Document:

exv10w20

	 	 	 	 	 

Exhibit 10.20

SUPERVISORY AGREEMENT 

     This Supervisory Agreement (Agreement) is made this 22nd day of February, 2011 (Effective
Date), by and through the Board of Directors (Board) of Home Federal Savings Bank, Rochester,
Minnesota, OTS Docket No. 02818 (Association) and the Office of Thrift Supervision (OTS), acting by
and through its Regional Director for the Central Region (Regional Director);

     WHEREAS, the OTS, pursuant to 12 U.S.C. § 1818, has the statutory authority to enter into and
enforce supervisory agreements to ensure the establishment and maintenance of appropriate
safeguards in the operation of the entities it regulates; and

     WHEREAS, the Association is subject to examination, regulation and supervision by the OTS; and

     WHEREAS, based on issues identified and discussed in the OTS August 9, 2010 Report of
Examination (2010 ROE) and previous OTS reports of examination of the Association, the OTS finds
that the Association has engaged in unsafe or unsound practices; and

     WHEREAS, in furtherance of their common goal to ensure that the Association addresses the
unsafe or unsound practices identified and discussed in the 2010 ROE and previous OTS reports of
examination, the Association and the OTS have mutually agreed to enter into this Agreement; and

     WHEREAS, on February 10, 2011, the Association’s Board, at a duly constituted meeting, adopted
a resolution (Board Resolution) that authorizes the Association to enter into this Agreement and
directs compliance by the Association and its directors, officers, employees, and other
institution-affiliated parties with each and every provision of this Agreement.

Home Federal Savings Bank

Rochester, Minnesota

Supervisory Agreement

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     NOW THEREFORE, in consideration of the above premises, it is agreed as follows:

Business Plan.

1. By May 31, 2011, the Association shall submit to the Regional Director an updated business plan
for the period beginning April 1, 2011 through December 31, 2012 (Business Plan). At a minimum,
the Business Plan shall conform to applicable laws, regulations, and regulatory guidance and
include:

(a) strategies for ensuring that the Association has the financial and personnel resources
necessary to implement and adhere to the Business Plan, adequately support the Association’s
risk profile, maintain compliance with applicable regulatory capital requirements, and
comply with this Agreement;

(b) plans to improve the Association’s core earnings and achieve profitability;

(c) quarterly pro forma financial projections (balance sheet and income statement for the
period covered by the Business Plan), including Tier 1 (Core) and Total Risk-Based Capital
Ratios;

(d) strategies to stress-test and adjust earnings forecasts based on continuing operating
results, economic conditions, and credit quality of the loan portfolio; and

(e) identification of all relevant assumptions made in formulating the Business Plan and a
requirement that documentation supporting such assumptions be retained by the Association.

2. Upon receipt of written notification from the Regional Director that the Business Plan is
acceptable, the Association shall implement and adhere to the Business Plan. A copy of the
Business Plan shall be provided to the Regional Director within five (5) days after Board approval.

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Rochester, Minnesota

Supervisory Agreement

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3. Any material modifications1 to the Business Plan shall receive the prior, written
non-objection of the Regional Director. The Association shall submit proposed material
modifications to the Regional Director at least forty-five (45) days prior to implementation.

4. By January 31, 2012, and each January 31st thereafter, the Business Plan shall be updated and
submitted to the Regional Director pursuant to Paragraphs 1 and 2 above incorporating the
Association’s budget plan and profit projections for the next two (2) fiscal years taking into
account any revisions to the Association’s loan, investment and operating policies.

5. Within forty-five (45) days after the close of each quarter, after implementation of the
Business Plan, the Board shall review written quarterly variance reports on the Association’s
compliance with the Business Plan (Variance Reports). The Variance Reports shall:

(a) identify variances in the Association’s actual performance during the preceding quarter
as compared to the projections set forth in the Business Plan;

(b) contain an analysis and explanation of identified variances; and

(c) discuss the specific measures taken or to be taken by the Association to address
identified variances.

6. A copy of each Variance Report shall be provided to the Regional Director within five (5) days
after review by the Board or a committee designated by the Board.

Problem Assets.

7. By March 31, 2011, the Association shall submit a detailed, written plan with specific

 

			
	1	 	A modification shall be considered material
under this Paragraph if the Association plans to: (a) engage in any activity
that is inconsistent with the Business Plan; or (b) exceed the level of any
activity contemplated in the Business Plan by more than ten percent (10%).

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Rochester, Minnesota

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strategies, targets and timeframes to reduce2 the Association’s level of Problem
Assets3 (Problem
Asset Reduction Plan) to the Regional Director. The Problem Asset Reduction Plan, at a minimum,
shall include:

(a) quarterly targets for the level of Problem Assets as a percentage of Tier 1 (Core)
Capital plus the Allowance for Loan and Lease Losses (ALLL);

(b) a description of the methods for reducing the Association’s level of Problem Assets to
the established targets; and

(c) all relevant assumptions and projections and documentation supporting such assumptions
and projections.

8. Upon receipt of written notification from the Regional Director that the Problem Asset Reduction
Plan is acceptable, the Association shall implement and adhere to the Problem Asset Reduction Plan.
The Board’s review of the Problem Asset Reduction Plan shall be documented in the Board meeting
minutes. A copy of the final Problem Asset Reduction Plan shall be provided to the Regional
Director within five (5) days of adoption by the Board.

9. Within thirty (30) days, the Association shall develop individual written specific workout plans
(Asset Workout Plans) for each adversely classified loan or group of loans to individual
relationships greater than one million dollars ($1,000,000) and for each REO where the original
loan amount collateralized by the REO exceeded one million dollars ($1,000,000).

10. Within forty-five (45) days after the end of each quarter, beginning with the quarter ending
June 30, 2011, the Association shall submit a quarterly written asset status report (Quarterly
Asset Report) to the Board. The Board’s review of the Quarterly Asset Report shall

 

			
	2	 	For purposes of this Paragraph, “reduce”
means to sell real estate owned (REO) and to collect, sell, charge off, or
improve the quality of a loan sufficient to warrant its removal from adverse
criticism or classification.
	 
	3	 	The term “Problem Assets” shall include all
REO and adversely classified assets.

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Rochester, Minnesota

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be documented
in the Board meeting minutes. The Quarterly Asset Report shall include, at a minimum:

(a) the current status of all Asset Workout Plans;

(b) the ratio of adversely classified assets to Tier 1 (Core) Capital plus ALLL;

(c) a comparison of adversely classified assets at the current quarter end with the
preceding quarter;

(d) a discussion of the actions taken during the preceding quarter to reduce the
Association’s level of Problem Assets; and

(e) any recommended revisions or updates to the Problem Asset Reduction Plan.

11. Within fifty (50) days after the end of each quarter, a copy of the Quarterly Asset Report
shall be provided to the Regional Director.

Loan Modification Documentation.

12. By April 30, 2011, the Association shall develop a loan modification policy (Loan Modification
Policy) that addresses the corrective action contained in the 2010 ROE concerning documentation of
loan modifications. The Loan Modification Policy shall conform to all applicable laws, regulations
and regulatory guidance.

Concentrations of Credit. 

13. By April 30, 2011, the Association shall revise its written program for identifying,
monitoring, and controlling risks associated with concentrations of credit (Credit Concentration
Program) to address all corrective actions set forth in the 2010 ROE relating to concentrations of
credit. The Credit Concentration Program shall comply with all applicable laws, regulations and
regulatory guidance.

Home Federal Savings Bank

Rochester, Minnesota

Supervisory Agreement

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14. By May 6, 2011, the Association shall submit its Credit Concentration Program to the Regional
Director for review and comment. Upon receipt of written notification from the Regional Director
that the Credit Concentration Program is acceptable, the Association shall implement and adhere to
the Credit Concentration Program. The Board’s review of the Credit
Concentration Program shall be documented in the Board meeting minutes. A copy of the Credit
Concentration Program shall be provided to the Regional Director within five (5) days of adoption
by the Board.

Allowance for Loan and Lease Losses.

15. By January 31, 2011, the Association shall revise its policies and procedures relating to the
calculation of the ALLL (ALLL Policy) to ensure that it addresses the corrective action set forth
in the 2010 ROE relating to the ALLL. The ALLL Policy shall comply with applicable laws,
regulations, and regulatory guidance.

Dividends and Other Capital Distributions.

16. Effective immediately, the Association shall not declare or pay dividends or make any other
capital distributions, as that term is defined in 12 C.F.R. § 563.141, without receiving the prior
written approval of the Regional Director in accordance with applicable regulations and regulatory
guidance. The Association’s written request for approval shall be submitted to the Regional
Director at least thirty (30) days prior to the anticipated date of the proposed declaration,
dividend payment or distribution of capital.

Growth.

17. Effective immediately, the Association shall not increase its total assets during any quarter
in excess of an amount equal to net interest credited on deposit liabilities during the prior
quarter without the prior written non-objection of the Regional Director.

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Rochester, Minnesota

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Golden Parachute Payments.

18. Effective immediately, the Association shall not make any golden parachute payment4
unless, with respect to such payment, the Association has complied with the requirements of
12 C.F.R. Part 359.

Directorate and Management Changes.

19. Effective immediately, the Association shall comply with the prior notification requirements
for changes in directors and Senior Executive Officers5 set forth in 12 C.F.R. Part 563,
Subpart H.

Employment Contracts and Compensation Arrangements.

20. Effective immediately, the Association shall not enter into any new contractual arrangement or
renew, extend, or revise any contractual arrangement relating to compensation or benefits for any
Senior Executive Officer or director of the Association, unless it first provides the Regional
Director with not less than thirty (30) days prior written notice of the proposed transaction. The
notice to the Regional Director shall include a copy of the proposed employment contract or
compensation arrangement or a detailed, written description of the compensation arrangement to be
offered to such Senior Executive Officer or director, including all benefits and perquisites. The
Board shall ensure that any contract, agreement, or arrangement submitted to the Regional Director
fully complies with the requirements of 12 C.F.R. Part 359, 12 C.F.R. §§ 563.39 and 563.161(b), and
12 C.F.R. Part 570 — Appendix A.

Third Party Contracts. 

21. Effective immediately, the Association shall not enter into any arrangement or contract

 

			
	4	 	The term “golden parachute payment” is defined at 12 C.F.R. § 359.1(f).
	 
	5	 	The term “Senior Executive Officer” is
defined at 12 C.F.R. § 563.555.

Home Federal Savings Bank

Rochester, Minnesota

Supervisory Agreement

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with a
third party service provider that is significant to the overall operation or financial condition of
the Association6 or outside the Association’s normal course of business unless, with
respect to each such contract, the Association has: (a) provided the Regional Director with a
minimum of thirty (30) days prior written notice of such arrangement or contract and a written
determination that the arrangement or contract complies with the standards and guidelines set forth
in OTS Thrift Bulletin 82a; and (b) received written notice of non-objection from the Regional
Director.

Effective Date.

22. This Agreement is effective on the Effective Date as shown on the first page.

Duration.

23. This Agreement shall remain in effect until terminated, modified or suspended, by written
notice of such action by the OTS, acting by and through its authorized representatives.

Time Calculations.

24. Calculation of time limitations for compliance with the terms of this Agreement run from the
Effective Date and shall be based on calendar days, unless otherwise noted.

Submissions and Notices.

25. All submissions to the OTS that are required by or contemplated by the Agreement shall be
submitted within the specified timeframes.

26. Except as otherwise provided herein, all submissions, requests, communications, consents or
other documents relating to this Agreement shall be in writing and sent by first class

 

			
	6	 	A contract will be considered significant to
the overall operation or financial condition of the Association where the
annual contract amount equals or exceeds two percent (2%) of the Association’s
total capital, where there is a foreign service provider, or where it involves
information technology that is critical to the Association’s daily operations
without regard to the contract amount.

Home Federal Savings Bank

Rochester, Minnesota

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U.S. mail
(or by reputable overnight carrier, electronic facsimile transmission or hand delivery by
messenger) addressed as follows:

	 	 	 	 	 

	(a)

	 	To:
	 	the OTS
	 
	 	 	 	 
	 

	 	 	 	Regional Director
	 

	 	 	 	Office of Thrift Supervision
	 

	 	 	 	One South Wacker Drive, Suite 2000
	 

	 	 	 	Chicago, Illinois 60606
	 

	 	 	 	Facsimile: (312) 917-5001
	 
	 	 	 	 
	(b)

	 	To:
	 	the Association
	 
	 	 	 	 
	 

	 	 	 	Chairman of the Board
	 

	 	 	 	Home Federal Savings Bank
	 

	 	 	 	1016 Civic Center Drive
	 

	 	 	 	Rochester, Minnesota 55901
	 

	 	 	 	Facsimile: (507) 535-1300

No Violations Authorized.

27. Nothing in this Agreement shall be construed as allowing the Association, its Board, officers
or employees to violate any law, rule, or regulation.

OTS Authority Not Affected.

28. Nothing in this Agreement shall inhibit, estop, bar or otherwise prevent the OTS from taking
any other action affecting the Association if at any time the OTS deems it appropriate to do so to
fulfill the responsibilities placed upon the OTS by law.

Other Governmental Actions Not Affected.

29. The Association acknowledges and agrees that its execution of the Agreement is solely for the
purpose of resolving the matters addressed herein, consistent with Paragraph 28 above, and does not
otherwise release, discharge, compromise, settle, dismiss, resolve, or in any way affect any
actions, charges against, or liability of the Association that arise pursuant to this action or
otherwise, and that may be or have been brought by any governmental entity other than the

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Rochester, Minnesota

Supervisory Agreement

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OTS.

Miscellaneous.

30. The laws of the United States of America shall govern the construction and validity of this
Agreement.

31. If any provision of this Agreement is ruled to be invalid, illegal, or unenforceable by the
decision of any Court of competent jurisdiction, the validity, legality, and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired thereby, unless the
Regional Director in his or her sole discretion determines otherwise.

32. All references to the OTS in this Agreement shall also mean any of the OTS’s predecessors,
successors, and assigns.

33. The section and paragraph headings in this Agreement are for convenience only and shall not
affect the interpretation of this Agreement.

34. The terms of this Agreement represent the final agreement of the parties with respect to the
subject matters thereof, and constitute the sole agreement of the parties with respect to such
subject matters.

Enforceability of Agreement.

35. This Agreement is a “written agreement” entered into with an agency within the meaning and for
the purposes of 12 U.S.C. § 1818.

Signature of Directors/Board Resolution.

36. Each Director signing this Agreement attests that he or she voted in favor of a Board
Resolution authorizing the consent of the Association to the issuance and execution of the
Agreement. This Agreement may be executed in counterparts by the directors after approval of
execution of the Agreement at a duly called board meeting. A copy of the Board Resolution

Home Federal Savings Bank

Rochester, Minnesota

Supervisory Agreement

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authorizing execution of this Agreement shall be delivered to the OTS, along with the executed
original(s) of this Agreement.

     WHEREFORE, the OTS, acting by and through its Regional Director, and the Board of
the Association, hereby execute this Agreement.

	 	 	 	 	 	 	 

	HOME FEDERAL SAVINGS BANK	 	 	 	OFFICE OF THRIFT SUPERVISION
	Rochester, Minnesota
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	/s/ Timothy R. Geisler
	 	 	 	By: 	 	/s/ Daniel T. McKee
	 

Timothy R. Geisler, Chairman
	 	 	 	
	 	Daniel T. McKee

Regional Director, Central Region
	 	 	 	 	 	 	 
	/s/ Allan R. DeBoer

	 	 	 	
	 

Allan R. DeBoer, Director

	 	 	 	 	 	 

	 	 	 	 	 
	 	 	 
	/s/ Michael J. Fogarty
 	 	 
	Michael J. Fogarty, Director 	 	 
	 	 	 
	 
	 	 	 
	/s/ Karen L. Himle
 	 	 
	Karen L. Himle, Director 	 	 
	 	 	 
	 
	 	 	 
	/s/ Susan K. Kolling
 	 	 
	Susan K. Kolling, Director 	 	 
	 	 	 
	 
	 	 	 
	/s/ Bradley C. Krehbiel
 	 	 
	Bradley C. Krehbiel, Director 	 	 
	 	 	 
	 
	 	 	 
	/s/ Malcolm W. McDonald
 	 	 
	Malcolm W. McDonald, Director 	 	 
	 	 	 
	 
	 	 	 
	/s/ Mahlon C. Schneider
 	 	 
	Mahlon C. Schneider, Director 	 	 
	 	 	 
	 
	 	 	 
	/s/ Hugh C. Smith
 	 	 
	Hugh C. Smith, Director 	 	 
	 	 	 
	 

Home Federal Savings Bank

Rochester, Minnesota

Supervisory Agreement

Page 11 of 11Exhibit 10.1

EXHIBIT 10.1

FOURTH AMENDMENT AND JOINDER TO CREDIT AGREEMENT

This Fourth Amendment and Joinder to Credit Agreement (“Amendment”) is made as of this 21st
day of December, 2009, by and among Gemino Healthcare Finance, LLC (“Lender”) and Clarient, Inc.,
Clarient Diagnostic Services, Inc. and ChromaVision International, Inc. (collectively, the
“Existing Borrowers”) and Applied Genomics, Inc. (“Joining Borrower” and together with the Existing
Borrowers, the “Borrowers” and each individually referred to as a “Borrower”).

BACKGROUND

A. Existing 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 “Loan Documents.” All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement.

B. Borrowers have informed Lender that on the date hereof Clarient has entered into the AG
Acquisition Documents, pursuant to which Clarient has consummated the AG Acquisition. Borrowers
have requested, pursuant to Section 7.01 of the Agreement, that Lender consent to the AG
Acquisition and Lender has agreed to provide such consent subject to the terms and conditions
hereof.

C. As a result of the AG Acquisition, Joining Borrower has become affiliated with Existing
Borrowers and, in recognition of the benefits and privileges thereunder, Joining Borrower and
Existing Borrowers have requested that Joining Borrower be permitted to join into the Loan
Documents as if an original signatory thereto and Lender has so consented subject to the terms and
conditions hereof

D. Existing Borrowers have requested and Lender has agreed to join the Joining Borrower as a
joint and several co-Borrower and to amend the terms and conditions of the Loan Documents pursuant
to the terms and conditions of this Amendment.

E. 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. Consent. Upon the effectiveness of this Amendment and in reliance upon Borrowers’
representations, warranties and covenants contained herein and subject to the terms and conditions
of this Amendment, Lender hereby consents to the AG Acquisition. This consent shall not be deemed a
consent to the breach by the Borrowers of any covenants or agreements contained in the Credit
Agreement with respect to any other transaction or matter or a consent to any waiver or
modification of any other term or condition of the Credit Agreement. Borrowers agree that the
consent set forth in this Amendment shall not be deemed (a) to be a consent to any waiver or
modification of any other
term or condition of the Credit Agreement, or (b) to prejudice any right or remedy that Lender
may now have or may in the future have under or in connection with the Credit agreement other than
with respect to the matter for which this consent has been provided. The consent described herein
shall not alter, affect, release or prejudice in any way any of Borrowers’ obligations under the
Credit Agreement (including, without limitation, the Obligations), each of which are ratified and
confirmed This Amendment shall not obligate Lender to provide any further consent to any waiver or
modification of any other term or condition of the Credit Agreement or prejudice any right or
remedy that Lender may now or hereafter have under or in connection with the Credit Agreement. This
consent shall not be construed as a course of conduct on the part of Lender upon which Borrowers
may rely at any time in the future. Borrowers expressly waive any right to assert any claim to such
effect at any time.

2. Joinder.

(a) Upon the effectiveness of this Amendment, Joining Borrower joins in as, assumes the
obligations and liabilities of, adopts the obligations, liabilities and role of, and becomes, a
Borrower under the Loan Documents, the Amended and Restated Revolving Note and all other Loan
Documents. All references to Borrowers contained in the Loan Documents are hereby deemed for all
purposes to also refer to and include Joining Borrower as a Borrower and Joining Borrower hereby
agrees to comply with all of the terms and conditions of the Loan Documents as if Joining Borrower
were an original signatory thereto.

(b) Without limiting the generality of the provisions of subparagraph (a) above, Joining
Borrower hereby becomes liable, on a joint and several basis, along with all other Borrowers, for
all Obligations, including, without limitation, all existing and future Loans and other liabilities
and obligations incurred at any time by any one or more Borrowers under the Loan Documents, as
amended hereby or as may be hereafter amended, modified, supplemented or replaced.

3. Amendment. Upon the effectiveness of this Amendment, the Credit Agreement are
hereby respectively amended in the following manner

(a) Annex I to the Credit Agreement is hereby amended by inserting the following definitions:

“AG Acquisition” shall mean the acquisition by Clarient of Applied
Genomics, Inc. by means of the merger of Clarient Acquisition Corporation, a
Delaware corporation and wholly-owned subsidiary of Clarient, with and into Applied
Genomics, Inc., with Applied Genomics, Inc. surviving the merger as a wholly-owned
subsidiary of Clarient.

“AG Acquisition Documents” shall mean that certain Agreement and Plan
of Merger and Reorganization, dated as of December 21, 2009, by and among Clarient,
Clarient Acquisition Corporation, Applied Genomics, Inc, certain stockholders of
Applied Genomics, Inc. and Robert S. Seitz as representative of the stockholders of
Applied Genomics, Inc., and all other certificates, agreements, documents or other
instruments executed and delivered in connection therewith.

 

 

 

(b) The Schedules to the Credit Agreement (other than Schedule 1.01) are hereby amended and
restated by the Schedules attached hereto as Exhibit A (“Amended and Restated Schedules”).

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

(a) Except as set forth on the Amended and Restated Schedules attached hereto, all warranties
and representations made to Lender under the Credit Agreement and the Loan 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 Amended and Restated
Revolving Note, the Commercial Depository Agreement and Governmental Depository Agreement, and 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, the Amended and Restated Revolving Note, 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 Loan Documents.

(e) Lender has received true, correct and complete copies of the AG Acquisition Documents
(including all exhibits, schedules and disclosure letters referred to therein or delivered pursuant
thereto, if any) and all amendments thereto, waivers relating thereto and other side letters or
agreements affecting the terms thereof. No such documents or agreements have been amended or
supplemented, nor have any of the provisions thereof been waived except pursuant to a written
agreement or instrument which has heretofore been delivered to Lender. The AG Acquisition has been
consummated in accordance with the AG Acquisition Documents and applicable law.

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) Execution and delivery by Borrowers of the Amended and Restated Revolving Note;

 

 

 

(c) Execution and delivery by Borrowers and Lockbox Bank of the Governmental Depository
Agreement and Commercial Depository Agreements;

(d) 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, the Amended and Restated Revolving Note, and each document required to be delivered by
any Section hereof;

(e) Delivery by Borrowers of Joining Borrower’s state certified Certificate of Incorporation
and Bylaws, certified by the secretary of Joining Borrower;

(f) Delivery by Borrowers of incumbency certificates for Joining Borrower identifying all
Authorized Officers with specimen signatures;

(g) Receipt of Uniform Commercial Code financing statement, judgment and state and federal tax
lien searches against Joining Borrower showing no Liens on any of the Collateral (other than Liens
released contemporaneously with the effectiveness of this Amendment);

(h) Delivery by Borrowers of copies of the accreditations, licenses, certifications required
by Section 5.03 of the Credit Agreement with respect to Joining Borrower;

(i) Delivery by Borrowers of an opinion letter from Borrowers’ counsel regarding such matters
as Lender may require in its sole discretion;

(j) Delivery by Borrowers of an Officer’s Closing Certificate;

(k) Delivery by Borrowers of payoff letters and releases from all Persons having a security
interest or other interest in the Collateral (except for Permitted Liens), together with all UCC-3
termination or partial releases or mortgage satisfactions necessary to terminate each such Person’s
interests in the Collateral;

(l) Delivery by Borrowers of the Amended and Restated Schedules;

(m) Delivery by Borrowers for Joining Borrower of copies of insurance policies or certificates
of insurance on an Acord 27 form evidencing liability and casualty insurance meeting the
requirements set forth in the Loan Documents; including, without limitation, naming Lender as
lender’s loss payee (as to property and casualty coverage) and additional insured (as to liability
coverage);

(n) Delivery by Borrowers to Lender of true, correct and complete copies of the AG Acquisition
Documents;

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

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

(q) 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 December 18, 2009, Borrowers are indebted to Lender, without defense,
setoff, claim or counterclaim, under the Loan Documents, in the aggregate principal amount of
$5,152,277.91 plus all fees, costs and expenses (including attorneys’ fees) incurred to date in
connection with the Loan Documents.

7. Ratification of Loan Documents. Except as expressly set forth herein, all of the
terms and conditions of the Credit Agreement and Loan 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. All references to the Revolving Note shall
mean the Amended and Restated Revolving Note.

8. Collateral. To secure the payment, promptly when due, and the punctual performance,
of all of the Obligations, and satisfaction by Borrowers of all covenants and undertakings
contained in the Credit Agreement and the Loan Documents, each Existing Borrower reconfirms the
prior grant of the security interest in and lien upon and to, all of its right, tide and interest
in and to the Collateral (including as set forth below), whether now owned or hereafter acquired,
created or arising and wherever located and Joining Borrower hereby assigns and grants to Lender a
security interest in, and a right of setoff against, any and all right, title and interest of such
Borrower in and to all of the following, whether now owned or existing or owned, acquired or
arising hereafter: (i) all accounts, Payment Intangibles, Instruments and other rights to receive
payments of Borrower (including without limitation the Accounts), whether now existing or hereafter
arising or acquired, (ii) all General Intangibles (including without limitation, contract rights
and Intellectual Property), Chattel Paper, Documents, Supporting Obligations, Letter of Credit
Rights, Commercial Tort Claims set forth on Schedule 2.13 to the Credit Agreement, remedies,
guarantees and collateral evidencing, securing or otherwise relating to or associated with the
property in subpart (i) above, including without limitation all rights of enforcement and
collection, (iii) all Commercial Lockboxes, all Government Lockboxes, all Collection Accounts and
other deposit accounts into which any of the Collections or Advances are deposited, all funds
received thereby or deposited therein, and any checks or instruments from time to time representing
or evidencing the same, (iv) all books and records of Borrowers evidencing or relating to or
associated with any of the foregoing, (v) all infounation and data compiled or derived by Borrowers
with respect to any of the foregoing (other than any such information and data subject to legal
restrictions of patient confidentiality), and (vi) all collections, Accessions, receipts and
Proceeds derived from any of the foregoing.

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. CONSENT TO JURISDICTION. EACH BORROWER AND LENDER HEREBY IRREVOCABLY CONSENT TO
THE NONEXCLUSIVE JURISDICTION OF, AND VENUE IN, ANY STATE OR FEDERAL COURT LOCATED IN THE
COMMONWEALTH OF PENNSYLVANIA IN ANY AND ALL ACTIONS AND PROCEEDINGS WHETHER ARISING HEREUNDER OR
UNDER ANY OTHER AGREEMENT OR UNDERTAKING. BORROWERS
WAIVE ANY OBJECTION TO IMPROPER VENUE AND FORUM NON-CONVENIENS TO PROCEEDINGS IN ANY SUCH
COURT OR COURTS AND ALL RIGHTS TO TRANSFER FOR ANY REASON. EACH BORROWER IRREVOCABLY AGREES TO
SERVICE OF PROCESS BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED TO THE ADDRESS OF THE APPROPRIATE
PARTY SET FORTH HEREIN.

 

 

 

11. WAIVER OF JURY TRIAL. EACH BORROWER AND LENDER HEREBY WAIVE ANY AND ALL RIGHTS IT
MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION COMMENCED BY OR AGAINST LENDER WITH
RESPECT TO RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE LOAN DOCUMENTS, WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE.

12. Certain Borrower Acknowledgments and Agreements.

(a) Each Borrower acknowledges that it will enjoy significant benefits from the business
conducted by the other Borrowers because of, inter alia, their combined ability to bargain with
other Persons including, without limitation, their ability to receive the Credit Facility on
favorable terms granted by the Credit Agreement and other Loan Documents which would not have been
available to an individual Borrower acting alone. Each Borrower has determined that it is in its
best interest to procure the Credit Facility which each Borrower may utilize directly and which
receive the credit support of the other Borrowers as contemplated by the Credit Agreement and the
other Loan Documents.

(b) Lender has advised Borrowers that it is unwilling to enter into this Amendment, the Credit
Agreement and the other Loan Documents and make available the Credit Facility extended hereby to
any Borrower unless each Borrower agrees, among other things, to be jointly and severally liable
for the due and proper payment of the Obligations of each Borrower under this Amendment, the Credit
Agreement and the other Loan Documents. Each Borrower has determined that it is in its best
interest and in pursuit of its purposes that it so induce Lender to extend credit pursuant to the
Credit Agreement and the other documents executed in connection therewith (i) because of the
desirability to each Borrower of the Credit Facility, the interest rates and the modes of borrowing
available hereunder, (ii) because each Borrower may engage in transactions jointly with other
Borrowers and (iii) because each Borrower may require, from time to time, access to funds under the
Credit Agreement for the purposes herein set forth.

(c) Each Borrower has determined that it has and, after giving effect to the transactions
contemplated by the Credit Agreement, this Amendment and the other Loan Documents (including,
without limitation, the inter-Borrower arrangement set forth in this Section 12) will have, assets
having a fair saleable value in excess of the amount required to pay its probable liability on its
existing debts as they fall due for payment and that the sum of its debts is not and will not then
be greater than all of its Property at a fair valuation, that such Borrower has, and will have,
access to adequate capital for the conduct of its business and the ability to pay its debts from
time to time incurred in connection therewith as such debts mature and that the value of the
benefits to be derived by such Borrower from the access to funds under this Agreement (including,
without limitation, the inter-Borrower arrangement set forth in this Section 12) is reasonably
equivalent to the obligations undertaken pursuant hereto.

(d) Borrower Representative (on behalf of each Borrower) shall maintain records specifying (i)
all Obligations incurred by each Borrower, (ii) the date of such incurrence, (iii) the date
and amount of any payments made in respect of such Obligations and (iv) all inter-Borrower
obligations pursuant to this Section 12. Borrower Representative shall make copies of such records
available to Lender, upon request.

 

 

 

13. Maximum Amount of Joint and Several Liability. Notwithstanding any provisions of
the Credit Agreement or this Amendment to the contrary, it is the intent of the parties hereto that
the primary and secondary nature of the liabilities of the Borrowers, and the security interests
granted by the Borrowers to secure the Obligations directly incurred by any Borrower not
constitute a fraudulent conveyance under Section 548 of Chapter 11 of Title 11 of the United States
Code (11 U.S.C. § 101, et seq.), as amended, or a fraudulent conveyance or fraudulent transfer
under the applicable provisions of any fraudulent conveyance, fraudulent transfer or similar law of
any state, nation or other governmental unit, as in effect from time to time or otherwise be
rendered invalid or unenforceable due to the nature of the joint and several liability.
Accordingly, Lender and Borrowers agree that if the Obligations of any Borrower, or any security
interests granted by such Borrower securing the Obligations would, but for the application of this
sentence, constitute a fraudulent conveyance or fraudulent transfer under Applicable Law, or would
otherwise render such Borrower’s Obligations or the security interests granted herein invalid or
unenforceable, the Obligations of such Borrower hereunder, as well as the security interests
securing such Obligations, shall be valid and enforceable only to the maximum extent that would not
cause such Obligations or security interests to constitute a fraudulent conveyance or fraudulent
transfer under Applicable Law or otherwise result in such invalidity or unenforceability; provided
however that each Borrower’s Obligations shall be presumptively valid and enforceable to their
fullest extent in accordance with the terms hereof or thereof, as if this Section 13 were not a
part of this Agreement.

14. Authorization of Borrower Representative by Borrowers.

(a) Each Borrower hereby irrevocably authorizes Borrower Representative to give notices, make
requests, make payments, receive payments and notices, give receipts and execute agreements, make
agreements or take any other action whatever on behalf of such Borrower under and with respect to
any Loan Document and each Borrower shall be bound thereby. This authorization is coupled with an
interest and shall be irrevocable, and Lender may rely on any notice, request, information supplied
by Borrower Representative, every document executed by Borrower Representative, every agreement
made by Borrower Representative or other action taken by Borrower Representative in respect of
Borrowers or any thereof as if the same were supplied, made or taken by any or all Borrowers.
Without limiting the generality of the foregoing, the failure of one or more Borrowers to join in
the execution of any writing in connection herewith shall not, unless the context clearly requires,
relieve any such Borrower from obligations in respect of such writing.

(b) Borrowers acknowledge that the credit provided under the Credit Agreement is on terms more
favorable than any Borrower acting alone would receive and that each Borrower benefits directly and
indirectly from all Advances thereunder. Each Borrower, shall be jointly and severally liable for
all Obligations, regardless of inter alia, which Borrower requested (or received the proceeds of) a
particular Advance.

 

 

 

15. Joint and Several Liability. The Revolving Loans made to the Borrowers shall be
deemed jointly funded to, and received by, all of the Borrowers. Each Borrower jointly and
severally agrees to pay, and shall be joint and severally liable for the payment and performance of
all Obligations directly incurred by any other Borrower, regardless of whether such Borrower
actually receives the proceeds of the indebtedness governed hereby or the benefit of any other
extensions of
credit hereunder. Each Borrower acknowledges and agrees that the joint and several liability
of the Borrowers is provided as an inducement to Lender to provide loans and other financial
accommodations to the Borrowers, and that each such Revolving Loan or other financial accommodation
shall be deemed to have been done or extended by Lender in consideration of, and in reliance upon,
the joint and several liability of the Borrowers. The joint and several liability of each Borrower
hereunder is absolute, unconditional and continuing, regardless of the validity or enforceability
of any of the Obligations, or the fact that a security interest or lien in any Collateral may not
be enforceable or subject to equities or defenses or prior claims in favor of others, or may be
invalid or defective in any way and for any reason. Each Borrower hereby waives: (a) all notices to
which such Borrower may be entitled as a co-obligor with respect to the Obligations, including
notice of (i) acceptance of this Amendment or the Credit Agreement, (ii) the making of Revolving
Loans or other financial accommodations under this Agreement, or the creation or existence of the
Obligations, and (iii) presentment, demand, protest, notice of protest and notice of non-payment;
and (b) all defenses based on (i) any modification (or series of modifications) of the Credit
Agreement, the other Loan Documents, that may create a substituted contract, or that may
fundamentally alter the risks imposed on-such-Borrower hereunder,-(ii)-the-release- — of any other
Borrower from its duties under the Credit Agreement and the other Loan Documents, or the extension
of the time of performance of any other Borrower’s duties hereunder or thereunder, (iii) the
taking, releasing, impairment or abandonment of any Collateral, or the settlement, release or
compromise of the Obligations or any other Borrower’s liabilities with respect to all or any
portion of the Obligations, or (iv) any other act (or any failure to act) that fundamentally alters
the risks imposed on such Borrower by virtue of its joint and several liability hereunder. It is
the intent of each Borrower by this paragraph to waive any and all suretyship defenses available to
such Borrower with respect to the Obligations, whether or not specifically enumerated above.
Borrowers acknowledge that the credit provided under the Credit Agreement is on terms more
favorable than any Borrower acting alone would receive and that each Borrower benefits directly and
indirectly from the Revolving Loans made hereunder. Each Borrower shall be jointly and severally
liable for all Obligations regardless of, inter alia, which Borrower received proceeds of the
Revolving Loans.

16. WARRANT OF ATTORNEY TO CONFESS JUDGMENT.

(a) Acknowledgment of Warrant of Attorney. THE FOLLOWING PARAGRAPH SETS FORTH A GRANT
OF AUTHORITY FOR ANY ATTORNEY TO CONFESS JUDGMENT AGAINST THE BORROWERS. IN GRANTING THIS WARRANT
OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE BORROWERS, FOLLOWING CONSULTATION WITH (OR DECISION NOT
TO CONSULT) SEPARATE COUNSEL FOR THE BORROWERS AND WITH KNOWLEDGE OF THE LEGAL EFFECT HEREOF, THE
BORROWERS HEREBY KNOWINGLY, INTENTIONALLY, VOLUNTARILY, INTELLIGENTLY AND UNCONDITIONALLY WAIVE ANY
AND ALL RIGHTS ANY OF THEM HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE
RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES OF AMERICA, COMMONWEALTH OF PENNSYLVANIA, OR
ELSEWHERE INCLUDING, WITHOUT LIMITATION, A HEARING PRIOR TO GARNISHMENT AND ATTACHMENT OF THE
BORROWERS’ BANK ACCOUNTS AND OTHER ASSETS. THE BORROWERS ACKNOWLEDGE AND UNDERSTAND THAT BY
ENTERING INTO THIS AMENDMENT CONTAINING A CONFESSION OF JUDGMENT CLAUSE THAT THE BORROWERS ARE EACH
VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY GIVING UP ANY AND ALL RIGHTS, INCLUDING CONSTITUTIONAL
RIGHTS, THAT ANY BORROWER HAS OR MAY HAVE TO NOTICE AND A HEARING BEFORE JUDGMENT CAN BE ENTERED
AGAINST
ANY BORROWER AND BEFORE THE BORROWERS’ ASSETS, INCLUDING, WITHOUT LIMITATION, THEIR BANK
ACCOUNTS, MAY BE GARNISHED, LEVIED, EXECUTED UPON AND/OR ATTACHED. THE BORROWERS UNDERSTAND THAT
ANY SUCH GARNISHMENT, LEVY, EXECUTION AND/OR ATTACHMENT SHALL RENDER THE PROPERTY GARNISHED,
LEVIED, EXECUTED UPON OR ATTACHED IMMEDIATELY UNAVAILABLE TO THE OBLIGORS. IT IS SPECIFICALLY
ACKNOWLEDGED BY THE BORROWERS THAT THE LENDER HAS RELIED ON THIS WARRANT OF ATTORNEY AND THE RIGHTS
WAIVED BY THE OBLIGORS HEREIN IN CONSENTING TO THIS AMENDMENT AND AS AN INDUCEMENT TO GRANT THE
ACCOMMODATIONS OUTLINED HEREIN TO THE BORROWERS.

 

 

 

(b) WARRANT OF ATTORNEY TO CONFESS JUDGMENT — Money. THE BORROWERS, AND EACH OF THEM,
HEREBY AUTHORIZE AND EMPOWER, UPON AN EVENT OF DEFAULT HEREUNDER, AND/OR UNDER THE OTHER LOAN
DOCUMENTS, ANY ATTORNEY OF ANY COURT OF RECORD OR THE PROTHONOTARY OR CLERK OF ANY COUNTY IN THE
COMMONWEALTH- OF PENNSYLVANIA, OR- 1N ANY JURISDICTION WHERE PERMITTED BY LAW, OR THE CLERK OF ANY
UNITED STATES DISTRICT COURT, TO APPEAR FOR THE BORROWERS IN ANY AND ALL ACTIONS WHICH MAY BE
BROUGHT HEREUNDER, AND/OR UNDER THE OTHER LOAN DOCUMENTS, AND ENTER AND CONFESS JUDGMENT AGAINST
THE BORROWERS, JOINTLY AND SEVERALLY, IN FAVOR OF THE LENDER OR ITS ASSIGNEE FOR THE ENTIRE AMOUNT
OF THE INDEBTEDNESS THEN DUE AND OUTSTANDING UNDER THE TERMS OF THE CREDIT AGREEMENT, AND/OR UNDER
THE TERMS OF THE OTHER LOAN DOCUMENTS, TOGETHER WITH ATTORNEYS’ FEES EQUAL TO FIFTEEN PERCENT (15%)
OF THE FOREGOING SUMS THEN DUE AND OWING, BUT IN NO EVENT LESS THAN FIVE THOUSAND ($5,000.00)
DOLLARS, ALL WITH OR WITHOUT DECLARATION, WITHOUT PRIOR NOTICE, WITHOUT STAY OF EXECUTION AND WITH
RELEASE OF ALL PROCEDURAL ERRORS AND THE RIGHT TO ISSUE EXECUTIONS FORTHWITH. TO THE EXTENT
PERMITTED BY LAW, EACH OF THE BORROWERS WAIVES THE RIGHT OF INQUISITION ON ANY REAL ESTATE LEVIED
ON, VOLUNTARILY CONDEMNS THE SAME, AUTHORIZES THE PROTHONOTARY OR CLERK TO ENTER UPON THE WRIT OF
EXECUTION THIS VOLUNTARY CONDEMNATION AND AGREES THAT SUCH REAL ESTATE MAY BE SOLD ON A WRIT OF
EXECUTION; AND ALSO WAIVES ANY RELIEF FROM ANY APPRAISEMENT, STAY OR EXEMPTION LAW OF ANY STATE NOW
IN FORCE OR HEREAFTER ENACTED. IF COPIES OF THE CREDIT AGREEMENT AND/OR THE OTHER LOAN DOCUMENTS
VERIFIED BY AFFIDAVIT OF ANY REPRESENTATIVE OF THE LENDER SHALL HAVE BEEN FILED IN SUCH ACTION, IT
SHALL NOT BE NECESSARY TO FILE THE ORIGINALS THEREOF AS A WARRANT OF ATTORNEY, ANY PRACTICE OR
USAGE TO THE CONTRARY NOTWITHSTANDING. THE AUTHORITY HEREIN GRANTED TO CONFESS JUDGMENT SHALL NOT
BE EXHAUSTED BY ANY SINGLE EXERCISE THEREOF, BUT SHALL CONTINUE AND MAY BE EXERCISED FROM TIME TO
TIME AS OFTEN AS THE LENDER SHALL FIND IT NECESSARY AND DESIRABLE AND AT ALL TIMES UNTIL FUT L
PAYMENT OF ALL AMOUNTS DUE HEREUNDER, AND/OR UNDER THE OTHER LOAN DOCUMENTS. THE LENDER MAY CONFESS
ONE OR MORE JUDGMENTS IN THE SAME OR DIFFERENT JURISDICTIONS FOR ALL OR ANY PART OF THE
INDEBTEDNESS OR OBLIGATIONS ARISING HEREUNDER, AND/OR UNDER THE OTHER LOAN DOCUMENTS, WITHOUT
REGARD TO WHETHER JUDGMENT HAS THERETOFORE BEEN CONFESSED ON MORE THAN ONE OCCASION FOR THE SAME
INDEBTEDNESS OR
OBLIGATIONS. IN THE EVENT THAT ANY JUDGMENT CONFESSED AGAINST THE BORROWERS IS STRICKEN OR
OPENED UPON APPLICATION BY OR ON BEHALF OF ANY OF THE BORROWERS FOR ANY REASON, THE LENDER IS
HEREBY AUTHORIZED AND EMPOWERED TO AGAIN APPEAR FOR AND CONFESS JUDGMENT AGAINST THE OBLIGORS FOR
ANY PART OR ALL OF THE INDEBTEDNESS DUE AND OWING TO THE LENDER HEREUNDER, AND/OR UNDER THE OTHER
LOAN DOCUMENTS.

 

 

 

(c) WARRANT OF ATTORNEY TO CONFESS JUDGMENT — General Provisions. IN ANY ACTION OR
PROCEEDING DESCRIBED IN SECTION 16 HEREIN OR IN CONNECTION THEREWITH, IF COPIES OF THE CREDIT
AGREEMENT AND/OR THE OTHER LOAN DOCUMENTS ARE THEREIN VERIFIED BY THE LENDER OR SOMEONE ACTING FOR
THE LENDER TO BE TRUE AND CORRECT COPIES OF THE CREDIT AGREEMENT AND/OR THE OTHER LOAN DOCUMENTS
(AND SUCH COPIES SHALL BE CONCLUSIVELY PRESUMED TO BE TRUE AND CORRECT BY VIRTUE OF SUCH
VERIFICATION), THEN IT SHALL NOT BE NECESSARY TO FIT ,E THE ORIGINAL OF THE CREDIT AGREEMENT AND/OR
THE OTHER LOAN DOCUMENTS, ANY STATUTE, RULE OF COURT OF LAW, CUSTOM OR PRACTICE TO THE CONTRARY
NOTWITHSTANDING. THE BORROWERS HEREBY RELEASE TO THE LENDER, ANYONE ACTING FOR THE LENDER AND ALL
ATTORNEYS WHO MAY APPEAR FOR THE BORROWERS, ALL ERRORS IN PROCEDURE REGARDING THE ENTRY OF JUDGMENT
OR JUDGMENTS BY CONFESSION OR OTHERWISE BY VIRTUE OF THE WARRANTS OF ATTORNEY CONTAINED IN THIS
AMENDMENT AND/OR THE OTHER LOAN DOCUMENTS, AND ALL LIABILITY THEREFOR. THE RIGHT TO ENTER JUDGMENT
OR JUDGMENTS BY CONFESSION OR OTHERWISE BY VIRTUE OF THE WARRANTS OF ATTORNEY CONTAINED IN THIS
AMENDMENT AND/OR THE OTHER LOAN DOCUMENTS, AND TO ENFORCE ALL OF THE OTHER PROVISIONS OF THE
AFORESAID DOCUMENTS MAY BE EXERCISED BY ANY ASSIGNEE OF THE LENDER’S RIGHT, TITLE AND INTEREST IN
THIS AMENDMENT AND/OR THE OTHER LOAN DOCUMENTS IN SUCH ASSIGNEE’S OWN NAME, ANY STATUTE, RULE OF
COURT OR LAW, CUSTOM OR PRACTICE TO THE CONTRARY NOTWITHSTANDING.

17. 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.

18. 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.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

 

 

 

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

	 	 	 	 	 
	EXISTING BORROWERS: 	CLARIENT, INC.

 	 
	 	By: 	/s/ Michael R. Rodriguez
 	 
	 	 	Name:  	Michael R. Rodriguez 	 
	 	 	Title:  	Senior Vice President and Chief Financial
Officer 	 
	 
	 	CLARIENT DIAGNOSTIC SERVICES, INC.

 	 
	 	By:	/s/ Michael R. Rodriguez
 	 
	 	 	Name:  	Michael R. Rodriguez 	 
	 	 	Title:  	Senior Vice President and Chief Financial
Officer 	 
	 
	 	CHROMAVISION INTERNATIONAL, INC.

 	 
	 	By:	              /s/ Michael R. Rodriguez
 	 
	 	 	Name:  	Michael R. Rodriguez 	 
	 	 	Title:  	Senior Vice President and Chief Financial
Officer 	 
	 
	JOINING BORROWER:	APPLIED GENOMICS, INC.

 	 
	 	By:	                   /s/ Michael R. Rodriguez
 	 
	 	 	Name:  	Michael R. Rodriguez 	 
	 	 	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 FOURTH AMENDMENT AND JOINDER TO CREDIT AGREEMENT]

 

 

 

[EXHIBIT A]

Schedule 2.01

Borrowers’ Jurisdictions of Organization/States of Qualification

	 	 	 	 	 
	 	 	Jurisdiction of	 	 
	Entity	 	Organization	 	States of Qualification
	Clarient, Inc.

	 	Delaware
	 	Alabama, Arizona,
California, Colorado,
Florida, Georgia,
Illinois, Kansas,
Louisiana, Maryland,
Massachusetts,
Michigan, Minnesota,
Missouri, Nevada, New
Jersey, New York,
North Carolina,
Oregon, Pennsylvania,
Tennessee, Texas,
Utah, Washington
	Clarient Diagnostic Services,
Inc.

	 	Delaware
	 	California
	ChromaVision International, Inc.

	 	Delaware	 	 
	Applied Genomics, Inc.

	 	Delaware
	 	Alabama, California

 

 

 

Schedule 2.02

Chief Executive Office/Other Locations of Collateral

	 	 	 
	Clarient, Inc.

Clarient Diagnostic Services, Inc.

ChromaVision International, Inc.

Applied Genomics, Inc.
	 	 
	 
	 	 
	Chief Executive Office

31 Columbia

Aliso Viejo, CA 92656

	 	Other Locations of Collateral

Public Storage

32371 San Juan Creek Road

San Juan Capistrano, CA 92675

Iron Mountain

700 Burning Tree Road

Fullerton, CA 92833

601 Genome Way, Suite 2200

Huntsville, AL 35806

 

 

 

Schedule 2.03

Prior Names

1. ChromaVision Medical Systems, Inc. changed its name to Clarient, Inc. on March 15, 2005.

2. ChromaVision Oncology Services, Inc. changed its name to Clarient Diagnostic Services, Inc. on
March 15, 2005.

 

 

 

Schedule 2.04

Provider Identification Numbers

Clarient Diagnostics, Inc.:

	 	 	 	 	 
	Entity	 	Provider Identification Number	 	Date
	Medicare
	 	05D1021650	 	11/26/2004
	California MediCal
	 	1649264300	 	11/1/2007
	Arizona Medicaid
	 	17269	 	5/5/2005
	Colorado Medicaid
	 	37022253	 	7/18/2005
	Illinois Medicaid
	 	201077777001	 	1/1/2007
	New Hampshire Medicaid
	 	30806376	 	12/19/2007
	Ohio Medicaid
	 	2638784	 	10/10/2004
	South Carolina Medicaid
	 	L00212	 	9/1/2005
	Tennessee Medicaid
	 	4490752	 	3/7/2005
	Texas Medicaid
	 	178046201	 	2/23/2006
	Virginia Medicaid
	 	10291216	 	3/4/2005
	Washington Medicaid
	 	7134562	 	1/1/2006
	Hawaii Medicaid
	 	61440501	 	2/7/2008

 

 

 

Schedule 2.05

Pending Litigation

None.

 

 

 

Schedule 2.06

Permitted Liens

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Collateral
	Debtor	 	Jurisdiction	 	Secured Party	 	Lien Type	 	Filing Into	 	Description
	Clarient, Inc.

	 	Delaware SOS
	 	Xerox Corporation

1301 Ridgeview 

Bldg 300

Lewisville, TX 75057
	 	UCC
	 	2005 3010932
Filed: 9-26-05	 	Leased equipment:

Four Xerox D2500
and Four Xerox
D250DF10
	Clarient, Inc.

	 	Delaware SOS
	 	Xerox Corporation

1301 Ridgeview 

Bldg 300

Lewisville, TX 75057
	 	UCC
	 	2007 1268035

Filed: 4-4-07	 	Leased equipment:

One Xerox D250X and
one Xerox D250EFI2
	ChromaVision Medical Systems,
Inc.

	 	Delaware SOS
	 	Xerox Capital Services LLC

1301 Ridgeview

Bldg 300

Lewisville, TX 75057
	 	UCC
	 	32014929

Filed: 8-4-06	 	Leased equipment:

One Xerox 

DCOL12
and One 

DC470SDX

Equipment lease from Beckman Coulter, Inc. Beckman Coulter, Inc. has a security interest and the
right to file UCC financing statements for their equipment under this lease regardless of whether
such UCC financing statements have been filed.

 

 

 

Schedule 2.07

Fiscal Year End

December 31

 

 

 

Schedule 2.08

Organization Number/Tax Identification Numbers

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Tax Identification	 
	Entity	 	Organization Number	 	 	Number	 
	Clarient, Inc.
	 	 	2609468	 	 	 	75-2649072	 
	Clarient Diagnostic Services, Inc.
	 	 	3784466	 	 	 	20-1077777	 
	ChromaVision International, Inc.
	 	 	2988621	 	 	 	33-0835274	 
	Applied Genomics, Inc.
	 	 	3223628	 	 	 	63-1250037	 

 

 

 

Schedule 2.09

Existing Guaranties/Investments and Borrowings

1. Clarient, Inc.’s investments in Clarient Diagnostic Services, Inc., ChromaVision International,
Inc. and Applied Genomics, Inc.

2. ChromaVision International, Inc.’s investments in CHROMAVISION SARL and CHROMAVISION
INTERNATIONAL GMBH.

3. Comerica Bank pursuant to the Security and Pledge Agreement dated March 26, 2009 pursuant to
which Clarient, Inc. has cash collateralized its obligations under a Standby Letter of Credit
Application and Agreement dated August 1, 2005 with Comerica Bank pursuant to which Comerica Bank
has provided a letter of credit in the amount of $2.25 million to the landlord of Clarient, Inc.’s
leased facility in Aliso Viejo, California.

4. Equipment lease from Xerox Corporation and Xerox Capital Services, LLC. $135,978 has been paid
under this lease in 2009, and payments totaling $48,859 are remaining for this year. The following
payments are scheduled under this lease: (i) 2010: $195,436 in the aggregate, (ii) 2011: $195,436
in the aggregate, (iii) 2012: $181,471 in the aggregate and (iv) 2013: $171,496 in the aggregate.
See Schedule 2.06.

5. Equipment lease from Beckman Coulter, Inc for one LIS Data Management System and accessories and
two Cytomics FC 500 and related equipment. Clarient, Inc. leases this equipment and buys reagents
from Beckman Coulter, Inc. Under the agreement, Clarient, Inc. is required to purchase reagents
and lease equipment in the following amounts: (i) 2009: $408,000 in the aggregate, (iii) 2010:
$408,000 in the aggregate and (iii) 2011: $374,000 in the aggregate.

6. Med One Capital Funding, LLC: 36 month lease for ACIS II system equipment starting April 1, 2008
at $4,500 per month for three months, which then increases to $11,500 per month for the lease
duration and a 36 month lease for imaging equipment from Med One Capital Funding, LLC starting June
1, 2008 at $2,635 per month.

7. Computer equipment lease from Hitachi Data Systems Credit Corporation. $267,288 has been paid
under this lease in 2009, and payments totaling $38,184 is remaining for this year. The following
payments are scheduled under this lease: (i) 2010: $458,208 in the aggregate, (ii) 2011: $458,208
in the aggregate, and (iii) 2012: $152,376 in the aggregate.

8. Obligations under Indebtedness permitted under Section 7.12 and incurred after the Closing Date.

9. Investments permitted under Section 7.06 and made after the Closing Date.

10. Guarantees permitted under Section 7.05.

 

 

 

Schedule 2.10

Other Associations

1. Clarient, Inc. directly owns 100% of Clarient Diagnostic Services, Inc., ChromaVision
International, Inc. and Applied Genomics, Inc.

2. ChromaVision International, Inc. directly owns 100% of CHROMAVISION SARL and CHROMAVISION
INTERNATIONAL GMBH.

3. Affiliates of Clarient, Inc. as described on Schedule 2.12 and thereafter as a result of public
trading of the shares of Clarient, Inc.

4. Investments permitted by Section 7.06.

 

 

 

Schedule 2.11

Environmental Matters

None.

 

 

 

Schedule 2.12

Capital Stock

	 	 	 
	Clarient, Inc.
	 	 
	 
	 	 
	Authorized Stock:

	 	150,000,000 shares of common stock, par value $.01

8,000,000 shares of preferred stock, par value $.01

	 	 	 
	Outstanding Stock as of November 30, 2009:

	 	78,773,023 shares of common stock

5,263,158 shares of preferred stock

Safeguard, through its wholly-owned subsidiaries Safeguard Delaware, Inc. and Safeguard Scientifics
(Delaware), Inc., holds 30,896,794 shares, or 28.1%, of the stock of Clarient, Inc. on a
fully-diluted basis.

Oak Investment Partners XII, Limited Partnership (“Oak”) holds 21,052,632 shares, or 19.2%, of the
stock of Clarient, Inc. on a fully-diluted basis.

Stock Options and Restricted Stock Awards: Please see the attached lists of outstanding stock
options and restricted stock awards as of December 17, 2009. Clarient, Inc. may also issue
additional stock options and restricted stock awards according to the equity incentive plans listed
below.

Equity Incentive Plans:

1. 1996 Equity Compensation Plan, as amended

2. 2007 Incentive Award Plan, as amended

Other Subscriptions, Options, Calls, Commitments, Rights or Agreements and Convertible Securities:

1. Securities Purchase Agreement, dated June 13, 2002, by and between Clarient, Inc., Safeguard
Delaware, Inc., and Safeguard Scientifics, Inc.

2. Amendment to Securities Purchase Agreement, dated March 26, 2009, entered into between Clarient,
Inc. and Safeguard Delaware, Inc.

3. Amended and Restated Registration Rights Agreement, dated February 27, 2009, by and among
Clarient, Inc., Safeguard Delaware, Inc., Safeguard Scientifics, Inc. and Safeguard Scientifics
(Delaware), Inc.

4. Stock Purchase Agreement, dated as of March 25, 2009, by and between Clarient, Inc. and Oak.

5. Registration Rights Agreement, dated as of March 26, 2009, by and between Clarient, Inc. and
Oak.

6. Stockholders Agreement dated March 26, 2009 by and among Safeguard Delaware, Inc., Safeguard
Scientifics, Inc., Safeguard Scientifics (Delaware), Inc., and Oak.

 

 

 

Warrants: Please see the attached list of outstanding warrants to purchase common stock as of
December 17, 2009. None of the issued and outstanding warrants contain a provision requiring
Clarient, Inc. to repurchase the warrant or the shares of stock issuable upon exercise thereof.

Convertible Securities: In March and May 2009, Clarient, Inc. issued and sold an aggregate of 5.2
million shares of Series A convertible preferred stock (the “Preferred Stock”) to Oak. Each share
of Preferred Stock will be voted with common shares on an as-converted basis and is initially
convertible, at any time, into four shares of Clarient, Inc.’s common stock, subject to broad-based
weighted-average anti-dilution protection in the event that Clarient, Inc. issues additional shares
at or below the then-applicable conversion price for such share (initially, $1.90). The shares of
Preferred Stock will automatically convert if, at any time beginning 12 months after March 26,
2009, Clarient, Inc.’s common stock price is above $4.75 per share (as adjusted for stock splits,
combinations, recapitalizations and the like) for 20 consecutive trading days over a 30-day trading
period (all of which trading days must fall after March 27, 2010).

Clarient Diagnostic Services, Inc. 

Authorized Stock: 1000 shares of common stock, par value $.01

Outstanding Stock: 100 shares owned by Clarient, Inc.

ChromaVision International, Inc. 

Authorized Stock: 100,000 shares of common stock, par value $.01

Outstanding Stock: 100,000 shares owned by Clarient, Inc.

Applied Genomics, Inc.

Authorized Stock: 1000 shares of common stock, par value $.0001

Outstanding Stock: 100 shares owned by Clarient, Inc.

 

 

 

Schedule 2.13

Commercial Tort Claims

None.

 

 

 

Schedule 2.14

Letter of Credit Rights

None.

 

 

 

Schedule 2.15

Intellectual Property

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Application/
	 	 	 	 	 	 	Application/	 	Registration
	Grantor	 	Country	 	Mark	 	Registration No.	 	Date
	Trademarks
	 	 	 	 	 	 	 	 
	Clarient, Inc.
	 	USA	 	Bringing Clarity to a Complex Disease	 	77-872403	 	11/13/2009
	Clarient, Inc.
	 	USA	 	Together, We Help You Find the Difference that Makes a Difference	 	77-854816	 	10/22/2009
	Clarient, Inc.
	 	USA	 	C Cause Cancer – Action – Understanding Services – Education	 	77-854803	 	10/22/2009
	Clarient, Inc.
	 	USA	 	Recurrence...Only Testing Will Tell	 	77-848631	 	10/14/2009
	Clarient, Inc.
	 	USA	 	Recurrence...Only Testing Will Tell	 	77-722216	 	4/24/2009
	Clarient, Inc.
	 	USA	 	Clarient Insight	 	3592638	 	3/17/2009
	Clarient, Inc.
	 	USA	 	Pathsite Scope	 	3670115	 	8/18/2009
	Clarient, Inc.
	 	USA	 	Clarient Synopsis	 	3606677	 	4/14/2009
	Clarient, Inc.
	 	USA	 	Clarient Synopsis	 	3651783	 	7/7/2009
	Clarient, Inc.
	 	USA	 	Clarient Continuum	 	3419091	 	4/29/2008
	Clarient, Inc.
	 	USA	 	Clarient	 	3360451	 	12/25/2007
	Clarient, Inc.
	 	USA	 	Pathsite	 	3319794	 	10/23/2007
	Clarient, Inc.
	 	USA	 	Clarient	 	3357168	 	12/18/2007
	Clarient, Inc.
	 	USA	 	Taking Cancer Personally	 	3294804	 	9/18/2007
	ChromaVision Medical Systems, Inc.
	 	USA	 	QUIHC	 	2976240	 	07/26/05
	ChromaVision Medical Systems, Inc.
	 	USA	 	Chromavision	 	2235101	 	3/24/2000
	Applied Genomics, Inc.
	 	USA	 	Mammostrat	 	3357528	 	12/18/2007
	Applied Genomics, Inc.
	 	USA	 	Pulmotype	 	3719323	 	12/1/2009
	Patents
	 	 	 	 	 	 	 	 
	Clarient, Inc.
	 	USA	 	CV212 Pending 1 Methods of Correlating Chemical and Spatial Data in Pathology Samples	 	12021267	 	1/28/2008
	Clarient, Inc.
	 	USA	 	CV215 Pending 1 Use of Laser Micro-dissection in Pathology	 	12/022750	 	1/15/2008
	Clarient, Inc.
	 	USA	 	CV221 Pending 1 Marker for myeloid, proliferation	 	12020972	 	1/21/2008
	Clarient, Inc.
	 	USA	 	CV 222 Pending 1 Oncogenic signature	 	11929858	 	1/15/2008
	Applied Genomics, Inc.
	 	USA	 	Basal Marker	 	7118853	 	10/10/2006
	Applied Genomics, Inc.
	 	USA	 	Ovarian Panel	 	7504255	 	3/17/2009
	Applied Genomics, Inc.
	 	PCT	 	Antibody Panel	 	PCT/US06/05601	 	2/17/2006
	Applied Genomics, Inc. 
	 	Australia	 	Antibody Panel	 	AU 2006255766	 	2/17/2006

 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Application/
	 	 	 	 	 	 	Application/	 	Registration
	Grantor	 	Country	 	Mark	 	Registration No.	 	Date
	Applied Genomics, Inc. 
	 	Canada	 	Antibody Panel	 	CA 2598170	 	2/17/2006
	Applied Genomics, Inc. 
	 	Europe	 	Antibody Panel	 	EP 06784318.5	 	2/17/2006
	Applied Genomics, Inc.
	 	PCT	 	HER2 + Panel	 	PCT/US07/80800	 	10/9/2007
	Applied Genomics, Inc.
	 	PCT	 	Head and Neck Panel	 	PCT/US08/57840	 	3/21/2008
	Applied Genomics, Inc.
	 	USA	 	Antibody Panel	 	12/013,758	 	1/14/2008
	Applied Genomics, Inc.
	 	USA	 	Antibody Panel	 	12/013,739	 	1/14/2008
	Applied Genomics, Inc.
	 	USA	 	TLE3 Panel	 	12/277,920	 	11/25/2008
	Applied Genomics, Inc.
	 	PCT	 	TLE3 Panel	 	PCT/US08/84658	 	11/25/2008
	Applied Genomics, Inc.
	 	USA	 	HER2 + Panel	 	12/444,007	 	10/9/2007
	Applied Genomics, Inc.
	 	UK	 	TLE3 Panel	 	GB 0910374.8	 	11/25/2008
	Applied Genomics, Inc.
	 	USA	 	TLE3 Panel	 	12/578,255	 	10/13/2009

Licenses

1. System & Services Agreement, dated as of August 16, 2007, by and between Xifin® Inc. and
Clarient, Inc.

2. PCR Patent License Agreement, dated as of December 21, 2004, by and between Roche Molecular
Systems, Inc. and Clarient Diagnostic Services, Inc. (f/k/a ChromaVision Oncology Services, Inc.).

3. Definiens Inc. Master Software License And Services Agreement, dated as of June 30, 2008, by and
between Definiens, Inc. and Clarient, Inc.

4. License Agreement, dated as of January 8, 2008, as amended October 5, 2009, by and between
Clarient, Inc. and Prediction Sciences, LLC.

5. License for Hybridoma Cell Lines, dated as of November 27, 2006 by and between Cancer Research
Technology Limited and Applied Genomics, Inc.

6. Co-Development and Commercialization Collaboration Agreement, dated as of April 25, 2007 by and
between Epitomics, Inc, and Applied Genomics, Inc.

7. Amended and Restated Service Agreement, dated as of September 22, 2004, by and between
Epitomics, Inc, and Applied Genomics, Inc.

8. License Agreement, dated as of May 24, 2006, by and between Genovac GmbH and Applied Genomics,
Inc.

9. Amended and Restated Exclusive License Agreement, dated as of November 17, 2000, by and between
Stanford University and Applied Genomics, Inc.

10. Amended and Restated Option Agreement, dated as of November 17, 2000, by and between Stanford
University and Applied Genomics, Inc.

 

 

 

Schedule 2.16

Investments

1. Investments of Clarient, Inc. in its Subsidiaries.

2. Investments of ChromaVision International, Inc. in CHROMAVISION SARL and CHROMAVISION
INTERNATIONAL GMBH.

 

 

 

Schedule 2.17

Indebtedness

None.

 

 

 

Schedule 7.04(a)

Transactions with Affiliates and Subsidiaries

1. Travel and other related expenses for Safeguard representatives on the Clarient, Inc. board to
attend meetings of the Clarient, Inc. board, all consistent with past practices, not to exceed
$25,000 in the aggregate in any calendar year.

2. Employee loans solely to the extent permitted under Section 7.06(h).

3. Subject to Section 7.10, issuance of stock options, restricted stock or other equity interests
in Clarient, Inc. to officers and directors pursuant to stock option or other agreements and
modifications to such agreements.

4. Compensation arrangements for officers approved by the compensation committee of the Board of
Directors of each of the Borrowers, consistent with past practices, including without limitation
relocation assistance, as applicable, and compensation arrangements for directors consistent with
industry standards.

5. Repurchases of stock from terminated employees or employees no longer employed due to death or
disability, not to exceed $50,000 in any fiscal year, solely in accordance with Section 7.10(iv).

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