12% SECURED CONVERTIBLE NOTE
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: June ___, 2018
$_____________
12% SECURED CONVERTIBLE NOTE
THIS
12% SECURED CONVERTIBLE NOTE is issued by MEDITE CANCER
DIAGNOSTICS, INC., a Delaware corporation (the
“Company”) (this note, the
“Note”).
FOR
VALUE RECEIVED, the Company promises to pay to
__________________________________ or his/its registered assigns
(the “Holder”), or shall have paid pursuant to the
terms hereunder, the principal sum of _____________________
(___________) (“Original Principal Amount”) on June
___, 2023 (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.
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:
“Alternate
Consideration” shall have the meaning set forth in Section
5(e).
“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).
“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.
-1-
“Buy-In”
shall have the meaning set forth in Section 4(c)(iv).
“Cash
Interest” shall have the meaning set forth in Section
2(b).
“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.
“Common
Stock” means the common stock of the Company, par value
..001.
“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.
-2-
“Notice of
Conversion” shall have the meaning set forth in Section
4(a).
“Original
Issue Date” means the date of the first issuance of the
Notes, regardless of any transfers of any Note and regardless of
the number of instruments which may be issued to evidence such
Notes.
“Payment
Date” shall have the meaning set forth in Section
2(b).
“Permitted
Indebtedness” means capital lease obligations and purchase
money indebtedness incurred in connection with the acquisition of
assets and such other indebtedness to be subordinate to the
indebtedness of Holder.
“Permitted
Lien” means the individual and collective reference to the
following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and
other governmental charges or levies being contested in good faith
and by appropriate proceedings for which adequate reserves (in the
good faith judgment of the management of the Company) have been
established in accordance with GAAP, (b) Liens imposed by Law which
were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and
mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s
business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or
materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being
contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing for the foreseeable
future the forfeiture or sale of the property or asset subject to
such Lien, (c) Liens incurred in connection with Permitted
Indebtedness, (d) Liens or security interests in favor of Senior
Creditor or liens or security interests in favor of Holder
subordinated to Senior Creditor in accordance with the
Subordination Agreement, (e) 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, (f) 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), (g) 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, (h) 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, (i) standard Liens of
collecting banks under the UCC on items in the course of
collection, statutory Liens and rights of set-off of banks, (j)
Liens arising from filing UCC financing statements relating solely
to leases not prohibited by the Transaction Documents or the Senior
Documents, and (k) Liens resulting from any judgment that is not
itself an Event of Default.
“Principal
Amount” means the Original Principal Amount.
“Purchase
Agreement” means the Securities Purchase Agreement, dated as
of February 1, 2018, 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 February 1,
2018, by and between the Company and the Collateral
Agent.
“Senior
Creditor” shall have the meaning set forth in the
Subordination Agreement.
“Senior
Debt” shall mean all obligations, liabilities and
indebtedness of every nature of the Company or any guarantor from
time to time owed to GPB Debt Holdings II, LLC or its successors
and assigns under the Senior Documents, including, without
limitation, the principal amount of all debts, claims and
indebtedness, accrued and unpaid interest and all fees, costs and
expenses, whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now and from time to time hereafter owing,
due or payable, whether before or after the filing of a proceeding
under the Bankruptcy Code together with (a) any amendments,
modifications, renewals or extensions thereof to the extent in
accordance with the terms of this Agreement and (b) any interest
accruing thereon after the commencement of a proceeding, without
regard to whether or not such interest is an allowed
claim.
-3-
“Senior
Documents” shall have the meaning set forth in the
Subordination Agreement.
“Shares”
means shares of the Company’s Common Stock.
“Share
Delivery Date” shall have the meaning set forth in Section
4(c)(ii).
“Stock
Interest” shall have the meaning set forth in Section
2(a).
“Subordination
Agreement” shall mean the Subordination and Intercreditor
Agreement, dated February 1, 2018, by and among (i) GPB Debt
Holdings II, LLC, (ii) the subordinated creditors listed therein
and (iii) the Company.
“Successor
Entity” shall have the meaning set forth in Section
5(e).
“Transaction
Documents” shall have the meaning set forth in the Purchase
Agreement.
Section
2. Interest
Payments.
(a) Interest.
Interest shall accrue to the Holder on the aggregate unconverted
and then outstanding principal amount of this Note, at the rate of
(i) twelve percent (12%) per annum paid in Shares of the Company
(the “Stock Interest”), calculated at a value of $0.075
per share and 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,
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, Stock Interest shall accrue at the lesser of (i)
the rate of fourteen and one-half percent (14.5%) per annum, and
(ii) the maximum amount permitted by law (the lesser of clause (i)
and (ii), the “Default Interest Rate”) 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 annual interest payments of Stock Interest
in arrears on the first Business Day of each calendar year
following the Original Issue Date (each an “Interest
Payment”). In the event that the Company does not have
sufficient Shares authorized for issuance to cover the Stock
Interest payment, the Holder shall have the right to receive any
and all accrued interest payments in cash (the “Cash
Interest”).
(c) Payment.
All Stock Interest payments shall be made in Shares on any Payment
Date.
(d) Prepayment.
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, the Company shall pay the Holder an
additional fee equal to 3% of the Principal Amount (or such portion
thereof being prepaid).
Section
3. Registration
of Transfers and Exchanges.
(a) Different
Denominations. This Note is exchangeable for an equal
aggregate principal amount of Notes of different authorized
denominations (of no less than $1,000 in principal amount), as
requested by the Holder surrendering the same. No service charge
will be payable for such registration of transfer or
exchange.
(b) Investor
Representations. This Note has been issued subject to
certain investment representations of the original Holder set forth
in the Purchase Agreement and may be transferred or exchanged only
in compliance with the Purchase Agreement and applicable federal
and state securities laws and regulations.
-4-
(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,
$0.075 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.
(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.
-5-
(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) Anti-Dilution.
In the event that the Company issues any new securities subsequent
to the Original Issue Date of this Note (subject to the
Over-Allotment as defined and set forth in the Purchase Agreement),
(i) the Conversion Price will decrease to the purchase price per
share of any new securities issued by the Company, and (ii) the
number of shares issuable upon the Conversion of this Note will
increase such that the number derived from multiplying the
Conversion Price by the number of shares issuable upon Conversion
the Note is the same immediately before and immediately after the
Conversion Price adjustment. To the extent the Company issues
derivative securities (other than pursuant to an employee stock
option plan) subsequent to the Original Issue Date of the Note with
a conversion or exercise price less than the Conversion Price, the
Conversion Price shall be reduced to the conversion or exercise
price of the derivative securities and the number of shares
issuable upon the conversion of the Note shall be increased in
accordance with (ii) herein.
(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) Xxxxxx’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
-7-
this
Section 4(d) solely with respect to the Holder’s Note at any
time, which decrease shall be effectively immediately upon delivery
of notice to the Company. The Beneficial Ownership Limitation
provisions of this paragraph shall be construed and implemented in
a manner otherwise than in strict conformity with the terms of this
Section 4(d) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial
Ownership Limitation contained herein or to make changes or
supplements necessary or desirable to properly give effect to such
limitation. The limitations contained
in this paragraph shall apply to a successor holder of this
Note.
Section
5. Certain
Adjustments.
(a) Stock
Dividends and Stock Splits. If the Company, at any time
while this Note is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions payable in shares
of Common Stock on shares of Common Stock or any Common Stock
Equivalents (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company upon conversion of, or
payment of interest on, the Notes or pursuant to any of the other
Transaction Documents), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, (iii) combines
(including by way of a reverse stock split) outstanding shares of
Common Stock into a smaller number of shares or (iv) issues, in the
event of a reclassification of shares of the Common Stock, any
shares of capital stock of the Company, then the Conversion Price
shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding any treasury shares
of the Company) outstanding immediately before such event, and of
which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made
pursuant to this Section shall become effective immediately after
the record date for the determination of shareholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.
(b) Reserved.
(c) Subsequent
Rights Offerings. In addition
to any adjustments pursuant to Section 5(a) above, if at any time
the Company grants, issues or sells any Common Stock, Common Stock
Equivalents or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of
shares of Common Stock (the “Purchase Rights”), then
the Holder will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of
shares of Common Stock acquirable upon complete conversion of this
Note (without regard to any limitations on conversion hereof,
including without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided,
however,
to the extent that the Holder’s right to participate in any
such Purchase Right would result in the Holder exceeding the
Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Purchase Right to such extent (or
in the beneficial ownership of any shares of Common Stock as a
result of such Distribution to such extent)).
(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 Xxxxxx. 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,
Subordination and Security. Each of MEDITE Enterprises Inc.,
MEDITE GmbH, MEDITE Lab Solutions, Inc., and CytoGlobe GmbH shall
unconditionally and irrevocably guaranty to pay and perform all of
the obligations of the Company under this Note pursuant to the
Guaranty Agreements. Payment of this Note shall be subordinated to
all Senior Debt in accordance with the Subordination Agreement and
secured in accordance with the Security Agreement.
Section
7. Negative
Covenants. As long as any portion of this Note remains
outstanding, unless the holders of all of the then outstanding Note
holders shall have otherwise given prior written consent, the
Company shall not, and shall not permit any of the Subsidiaries to,
directly or indirectly:
(a) other
than Permitted Indebtedness, enter into, create, incur, assume,
guarantee or suffer to exist any Indebtedness for borrowed money of
any kind, including, but not limited to, a guarantee, on or with
respect to any of its property or assets now owned or hereafter
acquired or any interest therein or any income or profits
therefrom;
(b) other
than Permitted Liens, enter into, create, incur, assume or suffer
to exist any Liens of any kind, on or with respect to any of its
property or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom;
(c) amend
its charter documents, including, without limitation, its
certificate of incorporation and bylaws, in any manner that
materially and adversely affects any rights of the Holder, provided
that any amendment to the increase in Shares for any employee stock
option plan shall not be considered materially and adversely
affecting any rights of the Holder;
-10-
(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 (Stock and/or Cash 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;
(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;
-11-
(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 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,
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..
(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 Xxxxxx 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.
-12-
(b) Notices.
All notices, offers, acceptance and any other acts under this
Agreement (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressees in person, by
Federal Express or similar receipted next business day delivery, as
follows:
If to
the Company: MEDITE Cancer Diagnostics,
Inc.
0000 XX
00xx Xxxxxx
Orlando, FL
32811
Telephone No.:
(000) 000-0000
Facsimile
No.:
Attention: Xxxxxxx
Xxx Xxxx
Email:
Xxxxxxx.xxxxxxx@xxxxxx-xxxxx.xxx
with a
copy to:
Xxxxxxx X. X’Xxxx
Attorney at
Law
000 X.
Xxxx Xxx
Suite
103-198
San Tan
Valley, AZ 85143
Telephone No: (000)
000-0000
Email:
xxx@XXXxxxXxxxxx.xxx
If to
Holder:
Address on signature page
with a copy
to: Xxxxxx &
Xxxxxx, LLP
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Telephone No.:
(000) 000-0000
Facsimile No.:
(000) 000-0000
Attention: Xxxxxx
Xxxxxx, Esq.
E-mail:
xxxxxxx@xxxxxxxxxxxx.xxx
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.
-13-
(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 t is not personally subject to the
jurisdiction of such New York Courts, or such New York Courts are
improper or inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Note and agrees that
such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other
manner permitted by applicable Law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable
Law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Note or the transactions
contemplated hereby.
(f) Waiver.
Any waiver by the Company or the Holder of a breach of any
provision of this Note shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of
any other provision of this Note. The failure of the Company or the
Holder to insist upon strict adherence to any term of this Note on
one or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence
to that term or any other term of this Note on any other occasion.
Any waiver by the Company or the Holder must be in
writing.
(g) Severability.
If any provision of this Note is invalid, illegal or unenforceable,
the balance of this Note shall remain in effect, as long as the
essential terms and conditions of this Note for each party remain
valid, binding, and enforceable. If it shall be found that any
interest or other amount deemed interest due hereunder violates the
applicable Law governing usury, the applicable rate of interest due
hereunder shall automatically be lowered to equal the maximum rate
of interest permitted under applicable Law.
(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.
-14-
(j) Authorized
Shares. The Company covenants that from and after the date
hereof it shall have reserved, and will continue to reserve, from
its authorized and unissued Common Stock, free of preemptive
rights, a sufficient number of shares equal to one (1) times the
number of shares of Common Stock issuable upon conversion of this
Note issuable under the Purchase Agreement to all Purchasers
thereunder (without regard to any limitations on exercise hereof,
including without limitation, the Beneficial Ownership Limitation,
and no later than, the date which is six (6) months from the
Original Issue Date, it shall have reserved, and will continue to
reserve, from its authorized and unissued Common Stock, free of
preemptive rights, a sufficient number of shares equal to two (2)
times the number of shares of Common Stock issuable upon conversion
of this Note issuable under the Purchase Agreement to all
Purchasers thereunder (without regard to any limitations on
exercise hereof, including without limitation, the Beneficial
Ownership Limitation). The Company further covenants that its
issuance of this Note shall constitute full authority to its
officers who are charged with the duty of executing the
Company’s securities to execute and issue the necessary
certificates for the shares of Common Stock issuable upon
conversion of this Note upon the exercise of the purchase rights
under this Note. The Company will take all such commercially
reasonable action as may be necessary to assure that such shares of
Common Stock issuable upon conversion of this Note may be issued as
provided herein without violation of any applicable law or
regulation, or of any requirements of any Trading Market upon which
the Common Stock may be listed. The Company covenants that all
shares of Common Stock issuable upon conversion of this Note which
may be issued upon the exercise of the purchase rights represented
by this Note will, upon exercise of the purchase rights represented
by this Note and payment for such shares of Common Stock issuable
upon conversion of this Note in accordance herewith, be duly
authorized, validly issued, fully paid and non-assessable and free
from all taxes, liens and charges created by the Company in respect
of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Note, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Note against impairment.
Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any shares of Common Stock
issuable upon conversion of this Note above the amount payable
therefor upon such exercise immediately prior to such increase in
par value, (ii) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock issuable upon
conversion of this Note upon the conversion of this Note and (iii)
use commercially reasonable efforts to obtain all such
authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof, as may be, necessary to enable
the Company to perform its obligations under this
Note.
Before
taking any action which would result in an adjustment in the number
of shares of Common Stock issuable upon conversion of this Note or
in the Conversion Price, the Company shall use commercially
reasonable efforts to obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.
(Signature Pages Follow)
-15-
IN
WITNESS WHEREOF, the Company has caused this Note to be duly
executed by a duly authorized officer as of the date first above
indicated.
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By:
__________________________________________
Name:
Xxxxxxx Xxx Xxxx
Title:
Chief Executive Officer
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-16-
ANNEX A
NOTICE OF CONVERSION
The
undersigned hereby elects to convert principal under the 12%
Secured Convertible Note due __________, 2023 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 12%
Secured Convertible Note due on ______________, 2023 in the
original principal amount of $______________ (the
“Note”) is issued by MEDITE Cancer Diagnostics, Inc., a
Delaware corporation. This Conversion Schedule reflects Conversions
made under Section 4 of the aforementioned Note.
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Date of
Conversion
(or for
first entry, Original Issue Date)
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Amount
of Converted Principal Amount
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Aggregate
Principal Amount Remaining Subsequent to Conversion
(or
Original Principal Amount)
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Applicable
Conversion Price
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Company
Attest
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-18-
