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 


 

















 


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 


 

















 


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]


 

















 


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