(o)(v).

 

“Disqualification
Event” shall have the meaning ascribed to such term in
Section 3.1(z).

 

 

 

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“Environmental
Laws” shall have the meaning ascribed to such term in Section
3.1(l).

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

 

“Exempt
Issuance” means the issuance of: (a) securities to employees,
officers or directors of, or consultants to, the Company, pursuant
to any stock or option plan duly adopted for such purpose and
approved by a majority of the non-employee members of the Board of
Directors or a majority of the members of a committee of
non-employee directors established for such purpose for services
rendered to the Company, (b) securities upon the exercise or
exchange of or conversion of any Securities issued hereunder, (c)
securities issued pursuant to any purchase money equipment loan or
capital leasing arrangement, real property leasing arrangement or
debt financing from a commercial bank or similar financial
institution, (d) securities in full or partial consideration in
connection with a bona fide strategic merger, acquisition,
consolidation or purchase of all or substantially all of the
securities or assets of a corporation or other entity approved by a
majority of the non-employee members of the Board of Directors, so
long as such issuance is not for the primary purpose of raising
capital by the Company, and (e) securities upon a stock split,
stock dividend or subdivision of the Common Stock.

 

“GAAP”
shall have the meaning ascribed to such term in Section
3.1(h).

 

“Guaranty
Agreements” means the Guaranty Agreements in the in the form
of Exhibit E
attached hereto.

 

“GPB
Note” means the $5,356,400 face value original issue discount
13.25% Senior Secured Convertible Note issued to GPB Debt Holdings
II, LLC, which shall be secured by a first priority lien on the
assets of the Company pursuant to a security agreement and
guaranteed pursuant to guaranty agreements.

 

“Hazardous
Materials” shall have the meaning ascribed to such term in
Section 3.1(l).

 

“Indebtedness”
means, with respect to any Person, without duplication, (i) all
indebtedness or liabilities for borrowed money or amounts owed in
excess of $10,000 (other than trade payables in the normal course
of business) (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not
the same are or should be reflected in the Company’s
consolidated balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business; and (z) the present value of any lease payments in excess
of $5,000 due under leases required to be capitalized in accordance
with GAAP.

 

“Independent
Third Party” means any Person who, immediately prior to the
contemplated transaction: (a) is not an officer or director of the
Company or an Affiliate of an officer or director of the Company,
(b) a Purchaser or an Affiliate of a Purchaser, (c) does not,
collectively with its Affiliates, own in excess of 10% of the
Common Stock on a fully-diluted basis (a “10% Owner”)
and is not an Affiliate of a 10% Owner, (d) is not the spouse or
descendent (by birth or adoption) of a Purchaser or 10% Owner or a
trust for the benefit of any 10% Owner (or their respective spouses
or descendants), and (e) is not a Person who through contract or
other arrangements (other than arrangements entered into in
connection with the contemplated transaction) would be an Affiliate
of any officer or director of the Company, the Purchaser, any 10%
Owner or the Company immediately after the contemplated
transaction.

 

“Intellectual
Property” means all of the following in any jurisdiction
throughout the world: (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all
improvements thereto, and all U.S. and foreign patents, patent
applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (b) all trademarks, service
marks, brand names, certification marks, trade dress, logos, trade
names, domain names, assumed names and corporate names, together
with all colorable imitations thereof, and including all goodwill
associated therewith, and all applications, registrations, and
renewals in connection therewith, (c) all copyrights, and all
applications, registrations, and renewals in connection therewith,
(d) all trade secrets under applicable state Laws and the common
Law and know-how (including formulas, techniques, technical data,
designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and
proposals), (e) all computer software (including source code,
object code, diagrams, data and related documentation), and (f) all
copies and tangible embodiments of the foregoing (in whatever form
or medium).

 

 

 

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“Intellectual
Property Agreement(s)” has the meaning set forth in Section
3.1(o)(iii) and in the form of Exhibit D attached
hereto.

 

“Irrevocable
Transfer Agent Instructions” has the meaning ascribed to such
term in Section 2.2(a)(vii).

 

“Issuer
Covered Person(s)” shall have the meaning ascribed to such
term in Section 3.1(z).

 

“Licensed
Intellectual Property Agreement” shall have the meaning
ascribed to such term in Section 3.1(o)(iv).

 

 “Liens”
means a lien, charge, pledge, security interest, encumbrance, right
of first refusal, preemptive right or other
restriction.

 

“Material
Adverse Effect” means: (a) a material adverse effect on the
legality, validity or enforceability of any Transaction Document,
(b) a material adverse effect on the results of operations, assets,
business, prospects or condition financial or otherwise of the
Company and the Subsidiaries, taken as a whole, in the long term or
(c) a material adverse effect on the Company’s ability to
perform in any material respect on a timely basis its obligations
under any Transaction Document; provided, however, that none of the
following shall be taken into account in determining whether there
has been, or could be, a Material Adverse Effect: (i) any adverse
change, event, development, or effect (whether short-term or
long-term) arising from or relating to (1) general business or
economic conditions, including such conditions related to the
business of the Company and its Subsidiaries, (2) any national or
international political or social conditions, (3) financial,
banking, or securities markets (including any disruption thereof
and any decline in the price of any security or any market index),
(4) changes in GAAP, (5) changes in laws, rules, regulations,
orders, or other binding directives issued by any governmental
entity, or (6) the taking of any action contemplated by any
Transaction Document, (ii) any failure to meet a forecast (whether
internal or published) of revenue, earnings, cash flow, or other
data for any period or any change in such a forecast, and (iii) any
existing event, occurrence, or circumstance with respect to which a
Purchaser has knowledge as of the date hereof.

 

“Material
Agreements” shall have the meaning ascribed to such term in
Section 3.1(aa).

 

“Material
Permits” shall have the meaning ascribed to such term in
Section 3.1(m).

 

“Maturity
Date” shall have the meaning ascribed to such term in the
Notes.

 

“Notes”
means the aggregate $572,649.58 face value original issue discount
13.25% Secured Convertible Notes issued to the Purchaser, in the
form of Exhibit A
attached hereto, which shall be secured pursuant to a Security
Agreement and guaranteed pursuant to the Guaranty
Agreements.

 

“Permitted
Liens” shall have the meaning set forth in the
Note.

 

“Person”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.

 

“Pre-Notice”
shall have the meaning ascribed to such term in Section
4.7(a).

 

“Proceeding”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or
partial proceeding, such as a deposition), whether commenced or
threatened.

 

“Purchaser
Party” shall have the meaning ascribed to such term in
Section 4.5.

 

 

 

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“Registrable
Securities” shall have the meaning ascribed to such term in
the Registration Rights Agreement and means, collectively (i) the
shares of common stock issuable upon conversion of the GPB Note and
the Note Shares (the Note Shares to be subject to cut back if any
is required before any cut backs are made to the shares of Common
Stock issuable upon conversion of the GPB Note); (ii) the Warrant
Shares; and (iii) any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar
event with respect to the foregoing; provided, that the holder of
such Registrable Securities has completed and delivered to the
Company a Selling Stockholder Questionnaire provided therein; and
provided,
further, that the
Note Shares and Warrant Shares shall cease to be Registrable
Securities upon the sale pursuant to a Registration Statement or
Rule 144 under the Securities Act (in which case, only such
security sold shall cease to be a Registrable
Security).

 

“Registration
Rights Agreement” means the Registration Rights Agreement in
the in the form of Exhibit
G attached hereto.

 

“Registration
Statement” shall have the meaning ascribed to such term in
the Registration Rights Agreement.

 

“Required
Approvals” shall have the meaning ascribed to such term in
Section 3.1(e).

 

“Rule
144” means Rule 144 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted
by the SEC having substantially the same purpose and effect as such
Rule.

 

“SEC”
means the United States Securities and Exchange
Commission.

 

“SEC
Documents” shall have the meaning ascribed to such term in
Section 3.1(h)

 

“Securities”
means the Note, the Shares, the Warrant and the Warrant
Shares.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

 

“Security
Agreement” means the security agreement, in the form of
Exhibit C attached
hereto, providing the Purchasers with a second lien on all of the
assets of the Company other than as provided in this
Agreement.

 

“Shares”
means the Common Stock issuable upon conversion of the
Note.

 

“Subscription
Amount” means $1,462,500 payable in United States dollars and
in immediately available funds.

 

“Subsidiary”
means with respect to any entity at
any date, any direct or indirect corporation, limited or general
partnership, limited liability company, trust, estate, association,
joint venture or other business entity of which (a) more than
50% of (i) the outstanding capital stock having (in the absence of
contingencies) ordinary voting power to elect a majority of the
board of directors or other managing body of such entity, (ii) in
the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited
liability company or (iii) in the case of a trust, estate,
association, joint venture or other entity, the beneficial interest
in such trust, estate, association or other entity business is, at
the time of determination, owned or controlled directly or
indirectly through one or more intermediaries, by such entity, or
(b) is under the actual control of the Company.

 

“Transaction
Documents” means this Agreement, the Note, the Warrant, the
Security Agreement, the Guaranty Agreement, the Registration Rights
Agreement and any other documents or agreements executed in
connection with the transactions contemplated
hereunder.

 

“Transfer
Agent” means Computershare, the current transfer agent of the
Company, with a mailing address of 33 N. LaSalle Street,
11th
Floor, Chicago, Illinois 60602 and any successor
transfer agent of the Company.

 

 

 

-4-

 

 

“Variable
Rate Transaction” shall have the meaning ascribed in Section
4.8(a).

 

“Warrants”
means the purchase warrants to initially purchase an aggregate
440,501 shares of Common Stock a number of shares of Common Stock
equal to 50% of the Shares, subject to adjustment as described
therein delivered to the Purchasers in accordance with Section
2.2(a) hereof, in the form of Exhibit B attached
hereto.

 

“Warrant
Exercise Price” shall equal the Conversion
Price.

 

“Warrant
Shares” means the shares of Common Stock issuable upon
exercise of the Warrant at the Warrant Exercise Price.

 

ARTICLE II.

 

PURCHASE
AND SALE

 

2.1           Purchase
and Closing.
Closing.
On the Closing Date, upon the terms and subject to the conditions
set forth herein, the Company agrees to sell, and the Purchasers
agree to purchase, the Note and the Warrant. Purchasers shall
deliver to the Company, via wire transfer immediately available
funds equal to the Subscription Amount, and the Company shall
deliver to the Purchasers the Notes and Warrants on the Closing
Date, and the Company and the Purchasers shall deliver the other
items set forth in Section 2.2 deliverable at the Closing. Upon
satisfaction of the covenants and conditions set forth in Sections
2.2 and 2.3, the Closing shall occur at the offices of Company
Counsel or such other location as the parties shall mutually
agree.

 

2.2         Deliveries.

 

(a)           On
or prior to the Closing, the Company shall deliver or cause to be
delivered to the Purchasers the following:

 

(i)           this
Agreement duly executed by the Company;

 

(ii)           the
Guaranty Agreements duly executed by each of MEDITE Enterprise,
Inc., MEDITE GmbH, MEDITE GmbH, MEDITE Lab Solutions Inc., MEDITE
sp.zo.o, and CytoGlobe, GmbH;

 

(iii)           a
Security Agreement providing the Purchasers with a second lien on
all of the assets of the Company and its Subsidiaries;

 

(iv)           
the Notes registered in the name of the Purchasers;

 

(v)           
the Warrants, exercisable at the applicable Warrant Exercise Price,
registered in the name of the Purchasers to purchase up to a number
of shares of Common Stock equal to 50% of the Shares, subject to
adjustment as described therein;

 

(vi)           Within
two (2) Business Days prior to the Closing, the Company and each
Subsidiary shall have delivered or caused to be delivered to the
Purchasers and the Collateral Agent a perfection certificate, duly
completed and executed by the each, in form and substance
satisfactory to the Purchasers;

 

(vii) irrevocable instructions from the
Company to the Transfer Agent and any subsequent transfer agent in
the form satisfactory to the Purchasers (the “Irrevocable Transfer Agent
Instructions”) to issue certificates or credit shares
to the applicable balance accounts at The Depository Trust Company
registered in the name of the Purchasers or its respective
nominee(s), for the shares of Common Stock issuable upon conversion
of the Notes and exercise of the Warrant;

 

(viii)
an Officer’s Certificate of the Company and each Subsidiary
certifying as to the conditions set forth in Section
2.3(a);

 

(ix) a
Secretary’s Certificate of the Company and each Subsidiary in
form and substance reasonably satisfactory to the
Purchasers;

 

 

 

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(x)
Good standing certificates as of a recent date evidencing the good
standing of the Company and each Subsidiary in its jurisdiction of
organization, if applicable or such concept has
meaning;

 

(xi)
a Solvency Certificate in form and substance satisfactory to the
Purchasers;

 

(xii) the Registration Rights Agreement attached
hereto as Exhibit
G.

 

(b)           On
or prior to each Closing, the Purchasers shall deliver or cause to
be delivered to the Company the following:

 

(i)

the Subscription
Amount subject to the closing by wire transfer; and

 

(ii)

Subordination and
Intercreditor Agreement by and among the Company, the Purchasers
and the senior lenders set forth therein.

 

2.3         Closing
Conditions.

 

(a)           The
obligations of the Company hereunder in connection with the Closing
are subject to the following conditions being
met:

 

(i)           the
accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the date
of the Closing of the representations and warranties of the
Purchasers contained herein (unless as of a specific date therein
in which case they shall be accurate as of such date);

 

(ii)           all
obligations, covenants and agreements of Purchasers required to be
performed at or prior to the date of the Closing shall have been
performed; and

 

(iii)           the
delivery by Purchasers of the items set forth in Section 2.2(b) of
this Agreement.

 

(b)           The
obligations of the Purchasers hereunder in connection with each
Closing are subject to the following conditions being
met:

 

(i)           the
accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the date
of the Closing of the representations and warranties of the Company
contained herein (unless as of a specific date therein in which
case they shall be accurate as of such date);

 

(ii)           all
obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing shall have been
performed;

 

(iii)           the
delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement; and

 

(iv)           there
shall have been no Material Adverse Effect with respect to the
Company since the date hereof.

 

 

 

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ARTICLE III.

 

REPRESENTATIONS
AND WARRANTIES

 

3.1         Representations
and Warranties of the Company. Except as set forth in
the Disclosure Schedules, which Disclosure Schedules shall be
deemed a part hereof and shall qualify any representation or
otherwise made herein to the extent of the disclosure contained in
the corresponding section of the Disclosure Schedules, the Company
hereby makes the following representations and warranties to
Purchasers as of the date hereof:

 

(a)           Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set
forth in Schedule
3.1(a). The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and
clear of any Liens, and all of the issued and outstanding shares of
capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.

 

(b)           Organization
and Qualification. The Company and each of the Subsidiaries
is an entity duly incorporated or otherwise organized, validly
existing and in good standing, if applicable, under the laws of the
jurisdiction of its incorporation or organization, with the
requisite power and authority to own and use its properties and
assets and to carry on its business as currently conducted. Neither
the Company nor any Subsidiary is in violation nor default of any
of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.
Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing, if applicable, as a
foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes
such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not have
or reasonably be expected to result in a Material Adverse Effect
and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

 

(c)           Authorization;
Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each
of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with
the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will
have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

(d)           No
Conflicts. The execution, delivery and performance by the
Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and
the consummation by it of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any
Subsidiary (other than as provided in the Transaction Documents),
or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise)
or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected.

 

 

 

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(e)           Filings,
Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.13 of this
Agreement, (ii) filings necessary to perfect the Liens in
favor of the Purchasers under the Security Agreement, and (iii)
such filings as are required to be made under applicable state
securities laws (collectively, the “Required
Approvals”).

 

(f)           Issuance
of the Securities. The Securities are duly authorized and,
when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the
Company. The Shares, when issued upon conversion of the Notes, and
the Warrant Shares, when issued in accordance with the terms of the
Warrants, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company. The Company has
reserved from its duly authorized capital stock a number of shares
of Common Stock issuable pursuant to the Notes and the Warrant
equal to the amount set forth in Section 4.6.

 

(g)           Capitalization.
The capitalization of the Company as of August , 2017 is as set
forth in Schedule
3.1(g). No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents.
Except as a result of the purchase and sale of the Securities, the
securities in favor of GPB pursuant to the Senior Documents, or as
set forth on Schedule
3.1(g), there are no outstanding options, warrants, scrip
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common
Stock or the capital stock of any Subsidiary, or contracts,
commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of
Common Stock or Common Stock Equivalents or capital stock of any
Subsidiary. The issuance and sale of the Securities will not
obligate the Company or any Subsidiary to issue shares of Common
Stock or other securities to any Person (other than the Purchaser)
and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under
any of such securities. There are no outstanding securities or
instruments of the Company or any Subsidiary that contain any
redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to redeem a security of the
Company or such Subsidiary. Schedule 3.1(g) lists all stock
appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement and all securities
issued thereunder . All of the outstanding shares of capital stock
of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and
state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to
subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities. Except as
set forth on Schedule
3.1(g), there are no stockholders agreements, voting
agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or,
to the knowledge of the Company, between or among any of the
Company’s stockholders.

 

(h)           SEC
Documents; Financial Statements. During the two (2) years prior to the date hereof,
the Company has filed all reports, schedules, forms, proxy
statements, information statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements
of the Exchange Act, excluding due dates (all of the foregoing
filed prior to the date hereof including, without limitation,
Current Reports on Form 8-K by the Company with the SEC whether
required to be filed or not (but excluding Item 7.01 thereunder)
and all exhibits and appendices included therein other than
Exhibits 99.1 to Form 8-K) and financial statements, notes and
schedules thereto and documents incorporated by reference therein
being hereinafter referred to as the “SEC Documents”).
The Company has delivered or has made available to the Purchasers
or their respective representatives true, correct and complete
copies of each of the SEC Documents not available on the EDGAR
system (if any). As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any
untrue statement of a material fact or

 

 

 

-8-

 

 

omitted to state a material fact required to be
stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial
statements of the Company provided to the Purchasers have been
prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the
periods involved (“GAAP”), except as may be otherwise
specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in accordance with
GAAP in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal
year-end audit adjustments and footnotes. Schedule 3.1(h) lists all material year-end
audit adjustments made to the financial statements of the Company
provided to the Purchasers.

 

(i)           Material
Changes; Undisclosed Events, Liabilities or Developments.
Since

 

June
30, 2017, (i) there has been no event, occurrence or development
that has had or that would reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to
be reflected in the Company’s financial statements pursuant
to Material Permit or disclosed in the financial statements, (iii)
the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of
cash or other property to its stockholders (other than as required
pursuant to the terms of any of its securities outstanding as of
the date hereof) or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) other
than as described on Schedule 3.1(i), the Company has not issued
any equity securities to any officer, director or Affiliate, except
pursuant to existing stock or option plans duly adopted for such
purpose or upon approval by a majority of the non-employee members
of the Board of Directors or a majority of the members of a
committee of non-employee directors established for such purpose
for services rendered to the Company.

 

(j)           Litigation.
There is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”) which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction
Documents or the issuance of the Securities or (ii) could, if
there were an unfavorable decision, have or reasonably be expected
to result in a Material Adverse Effect. Neither the Company nor any
Subsidiary, nor any director or officer thereof (in such capacity),
is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or
a claim of breach of fiduciary duty. Except as set forth on
Schedule 3(i),
there has not been, and to the knowledge of the Company, there is
not pending or contemplated, any investigation by the SEC or other
governmental or regulatory authority involving the Company or any
current or former director or officer of the Company.

 

(k)           Compliance.
Except as set forth on Schedule 3(k), neither the
Company nor any Subsidiary: (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the
Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in
violation of any judgment, decree or order of any court, arbitrator
or other governmental authority or (iii) is in violation of any
statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state
and local laws relating to taxes, occupational health and safety,
product quality and safety and employment and labor matters, except
as could not have reasonably been expected to and does not result
in a Material Adverse Effect.

 

 

 

-9-

 

 

(l)           Environmental
Laws. The Company and its Subsidiaries (i) are in compliance
with all federal, state, local and foreign laws relating to
pollution or protection of human health or the environment
(including ambient air, surface water, groundwater, land surface or
subsurface strata), including laws relating to emissions,
discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or
wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands, or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or
regulations, issued, entered, promulgated or approved thereunder
(“Environmental Laws”); (ii) have received all permits
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and
(iii) are in compliance with all terms and conditions of any such
permit, license or approval.

 

(m)           Regulatory
Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary
to conduct their respective businesses, except where the failure to
possess such permits could not reasonably be expected to and does
not result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has
received any notice of proceedings relating to the revocation or
modification of any Material Permit.

 

(n)           Title
to Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by
them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for
Permitted Liens. Any real property and facilities held under lease
by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance.

 

(o)           Intellectual
Property.

 

(i)           The
Company and each Subsidiary owns or possesses or has the right to
use pursuant to a valid and enforceable written license,
sublicense, agreement, or permission all Intellectual Property
necessary for the operation of the business of the Company and each
Subsidiary as presently conducted. The Company and each Subsidiary
has made available to the Purchasers a true and complete copy of
each such written license, sublicense, agreement or
permission.

 

(ii)           To
the knowledge of the Company, the Intellectual Property does not
interfere with, infringe upon, misappropriate, or otherwise come
into conflict with, any Intellectual Property rights of third
parties, and the Company has no Knowledge that facts exist which
indicate a likelihood of the foregoing. Neither the Company nor any
Subsidiary has received any charge, complaint, claim, demand, or
notice alleging any such interference, infringement,
misappropriation, or conflict (including any claim that the Company
must license or refrain from using any Intellectual Property rights
of any third party). To the Knowledge of the Company, no third
party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with, any Intellectual Property rights
of the Company or any Subsidiary.

 

(iii)           Neither
the Company nor any Subsidiary has any pending patent applications
or applications for registration that either entity has made with
respect to any Intellectual Property. Schedule
3.1(o) identifies each license,
sublicense, agreement, or other permission that the Company or a
Subsidiary has granted to any third party with respect to any of
such Intellectual Property (together with any exceptions). The
Company has made available to the Purchasers correct and complete
copies of all such licenses, sublicenses, agreements, and
permissions (as amended to date) (“Intellectual Property
Agreements”). Schedule 3.1(o)
also identifies each registered and
unregistered trademark, service mark, trade name, corporate name,
URLs or Internet domain name used by the Company and each
Subsidiary in connection with its business and which is not
licensed from a third party. With respect to each item of
Intellectual Property required to be identified in
Schedule
3.1(o):

 

 

 

-10-

 

 

(A) 

The
Company and each Subsidiary owns and possesses all right, title,
and interest in and to the item, free and clear of any Lien,
license, or other restriction or limitation regarding use or
disclosure;

 

(B) 

The
item is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;

 

(C) 

No
Action, claim, or demand is pending or, to the knowledge of the
Company, is threatened that challenges the legality, validity,
enforceability, use, or ownership by the Company or any Subsidiary;
and

 

(D) 

Neither
the Company nor any Subsidiary has agreed to indemnify any Person
for or against any interference, infringement, misappropriation, or
other conflict with respect to the item.

 

(iv)           Schedule
3.1(o)(iv) identifies each item
of Intellectual Property that any third party owns and that the
Company or a Subsidiary uses pursuant to license, sublicense,
agreement, or permission, excluding off-the-shelf software
purchased or licensed by the Company or a Subsidiary. The Company
has made available to the Purchasers correct and complete copies of
all such licenses, sublicenses, agreements, and permissions (each
as amended to date) (each, a “Licensed Intellectual Property
Agreement”). With respect to each Licensed Intellectual
Property Agreement:

 

(A) 

The
Licensed Intellectual Property Agreement is legal, valid, binding,
enforceable, and in full force and effect;

 

(B) 

Neither
the Company nor any Subsidiary is in breach or default, and no
event has occurred that with notice or lapse of time would
constitute the Company’s or a Subsidiary’s breach or
default or permit the counterparty rights to termination,
modification, or acceleration thereunder, which as to any such
breach, default or event could have a Material Adverse Effect on
the Company or a Subsidiary;

 

(C) 

No
party to such Licensed Intellectual Property Agreement has
repudiated any provision thereof;

 

(D) 

Except
as set forth in such Licensed Intellectual Property Agreement,
neither the Company nor a Subsidiary has received written or verbal
notice or otherwise has Knowledge that the underlying item of
Intellectual Property is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge; and

 

(E) 

Except as set forth on Schedule
3.1(o)(iv), neither the Company
nor any Subsidiary has not granted any sublicense or similar right
with respect to the license, sublicense, agreement, or
permission.

 

(v)           Each
Person who participated in the creation, conception, invention or
development of the Intellectual Property currently used in the
business of the Company and each Subsidiary (each, a
“Developer”) which is not licensed from third parties
has executed one or more agreements containing industry standard
confidentiality, work for hire and assignment provisions, whereby
the Developer has assigned to the Company and each Subsidiary, as
applicable, all copyrights, patent rights, Intellectual Property
rights and other rights in the Intellectual Property, including all
rights in the Intellectual Property that existed prior to the
assignment of rights by such Person to the Company and the
applicable Subsidiary. The Company has made available to the
Purchasers copies of any such agreements and assignments from each
such Developer (collectively, the “Developer
Agreements”).

 

 

 

-11-

 

 

 
(vi)           Each
Developer has signed a non-disclosure agreement with the Company
and each Subsidiary. The Company has made available to the
Purchasers copies any such non-disclosure agreements from each such
Person, if any.

 

(p)           Insurance.
The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary for entities with
financial positions similar to the Company in the businesses in
which the Company and the Subsidiaries are engaged. Neither the
Company nor any Subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a
significant increase in cost.

 

(q)           Transactions
With Affiliates and Employees. Except as set forth on
Schedule 3.1(q),
none of the officers or directors of the Company or any Subsidiary
and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or
lending of money to or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner.

 

(r)           Certain
Fees. Except for compensation payable to TriPoint Global
Equities LLC, no brokerage or finder’s fees or commissions
are or will be payable by the Company or any Subsidiary to any
broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction
Documents.

 

(s)           Investment
Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not
be or be an Affiliate of, an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended.

 

(t)           Registration
Rights. No Person has any right to cause the Company or any
Subsidiary to effect the registration under the Securities Act of
any securities of the Company or any Subsidiary other than pursuant
to the Registration Rights Agreement, in favor of GPB pursuant to
the Senior Documents or pursuant to Schedule 3.1(t).

 

(u)           Application
of Takeover Protections. The Company and the Board of
Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the
Company’s certificate of incorporation (or similar charter
documents) or the laws of its state of incorporation that is or
could become applicable to the Purchasers as a result of the
Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including
without limitation as a result of the Company’s issuance of
the Securities and the Purchasers’ ownership of the
Securities.

 

(v)           Disclosure.
All of the disclosure furnished by or on behalf of the Company to
the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby,
including the schedules to this Agreement, is true and correct and
does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were
made, not misleading. The Company acknowledges and agrees that no
Purchasers makes or has made any representations or warranties with
respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.2 hereof.

 

 

 

-12-

 

 

(w)           No
Integrated Offering. Neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that
would cause this offering of the Securities to be integrated with
prior offerings by the Company for purposes of the Securities Act
that would require the registration of any such securities under
the Securities Act.

 

(x)           Solvency.
Based on the consolidated financial condition of the Company as of
each Closing, after giving effect to the receipt by the Company of
the proceeds from the sale of the Securities hereunder, (i) the
fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the
Company, consolidated and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of
the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account
all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its liabilities when such amounts are
required to be paid. As of the date hereof, the Company has no
intention to file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within the
two years from the Closing Date. Schedule 3.1(x) set forth as of
the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments or guarantees.

 

(y)           Tax
Status. The Company and its Subsidiaries each (i) has made
or filed all United States federal, state and local income and all
foreign income and franchise tax returns, reports and declarations
required by any jurisdiction to which it is subject including
filing extension periods, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount,
shown or determined to be due on such returns, reports and
declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply, except in each case those which are being
contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in
accordance with GAAP. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company or of any Subsidiary
know of no basis for any such claim.

 

(z)           No
Disqualification Events. With respect to the Securities to
be offered and sold hereunder in reliance on Rule 506(b) under the
Securities Act, neither the Company nor, to the knowledge of the
Company, any of its predecessors, any affiliated issuer, any
director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of
20% or more of the Company’s outstanding voting equity
securities, calculated on the basis of voting power, or any
promoter (as that term is defined in Rule 405 under the Securities
Act) connected with the Company in any capacity at the time of sale
(each, an “Issuer Covered Person” and, together,
“Issuer Covered Persons”) is subject to any of the
“Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act (a
“Disqualification Event”), except for a
Disqualification Event covered by Rule 506(d)(2) or (d)(3). The
Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification Event. The
Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e), and has made available to the
Purchasers a copy of any disclosures provided
thereunder.

 

(aa)
Material
Agreements. The agreements set forth on Schedule 3.1(aa) (the
“Material Agreements”) are valid, binding and
enforceable in accordance with their terms against the Company, and
are in full force and effect, except as the enforcement thereof may
be limited by bankruptcy laws, other similar laws affecting
creditors’ rights and general principles of equity affecting
the availability of specific performance and other equitable
remedies. Except as set forth on Schedule 3.1(aa), neither the
Company nor any other party thereto is in material default
thereunder, nor has there occurred any event that with notice or
lapse of time, or both, would constitute a material default by the
Company or any other party thereunder. Accurate and complete copies
of each written Material Agreement have been delivered or otherwise
made available to the Purchasers. Except as set forth on
Schedule 3.1(aa),
as of the date of this Agreement, the Company nor any of its
Affiliates has received any notification that any party to a
Material Agreement intends to terminate such Material
Agreement.

 

 

 

-13-

 

 

(bb)
Customers and
Suppliers. Neither the Company nor any Subsidiary has
received any written or oral notice, and neither the Company nor
any Subsidiary knows or has any reason to believe, that any
customer of its with annual gross sales of in excess of $100,000 or
supplier or products to the Company or a Subsidiary in excess of
$100,000 (i) has ceased, or in the reasonably foreseeable future
may cease, to use the services of the Company or a Subsidiary, (ii)
has substantially reduced, or in the reasonably foreseeable future
may substantially reduce, the use of the services of the Company or
a Subsidiary or (iii) has terminated or materially altered, or in
the reasonably foreseeable future would reasonably be expected to
terminate or materially alter its business relations with the
Company or a Subsidiary.

 

3.2         Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other
Purchaser, hereby represents and warrants as of the date hereof and
as of each Closing to the Company as follows (unless as of a
specific date therein):

 

(a)           Organization;
Authority. Such Purchaser is
either an individual or an entity duly incorporated or formed,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of
this Agreement and performance by the Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all
necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of the Purchaser. Each
Transaction Document to which it is a party has been duly executed
by the Purchaser, and when delivered by the Purchaser in accordance
with the terms hereof, will constitute the valid and legally
binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

(b)           Understandings
or Arrangements. Such Purchaser
is acquiring the Securities as principal for its own account and
has no direct or indirect arrangement or understandings with any
other Persons to distribute or regarding the distribution of such
Securities (this representation and warranty not limiting the
Purchaser’s right to sell the Securities in compliance with
applicable federal and state securities laws). Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its
business. Such Purchaser understands that the Securities are
“restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and
is acquiring such Securities as principal for its own account and
not with a view to or for distributing or reselling such Securities
or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of
distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or
indirect arrangement or understandings with any other Persons to
distribute or regarding the distribution of such Securities in
violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting the
Purchaser’s right to sell such Securities in compliance with
applicable federal and state securities laws).

 

(c)           Purchaser
Status. At the time the
Purchaser was offered the Securities, it was, and as of the date
hereof it is, an “accredited investor” within the
meaning of Rule 501 under the Securities Act.

 

(d)           Experience
of Such Purchaser. Such
Purchaser, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Such Purchaser
is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete
loss of such investment.

 

 

 

-14-

 

 

(e)           Access
to Information. Such Purchaser
acknowledges that (i) it has had the opportunity to review the
Transaction Documents (including all exhibits and schedules
thereto), (ii) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the offering
of the Securities and the merits and risks of investing in the
Securities; (iii) access to information about the Company and its
financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its
investment; and (iv) the opportunity to obtain such additional
information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Such
Purchaser acknowledges and agrees that neither the Company nor
anyone else has provided the Purchaser with any information or
advice with respect to the Securities nor is such information or
advice necessary or desired.

 

(f)           Confidentiality.
Other than to other Persons party to this Agreement or to the
Purchaser’s representatives, including, without limitation,
its officers, directors, partners, legal and other advisors,
employees, agents and Affiliates, the Purchaser has maintained the
confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this
transaction).

 

(g)           Legends.
The Purchaser understands that the Securities and any securities
issued in respect of or exchange for the Securities, may be notated
with one or all of the following legends:

 

(i)

[THESE
SHARES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THESE SHARES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.]

 

[NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.]

 

 

 

-15-

 

 

[NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.]

 

(ii) Any
legend set forth in, or required by, the other Transaction
Documents.

 

(iii) Any
legend required by the securities laws of any state to the extent
such laws are applicable to the Securities represented by the
certificate, instrument, or book entry so legended.

 

ARTICLE IV.

 

OTHER
AGREEMENTS OF THE PARTIES

 

4.1           Information
Rights. So long as the Note
remains outstanding and until such time as the Purchasers no longer
is the beneficial owner of at least ten percent (10%) of the
outstanding Common Stock, on a fully diluted basis, the Company
shall provide the Purchasers with (i) monthly financial reports
including A/R and A/P statements within 30 days of each month end,
with such reports to also include comparisons of budgeted to actual
operations (ii) quarterly financial reports within 30 days of each
quarter end, with such reports to include comparisons of budgeted
to actual operations, (iii) yearly financial reports within 60 days
of each year end, with such reports to include comparisons of
budgeted to actual operations and (iv) audited financials within
120 days of each year end. Upon the request of the Purchasers, the
Company shall share with the Purchasers status updates on
manufacturing and capex, shipment of
products, sales pipeline, board decisions and relevant regulatory
and licensing developments. The Company shall use best efforts to
provide accurate quarterly and yearly reports, subject to
adjustments recommended by the Company’s
auditors.

 

4.2         Intentionally
Omitted.

 

4.3         Shareholder
Rights Plan. No claim will be
made or enforced by the Company or, with the consent of the
Company, any other Person, that any Purchaser is an
“Acquiring Person” under any control share acquisition,
business combination, poison pill (including any distribution under
a rights agreement) or similar anti-takeover plan or arrangement in
effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the
Company and the Purchasers.

 

4.4         Use
of Proceeds. Schedule 4.4 sets
forth a detailed list of the use of proceeds. The Company shall use
the net proceeds from the sale of the Securities hereunder for
working capital and capital expenditures related to sales and
marketing and application expansion and shall not use such
proceeds: (a) for the satisfaction of any portion of the
Company’s Indebtedness (other than as set forth on
Schedule
4.4 hereto, the payment of
trade payables in the ordinary course of the Company’s
business and prior practices and other than ordinary course payments of
principal and interest on the Company’s outstanding secured
promissory notes), or (b) for the redemption of any Common Stock or
Common Stock Equivalents other than an aggregate of $150,929.72 in
connection with a termination or separation of from the Company of
Michaela Ott and Michael Ott. The only Indebtedness of the Company
outstanding after the Closing shall be Permitted
Indebtedness.

 

 

 

-16-

 

 

4.5         Indemnification
of Purchasers. Subject to the
provisions of this Section 4.5, the Company will indemnify and hold
the Purchasers and each of their directors, officers, shareholders,
members, partners, employees and agents (and any other Persons with
a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each
Person who controls a Purchaser (within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling Persons (each, a
“Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements,
court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as
a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents,
(b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is
based upon a breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party
may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct
by such Purchaser Party that constitutes fraud, gross negligence,
willful misconduct or malfeasance) or (c) any untrue or alleged
untrue statement of a material fact contained in any registration
statement, any prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus,
or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to
make the statements therein (in the case of any prospectus or
supplement thereto, in light of the circumstances under which they
were made) not misleading. If any action shall be brought against
any Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser Party shall promptly
notify the Company in writing, and the Company shall have the right
to assume the defense thereof with counsel of its own choosing
reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company
has failed after a reasonable period of time to assume such defense
and to employ counsel or (iii) in such action there is, in the
reasonable opinion of counsel, a material conflict on any material
issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for
the reasonable fees and expenses of no more than one such separate
counsel. The Company will not be liable to any Purchaser Party
under any Transaction Document (x) for any settlement by a
Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or
(y) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or
agreements made by such Purchaser Party in this Agreement or
in the other Transaction
Documents; or (z) to the extent
caused solely by a Purchaser Party’s gross negligence or
willful misconduct. The indemnification required by this Section
4.5 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are
received or are incurred. The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any
Purchaser Party against the Company or others and any liabilities
the Company may be subject to pursuant to law.

 

4.6         Reservation
of Common Stock. As of the date
hereof, the Company has reserved and the Company shall continue to
reserve and keep available at all times, free of preemptive rights,
shares of Common Stock, subject to adjustment for stock splits and
dividends, combinations and similar events, equal to the amounts
required by the Transaction Documents. The Company shall not enter
into any agreement or file any amendment to its Certificate of
Incorporation (including the filing of a Certificate of
Designation) which conflicts with this Section 4.6 while the Notes
and Warrant remain outstanding. On or prior to the date that is six
months from the Closing, the Company shall amend its Certificate of
Incorporation to increase its authorized number of shares of Common
Stock to the amounts required by the Transaction Documents but no
less than a minimum of 100,000,000 shares.

 

4.7                   Intentionally
Omitted

 

 

 

 

-17-

 

 

4.8           Subsequent
Equity Sales.

 

(a)          From
the date hereof until such time as the Purchasers no longer holds
the Notes, the Company will not, without the consent of the
a majority in interest of the then-outstanding Notes, enter into any Equity Line of Credit or similar
agreement, nor issue nor agree to issue any Variable Priced Equity
Linked Instruments (collectively, the “Variable Rate
Transactions”). For purposes hereof, “Equity Line of
Credit” means any transaction involving a written agreement
between the Company and an investor or underwriter whereby the
Company has the right to “put” its securities to the
investor or underwriter over an agreed period of time and at future
determined price or price formula (other than customary
“preemptive” or “participation” rights or
“weighted average” or “full-ratchet”
antidilution provisions or in connection with fixed-price rights
offerings and similar transactions that are not Variable Priced
Equity Linked Instruments), and “Variable Priced Equity
Linked Instruments” means: (A) any debt or equity securities
which are convertible into, exercisable or exchangeable for, or
carry the right to receive additional shares of Common Stock either
(1) at any conversion, exercise or exchange rate or other price
that is based upon and/or varies with the trading prices of or
quotations for Common Stock at any time after the initial issuance
of such debt or equity security, or (2) with a conversion, exercise
or exchange price that is subject to being reset on more than one
occasion at some future date at any time after the initial issuance
of such debt or equity security due to a change in the market price
of the Company’s Common Stock since date of initial issuance
(other than customary “preemptive” or
“participation” rights or “weighted
average” or “full-ratchet” antidilution
provisions or in connection with fixed-price rights offerings and
similar transactions), and (B) any amortizing convertible security
which amortizes prior to its maturity date, where the Company is
required or has the option to (or any investor in such transaction
has the option to require the Company to) make such amortization
payments in shares of Common Stock which are valued at a price that
is based upon and/or varies with the trading prices of or
quotations for Common Stock at any time after the initial issuance
of such debt or equity security (whether or not such payments in
stock are subject to certain equity conditions). For purposes of
determining the total consideration for a convertible instrument
(including a right to purchase equity of the Company) issued,
subject to an original issue or similar discount or which principal
amount is directly or indirectly increased after issuance, the
consideration will be deemed to be the actual cash amount received
by the Company in consideration of the original issuance of such
convertible instrument.

 

(b)           Notwithstanding
the foregoing, this Section 4.8
shall not apply in respect of an
Exempt Issuance (except that no Variable Rate Transaction shall be
an Exempt Issuance). The Company shall provide the Purchasers with
notice of any such issuance or sale in the manner for disclosure of
Subsequent Financings set forth in Section
4.7.

 

4.9         Rule
144 Opinion and Registration Rights.

 

 (a)           Provided
that the provisions of Rule 144 so permit, the Company shall
deliver to the Purchasers an opinion of counsel (which opinion the
Company will be responsible for obtaining at its own cost) that the
Shares may be resold pursuant to Rule 144 free of restrictive
legends.

 

(b)           Whether
or not Rule 144 is not available for the resale of the Registrable
Securities, the Company shall register for resale all Registrable
Securities promptly in accordance with the terms of the
Registration Rights Agreement, if the Registration Statement
registering the Registrable Securities for resale is not filed as
required by this Section 4.9(b)
or not declared effective when or
maintained as provided in the Registration Rights Agreement, then
the Company shall pay to the Purchasers for liquidated damages an
amount of cash equal to 2% of the product of (i) the number of
Registrable Securities and (ii) the Closing Sale Price or Closing
Bid Price as of the trading day immediately prior to the Event Date
(as defined in the Registration Rights Agreement), such payments to
be made on the Event Date and every thirty (30) day anniversary
thereafter with a maximum penalty of 12%, until such time when the
Registration Statement is declared effective.

 

 

 

-18-

 

 

(c)           Each
Purchaser acknowledges its primary responsibilities under the
Securities Act and accordingly will not sell or otherwise transfer
the Securities or any interest therein without complying with the
requirements of the Securities Act and applicable law. While the
Registration Statement remains effective, each Purchaser may sell
its Registrable Securities in accordance with the plan of
distribution contained in the Registration Statement and if it does
so it will comply therewith and with the related prospectus
delivery requirements unless an exemption therefrom is available.
Each Purchaser shall, if notified by the Company in writing at any
time that the Registration Statement is not effective or that the
prospectus included in such Registration Statement no longer
complies with the requirements of Section 10 of the Securities Act,
refrain from selling such Registrable Securities until such time as
the Company notifies a Purchaser in writing that the Registration
Statement is effective or the prospectus is compliant with Section
10 of the Securities Act, unless a Purchaser is able to, and does,
sell such Registrable Securities pursuant to an available exemption
from the registration requirements of Section 5 of the Securities
Act. Each Purchaser agrees to promptly furnish to the Company such
information that the Company reasonably requires from that
Purchaser for use in the Registration Statement and consents to the
inclusion of such information in the Registration
Statement.

 

 (d)           Both
the Company and the Transfer Agent, and their respective directors,
executive officers, employees and agents, may rely on this
Section
4.9.

 

(e)      
Until such time as a Purchaser or any of its assignees no longer
owns any Registrable Securities, the Company shall timely file all reports required to be filed
with the SEC pursuant to the Exchange Act, and the Company shall
not terminate the registration of the Common Stock under Section 12
of the Exchange Act and/or the Company’s status as an issuer
required to file reports under the 1934 Act even if the Exchange
Act or the rules and regulations thereunder would no longer require
or otherwise permit such termination. The Company shall maintain
its eligibility to register the Registrable Securities on Form S-3
or Form S-1 (or another appropriate form in accordance
therewith).

 

4.10           
Conversion and Exercise
Procedures. The forms of Conversion Notice and Notice of
Exercise included in the Notes and Warrant set forth the totality
of the procedures required of the Purchasers in order to convert
the Notes or to exercise the Warrant. No additional legal opinion,
other information or instructions shall be required of the
Purchasers to convert their Notes or exercise their Warrant.
Without limiting the preceding sentences, no ink-original
Conversion Notice or Notice of Exercise shall be required, nor
shall any medallion guarantee (or other type of guarantee or
notarization) of any Conversion Notice or Notice of Exercise form
be required in order to convert the Notes or exercise the Warrant.
The Company shall honor conversions of the Notes and exercise of
the Warrant and shall deliver Shares and Warrant Shares in
accordance with the terms, conditions and time periods set forth in
the Transaction Documents.

 

4.11           Maintenance
of Property. The Company shall
use its commercially reasonable efforts to keep all of its
property, which is necessary or useful to the conduct of its
business, in good working order and condition, ordinary wear and
tear excepted.

 

4.12           
Preservation of
Corporate Existence. The
Company shall preserve and maintain its corporate existence,
rights, privileges and franchises in the jurisdiction of its
incorporation, and qualify and remain qualified, as a foreign
corporation in each jurisdiction in which such qualification is
necessary in view of its business or operations and where the
failure to qualify or remain qualified might reasonably have a
Material Adverse Effect.

 

4.13           Blue
Sky. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Securities for, sale to the Purchasers at
the applicable Closing under applicable securities or “Blue
Sky” laws of the states of the United States, and shall
provide evidence of such actions promptly upon request of the
Purchasers.

 

4.14           Intentionally
Omitted

 

 

 

-19-

 

 

4.15
Ranking of
Notes. Other than Permitted
Indebtedness subject to Permitted Liens and the GPB Note, no
Indebtedness of the Company and/or any Subsidiaries, at the Closing
will be in any manner and/or for any reason (i) senior to the Notes
and/or any other liabilities and/or obligations of the Company
and/or any Subsidiaries to the Purchasers in right of payment or
otherwise, and/or (ii) pari passu with the Notes and/or any other liabilities and/or
obligations of the Company and/or any Subsidiaries to the
Purchasers in right of payment and/or in otherwise, whether with
respect to payment, redemptions, principal, interest, or upon
liquidation, dissolution or otherwise.

 

4.16 Subsidiary Guarantees,
Etc.  For so long as the Notes remain outstanding, upon
any entity becoming a Subsidiary, the Company shall cause each such
Subsidiary to become party to all of the Security Documents, to the
extent required in the Security Documents and take all actions
required by the Security Documents in form and substance
satisfactory to the Collateral Agent and the
Purchaser.

 

4.17
Intentionally Omitted.

 

            

4.18 Intentionally
Omitted.

 

4.19 Disclosure of
Confidential Information. The
Company shall not, and the Company shall cause each of the
Subsidiaries and each of its and their respective officers,
directors, employees and agents not to, provide the Purchasers with
any material, non-public information regarding the Company and/or
any of the Subsidiaries from and after the date hereof without the
express prior written consent of the Purchasers (which may be
granted or withheld in the Purchasers’ sole discretion). In
the event of a breach of any of the foregoing covenants, the
Purchasers shall have the right to make a public disclosure, in the
form of a press release, public advertisement or otherwise, of such
breach or such material, non-public information, as applicable,
without the prior approval by the Company, any of its respective
Subsidiaries, or any of its or their respective officers,
directors, employees or agents. The Purchasers shall not have any
liability to the Company, any of the Subsidiaries, or any of its or
their respective officers, directors, employees, affiliates,
stockholders or agents, for any such disclosure. To the extent that
the Company or any of the Subsidiaries delivers any material,
non-public information to the Purchasers without the
Purchasers’ prior written consent, the Company hereby
covenants and agrees that the Purchasers shall not have any duty of
confidentiality with respect to, or a duty not to trade on the
basis of, such material, non-public information;. If the Company,
any of its respective Subsidiaries, or any of their respective
officers, directors, employees or agents, provides the Purchasers
with material non-public information relating to the Company and/or
any of the Subsidiaries, and such disclosure is without the consent
of the Purchasers, the Company shall immediately publicly disclose
such confidential information on a Current Report on Form 8-K or
otherwise.

 

4.20. Dissolution Medite GmbH (Austria) and
MEDITE sp.zo.o (Poland). On or prior to the date that is 120 days
after the Closing, Medite GmbH (Austria) and MEDITE sp.zo.o
(Poland) shall be dissolved or wound up.

 

ARTICLE V.

 

MISCELLANEOUS

 

5.1         Reserved.

 

5.2         Fees
and Expenses. Except as
expressly set forth below and in the Transaction Documents to the
contrary, each party shall pay the documented fees and expenses of
its advisers, counsel, accountants and other experts, if any, and
all other documented out-of-pocket expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for
same-day processing of any instruction letter delivered by the
Company and any exercise notice delivered by a Purchaser), stamp
taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchaser. The Company agrees to
pay outside counsel for the Purchasers its documented fees together
with reasonable and documented costs including those necessary to
provide the Purchasers with a lien on all the Collateral of the
Company. From the Purchasers’ Closing Subscription Amount,
the Purchasers may withhold fees in order to pay its due diligence
fees and the fees due its counsel as well as any costs incurred by
such counsel provided that written notice is given to the
Company.

 

 

 

-20-

 

 

 

5.3         Entire
Agreement. The Transaction
Documents, together with the exhibits and schedules thereto,
contain the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to
such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.

 

5.4         Notices.
Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the date of
transmission, if such notice or communication is delivered via
facsimile or email attachment at the facsimile number or email
address as set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Business Day, (b) the
next Business Day after the date of transmission, if such notice or
communication is delivered via facsimile or email attachment at the
facsimile number or email address as set forth on the signature
pages attached hereto on a day that is not a Business Day or later
than 5:30 p.m. (New York City time) on any Business Day, (c) the
second (2nd)
Business Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set
forth on the signature pages attached hereto.

 

5.5         Amendments;
Waivers. No provision of this
Agreement may be waived, modified, supplemented or amended except
in a written instrument signed, in the case of an amendment, by the
Company and the Purchasers who holds at least a majority in
interest of the then-outstanding Notes or, in the case of a waiver,
by the party against whom enforcement of any such waived provision
is sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of
any such right. Any amendment effected in accordance with
accordance with this Section 5.5 shall be binding upon the
Purchasers and holder of Securities and the
Company.

 

5.6         Successors
and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign
this Agreement or any rights or obligations hereunder without the
prior written consent of the Purchasers then holding the
outstanding Notes (other than by merger). Each Purchaser may assign
any or all of its rights under this Agreement to any Person to whom
such Purchaser assigns or transfers any Securities, provided that
such transferee agrees in writing to be bound, with respect to the
transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchaser”; provided, so
long as no Event of Default has occurred and is continuing, the
Secured Party shall not assign any of its rights hereunder to a
competitor of any Company.

 

5.7         No
Third-Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and
their respective successors and permitted assigns and is not for
the benefit of, nor may any provision hereof be enforced by, any
other Person, except as otherwise set forth in Sections 4.5 and 4.9
and this Section 5.7.

 

5.8         Governing
Law; Exclusive Jurisdiction.
All questions concerning the construction, validity, enforcement
and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal
Proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York, Borough of Manhattan. 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
(including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees
not to assert in any Action or Proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such
Action or Proceeding is improper or is an inconvenient venue for
such Proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such
Action or Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for 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 other manner permitted by law. If any party shall commence an Action or
Proceeding to enforce any provisions of the Transaction Documents,
then, in addition to the obligations of the Company elsewhere in
this Agreement, the prevailing party in such Action or Proceeding
shall be reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Action or
Proceeding.

 

 

 

-21-

 

 

5.9         Survival.
The representations and warranties contained herein shall survive
the Closing and the delivery of the Securities.

 

5.10                   Execution.
This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file,
such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile or
“.pdf” signature page were an original
thereof.

 

5.11                   Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired, or invalidated, as long as the essential terms and
conditions of this Notes for each party remain valid, binding, and
enforceable. The parties shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term,
provision, covenant or restriction.

 

5.12                   Remedies.
In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agree to waive and not to assert
in any Action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

 

5.13                   Saturdays,
Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.

 

5.14                   Construction.
The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the
Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in
any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the
date of this Agreement.

 

5.15                   WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY
JURY.

 

(Signature Pages Follow)

 

 

-22-

 

 

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

 

 

	

MEDITE CANCER DIAGNOSTICS, INC.

 

 

	

Address
for Notice:

 

	

By:___________________________________________

Name:
David Patterson

Title:
Chief Executive Officer

 

With a
copy to (which shall not constitute notice):

	

4203 SW
34th Street

Orlando,
Florida 32811

 

Email:

	
 

	
 

 

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE
PAGE FOR PURCHASERS FOLLOWS]

 

 

-23-

 

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

Name of
Purchaser:

Signature of Authorized Signatory of
Purchaser: _________________________________

Name of
Authorized Signatory:

Title
of Authorized Signatory:

Email
Address of Authorized Signatory:
_________________________________________

Facsimile Number of
Authorized Signatory:
__________________________________________

Address
for Notice to Purchaser:

 

 

Address
for Delivery of Securities to Purchaser (if not same as address for
notice):

 

 

 

EIN
Number: _______________________

 

 

 

[SIGNATURE
PAGES CONTINUE]

 

 

-24-

 

 

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

Name of
Purchaser:

Signature of Authorized Signatory of
Purchaser: _________________________________

Name of
Authorized Signatory:

Title
of Authorized Signatory:

Email
Address of Authorized Signatory:
_________________________________________

Facsimile Number of
Authorized Signatory:
__________________________________________

Address
for Notice to Purchaser:

 

 

Address
for Delivery of Securities to Purchaser (if not same as address for
notice):

 

 

 

EIN
Number: _______________________

 

 

 

[SIGNATURE
PAGES CONTINUE]

 

 

-25-

 

 

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

Name of
Purchaser: GPB Debt Holdings, LLC, in its capacity as Collateral
Agent

Signature of Authorized Signatory of
Purchaser: _________________________________

Name of
Authorized Signatory:

Title
of Authorized Signatory:

Email
Address of Authorized Signatory:
_________________________________________

Facsimile Number of
Authorized Signatory:
__________________________________________

Address
for Notice to Purchaser:

 

 

Address
for Delivery of Securities to Purchaser (if not same as address for
notice):

 

 

 

EIN
Number: _______________________

 

 

 

[SIGNATURE
PAGES CONTINUE]

 

 

-26-

 

 

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

Name of
Purchaser: Lisa Fortunoff

Signature of Authorized Signatory of
Purchaser: _________________________________

Name of
Authorized Signatory:

Title
of Authorized Signatory:

Email
Address of Authorized Signatory:
_________________________________________

Facsimile Number of
Authorized Signatory:
__________________________________________

Address
for Notice to Purchaser:

 

 

Address
for Delivery of Securities to Purchaser (if not same as address for
notice):

 

 

 

EIN
Number: _______________________

 

 

 

[SIGNATURE
PAGES CONTINUE]

 

 

-27-

 

 

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

Name of
Purchaser: Nedlog Investments LLC

Signature of Authorized Signatory of
Purchaser: _________________________________

Name of
Authorized Signatory:

Title
of Authorized Signatory:

Email
Address of Authorized Signatory:
_________________________________________

Facsimile Number of
Authorized Signatory:
__________________________________________

Address
for Notice to Purchaser:

 

 

Address
for Delivery of Securities to Purchaser (if not same as address for
notice):

 

 

 

EIN
Number: _______________________

 

 

 

[SIGNATURE
PAGES CONTINUE]

 

 

 

 

-28-

 

 

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

Name of
Purchaser: Kanter Family Foundation

Signature of Authorized Signatory of
Purchaser: _________________________________

Name of
Authorized Signatory:

Title
of Authorized Signatory:

Email
Address of Authorized Signatory:
_________________________________________

Facsimile Number of
Authorized Signatory:
__________________________________________

Address
for Notice to Purchaser:

 

 

Address
for Delivery of Securities to Purchaser (if not same as address for
notice):

 

 

 

EIN
Number: _______________________

 

 

 

[SIGNATURE
PAGES CONTINUE]

 

 

-29-

 

 

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

Name of
Purchaser: Ricky Solomon

Signature of Authorized Signatory of
Purchaser: _________________________________

Name of
Authorized Signatory:

Title
of Authorized Signatory:

Email
Address of Authorized Signatory:
_________________________________________

Facsimile Number of
Authorized Signatory:
__________________________________________

Address
for Notice to Purchaser:

 

 

Address
for Delivery of Securities to Purchaser (if not same as address for
notice):

 

 

 

EIN
Number: _______________________

 

 

 

[SIGNATURE
PAGES CONTINUE]

 

 

 

 

-30-

 

 

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

Name of
Purchaser: Austin Lewis

Signature of Authorized Signatory of
Purchaser: _________________________________

Name of
Authorized Signatory:

Title
of Authorized Signatory:

Email
Address of Authorized Signatory:
_________________________________________

Facsimile Number of
Authorized Signatory:
__________________________________________

Address
for Notice to Purchaser:

 

 

Address
for Delivery of Securities to Purchaser (if not same as address for
notice):

 

 

 

EIN
Number: _______________________

 

 

 

[SIGNATURE
PAGES CONTINUE]

 

 

 

 

-31-

 

 

Exhibit A

 

13.25% Secured Convertible Note

 

(attached)

 

 

 

 

-32-

 

 

Exhibit B

 

Warrant

 

(attached)

 

 

 

 

-33-

 

 

Exhibit C

 

Security Agreement

 

(attached)

 

 

 

-34-

 

 

Exhibit D

 

Intellectual
Property Security Agreement

 

(attached)

 

 

 

 

-35-

 

 

Exhibit E

 

Guaranty
Agreements

 

(attached)

 

 

 

 

-36-

 

 

Exhibit F

 

Solvency Certificate

 

(attached)

 

 

-37-

 

 

 

Exhibit G

 

Registration Rights Agreement

 

(attached)

 

 

-38-Ex10-7

Exhibit 10.7

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY
IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Original Issue
Date: September 26,
2017                                                                                                                                           
$_______

 

13.25% SECURED CONVERTIBLE NOTE

 

 

THIS
13.25% SECURED CONVERTIBLE NOTE is issued at a 2.5% original issue
discount by MEDITE CANCER DIAGNOSTICS, INC., a Delaware corporation
(the “Company”) (this note, the
“Note”).

 

FOR
VALUE RECEIVED, the Company promises to pay to _____________or its
registered assigns (the “Holder”), or shall have paid
pursuant to the terms hereunder, the principal sum of ______
Dollars ($______) (“Original Principal Amount”) on
August , 2020 (the “Maturity Date”) or such earlier
date as this Note is required or permitted to be repaid as provided
hereunder, and to pay interest to the Holder on the aggregate
unconverted and then outstanding principal amount of this Note in
accordance with the provisions hereof. As a result of the 2.5%
original issue discount, on the date hereof, the Holder shall
deliver to the Company, or its assigns, cash in the amount of
_________________ Dollars ($_______). This Note is subject to the
following additional provisions:

 

Section
1.                      
Definitions. For
the purposes hereof, (a) capitalized terms not otherwise defined
herein shall have the meanings set forth in the Purchase Agreement
and (b) the following terms shall have the following
meanings:

 

“Accrued PIK
Interest” shall have the meaning set forth in Section
2(c).

 

“Alternate
Consideration” shall have the meaning set forth in Section
5(e).

 

“Amortization
Payment” shall have the meaning set forth in Section
2(b).

 

“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.

 

“Bankruptcy
Event” means any of the following events: (a) the Company or
any Significant Subsidiary (as such term is defined in Rule 1-02(w)
of Regulation S-X) thereof commences a case or other proceeding
under any bankruptcy, reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction relating to the Company or any
Significant Subsidiary thereof, (b) there is commenced against the
Company or any Significant Subsidiary thereof any such case or
proceeding that is not dismissed within 60 days after commencement,
(c) the Company or any Significant Subsidiary thereof is
adjudicated insolvent or bankrupt or any order of relief or other
order approving any such case or proceeding is entered, (d) the
Company or any Significant Subsidiary thereof suffers any
appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60
calendar days after such appointment, (e) the Company or any
Significant Subsidiary thereof makes a general assignment for the
benefit of creditors, or (f) the Company or any Significant
Subsidiary thereof, by any act or failure to act, expressly
indicates its consent to, approval of or acquiescence in any of the
foregoing or takes any corporate or other action for the purpose of
effecting any of the foregoing.

 

 “Beneficial
Ownership Limitation” shall have the meaning set forth in
Section 4(d).

 

 

 

-1-

 

 

 

“Business
Day” means any day except any Saturday, any Sunday, any day
which is a federal legal holiday in the United States or any day on
which banking institutions in the State of New York are authorized
or required by law or other governmental action to
close.

 

“Buy-In”
shall have the meaning set forth in Section 4(c)(iv).

 

“Cash
Interest” shall have the meaning set forth in Section
2(a).

 

“Change of
Control Transaction” means the occurrence after the date
hereof of any of (a) an acquisition after the date hereof by an
individual or legal entity or “group” (as described in
Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective
control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 50%
of the voting securities of the Company (other than by means of
conversion, exercise or exchange of the Notes or the Securities
issued together with the Notes), (b) the Company merges into or
consolidates with any other Person, or any Person merges into or
consolidates with the Company and, after giving effect to such
transaction, the shareholders of the Company immediately prior to
such transaction own less than 50% of the aggregate voting power of
the Company or the successor entity of such transaction, or (c) the
Company sells or transfers all or substantially all of its assets
to another Person and the shareholders of the Company immediately
prior to such transaction own less than 50% of the aggregate voting
power of the acquiring entity immediately after the transaction,
(d) a replacement at one time or within a three year period of more
than one-half of the members of the Board of Directors which is not
approved by a majority of those individuals who are members of the
Board of Directors on the Original Issue Date (or by those
individuals who are serving as members of the Board of Directors on
any date whose nomination to the Board of Directors was approved by
a majority of the members of the Board of Directors who are members
on the date hereof), or (e) the execution by the Company of an
agreement to which the Company is a party or by which it is bound,
providing for any of the events set forth in clauses (a) through
(d) above.

 

“Collateral
Agent” means GPB Debt Holdings II, LLC, a Delaware limited
liability company.

 

“Conversion
Failure” shall have the meaning set forth in Section
4(c)(iv).

 

“Conversion”
shall have the meaning ascribed to such term in Section
4(a).

 

“Conversion
Date” shall have the meaning set forth in Section
4(a).

 

“Conversion
Price” shall have the meaning set forth in Section
4(b).

 

“Conversion
Schedule” means the Conversion Schedule in the form of
Schedule 1 attached
hereto.

 

“Conversion
Shares” means, collectively, the shares of Common Stock
issuable upon any Conversion of this Note in accordance with the
terms hereof.

 

“Default
Interest Rate” shall have the meaning set forth in Section
2(a).

 

“Event
of Default” shall have the meaning set forth in Section
8(a).

 

“Fundamental
Transaction” shall have the meaning set forth in Section
5(e).

 

“Exchange Act” means the Securities Exchange
Act of 1934, as amended.

 

“Guaranty
Agreements” means the guaranty agreements duly executed by
each of (a) MEDITE Enterprise, Inc., (b) MEDITE GmbH, (c) MEDITE
GmbH, (d) MEDITE Lab Solutions Inc., (e) MEDITE sp.zo.o, and (f)
CytoGlobe, GmbH, referred to in Section 6.

 

“Mandatory
Default Amount” means the sum of (a) one hundred twenty
percent (120%) of the outstanding Principal amount of this Note,
plus three percent (3%) plus any accrued and unpaid interest
hereon, and (b) all other amounts, costs, expenses and liquidated
damages due in respect of this Note.

 

 

 

-2-

 

 

“New York
Courts” shall have the meaning set forth in Section
9(e).

 

“Note
Register” shall mean the note register maintained by the
Company.

 

“Notice of
Conversion” shall have the meaning set forth in Section
4(a).

 

“Original
Issue Date” means the date of the first issuance of the
Notes, regardless of any transfers of any Note and regardless of
the number of instruments which may be issued to evidence such
Notes.

 

“Payment
Date” shall have the meaning set forth in Section
2(b).

 

“Permitted
Indebtedness” means capital lease obligations and purchase
money indebtedness incurred in connection with the acquisition of
assets and other indebtedness listed on Schedule P-1 attached hereto,
such other indebtedness to be subordinate to the indebtedness of
Holder.

 

“Permitted
Lien” means the individual and collective reference to the
following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and
other governmental charges or levies being contested in good faith
and by appropriate proceedings for which adequate reserves (in the
good faith judgment of the management of the Company) have been
established in accordance with GAAP, (b) Liens imposed by Law which
were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and
mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s
business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or
materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being
contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing for the foreseeable
future the forfeiture or sale of the property or asset subject to
such Lien, (c) Liens incurred in connection with Permitted
Indebtedness, (d) Liens described on Schedule P-1 attached hereto,
(e) Liens or security interests in favor of Senior Creditor or
liens or security interests in favor of Holder subordinated to
Senior Creditor in accordance with the Subordination Agreement, (f)
zoning restrictions and easements, licenses, covenants and other
restrictions affecting the use of real property and not interfering
in any material respect with ordinary conduct of business, (g)
Liens consisting of deposits or pledges made in the ordinary course
of business in connection with workers’ compensation,
unemployment, social security and similar laws, or to secure the
performance of statutory obligations, bids, leases, government
contracts, trade contracts, and other similar obligations
(exclusive of obligations for the payment of borrowed money), (h)
licenses (with respect to intellectual property and other
property), reagent rentals and their related financing
documentation, leases, subleases and usage arrangements granted to
third parties in the ordinary course of business, (i) Liens in
favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the
importation of goods, (j) standard Liens of collecting banks under
the UCC on items in the course of collection, statutory Liens and
rights of set-off of banks, (k) Liens arising from filing UCC
financing statements relating solely to leases not prohibited by
the Transaction Documents or the Senior Documents, and (l) Liens
resulting from any judgment that is not itself an Event of
Default.

 

“PIK
Interest” shall have the meaning set forth in Section
2(a).

 

“Principal
Amount” means the Original Principal Amount plus all Accrued
PIK Interest.

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as
of August , 2017 among the Company and the original Holder, as
amended, modified or supplemented from time to time in accordance
with its terms.

 

“Purchase
Rights” shall have the meaning set forth in Section
5(c).

 

“Securities
Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

 

“Security
Agreement” means the Security Agreement, dated August , 2017,
by and between the Company and the Collateral Agent.

 

“Senior
Creditor” shall have the meaning set forth in the
Subordination Agreement.

 

 

 

-3-

 

 

“Senior
Debt” shall mean all obligations, liabilities and
indebtedness of every nature of the Company or any guarantor from
time to time owed to GPB Debt Holdings II, LLC or its successors
and assigns under the Senior 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
Documents” shall have the meaning set forth in the
Subordination Agreement.

 

“Share
Delivery Date” shall have the meaning set forth in Section
4(c)(ii).

 

“Subordination
Agreement” shall mean the Subordination and Intercreditor
Agreement, dated [_____________], 2017, by and among (i) GPB Debt
Holdings II, LLC, (ii) the subordinated creditors listed therein
and (iii) the Company.

 

“Successor
Entity” shall have the meaning set forth in Section
5(e).

 

“Transaction
Documents” shall have the meaning set forth in the Purchase
Agreement.

 

Section
2.                      Interest;
Amortization
Payments.

 

(a)           Interest.
Interest shall accrue to the Holder on the aggregate unconverted
and then outstanding principal amount of this Note, which principal
amount shall include all Accrued PIK Interest as described in
clause (c) below, at the rate of (i) thirteen and one quarter
percent (13.25%) per annum paid in cash (the “Cash
Interest”) plus (ii) one percent (1%) per annum paid in kind
(the “PIK Interest”), calculated on the basis of a
360-day year and shall accrue and compound monthly commencing on
the Original Issue Date until payment in full of the outstanding
principal (or conversion to the extent applicable), together with
all accrued and unpaid interest, including Accrued PIK Interest,
and other amounts which may become due hereunder, has been made.
Following an Event of Default, until such Event of Default has been
cured or waived, Cash Interest shall accrue at the lesser of (i)
the rate of eighteen and one quarter percent (18.25%) per annum,
and (ii) the maximum amount permitted by law (the lesser of clause
(i) and (ii), the “Default Interest Rate”) and PIK
Interest shall continue to accrue. In the event that such Event of
Default is subsequently cured or waived, the adjustment referred to
in the preceding sentence shall cease to be effective as of the
calendar day immediately following the date of such cure; provided
that the interest as calculated and unpaid at the Default Interest
Rate during the continuance of such Event of Default shall continue
to apply to the extent relating to the days after the occurrence of
such Event of Default through and including the date of such cure
of such Event of Default or waiver.

 

(b)           Payments.
The Company shall make monthly interest payments of Cash Interest
and PIK Interest in arrears on the first Business Day of each
calendar month following the Original Issue Date (each an
“Interest Payment”) and, beginning on the 24th-month
anniversary of the Original Issue Date, the Company shall make
quarterly principal payments on the Original Principal Amount
outstanding (each such payment, an “Amortization
Payment” and each date on which the Company makes an Interest
Payment or an Amortization Payment, including the Maturity Date, a
“Payment Date”). If any Payment Date is not a Business
Day, then the applicable payment shall be due on the next
succeeding Business Day. Each Interest Payment shall be equal to
all accrued but unpaid interest (the “Accrued
Interest”). Each Amortization Payment shall be equal to 10%
of the Original Principal Amount of the Note, with the remaining
unpaid balance of the Principal Amount due on the Maturity
Date.

 

(c)           Payment.
All Cash Interest payments and Amortization Payments shall be made
in cash on any Payment Date. All PIK Interest accrued from the
previous Payment Date to such Payment Date (the “Accrued PIK
Interest”) shall be paid by increasing the Principal Amount
outstanding at the time of such payment by the amount of the
Accrued PIK Interest. Following an increase in the principal amount
outstanding as a result of Accrued PIK Interest the Note will bear
interest on such increased principal amount. Any reference to
outstanding principal amount of this Note (other than a reference
to Original Principal Amount) shall include all Accrued PIK
Interest.

 

 

 

-4-

 

 

(d)           Success
Fee. Subject to this Section 2(d), the Note may be prepaid
without penalty, in whole or in part, at any time prior to the
Maturity Date. In order to prepay the Notes (or any portion
thereof), the Company shall provide 20 days prior written notice to
the Holder, during which time the Holder may convert the Notes in
whole or in part at the Conversion Price.

 

Upon
any repayments or prepayment of the Principal Amount, in whole or
in part, for any reason and at any time (whether by voluntary
prepayment by the Company, by payment of the Amortization Payments
in accordance with Section 2(b), by reason of the occurrence of an
Event of Default, upon maturity, or otherwise), the Company shall
pay the Holder an additional fee equal to 3% of the Principal
Amount (or such portion thereof being prepaid).

 

Section
3.                      Registration
of Transfers and Exchanges.

 

(a)           Different
Denominations. This Note is exchangeable for an equal
aggregate principal amount of Notes of different authorized
denominations (of no less than $1,000 in principal amount), as
requested by the Holder surrendering the same. No service charge
will be payable for such registration of transfer or
exchange.

 

(b)           Investor
Representations. This Note has been issued subject to
certain investment representations of the original Holder set forth
in the Purchase Agreement and may be transferred or exchanged only
in compliance with the Purchase Agreement and applicable federal
and state securities laws and regulations.

 

(c)           Reliance
on Note Register. Prior to due presentment for transfer to
the Company of this Note, the Company and any agent of the Company
may treat the Person in whose name this Note is duly registered on
the Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or
not this Note is overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary.

 

Section
4.                      Conversion.

 

(a)           Voluntary
Conversion. After the Original Issue Date until this Note is
no longer outstanding, and provided that that the provisions of
Rule 144 under the Securities Act so permit, this Note shall be
convertible, in whole or in part, at any time, and from time to
time, into shares of Common Stock at the option of the Holder (a
“Conversion”). The Holder shall effect conversions by
delivering to the Company a Notice of Conversion, the form of which
is attached hereto as Annex A (each, a “Notice
of Conversion”), specifying therein the amount of this Note
to be converted and the date on which such Conversion shall be
effected (such date, the “Conversion Date”). If no
Conversion Date is specified in a Notice of Conversion, the
Conversion Date shall be the date that such Notice of Conversion is
deemed delivered hereunder. No ink-original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Conversion form be
required. To effect
conversions hereunder, the Holder shall not be required to
physically surrender this Note to the Company unless the Principal
Amount1, plus accrued and unpaid Cash Interest,
has been so converted. Conversions hereunder shall have the effect
of lowering the Principal Amount of this Note in an amount equal to
the applicable Conversion. The Holder and the Company shall
maintain records showing the portion of the Principal Amount
converted in each Conversion, each Conversion Date, and the
Conversion Price in effect at the time of each Conversion. The
Holder shall pay any and all transfer, stamp, issuance and similar
taxes, costs and expenses (including, without limitation, fees and
expenses of any transfer agent of the Company (the “Transfer
Agent”) and the Depository Trust Company
(“DTC”)), that may be payable with respect to the
issuance and delivery of Common Stock upon any Conversion.
The Holder, and any permitted
assignee by acceptance of this Note, acknowledges and agrees that,
by reason of the provisions of this paragraph, following a
Conversion, the unpaid and unconverted Principal Amount of this
Note may be less than the amount stated on the face
hereof.

 

(b)           Conversion
Price. The “Conversion Price” in effect on any
Conversion Date means, as of any Conversion Date or other date of
determination, 
$0.70 subject to adjustment as defined in Section
5.

 

 

-5-

 

 

(c)           Mechanics
of Conversion or Prepayment.

 

(i)           Conversion
Shares Issuable Upon Conversion of Principal Amount. The
number of Conversion Shares shall be determined by the quotient
obtained by dividing (x) the outstanding Principal Amount of this
Note to be converted by (y) the Conversion Price in effect at
the time of such Conversion.

 

(ii)           Delivery
of Certificate Upon Conversion. Not later than three (3)
Business Days after each Conversion Date (the “Share Delivery
Date”), the Company shall (1) provided the Transfer Agent is
participating in the DTC Fast Automated Securities Transfer
Program, credit such aggregate number of shares of Common Stock to
which the Holder shall be entitled pursuant to such conversion to
the Holder’s or its designee’s balance account with DTC
through its Deposit/Withdrawal at Custodian system, or (2) if the
Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, upon the request of the Holder, issue
and deliver (via reputable overnight courier) to the address as
specified in the Conversion Notice, a certificate, registered in
the name of the Holder or its designee, for the number of shares of
Common Stock to which the Holder shall be entitled pursuant to such
Conversion under this Section 4(c), which, on or after the date on
which such Conversion Shares are eligible to be sold under Rule 144
without the need for current public information and the Company has
received an opinion of counsel to such effect reasonably acceptable
to the Company (which opinion the Company will be responsible for
obtaining at its own cost), shall be free of restrictive legends
and trading restrictions.

 

(iii)           Failure
to Deliver Certificates. If, in the case of any Notice of
Conversion, Holder’s or its designees’ account with DTC
is not credited or such certificate or certificates are not
delivered to or as directed by the applicable Holder by the Share
Delivery Date (as the case may be), the Holder shall be entitled to
elect by written notice to the Company at any time on or before its
receipt of such certificate or certificates, to rescind such
Conversion, in which event the Company shall promptly return to the
Holder any original Note delivered to the Company and the Holder
shall promptly return to the Company the Common Stock certificates
issued to such Holder pursuant to the rescinded Conversion
Notice.

 

(iv)           Partial
Liquidated Damages. If the Company fails for any reason to
credit Holder’s or its designees’ account with DTC or
issue and deliver to the Holder such certificate or certificates
pursuant to Section 4(c)(ii) by the Share Delivery Date (a
“Conversion Failure”), and if on or after such Share
Delivery Date the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of
a sale by the Holder of all or any portion of the number of shares
of Common Stock issuable upon such conversion that the Holder
anticipated receiving from the Company (a “Buy-In”),
then, in addition to all other remedies available to the Holder,
the Company shall, within three (3) Business Days after receipt of
the Holder’s request and in the Holder’s sole
discretion, either, at the Holder’s option (1) pay cash to
the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions and other out-of-pocket
expenses, if any) for the shares of Common Stock so purchased
(including, without limitation, by any other Person in respect, or
on behalf, of the Holder) (the “Buy-In Price”), at
which point the Company’s obligation to so issue and deliver
such certificate or credit the balance account of the Holder or the
Holder’s designee, as applicable, with DTC for the number of
shares of Common Stock to which the Holder is entitled upon the
Holder’s conversion of the applicable Conversion Amount shall
terminate, or (2) promptly (but in no event later than two (2)
Business Days following the request by the Holder) honor its
obligation to so issue and deliver to the Holder a certificate or
certificates representing such shares of Common Stock or credit the
balance account of such Holder or such Holder’s designee, as
applicable, with DTC for the number of shares of Common Stock to
which the Holder anticipated receiving from the Company and pay
cash to the Holder in an amount equal to the excess (if any) of the
Buy-In Price over the product of (x) such number of shares of
Common Stock multiplied by (y) the lowest closing sale price or
closing bid price (as the case may be) of the Common Stock on any
Business Day during the period commencing on the date of the
applicable Conversion Notice and ending on the date of such
issuance and payout under this clause II (the “Buy-In Payment
Amount”). Nothing herein or elsewhere shall limit the
Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity, including, without limitation, a
decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock (or to timely
electronically deliver such shares of Common Stock) upon the
conversion of this Note as required pursuant to the terms hereof.
The Company shall also pay to the Holder, in cash, as liquidated
damages and not as a penalty, for each $1,000 of principal amount
being converted, $10 per Business Day (increasing to $20 per
Business Day on the tenth Business Day after such Conversion Date)
for each Business Day after such Share Delivery Date until such
certificates are delivered or Holder rescinds such conversion.
Nothing herein shall limit a Holder’s right to pursue actual
damages or declare an Event of Default pursuant to Section 7 hereof
for the Company’s failure to deliver

 

 

-6-

 

 

Conversion
Shares by the Share Delivery Date or, if applicable, cash, within
the period specified herein, and the Holder shall have the right to
pursue all remedies available to it hereunder, at Law or in equity
including, without limitation, a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not
prohibit the Holder from seeking to enforce damages pursuant to any
other Section hereof or under applicable Law.

 

(v)           Reserved.

 

(vi)           Reservation
of Shares Issuable Upon Conversion. The Company covenants
that it will reserve and keep available out of its authorized and
unissued shares of Common Stock for the purpose of issuances upon
conversion of this Note and the issued with this Note, free from
preemptive rights or any other actual contingent purchase rights of
Persons other than the Holder (and the other holders of the Notes),
not less than the amount of shares of Common Stock as shall from
time to time be sufficient to effect the conversion of the
outstanding principal amount of this Note; and if at any time the
number of authorized but unissued shares of Common Stock shall be
insufficient to effect such conversion, the Company shall take such
corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such
purpose. The Company covenants that all shares of Common Stock that
shall be issuable upon conversion of this Note shall, upon issue,
be duly authorized, validly issued, fully paid and
nonassessable.

 

(vii)           Fractional
Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the conversion of this Note.
As to any fraction of a share which the Holder would otherwise be
entitled to purchase upon such conversion, the Company shall at its
election, either pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the
Conversion Price or round up to the next whole share.

 

(viii)           Transfer
Taxes and Expenses. The issuance of certificates for shares
of the Common Stock on conversion of this Note shall be made
without charge to the Holder hereof for any documentary stamp or
similar taxes that may be payable in respect of the issue or
delivery of such certificates, provided that, the Company shall not
be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any such
certificate upon conversion in a name other than that of the Holder
of this Note so converted and the Company shall not be required to
issue or deliver such certificates unless or until the Person or
Persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid. The
Company shall pay all Transfer Agent fees required for same-day
processing of any Notice of Conversion and all fees to DTC (or
another established clearing corporation performing similar
functions) required for same-day electronic delivery of the
Conversion Shares.

 

(d)                      Holder’s
Conversion Limitations. The Company shall not effect any
conversion of this Note, and a Holder shall not have the right to
convert any portion of this Note, to the extent that after giving
effect to the conversion set forth on the applicable Notice of
Conversion, the Holder (together with the Holder’s
Affiliates, and any Persons acting as a group together with the
Holder or any of the Holder’s Affiliates) would beneficially
own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of
shares of Common Stock beneficially owned by the Holder and its
Affiliates shall include the number of shares of Common Stock
issuable upon conversion of this Note with respect to which such
determination is being made, but shall exclude the number of shares
of Common Stock which are issuable upon (i) conversion of the
remaining, unconverted principal amount of this Note beneficially
owned by the Holder or any of its Affiliates and (ii) exercise or
conversion of the unexercised or unconverted portion of any other
securities of the Company subject to a limitation on conversion or
exercise analogous to the limitation contained herein (including,
without limitation, any other Notes or the Warrants) beneficially
owned by the Holder or any of its Affiliates. Except as set forth
in the preceding sentence, for purposes of this Section 4(d),
beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. To the extent that the limitation contained in this
Section 4(d) applies, the determination of whether this Note is
convertible (in relation to other securities owned by the Holder
together with any Affiliates) and of which principal amount of this
Note is convertible shall be in the sole discretion of the Holder,
and the submission of a Notice of Conversion shall be deemed to be
the Holder’s determination of whether this Note may be
converted (in relation to other securities owned by the Holder
together with any Affiliates) and which principal amount of this
Note is convertible, in each case subject to the Beneficial
Ownership Limitation. To ensure compliance with this restriction,
the Holder will be deemed to represent to the Company each time it
delivers a Notice of Conversion that such Notice of
Conversion

 

 

 

-7-

 

 

has not
violated the restrictions set forth in this paragraph and the
Company shall have no obligation to verify or confirm the accuracy
of such determination. In addition, a
determination as to any group status as contemplated above shall be
determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated
thereunder. For purposes of
this Section 4(d), in determining the number of outstanding shares
of Common Stock, the Holder may rely on the number of outstanding
shares of Common Stock as stated in a written notice by the Company
or the Company’s transfer agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two (2) Business Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Note, by the Holder or its Affiliates since the date
as of which such number of outstanding shares of Common Stock was
reported. The “Beneficial Ownership Limitation” shall
be 4.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common
Stock issuable upon conversion of this Note held by the Holder. The
Holder, upon not less than 61 days’ prior notice to the
Company, may increase the Beneficial Ownership Limitation
provisions of this Section 4(d) solely with respect to the
Holder’s Note, provided that the Beneficial Ownership
Limitation in no event exceeds 9.99% of the number of shares of
Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock upon conversion of this Note
held by the Holder and the provisions of this Section 4(d) shall
continue to apply. Any such increase or decrease will not be
effective until the 61st day after such notice is delivered to the
Company. The Holder may also decrease the Beneficial Ownership
Limitation provisions of this Section 4(d) solely with respect to
the Holder’s Note at any time, which decrease shall be
effectively immediately upon delivery of notice to the Company. The
Beneficial Ownership Limitation provisions of this paragraph shall
be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 4(d) to correct this
paragraph (or any portion hereof) which may be defective or
inconsistent with the intended Beneficial Ownership Limitation
contained herein or to make changes or supplements necessary or
desirable to properly give effect to such limitation. The limitations contained in this paragraph shall
apply to a successor holder of this Note.

 

Section
5.                      Certain
Adjustments.

 

(a)           Stock
Dividends and Stock Splits. If the Company, at any time
while this Note is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions payable in shares
of Common Stock on shares of Common Stock or any Common Stock
Equivalents (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company upon conversion of, or
payment of interest on, the Notes or pursuant to any of the other
Transaction Documents), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, (iii) combines
(including by way of a reverse stock split) outstanding shares of
Common Stock into a smaller number of shares or (iv) issues, in the
event of a reclassification of shares of the Common Stock, any
shares of capital stock of the Company, then the Conversion Price
shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding any treasury shares
of the Company) outstanding immediately before such event, and of
which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made
pursuant to this Section shall become effective immediately after
the record date for the determination of shareholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.

 

(b)           Reserved.

 

(c)           Subsequent
Rights Offerings. In addition
to any adjustments pursuant to Section 5(a) above, if at any time
the Company grants, issues or sells any Common Stock, Common Stock
Equivalents or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of
shares of Common Stock (the “Purchase Rights”), then
the Holder will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of
shares of Common Stock acquirable upon complete conversion of this
Note (without regard to any limitations on conversion hereof,
including without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided,
however,
to the extent that the Holder’s right to participate in any
such Purchase Right would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Purchase Right to such extent (or
in the beneficial ownership of any shares of Common Stock as a
result of such Distribution to such extent)).

 

 

 

-8-

 

 

(d)           Pro
Rata Distributions. During such time as this Note is
outstanding, if the Company shall declare or make any dividend or
other distribution of its assets or rights or warrants to acquire
its assets, or subscribe for or purchase any security other than
Common Stock, to holders of shares of Common Stock, by way of
return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction)
(a “Distribution”), at any time after the issuance of
this Note, then, in each such case, the Holder shall be entitled to
participate in such Distribution to the same extent that the Holder
would have participated therein if the Holder had held the number
of shares of Common Stock acquirable upon complete conversion of
this Note (without regard to any limitations on exercise hereof,
including without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such
Distribution, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined
for the participation in such Distribution (provided, however, to the extent that the
Holder's right to participate in any such Distribution would result
in the Holder exceeding the Beneficial Ownership Limitation with
respect to the Company or any other publicly-traded corporation
subject to Section 13(d) of the Exchange Act, then the Holder shall
not be entitled to participate in such Distribution to such extent
(or in the beneficial ownership of any shares of Common Stock as a
result of such Distribution to such extent)).) and the portion of
such Distribution shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership Limitation
with respect to the Company or any other publicly-traded
corporation subject to Section 13(d) of the Exchange
Act).).

 

(e)           Fundamental
Transaction. If, at any time while this Note is outstanding,
(i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company
with or into another Person, (ii) the Company, directly or
indirectly, effects any sale, lease, license, assignment, transfer,
conveyance or other disposition of all or substantially all of its
assets in one or a series of related transactions, (iii) any,
direct or indirect, purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to
which holders of Common Stock are permitted to sell, tender or
exchange their shares for other securities, cash or property and
has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one
or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash
or property, (v) the Company, directly or indirectly, in one or
more related transactions consummates a stock or share purchase
agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock
(not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share
purchase agreement or other business combination) (each a
“Fundamental Transaction”, then, upon any subsequent
conversion of this Note, the Holder shall have the right to
receive, for each Conversion Share that would have been issuable
upon such Conversion immediately prior to the occurrence of such
Fundamental Transaction (without regard to any limitation on the
Conversion of this Note), the number of shares of Common Stock of
the successor or acquiring corporation or of the Company, if it is
the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable as a result of
such Fundamental Transaction by a holder of the number of shares of
Common Stock for which this Note is convertible immediately prior
to such Fundamental Transaction (without regard to any limitation
on the conversion of this Note). For purposes of any such
conversion, the determination of the Conversion Price shall be
appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect
of one (1) share of Common Stock in such Fundamental Transaction,
and the Company shall apportion the Conversion Price among the
Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to
the Alternate Consideration it receives upon any conversion of this
Note following such Fundamental Transaction. Notwithstanding
anything to the contrary, in the event of a Fundamental Transaction
that is (1) an all cash transaction, (2) a “Rule 13e-3
transaction” as defined in Rule 13e-3 under the Exchange Act,
or (3) a Fundamental Transaction involving a person or entity not
traded on a trading market, the Company or any Successor Entity (as
defined below) shall, at the Holder’s option, exercisable
concurrently with the consummation of the Fundamental Transaction,
purchase this Note from the Holder by paying to the Holder the
product of (a) the number of Conversion Shares issuable upon full
conversion of this Note (without regard to any limitation on
conversion of this Note) and (b) the positive
difference

 

 

 

-9-

 

 

between
the cash per share paid in such Fundamental Transaction minus the
then in effect Conversion Price. The Company shall cause any
successor entity in a Fundamental Transaction in which the Company
is not the survivor (the “Successor Entity”) to assume
in writing all of the obligations of the Company under this Note
and the other Transaction Documents in accordance with the
provisions of this Section 5(e) pursuant to written agreements in
form and substance reasonably satisfactory to the Holder and
approved by the Holder (without unreasonable delay) prior to such
Fundamental Transaction and shall, at the option of the holder of
this Note, deliver to the Holder in exchange for this Note a
security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to this Note which is
convertible for a corresponding number of shares of capital stock
of such Successor Entity (or its parent entity) equivalent to the
shares of Common Stock acquirable and receivable upon conversion of
this Note (without regard to any limitations on the conversion of
this Note) prior to such Fundamental Transaction , and with a
conversion price which applies the Conversion Price hereunder to
such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such conversion price being
for the purpose of protecting the economic value of this Note
immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and
substance to the Holder. Upon the occurrence of any such
Fundamental Transaction , the Successor Entity shall succeed to,
and be substituted for (so that from and after the date of such
Fundamental Transaction , the provisions of this Note and the other
Transaction Documents referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every
right and power of the Company and shall assume all of the
obligations of the Company under this Note and the other
Transaction Documents with the same effect as if such Successor
Entity had been named as the Company herein. Notwithstanding
anything in this Section 5(e), an Exempt Issuance shall not be
deemed a Fundamental Transaction.

 

(f)           Calculations.
All calculations under this Section 5 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 5, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding any treasury
shares of the Company) issued and outstanding.

 

(g)           Notice
to the Holder.

 

(i)           Adjustment
to Conversion Price. Whenever the Conversion Price is
adjusted pursuant to any provision of this Section 5, the Company
shall promptly deliver to each Holder a notice setting forth the
Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.

 

(ii)           Notice
to Allow Conversion by Holder. If (A) the Company shall
declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock,
(C) the Company shall authorize the granting to all holders of the
Common Stock of rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights, (D) the
approval of any shareholders of the Company shall be required in
connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property or (E)
the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company, then, in each case, the Company shall
cause to be filed at each office or agency maintained for the
purpose of conversion of this Note, and shall cause to be
delivered to the Holder at its last
address as it shall appear upon the Note Register, at least thirty
(30) calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange, provided that the failure to
deliver such notice or any defect therein or in the delivery
thereof shall not affect the validity of the corporate action
required to be specified in such notice. To the extent that any
notice provided hereunder constitutes, or contains, material,
non-public information regarding the Company or any of the
Subsidiaries (as determined in good faith by the Company), the
Company or its successor shall simultaneously file such notice with
the SEC pursuant to a Current Report on Form 8-K. The Holder shall
remain entitled to convert this Note during the 10-day period
commencing on the date of such notice through the effective date of
the event triggering such notice except as may otherwise be
expressly set forth herein.

 

 

 

-10-

 

 

Section
6.                      Guaranty,
Subordination and Security. Each of MEDITECH Enterprises
Inc., MEDITE GmbH, MEDITE GmbH, MEDITE Lab Solutions, Inc., MEDITE
sp.zo.o, and CytoGlobe, GmbH shall unconditionally and irrevocably
guaranty to pay and perform all of the obligations of the Company
under this Note pursuant to the Guaranty Agreements. Payment of
this Note shall be subordinated to all Senior Debt in accordance
with the Subordination Agreement and secured in accordance with the
Security Agreement.

 

Section
7.                      Negative
Covenants. As long as any portion of this Note remains
outstanding, unless the holders of a majority in principal amount
of the then outstanding Notes shall have otherwise given prior
written consent, the Company shall not, and shall not permit any of
the Subsidiaries to, directly or indirectly:

 

(a)           other
than Permitted Indebtedness, enter into, create, incur, assume,
guarantee or suffer to exist any Indebtedness for borrowed money of
any kind, including, but not limited to, a guarantee, on or with
respect to any of its property or assets now owned or hereafter
acquired or any interest therein or any income or profits
therefrom;

 

(b)           other
than Permitted Liens, enter into, create, incur, assume or suffer
to exist any Liens of any kind, on or with respect to any of its
property or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom;

 

(c)           amend
its charter documents, including, without limitation, its
certificate of incorporation and bylaws, in any manner that
materially and adversely affects any rights of the Holder, provided
that any amendment to the increase in Shares for any employee stock
option plan shall not be considered materially and adversely
affecting any rights of the Holder;

 

(d)           repay,
repurchase or offer to repay, repurchase or otherwise acquire more
than a de
minimis number of
shares of its Common Stock or Common Stock Equivalents other than
as to the Conversion Shares or Warrant Shares as permitted or
required under the Transaction Documents;

 

(e)           repay,
repurchase or offer to repay, repurchase or otherwise acquire
(other than Permitted Indebtedness) any Indebtedness, other than
the Notes if on a pro-rata basis, and other than regularly
scheduled principal and interest payments, provided that such
payments shall not be permitted if, at such time, or after giving
effect to such payment, any Event of Default exist or occur
provided,
however, this
covenant shall not apply with respect to the exercise of any
Holder’s conversion under
Section 4;

 

(f)           pay
cash dividends or distributions on any equity securities of the
Company;

 

(g)           enter
into any transaction with any Affiliate of the Company and its
Subsidiaries, unless such transaction is made on an
arm’s-length basis and expressly approved by a majority of
the disinterested directors of the Company (even if less than a
quorum otherwise required for board approval); or

 

(h)           enter
into any agreement with respect to any of the foregoing.

 

Section
8.                      Events
of Default. The Company must notify the Holder within two
(2) Business Days after it has become aware of an Event of
Default.

 

(a)           
“Event of
Default” means, wherever used herein, any of the
following events (whatever the reason for such event and whether
such event shall be voluntary or involuntary or effected by
operation of Law or pursuant to any judgment, decree or order of
any court, or any order, rule or regulation of any administrative
or governmental body):

 

(i)           any
default in the payment of (A) the Principal Amount of any Note or
(B) interest (Cash Interest and/or PIK Interest), late fees,
liquidated damages and other amounts owing to a Holder on any Note,
as and when the same shall become due and payable (whether on a
Conversion Date or the Maturity Date or by acceleration or
otherwise) which default, solely in the case of an interest payment
or other default under clause (B) above, is not cured within three
(3) Business Days;

 

 

 

-11-

 

 

(ii)           the
Company shall fail to observe or perform any other covenant or
agreement contained in the Transaction Documents (other than as
specifically set forth in another clause of this Section 8(a))
which failure is not cured, if possible to cure, within the earlier
to occur of (A) seven (7) Business Days after notice of such
failure sent by the Holder or by any other Holder to the Company
and (B) ten (10) Business
Days after the Company has become aware of such
failure;

 

 (iii)                      any
representation or warranty made in this Note, any other Transaction
Document, any written statement pursuant hereto or thereto or any
other report, financial statement or certificate made or delivered
to the Holder or any other Holder pursuant hereto or thereto shall be untrue or
incorrect in any material respect as of the date when made or
deemed made;

 

(iv)           the
Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;

 

(v)           the
Company or any Subsidiary shall default on any of its obligations
under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which
there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long
term leasing or factoring arrangement that (a) involves an
obligation greater than $25,000, whether such indebtedness now
exists or shall hereafter be created, and (b) results in such
indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable and
such default is not cured within ten (10) Business
Days;

 

(vi)           the
Company shall have consummated a Change of Control Transaction or
Fundamental Transaction without the Holder’s consent without
paying in full all amounts owed under the Note at or prior to such
consummation;

 

(vii)           a
final judgment for the payment of money aggregating in excess of
$50,000 is rendered against the Company and/or any of its
Subsidiaries and which judgment is not, within 45 days after the
entry thereof, bonded, discharged or stayed pending appeal, or is
not discharged within 60 days after the expiration of such stay;
provided, however, any judgment that is covered by insurance or an
indemnity from a credit-worthy party will not be included in
calculating the amount of the judgment so long as the Company
provides the Holder a written statement from such insurer or
indemnity provider (which written statement shall be reasonably
satisfactory to the Holder) to the effect that such judgment is
covered by insurance or an indemnity and the Company or such
Subsidiary (as the case may be) will receive the proceeds of such
insurance or indemnity within 30 days of the issuance of such
judgment ;

 

(viii)
the Company shall fail to satisfy the current public information
requirement under Rule 144(c) of the Securities Act, and any such
failure remains uncured for at least five (5) Business
Days;

 

(ix) the Company shall fail to remove any
restrictive legend on any certificate or any shares of Common Stock
issued to the Holder upon conversion or exercise (as the case may
be) of any Securities acquired by the Holder under the Purchase
Agreement (including this Note) as and when required by such
Securities, unless otherwise then prohibited by applicable federal
or state securities laws, and any such failure remains uncured for
at least five (5) Business Days; or

 

(x) the
Company’s (A) failure to cure a Conversion Failure or a
Delivery Failure (as defined in the Warrants) by delivery of the
required number of shares of Common Stock within five Business Days
after the applicable Conversion Date or exercise date (as the case
may be) or (B) notice to any holder of Notes or Warrants, including
by way of public announcement, of the Company’s intention to
not honor requests for conversions of any Notes in accordance with
the terms hereof or honor requests for exercise of any Warrants in
accordance with the terms thereof.

 

 

 

-12-

 

 

(b)           Remedies
Upon Event of Default. If any Event of Default occurs, the
Mandatory Default Amount shall become, at the Holder’s
election, immediately due and payable in cash at the Mandatory
Default Amount. Upon the payment in full of the Mandatory Default
Amount, the Holder shall promptly surrender this Note to or as
directed by the Company. In connection with such acceleration
described herein, the Holder need not provide, and the Company
hereby waives, any presentment, demand, protest or other notice of
any kind, and the Holder may immediately and without expiration of
any grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable
Law. Such acceleration may be rescinded and annulled by Holder at
any time prior to payment hereunder and the Holder shall have all
rights as a holder of the Note until such time, if any, as the
Holder receives full payment pursuant to this Section 7(b). No such
rescission or annulment shall affect any subsequent Event of
Default or impair any right consequent thereon.

 

(c)           Interest
Rate Upon Event of Default. Commencing on the occurrence of
any Event of Default and until such Event of Default is cured or
waived, this Note shall accrue interest at an interest rate equal
to the Default Interest Rate.

 

Section
9.                      
Miscellaneous.

 

(a)           No
Rights as Stockholder Until Conversion. This Note does not
entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the conversion hereof
other than as explicitly set forth in Section 4.

 

(b)           Notices.
All notices, offers, acceptance and any other acts under this
Agreement (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressees in person, by
Federal Express or similar receipted next business day delivery, as
follows:

 

If to
the
Company:                                                                 
Medite Cancer Diagnostics, Inc.

4203 SW
34th Street

Orlando, FL
32811

Telephone No.:
(407) 996-9630

Facsimile No.: [
]

Attention: David
Patterson

E-mail:
pattersond@medite-group.com

 

with a
copy
to:                                                                       
Taft Stettinius & Hollister LLP

One
Indiana Square, Suite 3500

Indianapolis, IN
46204

Telephone No.:
(317) 713-3480

Attention: Brad
Schwer

E-mail:
bschwer@taftlaw.com

 

If to
Holder:                                                                      
Address on signature page

 

with a copy
to:                                                                       

Gracin &
Marlow, LLP

The
Chrysler Building

405
Lexington Avenue, 26th Floor

New
York, New York 10174

Telephone No.:
(212) 907-6457

Facsimile No.:
(212) 208-4657

Attention: Leslie
Marlow, Esq.

E-mail:
lmarlow@gracinmarlow.com

 

or to
such other address as any of them, by notice to the other may
designate from time to time. Time shall be counted to, or from, as
the case may be, the date of delivery.

 

 

 

-13-

 

 

(c)           Absolute
Obligation. Except as expressly provided herein, no
provision of this Note shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal
of liquidated damages and accrued interest and late fees, as
applicable, on this Note at the time, place, and rate, and in the
coin or currency, herein prescribed. This Note is a direct debt
obligation of the Company. This Note ranks 
pari passu
with all other Notes now or hereafter issued under the Purchase
Agreement.

 

(d)           Lost
or Mutilated Note. If this Note shall be mutilated, lost,
stolen or destroyed, the Company shall execute and deliver, in
exchange and substitution for and upon cancellation of a mutilated
Note, or in lieu of or in substitution for a lost, stolen or
destroyed Note, a new Note for the principal amount of this Note so
mutilated, lost, stolen or destroyed, but only upon receipt of
evidence of such loss, theft or destruction of such Note, and of
the ownership hereof, reasonably satisfactory to the Company. The
applicant for a new Note under such circumstances shall also pay
any reasonable third-party costs (including customary indemnity)
associated with the issuance of the new Note.

 

(e)           Exclusive
Jurisdiction; Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this Note
shall be governed by and construed and enforced in accordance with
the internal laws of the State of New York, without regard to the
principles of conflict of laws thereof. Each party agrees that all
legal proceedings concerning the interpretation, enforcement and
defense of the transactions contemplated by any of the Transaction
Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents)
shall only be commenced in the state and federal courts sitting in
New York, New York (the “New York Courts”). Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of
the New York Courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), 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 such New York Courts, or such New York Courts are
improper or inconvenient venue for such proceeding. 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 via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Note 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 other
manner permitted by applicable Law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable
Law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Note or the transactions
contemplated hereby.

 

(f)           Waiver.
Any waiver by the Company or the Holder of a breach of any
provision of this Note shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of
any other provision of this Note. The failure of the Company or the
Holder to insist upon strict adherence to any term of this Note on
one or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence
to that term or any other term of this Note on any other occasion.
Any waiver by the Company or the Holder must be in
writing.

 

(g)           Severability.
If any provision of this Note is invalid, illegal or unenforceable,
the balance of this Note shall remain in effect, as long as the
essential terms and conditions of this Note for each party remain
valid, binding, and enforceable. If it shall be found that any
interest or other amount deemed interest due hereunder violates the
applicable Law governing usury, the applicable rate of interest due
hereunder shall automatically be lowered to equal the maximum rate
of interest permitted under applicable Law.

 

 

 

-14-

 

 

(h)           Remedies,
Characterizations, Other Obligations, Breaches and Injunctive
Relief. The remedies provided in this Note shall be
cumulative and in addition to all other remedies available under
this Note and any of the other Transaction Documents at Law or in
equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the
Holder’s right to pursue actual and consequential damages for
any failure by the Company to comply with the terms of this
Note. Amounts set forth or
provided for herein with respect to payments, conversion and the
like (and the computation thereof) shall be the amounts to be
received by the Holder and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the
performance thereof). The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the
Holder and that the remedy at Law for any such breach would be
inadequate. The Company therefore agrees that, in the event of any
such breach or threatened breach, the Holder shall be entitled, in
addition to all other available remedies, to an injunction
restraining any such breach or any such threatened breach, without
the necessity of showing economic loss and without any bond or
other security being required. The Company shall provide all
information and documentation to the Holder that is reasonably
requested by the Holder to enable the Holder to confirm the
Company’s compliance with the terms and conditions of this
Note.

 

(i)           Next
Business Day. Whenever any payment or other obligation
hereunder shall be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business
Day.

 

 (j)           Authorized
Shares. The Company covenants that from and after the date
hereof it shall have reserved, and will continue to reserve, from
its authorized and unissued Common Stock, free of preemptive
rights, a sufficient number of shares equal to one (1) times the
number of shares of Common Stock issuable upon conversion of this
Note issuable under the Purchase Agreement to all Purchasers
thereunder (without regard to any limitations on exercise hereof,
including without limitation, the Beneficial Ownership Limitation,
and no later than, the date which is six (6) months from the
Original Issue Date, it shall have reserved, and will continue to
reserve, from its authorized and unissued Common Stock, free of
preemptive rights, a sufficient number of shares equal to two (2)
times the number of shares of Common Stock issuable upon conversion
of this Note issuable under the Purchase Agreement to all
Purchasers thereunder (without regard to any limitations on
exercise hereof, including without limitation, the Beneficial
Ownership Limitation). The Company further covenants that its
issuance of this Note shall constitute full authority to its
officers who are charged with the duty of executing the
Company’s securities to execute and issue the necessary
certificates for the shares of Common Stock issuable upon
conversion of this Note upon the exercise of the purchase rights
under this Note. The Company will take all such commercially
reasonable action as may be necessary to assure that such shares of
Common Stock issuable upon conversion of this Note may be issued as
provided herein without violation of any applicable law or
regulation, or of any requirements of any Trading Market upon which
the Common Stock may be listed. The Company covenants that all
shares of Common Stock issuable upon conversion of this Note which
may be issued upon the exercise of the purchase rights represented
by this Note will, upon exercise of the purchase rights represented
by this Note and payment for such shares of Common Stock issuable
upon conversion of this Note in accordance herewith, be duly
authorized, validly issued, fully paid and non-assessable and free
from all taxes, liens and charges created by the Company in respect
of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Note, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Note against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any shares of Common Stock
issuable upon conversion of this Note above the amount payable
therefor upon such exercise immediately prior to such increase in
par value, (ii) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock issuable upon
conversion of this Note upon the conversion of this Note and (iii)
use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable
the Company to perform its obligations under this
Note.

 

Before
taking any action which would result in an adjustment in the number
of shares of Common Stock issuable upon conversion of this Note or
in the Conversion Price, the Company shall use commercially
reasonable efforts to obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

 

(Signature Pages Follow)

 

 

-15-

 

 

IN
WITNESS WHEREOF, the Company has caused this Note to be duly
executed by a duly authorized officer as of the date first above
indicated.

 

 

	

MEDITE CANCER DIAGNOSTICS, INC.

 

 

 

	

By:
__________________________________________

Name:
David Patterson

Title:
Chief Executive Officer

 

 

 

 

-16-

 

 

ANNEX A

 

NOTICE OF CONVERSION

 

The
undersigned hereby elects to convert principal under the 13.25%
Secured Convertible Note due August , 2020 issued by Medite Cancer
Diagnostics, Inc., a Delaware corporation (the
“Company”), into shares of common stock (the
“Common Stock”), of the Company according to the
conditions hereof, as of the date written below. If shares of
Common Stock are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by the Company in
accordance therewith. No fee will be charged to the holder for any
conversion, except for such transfer taxes, if any.

 

By the
delivery of this Notice of Conversion the undersigned represents
and warrants to the Company that its ownership of the Common Stock
does not exceed the amounts specified under Section 4 of this Note,
as determined in accordance with Section 13(d) of the Exchange
Act.

 

The
undersigned agrees to comply with applicable securities laws in
connection with any transfer of the aforesaid shares of Common
Stock.

 

Conversion
calculations:

Date to
Effect Conversion:

 

Principal Amount of
Note to be Converted:

 

Payment
of Cash Interest in Common Stock __ yes __ no

If yes,
$_____ of Cash Interest Accrued on Account of Conversion at
issue.

 

Number
of shares of Common Stock to be issued:

 

 

Signature:

 

Name:

 

 

 

-17-

 

 

Schedule 1

CONVERSION SCHEDULE

 

The
13.25% Secured Convertible Note due on August , 2020 in the
original principal amount of $_____________ (the
“Note”) is issued by Medite Cancer Diagnostics, Inc., a
Delaware corporation. This Conversion Schedule reflects Conversions
made under Section 4 of the aforementioned Note.

 

	

 

Date
of Conversion

(or
for first entry, Original Issue Date)

	

 

Amount
of Converted Principal Amount

	

 

Aggregate
Principal Amount Remaining Subsequent to Conversion

(or
Original Principal Amount)

	

 

Applicable
Conversion Price

	

 

Company
Attest

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

 

 

 

 

-18-

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