Exhibit 10.2

 

FIFTH AMENDMENT
TO AMENDED AND RESTATED LOAN AGREEMENT

 

This Fifth Amendment to Amended and Restated Loan Agreement is entered into as
of February 27, 2009 (the “Amendment”) by and between COMERICA BANK (“Bank”) and
CLARIENT, INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Amended and Restated Loan
Agreement dated as of February 28, 2008, as amended by that certain First
Amendment and Waiver to Amended and Restated Loan Agreement dated as of
March 14, 2008, that certain Second Amendment to Amended and Restated Loan
Agreement dated as of March 21, 2008, that certain Third Amendment and Consent
to Amended and Restated Loan Agreement dated as of July 31, 2008, and that
certain Fourth Amendment to Amended and Restated Loan Agreement dated as of
January 27, 2009 (as so amended, the “Agreement”).  The parties desire to amend
the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                       THE FOLLOWING DEFINED TERM IN
SECTION 1.1 OF THE AGREEMENT IS AMENDED TO READ AS FOLLOWS:

 

“Revolving Line” means a credit extension of up to Twelve Million Dollars
($12,000,000) (inclusive of any amounts outstanding under the Letter of Credit
Sublimit).

 

2.                                       EFFECTIVE MARCH 31, 2009, THE FOLLOWING
DEFINED TERM IN SECTION 1.1 OF THE AGREEMENT IS AMENDED TO READ AS FOLLOWS:

 

“REVOLVING MATURITY DATE” MEANS MARCH 30, 2010.

 

3.                                       THE FOLLOWING DEFINED TERMS ARE ADDED
TO SECTION 1.1 OF THE AGREEMENT TO READ AS FOLLOWS:

 

“Capital Lease” means, with respect to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee which would, in
accordance with GAAP, be required to be accounted for as a capital lease on the
balance sheet of such person.

 

“FIXED CHARGE COVERAGE RATIO” MEANS THE RATIO OF (A) EBITDA, TO (B) THE SUM OF
(I) INTEREST EXPENSE PAID IN CASH WITH RESPECT TO SENIOR DEBT, PLUS (II) 
INTEREST EXPENSE PAID IN CASH ON SUBORDINATED DEBT, PLUS (III) PAYMENTS MADE
UNDER CAPITAL LEASES, PLUS (IV) FEES PAID TO SAFEGUARD PURSUANT TO THE SAFEGUARD
INDEMNITY, PLUS (V) UNFINANCED CAPITAL EXPENDITURES, PLUS (VI) TAXES PAID IN
CASH, ALL AS DETERMINED FOR BORROWER AND ITS SUBSIDIARIES ON A CONSOLIDATED
BASIS IN ACCORDANCE WITH GAAP, ON A ROLLING FOUR QUARTER BASIS; PROVIDED,
HOWEVER, THAT SUCH CALCULATION AS OF THE FISCAL QUARTER ENDING MARCH 31, 2009
SHALL BE FOR THE MOST RECENT FISCAL QUARTERLY PERIOD ENDING ON SUCH DATE ON A
CUMULATIVE, ANNUALIZED BASIS; SUCH CALCULATION FOR THE FISCAL QUARTER ENDING
JUNE 30, 2009 SHALL BE FOR THE TWO (2) MOST RECENT FISCAL QUARTERLY PERIODS
ENDING ON SUCH DATE ON A CUMULATIVE, ANNUALIZED BASIS AND SUCH CALCULATION FOR
THE FISCAL QUARTER ENDING SEPTEMBER 30, 2009 SHALL BE FOR THE THREE (3) MOST
RECENT FISCAL QUARTERLY PERIODS ENDING ON SUCH DATE ON A CUMULATIVE, ANNUALIZED
BASIS.

 

“Funded Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

 

(A)                                  ALL OBLIGATIONS FOR BORROWED MONEY, WHETHER
CURRENT OR LONG-TERM (INCLUDING THE INDEBTEDNESS UNDER THE GEMINO CREDIT
AGREEMENT AND THE SUBORDINATED DEBT) AND ALL OBLIGATIONS OF SUCH PERSON
EVIDENCED BY BONDS, DEBENTURES, NOTES, LOAN AGREEMENTS OR OTHER SIMILAR
INSTRUMENTS;

 

(B)                                 ALL PURCHASE MONEY INDEBTEDNESS;

 

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(C)                                  THE PRINCIPAL PORTION OF ALL OBLIGATIONS
UNDER CONDITIONAL SALE OR OTHER TITLE RETENTION AGREEMENTS RELATING TO PROPERTY
PURCHASED BY SUCH PERSON (OTHER THAN CUSTOMARY RESERVATIONS OR RETENTIONS OF
TITLE UNDER AGREEMENTS WITH SUPPLIERS ENTERED INTO IN THE ORDINARY COURSE OF
BUSINESS);

 

(D)                                 THE MAXIMUM AMOUNT AVAILABLE TO BE DRAWN
UNDER LETTERS OF CREDIT (INCLUDING STANDBY AND COMMERCIAL), BANKERS’
ACCEPTANCES, BANK GUARANTIES, SURETY BONDS AND SIMILAR INSTRUMENTS;

 

(E)                                  ALL OBLIGATIONS IN RESPECT OF THE DEFERRED
PURCHASE PRICE OF PROPERTY OR SERVICES (OTHER THAN TRADE ACCOUNTS PAYABLE IN THE
ORDINARY COURSE OF BUSINESS);

 

(F)                                    ALL INDEBTEDNESS IN RESPECT OF CAPITAL
LEASES;

 

(G)                                 ALL PREFERRED STOCK OR OTHER EQUITY
INTERESTS PROVIDING FOR MANDATORY REDEMPTIONS, SINKING FUND OR LIKE PAYMENTS
PRIOR TO THE MATURITY DATE (AS DEFINED UNDER THE GEMINO CREDIT AGREEMENT);

 

(H)                                 ALL FUNDED INDEBTEDNESS OF OTHERS SECURED BY
(OR FOR WHICH THE HOLDER OF SUCH FUNDED INDEBTEDNESS HAS AN EXISTING RIGHT,
CONTINGENT OR OTHERWISE, TO BE SECURED BY) ANY LIEN ON, OR PAYABLE OUT OF THE
PROCEEDS OF PRODUCTION FROM, PROPERTY OWNED OR ACQUIRED BY SUCH PERSON, WHETHER
OR NOT THE OBLIGATIONS SECURED THEREBY HAVE BEEN ASSUMED; AND

 

(I)                                     ALL GUARANTEES WITH RESPECT TO FUNDED
INDEBTEDNESS OF THE TYPES SPECIFIED IN CLAUSES (A) THROUGH (H) ABOVE OF ANOTHER
PERSON.

 

“Gemino Defined Indebtedness” means, as to any Person at a particular time,
without duplication, all of the following, whether or not included as
indebtedness or liabilities in accordance with GAAP:

 

(A)                                  ALL FUNDED INDEBTEDNESS; AND

 

(B)                                 ALL GUARANTEES WITH RESPECT TO OUTSTANDING
INDEBTEDNESS OF THE TYPES SPECIFIED IN CLAUSE (A) ABOVE OF ANY OTHER PERSON.

 

“LETTER OF CREDIT SUBLIMIT” MEANS A SUBLIMIT FOR LETTERS OF CREDIT UNDER THE
REVOLVING LINE NOT TO EXCEED $3,000,000.

 

“LIBOR ADDENDUM” MEANS THAT CERTAIN DAILY ADJUSTING LIBOR ADDENDUM TO LOAN
AGREEMENT ENTERED INTO BETWEEN BORROWER AND BANK DATED AS OF EVEN DATE HEREWITH.

 

“Property” means an interest of Borrower or its Subsidiaries, or any of them, in
any kind of property or asset, whether real, personal or mixed, or tangible or
intangible.

 

“Safeguard” means Safeguard Delaware, Inc.

 

“Safeguard Delaware” means Safeguard Scientifics (Delaware), Inc.

 

“Safeguard Indemnity” means that certain Amended and Restated Reimbursement and
Indemnity Agreement dated January 17, 2007, executed by Clarient in favor of
Safeguard and Safeguard Delaware, as amended by that certain First Amendment to
Amended and Restated Reimbursement and Indemnity Agreement dated March 6, 2007,
among Clarient, Safeguard and Safeguard Delaware, that certain Second Amendment
to Amended and Restated Reimbursement and Indemnity Agreement dated March 14,
2008, among Clarient, Safeguard and Safeguard Delaware, and that certain Third
Amendment to Amended and Restated Reimbursement and Indemnity Agreement dated as
of even date herewith, among Clarient, Safeguard and Safeguard Delaware.

 

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“Safeguard Subordinated Debt” means certain obligations of Borrower to Safeguard
and Safeguard Delaware subject to the Safeguard Subordination Agreement.

 

“Safeguard Subordination Agreement” means that certain Amended and Restated
Subordination Agreement between Gemino, Safeguard, and Safeguard Delaware, as
amended, restated, supplemented or otherwise modified from time to time.

 

“Senior Debt” shall mean all Gemino Defined Indebtedness of the Borrower
including without limitation the Indebtedness under the Gemino Credit Agreement,
but not including the Subordinated Debt.

 

“Subordinated Debt” means debt or other obligations of Borrower that is
subordinated to the Obligations of Borrower to Gemino Healthcare Finance, LLC,
including, without limitation, the Obligations owing to Bank and the Safeguard
Subordinated Debt.

 

4.                                       SECTION 2.1(A) OF THE AGREEMENT IS
AMENDED TO READ AS FOLLOWS:

 

(A)                                  ADVANCES UNDER REVOLVING LINE.

 

(I)                                    AMOUNT.  SUBJECT TO AND UPON THE TERMS
AND CONDITIONS OF THIS AGREEMENT, BORROWER MAY REQUEST AND BANK AGREES TO MAKE
ADVANCES IN AN AGGREGATE OUTSTANDING AMOUNT NOT TO EXCEED THE REVOLVING LINE
LESS ANY AMOUNTS OUTSTANDING UNDER THE LETTER OF CREDIT SUBLIMIT.  SUBJECT TO
THE TERMS AND CONDITIONS OF THIS AGREEMENT, AMOUNTS BORROWED PURSUANT TO THIS
SECTION 2.1(A) MAY BE REPAID AND REBORROWED AT ANY TIME PRIOR TO THE REVOLVING
MATURITY DATE, AT WHICH TIME ALL ADVANCES UNDER THIS SECTION 2.1(A) SHALL BE
IMMEDIATELY DUE AND PAYABLE.  BORROWER MAY PREPAY ANY ADVANCES WITHOUT PENALTY
OR PREMIUM.

 

(II)                                WHENEVER BORROWER DESIRES AN ADVANCE,
BORROWER WILL NOTIFY BANK BY FACSIMILE TRANSMISSION OR TELEPHONE NO LATER THAN
3:00 P.M. PACIFIC TIME, ON THE BUSINESS DAY THAT THE ADVANCE IS TO BE MADE. 
EACH SUCH NOTIFICATION SHALL BE PROMPTLY CONFIRMED BY A PAYMENT/ADVANCE FORM IN
SUBSTANTIALLY THE FORM OF EXHIBIT B HERETO.  BANK IS AUTHORIZED TO MAKE ADVANCES
UNDER THIS AGREEMENT, BASED UPON INSTRUCTIONS RECEIVED FROM A RESPONSIBLE
OFFICER OR A DESIGNEE OF A RESPONSIBLE OFFICER, OR WITHOUT INSTRUCTIONS IF IN
BANK’S DISCRETION SUCH ADVANCES ARE NECESSARY TO MEET OBLIGATIONS WHICH HAVE
BECOME DUE AND REMAIN UNPAID.  BANK SHALL BE ENTITLED TO RELY ON ANY TELEPHONIC
NOTICE GIVEN BY A PERSON WHO BANK REASONABLY BELIEVES TO BE A RESPONSIBLE
OFFICER OR A DESIGNEE THEREOF, AND BORROWER SHALL INDEMNIFY AND HOLD BANK
HARMLESS FOR ANY DAMAGES OR LOSS SUFFERED BY BANK AS A RESULT OF SUCH RELIANCE. 
BANK WILL CREDIT THE AMOUNT OF ADVANCES MADE UNDER THIS SECTION 2.1(A) TO
BORROWER’S DEPOSIT ACCOUNT.

 

(III)                            LETTER OF CREDIT SUBLIMIT. SUBJECT TO THE
AVAILABILITY UNDER THE REVOLVING LINE, AND IN RELIANCE ON THE REPRESENTATIONS
AND WARRANTIES OF BORROWER SET FORTH HEREIN, AT ANY TIME AND FROM TIME TO TIME
FROM THE DATE HEREOF THROUGH THE BUSINESS DAY IMMEDIATELY PRIOR TO THE REVOLVING
MATURITY DATE, BANK SHALL ISSUE FOR THE ACCOUNT OF BORROWER SUCH LETTERS OF
CREDIT AS BORROWER MAY REQUEST BY DELIVERING TO BANK A DULY EXECUTED LETTER OF
CREDIT APPLICATION ON BANK’S STANDARD FORM; PROVIDED, HOWEVER, THAT THE
OUTSTANDING AND UNDRAWN AMOUNTS UNDER ALL SUCH LETTERS OF CREDIT (I) SHALL NOT
AT ANY TIME EXCEED THE LETTER OF CREDIT SUBLIMIT, AND (II) SHALL BE DEEMED TO
CONSTITUTE ADVANCES FOR THE PURPOSE OF CALCULATING AVAILABILITY UNDER THE
REVOLVING LINE.  ANY DRAWN BUT UNREIMBURSED AMOUNTS UNDER ANY LETTERS OF CREDIT
SHALL BE CHARGED AS ADVANCES AGAINST THE REVOLVING LINE.  ALL LETTERS OF CREDIT
SHALL BE IN FORM AND SUBSTANCE ACCEPTABLE TO BANK IN ITS SOLE DISCRETION AND
SHALL BE SUBJECT TO THE TERMS AND CONDITIONS OF BANK’S FORM APPLICATION AND
LETTER OF CREDIT AGREEMENT.  BORROWER WILL PAY ANY STANDARD ISSUANCE AND OTHER
FEES THAT BANK NOTIFIES BORROWER IT WILL CHARGE FOR ISSUING AND PROCESSING
LETTERS OF CREDIT.

 

5.                                       SECTION 2.3(A) OF THE AGREEMENT IS
AMENDED TO READ AS FOLLOWS:

 

(a)                                  Interest Rates.  Except as set forth in
Section 2.3(b), the Advances shall be a Base Rate Option Advance or a LIBOR
Option Advance as elected by Borrower in accordance with the terms set

 

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forth in the LIBOR Addendum, and shall bear interest on the outstanding Daily
Balance thereof at the applicable rate as set forth in the LIBOR Addendum.

 

6.                                       SECTION 6.6 OF THE AGREEMENT IS HEREBY
AMENDED IN ITS ENTIRETY TO READ AS FOLLOWS:

 

6.6                               Accounts.  Borrower shall maintain and shall
cause each of its Subsidiaries to maintain its primary depository, operating,
and investment accounts with Bank and/or Comerica Securities, Inc.; provided,
however, Borrower and its Subsidiaries shall be permitted to maintain accounts
at Citizen’s Bank.

 

7.                                       SECTION 6.8 OF THE AGREEMENT IS HEREBY
AMENDED IN ITS ENTIRETY TO READ AS FOLLOWS:

 

6.8                               Fixed Charge Coverage.  A Fixed Charge
Coverage Ratio of at least the following ratios for the respective periods
below:

 

PERIOD ENDING

 

REQUIRED RATIO

3/31/09 (three months annualized)

 

1.00:1.00

6/30/09 (six months annualized)

 

1.00:1.00

9/30/09 (nine months annualized)

 

1.10:1.00

12/31/09 (rolling four quarters)

 

1.20:1.00

 

8.                                       EXHIBIT C ATTACHED TO THE AGREEMENT IS
REPLACED WITH EXHIBIT C ATTACHED HERETO.

 

9.                                       UNLESS OTHERWISE DEFINED, ALL INITIALLY
CAPITALIZED TERMS IN THIS AMENDMENT SHALL HAVE THE RESPECTIVE MEANINGS SET FORTH
IN THE AGREEMENT.  THE AGREEMENT, AS AMENDED HEREBY, SHALL BE AND REMAIN IN FULL
FORCE AND EFFECT IN ACCORDANCE WITH ITS TERMS AND HEREBY IS RATIFIED AND
CONFIRMED IN ALL RESPECTS.  EXCEPT AS EXPRESSLY SET FORTH HEREIN, THE EXECUTION,
DELIVERY, AND PERFORMANCE OF THIS AMENDMENT SHALL NOT OPERATE AS A WAIVER OF, OR
AS AN AMENDMENT OF, ANY RIGHT, POWER, OR REMEDY OF BANK UNDER THE AGREEMENT, AS
IN EFFECT PRIOR TO THE DATE HEREOF.  BORROWER RATIFIES AND REAFFIRMS THE
CONTINUING EFFECTIVENESS OF ALL PROMISSORY NOTES, GUARANTIES, SECURITY
AGREEMENTS, MORTGAGES, DEEDS OF TRUST, ENVIRONMENTAL AGREEMENTS, AND ALL OTHER
INSTRUMENTS, DOCUMENTS AND AGREEMENTS ENTERED INTO IN CONNECTION WITH THE
AGREEMENT.

 

10.                                 THIS AMENDMENT MAY BE EXECUTED IN TWO OR
MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE INSTRUMENT (AND DELIVERED VIA FACSIMILE OR
ELECTRONIC TRANSMISSION).

 

11.                                 AS A CONDITION TO THE EFFECTIVENESS OF THIS
AMENDMENT, BANK SHALL HAVE RECEIVED, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO BANK, THE FOLLOWING:

 

(A)                                  THIS AMENDMENT, DULY EXECUTED BY BORROWER;

 

(B)                                 AN OFFICER’S CERTIFICATE OF BORROWER WITH
RESPECT TO INCUMBENCY AND RESOLUTIONS AUTHORIZING THE EXECUTION AND DELIVERY OF
THIS AMENDMENT;

 

(C)                                  THE LIBOR ADDENDUM, DULY EXECUTED BY
BORROWER;

 

(D)                                 AN AFFIRMATION AND AMENDMENT OF
SUBORDINATION AGREEMENT (SAFEGUARD DELAWARE, INC.);

 

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(E)                                  AN AFFIRMATION OF GUARANTY (SAFEGUARD
DELAWARE, INC. AND SAFEGUARD SCIENTIFICS (DELAWARE), INC.);

 

(F)                                    A COPY OF AN EXECUTED AMENDMENT OF THE
EXISTING SUBORDINATED CREDIT FACILITY WITH SAFEGUARD DELAWARE, INC. RENEWING THE
TERMS THEREIN UNTIL AT LEAST APRIL 1, 2010;

 

(G)                                 AN AMENDMENT FEE OF $10,000, AND AN AMOUNT
EQUAL TO ALL BANK EXPENSES INCURRED THROUGH THE DATE OF THIS AMENDMENT; AND

 

(H)                                 SUCH OTHER DOCUMENTS, AND COMPLETION OF SUCH
OTHER MATTERS, AS BANK MAY REASONABLY DEEM NECESSARY OR APPROPRIATE.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, THE UNDERSIGNED HAVE EXECUTED THIS AMENDMENT AS OF THE FIRST
DATE ABOVE WRITTEN.

 

 

CLARIENT, INC.

 

 

 

 

 

By:

/s/ Raymond J. Land

 

 

 

Title:

Raymond J. Land, Sr. VP and CFO

 

 

 

 

 

COMERICA BANK

 

 

 

 

 

By:

/s/ Todd A. McDonald

 

 

 

Title:

Senior Vice President

 

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EXHIBIT C
COMPLIANCE CERTIFICATE

 

TO:                                                                           
COMERICA BANK

 

FROM:                                                         CLARIENT, INC.

 

The undersigned authorized officer (the “Officer”) of CLARIENT, INC. hereby
certifies that in accordance with the terms and conditions of the Amended and
Restated Loan Agreement between Borrower and Bank (as amended to date, the
“Agreement”), (i) Borrower is in complete compliance for the period ending
                               with all required covenants except as noted below
and (ii) all representations and warranties of Borrower stated in the Agreement
are true and correct in all material respects as of the date hereof.  Attached
herewith are the required documents supporting the above certification.  The
Officer further certifies that these are prepared in accordance with Generally
Accepted Accounting Principles (GAAP) and are consistently applied from one
period to the next except as explained in an accompanying letter or footnotes.

 

Please indicate compliance status by circling Yes/No under “Complies” column.

 

Reporting Covenant

 

Required

 

Complies

 

 

 

 

 

 

 

 

 

Monthly financial statements

 

Monthly within 30 days

 

Yes  o

 

No  o

 

Annual (CPA Audited)

 

FYE within 90 days

 

Yes  o

 

No  o

 

10K and 10Q

 

(FYE within 90 days and FQE within 45 days or as extended by SEC provisions)

 

Yes  o

 

No  o

 

 

Financial Covenant

 

Required

 

Actual

 

Complies

 

 

 

 

 

 

 

 

 

 

 

Fixed Charge Coverage

 

See Agreement

 

  .    :1.00

 

Yes  o

 

No  o

 

 

 

Comments Regarding Exceptions: See Attached.

BANK USE ONLY

 

 

 

Received by:

 

Sincerely,

AUTHORIZED SIGNER

 

 

 

Date:

 

 

 

 

 

Verified:

 

SIGNATURE

AUTHORIZED SIGNER

 

 

 

 

 

 

Date:

 

TITLE

 

 

Compliance Status

Yes  o

No  o

 

 

 

DATE

 

 

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Daily Adjusting LIBOR Addendum To Loan Agreement

 

This Daily Adjusting LIBOR Addendum to Loan Agreement (this “Addendum”) is
entered into as of February 27, 2009 by and between Comerica Bank (“Bank”) and
CLARIENT, INC. (“Borrower”).  This Addendum replaces in its entirety the terms
of that certain LIBOR Addendum to Amended and Restated Loan Agreement dated as
of February 28, 2008 and supplements the terms of the Amended and Restated Loan
Agreement dated February 28, 2008, as amended from time to time, including
without limitation, by that certain First Amendment and Waiver to Amended and
Restated Loan Agreement dated as of March 14, 2008, that certain Second
Amendment to Amended and Restated Loan Agreement dated as of March 21, 2008,
that certain Third Amendment and Consent to Amended and Restated Loan Agreement
dated as of July 31, 2008, that certain Fourth Amendment to Amended and Restated
Loan Agreement dated as of January 27, 2009, and that certain Fifth Amendment to
Amended and Restated Loan Agreement dated as of the date hereof (collectively,
the “Agreement”).

 

1.                                       DEFINITIONS.  AS USED IN THIS ADDENDUM,
THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS.  INITIALLY CAPITALIZED
TERMS USED AND NOT DEFINED IN THIS ADDENDUM SHALL HAVE THE MEANINGS ASCRIBED
THERETO IN THE AGREEMENT.

 

(a)                                  “Applicable Margin” means 2.40 percent
(2.40%) per annum for the Advances.

 

(b)                                 “Business Day” means any day, other than a
Saturday, Sunday or any other day designated as a holiday under Federal or
applicable State statute or regulation, on which Bank is open for all or
substantially all of its domestic and international business (including dealings
in foreign exchange) in Detroit, Michigan and San Jose, California, and, in
respect of notices and determinations relating the Daily Adjusting LIBOR Rate,
also a day on which dealings in dollar deposits are also carried on in the
London interbank market and on which banks are open for business in London,
England.

 

(c)                                  “Daily Adjusting LIBOR Rate” means, for any
day, a per annum interest rate which is equal to the Applicable Margin, plus the
quotient of the following:

 

(1)                                  for any day, the per annum rate of interest
determined on the basis of the rate for deposits in United States Dollars for a
period equal to one (1) month appearing on Page BBAM of the Bloomberg Financial
Markets Information Service as of 8:00 a.m. (California time) (or as soon
thereafter as practical) on such day, or if such day is not a Business Day, on
the immediately preceding Business Day.  In the event that such rate does not
appear on Page BBAM of the Bloomberg Financial Markets Information Service (or
otherwise on such Service) on any day, the “Daily Adjusting LIBOR Rate” for such
day shall be determined by reference to such other publicly available service
for displaying eurodollar rates as may be reasonably selected by Bank, or in the
absence of such other service, the “Daily Adjusting LIBOR Rate” for such day
shall, instead, be determined based upon the average of the rates at which Bank
is offered dollar deposits at or about 8:00 a.m. (California time) (or as soon
thereafter as practical), on such day, or if such day is not a Business Day, on
the immediately preceding Business Day, in the interbank eurodollar market in an
amount comparable to the principal amount of the Obligations and for a period
equal to one (1) month;

 

divided by

 

(2)                                  a percentage (expressed as a decimal) equal
to 1.00 minus the maximum rate on such day at which Bank is required to maintain
reserves on “Euro-currency Liabilities” as defined in and pursuant to Regulation
D of the Board of Governors of the Federal Reserve System or, if such regulation
or definition is modified, and as long as Bank is required to maintain reserves
against a category of liabilities which includes eurodollar deposits or includes
a category of assets which includes eurodollar loans, the rate at which such
reserves are required to be maintained on such category.

 

(d)                                 “LIBOR Business Day” means a Business day on
which dealings in Dollar deposits may be carried out in the interbank LIBOR
market.

 

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(e)                                  “LIBOR Lending Office” means Bank’s office
located in the Cayman Islands, British West Indies, or such other branch of
Bank, domestic or foreign, as it may hereafter designate as its LIBOR Lending
Office by notice to Borrower.

 

(f)                                    “Prime Rate” means the per annum interest
rate established by Bank as its prime rate for its borrowers, as such rate may
vary from time to time, which rate is not necessarily the lowest rate on loans
made by Bank at any such time.

 

(g)                                 “Prime-based Rate” means a per annum
interest rate which is equal to the sum of one half of one percent (0.50%) plus
the greater of (i) the Prime Rate; or (ii) 1.75%.

 

2.                                       INTEREST RATE OPTIONS.  BORROWER SHALL
HAVE THE FOLLOWING OPTIONS REGARDING THE INTEREST RATE TO BE PAID BY BORROWER ON
ADVANCES UNDER THE AGREEMENT:

 

12.                                 A.                                       A
RATE EQUAL TO THE DAILY ADJUSTING LIBOR RATE (THE “LIBOR OPTION”); OR

 

13.                                 B.                                      A
RATE EQUAL TO THE PRIME-BASED RATE (THE “BASE RATE OPTION”).

 

3.                                       LIBOR OPTION ADVANCE.  THE MINIMUM
LIBOR OPTION ADVANCE FOR ANY ADVANCE WILL NOT BE LESS THAN FIVE HUNDRED THOUSAND
DOLLARS ($500,000) FOR ANY LIBOR OPTION ADVANCE.

 

4.                                       PAYMENT OF INTEREST.  ACCRUED AND
UNPAID INTEREST ON THE UNPAID BALANCE OF THE OBLIGATIONS OUTSTANDING UNDER THE
AGREEMENT SHALL BE PAYABLE MONTHLY, IN ARREARS, ON THE THIRTEENTH (13TH) DAY OF
EACH MONTH, UNTIL MATURITY (WHETHER AS STATED HEREIN, BY ACCELERATION, OR
OTHERWISE).  IN THE EVENT THAT ANY PAYMENT UNDER THIS ADDENDUM BECOMES DUE AND
PAYABLE ON ANY DAY WHICH IS NOT A BUSINESS DAY, THE DUE DATE THEREOF SHALL BE
EXTENDED TO THE NEXT SUCCEEDING BUSINESS DAY, AND, TO THE EXTENT APPLICABLE,
INTEREST SHALL CONTINUE TO ACCRUE AND BE PAYABLE THEREON DURING SUCH EXTENSION
AT THE RATES SET FORTH IN THIS ADDENDUM.  INTEREST ACCRUING HEREUNDER SHALL BE
COMPUTED ON THE BASIS OF A YEAR OF 360 DAYS, AND SHALL BE ASSESSED FOR THE
ACTUAL NUMBER OF DAYS ELAPSED, AND IN SUCH COMPUTATION, EFFECT SHALL BE GIVEN TO
ANY CHANGE IN THE APPLICABLE INTEREST RATE AS A RESULT OF ANY CHANGE IN THE
DAILY ADJUSTING LIBOR RATE OR, TO THE EXTENT APPLICABLE, THE PRIME-BASED RATE ON
THE DATE OF EACH SUCH CHANGE.

 

5.                                       BANK’S RECORDS.  THE AMOUNT AND DATE OF
EACH ADVANCE UNDER THE AGREEMENT, ITS APPLICABLE INTEREST RATE, AND THE AMOUNT
AND DATE OF ANY REPAYMENT SHALL BE NOTED ON BANK’S RECORDS, WHICH RECORDS SHALL
BE CONCLUSIVE EVIDENCE THEREOF, ABSENT MANIFEST ERROR; PROVIDED, HOWEVER, ANY
FAILURE BY BANK TO MAKE ANY SUCH NOTATION, OR ANY ERROR IN ANY SUCH NOTATION,
SHALL NOT RELIEVE BORROWER OF ITS OBLIGATIONS TO REPAY BANK ALL AMOUNTS PAYABLE
BY BORROWER TO BANK UNDER OR PURSUANT TO THIS ADDENDUM AND THE AGREEMENT, WHEN
DUE IN ACCORDANCE WITH THE TERMS HEREOF.   FOR ANY ADVANCE UNDER THE AGREEMENT
BEARING INTEREST AT THE DAILY ADJUSTING LIBOR RATE, IF BANK SHALL DESIGNATE A
LIBOR LENDING OFFICE WHICH MAINTAINS BOOKS SEPARATE FROM THOSE OF THE REST OF
BANK, BANK SHALL HAVE THE OPTION OF MAINTAINING AND CARRYING SUCH ADVANCE ON THE
BOOKS OF SUCH LIBOR LENDING OFFICE.

 

6.                                       SELECTION/CONVERSION OF INTEREST RATE
OPTIONS.  AT THE TIME ANY ADVANCE IS REQUESTED UNDER THE AGREEMENT AND/OR
BORROWER WISHES TO SELECT THE LIBOR OPTION FOR ALL OR A PORTION OF THE
OUTSTANDING PRINCIPAL BALANCE OF THE AGREEMENT, BORROWER SHALL GIVE BANK NOTICE
SPECIFYING  (A) THE INTEREST RATE OPTION SELECTED BY BORROWER;  AND (B) THE
PRINCIPAL AMOUNT SUBJECT THERETO.  ANY SUCH NOTICE MAY BE GIVEN BY TELEPHONE SO
LONG AS, WITH RESPECT TO EACH LIBOR OPTION SELECTED BY BORROWER, BANK RECEIVES
WRITTEN CONFIRMATION FROM BORROWER NOT LATER THAN TWO (2) LIBOR BUSINESS DAYS
AFTER SUCH TELEPHONE NOTICE IS GIVEN.  AT ANY TIME THE BASE RATE OPTION IS IN
EFFECT, BORROWER MAY CONVERT TO THE LIBOR OPTION.

 

7.                                       DEFAULT INTEREST RATE.  FROM AND AFTER
THE OCCURRENCE OF ANY EVENT OF DEFAULT, AND SO LONG AS ANY SUCH EVENT OF DEFAULT
REMAINS UNREMEDIED OR UNCURED THEREAFTER, THE OBLIGATIONS OUTSTANDING UNDER THE
AGREEMENT SHALL BEAR INTEREST AT A PER ANNUM RATE OF FIVE PERCENT (5%) ABOVE THE
OTHERWISE APPLICABLE INTEREST RATE HEREUNDER, WHICH INTEREST SHALL BE PAYABLE
UPON DEMAND.  IN ADDITION TO THE FOREGOING, A LATE PAYMENT CHARGE EQUAL TO FIVE
PERCENT (5%) OF EACH LATE PAYMENT HEREUNDER MAY BE CHARGED ON ANY PAYMENT NOT
RECEIVED BY BANK WITHIN TEN (10) CALENDAR DAYS AFTER THE PAYMENT DUE DATE
THEREFOR, BUT ACCEPTANCE OF PAYMENT OF ANY SUCH CHARGE SHALL NOT CONSTITUTE A
WAIVER

 

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OF ANY EVENT OF DEFAULT UNDER THE AGREEMENT.  IN NO EVENT SHALL THE INTEREST
PAYABLE UNDER THIS ADDENDUM AND THE AGREEMENT AT ANY TIME EXCEED THE MAXIMUM
RATE PERMITTED BY LAW.

 

8.                                       PREPAYMENT.   BORROWER MAY PREPAY ALL
OR PART OF THE OUTSTANDING BALANCE OF ANY OBLIGATIONS AT ANY TIME WITHOUT
PREMIUM OR PENALTY.  ANY PREPAYMENT HEREUNDER SHALL ALSO BE ACCOMPANIED BY THE
PAYMENT OF ALL ACCRUED AND UNPAID INTEREST ON THE AMOUNT SO PREPAID.  BORROWER
HEREBY ACKNOWLEDGES AND AGREES THAT THE FOREGOING SHALL NOT, IN ANY WAY
WHATSOEVER, LIMIT, RESTRICT, OR OTHERWISE AFFECT BANK’S RIGHT TO MAKE DEMAND FOR
PAYMENT OF ALL OR ANY PART OF THE OBLIGATIONS UNDER THE AGREEMENT DUE ON A
DEMAND BASIS IN BANK’S SOLE AND ABSOLUTE DISCRETION.

 

9.                                       REGULATORY DEVELOPMENTS OR OTHER
CIRCUMSTANCES RELATING TO THE DAILY ADJUSTING LIBOR RATE.

 

(a)                                  If, at any time, Bank determines that,
(1) Bank is unable to determine or ascertain the Daily Adjusting LIBOR Rate, or
(2) by reason of circumstances affecting the foreign exchange and interbank
markets generally, deposits in eurodollars in the applicable amounts or for the
relative maturities are not being offered to Bank, or (3) the Daily Adjusting
LIBOR Rate will not accurately or fairly cover or reflect the cost to Bank of
maintaining any of the Obligations under this Addendum at the Daily Adjusting
LIBOR Rate, then Bank shall forthwith give notice thereof to Borrower. 
Thereafter, until Bank notifies Borrower that such conditions or circumstances
no longer exist, the Prime-based Rate shall be the applicable interest rate for
all Obligations during such period of time.

 

(b)                                 If, after the date hereof, the introduction
of, or any change in, any applicable law, rule or regulation or in the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by Bank (or its
LIBOR Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, shall make it unlawful or impossible for
the Bank (or its LIBOR Lending Office) to make or maintain any Obligations under
the Agreement with interest at the Daily Adjusting LIBOR Rate, Bank shall
forthwith give notice thereof to Borrower.  Thereafter, until Bank notifies
Borrower that such conditions or circumstances no longer exist, the Prime-based
Rate shall be the applicable interest rate for all Obligations during such
period of time.

 

(c)                                  Further, at any time upon prior written
notice to the undersigned, Bank may, in its sole discretion based upon its good
faith belief that the Prime-based Rate is an appropriate basis for its floating
rate loans, suspend use of the Daily Adjusting LIBOR Rate as the applicable
interest rate hereunder, at which time, the Prime-based Rate shall thereafter be
the applicable interest rate for all Obligations outstanding under the
Agreement, unless Bank, in its sole discretion based upon its good faith belief
that the Prime-based Rate is no longer an appropriate basis for its floating
rate loans, rescinds such notice, in which case, the Daily Adjusting LIBOR Rate
shall, upon written notice from Bank to the undersigned, again be the applicable
interest rate for all Obligations outstanding under the Agreement.

 

(d)                                 If the adoption after the date hereof, or
any change after the date hereof in, any applicable law, rule or regulation
(whether domestic or foreign) of any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by Bank (or its LIBOR Lending Office) with any request or directive
(whether or not having the force of law) made by any such authority, central
bank or comparable agency after the date hereof: (a) shall subject Bank (or its
LIBOR Lending Office) to any tax, duty or other charge with respect to this
Addendum or any Obligations under the Agreement, or shall change the basis of
taxation of payments to Bank (or its LIBOR Lending Office) of the principal of
or interest under this Addendum or any other amounts due under this Addendum in
respect thereof (except for changes in the rate of tax on the overall net income
of Bank or its LIBOR Lending Office imposed by the jurisdiction in which Bank’s
principal executive office or LIBOR Lending Office is located); or (b) shall
impose, modify or deem applicable any reserve (including, without limitation,
any imposed by the Board of Governors of the Federal Reserve System), special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by Bank (or its LIBOR Lending Office), or shall
impose on Bank (or its LIBOR Lending Office) or the foreign exchange and
interbank markets any other condition affecting this Addendum or the
Obligations; and the result of any of the foregoing is to increase the cost to
Bank of maintaining any part of the Obligations or to reduce the amount of any
sum received or receivable by Bank under this Addendum by an amount deemed by
the Bank to be material, then Borrower shall pay to Bank, within fifteen (15)
days of Borrower’s receipt of written notice from Bank demanding such
compensation,

 

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such additional amount or amounts as will compensate Bank for such increased
cost or reduction.  A certificate of Bank, prepared in good faith and in
reasonable detail by Bank and submitted by Bank to Borrower, setting forth the
basis for determining such additional amount or amounts necessary to compensate
Bank shall be conclusive and binding for all purposes, absent manifest error.

 

(e)                                  In the event that any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to Bank, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by Bank with any
guideline, request or directive of any such authority (whether or not having the
force of law), including any risk-based capital guidelines, affects or would
affect the amount of capital required or expected to be maintained by Bank (or
any corporation controlling Bank), and Bank determines that the amount of such
capital is increased by or based upon the existence of any obligations of Bank
hereunder or the maintaining of any Obligations, and such increase has the
effect of reducing the rate of return on Bank’s (or such controlling
corporation’s) capital as a consequence of such obligations or the maintaining
of such Obligations to a level below that which Bank (or such controlling
corporation) could have achieved but for such circumstances (taking into
consideration its policies with respect to capital adequacy), then Borrower
shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written
notice from Bank demanding such compensation, additional amounts as are
sufficient to compensate Bank (or such controlling corporation) for any increase
in the amount of capital and reduced rate of return which Bank reasonably
determines to be allocable to the existence of any obligations of the Bank
hereunder or to maintaining any Obligations.  A certificate of Bank as to the
amount of such compensation, prepared in good faith and in reasonable detail by
the Bank and submitted by Bank to Borrower, shall be conclusive and binding for
all purposes absent manifest error.

 

10.                                 LEGAL EFFECT.  EXCEPT AS SPECIFICALLY
MODIFIED HEREBY, ALL OF THE TERMS AND CONDITIONS OF THE AGREEMENT REMAIN IN FULL
FORCE AND EFFECT.

 

11.                                 CONFLICTS.  AS TO THE MATTERS SPECIFICALLY
THE SUBJECT OF THIS ADDENDUM, IN THE EVENT OF ANY CONFLICT BETWEEN THIS ADDENDUM
AND THE AGREEMENT, THE TERMS OF THIS ADDENDUM SHALL CONTROL.

 

IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date
first set forth above.

 

COMERICA BANK

CLARIENT, INC.

 

 

By:

/s/ Todd A. McDonald

 

By:

Raymond J. Land

 

 

Title:

Senior Vice President

 

Its:

Senior Vice President and Chief Financial Officer

 

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