Document:

Ex 10-2

Exhibit 10.2

 

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                                                                                                                                           
$5,356,400

 

13.25% SENIOR SECURED CONVERTIBLE NOTE

 

THIS
13.25% SENIOR SECURED CONVERTIBLE NOTE is issued at an 9.9%
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 GPB DEBT HOLDINGS
II, LLC or its registered assigns (the “Holder”), or
shall have paid pursuant to the terms hereunder, the principal sum
of Five Million Three Hundred Fifty Six Thousand Four Hundred
Dollars ($5,356,400) (“Original Principal Amount”) on
September 26, 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
9.9% original issue discount, on the date hereof, the Holder shall
deliver to the Company, or its assigns, cash in the amount of Four
Million Eight Hundred Seventy Five Thousand Dollars ($4,875,000).
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.

 

“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).

 

 

 

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“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, provided that such Liens are not secured by assets of
the Company or its Subsidiaries other than the assets so acquired
or leased other than the Lien securing the note in the principal
amount of $425,000 issued on the hereof that is subordinate to the
Holder’s Lien which may be secured by a second priority lien
on the assets of the Company or its Subsidiaries , (d) Liens
described on Schedule P-1 attached hereto provided that such Liens
are not secured by assets of the Company or its Subsidiaries, (e)
Liens or security interests in favor of Holder, (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, 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 September 25, 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 September 25,
2017, by and between the Company and the Collateral
Agent.

 

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

 

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

 

 

 

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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.

 

(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.

 

 

 

-4-

 

 

 

(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
Amount, 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, 
$0.65 subject to adjustment as defined in Section
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.

 

 

 

-5-

 

 

 

(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 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.

 

 

 

-6-

 

 

 

(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 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.

 

 

 

-7-

 

 

 

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)).

 

(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).).

 

 

 

-8-

 

 

 

(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 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.

 

 

 

-9-

 

 

 

(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.

 

Section
6.                       

Guaranty 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 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;

 

 

 

-10-

 

 

 

(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;

 

(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;

 

 

 

-11-

 

 

 

(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.

 

(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:

 

 

 

-12-

 

 

 

If to
the
Company:                                                                 
Medite Cancer Diagnostics, Inc.

4203 SW
34th Street

Orlando, FL
32811

Telephone No.:
(407) 996-9630

Facsimile No.:
(407) 996-9631

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.

 

(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.

 

 

 

-13-

 

 

 

(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.

 

(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).

 

 

 

-14-

 

 

 

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:
/s/ David E.
Patterson

Name:
David Patterson

Title:
Chief Executive Officer

 

 

 

 

-16-

 

 

ANNEX A

NOTICE OF CONVERSION

 

The
undersigned hereby elects to convert principal under the 13.25%
Senior Secured Convertible Note due September 24, 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% Senior Secured Convertible Note due on September 24, 2020 in
the original principal amount of $5,356,400 (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-Ex 10-3

Exhibit 10.3

SECURITY AGREEMENT

 

THIS
SECURITY AGREEMENT (as amended, restated, supplemented or otherwise
modified from time to time, this “Agreement”) dated as
of September 26, 2017, by and among Medite Cancer Diagnostics,
Inc., a Delaware corporation (the “Company”, and
together with each of the undersigned direct and indirect
Subsidiaries from time to time and any other Person who becomes a
party to this Agreement by execution of a joinder in the form of
Exhibit A attached
hereto being hereinafter sometimes referred to individually as a
“Debtor” and, collectively, as the
“Debtors”), and GPB Debt Holdings II, LLC, a Delaware
limited liability company, in its capacity as Collateral Agent (the
“Collateral Agent”), and Purchaser (together with its
successors and permitted assigns, the “Secured
Party”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant
to the Purchase Agreement (as hereafter defined), the Secured Party
will purchase that certain senior secured convertible note issued
by the Company (such note, together with any promissory notes or
other securities issued in exchange or substitution therefor or
replacement thereof, and as any of the same may be amended,
supplemented, restated or modified and in effect from time to time,
the “Notes”);

 

AND
WHEREAS, the Notes are being acquired by the Secured Party, and the
Secured Party has made certain financial accommodations to the
Company pursuant to a Purchase Agreement dated as of the date
hereof between the Company and the Secured Party (as the same may
be amended, restated, supplemented or otherwise modified from time
to time, the “Purchase Agreement”);

 

AND
WHEREAS, each Debtor will derive substantial benefit and advantage
from the financial accommodations to the Company set forth in the
Purchase Agreement and the Notes, and it will be to each such
Debtor’s direct interest and economic benefit to assist the
Company in procuring said financial accommodations from the Secured
Party;

 

AND
WHEREAS, to induce the Secured Party to enter into the Purchase
Agreement and purchase the Notes, Debtor will pledge and grant a
security interest in all of its right, title and interest in and to
the Collateral (as hereinafter defined) as security for its
Obligations for the benefit of the Secured Party and its successors
and permitted assigns;

 

NOW,
THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:

 

Section
1. Definitions. Capitalized terms
used herein without definition and defined in the Purchase
Agreement are used herein as defined therein. In addition, as used
herein:

 

“Accounts”
means any “account,” as such term is defined in the
UCC, and, in any event, shall include, without limitation,
“supporting obligations” as defined in the
UCC.

 

“Chattel
Paper” means any “chattel paper,” as such term is
defined in the UCC.

 

“Collateral”
shall have the meaning ascribed thereto in Section 3
hereof.

 

“Commercial
Tort Claims” means “commercial tort claims”, as
such term is defined in the UCC.

 

“Contracts”
means all contracts, undertakings, or other agreements (other than
rights evidenced by Chattel Paper, Documents or Instruments) in or
under which a Debtor may now or hereafter have any right, title or
interest, including, without limitation, with respect to an
Account, any agreement relating to the terms of payment or the
terms of performance thereof.

 

“Copyrights”
means any copyrights, rights and interests in copyrights, works
protectable by copyrights, copyright registrations and copyright
applications, including, without limitation, the copyright
registrations and applications listed on Schedule III attached hereto
(if any), and all renewals of any of the foregoing, all income,
royalties, damages and payments now and hereafter due and/or
payable under or with respect to any of the foregoing, including,
without limitation, damages and payments for past, present and
future infringements of any of the foregoing and the right to sue
for past, present and future infringements of any of the
foregoing.

 

 

 

-1-

 

 

“Deposit
Accounts” means all “deposit accounts” as such
term is defined in the UCC, now or hereafter held in the name of a
Debtor.

 

“Documents”
means any “documents,” as such term is defined in the
UCC, and shall include, without limitation, all documents of title
(as defined in the UCC), bills of lading or other receipts
evidencing or representing Inventory or Equipment.

 

“Equipment”
means any “equipment,” as such term is defined in the
UCC and, in any event, shall include, Motor Vehicles.

 

“Event of
Default” shall have the meaning set forth in the
Notes.

 

“Excluded
Assets” means each of the following: (1) any lease, license
or other agreement or any property subject to a capital lease,
purchase money security interest or similar arrangement, to the
extent that a grant of a Lien thereon in favor of Secured Party
would violate or invalidate such lease, license, agreement or
capital lease, purchase money security interest or similar
arrangement or create a right of termination in favor of any other
party thereto (other than the Debtors), so long as such provision
exists and so long as such lease, license or agreement was not
entered into in contemplation of circumventing the obligation to
provide Collateral hereunder or in violation of the Purchase
Agreement, other than to the extent that any such term would be
rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or
9-409 of the UCC (or any successor provision or provisions) of any
relevant jurisdiction or any other applicable law including the
bankruptcy code, or principles of equity, (2) any of the
outstanding equity interests in a Foreign Subsidiary to the extent
that the pledge thereof is prohibited by the laws of the
jurisdiction of such Foreign Subsidiary’s organization and
(3) any application to register any trademark or service mark prior
to the filing under applicable law of a verified statement of use
(or the equivalent) for such trademark or service mark to the
extent the creation of a security interest therein or the grant of
a lien thereon would void or invalidate such trademark or service
mark.

 

“General
Intangibles” means any “general intangibles,” as
such term is defined in the UCC, and, in any event, shall include,
without limitation, all right, title and interest in or under any
Contract, models, drawings, materials and records, claims, literary
rights, goodwill, rights of performance, Copyrights, Trademarks,
Patents, warranties, rights under insurance policies and rights of
indemnification.

 

“Goods”
means any “goods”, as such term is defined in the UCC,
including, without limitation, fixtures and embedded Software to
the extent included in “goods” as defined in the
UCC.

 

“Governmental
Authority” means the government of the United States of
America or any other nation, or any political subdivision thereof,
whether state or local, or any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or
administration powers or functions of or pertaining to government
over any Debtor or any of its subsidiaries, or any of their
respective properties, assets or undertakings.

 

“Instruments”
means any “instrument,” as such term is defined in the
UCC, and shall include, without limitation, promissory notes,
drafts, bills of exchange, trade acceptances, letters of credit,
letter of credit rights (as defined in the UCC), and Chattel
Paper.

 

“Inventory”
means any “inventory,” as such term is defined in the
UCC.

 

“Investment
Property” means any “investment property”, as
such term is defined in the UCC.

 

“Obligations”
means all obligations, liabilities and indebtedness of every nature
of Debtors from time to time owed or owing under or in respect of
this Agreement, the Purchase Agreement, the Notes, any of the other
Security Documents and any of the other Transaction Documents, as
the case may be, 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/or from time to time hereafter owing, due or payable whether
before or after the filing of a bankruptcy, insolvency or similar
proceeding under applicable federal, state, foreign or other law
and whether or not an allowed claim in any such
proceeding.

 

“Lien”
has the meaning set forth in the Purchase Agreement.

 

 

   

	
 

	

 

	
 

 

-2-

 

 

“Motor
Vehicles” shall mean motor vehicles, tractors, trailers and
other like property, whether or not the title thereto is governed
by a certificate of title or ownership.

 

“Mortgage”
has the meaning set forth in Section 2(h).

 

“Patents”
means any patents and patent applications, including, without
limitation, the inventions and improvements described and claimed
therein, all inventions subject to
the patents and patent applications listed on Schedule IV attached
hereto (if any), and the
reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any of the foregoing, and all income,
royalties, damages and payments now or hereafter due and/or payable
under or with respect to any of the foregoing, including, without
limitation, damages and payments for past, present and future
infringements of any of the foregoing and the right to sue for
past, present and future infringements of any of the
foregoing.

 

“Permitted
Indebtedness” has the meaning set forth in the
Notes.

 

“Proceeds”
means “proceeds,” as such term is defined in the UCC
and, in any event, includes, without limitation, (a) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable
with respect to any of the Collateral, (b) any and all payments (in
any form whatsoever) made or due and payable from time to time in
connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any
Governmental Authority (or any person acting under color of
Governmental Authority), and (c) any and all other amounts from
time to time paid or payable under, in respect of or in connection
with any of the Collateral.

 

“Representative”
means any Person acting as agent, representative or trustee on
behalf of the Secured Party from time to time.

 

“Security
Documents” means this Agreement and any other documents
securing the Liens of the Secured Party hereunder.

 

“Software”
means all “software” as such term is defined in the
UCC, now owned or hereafter acquired by a Debtor, other than
software embedded in any category of Goods, including, without
limitation, all computer programs and all supporting information
provided in connection with a transaction related to any
program.

 

“Trademarks”
means any trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service
marks, logos, other business identifiers, prints and labels on
which any of the foregoing have appeared or appear, all
registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, the trademarks
and applications listed in Schedule V attached hereto (if
any) and renewals thereof, and all income, royalties, damages and
payments now or hereafter due and/or payable under or with respect
to any of the foregoing, including, without limitation, damages and
payments for past, present and future infringements of any of the
foregoing and the right to sue for past, present and future
infringements of any of the foregoing.

 

“Transaction
Documents” means the Purchase Agreement, the Notes, the
Security Documents, the Warrants and any other related agreements
delivered to and in favor of the Purchaser.

 

“UCC”
shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York; provided, that to the extent that
the Uniform Commercial Code is used to define any term herein and
such term is defined differently in different Articles or Divisions
of the Uniform Commercial Code, the definition of such term
contained in Article or Division 9 shall govern.

 

Section
2. Representations, Warranties and
Covenants of Debtors. Each Debtor represents and warrants
to, and covenants with, the Secured Party as follows:

 

(a)            Such
Debtor has or will have rights in and the power to grant a security
interest in the Collateral in which it purports to grant a security
interest pursuant to Section 3 hereof (subject, with respect to
after acquired Collateral, to such Debtor acquiring the same) and
no Lien other than Permitted Liens exist or will exist upon such
Collateral at any time.

 

 

   

	
 

	

 

	
 

 

-3-

 

 

(b) This
Agreement is effective to create in favor of Secured Party a valid
security interest in and Lien upon all of such Debtor’s
right, title and interest in and to the Collateral, and upon (i)
the filing of appropriate UCC financing statements in the
jurisdictions listed on Schedule I attached hereto,
(ii) the execution of a deposit account control agreement, (iii)
filings in the United States Patent and Trademark Office, or United
States Copyright Office with respect to Collateral that is
applications for or registered Patents and Trademarks, or
Copyrights, as the case may be, (iv) the filing of the Mortgages in
the jurisdictions listed on Schedule I hereto, (v) the
security interest created hereby being noted on each certificate of
title evidencing the ownership of any Motor Vehicle in accordance
with Section 4.1(d) hereof and (vi) delivery to the Secured Party
or its Representative of Instruments duly endorsed by such Debtor
or accompanied by appropriate instruments of transfer duly executed
by such Debtor with respect to Instruments not constituting Chattel
Paper, such security interest will be a duly perfected first
priority perfected security interest (subject to Permitted Liens)
in all of the Collateral.

 

(c) All of the
Equipment, Inventory and Goods owned by such Debtor is located at
the places as specified on Schedule I attached hereto.
Except as disclosed on Schedule I, none of the
Collateral is in the possession of any bailee, warehousemen,
processor or consignee, other than Collateral in transit, out for
repair or with an employee in ordinary course of business.
Schedule I
discloses such Debtor’s name as of the date hereof as it
appears in official filings in the state or province, as
applicable, of its incorporation, formation or organization, such
Debtor’s state or province, as applicable, of incorporation,
formation or organization and the chief place of business, chief
executive office and the office where such Debtor keeps its books
and records and the states in which such Debtor conducts its
business. Such Debtor has only one state or province, as
applicable, of incorporation, formation or organization. Such
Debtor does not do business and has not done business during the
past five (5) years under any trade name or fictitious business
name except as disclosed on Schedule II attached
hereto.

 

(d) Schedules III, IV and V contain complete and accurate
lists as of the date hereof of all (i) registered copyrights and
applications therefor; (ii) patents and pending applications
therefor; (iii) registered trademarks and service marks and
applications therefor; and (iv) all unregistered trademarks and
service marks that are material to the operations of the business
of such Debtor; in each case owned by such Debtor. No Copyrights,
Patents or Trademarks listed on Schedules III, IV and V,
respectively, if any, have been adjudged invalid or unenforceable
or have been canceled, in whole or in part, or are not presently
subsisting. Each of such Copyrights, Patents and Trademarks (if
any) is valid and enforceable. Such Debtor is the sole and
exclusive owner of the entire and unencumbered right, title and
interest in and to each of such Copyrights, Patents and Trademarks,
identified on Schedules
III, IV and V, as applicable, as being owned by such Debtor,
free and clear of any liens, charges and encumbrances, including
without limitation licenses, shop rights and covenants by such
Debtor not to sue third persons. Such Debtor has adopted, used and
is currently using, or has a current bona fide intention to use,
all of such Trademarks. Such Debtor has no notice of any suits or
actions commenced or threatened in writing with reference to the
Copyrights, Patents or Trademarks owned by it.

 

(e) Each Debtor agrees
to deliver to the Secured Party an updated Schedule I, II, III, IV and/or
V within five (5) Business Days of any change
thereto.

 

(f) All depositary and
other accounts including, without limitation, Deposit Accounts,
securities accounts, brokerage accounts and other similar accounts,
maintained by each Debtor are described on Schedule VI hereto, which
description includes for each such account the name of the Debtor
maintaining such account, the name, address and telephone and
telecopy numbers of the financial institution at which such account
is maintained, the account number and the account officer, if any,
of such account. No Debtor shall open any new Deposit Accounts,
securities accounts, brokerage accounts or other accounts unless
such Debtor shall have given Secured Party ten (10) Business
Days’ prior written notice of its intention to open any such
new accounts. Each Debtor shall deliver to Secured Party a revised
version of Schedule
VI showing any changes thereto within five (5) Business Days
of any such change. Each Debtor hereby authorizes the financial
institutions at which such Debtor maintains an account to provide
Secured Party with such information with respect to such account as
Secured Party from time to time may request, and each Debtor hereby
consents to such information being provided to Secured Party. In
addition, all of such Debtor’s depositary, security,
brokerage and other accounts including, without limitation, Deposit
Accounts shall be subject to the provisions of Section 4.5
hereof.

 

(g) Such Debtor does
not own any Commercial Tort Claim except for those disclosed on
Schedule VII hereto
(if any).

 

(h) Such Debtor does
not have any interest in real property with respect to real
property except as disclosed on Schedule VIII (if any). Each
Debtor shall deliver to Secured Party a revised version of
Schedule VIII
showing any changes thereto within ten (10) Business Days of any
such change. Except as otherwise agreed to by Secured Party, all
such interests in real property with respect to such real property
are subject to a mortgage or deed of trust, as applicable in
accordance with the custom in the relevant jurisdiction, in form
and substance satisfactory to Secured Party, in favor of Secured
Party (hereinafter, a “Mortgage”).

 

 

   

	
 

	

 

	
 

 

-4-

 

 

(i) Each Debtor shall
duly and properly record each interest in real property held
by such Debtor except with respect to easements, rights of
way, access agreements, surface damage agreements, surface use
agreements or similar agreements that such Debtor, using
prudent customs and practices in the industry in which it operates,
does not believe are of material value or material to the operation
of such Debtor’s business or, with respect to state and
federal rights of way, are not capable of being recorded as a
matter of state and federal law.

 

(j) All Equipment
(including, without limitation, Motor Vehicles) owned by a Debtor
and subject to a certificate of title or ownership statute is
described on Schedule
IX hereto.

 

Section
3. Collateral. As collateral
security for the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the Obligations, each
Debtor hereby pledges and grants to the Secured Party a Lien on and
security interest in and to all of such Debtor’s right, title
and interest in the following properties and assets of such Debtor,
whether now owned by such Debtor or hereafter acquired and whether
now existing or hereafter coming into existence and wherever
located (all being collectively referred to herein as
“Collateral”):

 

(a)            all
Instruments, together with all payments thereon or
thereunder:

 

(b) all
Accounts;

 

(c) all
Inventory;

 

(d) all General
Intangibles (including payment intangibles (as defined in the UCC)
and Software);

 

(e) all
Equipment;

 

(f) all
Documents;

 

(g) all
Contracts;

 

(h) all
Goods;

 

(i) all Investment
Property, including without limitation all equity interests now
owned or hereafter acquired by such Debtor;

 

(j) all Deposit
Accounts, including, without limitation, the balance from time to
time in all bank accounts maintained by such Debtor;

 

(k) all Commercial Tort
Claims specified on Schedule VII;

 

(l) all Trademarks,
Patents and Copyrights;

 

(m) all books and
records pertaining to the other Collateral; and

 

(n) all other tangible
and intangible property of such Debtor, including, without
limitation, all interests in real property, Proceeds, tort claims,
products, accessions, rents, profits, income, benefits,
substitutions, additions and replacements of and to any of the
property of such Debtor described in the preceding clauses of this
Section 3 (including, without limitation, any proceeds of insurance
thereon, insurance claims and all rights, claims and benefits
against any Person relating thereto), other rights to payments not
otherwise included in the foregoing, and all books, correspondence,
files, records, invoices and other papers, including without
limitation all tapes, cards, computer runs, computer programs,
computer files and other papers, documents and records in the
possession or under the control of such Debtor, any computer bureau
or service company from time to time acting for such
Debtor.

 

Notwithstanding
anything to the contrary contained herein or in any Transaction
Document, in no event shall the security interest granted herein or
therein attach to any Excluded Assets.

 

Section
4. Covenants; Remedies. In
furtherance of the grant of the pledge and security interest
pursuant to Section 3 hereof, each Debtor hereby agrees with the
Secured Party as follows:

 

 

   

	
 

	

 

	
 

 

-5-

 

 

4.1 Delivery
and Other Perfection; Maintenance, etc.

 

(a) Delivery of Instruments, Documents,
Etc. Each Debtor shall deliver and pledge to the Secured
Party or its Representative any and all Instruments, negotiable
Documents, Chattel Paper and certificated securities (accompanied
by stock powers executed in blank, which stock powers may be filled
in and completed at any time upon the occurrence of any Event of
Default) duly endorsed and/or accompanied by such instruments of
assignment and transfer executed by such Debtor in such form and
substance as the Secured Party or its Representative may request;
provided, that so
long as no Event of Default shall have occurred and be continuing,
each Debtor may retain for collection in the ordinary course of
business any Instruments, negotiable Documents and Chattel Paper
received by such Debtor in the ordinary course of business, and the
Secured Party or its Representative shall, promptly upon request of
a Debtor, make appropriate arrangements for making any other
Instruments, negotiable Documents and Chattel Paper pledged by such
Debtor available to such Debtor for purposes of presentation,
collection or renewal (any such arrangement to be effected, to the
extent deemed appropriate by the Secured Party or its
Representative, against a trust receipt or like document). If a
Debtor retains possession of any Chattel Paper, negotiable
Documents or Instruments pursuant to the terms hereof, such Chattel
Paper, negotiable Documents and Instruments shall be marked with
the following legend: “This writing and the obligations
evidenced or secured hereby are subject to the security interest of
GPB Debt Holdings II, LLC, in its capacity as Collateral Agent for
the benefit of the Purchaser, as secured party.”

 

(b) Other Documents and Actions.
Subject to the rights of holders of
Permitted Liens, each Debtor shall give, execute, deliver,
file and/or record any financing statement, registration, notice,
instrument, document, agreement, Mortgage or other papers that may
be necessary or desirable (in the reasonable judgment of the
Secured Party or its Representative) to create, preserve, perfect
or validate the security interest granted pursuant hereto (or any
security interest or mortgage contemplated or required hereunder,
including with respect to Section 2(h) of this Agreement) or to
enable the Secured Party or its Representative to exercise and
enforce the rights of the Secured Party hereunder with respect to
such pledge and security interest, provided that notices to
account debtors in respect of any Accounts or Instruments shall be
subject to the provisions of clause (e) below; provided further
that with respect to Medite GmbH (Austria) and MEDITE sp.zo.o
(Poland), Collateral Agent shall not require any foreign governed
security documentation so long as such entities are dissolved or
otherwise wound up within 120 days of the date of this Agreement
(such time which may be extended with the consent of Collateral
Agent in its sole discretion). Notwithstanding the foregoing each
Debtor hereby irrevocably authorizes the Secured Party at any time
and from time to time to file in any filing office in any
jurisdiction any initial financing statements (and other similar
filings or registrations under other applicable laws and
regulations pertaining to the creation, attachment, or perfection
of security interests) and amendments thereto that (a) indicate the
Collateral (i) as all assets of such Debtor or words of similar
effect, regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the UCC, or (ii)
as being of an equal or lesser scope or with greater detail, and
(b) contain any other information required by part 5 of Article 9
of the UCC for the sufficiency or filing office acceptance of any
financing statement or amendment, including (i) whether such Debtor
is an organization, the type of organization and any organization
identification number issued to such Debtor, and (ii) in the case
of a financing statement filed as a fixture filing, a sufficient
description of real property to which the Collateral relates. Each
Debtor agrees to furnish any such information to the Secured Party
promptly upon request. Each Debtor also ratifies its authorization
for the Secured Party to have filed in any jurisdiction any like
initial financing statements or amendments thereto if filed prior
to the date hereof.

 

(c) Books and Records. Each Debtor
(or a Company on behalf of a Debtor) shall maintain at its own cost
and expense complete and accurate books and records of the
Collateral, including, without limitation, a record of all payments
received and all credits granted with respect to the Collateral and
all other dealings with the Collateral. Upon the occurrence and
during the continuation of any Event of Default, each Debtor shall
deliver and turn over any such books and records (or true and
correct copies thereof) to the Secured Party or its Representative
at any time on demand. Each Debtor shall permit any Representative
of the Secured Party, in accordance with Section 8.13 of the
Purchase Agreement, to inspect such books and records at any time
during reasonable business hours and will provide photocopies
thereof at such Debtor’s expense to the Secured Party upon
request of the Secured Party.

 

 

   

	
 

	

 

	
 

 

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(d) Motor Vehicles. Each Debtor
shall, promptly upon acquiring same, cause the Secured Party to be
listed as the lienholder on each certificate of title or ownership
covering any items of Equipment, including Motor Vehicles, having a
value in excess of $100,000 individually or in the aggregate for
all such items of Equipment of the Debtor, or otherwise comply with
the certificate of title or ownership laws of the relevant
jurisdiction issuing such certificate of title or ownership in
order to properly evidence and perfect Secured Party’s
security interest in the assets represented by such certificate of
title or ownership.

 

(e) Notice to Account Debtors;
Verification. (i) Subject to
the rights of holders of Permitted Liens, upon the
occurrence and during the continuance of any Event of Default or if
any rights of set-off (other than set-offs against an Account
arising under the Contract giving rise to the same Account) or
contra accounts may be asserted, upon request of the Secured Party
or its Representative, each Debtor shall promptly notify (and each
Debtor hereby authorizes the Secured Party and its Representative
so to notify) each account debtor in respect of any Accounts or
Instruments or other Persons obligated on the Collateral that such
Collateral has been assigned to the Secured Party hereunder, and
that any payments due or to become due in respect of such
Collateral are to be made directly to the Secured Party, and (ii)
the Secured Party and its Representative shall have the right at
any time or times to make direct verification with the account
debtors or other Persons obligated on the Collateral of any and all
of the Accounts or other such Collateral.

 

(f) Intellectual Property. If such
Debtor shall (i) obtain rights to any new patentable inventions,
any registered Copyrights or any Patents or Trademarks, or (ii)
become entitled to the benefit of any registered Copyrights or any
Patents or any registered Trademarks
or unregistered Trademarks material to the operations of the
business of such Debtor or any improvement on any Patent,
the provisions of this Agreement above shall automatically apply
thereto and such Debtor shall give to Secured Party prompt written
notice thereof. Each Debtor hereby authorizes Secured Party to
modify this Agreement by amending Schedules III, IV and V, as
applicable, to include any such registered Copyrights or any such
Patents and Trademarks. Each Debtor shall have the duty (i) to
prosecute diligently any patent, trademark, or service mark
applications pending as of the date hereof or hereafter, (ii) to
preserve and maintain all rights in the Copyrights, Patents and
Trademarks, to the extent material to the operations of the
business of such Debtor and (iii) to ensure that the Copyrights,
Patents and Trademarks are and remain enforceable, in each case to
the extent material to the operations of the business of such
Debtor. Any expenses incurred in connection with such
Debtor’s obligations under this Section 4.1(f) shall be borne
by such Debtor. Except for any such items that a Debtor reasonably
believes (using prudent industry customs and practices) are no
longer necessary for the on-going operations of its business, no
Debtor shall abandon any material right to file a patent, trademark
or service mark application, or abandon any pending patent,
trademark or service mark application or any other Copyright,
Patent or Trademark without the prior written consent of Secured
Party, which consent shall not be unreasonably
withheld.

 

(g) Further Identification of
Collateral. Each Debtor will, when and as often as requested
by the Secured Party or its Representative, furnish to the Secured
Party or such Representative, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Secured Party or its
Representative may reasonably request, all in reasonable
detail.

 

(h) Investment Property. Each
Debtor will take any and all actions required or reasonably requested by the Secured Party,
from time to time, to (i) cause the Secured Party to obtain
exclusive control of any Investment Property owned by such Debtor
in a manner acceptable to the Secured Party and (ii) obtain from
any issuers of Investment Property and such other Persons, for the
benefit of the Secured Party, written confirmation of the Secured
Party’s control over such Investment Property. For purposes
of this Section 4.1(h), the Secured Party shall have exclusive
control of Investment Property if (i) such Investment Property
consists of certificated securities and a Debtor delivers such
certificated securities to the Secured Party (with appropriate
endorsements if such certificated securities are in registered
form); (ii) such Investment Property consists of uncertificated
securities and the issuer thereof agrees, pursuant to documentation
in form and substance satisfactory to the Secured Party, that it
will comply with instructions originated by the Secured Party
without further consent by such Debtor, and (iii) such Investment
Property consists of security entitlements and either (x) the
Secured Party becomes the entitlement holder thereof or (y) the
appropriate securities intermediary agrees, pursuant to the
documentation in form and substance satisfactory to the Secured
Party, that it will comply with entitlement orders originated by
the Secured Party without further consent by any Debtor; provided
that in each case Secured Party may only exercise the remedies set
forth under this Agreement with respect to any Investment Property
during the existence of an Event of Default.

 

 

   

	
 

	

 

	
 

 

-7-

 

 

(i) Commercial Tort Claims. Each
Debtor shall promptly notify Secured Party of any Commercial Tort
Claim acquired by it that concerns a claim in excess of $50,000 and
unless otherwise consented to by Secured Party, such Debtor shall
enter into a supplement to this Agreement granting to Secured Party
a Lien on and security interest in such Commercial Tort
Claim.

 

4.2 Other Liens. Debtors will not
create, permit or suffer to exist, and will defend the Collateral
against and take such other action as is necessary to remove, any
Lien on the Collateral except Permitted Liens, and will defend the right, title
and interest of the Secured Party in and to the Collateral and in
and to all Proceeds thereof against the claims and demands of all
Persons whatsoever, except holders of Permitted Liens.

 

4.3 Preservation of Rights. Whether
or not any Event of Default has occurred or is continuing, the
Secured Party and its Representative may, but shall not be required
to, take any steps the Secured Party or its Representative deems
necessary or appropriate to preserve any Collateral or any rights
against third parties to any of the Collateral, including obtaining
insurance for the Collateral at any time when such Debtor has
failed to do so, and Debtors shall promptly pay, or reimburse the
Secured Party for, all expenses incurred in connection
therewith.

 

4.4 Formation
of Subsidiaries; Name Change; Location; Bailees.

 

(a) No Debtor shall
form or acquire any subsidiary unless (i) such Debtor pledges all
of the stock or equity interests of such subsidiary to the Secured
Party pursuant to an agreement in a form agreed to by the Secured
Party, (ii) such subsidiary becomes a party to this Agreement and
all other applicable Security Documents and (iii) the formation or
acquisition of such Subsidiary is not prohibited by the terms of
the Transaction Documents.

 

(b) No Debtor shall (i)
reincorporate or reorganize itself under the laws of any
jurisdiction other than the jurisdiction in which it is
incorporated or organized as of the date hereof, or (ii) otherwise
change its identity or corporate structure, in each case, without
the prior written consent of Secured Party, which consent shall not
be unreasonably withheld, or (iii) change its name without
delivering twenty (20) days prior notice of such change to Secured
Party. Each Debtor will notify Secured Party promptly in writing
prior to any such change in the proposed use by such Debtor of any
tradename or fictitious business name other than any such name set
forth on Schedule
II attached hereto.

 

(c) Except
for the sale of Inventory in the ordinary course of business and
other sales of assets expressly permitted by the terms of the
Purchase Agreement, Collateral in transit, our for repair or with
an employee in the ordinary course of business, each Debtor will
keep the Collateral at the locations specified in Schedule I. Each Debtor will
give Secured Party thirty (30) day’s prior written notice of
any change in such Debtor’s chief place of business or of any
new location for any of the Collateral.

 

(d) If any Collateral
is at any time in the possession or control of any warehousemen,
bailee, consignee or processor in an aggregate amount of at least
$100,000, such Debtor shall, upon the request of Secured Party or
its Representative, notify such warehousemen, bailee, consignee or
processor of the Lien and security interest created hereby and
shall instruct such Person to hold all such Collateral for Secured
Party’s account subject to Secured Party’s
instructions.

 

(e) Each Debtor
acknowledges that it is not authorized to file any financing
statement or amendment or termination statement with respect to any
financing statement relating to
Secured Party’s security interests hereunder without
the prior written consent of Secured Party and agrees that it will
not do so without the prior written consent of Secured Party,
subject to such Debtor’s rights under Section 9-509(d)(2) to
the UCC.

 

(f) Subject to the rights of holders of Permitted
Liens, no Debtor shall enter into any Contract that
restricts or prohibits the grant to Secured Party of a security
interest in material Accounts, Chattel Paper, Instruments or
payment intangibles or the proceeds of the foregoing.

 

 

   

	
 

	

 

	
 

 

-8-

 

 

4.5 Events of Default, Etc. During
the period during which an Event of Default shall have occurred and
be continuing, subject to the
rights of holders of Permitted Liens:

 

(a) each Debtor shall,
at the request of the Secured Party or its Representative, assemble
the Collateral and make it available to Secured Party or its
Representative at a place or places designated by the Secured Party
or its Representative which are reasonably convenient to Secured
Party or its Representative, as applicable, and such
Debtor;

 

(b) the Secured Party
or its Representative may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral
and may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, any of the
Collateral;

 

(c) the Secured Party
shall have all of the rights and remedies with respect to the
Collateral of a secured party under the UCC (whether or not said
UCC is in effect in the jurisdiction where the rights and remedies
are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be
asserted, including, without limitation, the right, to the maximum
extent permitted by law, to: (i) exercise all voting, consensual
and other powers of ownership pertaining to the Collateral as if
the Secured Party were the sole and absolute owner thereof (and
each Debtor agrees to take all such action as may be appropriate to
give effect to such right) and (ii) to the appointment of a
receiver or receivers for all or any part of the Collateral or
business of a Debtor, whether such receivership be incident to a
proposed sale or sales of such Collateral or otherwise and without
regard to the value of the Collateral or the solvency of any person
or persons liable for the payment of the Obligations secured by
such Collateral. Each Debtor hereby consents to the appointment of
such receiver or receivers, waives any and all defenses to such
appointment and agrees that such appointment shall in no manner
impair, prejudice or otherwise affect the rights of Secured Party
under this Agreement. Each Debtor hereby expressly waives notice of
a hearing for appointment of a receiver and the necessity for bond
or an accounting by the receiver;

 

(d) the Secured Party
or its Representative in its discretion may, in the name of the
Secured Party or in the name of a Debtor or otherwise, demand, sue
for, collect or receive any money or property at any time payable
or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so;

 

(e) the Secured Party
or its Representative may take immediate possession and occupancy
of any premises owned, used or leased by a Debtor and exercise all
other rights and remedies which may be available to the Secured
Party;

 

(f) the Secured Party
may, upon reasonable notice (such reasonable notice to be
determined by Secured Party in its sole and absolute discretion,
which shall not be less than ten (10) days), with respect to the
Collateral or any part thereof which shall then be or shall
thereafter come into the possession, custody or control of the
Secured Party or its Representative, sell, lease, license, assign
or otherwise dispose of all or any part of such Collateral, at such
place or places as the Secured Party deems best, and for cash or
for credit or for future delivery (without thereby assuming any
credit risk), at public or private sale, without demand of
performance or notice of intention to effect any such disposition
or of the time or place thereof (except such notice as is required
above or by applicable statute and cannot be waived), and the
Secured Party or anyone else may be the purchaser, lessee,
licensee, assignee or recipient of any or all of the Collateral so
disposed of at any public sale (or, to the extent permitted by law,
at any private sale) and thereafter hold the same absolutely, free
from any claim or right of whatsoever kind, including any right or
equity of redemption (statutory or otherwise), of Debtors, any such
demand, notice and right or equity being hereby expressly waived
and released. The Secured Party may, without notice or publication,
adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place
to which the sale may be so adjourned;

 

(g) the rights,
remedies and powers conferred by this Section 4.5 are in addition
to, and not in substitution for, any other rights, remedies or
powers that the Secured Party may have under any Transaction
Document, at law, in equity or by or under the UCC or any other
statute or agreement. The Secured Party may proceed by way of any
action, suit or other proceeding at law or in equity and no right,
remedy or power of the Secured Party will be exclusive of or
dependent on any other. The Secured Party may exercise any of its
rights, remedies or powers separately or in combination and at any
time; and

 

 

   

	
 

	

 

	
 

 

-9-

 

 

(h) unless otherwise
agreed in the sole discretion of Secured Party, each Debtor,
Secured Party and each Debtor’s bank shall enter into a
deposit account control agreement in form and substance
satisfactory to Secured Party that is sufficient to give Secured
Party “control” (for purposes of Articles 8 and 9 of
the Uniform Commercial Code) over such account and which directs
such bank to transfer such funds so deposited on a daily basis, or
at other times acceptable to Secured Party, to Secured Party,
either to any account maintained by Secured Party at said bank or
by wire transfer to appropriate account(s) at Secured Party. All
funds deposited in such Deposit Accounts shall immediately become
subject to the security interest of Secured Party for its own
benefit, and Secured Party shall obtain the agreement by such bank
to waive any offset rights against the funds so deposited. Secured
Party shall apply all funds received by it from the Deposit
Accounts to the satisfaction of the Obligations.

 

The
proceeds of each collection, sale or other disposition under this
Section 4.5 shall be applied in accordance with Section 4.8
hereof.

 

4.6 Deficiency. If the proceeds of
sale, collection or other realization of or upon the Collateral are
insufficient to cover the costs and expenses of such realization
and the payment in full of the Obligations, Debtors shall remain
jointly and severally liable for any deficiency.

 

4.7 Private Sale. Each Debtor
recognizes that the Secured Party may be unable to effect a public
sale of any or all of the Collateral consisting of securities by
reason of certain prohibitions contained in the Securities Act of
1933, as amended (the “Act”), and applicable state
securities laws, but may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers who will
be obliged to agree, among other things, to acquire such Collateral
for their own account for investment and not with a view to the
distribution or resale thereof. Each Debtor acknowledges and agrees
that any such private sale may result in prices and other terms
less favorable to the seller than if such sale were a public sale
and each Debtor agrees that it is not commercially unreasonable for
Secured Party to engage in any such private sales or dispositions
under such circumstances. The Secured Party shall be under no
obligation to delay a sale of any of the Collateral to permit a
Debtor to register such Collateral for public sale under the Act,
or under applicable state securities laws, even if Debtors would
agree to do so. The Secured Party shall not incur any liability as
a result of the sale of any such Collateral, or any part thereof,
at any private sale provided for in this Agreement conducted in a
commercially reasonable manner, and so long as Secured Party
conducts such sale in a commercially reasonable manner each Debtor
hereby waives any claims against the Secured Party arising by
reason of the fact that the price at which the Collateral may have
been sold at such a private sale was less than the price which
might have been obtained at a public sale or was less than the
aggregate amount of the Obligations, even if the Secured Party
accepts the first offer received and does not offer the Collateral
to more than one offeree.

 

Each
Debtor further agrees to do or cause to be done all such other acts
and things as may be necessary to make such sale or sales of any
portion or all of any such Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders,
writs, injunctions, decrees or awards of any and all courts,
arbitrators or governmental instrumentalities, domestic or foreign,
having jurisdiction over any such sale or sales, all at such
Debtor’s expense. Each Debtor further agrees that a breach of
any of the covenants contained in this Section 4.7 will cause
irreparable injury to the Secured Party, that the Secured Party has
no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this
Section 4.7 shall be specifically enforceable against Debtors, and
each Debtor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred and is
continuing.

 

4.8 Application of Proceeds. The
proceeds of any collection, sale or other realization of all or any
part of the Collateral, and any other cash at the time held by the
Secured Party under this Agreement, shall be applied to the
Obligations in such order as Secured Party shall
elect.

 

 

   

	
 

	

 

	
 

 

-10-

 

 

4.9 Attorney-in-Fact. Each Debtor
hereby irrevocably constitutes and appoints the Secured Party, with
full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of
such Debtor and in the name of such Debtor or in its own name, from
time to time in the discretion of the Secured Party, for the
purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to
perfect or protect any security interest granted hereunder, to
maintain the perfection or priority of any security interest
granted hereunder, or to otherwise accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing,
hereby gives the Secured Party the power and right, on behalf of
such Debtor, without notice to or assent by such Debtor (to the
extent permitted by applicable law), subject to the rights
of holders of Permitted Liens, to do the
following:

 

(a) to take any and all
appropriate action and to execute and deliver any and all documents
and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement;

 

(b) upon the occurrence
and during the continuation of an Event of Default, to ask, demand,
collect, receive and give acquittance and receipts for any and all
moneys due and to become due under any Collateral and, in the name
of such Debtor or its own name or otherwise, to take possession of
and endorse and collect any checks, drafts, notes, acceptances or
other Instruments for the payment of moneys due under any
Collateral and to file any claim or to take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Secured Party for the purpose of collecting any
and all such moneys due under any Collateral whenever payable and
to file any claim or to take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the
Secured Party for the purpose of collecting any and all such moneys
due under any Collateral whenever payable;

 

(c) to pay or discharge
charges or liens levied or placed on or threatened against the
Collateral, to effect any insurance called for by the terms of this
Agreement and to pay all or any part of the premiums
therefor;

 

(d) to direct any party
liable for any payment under any of the Collateral to make payment
of any and all moneys due, and to become due thereunder, directly
to the Secured Party or as the Secured Party shall direct, and to
receive payment of and receipt for any and all moneys, claims and
other amounts due, and to become due at any time, in respect of or
arising out of any Collateral;

 

(e) upon the occurrence
and during the continuation of an Event of Default, to sign and
indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts and other
Documents constituting or relating to the Collateral;

 

(f) upon the occurrence
and during the continuation of an Event of Default, to commence and
prosecute any suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect the Collateral or
any part thereof and to enforce any other right in respect of any
Collateral;

 

(g) upon the occurrence
and during the continuation of an Event of Default, to defend any
suit, action or proceeding brought against a Debtor with respect to
any Collateral;

 

(h) upon the occurrence
and during the continuation of an Event of Default, to settle,
compromise or adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or releases
as the Secured Party may deem appropriate;

 

(i) to the extent that
a Debtor’s authorization given in Section 4.1(b) of this Agreement is not
sufficient to file such financing statements with respect to this
Agreement, with or without such Debtor’s signature, or to
file a photocopy of this Agreement in substitution for a financing
statement, as the Secured Party may deem appropriate and to execute
in such Debtor’s name such financing statements and
amendments thereto and continuation statements which may require
such Debtor’s signature;

 

(j) upon the occurrence
and during the continuation of an Event of Default, generally to
sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely
as though the Secured Party were the absolute owners thereof for
all purposes; and

 

 

   

	
 

	

 

	
 

 

-11-

 

 

(k) to do, at the
Secured Party’s option and at such Debtor’s expense, at
any time, or from time to time, all acts and things which the
Secured Party reasonably deems necessary to protect or preserve or,
upon the occurrence and during the continuation of an Event of
Default, realize upon the Collateral and the Secured Party’s
lien therein, in order to effect the intent of this Agreement, all
as fully and effectively as such Debtor might do.

 

Each
Debtor hereby ratifies, to the extent permitted by law, all that
such attorneys lawfully do or cause to be done by virtue hereof
provided the same is performed in a commercially reasonable manner.
The power of attorney granted hereunder is a power coupled with an
interest and shall be irrevocable until the Obligations are
indefeasibly paid in full in cash and this Agreement is terminated
in accordance with Section 4.11 hereof.

 

Each
Debtor also authorizes the Secured Party, at any time from and
after the occurrence and during the continuation of any Event of
Default, (x) to communicate in its own name with any party to any
Contract with regard to the assignment of the right, title and
interest of such Debtor in and under the Contracts hereunder and
other matters relating thereto and (y) to execute, in connection with any
sale of Collateral provided for in Section 4.5 hereof, any
endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.

 

4.10 Perfection.
Prior to or concurrently with the execution and delivery of this
Agreement, each Debtor shall:

 

(a) at Secured
Party’s request, deliver to the Secured Party or its
Representative the originals of all Instruments together with, in
the case of Instruments constituting promissory notes, allonges
attached thereto showing such promissory notes to be payable to the
order of a blank payee;

 

(b) deliver to the
Secured Party or its Representative the originals of all Motor
Vehicle titles in the aggregate amount over $100,000, duly endorsed
indicating the Secured Party’s interest therein as a
lienholder, together with such other documents as may be required
consistent with Section 4.1(d) hereof to perfect the security
interest granted by Section 3 in all such Motor Vehicles (if
any).

 

4.11 Termination;
Partial Release of Collateral. This Agreement and the Liens
and security interests granted hereunder shall not terminate until
the termination of the Purchase Agreement and the Notes and the
full and complete performance and indefeasible satisfaction of all
the Obligations (i) in respect of the Transaction Documents
(including, without limitation, the indefeasible payment in full in
cash of all such Obligations) and (ii) with respect to which claims
have been asserted by the Collateral Agent/ and or Purchaser,
whereupon the Secured Party shall forthwith cause to be assigned,
transferred and delivered, against receipt but without any
recourse, warranty or representation whatsoever, any remaining
Collateral to or on the order of Debtors. The Secured Party shall
also execute and deliver to Debtors upon such termination or in
connection with a Permitted Disposition and at Debtors’
expense such UCC termination statements, certificates for
terminating the liens on the Motor Vehicles (if any), possessory
collateral and such other documentation as shall be reasonably
requested by Debtors to effect the termination and release of the
Liens and security interests in favor of the Secured Party
affecting the Collateral.

 

4.12 Further
Assurances. At any time and from time to time, upon the
written request of the Secured Party or its Representative, and at
the sole expense of Debtors, subject to the rights of holders of
Permitted Liens, Debtors will promptly and duly execute and deliver
any and all such further instruments, documents and agreements and
take such further actions as the Secured Party or its
Representative may reasonably require in order for the Secured
Party to obtain the full benefits of this Agreement and of the
rights and powers herein granted in favor of the Secured Party,
including, without limitation, using Debtors’ best efforts to
secure all consents and approvals necessary or appropriate for the
assignment to the Secured Party of any Collateral held by Debtors
or in which a Debtor has any rights not heretofore assigned, the
filing of any financing or continuation statements under the UCC
with respect to the liens and security interests granted hereby,
transferring Collateral to the Secured Party’s possession (if
a security interest in such Collateral can be perfected by
possession) in accordance with the terms hereof, placing the
interest of the Secured Party as lienholder on the certificate of
title of any Motor Vehicle in accordance with the terms hereof, and
obtaining waivers of liens from landlords in accordance with the
terms hereof. Each Debtor also hereby authorizes the Secured Party
and its Representative to file any such financing or continuation
statement without the signature of such Debtor to the extent
permitted by applicable law.

 

 

   

	
 

	

 

	
 

 

-12-

 

 

4.13 Limitation
on Duty of Secured Party. The powers conferred on the
Secured Party under this Agreement are solely to protect the
Secured Party’s interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. The Secured
Party shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and neither
the Secured Party nor its Representative nor any of their
respective officers, directors, employees or agents shall be
responsible to Debtors for any act or failure to act, except for
gross negligence or willful misconduct. Without limiting the
foregoing, the Secured Party and any Representative shall be deemed
to have exercised reasonable care in the custody and preservation
of the Collateral in their possession if such Collateral is
accorded treatment substantially equivalent to that which the
relevant Secured Party or any Representative, in its individual
capacity, accords its own property consisting of the type of
Collateral involved, it being understood and agreed that neither
the Secured Party nor any Representative shall have any
responsibility for taking any necessary steps (other than steps
taken in accordance with the standard of care set forth above) to
preserve rights against any Person with respect to any
Collateral.

 

Also
without limiting the generality of the foregoing, neither the
Secured Party nor any Representative shall have any obligation or
liability under any Contract or license by reason of or arising out
of this Agreement or the granting to the Secured Party of a
security interest therein or assignment thereof or the receipt by
the Secured Party or any Representative of any payment relating to
any Contract or license pursuant hereto, nor shall the Secured
Party or any Representative be required or obligated in any manner
to perform or fulfill any of the obligations of Debtors under or
pursuant to any Contract or license, or to make any payment, or to
make any inquiry as to the nature or the sufficiency of any payment
received by it or the sufficiency of any performance by any party
under any Contract or license, or to present or file any claim, or
to take any action to collect or enforce any performance or the
payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.

 

Section
5. Miscellaneous.

 

5.1 No Waiver. No failure on the
part of the Secured Party or any of its Representatives to
exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the
Secured Party or any of its Representatives of any right, power or
remedy hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The rights and
remedies hereunder provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights and
remedies provided by law.

 

5.2 Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of
New York.

 

5.3 Notices. All notices,
approvals, requests, demands and other communications hereunder
shall be delivered or made in the manner set forth in, and shall be
effective in accordance with the terms of, the Purchase Agreement;
provided, that, to the extent any such communication is being made
or sent to a Debtor that is not the Company, such communication
shall be effective as to such Debtor if made or sent to the Company
in accordance with the foregoing. Debtors and Secured Party may change their
respective notice addresses by written notice given to each other
party five (5) days prior to the effectiveness of such
change.

 

5.4 Amendments, Etc. The terms of
this Agreement may be waived, altered or amended only by an
instrument in writing duly executed by the Debtor sought to be
charged or benefited thereby and the Secured Party. Any such
amendment or waiver shall be binding upon the Secured Party and the
Debtor sought to be charged or benefited thereby and their
respective successors and assigns.

 

5.5 Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of each of the parties hereto,
provided, that no Debtor shall assign or transfer its rights
hereunder without the prior written consent of the Secured Party.
Secured Party may assign its rights hereunder without the consent
of Debtors, in which event such assignee shall be deemed to be
Secured Party hereunder with respect to such assigned rights;
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 the Company.

 

 

   

	
 

	

 

	
 

 

-13-

 

 

5.6 Counterparts; Headings. This
Agreement may be authenticated in any number of counterparts, all
of which taken together shall constitute one and the same
instrument and any of the parties hereto may authenticate this
Agreement by signing any such counterpart. This Agreement may be
authenticated by manual signature or facsimile, .pdf or similar
electronic signature, all of which shall be equally valid. The
headings in this Agreement are for convenience of reference only
and shall not alter or otherwise affect the meaning
hereof.

 

5.7 Severability. If any provision
hereof is invalid and unenforceable in any jurisdiction, then, to
the fullest extent permitted by law, (a) the other provisions
hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in favor of the Secured Party and
its Representative in order to carry out the intentions of the
parties hereto as nearly as may be possible and (b) the invalidity
or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision
in any other jurisdiction.

 

5.8 SUBMISSION
TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS.
EACH DEBTOR HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL
OR NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK, BOROUGH OF
MANHATTAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT AND EACH DEBTOR HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS
AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF
SECURED PARTY TO BRING PROCEEDINGS AGAINST ANY DEBTOR IN THE COURTS
OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY A DEBTOR
AGAINST SECURED PARTY OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN
NEW YORK, NEW YORK (AND SECURED PARTY HEREBY SUBMITS TO THE
JURISDICTION OF SUCH COURT). NOTHING CONTAINED HEREIN SHALL BE
DEEMED TO LIMIT IN ANY WAY ANY RIGHT OF SECURED PARTY TO SERVE
PROCESS IN ANY MANNER PERMITTED BY LAW.

 

5.9 WAIVER
OF RIGHT TO TRIAL BY JURY.
EACH DEBTOR AND SECURED PARTY WAIVE THEIR RESPECTIVE RIGHTS TO A
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION
OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY
OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. EACH DEBTOR AND SECURED PARTY AGREE THAT ANY SUCH
CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE
THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION 5.9 AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE
VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT.

 

5.10 Joint
and Several. The obligations, covenants and agreements of
Debtors hereunder shall be the joint and several obligations,
covenants and agreements of each Debtor, whether or not
specifically stated herein without preferences or distinction among
them.

 

 

   

	
 

	

 

	
 

 

-14-

 

 

5.11 Parallel
Debt. For the purpose
of taking and ensuring the continuing validity of certain of
the security under the Security Documents, each Debtor incorporated
in Germany hereby agrees and covenants with the Collateral Agent by
way of an abstract acknowledgement of debt (abstraktes Schuldanerkenntnis) that
each of them shall pay to the Collateral Agent sums equal to, and
in the currency of, any sums owing by such Debtor to the Secured
Party under any Transaction Document (the "Corresponding
Obligation") when these amounts are due and payable (such abstract
acknowledgement of debt the "Parallel Debt"). Any security granted
by a Debtor incorporated in Germany under any Security Document to
the Collateral Agent to secure the Parallel Debt is granted to the
Collateral Agent shall be held on a German security trust
(deutsch-rechtliche
Sicherheitentreuhand) for the benefit of the Secured
Party.

 

Notwithstanding
anything to the contrary in this Security Agreement, the Collateral
Agent shall have its own independent right to demand payment of the
Parallel Debt by any Debtor incorporated in Germany. The rights of
the Secured Party to receive payment of the Corresponding
Obligations are several from the rights of the Collateral Agent to
receive payment under the Parallel Debt provided that the payment by
such Debtor of its Parallel Debt to the Collateral Agent in
accordance with this Section 5.11 by a Debtor
incorporated in Germany of its Corresponding Obligations shall be a
good discharge of the relevant Parallel Debt. In the event of a
good discharge of the Corresponding Obligations the Collateral
Agent shall no longer be entitled to demand payment of the Parallel
Debt and such Parallel Debt shall cease to exist. This shall apply
mutatis mutandis in the event of a good discharge of the Parallel
Debt to the Corresponding Obligations.

 

5.12 Concerning
Collateral Agent. Collateral
Agent shall act in accordance with the terms of the Purchase
Agreement. The Collateral Agent may exercise or refrain from
exercising any rights (including making demands and giving notices)
and take or refrain from taking any action, in accordance with this
Agreement and the Purchase Agreement. The Collateral Agent may
employ agents and attorneys-in-fact in connection herewith and
shall not be liable for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it in good faith. The
Collateral Agent may resign with 10 days’ written notice to
Company and a successor Collateral Agent may be appointed by the
Purchaser in consultation with Company. On the acceptance of
appointment as the successor Collateral Agent, that successor
Collateral Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring
Collateral Agent under this Agreement, and the retiring Collateral
Agent shall thereupon be discharged from its duties and obligations
under this Agreement. After any retiring Collateral Agent's
resignation, the provisions hereof shall inure to its benefit as to
any actions taken or omitted to be taken by it under this Agreement
while it was the Collateral Agent.

 

5.13 No
Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be
applied against any party.

 

5.14 ENTIRE
AGREEMENT; AMENDMENT. THIS AGREEMENT, TOGETHER WITH THE
OTHER TRANSACTION DOCUMENTS, SUPERSEDES ALL OTHER PRIOR ORAL OR
WRITTEN AGREEMENTS BETWEEN SECURED PARTY, THE DEBTORS, THEIR
AFFILIATES AND PERSONS ACTING ON THEIR BEHALF WITH RESPECT TO THE
MATTERS DISCUSSED HEREIN, AND THIS AGREEMENT, TOGETHER WITH THE
OTHER TRANSACTION DOCUMENTS AND THE OTHER INSTRUMENTS REFERENCED
HEREIN AND THEREIN, CONTAIN THE ENTIRE UNDERSTANDING OF THE PARTIES
WITH RESPECT TO THE MATTERS COVERED HEREIN AND THEREIN AND, EXCEPT
AS SPECIFICALLY SET FORTH HEREIN OR THEREIN, NEITHER THE SECURED
PARTY NOR ANY DEBTOR MAKES ANY REPRESENTATION, WARRANTY, COVENANT
OR UNDERTAKING WITH RESPECT TO SUCH MATTERS. AS OF THE DATE OF THIS
AGREEMENT, THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES
WITH RESPECT TO THE MATTERS DISCUSSED HEREIN. NO PROVISION OF THIS
AGREEMENT MAY BE AMENDED, MODIFIED OR SUPPLEMENTED OTHER THAN BY AN
INSTRUMENT IN WRITING SIGNED BY THE DEBTORS AND THE SECURED
PARTY.

 

[Remainder of Page Intentionally Left Blank; Signature Page
Follows]

 

   

	
 

	

 

	
 

 

-15-

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the day and year
first above written.

 

DEBTORS:

 

MEDITE CANCER DIAGNOSTICS, INC., a
Delaware corporation

 

 

 

By: /s/ David E. Patterson
                                                                  

Name:
David Patterson

 

Title:
Chief Executive Officer

 

 

[INSERT
OTHER DEBTORS]

 

 

-16-

 

 

SECURED PARTY:

 

GPB
DEBT HOLDINGS II, LLC

 

 

 

By: /s/ David Gentile
                                                                    

Name:
David Gentile

 

Title:
Manager

 

 

 

Notice
Address:

 

535
West 24th
Street, Floor 4

New
York, NY 10011

 

 

-17-

 

 

EXHIBIT A

Form of
Joinder

Joinder
to Security Agreement

 

The
undersigned, ______________________________, hereby joins in the
execution of that certain Security Agreement dated as of September
26, 2017 (as amended, restated, supplemented or otherwise modified
from time to time, the “Security Agreement”) by Medite
Cancer Diagnostics, Inc., a Delaware corporation, GPB Debt Holdings
II, LLC, a Delaware limited liability company, and each other
Person that becomes a Debtor or a Secured Party (as defined
therein) thereunder after the date thereof and hereof and pursuant
to the terms thereof, to and in favor of the Secured Party. By
executing this Joinder, the undersigned hereby agrees that it is a
Debtor thereunder and agrees to be bound by all of the terms and
provisions of the Security Agreement. The undersigned represents
and warrants that the representations and warranties set forth in
the Security Agreement are, with respect to the undersigned, true
and correct in all material respects as of the date
hereof.

 

The
undersigned represents and warrants to Secured Party
that:

 

(a) all of the
Equipment, Inventory and Goods owned by such Debtor is located at
the places as specified on Schedule I and such Debtor
conducts business in the jurisdiction set forth on Schedule I;

 

(b) except as disclosed
on Schedule I, none
of such Collateral is in the possession of any bailee,
warehousemen, processor or consignee;

 

(c) the chief place of
business, chief executive office and the office where such Debtor
keeps its books and records are located at the place specified on
Schedule
I;

 

(d) such Debtor
(including any Person acquired by such Debtor) does not do business
or has not done business during the past five years under any
tradename or fictitious business name, except as disclosed on
Schedule
II;

 

(e) all registered
Copyrights, Patents and Trademarks owned or licensed by the
undersigned are listed in Schedules III, IV and V, respectively;

 

(f) all Deposit
Accounts, securities accounts, brokerage accounts and other similar
accounts maintained by such Debtor, and the financial institutions
at which such accounts are maintained, are listed on Schedule VI;

 

(g) all Commercial Tort
Claims of such Debtor are listed on Schedule VII;

 

(h) all interests in
real property and mining rights held by such Debtor are listed on
Schedule
VIII;

(i) all Equipment
(including Motor Vehicles) owned by such debtor are listed on
Schedule
IX.

  , a
______________

 

By: 

 Title:

  FEIN:

 

-18-

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