Document:

Exhibit 10.1

CLARIENT, INC.

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”)
is dated as of September 22, 2006, among Clarient, Inc., a Delaware corporation
(the “Company”), and Safeguard Delaware, Inc., a Delaware corporation
(the “Purchaser”); and

WHEREAS, subject to the terms and conditions set forth
in this Agreement and pursuant to Section 4(2) of the Securities Act (as
defined below), and Rule 506 promulgated thereunder, the Company desires to
issue and sell to the Purchaser, and the Purchaser desires to purchase from the
Company in the aggregate, up to $3,000,000 of Common Stock, together with
Warrants to purchase additional shares of Common Stock equal to 15% of the
number of shares of Common Stock purchased hereunder (each unit of one share of
Common Stock and one Warrant to purchase 3/20ths of a share of Common Stock is
referred to herein as a “Unit”).

NOW, THEREFORE, IN CONSIDERATION of the mutual
covenants contained in this Agreement, and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the
Company and the Purchaser agree as follows:

ARTICLE
I.

DEFINITIONS

1.1           Definitions.  In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms have
the meanings indicated in this Section 1.1:

“2004 Registration Rights Agreement” means the registration
rights agreement, dated as of February 10, 2004, between the Company, fka
ChromaVision Medical Systems, Inc., and the Purchaser.

“Action” shall have the meaning ascribed to such term in Section
3.1(j).

“Affiliate” means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with a Person as such terms are used in and construed under Rule
144.

“Authorization” shall have the meaning ascribed to such term in
Section 3.1(e).

“Business Day” means any day except Saturday, Sunday and any day
which shall be a federal legal holiday or a day on which banking institutions
in the State of New York are authorized or required by law or other
governmental action to close.

“Closing” means the closing of the purchase and sale of the
Units pursuant to Section 2.1.

“Commission” means the Securities and Exchange Commission.

 

“Common
Stock” means the common stock of the Company, $0.01 par value per share,
and any securities into which such common stock may hereafter be reclassified.

“Company
Counsel” means Latham and Watkins LLP, counsel to the Company.

“Disclosure
Materials” shall have the meaning ascribed to such term in
Section 3.1(h).

“Disclosure Schedules” means the Disclosure Schedules attached
hereto.

“Effective Date” means the date that the Registration Statement
is first declared effective by the Commission.

“Effectiveness Period” shall have the meaning ascribed to such
term in Section 4.2.

“Evaluation Date” shall have the meaning ascribed to such term
in Section 3.1(u).

“Exchange Act” means the Securities Exchange Act of 1934, as
amended.

“GAAP” shall have the meaning ascribed to such term in Section
3.1(h).

“Governmental Entity” shall have the meaning ascribed to such
term in Section 3.1(e).

“Intellectual Property Rights” shall have the meaning ascribed
to such term in Section 3.1(p).

“Law” shall have the meaning ascribed to such term in Section
3.1(e).

“Liens” shall have the meaning ascribed to such term in Section
3.1(a).

“Material Adverse Effect” shall have the meaning ascribed to
such term in Section 3.1(b).

“Material Permits” shall have the meaning ascribed to such term
in Section 3.1(n).

“Per Unit Purchase Price” equals $0.72, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the
Common Stock that occur after the date of this Agreement.

“Person” means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.

“Registration Statement” means a registration statement meeting
the requirements set forth in the 2004 Registration Rights Agreement and
covering the resale by the Purchaser of the Shares.

“Regulation D” shall have the meaning ascribed to such term in
Section 3.1(ff).

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“Rule 144” means Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

“SEC Reports” shall have the meaning ascribed to such term in
Section 3.1(h).

“Securities” means
the Shares, the Warrants and the Warrant Shares.

“Securities Act” means the Securities Act of 1933, as amended.

“Sellers” means Trestle Holdings, Inc., a Delaware corporation,
and Trestle Acquisition Corp., a Delaware corporation.

“Shares” means the shares of Common Stock issued or issuable to
the Purchaser pursuant to this Agreement.

“Subsidiary” means any “significant subsidiary” as defined in Rule
1-02(w) of Regulation S-X promulgated by the Commission under the Exchange Act
of the Company.

“Subscription Amount” means $3,000,000.

“Trading Day” means (i) a day on which the Common Stock is
traded on a Trading Market, or (ii) if the Common Stock is not listed or quoted
on a Trading Market, a day on which the Common Stock is traded on the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is
not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted
in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.

“Trading Market” means the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date in question:
the American Stock Exchange, the New York Stock Exchange, the Nasdaq National
Market or the Nasdaq SmallCap Market (the Nasdaq National Market and Nasdaq
SmallCap Market, “Nasdaq”).

“Transaction Documents” means this Agreement, the 2004
Registration Rights Agreement and the Warrant.

“Warrants” means Common Stock Purchase Warrants, in the form of Exhibit
A, issuable to the Purchaser at Closing, which warrants shall be
exercisable immediately and have an exercise price equal to $0.98 per share of
Common Stock and a term of exercise of four (4) years.

“Warrant Shares” means the shares of Common Stock issuable upon
exercise of the Warrants.

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ARTICLE
II.

PURCHASE AND SALE

2.1           Closing.

(a)           Closing.  Subject to the terms and conditions set forth
in this Agreement, at the Closing, the Purchaser shall purchase, and the
Company shall issue and sell, to the Purchaser 4,162,042 Units at the Per Unit
Purchase Price.  The Closing shall occur
at the offices of Latham & Watkins LLP, 633 West Fifth Street, Suite 4000,
Los Angeles, California, 90071 on September 22, 2006, or on such other date and
at such other location as the Company and the Purchaser shall mutually agree.

2.2           Closing Deliveries.

(a)           At
the Closing the Company shall deliver or cause to be delivered to the Purchaser
the following:

(i)            this
Agreement duly executed by the Company;

(ii)           a
certificate evidencing a number of Shares equal to the Subscription Amount
divided by the Per Unit Purchase Price, registered in the name of Purchaser;

(iii)          a
Warrant, registered in the name of the Purchaser, pursuant to which Purchaser
shall have the right to acquire up to the number of shares of Common Stock
equal to 15% of the number of Shares purchased at the Closing;

(b)           At
the Closing, the Purchaser shall deliver or cause to be delivered to the Company
the following:

(i)            this
Agreement duly executed by Purchaser; and

(ii)           the
Subscription Amount by wire transfer to the account designated in writing by
the Company.

ARTICLE
III.

REPRESENTATIONS AND WARRANTIES

3.1           Representations and Warranties of the Company.  Except as set forth in the SEC Reports or
under the corresponding section of the Disclosure Schedules delivered
concurrently herewith, the Company hereby makes the following representations
and warranties as of the date hereof and as of the Closing Date to the
Purchaser:

(a)           Subsidiaries.  The Company owns, directly or indirectly, all
of the capital stock of each Subsidiary free and clear of any lien, charge,
security interest, encumbrance, right of first refusal or other restriction
(collectively, “Liens”), and all the issued and outstanding shares of
capital stock of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights.

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(b)           Organization
and Qualification.  Each of the
Company and each Subsidiary is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as described in the Disclosure Materials.  Each Subsidiary is a direct or indirect
wholly owned Subsidiary of the Company. 
Neither the Company nor any Subsidiary is in violation of any of the
provisions of its respective certificate or articles of incorporation, bylaws
or other organizational or charter documents. 
Each of the Company and the Subsidiaries is duly qualified or licensed
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, would not
have or reasonably be expected to (i) result in a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii)
result in a material adverse effect on the results of operations, assets,
business or financial condition of the Company and the Subsidiaries, taken as a
whole, or (iii) adversely impair the Company’s ability to perform in any
material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”).

(c)           Authorization;
Enforcement.  The Company has the
requisite corporate power and authority to execute and deliver each of the
Transaction Documents and to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is party and
otherwise to carry out its obligations thereunder.  The execution and delivery of each of the
Transaction Documents to which it is a party by the Company and the
consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company or its stockholders in connection
therewith.  Each Transaction Document
including this Agreement has been (or upon delivery will have been) duly
executed by the Company and, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) with
respect to indemnification and contribution in Section 4.9 hereof, as limited
by laws, or public policy underlying such laws.

(d)           No
Conflicts.  The execution, delivery
and performance of the Transaction Documents to which it is a party by the
Company and the consummation by the Company of the transactions contemplated
thereby do not and will not (i) conflict with or violate any provision of the
Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws
or other organizational or charter documents; (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both)
of, any agreement, credit facility, debt or other instrument (evidencing a
Company or Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which 

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any property or asset of the Company or any Subsidiary is bound or
affected; (iii) to the Company’s knowledge, conflict with, or result in or
constitute any violation of, any award, decision, judgment, decree, injunction,
writ, order, subpoena, ruling, verdict or arbitration award entered, issued,
made or rendered by any federal, state, local or foreign government or any
other Governmental Entity, or any Law, applicable to the Company or any of its
Subsidiaries, or to any of their respective properties or assets, or to any
Securities; (iv) result in the creation or imposition of (or the obligation to
create or impose) any Lien on any of the properties or assets of the Company or
any of its subsidiaries, or on any of the Securities; or (v) conflict with, or
result in or constitute any violation of, or result in the termination,
suspension or revocation of, any Authorization applicable to the Company or any
of its subsidiaries, or to any of their respective properties or assets, or to
any of the Securities, or result in any other impairment of the rights of the
holder of any such Authorization; except in the case of each of clauses (ii),
(iii), (iv) and (v), such as would not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect.

(e)           Filings,
Consents and Approvals.  Assuming the
accuracy of the representation of the Purchaser set forth in Section 3.2
hereof, no registration (including any registration under the Securities Act)
or filing with, or any notification to, or any approval, permission, consent,
ratification, waiver, authorization, order, finding of suitability, permit,
license, franchise, exemption, certification or similar instrument or document
(each, an “Authorization”) of or from, any court, arbitral tribunal,
arbitrator, administrative or regulatory agency or commission or other
governmental or regulatory authority, agency or governing body, domestic or
foreign, including without limitation any Trading Market (each, a “Governmental
Entity”), or any other person, or under any statute, law, ordinance, rule,
regulation or agency requirement of any Governmental Entity, (each, a “Law”),
on the part of the Company or any of its subsidiaries is required in connection
with the execution or delivery by the Company of the Transaction Documents or the
performance by the Company of its obligations under each of the Transaction
Documents except (i) as would not have a Material Adverse Effect on the
Company or its performance of its obligations under the Transaction Documents
and (ii) Form D and blue sky filings and (iii) the filings
contemplated by the Transaction Documents.

(f)            Issuance
of the Securities.  The Securities
have been duly authorized and, when issued and paid for in accordance with the
Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens, except for such restrictions on
transfer or ownership imposed by applicable federal or state securities laws or
set forth in this Agreement.  The Company
has reserved from its duly authorized capital stock the maximum number of
shares of Common Stock issuable pursuant to this Agreement.

(g)           Capitalization.  As of the date hereof, the authorized capital
stock of the Company consists of 108,000,000 shares,
100,000,000 shares of which are common stock, $0.01 par value per share
and 8,000,000 shares of which are preferred stock, $0.01 par value per
share.  As of the date hereof and
immediately prior to the transactions contemplated hereby, there are 66,864,383 shares of Common Stock
issued and outstanding and no shares of preferred stock issued and
outstanding.  Other than as 

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contemplated in this Agreement, the Company has not issued any capital
stock since December 14, 2005 other than pursuant to the exercise of
(i) stock options or restricted grants held by employees, officers,
directors, or consultants, whether or not pursuant to the Company’s equity
incentive plans or stock option plans, (ii) the issuance of shares of
Common Stock to employees pursuant to the Company’s equity incentive plans,
stock option plans, stock option agreements, restricted stock agreements, stock
ownership plans or dividend reinvestment plans, and (iii) pursuant to the
conversion or exercise of outstanding Common Stock Equivalents.  Except as set forth in the Disclosure Materials,
no Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. 
Except as disclosed on Schedule 3.1(g) of the Disclosure
Schedules, there are no outstanding options, warrants, script rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue additional shares of
Common Stock, or securities or rights convertible or exchangeable into shares
of Common Stock.  The issue and sale of
the Securities will not obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the shares of Common Stock being issued
to the Purchaser hereunder) and will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or reset price
under such securities.

(h)           SEC
Reports; Financial Statements.  The
Company has filed all reports required to be filed by it under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as
the Company was required by law to file such material) (the foregoing
materials, including the exhibits thereto (together with any materials filed by
the Company under the Exchange Act, whether or not required), being
collectively referred to herein as the “SEC Reports” and, together with
the Disclosure Schedules to this Agreement, the “Disclosure Materials”)
on a timely basis or has timely filed a valid extension of such time of filing
and has filed any such SEC Reports prior to the expiration of any such
extension.  The Company has informed the
Purchaser prior to the date hereof of any filing by the Company of any SEC
Reports within the 10 days preceding the date hereof.  As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  The financial statements of
the Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the 

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Company and its consolidated subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.  All material
agreements to which the Company and its Subsidiaries are a party or to which
any of their respective property or assets are subject that are required to be
filed as Exhibits to the SEC Reports under Item 601 of Regulation S-K
are included as a part of, or specifically identified in, the SEC Reports.

(i)            Material
Changes.  Since the date of the
latest audited financial statements included within the SEC Reports, except as
disclosed in the Disclosure Materials, (i) there has been no event,
occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and
accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities that would not be required to be
reflected in the Company’s financial statements pursuant to GAAP or that would
not be required to be disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the Company has
not issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company equity incentive plans, stock option plans, stock
option agreements, restricted stock agreements, stock ownership plans or
dividend reinvestment plans.  The Company
does not have pending before the Commission any request for confidential
treatment of information.

(j)            Litigation.  Except as disclosed in the Disclosure
Materials, there are no actions, suits, inquiries, notices of violation, proceedings
or investigations pending or, to the knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) would have or reasonably be expected
to result in a Material Adverse Effect. 
Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty.  There has not
been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or any
current or former director or officer of the Company.  The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed
by the Company or any Subsidiary under the Exchange Act or the Securities Act.

(k)           Labor
Relations.  No material labor dispute
exists or, to the knowledge of the Company, is imminent with respect to any of
the employees of the Company or any Subsidiary which could reasonably be
expected to result in a Material Adverse Effect.

(l)            Taxes.  Each of the Company and its Subsidiaries has
filed all necessary material federal, state and foreign income and franchise
tax returns and has paid or 

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accrued all material taxes shown as due thereon, and neither the
Company nor any of its Subsidiaries has knowledge of a tax deficiency which has
been or might be asserted or threatened against it which could reasonably be
expected to result in a Material Adverse Effect.

(m)         
Compliance.  Neither the Company
nor any Subsidiary (i) is in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of time or both,
could result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default
under or that it is in violation of, any agreement, credit facility, debt or
other instrument (evidencing a Company or Subsidiary debt or otherwise) or
other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or
affected (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
to the Company’s knowledge, is or has been in violation of any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental
protection, kickbacks
and false claims in healthcare programs, occupational health and safety,
product quality and safety and employment, labor matters, except in each case
as would not, individually or in the aggregate, have or reasonably be expected
to result in a Material Adverse Effect. The Company is in compliance with the
applicable requirements of the Sarbanes-Oxley Act of 2002 and the rules and
regulations thereunder promulgated by the Commission, except where such
noncompliance would not have or reasonably be expected to result in a Material
Adverse Effect.

(n)           Regulatory
Permits.  The Company and the
Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary
to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits would not have or reasonably be
expected to result in a Material Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.

(o)           Title
to Assets.  The Company and the
Subsidiaries have good and marketable title in fee simple to all real property
owned by them that is material to their respective businesses and good and
marketable title in all personal property owned by them that is material to
their respective businesses, in each case free and clear of all Liens, except
for (i) Liens described on Schedule 3.1(o) of the Disclosure
Schedules, (ii) Liens as do not materially affect the value of such
property, do not materially interfere with the use made and proposed to be made
of such property by the Company and the Subsidiaries, (iii) Liens for
taxes not yet due and payable and (iv) Liens which would not, individually
or in the aggregate, reasonably be expected to have or result in a Material
Adverse Effect.  To the Company’s
knowledge, any real property and facilities held under lease by the Company and
the Subsidiaries are held by them under valid, subsisting and enforceable
leases of which the Company and the Subsidiaries are in compliance except, in
each case, as would not reasonably be expected to result in a Material Adverse
Effect.

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(p)           Patents and
Trademarks.  The Company and the
Subsidiaries own (and are the record owner of) or possess adequate licenses to
use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, licenses, confidential information,
technology and other similar rights (and all goodwill associated therewith)
that are necessary or that are used in connection with their respective
businesses as described in the SEC Reports and which the failure to so own or
have would, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect (collectively, the “Intellectual
Property Rights”).  Except as set forth in the Disclosure
Materials, neither the Company nor any Subsidiary has received a written notice
that any of the Intellectual Property Rights violates or infringes upon or
conflicts with the rights of any Person. 
Except as set forth in the Disclosure Materials, or as would not
reasonably be expected to result in a Material Adverse Effect, to the knowledge
of the Company, all such Intellectual Property Rights are enforceable and there
is no existing infringement by another Person of any of the Intellectual
Property Rights.

(q)           FDA Compliance.  The Company, and the manufacture, marketing
and sales of its products, comply with any and all applicable requirements of
the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301, et seq., any rules
and regulations of the Food and Drug Administration promulgated thereunder, and
any similar laws outside of the United States to which the Company is subject,
except where such noncompliance would not, individually or in the aggregate,
have a Material Adverse Effect.

(r)            Insurance.  The Company and the Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in
which the Company and the Subsidiaries are engaged.  Neither the Company nor any Subsidiary has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a
significant increase in cost.

(s)           Price of Common
Stock.  The Company has not taken,
and will not take, directly or indirectly, any action designed to cause or
result in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the shares of the
Common Stock to facilitate the sale or resale of the Securities.

(t)            Transactions
With Affiliates and Employees. 
Except as set forth in the Disclosure Materials, none of the officers or
directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and
directors) which would be required to be disclosed by the Company pursuant to
Item 402 under Regulation S-K under the Exchange Act, including
any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner, in each case in excess of 

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$60,000
other than (a) for payment of salary or consulting fees for services
rendered, (b) reimbursement for expenses incurred on behalf of the Company
and (c) for other employee benefits, including stock option agreements,
whether or not issued, under any stock option plan of the Company.

(u)           Internal
Accounting Controls.  The Company and
each of its subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.  The Company has established disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the Company and designed such disclosure controls and procedures to ensure
that material information relating to the Company, including its subsidiaries,
is made known to the certifying officers by others within those entities,
particularly during the period in which the Company’s Form 10-K or
10-Q, as the case may be, is being prepared.  The Company’s certifying officers have
evaluated the effectiveness of the Company’s controls and procedures as of the
last day of the fiscal quarter covered by the most recently filed periodic
report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in its most recently
filed Form 10-K or Form 10-Q the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no
significant changes in the Company’s internal controls (as such term is defined
in Item 307(b) of Regulation S-K under the Exchange Act) or, to
the Company’s knowledge, in other factors that could significantly affect the
Company’s internal controls.

(v)           Solvency.  Based on the financial condition of the
Company as of the Closing Date (and assuming that the Closing shall have
occurred), (i) the Company’s fair saleable value of its assets exceeds the
amount that will be required to be paid on or in respect of the Company’s
existing debts and other liabilities (including known contingent liabilities)
as they mature; (ii) the Company’s assets do not constitute unreasonably small
capital to carry on its business for the current fiscal year as now conducted
and as proposed to be conducted including its capital needs taking into account
the particular capital requirements of the business conducted by the Company,
and projected capital requirements and capital availability thereof; and (iii)
the current cash flow of the Company, together with the proceeds the Company
would receive, were it to liquidate all of its assets, after taking into
account all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its debt when such amounts are required to be
paid.  The Company does not intend to
incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in respect of its
debt).

(w)          Certain Fees.  No brokerage or finder’s fees or commissions
are or will be payable by the Company to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions 

 11
 

 

contemplated
by this Agreement.  Purchaser shall have
no obligation with respect to any fees or with respect to any claims made by or
on behalf of other Persons for fees of a type contemplated in this Section that
may be due in connection with the transactions contemplated by this Agreement.

(x)            Certain
Registration Matters.  Assuming the
accuracy of Purchaser’s representations and warranties set forth in Section
3.2(b)-(e), no registration under the Securities Act is required for the offer
and sale of the Securities by the Company to the Purchaser under the
Transaction Documents.  The Company is
eligible to register the resale of its Common Stock for resale by the Purchaser
under Form S-3 under the Securities Act.

(y)           Registration
Rights.  Except as set forth in the
Disclosure Materials, no Person has any right to cause the Company to effect
the registration under the Securities Act of any securities of the Company.

(z)            Listing and
Maintenance Requirements.  Except as
specified in the Disclosure Materials, the Company has not, in the twenty-four
months preceding the date hereof, received notice from any Trading Market on
which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is, and has no reason to believe that it will
not in the foreseeable future continue to be, in compliance with all such
listing and maintenance requirements. 
The Company is in compliance with the listing and maintenance
requirements for continued listing of the Common Stock on the Nasdaq SmallCap
Market.

(aa)         Investment Company.  The Company is not, and after giving effect
to the sale of the Securities and the application of the net proceeds
therefrom, will not be,  an “investment
company” within the meaning of the Investment Company Act of 1940, as amended,
or an Affiliate of an “investment company.”

(bb)         Off-Balance Sheet
Arrangements.  There is no
transaction, arrangement or other relationship between the Company and an
unconsolidated or other off-balance sheet entity that is required to be
disclosed by the Company in its Exchange Act filings and is not so disclosed or
that otherwise would be reasonably expected to result in a Material Adverse
Effect.  There are no such transactions,
arrangements or other relationships with the Company that may create
contingencies or liabilities that are not otherwise disclosed by the Company in
its Exchange filings.

(cc)         Application of
Takeover Protections.  The Company
and its Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Certificate of Incorporation
(or similar charter documents) or the laws of its state of incorporation or any
agreement to which the Company is a party that is or could become applicable to
the Purchaser as a result of the Purchaser and the Company fulfilling their
obligations or exercising their rights under the Transaction Documents, including
without limitation the Company’s issuance of the Securities and the Purchaser’s
ownership of the Securities.

 12
 

 

(dd)         No Additional
Agreements.  The Company does not
have any agreement or understanding with the Purchaser with respect to the
transactions contemplated by the Transaction Documents other than as specified
in this Agreement.

(ee)         Disclosure.  All disclosure provided to the Purchaser
regarding the Company, its business and the transactions contemplated hereby,
including the Disclosure Schedules to this Agreement, furnished by or on behalf
of the Company are true and correct in all material respects and do not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.

(ff)           Regulation D.  None
of the Company or any affiliate (as defined in Rule 501(b) of Regulation D
(“Regulation D”) under the Securities Act) of the Company has directly,
or through any agent, (a) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of any security (as defined in the Securities
Act) which is or will be integrated with the sale of the Securities in a manner
that would require the registration of the Securities under the Securities Act
or cause this offering to be integrated with other offerings of the Company for
purposes of the rules and regulations of the Nasdaq National Market or; (b)
engaged in or used any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the sale of the
Securities, including articles, notices or other communications published in
any newspaper, magazine or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising.

(gg)         Acknowledgment Regarding Purchaser’s Purchase
of Company Securities.  The Company acknowledges and agrees that the
Purchaser is acting solely in the capacity of an arm’s length purchaser with
respect to this Agreement and the transactions contemplated hereby.  The Company further acknowledges that
Purchaser is not acting as a financial advisor or fiduciary of the Company (or
in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and any advice given by Purchaser
or any of its representatives or agents in connection with the Transaction
Document and the transactions contemplated hereby and thereby is merely
incidental to Purchaser’s purchase of the Securities.  The Company further represents to Purchaser
that the Company’s decision to enter into the Transaction Documents has been
based solely on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.

3.2           Representations and Warranties of
the Purchaser.  Purchaser hereby
represents and warrants as of the date hereof and as of the Closing Date to the
Company as follows:

(a)           Organization; Authority.  Purchaser is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the applicable
Transaction Documents and otherwise to carry out its obligations thereunder.
The execution, delivery and performance by Purchaser of the transactions
contemplated by this Agreement has been duly authorized by all necessary corporate
action, on the part of Purchaser.  Each
of this 

 13
 

 

Agreement
and the 2004 Registration Rights Agreement has been duly executed by Purchaser,
and when delivered by Purchaser in accordance with terms hereof, will
constitute the valid and legally binding obligation of Purchaser, enforceable
against it in accordance with its terms.

(b)           Investment Intent.  Purchaser is acquiring the Securities as
principal for its own account and not with a view to or for distributing or
reselling such Securities or any part thereof, without prejudice, however, to
Purchaser’s right, subject to the provisions of this Agreement, at all times to
sell or otherwise dispose of all or any part of such Securities pursuant to an
effective registration statement under the Securities Act or under an exemption
from such registration and otherwise in compliance with applicable federal and
state securities laws.  Subject to the
immediately preceding sentence, nothing contained herein shall be deemed a
representation or warranty by Purchaser to hold the Securities for any period
of time.  Purchaser is acquiring the
Securities hereunder in the ordinary course of its business. Purchaser does not
have any agreement or understanding, directly or indirectly, with any Person to
distribute any of the Securities.

(c)           Purchaser Status.  At the time Purchaser was offered the
Securities, it was, and at the date hereof it is an “accredited investor” as
defined in Rule 501(a) under the Securities Act.  Purchaser is not required to be registered as
a broker-dealer under Section 15 of the Exchange Act.

(d)           Experience of
Purchaser.  Purchaser, either alone
or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has
so evaluated the merits and risks of such investment.  Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford
a complete loss of such investment. 
Purchaser has requested, received, reviewed and considered all
information it deems relevant in making an informed decision to purchase the
Securities.

(e)           General
Solicitation.  Purchaser is not
purchasing the Securities as a result of any advertisement, article, notice or
other communication regarding the Securities published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.  At no time was the Purchaser presented with
or solicited by any publicly issued or circulated newspaper, mail, radio,
television, or to the Purchaser’s knowledge, any other form of general
advertising or solicitation in connection with the offer, sale and purchase of
the Securities.

(f)            Registration
Required.  Purchaser hereby covenants
with the Company not to, directly or indirectly, offer, sell, pledge, transfer,
or otherwise dispose of (or solicit offers to buy, purchase or otherwise
acquire or take pledge of) any of the Securities without complying with the
provisions hereof, the 2004 Registration Rights Agreement and the Securities
Act and the applicable rules and regulations of the Commission thereunder,
including without limitation, the prospectus delivery requirement under the
Securities Act to be satisfied (unless Purchaser is selling such Securities in
a transaction not subject to the prospectus delivery requirement), and
Purchaser acknowledges that the 

 14
 

 

certificates
evidencing the Shares will be imprinted with a legend that prohibits their
transfer except in accordance therewith.

(g)           Access to
Information.  Purchaser acknowledges
that it has reviewed the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and
conditions of the offering of the Securities and the merits and risks of
investing in the Securities; (ii) access to information about the Company and
the Subsidiaries and their respective financial condition, results of
operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such additional
information that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment decision
with respect to the investment.  Neither
such inquiries nor any other investigation conducted by or on behalf of
Purchaser or its representatives or counsel shall modify, amend or affect
Purchaser’s right to rely on the truth, accuracy and completeness of the
Disclosure Materials and the Company’s representations and warranties contained
in the Transaction Documents.

(h)           Certain Fees.  Except for the fees that will be payable by
the Company under Section 3.1(w), Purchaser has not entered into any agreement
or arrangement that would entitle any broker or finder to compensation by the
Company in connection with the sale of the Company Securities to Purchaser

(i)            No Tax, Legal or
Investment Advice.  Purchaser
understands that nothing in the Transaction Documents or any other materials
presented to Purchaser in connection with the purchase and sale of the Securities
constitutes tax, legal, or investment advice. 
Purchaser has consulted such tax, legal, and investment advisors as it,
in its sole discretion, has deemed necessary or appropriate in connection with
its purchase of Securities.

(j)            Certain Sales;
Regulation M.  Purchaser represents
and warrants that it is aware of the following Telephone Interpretation in the
SEC Manual of Publicly Available Telephone Interpretations (July 1997):

A.65.       Section 5

An issuer filed a Form
S-3 registration statement for a secondary offering of common stock which is
not yet effective.  One of the selling
shareholders wanted to do a short sale of common stock “against the box” and
cover the short sale with registered shares after the effective date.  The issuer was advised that the short sale
could not be made before the registration statement becomes effective, because
the shares underlying the short sale are deemed to be sold at the time such
sale is made.  There would, therefore, be
a violation of Section 5 if the shares were effectively sold prior to the
effective date.

(k)           In addition,
Purchaser acknowledges that (i) the Company has informed Purchaser that the
anti-manipulation provisions of Regulation M under the Exchange Act 

 15
 

 

may
apply to purchases and sales of Shares and that there are restrictions on
market making activities by persons engaged in the distribution of Shares and
(ii) the Company has advised Purchaser to consult with its counsel regarding
such matters.

(l)            Broker-Dealer
Status.  Purchaser is not and is not
required to be registered as a broker-dealer pursuant to the Exchange Act.

(m)          Purchase or Sale
of Common Stock. Neither Purchaser nor
any person acting on its behalf or at its direction has engaged in any purchase
or sale of Common Stock (including without limitation any short sale of the
Common Stock, or pledge or transfer of, or establishment or maintenance of an
open “put equivalent position” (within the meaning of Rule 16a-1(h) under
the Exchange Act) with respect to, any of the Securities) during the during the
period beginning on the date on which the Company first contacted Purchaser
regarding the transactions contemplated by this Agreement and ending on the
Closing Date.

(n)           Reliance.  Purchaser understands and acknowledges that
(i) the Securities are being offered and sold to it without registration under
the Securities Act in a private placement that is exempt from the registration
requirements of the Securities Act and (ii)the availability of such exemption,
depends in part on, and the Company will rely upon the accuracy and
truthfulness of, the foregoing representations and warranties and Purchaser
hereby consents to such reliance.

The Company acknowledges and agrees that Purchaser
does not make or has not made any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
this Section 3.2.

ARTICLE
IV.

OTHER AGREEMENTS OF THE PARTIES

4.1           Transfer
Restrictions.

(a)           The Securities may
only be disposed of in compliance with state and federal securities laws,
including pursuant to an exemption therefrom. 
In connection with any transfer of the Securities other than pursuant to
an effective registration statement, pursuant to paragraph (k) of Rule 144, to
the Company, to an Affiliate of Purchaser or in connection with a pledge as
contemplated in Section 4.1(b), the Company may require the transferor thereof
to provide to the Company an opinion of counsel selected by the transferor, the
form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act.  As a condition of transfer, any such
transferee shall agree in writing to be bound by the terms of this Agreement
and the 2004 Registration Rights Agreement and, if such transfer is a transfer
of at least 5,000 shares of Common Stock, shall have the rights of Purchaser
under this Agreement and the 2004 Registration Rights Agreement.

(b)           Purchaser agrees to
the imprinting, so long as is required by this Section 4.1(b), of a legend
on any of the Securities in the following form:

 16
 

 

THESE SECURITIES HAVE NOT
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  SUBJECT TO COMPLIANCE WITH
APPLICABLE SECURITIES LAWS, THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE
501(a) UNDER THE SECURITIES ACT.

The Company acknowledges and agrees that, subject to compliance with
applicable securities laws, Purchaser may from time to time pledge and/or grant
a security interest pursuant to a bona fide margin agreement in a bona fide
margin account and, if required under the terms of such arrangement, agreement
or account, Purchaser may transfer pledged or secured Securities to the
pledgees or secured parties.  Such a
pledge or transfer would not be subject to approval of the Company and no legal
opinion of legal counsel of the pledgee, secured party or pledgor shall be
required in connection therewith. 
However, at the discretion of the Company, such legal opinion may be
required in connection with a subsequent transfer following default by the
Purchaser transferee of the pledge.  No
notice shall be required of such pledge. 
At the appropriate Purchaser’s expense, the Company will execute and
deliver such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or transfer of
the Securities, including, if the Securities are subject to registration
pursuant to the 2004 Registration Rights Agreement, the preparation and filing
of any required prospectus supplement under Rule 424(b)(3) under the Securities
Act or other applicable provision of the Securities Act to appropriately amend
the list of Selling Stockholder(s) thereunder.

(c)           Certificates
evidencing the Shares shall not contain any legend (including the legend set
forth in Section 4.1(b)), (i) while a registration statement (including the
Registration Statement) covering the resale of such security is effective under
the Securities Act, or (ii) following any sale of such Shares pursuant to Rule
144, or (iii) if such Shares are eligible for sale or are sold under Rule
144(k), or (iv) if such legend is not required under applicable requirements of
the Securities Act (including judicial interpretations and pronouncements
issued by the Staff of the Commission). 
Promptly following effectiveness of a registration statement
contemplated under clause (i) of this Section 4.1(c), the Company shall, or
shall cause its counsel to, deliver to the Company’s transfer agent written
notice that such a registration statement is effective, and that such 

 17
 

 

Shares
may be sold pursuant thereto by Purchaser without any legend.  In addition, in the case of clause (ii) of
this Section 4.1(c), the Company shall, if requested by its transfer agent,
direct the Company’s counsel to issue a legal opinion to such transfer agent to
effect the removal of the legend hereunder and, if required by the Company’s
transfer agent, such legal opinion need not be issued until the Company’s
transfer agent has first received a copy of the Purchaser’s broker
representation letter relating to the Purchaser’s Shares.  The Company agrees that following the
Effective Date or at such time as such legend is no longer required under this
Section 4.1(c), it will, no later than four Trading Days following the delivery
by Purchaser to the Company or the Company’s transfer agent of a certificate
representing Shares with a restrictive legend, direct the transfer agent to
deliver to Purchaser a certificate representing such Securities that is free
from all restrictive and other legends. 
The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section.

(d)           Purchaser agrees
that the removal of the restrictive legend from certificates representing
Securities as set forth in this Section 4.1 is predicated upon (i) the
Company’s reliance that the Purchaser will sell any Shares pursuant to either
the registration requirements of the Securities Act, including any applicable
prospectus delivery requirements, or an exemption therefrom, and/or (ii) that
in the context of a sale under Rule 144, if requested by the Company’s transfer
agent, the Purchaser shall have delivered to the transfer agent a broker
representation letter relating to the Purchaser’s Shares.

4.2           Furnishing
of Information.  As long as Purchaser
owns the Securities, the Company covenants to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act.  Upon the request of any
such holder of Securities, the Company shall deliver to such holder a written
certification of a duly authorized officer as to whether it has complied with
the preceding sentence unless such statement has been included in the Company’s
most recent report filed pursuant to Section 13 or Section 15(d) of
the Exchange Act.  Prior to the
registration of the re-sale of the Securities (the “Effectiveness Period”),
as long as Purchaser owns Securities, if the Company is not required to file
reports pursuant to such laws, it will prepare and furnish to the Purchaser and
make publicly available in accordance with Rule 144(c) such information as
is required for the Purchaser to sell the Securities under Rule 144.  The Company further covenants that it will
take such further action during the Effectiveness Period as any holder of
Securities may reasonably request to the extent required from time to time to
enable such Person to sell such Securities without registration under the
Securities Act within the limitation of the exemptions provided by
Rule 144.

4.3           Integration.  The Company shall not sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchaser or that
would be integrated with the offer or sale of the Securities for purposes of
the rules and regulations of any Trading Market such that it would require
stockholder approval prior to the closing of such other transaction unless
stockholder approval is obtained before the closing of such subsequent
transaction.

 18

 

4.4           [Intentionally Omitted.]

4.5           Securities Laws Disclosure; Publicity.  The Company shall, within five Business Days
of the date of this Agreement, issue a press release and file a Current Report
on Form 8-K disclosing the transactions contemplated hereby and the material
terms thereof and make such other filings and notices in the manner and time
required by the Commission.  The Company
shall, within five Business Days of the date hereof, file a Current Report on
Form 8-K including each of the Transaction Documents as exhibits.

4.6           Stockholders Rights Plan.  No claim will be made or enforced by the
Company or any other Person that Purchaser is an “Acquiring Person” under any
stockholders rights plan or similar plan or arrangement in effect or hereafter
adopted by the Company, or that Purchaser could be deemed to trigger the
provisions of any such plan or arrangement, by virtue of receiving Securities
under the Transaction Documents or under any other agreement between the
Company and the Purchaser.

4.7           Non-Public Information.  The Company covenants and agrees that neither
it nor any other Person acting on its behalf will provide Purchaser or its
agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto Purchaser shall have
executed a written agreement regarding the confidentiality and use of such
information.  The Company understands and
confirms that Purchaser shall be relying on the foregoing representations in
effecting transactions in securities of the Company.

4.8           Use of Proceeds. 
The Company shall use the net proceeds from the sale of the Securities
hereunder to purchase certain assets of the Sellers pursuant to that certain
Asset Purchase Agreement, dated as of June 19, 2006, by and among the Company,
CLRT Acquisition, LLC, a Delaware limited liability company and wholly-owned
subsidiary of the Company, and the Sellers, to fund transaction expenses
related thereto and for general corporate purposes.

4.9           Reimbursement. 
If Purchaser becomes involved in any capacity in any Proceeding by or
against any Person who is a stockholder of the Company (except as a result of
sales, pledges, margin sales and similar transactions by Purchaser to or with
any current stockholder), solely as a result of Purchaser’s acquisition of the
Securities under this Agreement, the Company will reimburse Purchaser for its
reasonable legal and other expenses (including the cost of any investigation
preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred; provided, that the Company shall only
be required to reimburse Purchaser pursuant to this Section 4.9 with respect to
a Proceeding in which (i) the Proceeding primarily results from the Company’s
breach of the terms of this Agreement and (ii) the Proceeding does not
primarily result from any action in violation of the terms of this Agreement or
other wrongful acts by the Purchaser requesting reimbursement.  The reimbursement obligations of the Company
under this paragraph shall be in addition to any liability which the Company
may otherwise have, shall extend upon the same terms and conditions to any
Affiliates of the Purchaser who are actually named in such action, proceeding
or investigation, and partners, directors, agents, employees and controlling
persons (if any), as the case may be, of the Purchaser and any such Affiliate,
and shall be binding upon and inure to the benefit of any successors, assigns,
heirs and personal representatives of the Company, the Purchaser and any such
Affiliate and any such Person.  The
Company also agrees that neither the Purchaser nor any such Affiliates,
partners, directors, agents, employees or controlling persons 

 19
 

 

shall have any liability to the Company or
any Person asserting claims on behalf of or in right of the Company solely as a
result of acquiring the Securities under this Agreement.

4.10         Reservation of Common Stock.  As of the Closing Date, the Company shall
have reserved and the Company shall continue to reserve and keep available at
all times, free of preemptive rights, a sufficient number of shares of Common
Stock for the purpose of enabling the Company to issue Shares pursuant to this
Agreement and to issue Warrant Shares pursuant to the Warrants.

4.11         Listing of Common Stock.  The Company hereby agrees to use commercially
reasonable efforts to maintain the listing of the Common Stock on the Trading
Market, and as soon as reasonably practicable following the Closing (but not
later than the earlier of the Effective Date and the first anniversary of the
Closing Date) to list all of the Shares and the Warrant Shares on the Trading
Market. The Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will include in such application
all of the Shares, and will take such other action as is necessary or desirable
in the opinion of the Purchaser to cause the Shares and the Warrant Shares to
be listed on such other Trading Market as promptly as possible.  The Company will use commercially reasonable
efforts to comply in all material respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Trading Market.

4.12         Registration of Common Stock.  The Company agrees that the Shares and the
Warrant Shares will be Registrable Securities as such term is defined in the
2004 Registration Rights Agreement and that the terms of the 2004 Registration
Rights Agreement shall apply with respect thereto.

4.13         NASD Filing. 
The Company shall file with the National Association of Securities
Dealers, a Notification Form:  Change in
the Number of Shares Outstanding with respect to the Shares and the Warrant
Shares.

ARTICLE
V.

MISCELLANEOUS

5.1           Fees and Expenses. 
Except as otherwise set forth in this Agreement, each party shall pay
the fees and expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all stamp and other
taxes and duties levied in connection with the sale of the Securities.

5.2           Entire Agreement. 
The Transaction Documents, together with the exhibits and schedules
thereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.

5.3           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 6:30 

 20
 

 

p.m. (New York City time) on a Trading Day or
by email to the email address set forth on the signature pages attached hereto
if such email is sent prior to 6:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the date of transmission or email, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto or by email to the email address
set forth on the signature pages attached hereto on a day that is not a Trading
Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the
second Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party
to whom such notice is required to be given. 
The address for such notices and communications shall be as set forth on
the signature pages attached hereto.

5.4           Amendments; Waivers.  No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company and the Purchaser or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought.  No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.

5.5           Construction. 
The headings herein are for convenience only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.  The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be
applied against any party.  This
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement or any of the
Transaction Documents.

5.6           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted
assigns.  The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of Purchaser.  Purchaser may
assign any or all of its rights under this Agreement  in connection with a transfer of not less
than 5,000 shares of Common Stock pursuant to Section 4.1(a) to any Person to
whom Purchaser assigns or transfers any Securities, provided such transferee
agrees in writing to be bound, with respect to the transferred Securities, by
the provisions hereof that apply to the “Purchaser”.

5.7           No Third-Party Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.9.

5.8           Governing Law. 
All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought
against a party hereto or its respective 

 21
 

 

affiliates, directors, officers,
stockholders, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York.  Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the
City of New York, New York for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of the any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is
improper.  Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party hereto (including its affiliates,
agents, officers, directors and employees) hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of a Transaction Document, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

5.9           Survival. 
The representations, warranties, agreements and covenants contained
herein shall survive the Closing and the delivery of the Securities.

5.10         Execution. 
This Agreement may be executed in two or more counterparts, all of which
when taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.

5.11         Severability. 
If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

5.12         Replacement of Securities.  If any certificate or instrument evidencing
any Securities is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested.  The applicants
for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs associated with the issuance of such replacement
Securities.

 22
 

 

5.13         Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, Purchaser and the Company will be entitled
to specific performance under the Transaction Documents.  The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

5.14         Payment Set Aside. 
To the extent that the Company makes a payment or payments to Purchaser
pursuant to any Transaction Document or Purchaser enforces or exercises its
rights thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

ARTICLE
VI.

CONDITIONS

6.1           Conditions to the Closing of the Purchaser.  Purchaser’s obligation to purchase the
portion of the Securities being issued at the Closing is subject to the
satisfaction, or waiver by Purchaser, of the following conditions:

(a)           Representations
and Warranties.  The representations
and warranties of the Company set forth in this Agreement shall be true and
correct in all material respects (except for those qualified as to materiality
or a Material Adverse Effect, which shall be true and correct in all respects)
as of the date of this Agreement and as of the Closing Date (except to the
extent that such representation or warranty speaks of an earlier date, in which
case such representation or warranty shall be true and correct in all material
respects (or if qualified as to materiality or a Material Adverse Effect, true
and correct in all respects) as of such date) as though made on and as of the
Closing Date.

(b)           Performance
of Obligations of Company.  The
Company shall have performed in all material respects all agreements and
covenants required to be performed by it under this Agreement on or prior to
the Closing Date.

(c)           No
Suspension of Trading.  From the date
hereof to the Closing Date, trading in the Common Stock shall not have been
suspended by the Commission (except for any suspension of trading of limited
duration agreed to by the Company, which suspension shall be terminated prior
to each Closing), and, at any time prior to the Closing Date, trading in
securities generally as reported by Bloomberg Financial Markets shall not have
been suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by the United States
or New York State authorities.

 23
 

 

6.2           Conditions to the Closing of the Company.  The Company’s obligation to issue and sell
the portion of the Securities being issued at the Closing is subject to the
satisfaction, or waiver by the Company, of the following conditions:

(a)           Representations
and Warranties.  The representations
and warranties of Purchaser set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date (except to the extent that such representation or warranty speaks
of an earlier date, in which case such representation or warranty shall be true
and correct in all material respects as of such date) as though made on and as
of the Closing Date.

(b)           Performance
of Obligations of the Purchaser.  The
Purchaser shall have performed in all material respects all agreements and
covenants required to be performed by it under this Agreement on or prior to
the Closing Date.

(c)           Regulatory
Approvals.  The Company and the
Purchaser shall have received all requisite approvals (including all required
findings of suitability).

[SIGNATURE PAGE
FOLLOWS]

 24

 

IN WITNESS WHEREOF, the parties
hereto have caused this Securities Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated above.

	
  CLARIENT, INC.

  	
  Address for Notice:

  
	
   

  	
   

  
	
   

  	
  Clarient, Inc.

  
	
   

  	
  31 Columbia

  
	
  By:

  	
  /s/ James V. Agnello

  	
   

  	
  Aliso Viejo, California 92656

  
	
  Name:  James V. Agnello

  	
  Attn: James V. Agnello

  
	
  Title: Senior
  Vice President and Chief Financial Officer

  	
  E-mail: 
  jagnello@clarientinc.com

  
	
   

  	
  Tel:  949-425-5700

  
	
   

  	
  Fax:  949-425-5701

  
				

 

With a copy to (which shall not constitute notice):

Latham & Watkins LLP

633 West Fifth Street,
Suite 4000

Los Angeles, CA 90071

Attn: W. Alexander
Voxman, Esq.

E-mail:  Alex.Voxman@LW.com

Tel:   (213) 485-1234

Fax:  (213) 891-8763

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK –

SIGNATURE PAGE FOR
PURCHASER FOLLOWS]

 

 

	
  SAFEGUARD DELAWARE, INC.

  	
  Address for Notice:

  
	
   

  	
   

  
	
   

  	
  Safeguard
  Scientifics, Inc.

  
	
   

  	
  435 Devon Park
  Drive

  
	
  By:

  	
  /s/ Christopher J. Davis

  	
   

  	
  800 Building

  
	
  Name:
  Christopher J. Davis

  	
  Wayne, PA 19087

  
	
  Title: Vice
  President

  	
  Attn: Christopher J. Davis

  
	
   

  	
  E-mail:  cdavis@safeguard.com

  
	
   

  	
  Tel:  (610) 975-4924

  
	
   

  	
  Fax:  (610) 975-4922Exhibit 10.2

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH
THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.

COMMON STOCK PURCHASE
WARRANT

To Purchase
624,306 Shares of Common Stock of

Clarient, Inc.

THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for
value received, Safeguard Delaware, Inc., a Delaware corporation (the “Holder”),
is entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after September 23, 2006
(the “Initial Exercise Date”) and on or prior to the close of business on September
23, 2010 (the “Termination Date”) but not thereafter, to subscribe for and
purchase from Clarient, Inc., a corporation incorporated in the State of
Delaware (the “Company”), up to 624,306 shares (the “Warrant Shares”) of Common
Stock, par value $0.01 per share, of the Company (the “Common Stock”).  The purchase price of one share of Common
Stock (the “Exercise Price”) under this Warrant shall be $0.98, subject to
adjustment hereunder. The Exercise Price and the number of Warrant Shares for
which the Warrant is exercisable shall be subject to adjustment as provided
herein. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in that certain Securities Purchase Agreement (the “Purchase
Agreement”), dated September 22, 2006, between the Company and the purchasers
signatory thereto.

1.             Title to Warrant.  Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
subject to compliance with Section 4.1 of the Purchase Agreement and upon
surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed.  The transferee shall
sign an investment letter in form and substance reasonably satisfactory to the
Company.

 

2.             Authorization of Shares.  The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by
this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).

3.             Exercise of Warrant.

(a)  Exercise
of the purchase rights represented by this Warrant may be made at any time or
times on or after the Initial Exercise Date and on or before the Termination
Date by delivering the Notice of Exercise Form annexed hereto duly completed
and executed (which delivery may be by facsimile), at the office of the Company
(or such other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder appearing on the
books of the Company) and upon full payment of the Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn on a United States
bank or by means of a cashless exercise pursuant to Section 3(d), the Holder
shall be entitled to receive a certificate for the number of Warrant Shares so
purchased.  Certificates for shares
purchased hereunder shall be delivered to the address specified by the Holder
in the Notice of Exercise within three (3) Trading Days from the delivery to
the Company of the Notice of Exercise Form, surrender of this Warrant and
payment of the aggregate Exercise Price as set forth above (“Warrant Share
Delivery Date”).  In lieu of delivering
physical certificates for the shares purchased hereunder, provided the Company’s
transfer agent is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer program, and so long as the legend upon the
certificates for the shares may be removed in accordance with Section 4.1 of
the Purchase Agreement, upon request of the Holder, the Company shall use
commercially reasonable efforts to cause its transfer agent electronically to
transmit such shares by crediting the account of the Holder’s prime broker with
DTC through its Deposit Withdrawal Agent Commission system (provided that the
same time limitations herein as for stock certificates shall apply and that the
Company may in all events satisfy its obligations to deliver certificates by
delivery of physical stock certificates). 
This Warrant shall be deemed to have been exercised on the date the
Exercise Price is received by the Company. 
The Warrant Shares shall be deemed to have been issued, and Holder or
any other person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the date the
Warrant has been exercised by payment to the Company of the Exercise Price.

(b)  In
addition to any other rights available to the holder, if the Company fails to deliver
or cause its transfer agent to deliver or transmit (in the manner contemplated
by clause (a) above) to the Holder a certificate or certificates representing
the Shares pursuant to an exercise on or before the Warrant Share Delivery
Date, and if after such date the holder is required by its broker to purchase
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the holder of the Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the Company
shall promptly honor its obligation to deliver to the Holder such Warrant
Shares and pay in cash to the holder the amount by which (x) the holder’s total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A)
the number of 

 2
 

 

Shares that the Company was
required to deliver to the holder in connection with the exercise at issue
times (B) the closing price per share on date of exercise. The holder shall
provide the Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In, together with applicable confirmations and other
evidence reasonably requested by the Company. 
Nothing herein shall limit a Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the
Company’s failure to timely deliver certificates representing shares of Common
Stock upon exercise of the Warrant as required pursuant to the terms hereof.

(c)  Notwithstanding
anything to the contrary set forth herein, upon partial exercise of this
Warrant in accordance with the terms hereof, the Holder shall not be required
to physically surrender this Warrant to the Company unless such Holder is
purchasing the full amount of Warrant Shares then represented by this
Warrant.  The Holder and the Company
shall maintain records showing the number of Warrant Shares so purchased
hereunder and the dates of such purchases or shall use such other method,
reasonably satisfactory to the Holder and the Company, so as not to require
physical surrender of this Warrant upon each such exercise.  The requirement of physical surrender upon
full exercise shall be satisfied by the Holder mailing, postage prepaid, or
arranging for delivery by commercial courier this Warrant to the Company’s
notice address.

(d)  This
Warrant may also be exercised at such time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a certificate for the number of
Warrant Shares equal to the quotient obtained by dividing ((A-B) (X)) by (A),
where:

(A) =  the last reported sale price of the Common
Stock on the Trading Day immediately preceding the date of such election or, if
not reported, the fair market value of such Common Stock as reasonably
determined by the Company’s Board of Directors;

(B) =  the Exercise Price, as adjusted; and

(X) =  the
number of Warrant Shares with respect to which this Warrant is being exercised.

4.             No Fractional Shares or Scrip.  No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.  As to any fraction of a share which Holder
would otherwise be entitled to purchase upon such exercise, the Company shall
pay a cash adjustment in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price.

5.             Charges, Taxes and Expenses.  Issuance of certificates for Warrant Shares
shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company
may require, as a condition thereto, the payment of a 

 3
 

 

sum sufficient to
reimburse it for any transfer tax incidental thereto, compliance with the
provisions of Section 4.1 of the Purchase Agreement and an investment letter
from the transferee in form and substance reasonably satisfactory to the
Company.

6.             Closing of Books.  The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

7.             Transfer, Division and
Combination.

(a)  Subject
to compliance with any applicable securities laws and the conditions set forth
in Sections 1 and 7(e) hereof and to the provisions of Section 4.1 of the
Purchase Agreement, this Warrant and all rights hereunder are transferable, in
whole or in part, upon surrender of this Warrant at the principal office of the
Company, together with a written assignment of this Warrant substantially in
the form attached hereto duly executed by the Holder or its agent or attorney
and funds sufficient to pay any transfer taxes payable upon the making of such
transfer.  Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees and in the denomination or
denominations specified in such instrument of assignment, and shall issue to
the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.

(b)  This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. 
Subject to compliance with Section 7(a), as to any transfer which may be
involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.

(c)  The
Company shall prepare, issue and deliver at its own expense (other than
transfer taxes) the new Warrant or Warrants under this Section 7.

(d)  The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.  If, at the time of the surrender of this
Warrant in connection with any transfer of this Warrant, the transfer of this
Warrant shall not be registered pursuant to an effective registration statement
under the Securities Act and under applicable state securities or blue sky
laws, the Company may require, as a condition of allowing such transfer (i)
that the Holder or transferee of this Warrant, as the case may be, furnish to
the Company a written opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions) to the effect that such transfer may be made without registration
under the Securities Act and under applicable state securities or blue sky
laws, (ii) that the holder or transferee execute and deliver to the Company an
investment letter in form and substance reasonably acceptable to the Company
and (iii) that the transferee be an “accredited investor” as defined in Rule
501(a) promulgated under the Securities Act.

 4
 

 

8.             No Rights as Shareholder until
Exercise.  This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. 
Upon the surrender of this Warrant and the payment of the aggregate
Exercise Price (or by means of a cashless exercise), the Warrant Shares so
purchased shall be and be deemed to be issued to such Holder as the record
owner of such shares as of the close of business on the later of the date of
such surrender or payment.

9.             Loss, Theft, Destruction or
Mutilation of Warrant.  The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any
stock certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

10.           Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking
of any action or the expiration of any right required or granted herein shall
be a Saturday, Sunday or a legal holiday, then such action may be taken or such
right may be exercised on the next succeeding day that is not a Saturday,
Sunday or legal holiday.

11.           Adjustments of Exercise Price and
Number of Warrant Shares.  The number
and kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following.  In
case the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock, then the number of
Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive had such Warrant been
exercised immediately prior to the occurrence of such event.  Upon each such adjustment of the kind and
number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the Holder shall thereafter be entitled to purchase the
number of Warrant Shares or other securities resulting from such adjustment at
an Exercise Price per Warrant Share or other security obtained by multiplying
the Exercise Price in effect immediately prior to such adjustment by the number
of Warrant Shares purchasable pursuant hereto immediately prior to such
adjustment and dividing such amount by the number of Warrant Shares or other
securities of the Company purchasable pursuant hereto as a result of such
adjustment (such that the aggregate purchase price for all Warrant Shares or
other securities resulting from such adjustment upon full exercise of this
Warrant shall remain the same).  An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event.

12.           Reorganization, Reclassification,
Merger, Consolidation or Disposition of Assets.  In case the Company shall reorganize its
capital, reclassify its capital stock, consolidate or merge 

 5
 

 

with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the
Company), or sell, transfer or otherwise dispose of all or substantially all
its property, assets or business to another corporation and, pursuant to the
terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or acquiring
corporation, or any cash, shares of stock or other securities or property of
any nature whatsoever (including warrants or other subscription or purchase
rights) in addition to or in lieu of common stock of the successor or acquiring
corporation (“Other Property”), are to be received by or distributed to the
holders of Common Stock of the Company, then the Holder shall have the right
thereafter to receive upon exercise of this Warrant (and this Warrant shall
thereafter be exercisable only for), the number of shares of Common Stock of
the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and Other Property receivable upon or as a result of
such reorganization, reclassification, merger, consolidation or disposition of
assets by a Holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company)
shall expressly assume the due and punctual observance and performance of each
and every covenant and condition of this Warrant to be performed and observed
by the Company and all the obligations and liabilities hereunder, subject to
such modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this
Section 12.  For purposes of this Section
12, “common stock of the successor or acquiring corporation” shall include
stock of such corporation of any class which is not preferred as to dividends
or assets over any other class of stock of such corporation and which is not
subject to redemption.  The foregoing
provisions of this Section 12 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.

13.           Intentionally Deleted.

14.           Notice of Adjustment.  Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.

15.           Notice of Corporate Action.  If at any time:

(a)  the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of
stock of any class or any other securities or property, or to receive any other
right, or

(b)  there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the 

 6
 

 

Company with, or any sale,
transfer or other disposition of all or substantially all the property, assets
or business of the Company to, another corporation that would trigger an
adjustment pursuant to Section 12, or

(c)  there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;

then, in any one or more of such cases, the
Company shall give to Holder (i) at least 20 days’ prior written notice of the
date on which a record date shall be selected for such dividend, distribution
or right or for determining rights to vote in respect of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 20 days’ prior
written notice of the date when the same shall take place.  Such notice in accordance with the foregoing
clause also shall specify (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, the date on which the
holders of Common Stock shall be entitled to any such dividend, distribution or
right, and the amount and character thereof, and (ii) the estimated date on
which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of
Common Stock shall be entitled to exchange their Warrant Shares for securities
or other property deliverable upon such disposition, dissolution, liquidation
or winding up. Each such written notice shall be sufficiently given if
addressed to Holder at the last address of Holder appearing on the books of the
Company and delivered in accordance with Section 17(d).

16.           Authorized Shares.  The Company covenants that during the period
the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.  The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of the Principal Market upon which the Common Stock may be listed.

Except and to the
extent as waived or consented to by the Holder, the Company shall not by any
action, including, without limitation, amend its certificate of incorporation
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant
against impairment.  Without limiting the
generality of the foregoing, the Company will (a) not increase the par value of
any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the exercise of
this Warrant, 

 7
 

 

and
(c) use commercially reasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations
under this Warrant.

Before taking any
action which would result in an adjustment in the number of Warrant Shares for
which this Warrant is exercisable or in the Exercise Price, the Company shall
obtain all such authorizations or exemptions thereof, or consents thereto, as
may be necessary from any public regulatory body or bodies having jurisdiction
thereof.

17.           Miscellaneous.

(a)  Jurisdiction.  This Warrant shall constitute a contract
under the laws of the State of New York.

(b)  Restrictions.  The Holder acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.

(c)  Nonwaiver
and Expenses.  No course of dealing or
any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice Holder’s rights,
powers or remedies, notwithstanding all rights hereunder terminate on the
Termination Date.

(d)  Notices.  Any notice, request or other document
required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Purchase
Agreement; provided upon any permitted assignment of this Warrant, the assignee
shall promptly provide the Company with its contact information.

(e)  Limitation
of Liability.  No provision hereof, in the
absence of any affirmative action by Holder to exercise this Warrant or
purchase Warrant Shares, and no enumeration herein of the rights or privileges
of Holder, shall give rise to any liability of Holder for the purchase price of
any Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.

(f)  Remedies.  Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Warrant and hereby agrees to waive the defense
in any action for specific performance that a remedy at law would be adequate.

(g)  Successors
and Assigns.  Subject to applicable
securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company
and the successors and permitted assigns of Holder.  The provisions of this Warrant are intended
to be for the benefit of all Holders from time to time of this Warrant and
shall be enforceable by any such Holder or holder of Warrant Shares.

(h)  Amendment
and Waiver.  This Warrant may be modified
or amended or the 

 8
 

 

provisions hereof waived with
the written consent of the Company and the Holder.

(i)  Severability.  Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

(j)  Headings.  The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

********************

 9

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly
authorized.

Dated:  September
22, 2006

	
   

  	
  CLARIENT, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James V.
  Agnello

  	
   

  
	
   

  	
  Name:  James V. Agnello

  
	
   

  	
  Title:  Senior Vice President and Chief Financial

  
	
   

  	
  Officer

  

 

 

NOTICE OF EXERCISE

To:          Clarient,
Inc.

(1) The undersigned
hereby elects to purchase           
Warrant Shares of Clarient, Inc. pursuant to the terms of the attached Warrant
(only if exercised in full), and tenders herewith payment of the exercise price
in full, together with all applicable transfer taxes, if any.

(2) Payment shall take
the form of (check applicable box):

o    in lawful money of the United States; or

o    the cancellation of such number of Warrant
Shares as is necessary, in accordance with the formula set forth in subsection
3(d), to exercise this Warrant with respect to the maximum number of Warrant
Shares purchasable pursuant to the cashless exercise procedure set forth in subsection
3(d).

(3) Please issue a
certificate or certificates representing said Warrant Shares in the name of the
undersigned or in such other name as is specified below:

The Warrant Shares shall be delivered to the
following:

	
  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

(4) Accredited Investor.
The undersigned is an “accredited investor” as defined in Regulation D
promulgated under the Securities Act of 1933, as amended.

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  
							

 

 

ASSIGNMENT FORM

(To assign the foregoing warrant, execute this form
and supply required information.  Do not
use this form to exercise the warrant.)

FOR VALUE RECEIVED, the
foregoing Warrant and all rights evidenced thereby are hereby assigned to

                                      whose
address is                                                 

Dated:           ,    

	
  Holder’s Signature:

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Holder’s Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  Signature
  Guaranteed:  

  	
   

  	
   

  
					

 

NOTE: The signature to this Assignment Form must
correspond with the name as it appears on the face of the Warrant, without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank or trust company. Officers of corporations and those acting in a fiduciary
or other representative capacity should file proper evidence of authority to
assign the foregoing Warrant.

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