MEDirect Enters into Forbearance Agreement with Lenders
POMPANO BEACH, Fla.--MEDirect Latino, Inc. (Pink Sheets:MLTO) today
announced that it has entered into a forbearance agreement (the
"Forbearance Agreement") with its Lenders. The company announced in
October that it had failed to make a scheduled interest payment to its
Lenders on Notes outstanding under its Amended Loan and Security
Agreement (the "Loan Agreement"). Principal and accrued interest
outstanding on the Notes is $6,097,058 and $137,183, respectively.
Under the Loan Agreement, the company has pledged all of its assets as
Collateral.
Under the terms of the Forbearance Agreement, the company acknowledged
that it has defaulted on its interest payments under the Loan
Agreement, and the Lenders have agreed to forbear from exercising their
rights and remedies pursuant to the default until November 20, 2007, or
earlier, at the discretion of the Lenders. The company is unable to
cure the default. In addition, the Lenders have advanced an additional
$300,000 to the company to allow it to continue its operations while
both the company and its Lenders explore strategic alternatives. The
Forbearance Agreement provides that the company will fully cooperate
with the Lenders in connection with any efforts to dispose of some or
all of the Collateral pursuant to the Uniform Commercial Code.
The company has reduced its staff to approximately 27 employees, and
continues to reduce its operating expenses as it and the Lenders
explore various options.
The company also announced today that Mr. James LeGates, its chief
financial officer, is leaving the company, effective immediately. Mr.
Robert Lautz, a nominee director of the Lenders, resigned from the
board on October 29, 2007.
