Exhibit 10.3

 

FIRST AMENDMENT AND CONSENT

 

OF

 

AMENDED AND RESTATED SENIOR SUBORDINATED REVOLVING CREDIT AGREEMENT

 

THIS FIRST AMENDMENT AND WAIVER OF AMENDED AND RESTATED SENIOR SUBORDINATED
REVOLVING CREDIT AGREEMENT (this “Amendment”) is made and entered into as of
July 31, 2008, by and among CLARIENT, INC, a Delaware corporation (“Borrower”),
and SAFEGUARD DELAWARE, INC., a Delaware corporation (the “Lender”). 
Capitalized terms used but not defined herein shall have the meanings given to
them in that certain Amended and Restated Senior Subordinated Revolving Credit
Agreement dated March 14, 2008 (the “Agreement”) between Lender and Borrower.

 

RECITALS:

 

WHEREAS, Borrower is on the date hereof  entering into a Replacement Capital
Facility through a Credit Agreement with Gemino Healthcare Finance, LLC
(“Gemino”) (in substantially the form attached hereto as Exhibit A), which will
provide Borrower capital and under which Borrower will incur additional
Indebtedness (the “Gemino Financing”); and

 

WHEREAS, Borrower has requested, and Lender has agreed, to consent to the Gemino
Financing and amend and waive certain terms of the Agreement, to accommodate the
Gemino Financing.

 

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.                                      Consent and Waiver.  Lender hereby
consents to Borrower’s entry into the Gemino Financing (including the
indebtedness incurred and the security interests granted in connection
therewith) and waives the application of Section 5.3 of the Agreement with
respect thereto.  Lender and Borrower agree that the Gemino Financing
constitutes a Replacement Capital Facility.

 

2.                                      Amendment to Definitions.

 

(a)                                 The definition of “Capital Transaction” is
hereby amended and restated to read as follows:

 

“Capital Transaction” means the issuance by Borrower of (x) debt from a single
source (or affiliated sources) or in a single syndicated facility,  (y) equity
(including debt convertible to equity) or (z) both (x) and (y) if the debt and
equity are from a single source or affiliated sources, whether in a single
transaction or series of directly related transactions, which results in net
proceeds to Borrower not less than the greater of (i) fifteen million dollars
($15,000,000) or (ii) the Outstanding Amounts on the date of the first closing
of such transaction.

 

(b)                                The definition of “Replacement Capital
Facility” is hereby amended and restated to read as follows:

 

“Replacement Capital Facility” means any credit facility (which may include an
accounts receivable and/or capital leasing debt facility) provided by a third
party, which

 

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may be secured by all or a portion of the Borrower’s assets, provided that any
credit facility which has a lien securing debt permitted pursuant to
Section 5.1(a)(iii) shall not be a Replacement Capital Facility hereunder.

 

3.                                      Amendment of Section 2.7(b)(i). 
Section 2.7(b)(i) of the Agreement is hereby amended and restated to read as
follows:

 

(I)                                     IMMEDIATELY UPON THE CLOSING OF THE
FIRST REPLACEMENT CAPITAL FACILITY, BORROWER SHALL CAUSE TO BE PAID TO LENDER A
ONE-TIME REPAYMENT OF OUTSTANDING AMOUNTS IN AN AMOUNT EQUAL TO $4,600,000.

 

4.                                      Amendment of Section 2.7(b)(ii). 
Section 2.7(b)(ii) of the Agreement is hereby amended and restated to read as
follows:

 

(II)                                  IMMEDIATELY UPON THE CLOSING OF A CAPITAL
TRANSACTION, BORROWER SHALL CAUSE TO BE PAID TO LENDER A ONE-TIME REPAYMENT OF
THE OUTSTANDING AMOUNTS TO THE EXTENT OF THE NET CASH PROCEEDS OF SUCH CAPITAL
TRANSACTION; PROVIDED THAT IF THE CAPITAL TRANSACTION HAS MULTIPLE CLOSINGS, THE
NET PROCEEDS OF EACH CLOSING SHALL FIRST (AND IMMEDIATELY UPON EACH SUCH
CLOSING) BE USED TO REPAY ANY OUTSTANDING AMOUNTS UNTIL NO OUTSTANDING AMOUNTS
REMAIN.  UPON THE REPAYMENT OF THE OUTSTANDING AMOUNTS, THE REMAINING NET CASH
PROCEEDS SHALL BE RETAINED BY BORROWER.  THE COMMITMENT SHALL BE IMMEDIATELY AND
IRREVOCABLY REDUCED, DOLLAR-FOR-DOLLAR, FOR PAYMENTS MADE PURSUANT TO THIS
SECTION 2.7(B)(II), SUBJECT TO A MINIMUM COMMITMENT IRRESPECTIVE OF SUCH
PAYMENT(S) OF SIX MILLION DOLLARS ($6,000,000).  UPON THE REDUCTION OF THE
COMMITMENT TO $6,000,000 IN ACCORDANCE WITH THE PRECEDING SENTENCE, ALL PAYMENT
OBLIGATIONS OF BORROWER UNDER THIS SECTION 2.7(B)(II) SHALL BE DEEMED SATISFIED.

 

5.                                      New
Section 2.7(b)(v).                           A new Section 2.7(b)(v) is hereby
added to the Agreement, as follows:

 

(V)                                 AT SUCH TIME AS, IN THE AGGREGATE, MORE THAN
$4,600,000 BECOMES AVAILABLE UNDER ALL THEN-OUTSTANDING REPLACEMENT CAPITAL
FACILITIES, BORROWER SHALL REPAY THE OUTSTANDING AMOUNTS IN AN AMOUNT EQUAL TO
THE LESSER OF (X) SUCH EXCESS OR (Y) THE AMOUNT EQUAL TO $2,904,168 LESS THE SUM
OF PAYMENTS PREVIOUSLY MADE PURSUANT TO THIS SECTION 2.7(B)(V) AND
SECTION 2.7(B)(II).  FOR THE AVOIDANCE OF DOUBT, (A) THE APPLICATION OF SECTIONS
2.7(B)(I) AND 2.7(B)(V) SHALL NOT CAUSE BORROWER TO REPAY OUTSTANDING AMOUNTS OF
MORE THAN (IN THE AGGREGATE) THE LESSER OF $7,504,168 OR THE OUTSTANDING AMOUNTS
AND (B) BORROWER SHALL ONLY MAKE PAYMENTS PURSUANT TO THIS SECTION 2.7(B)(V) IF
AND WHEN PERMITTED BY THE SUBORDINATION AGREEMENTS.

 

6.                                      Amendment of Section 5.1(a)(i).  Clause
(i) of Section 5.1(a) of the Agreement is hereby amended and restated to read as
follows:

 

(i) amounts outstanding from time to time under (x) the Comerica Agreement and
refinancings thereof (which refinancings shall be subject to the prior written
consent of Lender), or (y) any Replacement Capital Facility (and refinancings
thereof);

 

5.                                      Amendment of Section 5.5.  Section 5.5
of the Agreement is hereby amended and restated to read as follows:

 

5.5                                 Replacement Capital Facility; Capital
Transaction.  At the request of Lender (but subject to the Subordination
Agreements) Borrower shall promptly and diligently take all

 

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reasonably necessary actions to execute and deliver all instruments, financing
statement terminations, certificates, agreements or other documents to transfer
to Lender substantially the rights that GE Capital had to the assets of Borrower
under the GE Capital Facility (the “A/R and Asset Security Interests”) other
than with respect to those assets in which Borrower grants Gemino Healthcare
Finance, LLC (“Gemino”) a lien and security interest in connection with the
Replacement Capital Facility entered into with Gemino. In connection with the
closing of any Replacement Capital Facility after the Gemino Financing, Lender
shall promptly and diligently take all actions reasonably necessary to terminate
all instruments, financing statements, certificates, agreements or other
documents and to release the A/R and Asset Security Interests Lender has which
are required to secure such Replacement Capital Facility, and execute
appropriate subordination agreements and/or amendments thereto and take such
other actions as may be reasonably necessary so as to enable Borrower to
consummate such Replacement Capital Facility.  In addition, to the extent not
previously released, after Borrower has paid to Lender all amounts paid by or on
behalf of Borrower to terminate the GE Capital Facility under Sections
2.7(b)(i) and 2.7(b)(v), (i) Lender’s rights in the A/R and Asset Security
Interests shall automatically terminate, and (ii) Lender shall promptly and
diligently take all actions reasonably necessary to release any remaining rights
it has to the A/R and Asset Security Interests.  Borrower shall reimburse Lender
for its reasonable out-of-pocket expenses (including professional fees) relating
to the release of the A/R and Asset Security Interests.  Furthermore Lender
agrees to cooperate in good faith with Borrower so as to facilitate the
completion of a Capital Transaction and/or Replacement Capital Facilities,
including (by way of example), by approving an amendment to Borrower’s
certificate of incorporation to authorize a reasonably sufficient number of
additional shares of Borrower’s common stock, providing waivers of preemptive
rights, registration rights and/or advance notification requirements in
connection with such transactions.

 

Except for capitalized terms defined only in this Amendment and as expressly set
forth above, no amendment, consent or waiver is intended by Borrower or Lender. 
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 and the
same instrument.

 

[signature page follows]

 

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IN WITNESS WHEREOF, the Undersigned have executed this First Amendment and
Consent as of the date first written above.

 

LENDER:

 

BORROWER:

 

 

 

SAFEGUARD DELAWARE, INC.

 

CLARIENT, INC.

 

 

 

 

 

 

By:

/s/ Stephen T. Zarrilli

 

By:

/s/ Raymond Land

Name: Stephen T. Zarrilli

 

Name: Raymond Land

Title: Vice President and Treasurer

 

Title: Chief Financial Officer and Secretary

 

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