Exhibit 10.9

SENIOR SUBORDINATED REVOLVING CREDIT AGREEMENT

BY AND BETWEEN

CLARIENT, INC.

AND

SAFEGUARD DELAWARE, INC.

DATED AS OF MARCH 7, 2007

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TABLE OF CONTENTS

 

 

 

Page

1.

 

DEFINITIONS

 

1

 

 

 

 

 

2.

 

LOANS TO BORROWER; ISSUANCE OF WARRANTS

 

6

 

 

 

 

 

 

 

2.1. Advances

 

6

 

 

2.2. Use of Proceeds

 

7

 

 

2.3. Interest

 

7

 

 

2.4. Payments

 

7

 

 

2.5. Manner of Payment

 

7

 

 

2.6. Prepayments

 

7

 

 

2.7. Issuance of Warrants

 

8

 

 

 

 

 

3.

 

CLOSING; DELIVERIES; CONDITIONS TO ADVANCE

 

8

 

 

 

 

 

 

 

3.1. Closing Date

 

8

 

 

3.2. Closing Deliveries and Actions

 

9

 

 

3.3. Conditions to Subsequent Advances

 

9

 

 

 

 

 

4.

 

REPRESENTATIONS AND WARRANTIES OF BORROWER

 

10

 

 

 

 

 

 

 

4.1. Organization and Qualification

 

10

 

 

4.2. Power and Authority

 

10

 

 

4.3. Subsidiaries and Affiliates

 

10

 

 

4.4. Capitalization

 

10

 

 

4.5. Authorization

 

11

 

 

4.6. No Violations or Conflicts

 

11

 

 

4.7. Consents and Approvals

 

11

 

 

4.8. Financial Statements; Disclosure

 

11

 

 

4.9. Absence of Changes

 

12

 

 

4.10. Litigation

 

12

 

 

4.11. Intellectual Property

 

13

 

 

4.12. Title to Assets, Properties and Rights

 

13

 

 

4.13. Compliance with Laws; Legal Requirements

 

13

 

 

4.14. Employees and Labor Matters

 

14

 

 

4.15. Brokers and Finders

 

14

 

 

4.16. Tax Matters

 

14

 

 

4.17. Books and Records

 

15

 

 

4.18. Offering Valid

 

15

 

 

 

 

 

5.

 

COVENANTS

 

15

 

 

 

 

 

 

 

5.1. Negative Covenants

 

15

 

 

5.2. Affirmative Covenants

 

16

 

 

5.3. Right of First Offer and Refusal

 

18

 

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5.4. No Third-Party Rights

 

18

 

 

 

 

 

6.

 

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS, ETC.

 

18

 

 

 

 

 

7.

 

EVENTS OF DEFAULT; REMEDIES

 

18

 

 

 

 

 

 

 

7.1. Events of Default

 

18

 

 

7.2. Remedies

 

19

 

 

 

 

 

8.

 

MISCELLANEOUS

 

20

 

 

 

 

 

 

 

8.1. Governing Law; Submission to Jurisdiction

 

20

 

 

8.2. Assignments; Successors; Third Party Rights

 

20

 

 

8.3. Entire Agreement; Amendment

 

20

 

 

8.4. Notices

 

20

 

 

8.5. Failure or Indulgence Not Waiver; Remedies Cumulative

 

21

 

 

8.6. Severability

 

21

 

 

8.7. Section Headings; Construction

 

22

 

 

8.8. Counterparts

 

22

 

 

8.9. Fees and Expenses

 

22

 

 

8.10. Reinstatement

 

22

 

 

8.11. Payment on Non-Business Days

 

22

 

 

8.12. Time of Day

 

22

 

 

8.13. WAIVER OF JURY TRIAL

 

22

 

 

 

 

 

9.

 

LENDER REPRESENTATIONS

 

23

 

 

 

 

 

 

 

9.1. Lender Representations

 

23

 

Exhibits

 

 

 

 

 

 

 

 

 

Exhibit A

 

-

 

Form of Note

Exhibit B-1

 

-

 

Form of Commitment Fee Warrant ($.01 Exercise Price)

Exhibit B-2

 

-

 

Form of Commitment Fee Warrant (Discounted Market Price)

Exhibit B-3

 

-

 

Form of Usage Fee Warrant

Exhibit C

 

-

 

Form of Borrowing Request

 

ii

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SENIOR SUBORDINATED REVOLVING CREDIT AGREEMENT

THIS SENIOR SUBORDINATED REVOLVING CREDIT AGREEMENT (this “Agreement”) is made
and entered into as of March 7, 2007, by and among CLARIENT, INC, a Delaware
corporation (“Borrower”), and SAFEGUARD DELAWARE, INC., a Delaware corporation
(the “Lender”).

RECITALS:

WHEREAS, Borrower has requested, and Lender has agreed to provide to Borrower a
subordinated revolving credit facility in the maximum aggregate principal amount
of $12,000,000, on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and mutual covenants and
obligations hereafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

1.                                      DEFINITIONS.

For purposes of this Agreement, the following terms shall have the following
meanings:

“Advance” and “Advances” have the respective meanings set forth in Section
2.1(a) hereof.

“Agreement” has the meaning set forth in the Preamble.

“Balance Sheet Date” has the meaning set forth in Section 4.8 hereof.

“Balance Sheet” has the meaning set forth in Section 4.8 hereof.

“Bankruptcy Law” has the meaning set forth in Section 7.1(b) hereof.

“Borrower” has the meaning set fort in the Preamble.

“Borrowing Request” means the form to be provided by Borrower to Lender in
connection with each requested Advance, which shall be in the form of Exhibit C
attached hereto.

“Business Day” means any day other than a Saturday, Sunday or legal holiday in
the State of Delaware or the State of California.

“Capitalized Lease” means, with respect to any Person, any lease of such Person
as lessee that, in accordance with GAAP, is required to be classified and
accounted for as a capital lease on a balance sheet of that Person.

“Capitalized Lease Obligation” means, with respect to any Capitalized Lease of
any Person, the amount of the obligation of the lessee of such Capitalized Lease
that , in accordance with GAAP, would appear on a balance sheet of such lessee
in respect of such Capitalized Lease.

“Closing” has the meaning set forth in Section 3.1 hereof.

“Closing Date” has the meaning set forth in Section 3.1 hereof.

“CLRT Asset Sale” means the sale of certain assets relating to Borrower’s
business of developing, manufacturing, and selling telepathology, virtual
microscopy and/or automated imaging instruments, including

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without limitation 100% of the membership interests of CLRT, pursuant to (and as
such assets are described in) an asset purchase agreement substantially in the
draft form attached to that certain consent letter, dated as of March 7, 2007,
by and among GECC, as lender, and the Borrower, Clarient Diagnostic Services,
Inc., and CLRT Acquisition, LLC, as borrowers, as Exhibit A thereto.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder.

“Comerica Agreement” means that certain Loan Agreement by and between Borrower
and Comerica Bank dated as of February 13, 2003, as amended, including without
limitation by that certain First Amendment to Loan Agreement dated as of October
21, 2003, that certain Second Amendment to Loan Agreement dated as of January
22, 2004, that certain Third Amendment to Loan Agreement dated as of January 31,
2005, that certain Fourth Amendment to Loan Agreement dated as of March 11,
2005, that certain Consent and Waiver dated as of July 13, 2005, that certain
letter agreement dated as of January 26, 2006, that certain Waiver and Fifth
Amendment to Loan Agreement dated as of August 1, 2006, that certain Sixth
Amendment to Loan Agreement dated as of February 28, 2006, that certain Seventh
Amendment to Loan Agreement dated as of January 17, 2007, and that certain
Waiver and Eighth Amendment to Loan Agreement dated as of February 28, 2007, and
all documents, instruments and agreements executed and delivered in connection
therewith, as the same may be further amended from time to time, with the prior
written consent of Lender, which consent shall not be unreasonably withheld or
delayed.

“Commitment” means the maximum aggregate principal amount which may be borrowed
hereunder, being, as of the date hereof, Twelve Million Dollars ($12,000,000),
as the same may be reduced from time to time pursuant to and in accordance with
Section 2.6 hereof.

“Commitment Fee Warrants” has the meaning set forth in Section 2.7(a) hereof.

“Common Stock” means the common stock, par value $0.01, of Borrower.

“Default” means an event, condition, or circumstance the occurrence of which
would, with the passage of time, the giving of notice, or both, constitute an
Event of Default.

“Encumbrances” means all claims, liens, charges, security interests, pledges,
mortgages, or other restrictions or encumbrances.

“Environmental Laws” means any and all applicable federal, state, local, and
foreign laws and regulations relating to the protection of human health and
safety or emissions, discharge, releases, threatened releases, removal,
remediation, or abatement of pollutants, contaminants, chemicals, or industrial,
hazardous, or toxic substances or wastes into or in the environment (including,
without limitation, air, surface water, ground water, or land) or otherwise used
in connection with the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants, hazardous
or toxic substances or wastes, as defined under such applicable laws.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“Event of Default” means an event described in Section 7.1 hereof.

“Financial Statements” has the meaning set forth in Section 4.8 hereof.

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“GAAP” means United States generally accepted accounting principles applied on a
consistent basis.

“GE Capital” means General Electric Capital Corporation, a Delaware corporation.

“GE Capital Facility” means, collectively, (a) that certain Loan and Security
Agreement, dated as of September 29, 2006, by and among Borrower, Clarient
Diagnostic Services, Inc., CLRT Acquisition, LLC,  and GE Capital; and (b) (i)
that certain Master Lease Agreement, dated as of June 23, 2004, by and between
ChromaVision Oncology Services, Inc. (predecessor to Clarient Diagnostic
Services, Inc., an affiliate of Borrower) and GE Capital, and (ii) that certain
Master Security Agreement, dated as of July 15, 2003, by and between Borrower
and GE Capital, and, in each case, all documents, instruments and agreements
executed and delivered in connection therewith, as the same may be further
amended from time to time, with the prior written consent of Lender, which
consent shall not be unreasonably withheld or delayed.

“Governmental Authority” means any court or any federal, state, municipal, or
other domestic or foreign government or governmental or regulatory department,
commission, board bureau, agency, authority, or instrumentality.

“Guaranteed Obligations” means as to any Person, without duplication, any
obligation of such Person guaranteeing, providing comfort or otherwise
supporting any Indebtedness, lease, dividend, or other obligation (“primary
obligation”) of any other Person in any matter; provided that the term
Guaranteed Obligations shall not include endorsements for collection or deposit
in the ordinary course of business.  The amount of any Guaranteed Obligation at
any time shall be deemed to be an amount equal to the lesser at such time of (x)
the stated or determinable amount of the primary obligation in respect to which
such Guaranteed Obligation is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Obligation, or, if not stated or determinable, the maximum reasonably
anticipated liability (assuming full performance) in respect thereof.

“Intangible Assets” means all assets of Borrower which would be classified in
accordance with GAAP as intangible assets, including without limitation, all
franchises, licenses, permits, patents, patent applications, copyrights,
trademarks, trade-names, goodwill, experimental or organization expenses and
other like intangibles, the cash surrender value and other like intangibles of
any life insurance policy, treasury stock and unamortized debt discount.

“Indebtedness” of a Person means at any date, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person to pay the deferred purchase price of property or services incurred in
the ordinary course of business if the purchase price is due more than six (6)
months from the date the obligation in incurred, (d) all Capitalized Lease
Obligations of such Person, (e) the principal balance outstanding under any
synthetic lease, tax retention, operating lease, off-balance sheet loan or
similar off-balance sheet financing product, (f) all obligations of such Person
to purchase securities (or other property) which arise out of or in connection
with the issuance or sale of the same or substantially similar securities (or
property), (g) all contingent or non-contingent obligations of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter of
credit or similar instrument, (h) all equity securities of such Person subject
to repurchase or redemption otherwise than at the sole option of such Person,
(i) all “earnouts” and similar payment obligations of such Person, (j) all
Indebtedness secured by a Lien on any asset of such Person, whether or not such
Indebtedness if otherwise an obligation of such Person, (k) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate

3

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swap, cap or collar agreement or other similar agreement or arrangement designed
to alter the risks of that Person arising from fluctuations in currency values
or interest rates, in each case whether contingent or matured, (l) all
Guaranteed Obligations of such Person; and (m) all obligations of such Person to
trade creditors incurred in the ordinary course of business and more than ninety
(90) days past due.

“Intellectual Property” has the meaning set forth in Section 4.11(a) hereof.

“Laws” has the meaning set forth in Section 4.13 hereof.

“Lender” has the meaning set forth in the Preamble hereto.

“Licenses and Permits” has the meaning set forth in Section 4.13(b) hereof.

“Liquidity Event” means (a) the liquidation, dissolution or winding up of
Borrower, whether voluntary or involuntary, (b) a sale of all or substantially
all of the assets of Borrower, or (c) a merger or acquisition of Borrower by
another Person by means of any transaction or series of related transactions
(including any reorganization, merger or consolidation) where the holders of the
voting securities of Borrower immediately preceding such transaction or series
of transactions own directly or indirectly, following such transaction or series
of transactions, less than fifty percent (50%) of the voting securities of
Borrower or the surviving entity in such transaction or series of transactions.

“Loan” means, collectively, the aggregate amount of all Advances from time to
time outstanding hereunder.

“Loan Documents” means this Agreement, the Note, the Warrants, the Subordination
Agreements, and any other agreements, documents, instruments and writings now or
hereafter existing, creating, evidencing, guarantying, securing or relating to
any of the liabilities of Borrower to Lender pursuant to and in connection with
this Agreement, together with all amendments, modifications, renewals or
extensions thereof.

“Material Adverse Effect” means a material adverse change in, or a material
adverse effect on, the business, operations, properties, assets, liabilities,
financial condition or results of operations of Borrower and/or its
Subsidiaries, taken as a whole, or Borrower’s ability to perform its obligations
under this Agreement, the Note or the Warrants.

“Maturity Date” means the later of (a) December 8, 2008 or (b) ninety-one (91)
days after the date on which all Indebtedness owing under the GE Capital
Facility shall have been paid in full and GE Capital shall have no obligation to
extend or make loans under the GE Capital Facility.

“Note” means that certain subordinated Revolving Credit Note issued by Borrower
in favor of Lender pursuant to this Agreement, in the form of Exhibit A hereto.

“Order” means any order, execution, writ, injunction, judgment, decree, ruling,
assessment, or arbitration award.

“Outstanding Amounts” means the aggregate principal amount of Indebtedness, plus
interest thereon, outstanding hereunder and under the Note on any date of
determination.

“Permitted Liens” means (a) deposits or pledges to secure obligations under
workmen’s compensation, social security or similar laws, or under unemployment
insurance, (b) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory

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obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business, (c) mechanic’s, workmen’s
materialmen’s or other like Encumbrances attaching only to equipment and real
property arising in the ordinary course of business with respect to obligations
which are not due, or which are being contested in good faith by appropriate
proceedings which suspend the collection thereof and in respect of which
adequate reserves have been made in accordance with GAAP (provided that such
proceedings, do not in Lender’s reasonable discretion, involve any substantial
risk of the sale, loss or forfeiture of such property or assets or any interest
therein), (d) Liens set forth in Schedule 4.12(a), (e) Encumbrances being
contested in good faith, (f) Liens created or assumed in connection with the
financing or acquisition of capital assets in an aggregate principal amount
outstanding not greater than $500,000 at any time; provided that such liens
secure only such assets acquired and do not exceed one hundred percent (100%) of
the purchase price of the subject assets; and (g) attachment or judgment
Encumbrances which individually or when aggregated with all other attachments
and judgments exceed by more than $50,000 any insurance coverage applicable
thereto (and as to which the insurance company has acknowledged coverage in
writing), subject to customary deductibles and continue unsatisfied or unstayed
for a period of ten (10) days.

“Permitted Sale/Equity Transaction” means an asset sale by Borrower or any
Subsidiary of Borrower or issuance of equity by Borrower which results in
Borrower’s receipt of net proceeds in excess of $7,000,000, including, without
limitation, the CLRT Asset Sale.

“Person” means any individual, partnership, corporation, limited liability
company, association, joint stock company, trust, joint venture, unincorporated
organization or governmental entity or any department, agency, or political
subdivision thereof.

“Required Consents” has the meaning set forth in Section 4.7 hereof.

“Returns” has the meaning set forth in Section 4.16 hereof.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Securities Act” means the Securities Act of 1933, as amended.

“Securities Laws” means the Securities Act, the Securities Exchange Act of 1934,
Sarbanes-Oxley and the applicable accounting and auditing principles, rules,
standards and practices promulgated, approved or incorporated by the SEC or the
Public Company Accounting Oversight Board, as each of the foregoing may be
amended and in effect on any applicable date hereunder.

“Subordination Agreements” means, collectively, (a) that certain Subordination
and Intercreditor Agreement dated as of even date herewith, by and among
Borrower, Comerica Bank, and Lender; and (b) that certain Subordination and
Intercreditor Agreement dated as of even date herewith, by and among Borrower,
GE Capital, and Lender.

“Subsidiary” means any corporation, company or partnership in which (i) any
general partnership interest or (ii) more than 50% of the stock or other units
of ownership which by the terms thereof has the ordinary voting power to elect
the Board of Directors, managers or trustees of the entity, at the time as of
which any determination is being made, is owned by Borrower, either directly or
through another Subsidiary.

“Tax” as used in this Agreement, the term “Tax” means any of the Taxes and the
term “Taxes” means, with respect to any Person, (i) all applicable domestic and
foreign income taxes (including any tax

5

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on or based upon net income, or gross income, or income as specially defined, or
earnings, or profits, or selected items of income, earnings or profits) and all
applicable domestic and foreign gross receipts, sales, use, ad valorem,
transfer, franchise, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, environmental, property or windfall
profits taxes, alternative or add-on minimum taxes, customs duties or other
taxes, fees, assessments or charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority (domestic or foreign) on such Person and (ii) any liability
for the payment of any amount of the type described in the immediately preceding
clause (i) as a result of being a “transferee” (within the meaning of Section
6901 of the Code or any other applicable law) of another Person or a member of
an affiliated, consolidated or combined group.

“Usage Fee Warrants” has the meaning set forth in Section 2.7(a) hereof.

“Warrants” means, collectively, the Commitment Fee Warrants and the Usage Fee
Warrants, if any.

2.                                      LOANS TO BORROWER; ISSUANCE OF WARRANTS.

2.1.  ADVANCES.

(A)                                  GENERALLY.  SUBJECT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT AND THE SUBORDINATION AGREEMENTS, INCLUDING WITHOUT
LIMITATION RECEIPT OF THE CLOSING DELIVERIES SPECIFIED IN SECTION 3.2 AND THE
OTHER CONDITIONS SPECIFIED IN SECTION 3.3, LENDER SHALL ADVANCE FUNDS TO
BORROWER (EACH SUCH ADVANCE, INDIVIDUALLY, AN “ADVANCE”, AND ALL SUCH ADVANCES,
THE “ADVANCES”) BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS VIA FEDERAL
RESERVE SYSTEM TO:

Recipient Bank:

Comerica Bank

 

11512 El Camino Real

 

Suite 350B

 

San Diego, CA 92130

 

858 509-2399

 

Contact — Hang Landrum

 

 

ABA#:

121137522

Account Name:

Clarient, Inc. - Money Market

Account #:

1892035252

 

(B)                                 ADVANCE PROCEDURES.

(I)                                     SUBJECT TO AND UPON THE TERMS AND
CONDITIONS OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION THE CONDITIONS
SPECIFIED IN SECTION 3.3, BORROWER MAY REQUEST AN ADVANCE, IN A MINIMUM
PRINCIPAL AMOUNT OF $1,000,000 (OR THE TOTAL REMAINING COMMITMENT, IF LESS), UP
TO AN AGGREGATE OUTSTANDING AMOUNT FOR ALL ADVANCES NOT TO EXCEED THE
COMMITMENT.  SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, AMOUNTS
BORROWED PURSUANT TO THIS SECTION 2.1 MAY BE REPAID AND REBORROWED AT ANY TIME
PRIOR TO THE MATURITY DATE, AT WHICH TIME ALL ADVANCES THEN OUTSTANDING SHALL BE
IMMEDIATELY DUE AND PAYABLE.

(II)                                  WHENEVER BORROWER DESIRES AN ADVANCE,
BORROWER WILL NOTIFY LENDER BY FACSIMILE TRANSMISSION OR EMAIL NO LATER THAN
2:00 P.M. EASTERN TIME, NOT LESS THAN ONE (1) BUSINESS DAY PRIOR TO THE BUSINESS
DAY ON WHICH THE ADVANCE IS TO BE FUNDED.  EACH SUCH NOTIFICATION SHALL BE IN
THE FORM OF A BORROWING REQUEST IN SUBSTANTIALLY THE FORM OF EXHIBIT C HERETO. 
LENDER SHALL WIRE THE AMOUNT

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OF ADVANCES MADE UNDER THIS SECTION 2.1(B) TO THE WIRE ADDRESS SET FORTH IN
SECTION 2.1(A), OR TO SUCH OTHER WIRE ADDRESS AS BORROWER HAS ADVISED LENDER IN
WRITING IN CONNECTION WITH SUCH BORROWING REQUEST.

2.2.  Use of Proceeds.  The proceeds from the Note shall be used by Borrower for
general working capital and business purposes.

2.3.  Interest.  Interest shall accrue on the unpaid principal balance of each
Advance at the rate of twelve percent (12%) per annum, accruing daily.  Interest
shall be capitalized quarterly, and shall otherwise be payable in the manner
provided in Section 2.4 below.  Interest shall be cumulative and shall be
calculated on the basis of a year of 365 or 366 days, for the actual number of
days elapsed.

2.4.  PAYMENTS.

(A)                                  PRINCIPAL GENERALLY.  SUBJECT TO THE TERMS
AND CONDITIONS OF THE SUBORDINATION AGREEMENTS AND TO SECTION 7 AND SECTION
2.6(B) HEREOF, THE PRINCIPAL BALANCE OUTSTANDING HEREUNDER, TOGETHER WITH ALL
ACCRUED AND UNPAID INTEREST THEREON, SHALL BE DUE AND PAYABLE ON THE MATURITY
DATE.

(B)                                 INTEREST.  SUBJECT TO THE TERMS AND
CONDITIONS OF THE SUBORDINATION AGREEMENTS, PAYMENTS OF ACCRUED INTEREST ON THE
PRINCIPAL BALANCE OUTSTANDING HEREUNDER FROM TIME TO TIME, SHALL BE MADE (I) ON
THE MATURITY DATE, AND (II) IF EARLIER, IMMEDIATELY UPON RECEIPT BY THE BORROWER
OF ANY DEFERRED PROCEEDS OF, OR OTHER DEFERRED OR ESCROWED CONSIDERATION WITH
RESPECT TO, ANY PERMITTED SALE/EQUITY TRANSACTION, TOGETHER WITH ACCRUED AND
UNPAID FEES AND COSTS INCURRED BY LENDER IN CONNECTION WITH THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREBY.

2.5.  Manner of Payment.  All payments and prepayments of principal and interest
shall be made by wire of immediately available funds as directed by Lender
pursuant to written instructions provided to Borrower from time to time.  If any
payment of principal or interest required hereunder is due on a day that is not
a Business Day, such payment shall be due on the next succeeding Business Day,
and such extension of time shall be taken into account in calculating the amount
of interest payable hereunder.  All payments and prepayments shall be credited
first to accrued and unpaid interest, and then to the outstanding principal
amount of Advances.

2.6.  PREPAYMENTS.

(A)                                  OPTIONAL PREPAYMENTS.  SUBJECT TO THE TERMS
AND CONDITIONS OF THE SUBORDINATION AGREEMENTS, BORROWER MAY PREPAY ALL OR ANY
PORTION OF THE OUTSTANDING PRINCIPAL BALANCE DUE UNDER THE NOTE AND ANY INTEREST
ACCRUED THEREON, AT ANY TIME AND FROM TIME TO TIME, WITHOUT PREMIUM OR PENALTY,
PROVIDED THAT BORROWER SHALL HAVE GIVEN LENDER NOT LESS THAN ONE (1) BUSINESS
DAY PRIOR WRITTEN NOTICE OF ITS INTENT TO SO PREPAY, AND THE AMOUNT OF SUCH
PREPAYMENT.  ANY SUCH PREPAYMENT SHALL NOT REDUCE THE COMMITMENT UNLESS SO
REQUESTED IN WRITING BY BORROWER.

(B)                                 MANDATORY PREPAYMENTS AND REDUCTION OF
COMMITMENT.  SUBJECT TO THE TERMS AND CONDITIONS OF THE SUBORDINATION
AGREEMENTS:

(I)                                     IMMEDIATELY UPON THE CLOSING OF A
PERMITTED SALE/EQUITY TRANSACTION, BORROWER SHALL CAUSE TO BE PAID TO LENDER A
ONE-TIME PAYMENT OF THE OUTSTANDING PRINCIPAL IN AN AMOUNT NOT TO EXCEED THE
LESSER OF $6,000,000 OR FIFTY PERCENT (50%) OF THE CASH PROCEEDS RECEIVED AT THE
CLOSING OF SUCH PERMITTED SALE/EQUITY TRANSACTION.  UPON SUCH OCCURRENCE THE
COMMITMENT SHALL BE IMMEDIATELY AND IRREVOCABLY REDUCED TO SIX MILLION DOLLARS
($6,000,000).

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(II)                                  IMMEDIATELY UPON THE CONSUMMATION OF A
LIQUIDITY EVENT (OTHER THAN A PERMITTED SALE/EQUITY TRANSACTION), ALL AMOUNTS
OUTSTANDING HEREUNDER SHALL BE PAID IN FULL AND THE COMMITMENT SHALL BE
IMMEDIATELY AND IRREVOCABLY TERMINATED.

2.7.  ISSUANCE OF WARRANTS.

(A)                                  COMMITMENT FEE WARRANTS.  LENDER SHALL
RECEIVE, IN CONNECTION WITH THE CLOSING WARRANTS (SUCH WARRANTS, THE “COMMITMENT
FEE WARRANTS”):

(I)                                     IN THE FORM OF EXHIBIT B-1 ATTACHED
HERETO, TO PURCHASE SHARES OF COMMON STOCK, EXERCISABLE IN THE SOLE DISCRETION
OF THE HOLDER THEREOF.  SUCH WARRANTS SHALL ENTITLE, BUT NOT OBLIGATE, THE
HOLDER THEREOF TO PURCHASE 125,000 SHARES OF COMMON STOCK OF BORROWER AT AN
EXERCISE PRICE OF $.01 PER SHARE.

(II)                                  IN THE FORM OF EXHIBIT B-2 ATTACHED
HERETO, TO PURCHASE SHARES OF COMMON STOCK, EXERCISABLE IN THE SOLE DISCRETION
OF THE HOLDER THEREOF.  SUCH WARRANTS SHALL ENTITLE, BUT NOT OBLIGATE, THE
HOLDER THEREOF TO PURCHASE 62,500 SHARES OF COMMON STOCK OF BORROWER AT AN
EXERCISE PRICE EQUAL TO 85% OF THE TRAILING TEN-DAY AVERAGE CLOSING PRICE OF
COMMON STOCK OF THE BORROWER ON THE DATE PRIOR TO THE CLOSING DATE.

(B)                                 USAGE FEE WARRANTS.  LENDER SHALL RECEIVE,
IN CONNECTION WITH EACH ADVANCE, WARRANTS (SUCH WARRANTS, THE “USAGE FEE
WARRANTS”), IN THE FORM OF EXHIBIT B-3 ATTACHED HERETO, TO PURCHASE SHARES OF
COMMON STOCK, EXERCISABLE IN THE SOLE DISCRETION OF THE HOLDER THEREOF.  SUCH
USAGE FEE WARRANTS SHALL ENTITLE, BUT NOT OBLIGATE, THE HOLDER THEREOF TO
PURCHASE 31.25 SHARES OF COMMON STOCK OF BORROWER FOR EACH $1,000 IN PRINCIPAL
SUBJECT TO SUCH ADVANCE, AT AN EXERCISE PRICE OF $.01 PER SHARE; PROVIDED,
HOWEVER, THAT FOR THE AVOIDANCE OF DOUBT, USAGE FEE WARRANTS SHALL ONLY BE
ISSUABLE WITH RESPECT TO INCREMENTAL ADVANCES WHICH RESULT IN AN INCREASE OF THE
AGGREGATE PRINCIPAL INDEBTEDNESS UNDER THIS AGREEMENT IN EXCESS OF THE PREVIOUS
MAXIMUM AMOUNT OF  AGGREGATE PRINCIPAL INDEBTEDNESS INCURRED BY BORROWER UNDER
THIS AGREEMENT.  BY WAY OF EXAMPLE, IF (I) BORROWER INITIALLY RECEIVES AN
ADVANCE OF $2,000,000, LENDER WOULD BE ENTITLED TO USAGE FEE WARRANTS TO
PURCHASE 62,500 SHARES OF COMMON STOCK AND (II) BORROWER SUBSEQUENTLY PREPAYS
SUCH ADVANCES AND THEREAFTER RECEIVES ADVANCES OF $5,000,000, LENDER WOULD BE
ENTITLED TO RECEIVE ADDITIONAL USAGE FEE WARRANTS TO PURCHASE 93,750 SHARES OF
COMMON STOCK (CORRELATING TO THE $3,000,000 OF INDEBTEDNESS IN EXCESS OF THE
PREVIOUSLY BORROWED $2,000,000 OF INDEBTEDNESS).  NOTWITHSTANDING THE FOREGOING,
IN THE EVENT (I) LENDER HAS RECEIVED USAGE FEE WARRANTS TO PURCHASE MORE THAN
187,500 SHARES OF COMMON STOCK (THE “USAGE FEE CAP”) (AS A RESULT OF ADVANCES IN
EXCESS OF $6,000,000) AND (II) THAT, ON OR PRIOR TO MAY 15, 2007, THE COMMITMENT
IS REDUCED TO $6,000,000 AND THE MANDATORY PREPAYMENT HAS BEEN PAID, EACH AS
REQUIRED BY SECTION 2.6(B)(I), THEN LENDER SHALL AUTOMATICALLY UPON SUCH
REDUCTION FORFEIT AND RETURN TO BORROWER FOR CANCELLATION ANY USAGE FEE WARRANTS
ISSUED TO IT IN EXCESS OF THE USAGE FEE CAP (AND, TO THE EXTENT LENDER HAS
EXERCISED ANY SUCH USAGE FEE WARRANTS WHICH IT WOULD HAVE BEEN REQUIRED TO
FORFEIT AND RETURN TO BORROWER AS PROVIDED IN THIS SENTENCE, LENDER SHALL
FORFEIT AND RETURN TO BORROWER FOR CANCELLATION THE SHARES OF COMMON STOCK
ISSUED TO IT UPON EXERCISE OF SUCH USAGE FEE WARRANTS).

(C)                                  REGISTRABLE SECURITIES.  ALL OF THE COMMON
STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANTS THEREOF, SHALL CONSTITUTE
REGISTRABLE SECURITIES UNDER BORROWER’S REGISTRATION RIGHTS AGREEMENT WITH
LENDER DATED NOVEMBER 8, 2005.

3.                                      CLOSING; DELIVERIES; CONDITIONS TO
ADVANCE.

3.1.  Closing Date.  The closing of this Agreement (the “Closing”) is taking
place on the date hereof (“Closing Date”) and is being held at the offices of
Pepper Hamilton LLP, 3000 Two Logan

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Square, 18th and Arch Streets, Philadelphia, Pennsylvania, 19103
contemporaneously with the execution of this Agreement.

3.2.  Closing Deliveries and Actions.  The parties acknowledge the following
deliveries and other actions at the Closing:

(A)                                  BORROWER HAS DELIVERED OR CAUSED TO BE
DELIVERED TO LENDER A FULLY EXECUTED COUNTERPART OF THIS AGREEMENT, THE NOTE,
AND THE COMMITMENT FEE WARRANTS AND LENDER HAS DELIVERED OR CAUSED TO BE
DELIVERED TO BORROWER A FULLY EXECUTED COUNTERPART TO THIS AGREEMENT;

(B)                                 BORROWER HAS DELIVERED A CERTIFICATE,
EXECUTED ON BEHALF OF BORROWER BY THE CHIEF EXECUTIVE OFFICER THEREOF, DATED AS
OF THE DATE HEREOF, CERTIFYING THE INCUMBENCY OF EACH OF THE OFFICERS OF
BORROWER EXECUTING THIS AGREEMENT, AND ALL OTHER DOCUMENTS, INSTRUMENTS OR
CERTIFICATES TO BE EXECUTED AND DELIVERED BY BORROWER, AND ATTACHING CERTIFIED
COPIES OF (I) THE RESOLUTIONS OF A SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS
OF BORROWER APPROVING THIS AGREEMENT, THE WARRANTS, AND THE OTHER TRANSACTIONS
CONTEMPLATED HEREBY, (II) TRUE, COMPLETE, AND ACCURATE COPIES OF EACH OF (X) THE
CERTIFICATE OF INCORPORATION OF BORROWER, CERTIFIED BY THE SECRETARY OF STATE OF
THE STATE OF DELAWARE, AND (Y) THE BYLAWS OF BORROWER, EACH OF WHICH REMAIN IN
FULL FORCE AND EFFECT, WITHOUT MODIFICATION, AS OF THE DATE OF THE CLOSING, AND
(III) A CERTIFICATE OF GOOD STANDING, ISSUED BY THE SECRETARY OF STATE OF EACH
JURISDICTION IN WHICH BORROWER IS QUALIFIED TO AND CONDUCTS BUSINESS, CERTIFYING
THAT BORROWER IS IN GOOD STANDING, AS OF A RECENT DATE PRIOR TO THE CLOSING, IN
EACH SUCH JURISDICTION;

(C)                                  BORROWER, LENDER AND COMERICA SHALL HAVE
ENTERED INTO A SUBORDINATION AGREEMENT IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTIES;

(D)                                 BORROWER, LENDER AND GE CAPITAL SHALL HAVE
ENTERED INTO A SUBORDINATION AGREEMENT IN FORM AND SUBSTANCE SATISFACTORY TO THE
PARTIES;

(E)                                  BORROWER AND LENDER HAVE DELIVERED A FULLY
EXECUTED AMENDMENT TO SAFEGUARD REIMBURSEMENT AGREEMENT; AND

(F)                                    BORROWER SHALL HAVE PAID TO LENDER ALL
PROFESSIONAL FEES AND OUT-OF POCKET COSTS AND EXPENSES PAYABLE BY LENDER TO
THIRD PARTIES IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY AND SET
FORTH IN AN INVOICE DELIVERED TO BORROWER AT LEAST ONE (1) BUSINESS DAY PRIOR TO
THE CLOSING DATE.

3.3.  Conditions to Subsequent Advances.  It shall be a condition to Lender’s
funding any subsequent Advance:

(A)                                  BORROWER SHALL HAVE DELIVERED TO LENDER A
BORROWING REQUEST;

(B)                                 BORROWER HAS DELIVERED TO LENDER A
CERTIFICATE, EXECUTED ON BEHALF OF BORROWER BY AN OFFICER THEREOF, DATED AS OF
THE DATE OF SUCH PROPOSED ADVANCE, CERTIFYING THAT THAT NO DEFAULT OR EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING ON THE DATE OF SUCH ADVANCE OR WILL BE
CAUSED BY SUCH ADVANCE; AND THAT EACH OF BORROWER’S REPRESENTATIONS AND
WARRANTIES MADE HEREIN AND IN THE OTHER LOAN DOCUMENTS SHALL BE TRUE AND CORRECT
IN ALL MATERIAL RESPECTS AS IF REMADE ON THE DATE OF SUCH ADVANCE (UNLESS THEY
RELATE TO A SPECIFIC DATE, IN WHICH CASE THEY SHALL BE TRUE AND CORRECT IN ALL
MATERIAL RESPECTS ON AND AS OF SUCH DATE); AND

(C)                                  ALL AMOUNTS (INCLUDING, WITHOUT LIMITATION,
FEES) REQUIRED TO HAVE BEEN PAID PURSUANT TO THIS AGREEMENT, THE NOTE, AND THE
WARRANTS (TO THE EXTENT SAME ARE PERMITTED TO BE PAID PURSUANT TO THE TERMS AND
CONDITIONS OF THE SUBORDINATION AGREEMENTS), SHALL HAVE BEEN PAID.

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4.                                      REPRESENTATIONS AND WARRANTIES OF
BORROWER.

Borrower represents and warrants to, and covenants with, Lender, that the
following representations and warranties are true and correct in all material
respects, as of the date hereof.

4.1.  Organization and Qualification.  Borrower is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Delaware.  Each Subsidiary has been duly formed and is validly existing under
the laws of the jurisdiction of its formation.  Borrower has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as presently conducted, and to enter into and carry out the
transactions contemplated by this Agreement and the other transactions
contemplated hereby.  Except as set forth on Schedule 4.1, Borrower is duly
licensed or qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the ownership of property or the conduct
of its business requires such licensing or qualification, except for failures to
be so licensed or qualified which, when taken together with all other such
failures, to be so licensed or qualified would not have a Material Adverse
Effect.  Borrower has made available to Lender true, complete, and accurate
copies of its respective formation documents, each as amended to, and as in
effect on, the date hereof, and its respective organizational documents,
minutes, corporate records and stock register and transfer records.

4.2.  Power and Authority.  Borrower has all the requisite legal and other power
and authority to execute and deliver this Agreement and the other Loan Documents
to which it is a party, to consummate the transactions contemplated hereby and
thereby and to perform its obligations hereunder and thereunder, including the
issuance, sale and delivery of the Note and the Warrants. Each of the Loan
Documents to which Borrower is a party constitutes a legal, valid and binding
obligation of Borrower, enforceable against Borrower, in accordance with its
terms, except as may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to or affecting the
enforcement of creditors’ rights generally and (b) the effect of rules of law
governing the availability of equitable remedies.

4.3.  Subsidiaries and Affiliates.  Borrower does not own or control, directly
or indirectly, any equity interest or investment in any corporation,
association, partnership, joint venture, limited liability company, or other
form of business or similar entity except as set forth on Schedule 4.3.

4.4.  CAPITALIZATION.

(A)                                  THE CAPITALIZATION OF BORROWER IS AS SET
FORTH IN ITS MOST RECENT APPLICABLE FILINGS WITH THE SEC.

(B)                                 EXCEPT AS SET FORTH IN ITS MOST RECENT
APPLICABLE FILINGS WITH THE SEC, THERE ARE NO OUTSTANDING, ISSUED OR AUTHORIZED
OPTIONS, WARRANTS, PURCHASE AGREEMENTS, PARTICIPATION AGREEMENTS, SUBSCRIPTION
RIGHTS, CONVERSION RIGHTS, EXCHANGE RIGHTS OR OTHER SECURITIES, CONTRACTS,
ARRANGEMENTS, UNDERSTANDINGS OR COMMITMENTS THAT COULD REQUIRE BORROWER ISSUE,
SELL OR OTHERWISE CAUSE TO BECOME OUTSTANDING ANY OF THEIR RESPECTIVE AUTHORIZED
BUT UNISSUED SHARES OR ANY SECURITIES CONVERTIBLE INTO, EXCHANGEABLE FOR OR
CARRYING A RIGHT OR OPTION TO PURCHASE ANY SHARE, OR TO CREATE, AUTHORIZE,
ISSUE, SELL OR OTHERWISE CAUSE TO BECOME OUTSTANDING ANY NEW CLASS OF STOCK. 
EXCEPT FOR THE WARRANTS AND THIS AGREEMENT, THERE ARE NO OUTSTANDING
STOCKHOLDERS’ AGREEMENTS, REGISTRATION RIGHTS AGREEMENTS, OR RIGHTS OF FIRST
REFUSAL PERTAINING TO THE SHARES OF BORROWER. NONE OF THE ISSUED AND OUTSTANDING
SHARES OF COMMON STOCK OF BORROWER HAVE BEEN ISSUED IN VIOLATION OF ANY RIGHTS
OF ANY PERSON OR IN VIOLATION OF THE REGISTRATION REQUIREMENTS OF ANY APPLICABLE
SECURITIES LAW.

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(C)                                  ALL SHARES AND OTHER SECURITIES ISSUED BY
BORROWER PRIOR TO THE DATE HEREOF HAVE BEEN ISSUED IN ACCORDANCE WITH THE
REQUIREMENTS OF THE SECURITIES ACT, OR IN TRANSACTIONS EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT, ALL APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS,
AND ANY SIMILAR LAW, RULE OR REGULATION OF ANY OTHER JURISDICTION.  BORROWER HAS
COMPLIED IN ALL MATERIAL RESPECTS WITH ALL APPLICABLE PROVISIONS OF THE
SECURITIES ACT, ANY APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS, OR ANY
SIMILAR LAW, RULE OR REGULATION OF ANY OTHER JURISDICTION IN CONNECTION WITH THE
ISSUANCE OF ANY SHARES OR OTHER SECURITIES PRIOR TO THE DATE HEREOF.

4.5.  AUTHORIZATION.

(A)                                  THE EXECUTION AND DELIVERY BY BORROWER OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY, AND THE
PERFORMANCE OF ITS OBLIGATIONS HEREUNDER AND THEREUNDER, AS APPLICABLE, HAVE
BEEN DULY AUTHORIZED BY ALL REQUISITE CORPORATE ACTION ON THE PART OF BORROWER,
AND NO FURTHER AUTHORIZATION ON THE PART OF BORROWER IS NECESSARY TO AUTHORIZE
SUCH EXECUTION, DELIVERY AND PERFORMANCE.

(B)                                 THE ISSUANCE, SALE AND DELIVERY OF THE
WARRANTS AND THE NOTE HAVE BEEN DULY AUTHORIZED BY ALL REQUISITE CORPORATE
ACTION ON THE PART OF BORROWER AND WHEN ISSUED, SOLD AND DELIVERED IN ACCORDANCE
WITH THIS AGREEMENT, WILL BE DULY AND VALIDLY ISSUED AND OUTSTANDING AND NOT
SUBJECT TO PREEMPTIVE OR ANY OTHER SIMILAR RIGHTS OF THE STOCKHOLDERS OF
BORROWER OR OTHERS.

4.6.  No Violations or Conflicts.  The execution and delivery of this Agreement
and the other Loan Documents by Borrower and the performance by it of its
obligations hereunder and thereunder do not and will not (a) violate any
provision of law, statute, rule or regulation, or any Order of any court,
administrative agency or other governmental body applicable to Borrower or any
of its properties or assets, as applicable; (b) conflict with or result in any
breach of any of the terms, conditions or provisions of, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
or give rise to any right of termination, cancellation or acceleration under or
result in the creation of any Encumbrances upon any of the properties or assets
of Borrower under, (i) Borrower’s organizational documents, or (ii) any note,
indenture, mortgage, lease agreement, permit, license, grant of authority or
other contract, agreement or instrument to which Borrower is a party or by which
Borrower or any of its properties is bound or affected, except where any such
violation, conflict, breach or suspension described in this subsection would
not, individually or in the aggregate, result in a Material Adverse Effect.

4.7.  Consents and Approvals.  Except as set forth on Schedule 4.7
(collectively, the “Required Consents”), and except for filings required by
applicable securities laws, no consent, approval or authorization of, or
declaration to or filing or registration with, any Governmental Authority or
other Person, is required to be made or obtained by Borrower in connection with
the valid execution, delivery and performance of this Agreement and the other
Loan Documents, including the issuance, sale and delivery of the Warrants and
the shares issuable thereunder.

4.8.  FINANCIAL STATEMENTS; DISCLOSURE.

(A)                                  BORROWER HAS DELIVERED TO LENDER TRUE,
COMPLETE AND CORRECT COPIES OF THE CONSOLIDATED BALANCE SHEET (“BALANCE SHEET”)
OF BORROWER AS OF DECEMBER 31, 2006 (“BALANCE SHEET DATE”) AND THE RELATED
STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE FISCAL YEAR THEN ENDED (THE
“FINANCIAL STATEMENTS”).  THE FINANCIAL STATEMENTS FAIRLY AND ACCURATELY PRESENT
IN ALL MATERIAL RESPECTS THE FINANCIAL POSITION, LIABILITIES AND OBLIGATIONS AND
THE RESULTS OF OPERATIONS AS OF THE DATES AND FOR THE PERIODS INDICATED, AND IN
ACCORDANCE WITH GAAP.  EXCEPT AS DISCLOSED ON THE BALANCE SHEET OR THE FINANCIAL
STATEMENTS OR ON SCHEDULE 4.8(A), AS OF THE BALANCE SHEET DATE AND THE DATE
HEREOF (X) BORROWER HAS HAD NO OR HAS NO LIABILITIES (WHETHER MATURED OR
UNMATURED, FIXED OR CONTINGENT, LIQUIDATED

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OR UNLIQUIDATED OR OTHERWISE), OR OBLIGATIONS, EXCEPT AS MAY HAVE BEEN INCURRED
IN THE ORDINARY COURSE OF BUSINESS FOLLOWING THE BALANCE SHEET DATE, AND (Y)
BORROWER HAD OR HAS RESERVED OR DISCLOSED ALL LIABILITY RESERVES THAT ARE
REQUIRED TO BE RESERVED OR DISCLOSED IN ACCORDANCE WITH GAAP.

(B)                                 NONE OF THE INFORMATION (FINANCIAL OR
OTHERWISE) FURNISHED BY OR ON BEHALF OF BORROWER TO LENDER HEREUNDER OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY CONTAINS ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITS TO
STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS CONTAINED HEREIN OR
THEREIN NOT MISLEADING IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH SUCH
STATEMENTS WERE MADE.  EXCEPT AS SET FORTH ON SCHEDULE 4.8(B), TO THE KNOWLEDGE
OF BORROWER, THERE ARE NO FACTS THAT COULD RESULT, INDIVIDUALLY OR IN THE
AGGREGATE, IN A MATERIAL ADVERSE EFFECT AND HAVE NOT BEEN SET FORTH IN THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR IN OTHER DOCUMENTS DELIVERED TO LENDER
IN CONNECTION HEREWITH.

4.9.  Absence of Changes.  Except as set forth on Schedule 4.9, since the
Balance Sheet Date to the date hereof and other than pursuant to transactions
contemplated by this Agreement and the Related Agreements:

(A)                                  THERE HAS BEEN NO ACTION, EVENT OR
OCCURRENCE WHICH HAS HAD A MATERIAL ADVERSE EFFECT;

(B)                                 BORROWER HAS NOT PERMITTED ANY OF ITS
ASSETS, TANGIBLE OR INTANGIBLE, TO BECOME SUBJECT TO ANY ENCUMBRANCES, EXCEPT
FOR (I) LIENS FOR CURRENT TAXES AND ASSESSMENTS NOT YET DUE, (II) PERMITTED
LIENS AND (III) OTHER ENCUMBRANCES WHICH ARE NOT REASONABLY LIKELY, INDIVIDUALLY
OR IN THE AGGREGATE, TO HAVE A MATERIAL ADVERSE EFFECT;

(C)                                  THERE HAS BEEN NO SALE, ASSIGNMENT,
MORTGAGE, PLEDGE, LICENSE OR TRANSFER OF ANY TANGIBLE OR INTANGIBLE ASSETS OF
BORROWER EXCEPT AS NOT PROHIBITED BY THIS AGREEMENT;

(D)                                 EXCEPT FOR (I) THE INDEBTEDNESS EVIDENCED BY
THE NOTE, THE COMERICA AGREEMENT, AND THE GE CAPITAL FACILITY; AND (B)
LIABILITIES INCURRED, AND LIABILITIES UNDER CONTRACTS OR CAPITALIZED LEASE
OBLIGATIONS, IN EACH CASE, ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS,
BORROWER HAS NOT INCURRED ANY INDEBTEDNESS TO ANY PERSON, OR MADE ANY AGREEMENT
OR COMMITMENT THEREFOR;

(E)                                  SINCE DECEMBER 31, 2006, THERE HAS BEEN NO
CHANGE IN THE RESPECTIVE ACCOUNTING METHODS, PRACTICES OR POLICIES FOLLOWED BY
BORROWER, OR ANY CHANGE IN DEPRECIATION OR AMORTIZATION POLICIES OR RATES
THERETOFORE ADOPTED UNLESS REQUIRED BY GAAP; AND

(F)                                    BORROWER IS NOT IN DEFAULT IN ANY RESPECT
UNDER ANY CONTRACT EXCEPT WHERE ANY SUCH DEFAULT WOULD NOT, INDIVIDUALLY OR IN
THE AGGREGATE, RESULT IN A MATERIAL ADVERSE EFFECT.

4.10.  Litigation.  Except as set forth in Schedule 4.10 or as described in
filings with the SEC, there is no civil action, suit, claim, hearing,
investigation or proceeding pending (for which proper service has been made) or,
to the knowledge of Borrower, threatened against Borrower, or any property or
assets owned or possessed by Borrower, or, to the extent relating in any manner
to Borrower or the ability to consummate the transactions hereunder, any of
Borrower executives that is reasonably likely, either individually or in the
aggregate, to (a) adversely affect the validity of this Agreement, the Note or
the Warrants, or the transactions contemplated hereby or thereby, or (b) have a
Material Adverse Effect.

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4.11.  INTELLECTUAL PROPERTY.

(A)                                  BORROWER HAS GOOD TITLE AND/OR THE RIGHT TO
USE ALL INTELLECTUAL PROPERTY (INCLUDING ALL SUCH PROPERTY IN WHICH BORROWER HAS
AN INTEREST AS LICENSEE) NECESSARY FOR THE CONDUCT OF ITS BUSINESS (THE
“INTELLECTUAL PROPERTY”);

(B)                                 AS OF THE DATE HEREOF BORROWER HAS NOT
RECEIVED ANY NOTICE OF ANY JUDICIAL, ADMINISTRATIVE OR ARBITRATION PROCEEDING
INSTITUTED AGAINST ANY IT, OR OF ANY CLAIM OR THREATENED CLAIM BY ANY PERSON
AGAINST IT ALLEGING THAT THE CONDUCT OF ITS BUSINESS INFRINGES ANY INTELLECTUAL
PROPERTY RIGHTS OF ANY OTHER PERSON; AND

(C)                                  TO THE BEST OF BORROWER’S KNOWLEDGE, ITS
USE OR ENJOYMENT DOES NOT, OR WOULD NOTE, VIOLATE ANY INTELLECTUAL PROPERTY
RIGHTS OF A THIRD PARTY, AND NO THIRD PARTY IS INFRINGING UPON THE INTELLECTUAL
PROPERTY;

except, in each case under clause (a), (b) and (c) of this Section 4.11, as are
not reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect.

4.12.  TITLE TO ASSETS, PROPERTIES AND RIGHTS.

(A)                                  EXCEPT FOR PERMITTED LIENS, BORROWER HAS
GOOD AND MARKETABLE TITLE TO ALL OF ITS RESPECTIVE PROPERTIES, INTERESTS IN
PROPERTIES AND ASSETS, REAL, PERSONAL AND MIXED, TANGIBLE OR INTANGIBLE, THAT IT
OWNS OR PURPORTS TO OWN THAT IS USED OR USEFUL IN THE CONDUCT OF ITS BUSINESS,
FREE AND CLEAR OF ANY AND ALL ENCUMBRANCES, EXCEPT FOR:  (I) LIENS, IF ANY, FOR
CURRENT TAXES AND ASSESSMENTS NOT YET DUE, AND (II) MINOR LIENS AND
ENCUMBRANCES, IN EACH CASE, WHICH ARE NOT REASONABLY LIKELY, INDIVIDUALLY OR IN
THE AGGREGATE, TO HAVE A MATERIAL ADVERSE EFFECT.

(B)                                 WITH RESPECT TO THE PROPERTY AND ASSETS
LEASED OR LICENSED BY BORROWER OR ITS SUBSIDIARIES, BORROWER OR SUCH SUBSIDIARY,
AS APPLICABLE, IS IN COMPLIANCE WITH SUCH LEASES OR LICENSES AND HOLDS VALID
LEASEHOLD OR OTHER INTERESTS FREE AND CLEAR OF ANY ENCUMBRANCES, EXCEPT AS ARE
NOT REASONABLY LIKELY, INDIVIDUALLY OR IN THE AGGREGATE, TO HAVE A MATERIAL
ADVERSE EFFECT.

(C)                                  BORROWER HAS IN FULL FORCE AND EFFECT FIRE
AND CASUALTY INSURANCE POLICIES, AND INSURANCE AGAINST OTHER HAZARDS, RISKS AND
LIABILITIES TO PERSONS AND PROPERTY TO THE EXTENT AND IN THE MANNER CUSTOMARY
FOR COMPANIES IN SIMILAR BUSINESSES SIMILARLY SITUATED.  BORROWER HAS MADE
AVAILABLE TO LENDER A TRUE, COMPLETE AND CORRECT LIST, AND A SUMMARY DESCRIPTION
OF THE COVERAGE PROVIDED THEREBY, OF ALL LIABILITY INSURANCE POLICIES MAINTAINED
BY BORROWER ON ITS ASSETS OR IN RELATION TO ITS BUSINESS.  ALL OF SUCH POLICIES
ARE IN FULL FORCE AND EFFECT.  ALL PREMIUMS DUE ON SUCH INSURANCE POLICIES ON OR
PRIOR TO THE DATE HEREOF HAVE BEEN PAID.  AS OF THE DATE HEREOF, THERE ARE NO
CLAIMS WITH RESPECT TO BORROWER, NOR ITS RESPECTIVE ASSETS, PENDING UNDER ANY
CURRENT OR PRIOR INSURANCE POLICY.

4.13.  COMPLIANCE WITH LAWS; LEGAL REQUIREMENTS.

(A)                                  EXCEPT AS SET FORTH ON SCHEDULE 4.13,
BORROWER HAS COMPLIED, AND IS IN COMPLIANCE, IN ALL MATERIAL RESPECTS, WITH ALL
FOREIGN, FEDERAL, STATE OR LOCAL LAWS (INCLUDING COMMON LAW), STATUTES, CODES,
ORDINANCES, RULES, REGULATIONS, AND ORDERS OF GOVERNMENTAL AUTHORITIES
APPLICABLE TO OR AFFECTING THEM OR THEIR ASSETS OR BUSINESSES, INCLUDING,
WITHOUT LIMITATION, ERISA AND ENVIRONMENTAL LAWS (COLLECTIVELY, “LAWS”), EXCEPT
FOR SUCH NON-COMPLIANCE WHICH IS NOT REASONABLY LIKELY TO HAVE A MATERIAL
ADVERSE EFFECT.  NEITHER BORROWER, NOR ANY OF ITS SENIOR OFFICERS, HAS RECEIVED
NOTICE OF ANY VIOLATION (OR ANY INVESTIGATION, INSPECTION, AUDIT, OR OTHER
PROCEEDING BY ANY GOVERNMENTAL AUTHORITY INVOLVING AN ALLEGATION OF ANY
VIOLATION) OF ANY LAW BY OR AFFECTING BORROWER, AND TO THE KNOWLEDGE OF
BORROWER, NO INVESTIGATION, INSPECTION, AUDIT, OR OTHER PROCEEDING BY ANY
GOVERNMENTAL AUTHORITY INVOLVING AN ALLEGATION OF VIOLATION OF ANY LAW IS
THREATENED.

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(B)                                 BORROWER HAS OBTAINED ALL OF THE
REGISTRATIONS, APPLICATIONS, FILINGS, CERTIFICATIONS, NOTICES, ORDERS, LICENSES,
PERMITS, APPROVALS, CONSENTS, QUALIFICATIONS, AUTHORIZATIONS AND WAIVERS OF ANY
GOVERNMENTAL AUTHORITY (“LICENSES AND PERMITS”) NECESSARY TO CONDUCT ITS
RESPECTIVE BUSINESS AS IT IS PRESENTLY BEING CONDUCTED AND HAS BEEN CONDUCTED
AND IS IN COMPLIANCE WITH ALL SUCH LICENSES AND PERMITS, AND SUCH LICENSES AND
PERMITS ARE VALIDLY ISSUED AND IN FULL FORCE AND EFFECT, EXCEPT WHERE THE
FAILURE TO OBTAIN, OR TO BE IN COMPLIANCE WITH, SUCH LICENSES AND PERMITS OR
HAVE IN FULL FORCE AND EFFECT IS NOT REASONABLY LIKELY, INDIVIDUALLY OR IN THE
AGGREGATE, TO HAVE A MATERIAL ADVERSE EFFECT.

4.14.  EMPLOYEES AND LABOR MATTERS.

(A)                                  TO BORROWER’S KNOWLEDGE, NONE OF BORROWER’S
EMPLOYEES IS BOUND BY ANY AGREEMENT WITH ANY OTHER PERSON THAT IS VIOLATED OR
BREACHED BY SUCH EMPLOYEE PERFORMING THE SERVICES HE OR SHE IS CURRENTLY
PERFORMING FOR BORROWER.

(B)                                 BORROWER IS NOT DELINQUENT (I) IN ANY
PAYMENTS TO ANY OF ITS RESPECTIVE EMPLOYEES OR OTHER PERSONNEL FOR ANY WAGES,
SALARIES, COMMISSIONS, BONUSES OR OTHER DIRECT COMPENSATION, OR (II) IN ANY
MATERIAL RESPECT, IN ANY PAYMENTS TO CONSULTANTS, INDEPENDENT CONTRACTORS’
AGENTS, OR REPRESENTATIVES, FOR ANY SERVICES PERFORMED BY THEM IN ANY CAPACITY,
IN EACH CASE, TO THE DATE HEREOF OR FOR AMOUNTS REQUIRED TO BE REIMBURSED TO ANY
SUCH PERSON TO THE DATE HEREOF.

(C)                                  AS OF THE DATE HEREOF, THERE IS NO
COLLECTIVE BARGAINING AGREEMENT OR UNION CONTRACT BINDING ON BORROWER, THERE HAS
NOT BEEN ANY UNION ORGANIZING ACTIVITY WITH RESPECT TO BORROWER, AND NO UNION
VOTE IS PENDING WITH RESPECT TO BORROWER.

(D)                                 EXCEPT AS WOULD NOT REASONABLY BE EXPECTED
TO HAVE A MATERIAL ADVERSE EFFECT, (I) THERE ARE NO UNFAIR LABOR PRACTICE
CHARGES OR COMPLAINTS, MINIMUM WAGE OR OVERTIME OR EQUAL PAY CHARGES OR
COMPLAINTS, OCCUPATIONAL SAFETY AND HEALTH CHARGES OR COMPLAINTS, WRONGFUL
DISCHARGE CHARGES OR COMPLAINTS, EMPLOYEE GRIEVANCES, DISCRIMINATION CLAIMS OR
WORKERS’ COMPENSATION CLAIMS PENDING OR, TO THE KNOWLEDGE OF BORROWER,
THREATENED AGAINST EITHER OF THEM BEFORE ANY GOVERNMENTAL AUTHORITY, AND
(II) NEITHER BORROWER NOR ANY OF ITS SENIOR OFFICERS HAS RECEIVED NOTICE FROM
ANY GOVERNMENTAL AUTHORITY OF ANY ALLEGED VIOLATION OF APPLICABLE LAW THAT
REMAINS UNRESOLVED RESPECTING EMPLOYMENT AND EMPLOYMENT PRACTICES, TERMS AND
CONDITIONS OF EMPLOYMENT, OR WAGE AND HOURS.

(E)                                  BORROWER IS IN COMPLIANCE IN ALL MATERIAL
RESPECTS WITH ALL FEDERAL, STATE, LOCAL AND FOREIGN LAWS, ORDINANCES,
REGULATIONS AND ORDERS WITH RESPECT TO THE WAGES, HOURS AND WORKING CONDITIONS
OF ITS RESPECTIVE EMPLOYEES.

(F)                                    EXCEPT AS SET FORTH IN APPLICABLE FILINGS
WITH THE SEC OR AS OTHERWISE DISCLOSED TO LENDER (OR AS WILL BE DISCLOSED BY
LENDER NOT LATER THAN APRIL 5, 2007), AS OF THE DATE HEREOF, NONE OF BORROWER’S
EXECUTIVE OFFICERS HAS AN EMPLOYMENT OR SEVERANCE AGREEMENT WITH BORROWER, OR
ANY OTHER AGREEMENT THAT PROVIDES FOR SEVERANCE PAYMENTS MATERIAL TO THE
BORROWER AND ITS SUBSIDIARIES TAKEN AS A WHOLE, UPON TERMINATION OF EMPLOYMENT.

4.15.  Brokers and Finders.  Neither Borrower, nor any of its officers,
directors, employees, agents or representatives, has employed any broker,
investment bank, financial advisor or finder in connection with this Agreement,
the other Loan Documents, or the transactions contemplated hereby and thereby.

4.16.  Tax Matters.  Borrower has timely filed all respective federal, state,
local and foreign tax returns, declarations of estimated tax, tax reports,
information returns and statements (collectively, the “Returns”) required to be
filed by it prior to the date hereof (other than those for which extensions
shall

14

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have been granted prior to the date hereof) relating to (i) any federal Taxes
and (ii) any other Taxes in any material amount.  The Returns were complete and
correct in all material respects and all Taxes shown on the Returns to be due
were timely paid.

(A)                                  AS OF THE DATE HEREOF, THERE ARE NO PENDING
OR, TO THE BEST OF BORROWER’S KNOWLEDGE, ANY THREATENED TAX AUDITS OF ANY
RETURNS.

(B)                                 NO TAX ENCUMBRANCES (OTHER THAN FOR CURRENT
TAXES NOT YET DUE AND PAYABLE AND TAXES BEING CONTESTED IN GOOD FAITH) HAVE BEEN
FILED AND NO DEFICIENCY IN TAX HAS BEEN PROPOSED, ASSESSED OR ASSERTED IN
WRITING AGAINST BORROWER.

(C)                                  BORROWER HAS TIMELY WITHHELD AND PAID ALL
TAXES REQUIRED TO HAVE BEEN WITHHELD AND PAID BY IT IN CONNECTION WITH ANY
AMOUNTS PAID OR OWING TO ANY EMPLOYEE OF BORROWER.

(D)                                 BORROWER HAS NEVER BEEN A MEMBER OF AN
AFFILIATED GROUP WITHIN THE MEANING OF SECTION 1504 OF THE CODE, OR FILED OR
BEEN INCLUDED IN A COMBINED, CONSOLIDATED OR UNITARY RETURN OTHER THAN AN
AFFILIATED GROUP (AND RELATED RETURN) IN WHICH BORROWER IS THE COMMON PARENT.

(E)                                  BORROWER IS NOT LIABLE FOR TAXES OF ANY
OTHER PERSON (OTHER THAN ITS SUBSIDIARIES), AND BORROWER IS NOT UNDER ANY
CONTRACTUAL OBLIGATION TO INDEMNIFY ANY PERSON WITH RESPECT TO TAXES, NOR A
PARTY TO ANY TAX SHARING AGREEMENT OR OTHER AGREEMENT PROVIDING FOR PAYMENTS BY
BORROWER WITH RESPECT TO TAXES.

(F)                                    BORROWER IS NOT A PARTY TO ANY JOINT
VENTURE, PARTNERSHIP OR OTHER ARRANGEMENT OR CONTRACT THAT COULD BE TREATED AS A
PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES.

4.17.  Books and Records.  The books and records of Borrower, including with
respect to operations, employees and properties, have been maintained in the
usual, regular and ordinary manner, all entries with respect thereto have been
accurately made, and all transactions have been accurately accounted for, except
as could not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect.

4.18.  Offering Valid.  Assuming the accuracy of the representations of Lender
in Section 9 hereof, the offer, sale and issuance of the Note and the Warrants
will be exempt from the registration requirements of the Securities Act and any
similar law, rule or regulation of any other jurisdiction and will have been
registered or qualified (or are exempt from registration and qualification)
under the registration, permit or qualification requirements of all applicable
state securities laws.  Neither Borrower nor any agent on Borrower’s behalf, has
solicited or will solicit any offers to sell or has offered to sell or will
offer to sell all or any part of the Note or the Warrants so as to bring the
sale of such Note or Warrants within the registration provisions of the
Securities Act.

5.                                      COVENANTS.

5.1.  Negative Covenants.  Borrower covenants to Lender that at any time as
there shall be any Outstanding Amount and the Commitment has not been
irrevocably terminated, unless Lender has first consented thereto in writing,
Borrower will not:

(A)                                  INCUR OR GUARANTEE ANY INDEBTEDNESS OTHER
THAN (WITHOUT DUPLICATION):  (I) AMOUNTS CURRENTLY OUTSTANDING OR AVAILABLE
UNDER THE COMERICA AGREEMENT AND GE CAPITAL FACILITY, AND REFINANCINGS THEREOF
(WHICH REFINANCINGS SHALL BE SUBJECT TO THE PRIOR WRITTEN CONSENT OF LENDER);
(II) INDEBTEDNESS OUTSTANDING ON THE DATE HEREOF AND IDENTIFIED ON
SCHEDULE 5.1(A); (III) INDEBTEDNESS INCURRED,

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AND INDEBTEDNESS UNDER CONTRACTS OR CAPITALIZED LEASE OBLIGATIONS, IN EACH CASE,
ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS; (IV) INDEBTEDNESS OWED TO ANY
SUBSIDIARY OF BORROWER; (V) INDEBTEDNESS CONSISTING OF GUARANTIES FOR THE
BENEFIT OF SUBSIDIARIES OF BORROWER; AND (VI) OTHER INDEBTEDNESS PERMITTED UNDER
THE GE CAPITAL FACILITY, AS IN EFFECT ON THE DATE HEREOF.

(B)                                 SELL, TRANSFER OR OTHERWISE DISPOSE OF IN
ANY TRANSACTION OR SERIES OF RELATED TRANSACTIONS DURING THE TERM OF THIS
AGREEMENT ANY OF BORROWER’ ASSETS (OTHER THAN (I) SALES OF PRODUCTS OR
INTELLECTUAL PROPERTY IN THE ORDINARY COURSE OF BUSINESS; (II) REINVESTMENTS OR
CONVERSIONS OF CASH EQUIVALENTS TO CASH OR OTHER CASH EQUIVALENTS,
(III) DISPOSITIONS OF ASSETS THAT ARE NO LONGER USED OR USEFUL IN ITS BUSINESS,
(IV) TRANSFERS OF ASSETS TO SUBSIDIARIES, AND (V) ANY ASSET SALE CONTEMPLATED BY
THE DEFINITION OF PERMITTED SALE/EQUITY TRANSACTION).

(C)                                  ACQUIRE ANY SECURITIES OF, OR OTHER
OWNERSHIP INTEREST IN, ANY PERSON IN ANY TRANSACTION OR SERIES OF TRANSACTIONS
(OTHER THAN (I) REINVESTMENTS OR CONVERSIONS OF CASH EQUIVALENTS AND
(II) INVESTMENTS IN SUBSIDIARIES);

(D)                                 DECLARE OR PAY ANY DISTRIBUTIONS ON, OR MAKE
ANY REDEMPTIONS OF, ANY CLASS OR SERIES OF ITS SHARES (OTHER THAN, SO LONG AS NO
DEFAULT OR EVENT OF DEFAULT THEN EXISTS OR WOULD RESULT THEREFROM, REPURCHASES
OF COMMON STOCK OF BORROWER FROM FORMER EMPLOYEES, WHICH SHALL NOT EXCEED
$50,000 IN THE AGGREGATE IN ANY FISCAL YEAR OF BORROWER);

(E)                                  ENTER INTO ANY AGREEMENT, ARRANGEMENT OR
TRANSACTION WITH ANY OFFICER OR KEY EMPLOYEE OF BORROWER, OR ANY AFFILIATE
(OTHER THAN LENDER), RELATIVE, BENEFICIARY OR EMPLOYEE OF THE FOREGOING, ON
TERMS TAKEN AS A WHOLE ARE LESS FAVORABLE TO BORROWER, AS THE CASE MAY BE, THAN
WOULD BE AVAILABLE IN AN ARM’S-LENGTH TRANSACTION BETWEEN WILLING PARTIES (OTHER
THAN EMPLOYMENT TRANSACTIONS IN THE ORDINARY COURSE OF BUSINESS);

(F)                                    UNDERTAKE OR AGREE TO UNDERTAKE ANY
MERGER OR CONSOLIDATION, WHETHER OR NOT BORROWER OR A SUBSIDIARY IS THE
SURVIVING CORPORATION (OTHER THAN MERGERS AND CONSOLIDATIONS WITH ANY SUBSIDIARY
IN WHICH BORROWER IS THE SURVIVING ENTITY);

(G)                                 (I) CHANGE THE ORGANIC FORM OF BORROWER FROM
THAT OF A CORPORATION FORMED UNDER DELAWARE LAW, OR (II) ISSUE ADDITIONAL SHARES
OF BORROWER STOCK, OTHER THAN AS THOSE SHARES DESCRIBED AND PERMITTED TO BE
ISSUED TO LENDER UNDER THIS AGREEMENT AND OPTION AND WARRANT SHARES ISSUED AS A
RESULT OF THE EXERCISE, IN ACCORDANCE WITH THEIR RESPECTIVE TERMS, OF ANY
OPTIONS OR WARRANTS CURRENTLY OUTSTANDING OR PERMITTED UNDER THIS AGREEMENT; OR

(H)                                 CHANGE BORROWER’S OR ANY SUBSIDIARY’S
GENERAL LINE OF BUSINESS.

5.2.  Affirmative Covenants.  Borrower covenants to Lender that at any time as
there shall be any Outstanding Amount and the Commitment has not been
irrevocably terminated:

(A)                                  FINANCIAL STATEMENTS.  BORROWER SHALL
DELIVER OR CAUSE TO BE DELIVERED TO LENDER:

(I)                                     COMMENCING WITH THE 2007 FISCAL YEAR FOR
BORROWER, AS SOON AS PRACTICABLE, BUT IN ANY EVENT NOT LATER THAN NINETY (90)
DAYS AFTER THE END OF EACH APPLICABLE FISCAL YEAR OF BORROWER, THE CONSOLIDATED
BALANCE SHEET OF BORROWER, AS AT THE END OF SUCH YEAR, AND THE RELATED
CONSOLIDATED AND CONSOLIDATING STATEMENT OF INCOME AND STATEMENT OF CASH FLOW,
SETTING FORTH IN COMPARATIVE FORM THE FIGURES FOR THE PREVIOUS FISCAL YEAR (IF
APPLICABLE) AND ALL SUCH CONSOLIDATED AND CONSOLIDATING STATEMENTS TO BE IN
REASONABLE DETAIL, PREPARED IN ACCORDANCE WITH GAAP, TOGETHER WITH THE REPORT OF
BORROWER’S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT REASONABLY ACCEPTABLE TO
LENDER;

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(II)                                  AS SOON AS PRACTICABLE AND TO THE EXTENT
POSSIBLE WITHIN THIRTY (30) DAYS AFTER THE END OF EACH MONTH, COPIES OF
BORROWER’S INTERNALLY PREPARED CONSOLIDATED BALANCE SHEET, EACH AS AT THE END OF
SUCH MONTH, AND THE RELATED CONSOLIDATED STATEMENT OF INCOME AND STATEMENT OF
CASH FLOW FOR SUCH MONTH, ALL IN REASONABLE DETAIL AND PREPARED IN ACCORDANCE
WITH GAAP WITH THE EXCEPTION OF NOTES TO THE FINANCIAL STATEMENTS, TOGETHER WITH
A CERTIFICATION BY THE CHIEF FINANCIAL OFFICER OF BORROWER (IN HIS OF HER
CAPACITY AS AN OFFICER OF BORROWER AND WITHOUT PERSONAL LIABILITY) THAT THE
INFORMATION CONTAINED IN SUCH FINANCIAL STATEMENTS FAIRLY PRESENTS IN ALL
MATERIAL RESPECTS BORROWER’S FINANCIAL POSITION ON THE DATE THEREOF (SUBJECT TO
YEAR END ADJUSTMENTS); AND

(III)                               AS SOON AS AVAILABLE, BUT IN ANY EVENT NOT
LATER THAN SIXTY (60) DAYS AFTER THE DATE HEREOF, OF A BUSINESS PLAN FOR SUCH
FUTURE PERIODS, AND INCLUDING SUCH ITEMS, AS IS REQUESTED BY LENDER, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO LENDER; AND

(IV)                              ALL OTHER INFORMATION REASONABLY REQUESTED BY
LENDER.

(B)                                 EXISTENCE.  BORROWER WILL DO OR CAUSE TO BE
DONE ALL THINGS NECESSARY TO PRESERVE AND KEEP IN FULL FORCE AND EFFECT ITS
CORPORATE EXISTENCE.

(C)                                  COMPLIANCE WITH LAWS; APPROVALS AND
AUTHORITY.  EXCEPT AS IS NOT REASONABLY LIKELY, INDIVIDUALLY OR IN THE
AGGREGATE, TO HAVE A MATERIAL ADVERSE EFFECT, BORROWER WILL COMPLY WITH THE
APPLICABLE LAWS AND REGULATIONS WHEREVER ITS BUSINESS IS CONDUCTED INCLUDING,
WITHOUT LIMITATION, ERISA AND ALL ENVIRONMENTAL LAWS, AND ALL ORDERS OF ANY
TRIBUNAL UNDER ANY SUCH LEGISLATION THAT APPLIES TO THE CONDUCT OF OPERATING AND
ADMINISTERING ITS BUSINESS.

(D)                                 ERISA COMPLIANCE.  UPON REASONABLE REQUEST
OF LENDER, BORROWER WILL (I) PROMPTLY UPON ITS FILING THE SAME, OR AS SOON AS
POSSIBLE AFTER NOTIFICATION TO BORROWER OF THE FILING BY ANOTHER PERSON OF THE
SAME, WITH THE DEPARTMENT OF LABOR OR INTERNAL REVENUE SERVICE, FURNISH TO
LENDER COPIES OF THE MOST RECENT ACTUARIAL STATEMENT, IF ANY, REQUIRED TO BE
SUBMITTED UNDER §103(D) OF ERISA AND ANNUAL REPORT - FORM 5500, WITH ALL
REQUIRED ATTACHMENTS, IN RESPECT OF EACH GUARANTEED PENSION PLAN, AND (II)
PROMPTLY UPON RECEIPT OR DISPATCH BY BORROWER, OR AS SOON AS POSSIBLE AFTER
NOTIFICATION TO BORROWER OF RECEIPT OR DISPATCH BY ANOTHER PERSON, FURNISH TO
LENDER ANY NOTICE, REPORT OR DEMAND SENT OR RECEIVED IN RESPECT OF A GUARANTEED
PENSION PLAN UNDER §§302, 4041, 4042, 4043, 4063, 4065, 4066 AND 4068 OF ERISA,
OR IN RESPECT OF A MULTIEMPLOYER PLAN, UNDER §§4041A, 4202, 4219, 4242, OR 4245
OF ERISA WHICH INVOLVES A LIABILITY WHICH IS REASONABLY LIKELY TO RESULT IN A
MATERIAL ADVERSE EFFECT.

(E)                                  INSURANCE.  BORROWER SHALL MAINTAIN IN FULL
FORCE AND EFFECT FIRE AND CASUALTY INSURANCE POLICIES, AND INSURANCE AGAINST
OTHER HAZARDS, RISKS AND LIABILITIES TO PERSONS AND PROPERTY TO THE EXTENT AND
IN THE MANNER CUSTOMARY FOR COMPANIES IN SIMILAR BUSINESSES SIMILARLY SITUATED.

(F)                                    TAXES.  BORROWER WILL DULY PAY AND
DISCHARGE, OR CAUSE TO BE PAID AND DISCHARGED, BEFORE THE SAME SHALL BECOME
OVERDUE OR SUBJECT TO PENALTY OR INTEREST, ALL TAXES, ASSESSMENTS AND OTHER
GOVERNMENTAL CHARGES IMPOSED UPON IT AND ITS REAL PROPERTIES, SALES AND
ACTIVITIES, OR ANY PART THEREOF, OR UPON THE INCOME OR PROFITS THEREFROM;
PROVIDED THAT ANY SUCH TAX, ASSESSMENT, OR CHARGE NEED NOT BE PAID IF THE
VALIDITY OR AMOUNT THEREOF SHALL CURRENTLY BE CONTESTED IN GOOD FAITH BY
APPROPRIATE PROCEEDINGS AND IF SUCH, BORROWER SHALL HAVE SET ASIDE ON ITS BOOKS
ADEQUATE RESERVES WITH RESPECT THERETO.

(G)                                 CLAIMS; LITIGATION.  BORROWER WILL INFORM
LENDER, PROMPTLY AFTER RECEIPT BY BORROWER OF NOTICE OF ANY MATERIAL THREATENED
OR POTENTIAL ADVERSE CLAIM, DISPUTE, LITIGATION AND GOVERNMENTAL INVESTIGATION
OR CITATION AGAINST BORROWER THAT, IF ADVERSELY DETERMINED, IS REASONABLY LIKELY
TO RESULT IN A MATERIAL ADVERSE EFFECT.

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(H)                                 NOTICE OF FAILURE TO COMPLY WITH COVENANTS. 
BORROWER SHALL PROMPTLY GIVE PROMPT NOTICE TO LENDER OF ANY DEFAULT OR EVENT OF
DEFAULT.

(I)                                     EXPENSES.  SUBJECT TO THE TERMS AND
CONDITIONS OF THE SUBORDINATION AGREEMENTS, BORROWER SHALL PAY OR REIMBURSE
LENDER FOR ALL REASONABLE OUT-OF-POCKET COSTS AND EXPENSES (INCLUDING BUT NOT
LIMITED TO REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS) SUCH LENDER MAY PAY OR
INCUR IN CONNECTION WITH THE COLLECTION OR ENFORCEMENT OF THIS AGREEMENT, THE
NOTE AND THE WARRANTS, AND ALL AMENDMENTS IN CONNECTION THEREWITH AND IN ALL
OTHER DOCUMENTATION RELATED THERETO MADE AT BORROWER’S REQUEST, AND ANY AND ALL
WAIVERS AND CONSENTS, INCLUDING WITHOUT LIMITATION ANY FEES AND DISBURSEMENTS
INCURRED IN DEFENSE OF OR TO RETAIN AMOUNTS OF PRINCIPAL, INTEREST OR FEES PAID,
AND ANY CLAIMS, DAMAGES, INTEREST (INCLUDING POST-PETITION INTEREST), JUDGMENTS,
COSTS, OR EXPENSES AWARDED IN RESPECT THEREOF.  ALL OBLIGATIONS PROVIDED FOR IN
THIS SECTION 5.2(I) SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT AND THE
REPAYMENT OF THE LOAN.

5.3.  Right of First Offer and Refusal.  Borrower shall notify Lender in writing
not less than thirty (30) days prior to its seeking any credit arrangement
intended to be subordinate to the GE Capital Facility and the Comerica Agreement
and shall accord Lender the right of first offer with respect to such
arrangements.  In the event Borrower does not reach agreement with Lender on the
terms of any such credit facility required by Borrower and Borrower seeks third
party financing, Borrower shall notify Lender in writing, not less than five (5)
Business Days prior to its acceptance of any such alternate financing of the
terms of such financing, and Lender shall have the right to match such terms and
provide such financing to Borrower.

5.4.  No Third-Party Rights.  Nothing expressed or referred to in this Agreement
will be construed to give any Person other than the parties to this Agreement
any legal or equitable right, remedy or claim under or with respect to this
Agreement or any provision of this Agreement.

6.                                      SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND AGREEMENTS, ETC.

Except as expressly provided to the contrary, all covenants and agreements
contained in this Agreement shall survive the Closing and shall remain in full
force and effect as of the date when made.  The representations and warranties
hereunder shall survive the Closing as of the date when made so long as any
Indebtedness hereunder, or under any Note, or any obligations under any Warrant
remain outstanding.

7.                                      EVENTS OF DEFAULT; REMEDIES.

7.1.  EVENTS OF DEFAULT. THE OCCURRENCE OF ANY ONE OR MORE OF THE FOLLOWING
EVENTS SHALL CONSTITUTE AN EVENT OF DEFAULT HEREUNDER (“EVENT OF DEFAULT”):

(A)                                  IF BORROWER SHALL FAIL TO PAY (I) AS AND
WHEN DUE, ANY PAYMENT OF PRINCIPAL UNDER THIS AGREEMENT OR THE NOTE, AND (II)
ANY PAYMENT OF INTEREST OR EXPENSES PAYABLE UNDER THIS AGREEMENT OR THE NOTE AND
SUCH FAILURE TO PAY IS NOT CURED WITHIN TEN (10) DAYS FOLLOWING THE DATE SUCH
PAYMENT IS DUE;

(B)                                 IF, PURSUANT TO OR WITHIN THE MEANING OF THE
UNITED STATES BANKRUPTCY CODE OR ANY OTHER FEDERAL, STATE, OR APPLICABLE FOREIGN
LAW RELATING TO INSOLVENCY OR RELIEF OF DEBTORS (COLLECTIVELY, A “BANKRUPTCY
LAW”), BORROWER SHALL (I) COMMENCE A VOLUNTARY CASE OR PROCEEDING; (II) CONSENT
TO THE ENTRY OF AN ORDER FOR RELIEF AGAINST IT IN AN INVOLUNTARY CASE; (III)
CONSENT TO THE APPOINTMENT OF A TRUSTEE, RECEIVER, ASSIGNEE, LIQUIDATOR OR
SIMILAR OFFICIAL; (IV) MAKE AN ASSIGNMENT FOR THE BENEFIT OF ITS CREDITORS; OR
(V) ADMIT IN WRITING ITS INABILITY TO PAY ITS DEBTS AS THEY BECOME DUE;

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(C)                                  IF (I) A CASE IS COMMENCED AGAINST BORROWER
PURSUANT TO ANY BANKRUPTCY LAW, OR (II) A COURT OF COMPETENT JURISDICTION ENTERS
AN ORDER OR DECREE UNDER ANY BANKRUPTCY LAW THAT (A) IS FOR RELIEF AGAINST
BORROWER IN AN INVOLUNTARY CASE, (B) APPOINTS A TRUSTEE, RECEIVER, ASSIGNEE,
LIQUIDATOR OR SIMILAR OFFICIAL FOR BORROWER OR SUBSTANTIALLY ALL OF THE
PROPERTIES OF ANY OF BORROWER, OR (C) ORDERS THE LIQUIDATION OF BORROWER, AND,
IN EACH CASE, THE CASE, ORDER OR DECREE IS NOT DISMISSED WITHIN SIXTY (60) DAYS;

(D)                                 IF BORROWER SHALL FAIL TO COMPLY WITH OR
PERFORM (I) THE COVENANTS SET FORTH IN SECTION 5.1 HEREOF; OR (II) ANY PROVISION
OF THE WARRANTS;

(E)                                  IF BORROWER SHALL FAIL TO COMPLY WITH OR
PERFORM ANY OTHER COVENANT OR OTHER AGREEMENT SET FORTH HEREIN, OR IN ANY NOTE,
WHICH FAILURE IS NOT CURED WITHIN THIRTY (30) DAYS AFTER WRITTEN NOTICE FROM
LENDER;

(F)                                    IF ANY REPRESENTATION OR WARRANTY BY
BORROWER HEREIN CONTAINED IS FALSE OR MISLEADING IN ANY MATERIAL RESPECT WHEN
MADE;

(G)                                 IF ANY EVENT OF DEFAULT SHALL HAVE OCCURRED
AND BE CONTINUING WITH RESPECT TO THE COMERICA AGREEMENT OR THE GE CAPITAL
FACILITY, WHICH EVENT OF DEFAULT PERMITS COMERICA OR GE CAPITAL, AS APPLICABLE,
TO ACCELERATE THE INDEBTEDNESS UNDER THE COMERICA AGREEMENT OR THE GE CAPITAL
FACILITY AS APPLICABLE; OR

(H)                                 IF A LIQUIDITY EVENT OCCURS.

7.2.  REMEDIES.

(A)                                  UPON THE OCCURRENCE OF AN EVENT OF DEFAULT
HEREUNDER OTHER THAN AS PROVIDED IN SECTIONS 7.1(B) OR (C) ABOVE (UNLESS CURED
BY BORROWER OR WAIVED BY LENDER), THE ENTIRE UNPAID PRINCIPAL BALANCE OF THE
NOTE, TOGETHER WITH ALL ACCRUED INTEREST THEREON, MAY BE DECLARED BY LENDER DUE
AND PAYABLE.  UPON THE OCCURRENCE OF AN EVENT OF DEFAULT AS PROVIDED IN SECTION
7.1(B) OR (C) ABOVE, THE ENTIRE UNPAID PRINCIPAL BALANCE OUTSTANDING HEREUNDER
AND UNDER THE NOTE, TOGETHER WITH ALL ACCRUED INTEREST THEREON, SHALL, SUBJECT
TO THE TERMS AND CONDITIONS OF THE SUBORDINATION AGREEMENTS) BE IMMEDIATELY DUE
AND PAYABLE REGARDLESS OF ANY PRIOR FORBEARANCE.  NOTWITHSTANDING ANYTHING TO
THE CONTRARY IN THIS AGREEMENT, IN NO EVENT SHALL THE INTEREST PAYABLE ON THE
UNPAID PRINCIPAL BALANCE OF THE LOANS EXCEED THE MAXIMUM RATE PERMITTED UNDER
APPLICABLE LAWS.  IN THE EVENT THAT SUCH RATE OF INTEREST EXCEEDS THE MAXIMUM
RATE PERMITTED UNDER APPLICABLE LAWS, SUCH EXCESS SHALL BE DEEMED ADDITIONAL
PRINCIPAL PAYMENTS UNDER THIS AGREEMENT AND THE NOTE.

(B)                                 IN ADDITION, UPON THE OCCURRENCE OF AN EVENT
OF DEFAULT (UNLESS CURED BY BORROWER OR WAIVED BY LENDER) AND FOR, BUT ONLY FOR,
THE PERIOD DURING WHICH SUCH EVENT OF DEFAULT REMAINS UNCURED OR HAS NOT BEEN
WAIVED IN WRITING BY LENDER, THE INTEREST DUE ON THE PRINCIPAL BALANCE
OUTSTANDING HEREUNDER SHALL ACCRUE AT A RATE OF FIFTEEN PERCENT (15%) PER ANNUM
(CALCULATED IN THE SAME MANNER AS PROVIDED ABOVE) RATHER THAN THE RATE SPECIFIED
IN THE NOTE, IN EACH OF THE PREAMBLE AND SECTION 1.1 THERETO.

(C)                                  NO FAILURE OR DELAY ON THE PART OF ANY
PARTY HERETO IN THE EXERCISE OF ANY RIGHT HEREUNDER SHALL IMPAIR SUCH RIGHT OR
BE CONSTRUED TO BE A WAIVER OF, OR ACQUIESCENCE IN, ANY BREACH OF ANY
REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT HEREIN, NOR SHALL ANY SINGLE OR
PARTIAL EXERCISE OF ANY SUCH RIGHT PRECLUDE OTHER OR FURTHER EXERCISE THEREOF OR
OF ANY OTHER RIGHT.  ALL RIGHTS AND REMEDIES OF LENDER EXISTING PURSUANT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT ARE CUMULATIVE TO, AND NOT

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EXCLUSIVE OF, ANY RIGHTS OR REMEDIES OTHERWISE AVAILABLE, WHETHER BY CONTRACT,
AT LAW, IN EQUITY OR OTHERWISE.

8.                                      MISCELLANEOUS.

8.1.  GOVERNING LAW; SUBMISSION TO JURISDICTION.

(A)                                  THIS AGREEMENT AND THE DOCUMENTS AND
INSTRUMENTS EXECUTED IN CONNECTION HEREWITH SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO
PRINCIPLES OF THE CONFLICT OF LAWS THEREOF.

(B)                                 THE PARTIES HERETO AGREE THAT ANY SUIT,
ACTION OR PROCEEDING INSTITUTED AGAINST ONE OR MORE OF THEM WITH RESPECT TO THIS
AGREEMENT (INCLUDING ANY EXHIBITS HERETO) SHALL BE BROUGHT IN ANY FEDERAL OR
STATE COURT LOCATED IN THE STATE OF DELAWARE OR SUCH OTHER JURISDICTION AGREED
UPON BY THE PARTIES.  THE PARTIES HERETO, BY THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, IRREVOCABLY WAIVE ANY OBJECTION OR DEFENSE TO THE INSTITUTION OF ANY
ACTION IN DELAWARE BASED ON IMPROPER VENUE, THE CONVENIENCE OF THE FORUM OR THE
JURISDICTION OF SUCH COURTS, OR FROM THE EXECUTION OF JUDGMENTS RESULTING
THEREFROM, AND THE PARTIES HERETO IRREVOCABLY ACCEPT AND SUBMIT TO THE
JURISDICTION OF THE AFORESAID COURTS IN ANY SUIT, ACTION OR PROCEEDING AND
CONSENT TO THE SERVICE OF PROCESS BY CERTIFIED MAIL AT THE ADDRESS SET FORTH IN
SECTION 7.4 HEREOF.

8.2.  Assignments; Successors; Third Party Rights.  No party to this Agreement
may not assign any of its rights under this Agreement without the prior written
consent of the other parties hereto which consent, in respect of any assignment
by Lender, shall not be unreasonably withheld; provided that Lender may assign
its rights hereunder to one or more affiliates without the consent of Borrower
and provided further that any such assignee agrees in writing to be subject to
the terms and conditions of each of the Subordination Agreements then in
effect.  Subject to the preceding sentence, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of the successors, heirs,
personal representatives, executors and permitted assigns of the parties. 
Borrower shall maintain a registry of the owners of the Note in a manner that
complies with the book entry form of registration for purposes of Section 871(h)
of the Code.  Nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this Agreement any legal
or equitable right, remedy or claim under or with respect to this Agreement or
any provision of this Agreement.

8.3.  Entire Agreement; Amendment.  This Agreement and the other Loan Agreements
constitute the full and entire understanding and agreement among the parties
with regard to the subjects hereof and thereof and they supersede, merge and
render void every other prior written and/or oral understanding or agreement
among or between the parties hereto. This Agreement, the Note and the Warrants
may not be amended except by a written agreement executed by Borrower and
Lender.

8.4.  Notices.  All notices, consents, waivers, or other communications required
or permitted under this Agreement shall be in writing and shall be delivered or
sent to the parties hereto at the following addresses or fax numbers, or at such
other address or fax number as Lender or Borrower may give by notice to the
other party and will be deemed to have been duly given and received: (a) on the
date of receipt if personally delivered, (b) five days after being sent by mail,
postage prepaid, (c) the date of receipt, if sent by registered or certified
mail, postage prepaid, (d) when sent by facsimile or telecopier transmission if
sent during normal business hours of the recipient, if not, then on the next
Business Day, provided, that confirmation or receipt by the receiving party’s
receiver can be documented, or (e) one Business Day after having been sent by a
recognized overnight courier service upon confirmation of delivery by such
courier service:

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(A)                                  IF TO LENDER:

103 Springer Building

3411 Silverside Road

Wilmington, DE  19810

Telecopier No.:  610.293.0601

with a courtesy copy to:

Safeguard Scientifics, Inc.
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA  19087
Attention:  Steven J. Feder, Esquire
Telecopier No.: 610.482.9105

(B)                                 IF TO BORROWER:

Clarient, Inc.

31 Columbia,

Aliso Viejo, CA  92656

Attention:  James Agnello, Senior Vice President &

Chief Financial Officer

Telecopier:  949.4245.5863

with a courtesy copy to:

Latham & Watkins LLP

633 West Fifth Street, Suite 4000
Los Angeles, CA  90071-2007
Attention:  W. Alex Voxman, Esquire

Telecopier No.:  213.891.8763

8.5.  Failure or Indulgence Not Waiver; Remedies Cumulative.  No failure or
delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty, covenant or agreement herein, nor
shall any single or partial exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available, whether by contract, at law, in equity or otherwise.

8.6.  Severability.  If any provision of this Agreement or the application of
any such provision to any party or circumstance shall be determined by any court
of competent jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement, or the application of such provision to any party
or circumstance other than those to which it is so determined to be invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
enforced to the fullest extent permitted by law. If the final judgment of a
court of competent jurisdiction declares that any item or provision hereof is
invalid or unenforceable, the parties hereto agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration or area of the term or provision, or to delete specific
words or phrases, and to replace any invalid or unenforceable term or provision
with a

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term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified.

8.7.  Section Headings; Construction.  The headings in this Agreement are
provided for convenience only and will not affect its construction or
interpretation. In this Agreement (a) words denoting the singular include the
plural and vice versa, (b) “it” or “its” or words denoting any gender include
all genders, (c) the word “including” means “including, without limitation,”
whether or not expressed and (d) any reference herein to a Section, Article,
Schedule or Exhibit refers to a Section or Article of, or a Schedule or Exhibit
to, this Agreement, unless otherwise stated. Each party acknowledges that it has
been advised and represented by counsel in the negotiation, execution and
delivery of this Agreement and accordingly agrees that if an ambiguity exists
with respect to any provision of this Agreement, such provision shall not be
construed against any party because such party or its representatives drafted
such provision.

8.8.  Counterparts.  This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

8.9.  Fees and Expenses.  Except as otherwise expressly set forth herein, all
fees, costs and expenses incurred by Borrower or Lender and payable to third
parties in connection with the negotiation, execution and delivery of this
Agreement or any amendment thereto and the other Loan Documents and the
performance of the transactions contemplated hereby and thereby shall be paid by
the party incurring such fees, costs or expenses, except Borrower shall be
responsible for the reasonable fees, costs or expenses of Lender payable to
third parties and incurred in connection with any amendment of this Agreement
made at Borrower’s request.

8.10.  Reinstatement.  Notwithstanding anything contained herein to the
contrary:  (a) this Agreement and the other Loan Documents shall remain in full
force and effect and continue to be effective should any petition be filed by or
against Borrower liquidation or reorganization, should Borrower become insolvent
or make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of Borrower’s
assets, and shall continue to be effective or to be reinstated, as the case may
be, if at any time payment and performance of the obligations hereunder or under
the Note, or any part thereof, is, pursuant to applicable law, rescinded,
avoided or reduced in amount, or must otherwise be restored or returned by
Lender, whether as a “voidable preference,” “fraudulent transfer,” “fraudulent
conveyance,” or otherwise, all as though such payment or performance had not
been made; and (b) in the event that any payment, or any part thereof, is
rescinded, avoided, reduced, restored or returned, the Note shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, avoided,
reduced, restored or returned.

8.11.  Payment on Non-Business Days.  Whenever any payment to be made hereunder
shall be stated to be due on a day other than a Business Day, such payment may
be made on the next succeeding Business Day, provided however that such
extension of time shall be included in the computation of interest due in
conjunction with such payment or other fees due hereunder, as the case may be.

8.12.  Time of Day.  All time of day restrictions imposed herein shall be
calculated using Delaware local time.

8.13.  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE NOTE OR COLLATERAL SECURITY DOCUMENTS OR
ANY COURSE OF CONDUCT, COURSE OF DEALING,

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STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF LENDER.  THIS PROVISION IS A
MATERIAL INDUCEMENT FOR LENDER’S ENTERING INTO THIS AGREEMENT.

9.                                      LENDER REPRESENTATIONS.

9.1.  LENDER REPRESENTATIONS.  LENDER REPRESENTS AND WARRANTS TO THE BORROWER AS
FOLLOWS:

(A)                                  LENDER IS ACQUIRING THE WARRANTS AND THE
NOTES, AND (IF AND WHEN IT EXERCISES THE WARRANTS) IT WILL ACQUIRE THE SHARES OF
COMMON STOCK UNDERLYING THE WARRANTS (THE “WARRANT SHARES” AND, TOGETHER WITH
THE WARRANTS AND THE NOTES, THE “SECURITIES”), FOR ITS OWN ACCOUNT FOR
INVESTMENT AND NOT WITH A VIEW TO, OR FOR SALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF, NOR WITH ANY PRESENT INTENTION OF DISTRIBUTING OR SELLING
THE SAME; AND THE LENDER HAS NO PRESENT OR CONTEMPLATED AGREEMENT, UNDERTAKING,
ARRANGEMENT, OBLIGATION, INDEBTEDNESS OR COMMITMENT PROVIDING FOR THE
DISPOSITION THEREOF.

(B)                                 LENDER HAS MADE SUCH INQUIRY CONCERNING THE
BORROWER AND ITS BUSINESS AND PERSONNEL AS IT HAS DEEMED APPROPRIATE AND HAS HAD
THE OPPORTUNITY TO DISCUSS, ASK QUESTIONS AND RECEIVE ANSWERS WITH RESPECT TO
THE BORROWER’S BUSINESS, MANAGEMENT AND FINANCIAL AFFAIRS WITH THE BORROWER’S
MANAGEMENT; AND LENDER HAS SUFFICIENT KNOWLEDGE AND EXPERIENCE IN FINANCE AND
BUSINESS THAT IT IS CAPABLE OF EVALUATING THE RISKS AND MERITS OF ITS FUNDING OF
THE NOTE AND PURCHASE OF THE WARRANTS.

(C)                                  LENDER ACKNOWLEDGES THAT THE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND MUST BE HELD INDEFINITELY
UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

BORROWER:

 

 

 

CLARIENT, INC.

 

 

 

By:

/s/ James Agnello

 

 

 

Name: James Agnello

 

 

Title:   Senior Vice President and Chief

 

 

Financial Officer

 

 

 

 

 

 

 

 

 

 

LENDER:

 

 

 

 

SAFEGUARD DELAWARE, INC.

 

 

 

 

By:

/s/ Steven J. Feder

 

 

 

Name: Steven J. Feder

 

 

Title: Vice President

 

Senior Subordinated Revolving Credit Agreement
Signature Page

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EXHIBIT A
FORM OF NOTE

A-1

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EXHIBIT B-1
FORM OF COMMITMENT FEE WARRANT
($.01 Exercise Price)

B-1-1

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EXHIBIT B-2
FORM OF COMMITMENT FEE WARRANT
(Discounted Market Price)

B-2-1

--------------------------------------------------------------------------------

EXHIBIT B-3
FORM OF USAGE FEE WARRANT

B-3-1

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EXHIBIT C

FORM OF BORROWING REQUEST

C-1

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