Blueprint
Exhibit 10.1
FORBEARANCE AGREEMENT
This FORBEARANCE AGREEMENT (this
“Agreement”) is entered
into as of February 5, 2018, by and among MEDITE Cancer
Diagnostics, Inc., a Delaware corporation (“Borrower”), and GPB Debt
Holdings II LLC, a Delaware limited liability company
(“Lender”). Capitalized
terms used but not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Transaction
Documents (as hereinafter defined).
RECITALS
A. Borrower
and Lender are parties to that 13.25% Senior Secured Convertible
Note in the original principal amount (“Principal”) of $5,356,400
(the “Note”).
B. Borrower and Lender
are parties to that certain Security Agreement, dated as of
September 26, 2017 (the “Security Agreement”), to
secure the prompt payment, performance and discharge in full of all
of Borrower’s obligations under the Note.
C. Borrower and Lender
are party to that certain Guarantee Agreement, dated September 26,
2017 (the “Guarantee
Agreement”) whereby Medite Enterprises Inc., Medite
GMBH, Medite Lab Solutions, Inc. and Cytoglobe GMBH guaranteed all
of Borrower’s obligations arising under, among other things,
the Note.
D. Borrower has
notified Lender that Borrower shall, until July 1, 2018, be unable
to (i) register shares of the Company’s common stock pursuant
to Section 4.9 of the Securities Purchase Agreement dated September
26, 2017 (the “SPA”), nor (ii) maintain
an interest reserve in the minimum amount required under Section
4.14 of the SPA. Borrower further notified Lender that until April
1, 2018, Borrower has failed to, and is unable to make monthly
interest payments as required under Section 4.21 of the SPA and due
and owing on the Note for the months of January 2018, February
2018, and March 2018. Such failures each constitute an Event of
Default (the “Specified Defaults”)
pursuant to Section 8 of the Note. [Are these requirements under
the SPA, or under the Note and Security Agreement?]
E. As a result of the
Specified Defaults, the indebtedness evidenced by the Transaction
Documents is due and payable immediately, and Lender has the right,
pursuant to the terms of the Transaction Documents and applicable
law, to collect the indebtedness due to Lender under the
Transaction Documents and, pursuant to Section 4.5 of the Security
Agreement, to exercise any and all legal rights and remedies
available to Lender, having reserved all rights it has at law, in
equity, by agreement or otherwise.
F. Borrower has
requested that during the Forbearance Period (as hereinafter
defined), Lender forbear from exercising its rights and remedies
against Borrower with
respect to the Specified Defaults, notwithstanding the existence of
the Specified Defaults, in order to allow Borrower to complete an
additional round of founding.
G. Subject to the
terms and conditions set forth herein, and without prejudice to
anything contained in Section 2(b) herein, Lender has agreed to
forbear from exercising any default-related rights and remedies
against Borrower for a limited period of time in accordance with
this Agreement.
NOW,
THEREFORE, in consideration of the foregoing, the terms, covenants
and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION
1. Recitals.
The
Recitals, which are true and correct, are incorporated herein by
reference.
SECTION
2. Confirmation
by Borrower of Principal and Specified
Defaults.
(a)
Borrower
acknowledges and agrees that as of the close of business on
February 2, 2018, the aggregate Principal balance of the
outstanding amount under the Note was not less than $5,356,400. The
foregoing amount does not include interest, fees, expenses and
other amounts which are chargeable or otherwise reimbursable under
the Transaction Documents (together with the Principal, the
“Obligations”).
(b)
Borrower
acknowledges and agrees that (i) the Transaction Documents
constitute the legal, valid and binding obligations of Borrower,
enforceable by Lender in accordance with their respective terms,
and the security interests granted by Borrower in its assets are
the legal, valid and binding obligations of Borrower; (ii) the
Specified Defaults constitute an Event of Default and that there
are no disputes as to the occurrence and continued existence of the
Specified Defaults; (iii) the Specified Defaults are not curable;
(iv) Lender has the right to payment of the Obligations, to
immediately enforce its right to payment of the Obligations, to
immediately enforce its security interests in the collateral
securing the Note, and to exercise all other rights, powers and
remedies provided to Lender under the Transaction Documents; (v)
Lender is entitled to be paid and/or reimbursed for all legal fees
and expenses in connection with enforcement of its rights under the
Transaction Documents; (vi) pursuant to the terms of Section 2a of
the Note, Lender has the right to accrue Cash Interest on the
Obligations at the default rate of 18.25%; and (vii) Borrower has
no defenses, offsets and/or counterclaims against Lender and/or its
agents in connection with the Note or against the enforcement of
the Note, and Borrower shall not dispute or contest (or cause
anyone else to dispute or contest) the validity or enforceability
of the Note or the priority, enforceability or extent of
Lender’s security interest in, and lien on, the collateral
securing the Note, in any judicial, administrative or other
proceeding, either during or following the termination or
expiration of the Forbearance Period set forth herein.
SECTION
3. Forbearance;
Forbearance Default Rights and Remedies.
(a)
Effective as of the
date hereof, Lender agrees that until the expiration or termination
of the Forbearance Period (as hereinafter defined), it will
temporarily forbear from exercising any Default-related rights and
remedies against Borrower, in each case solely with respect to the
Specified Defaults; provided, however, that:
(i) except as otherwise
expressly provided herein, the Specified Defaults shall each
continue to constitute an actionable Event of Default for the
purpose of triggering all limitations, restrictions or prohibitions
on certain actions that may be taken or omitted or otherwise
acquiesced to by or on behalf of Borrower pursuant to the
Transaction Documents, including, without limitation, any
limitations, restrictions or prohibitions with respect to any
distribution, advance or other payment directly or indirectly from
or for the benefit of Borrower to any direct or indirect owner of
an equity interest in Borrower; and any actions or inactions taken
or omitted or otherwise acquiesced to by or on behalf of Borrower
in violation of such provisions, in each case while any Default or
Event of Default (including the Specified Defaults) exists, will
constitute additional Events of Default under the Transaction
Documents, as well as a Forbearance Default (as hereinafter
defined) under this Agreement; and
(ii) default
and/or other notices and correspondence to Borrower may be
delivered in accordance with the terms of this
Agreement.
(b)
As used
herein, the term “Forbearance Period” shall
mean the period beginning on the date hereof and ending on the
earliest to occur of: (i) 11:59 PM (New York Time) on July 1, 2018,
with respect to the exercise of registration rights by Borrower
pursuant to Section 4.9 of the SPA, (ii) 11:59 PM (New York Time)
on July 1, 2108, or upon the completion of a two million dollar
($2,000,000) equity funding by Borrower, whichever is earlier, with
respect to the maintenance of the required interest reserve account
pursuant to the Transaction Documents, and (ii) with respect to the
repayment of deferred monthly interest payments pursuant to the
Transaction Documents, the Forbearance Period shall terminate on
April 1, 2018, except that Borrower shall be required to make such
payments of deferred interest (including interest accruing at the
revised default rate of 15.75% for the Cash Interest specified in
clause (e) below) during the last three (3) months of 2018, in
addition to the interest payments owed and due to Lender for such
months, so as to be current on all monthly interest payments by
December 31, 2018, (iv) the date on which Lender delivers to
Borrower a written notice terminating the Forbearance Period, which
notice may be delivered at any time upon or after the occurrence of
any Forbearance Default (as hereinafter defined), and (v) the date Borrower
repudiates or asserts any defense to any Obligation or other
liability under or in respect of this Agreement or the Transaction
Documents or applicable law, or makes or pursues any claim or cause
of action against Lender; (the occurrence of any of the foregoing
clauses (i) and (v), a “Termination Event”). As
used herein, the term “Forbearance Default”
shall mean: (A) the occurrence of any Default or Event of Default
other than the Specified Defaults; (B) the failure of Borrower to
timely comply with any material term, condition, or covenant set
forth in this Agreement; (C) the failure of any representation or
warranty made by Borrower under or in connection with this
Agreement to be true and complete in all material respects as of
the date when made; or (D) Lender’s reasonable belief that
Borrower: (1) has ceased or is not actively pursuing mutually
acceptable restructuring or foreclosure alternatives with Lender;
or (2) is not negotiating such alternatives in good faith. Any
Forbearance Default will not be effective until one (1) Business
Day after receipt by Borrower of written notice from Lender of such
Forbearance Default. Any effective Forbearance Default shall
constitute an immediate Event of Default under the Transaction
Documents. In addition, Borrower agrees that no Board of Director
or management changes shall be made without the prior written
consent of Lender for a period of twelve (12) months from the
effective date of this Agreement.
(c)
Upon
the occurrence of a Termination Event, the agreement of Lender
hereunder to forbear from exercising any default-related rights and
remedies shall immediately terminate without the requirement of any
demand, presentment, protest, or notice of any kind, all of which
Borrower waives (other than the notice expressly provided in
Section 1(b). Borrower agrees that Lender may at any time
thereafter proceed to exercise any and all of its rights and
remedies under any or all of the Transaction Document and/or
applicable law, including, without limitation, its rights and
remedies with respect to any of the Specified Defaults that are
continuing at such time. Without limiting the generality of the
foregoing, upon the occurrence of a Termination Event, without the
requirement of any demand, presentment, protest, or notice of any
kind, other than the notice expressly provided in Section 1(b), (i)
Lender may commence any legal or other action to collect any or all
of the Obligations from Borrower and/or any Collateral, and
(ii) Lender may take any other enforcement action or otherwise
exercise any or all rights and remedies provided for by any or all
of the Transaction Documents and/or applicable law, all of which
rights and remedies are fully reserved by Lender, in accordance
with the terms and conditions of the Transaction Documents, and
applicable law.
(d)
Any
agreement to extend the Forbearance Period, if any, must be set
forth in writing and signed by a duly authorized signatory of
Lender, and Borrower acknowledges that Lender has not made any
assurances concerning any possibility of an extension of the
Forbearance Period.
(e)
Lender and Borrower agree that solely for the January 2018,
February 2018, and March 2018 interest payments, the Cash Interest
default rate shall be reduced to 15.75% and such default interest
shall be paid as specified in clause (b) above.
SECTION
4. General
Cooperation from Borrower.
Borrower shall, and
shall use commercially reasonable efforts to cause its Chief
Financial Officer and consultants to cooperate fully with Lender in
furnishing information as and when reasonably requested by Lender
regarding the Collateral or Borrower’s financial affairs,
finances, financial condition, business and operations. Borrower
authorizes Lender to meet and/or have discussions with
Borrower’s Chief Financial Officer and other employees and
consultants from time to time.
SECTION
5. General
Release; Covenant Not to Sue.
(a)
In
consideration of, among
other things, Lender’s execution and delivery of
this Agreement, Borrower, on behalf and itself and its
successors, assigns, parents, subsidiaries, affiliates, officers,
directors, employees, and agents, hereby forever, fully,
unconditionally and irrevocably waives and releases Lender and its
successors, assigns, parents, subsidiaries, affiliates, officers,
directors, employees, and agents (collectively, the
“Releasees”) from any and all claims, liabilities,
obligations, debts, causes of action (whether at law or in equity
or otherwise), defenses, counterclaims, setoffs, of any kind,
whether known or unknown, whether liquidated or unliquidated,
matured or unmatured, fixed or contingent, directly or indirectly
arising out of, connected with, resulting from, or related to any
act or omission by any Lender or any other Releasee with respect to
the Transaction Documents and any Collateral (other than any
Lender’s or any Releasee’s willful acts or omissions),
on or before the date of this Agreement (collectively,
the “Claims”).
(b)
In
connection with such releases, Borrower acknowledge that they are
aware that they or their attorneys or others may hereafter discover
claims or facts presently unknown or unsuspected in addition to or
different from those which they now know or believe to be true with
respect to the subject matter of the Claims being released pursuant
to Section 5(a) hereof. Nevertheless, it is the intention of
Borrower in executing this Agreement to fully, finally, and forever
settle and release all matters and all claims relating thereto,
which exist, hereafter may exist or might have existed (whether or
not previously or currently asserted in any action) constituting
Claims released pursuant to Section 5(a) hereof.
(c)
In
entering into this Agreement, Borrower consulted with, and has been
represented by, legal counsel and expressly disclaims any reliance
on any representations, acts or omissions by any of the Releasees
and hereby agrees and acknowledges that the validity and
effectiveness of the releases set forth above do not depend in any
way on any such representations, acts and/or omissions or the
accuracy, completeness or validity hereof.
(d)
Borrower hereby
absolutely, unconditionally and irrevocably, covenants and agrees
with and in favor of each Releasee that it will not sue (at law, in
equity, in any regulatory proceeding or otherwise) any Releasee on
the basis of any Claim released, remised and discharged by Borrower
pursuant to Section 5(a) hereof. If Borrower violates the foregoing
covenant, Borrower agree to pay, in addition to such other damages
as any Releasee may sustain as a result of such violation, all
reasonable attorneys’ fees and reasonable out-of-pocket
expenses incurred by any Releasee as a result of such
violation.
(e)
The
provisions of this Section shall survive the termination of this
Agreement, the Transaction Documents, and payment in full of the
Obligations.
SECTION
6. Representations,
Warranties and Covenants of Borrowers and Other
Borrower.
Borrower
represents, warrants and covenants that:
(a)
The
individual executing this Agreement on behalf of Borrower is
authorized to so act and the execution, delivery and performance by
Borrower of this Agreement has been duly authorized, and this
Agreement and all documents and instruments delivered in connection
herewith are legal, valid and binding obligations of such Borrower
enforceable against it in accordance with their respective terms,
except as the enforcement thereof may be subject to (i) the effect
of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors’ rights
generally and (ii) general principles of equity (regardless of
whether such enforcement is sought in a proceeding in equity or at
law);
(b)
Except
with respect to the Specified Defaults, each of the representations
and warranties contained in the Transaction Documents is true and
correct in all material respects (or, to the extent such
representations are already qualified by materiality in the
applicable Transaction Document, in all respects) on and as of the
date hereof as if made on the date hereof, except to the extent
that such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties
shall be true and correct in all material respects (or, to the
extent such representations are already qualified by materiality in
the applicable Transaction Document, in all respects) as of such
earlier date;
(c)
Neither
the execution, delivery and performance of this Agreement and all
documents and instruments delivered in connection herewith nor the
consummation of the transactions contemplated hereby or thereby
does or shall contravene, result in a breach of, or violate (i) any
provision of Borrower’s formation documents, (ii) any law or
regulation, or any order or decree of any court or government
instrumentality, or (iii) any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which Borrower is a party
or by which Borrower or any of its property is bound;
(e)
Before execution and delivery of this Agreement, Lender had no
obligation to negotiate with any of Borrower or any other person or
entity concerning anything contained herein. Borrower agrees that
Lender’s execution of this Agreement does not create any such
obligation; and
(f)
Borrower has made its own decisions regarding all of its operations
and its incurrence and payment of all third party debt and all
other payments.
SECTION
7. Ratification
of Liability.
(a)
Borrower, as
debtor, grantor, pledgor, guarantor, assignor, or in other similar
capacities in which Borrower grant liens or security interests in
its properties or otherwise act as an accommodation party or
guarantor, as the case may be, under the Transaction Documents,
hereby ratifies and reaffirms all of its payment and performance
obligations and obligations to indemnify, contingent or otherwise,
under each of such Transaction Documents to which it is a party,
and hereby ratifies and reaffirms its grant of liens on or security
interests in its properties pursuant to such Transaction Documents
to which it is a party as security for the Obligations under or
with respect to the Transaction Documents, and confirms and agrees
that such liens and security interests, all of which are valid,
properly perfected and have the priority required by the
Transaction Documents, hereafter secure all of the Obligations,
including, without limitation, all additional Obligations hereafter
arising or incurred pursuant to or in connection with this
Agreement or the Transaction Documents. Borrower further agrees and
reaffirms that the Transaction Documents to which it is a party
apply to all Obligations owing under the Note (including, without
limitation, all additional Obligations hereafter arising or
incurred pursuant to or in connection with this Agreement the
Transaction Document). Borrower (i) further acknowledges receipt of
a copy of this Agreement and all other agreements, documents, and
instruments executed and/or delivered in connection herewith, (ii)
consents to the terms and conditions of same, and (iii) agrees and
acknowledges that each of the Transaction Documents remains in full
force and effect and is hereby ratified and confirmed. Except as
expressly provided herein, the execution of this Agreement shall
not operate as a waiver of any right, power or remedy of Lender,
nor constitute an amendment or waiver of any provision of any of
the Transaction Documents nor constitute a novation of any of the
Obligations under the Transaction Documents.
(b)
In
furtherance of this Section 7, simultaneously with Borrower’s
execution and delivery of this Agreement, Borrower shall execute
and deliver a Confession of Judgment with regard to the Obligations
in form and substance reasonably acceptable to Lender. Lender shall
not file the Confession of Judgment with any court unless there has
been a Termination Event.
SECTION
8. Reference
to and Effect Upon the Transaction Documents.
(a)
Except
as expressly modified hereby, all terms, conditions, covenants,
representations and warranties contained in the Transaction
Documents, and all rights of Lender and all of the Obligations,
shall remain in full force and effect.
(b)
Except
as expressly set forth herein, the execution, delivery and
effectiveness of this Agreement shall not directly or indirectly
(i) create any obligation to defer any enforcement action after the
occurrence and continuance of any Default or Event of Default
(including, without limitation, any Forbearance Default), (ii)
constitute a consent or waiver of any past, present or future
violations of any provisions of the Transaction Documents,
(iii) amend, modify or operate as a waiver of any provision of
the Transaction Documents or any right, power or remedy of Lender,
(iv) constitute a consent to any merger or other transaction or to
any sale, restructuring or refinancing transaction or (v)
constitute a course of dealing or other basis for altering any
Obligations or any other contract or instrument. Except as
expressly set forth herein, Lender reserves all of its respective
rights, powers, and remedies under the Agreement, the Transaction
Documents and applicable law.
(c)
From
and after the Forbearance Effective Date, the term
“Transaction Documents” in the Transaction Documents
shall include, without limitation, this Agreement and any
agreements, instruments and other documents executed and/or
delivered in connection herewith.
(d)
This
Agreement shall not be deemed or construed to be a satisfaction,
reinstatement, novation or release of the Transaction Documents or
any obligations arising thereunder.
SECTION
9. Construction.
This
Agreement and all other agreements and documents executed and/or
delivered in connection herewith have been prepared through the
joint efforts of all of the parties hereto. Neither the provisions
of this Agreement nor any such other agreements and documents nor
any alleged ambiguity therein shall be interpreted or resolved
against any party on the ground that such party or its counsel
drafted this Agreement or such other agreements and documents, or
based on any other rule of strict construction. Each of the parties
hereto represents and declares that such party has carefully read
this Agreement and all other agreements and documents executed in
connection therewith, and that such party knows the contents
thereof and signs the same freely and voluntarily. The parties
hereto acknowledge that they have been represented by legal counsel
of their own choosing in negotiations for and preparation of this
Agreement and all other agreements and documents executed in
connection herewith and that each of them has read the same and had
their contents fully explained by such counsel and is fully aware
of their contents and legal effect.
SECTION
10. Counterparts.
This
Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed an original, but all such
counterparts shall constitute one and the same instrument, and all
signatures need not appear on any one counterpart. Any party hereto
may execute and deliver a counterpart of this Agreement by
delivering by facsimile or other electronic transmission a
signature page of this Agreement signed by such party, and any such
facsimile or other electronic transmission shall be treated in all
respects as having the same effect as an original
signature.
SECTION
11. Governing
Law.
The law
of the State of New York shall govern all matters arising out of,
in connection with or relating to this Agreement, including,
without limitation, its validity, interpretation, construction,
performance and enforcement.
SECTION
12. Severability.
The
invalidity, illegality, or unenforceability of any provision in or
obligation under this Agreement in any jurisdiction shall not
affect or impair the validity, legality, or enforceability of the
remaining provisions or obligations under this Agreement or of such
provision or obligation in any other jurisdiction. If feasible, any
such offending provision shall be deemed modified to be within the
limits of enforceability or validity; however, if the offending
provision cannot be so modified, it shall be stricken and all other
provisions of this Agreement in all other respects shall remain
valid and enforceable.
SECTION
13. Further
Assurances.
Borrower agrees to
take all further actions and execute all further documents as
Lender may from time to time reasonably request that are necessary
to carry out the transactions contemplated by this Agreement and
all other agreements executed and delivered in connection
herewith.
SECTION
14. Section
Headings.
Section
headings in this Agreement are included herein for convenience of
reference only and shall not constitute part of this Agreement for
any other purpose.
SECTION
15. Notices.
All
notices, requests, and demands to or upon the respective parties
hereto shall be given in accordance with the Transaction
Documents.
SECTION
16. Assignments;
No Third Party Beneficiaries.
This
Agreement shall be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns;
provided, that Borrower shall not be entitled to delegate any of
its duties hereunder and shall not assign any of its rights or
remedies set forth in this Agreement without the prior written
consent of Lender in its sole discretion. No Person other than the
parties hereto and the Releasees shall have any rights hereunder or
be entitled to rely on this Agreement and all third-party
beneficiary rights (other than the rights of the Releasees under
Section 6 hereof) are hereby expressly disclaimed.
SECTION
17. Final
Agreement.
This
Agreement, the Transaction Documents, and the other written
agreements, instruments, and documents entered into in connection
therewith set forth in full the terms of agreement between the
parties hereto and thereto and are intended as the full, complete,
and exclusive contracts governing the relationship between such
parties, superseding all other discussions, promises,
representations, warranties, agreements, and understandings between
the parties with respect thereto. Any waiver of any condition in,
or breach of, any of the foregoing in a particular instance shall
not operate as a waiver of other or subsequent conditions or
breaches of the same or a different kind. Lender’s exercise
or failure to exercise any rights or remedies under any of the
foregoing in a particular instance shall not operate as a waiver of
its right to exercise the same or different rights and remedies in
any other instances. There are no oral agreements among the parties
thereto or hereto.
SECTION
20. Miscellaneous.
(a)
Each of the parties hereto agrees that the transactions
contemplated hereby constitute a contemporaneous exchange for new
value.
(b)
The parties hereto recognize that Borrower have not fully complied
with the terms of the Transaction Documents as of the date hereof.
No course of dealing between Lender, on one hand, and Borrower, on
the other hand, is established by virtue of Borrower’s
non-compliance therewith. Borrower understands that Lender’s
failure to insist on strict performance as of such date shall not
be interposed as a defense to Lender’s exercise of its legal
rights, nor shall it constitute a waiver of any
thereof.
(c)
Borrower acknowledges that TIME IS OF THE ESSENCE with respect to
the time for performance of the terms and conditions of this
Agreement.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and year first above
written.
BORROWER:
MEDITE
CANCER DIAGNOSTICS, INC., as
Borrower
By:
/s/Stephen Von
Rum
Name:
Stephen Von Rump
Title:
Chief Executive Officer
LENDER:
GPB
DEBT HOLDINGS II LLC, as Lender
By:
/s/Evan
Myrianthopoulos
Name:
Evan Myrianthopoulos
Title:
Managing Partner