Exhibit 10.1


 


SECOND AMENDMENT TO CREDIT
AGREEMENT


 


This Second Amendment to Credit Agreement
(“Amendment”) is made as of this 27th day of February, 2009, by and among
Gemino Healthcare Finance, LLC (“Lender”) and Clarient, Inc., Clarient
Diagnostic Services, Inc. and ChromaVision International, Inc. (collectively,
the “Borrowers”).


 


BACKGROUND


 


A.                                   Borrowers
and Lender are parties to a certain Credit Agreement dated July 31, 2008
(as modified and amended from time to time, the “Credit Agreement”), pursuant to
which Borrowers established certain financing arrangements with Lender. The
Credit Agreement and all instruments, documents and agreements executed in
connection therewith, or related thereto are referred to herein collectively as
the “Existing Credit Documents.” All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Credit Agreement.


 


B.                                     Borrowers
have requested and Lender has agreed to amend the terms and conditions of the
Existing Credit Documents, pursuant to the terms and conditions of this
Amendment.


 


C.                                     Borrowers
and Lender desire to set forth their agreement in writing.


 


NOW THEREFORE, with the foregoing Background deemed
incorporated by reference and for good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto, intending to
be legally bound, covenant and agree as follows:


 


1.                                       Amendment.
Upon the effectiveness of this Amendment, the Credit Agreement is hereby
amended in the following manner:


 


(a)                                  The
definitions of “Applicable Margin,” “Default Rate,” “Safeguard Indemnity,”
“Safeguard Loan Documents,” “Safeguard Subordination Agreement” and “Senior
Debt” set forth in Annex I to the Credit Agreement are hereby by amended and
restated as follows:


 


“Applicable Margin” means the
spread over the LIBOR Rate equal to 6.00%.


 


“Default Rate” means five percent
(5.0%) above the Interest Rate otherwise applicable on the Revolving Loans.


 


“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 February 27, 2009
among Clarient, Safeguard and Safeguard Delaware.


 

















 


“Safeguard Loan Documents” mean, collectively
and individually as context requires, that certain Second Amended and Restated
Senior Subordinated Revolving Credit Agreement dated February 27, 2009
between Clarient and Safeguard, that certain Second Amended and Restated
Revolving Credit Note executed by Clarient in favor of Safeguard dated February 27,
2009, those certain Warrants (as defined in the Safeguard Subordination
Agreement), that certain Amended and Restated Registration Rights Agreement
dated February 27, 2009 among Clarient, Safeguard, Safeguard Scientifics, Inc.
and Safeguard Delaware and the Safeguard Indemnity, each as amended, restated, supplemented
or otherwise modified from time to time to the extent that such amendments,
restatements, supplements or modification are permitted pursuant to the
Safeguard Subordination Agreement.


 


“Safeguard Subordination Agreement” means that
certain Amended and Restated Subordination Agreement dated as of February 27,
2009 executed by Safeguard and Safeguard Delaware in favor of Lender, as
amended, restated, supplemented or otherwise modified from time to time.


 


“Senior Debt” means all Indebtedness of Borrowers
including without limitation the Obligations hereunder, but not including the
Subordinated Debt.


 


(b)                                 Section 2.01(d) of
the Credit Agreement is hereby amended and restated as follows:


 


(d)                                 The
initial term of the Credit Facility (“Initial Term”) shall expire on January 31,
2010; provided that, so long as (A) no Unmatured Event of Default
or Event of Default has occurred and is continuing, (B) no later than
thirty (30) days prior to the last day of the Initial Term, Borrowers have
delivered to Lender evidence, in form and substance satisfactory to Lender,
that the Second SubDebt Extension has occurred, and (C) Borrowers shall
have executed and delivered to Lender such amendments and other documents
required by Lender, in form and substance satisfactory to Lender in its sole
discretion, to amend such terms and conditions required by Lender, all in form
and substance satisfactory to Lender, such Initial Term shall be automatically
extended to January 31, 2011. All Revolving Loans shall be repaid on or before
the earlier of the last day of the Initial Term or upon termination of the
Credit Facility or termination of this Agreement (“Maturity Date”). After
the Maturity Date no further Revolving Loans shall be available from Lender.


 


(c)                                  Section 6.06
of the Credit Agreement is hereby amended and restated as follows:


 


6.06                           Financial
Covenants. Borrowers
shall perform and comply with


 


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each
of the following financial covenants as reflected and computed from their
financial statements:


 


(a)                                  Borrowers
shall maintain, at all times, a Fixed Charge Coverage Ratio, measured quarterly
at the end of each fiscal quarter, of not less than (i) 1.0 to 1.0 as of
the fiscal quarter ending March 31, 2009, (ii) 1.0 to 1.0 as of the
fiscal quarter ending June 30, 2009, (iii) 1.10 to 1.0 as of the
fiscal quarter ending September 30, 2009 and (iv) 1.20 to 1.0 as of
the fiscal quarter ending December 31, 2009 and each fiscal quarter
thereafter.


 


(b)                                 Borrowers
shall maintain at all times a minimum Excess Liquidity of not less than
$3,000,000.


 


(d)                                 Section 7.13
of the Credit Agreement is hereby amended and restated as follows:


 


7.13                           Capital
Expenditures. No Borrower shall contract for, purchase or make any
expenditure or commitments for fixed or capital assets (including capitalized
leases) in any fiscal year in an aggregate amount for all Borrowers in excess
of $7,500,000.


 


(e)                                  Schedule
1.01 of the Credit Agreement is hereby deleted and replaced with Schedule 1.01
attached hereto.


 


(f)                                    Schedule
2.12 of the Credit Agreement is hereby deleted and replaced with Schedule 2.12
attached hereto.


 


2.                                       Consents.


 


(a)                                  Upon
the effectiveness of this Amendment, Lender hereby consents to Borrower
entering into an amendment to the Comerica Loan Documents, in form and
substance satisfactory to Lender in its sole discretion and substantially in
the form attached hereto as Exhibit A (“Comerica Amendment”), evidencing
an extension of the maturity date of the Comerica Subordinated Debt to a date
no earlier than February 26, 2010.


 


(b)                                 Upon
the effectiveness of this Amendment, Lender hereby consents to Borrower
entering into the Second Amended and Restated Senior Subordinated Revolving
Credit Agreement, Second Amended and Restated Revolving Credit Note, Third
Amendment to Amended and Restated Reimbursement and Indemnity Agreement,
Amended and Restated Registration Rights Agreement and Warrants, in form and
substance satisfactory to Lender in its sole discretion and substantially in
the form attached hereto as Exhibit B (“Amended Safeguard Loan Documents”),
evidencing an extension of the maturity date of the Safeguard Subordinated Debt
to a date no earlier than April 1, 2010.


 


3.                                       Amendment
Fee. Prior the to the effectiveness of this Amendment, Borrowers shall pay
to Lender a nonrefundable amendment fee (“Amendment Fee”) equal to $40,000,
which Amendment Fee shall be fully earned upon execution of this Amendment.


 


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4.                                       Representations
and Warranties. Each Borrower represents and warrants to Lender that:


 


(a)                                  All
warranties and representations made to Lender under the Credit Agreement and
the Existing Credit Documents are true and correct as of the date hereof
(except as to such warranties and representations which are as of a specific
date, which warranties and representations are true and correct as of such
date).


 


(b)                                 The
execution and delivery by such Borrower of this Amendment the performance by it
of the transactions herein contemplated (i) are and will be within its
powers, (ii) have been authorized by all necessary organizational action,
and (iii) are not and will not be in contravention of any order of any
court or other agency of government, of law or any other indenture, agreement
or undertaking to which any Borrower is a party or by which the property of
such Borrower is bound, or be in conflict with, result in a breach of, or
constitute (with due notice and/or lapse of time) a default under any such
indenture, agreement or undertaking or result in the imposition of any lien,
charge or encumbrance of any nature on any of the properties of such Borrower.


 


(c)                                  This
Amendment and any assignment, instrument, document, or agreement executed and
delivered in connection herewith, is valid, binding and enforceable in
accordance with its respective terms.


 


(d)                                 No
Event of Default or Unmatured Event of Default has occurred and is continuing
under the Credit Agreement or any of the other Existing Credit Documents.


 


5.                                       Effectiveness
Conditions. This Amendment shall be effective upon completion of the
following conditions precedent (all documents and other items to be in form and
substance satisfactory to Lender and Lender’s counsel):


 


(a)                                  Execution
and delivery by Borrowers of this Amendment;


 


(b)                                 Delivery
of the fully executed Safeguard Subordination Agreement;


 


(c)                                  Delivery
by Borrowers of the fully executed Comerica Amendment, along with (i) a
copy of the written consent to such amendment from Safeguard Delaware, Inc.
and Safeguard Scientifics (Delaware), Inc. (collectively, “Safeguard”)
required pursuant to Section 1(c) of the Amended and Restated
Reimbursement and Indemnity Agreement dated January 17, 2007 among
Clarient, Inc. and Safeguard, as amended, and (ii) evidence that all
conditions to the effectiveness of such amendment have been satisfied, all on
terms and conditions satisfactory to Lender;


 


(d)                                 Delivery
by Borrowers of the fully executed Amended Safeguard Loan Documents, along with
evidence that all conditions to effectiveness of such documents have been satisfied,
all on terms and conditions satisfactory to Lender;


 


(e)                                  Delivery
by Borrowers of certified copies of resolutions of each Borrower’s board of
directors, general partners, members or managers, as applicable, authorizing
the execution of this Amendment and each document required to be delivered by
any Section hereof;


 


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(f)                                    No
Unmatured Event of Default or Event of Default shall have occurred and be
continuing under the Loan Documents;


 


(g)                                 Payment
by Borrowers of any and all costs, fees and expenses of Lender (including, the
Amendment Fee and attorneys’ fees) in connection with this Amendment and the
transaction contemplated hereby; and


 


(h)                                 Execution
and/or delivery by Borrowers of all agreements, instruments and documents
requested by Lender to effectuate and implement the terms hereof and the Loan
Documents.


 


6.                                       Confirmation
of Indebtedness. Borrowers hereby acknowledge and confirm that as of the
close of business on February 24, 2009, Borrowers are indebted to Lender,
without defense, setoff, claim or counterclaim, under the Loan Documents, in
the aggregate principal amount of $4,653,534.92 plus all fees, costs and expenses
(including attorneys’ fees) incurred to date in connection with the Loan Documents.


 


7.                                       Ratification
of Existing Credit Documents. Except as expressly set forth herein, all of
the terms and conditions of the Credit Agreement and Existing Credit Documents
are hereby ratified and confirmed and continue unchanged and in full force and
effect. All references to the Credit Agreement shall mean the Credit Agreement as
modified by this Amendment.


 


8.                                       Security
Interest. Borrowers hereby confirm and agree that all security interests
and liens granted to Lender continue to be perfected, first priority liens and
remain in full force and effect and shall continue to secure the Obligations. All
Collateral remains free and clear of any liens other than liens in favor of
Lender and Permitted Liens. Nothing herein contained is intended to in any way
impair or limit the validity, priority, and extent of Lender’s existing
security interest in and liens upon the Collateral.


 


9.                                       Governing
Law. This Amendment, and all matters arising out of or relating to this
Amendment, shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania, without giving effect to principles of
conflicts of laws, and shall be construed without the aid of any canon, custom
or rule of law requiring construction against the draftsman.


 


10.                                 Release.
As further consideration for Lender’s agreement to grant the accommodations set
forth herein, each Borrower hereby waives and releases and forever discharges
Lender and its officers, directors, attorneys, agents and employees from any
liability, damage, claim, loss or expense of any kind that Borrowers, or any of
them, may have against Lender arising out of or relating to the Obligations,
this Amendment or the Loan Documents.


 


11.                                 Counterparts.
This Amendment may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original, and such counterparts
together shall constitute one and the same respective agreement. Signature by
facsimile or PDF shall bind the parties hereto.


 


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IN WITNESS WHEREOF, the
parties have executed this Amendment the day and year first above written.


 


	
  BORROWERS:

  	
  CLARIENT,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Raymond Land

  
	
   

  	
  Name: Raymond Land

  
	
   

  	
  Title: SVP, Chief Financial Officer and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  CLARIENT
  DIAGNOSTIC SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Raymond Land

  
	
   

  	
  Name: Raymond Land

  
	
   

  	
  Title: Senior Vice President and Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  CHROMAVISION
  INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Raymond Land

  
	
   

  	
  Name: Raymond Land

  
	
   

  	
  Title: Senior Vice President and Chief Financial
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LENDER:

  	
  GEMINO
  HEALTHCARE FINANCE, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Miriam P. Gallagher

  
	
   

  	
  Name:

  	
   

  	
  Miriam P. Gallagher

  
	
   

  	
  Title:

  	
   

  	
  Senior Portfolio Manager

  
					



 


[SIGNATURE PAGE TO SECOND AMENDMENT
TO CREDIT AGREEMENT]


 


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