Exhibit 10.1

Distribution

and

Development

Agreement

DakoCytomation Denmark A/S

(Ref. no. 2967)

Clarient, Inc.

Confidential treatment has been requested for portions of this exhibit.  The copy filed herewith omits the information subject to the confidentiality request.  Omissions are designated as [***].  A complete version of this exhibit has been field separately with the Securities and Exchange Commission pursuant to an application for confidential treatment under Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

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Table of contents

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LIST OF EXHIBITS

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This Distribution and Development Agreement is entered into

W I T N E S S E T H:

WHEREAS Clarient is a company in the business of, among other things, developing, producing and selling of products within the field of image analysis and virtual microscopy; and

WHEREAS DakoCytomation is a diagnostic company with world-wide activities within the field of development, production and sale of reagents and instruments within the field of pathology and has a world-wide marketing and sales organization; and

WHEREAS DakoCytomation desires to obtain an exclusive right to purchase the Products from Clarient and to be appointed as Clarient’s exclusive distributor world wide; and

WHEREAS Clarient is willing to sell the Products exclusively in certain areas to DakoCytomation and make such an appointment, subject to the terms and conditions set forth in this Agreement; and

WHEREAS the Parties have agreed to enter into a collaboration with the purpose of further developing Clarient’s present products and to develop new products subject to the terms and conditions set forth in this Agreement.

NOW THEREFORE in consideration of the mutual covenants and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, have entered into this Agreement on the following terms and conditions:

Article 1               Definitions

1.1       “ACIS III” shall mean: The further development of the Product as described in Exhibits 14 and 15.

1.2       “Adverse Event” shall mean:

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1.2.1           Any malfunction, failure or deterioration in the characteristics and/or performance of a device/material, as well as any inadequacy in the labeling or the instructions for use which, directly or indirectly, might lead to or might have led to the death of a patient or user or of other persons or to a serious deterioration in their state of health;

1.2.2           Any technical or medical reason in relation to the characteristics or performance of a device/material for the reasons referred to in Subclause 1.2.1 leading to systematic recall of devices/materials of the same type by Clarient.

1.3       “Affiliate” shall mean any entity that directly or indirectly controls, is controlled by or is under common control with a Party to this Agreement, where “control” means direct or indirect possession of at least fifty percent (50%) of the outstanding voting securities of a corporation or at least fifty percent (50%) interest of the income of such corporation or a comparable ownership in any other type of entity, provided, however, that if the law of the jurisdiction in which such entity operates does not allow fifty percent (50%) or greater ownership by a Party to this Agreement, such ownership interest shall be at least forty percent (40%).

1.4       “Agreement” shall mean this entire Agreement and all of its Exhibits attached hereto.

1.5       “Business Day(s)” shall mean any day other than a Saturday, Sunday or public holiday in Denmark and/or the United States.

1.6       “Calendar Day(s)” shall mean any day and not limited to Business Days.

1.7       “Calendar Quarter(s)” shall mean the three (3) month periods ending on 31 March, 30 June, 30 September or 31 December.

1.8       “Calendar Year” shall mean the period 1 January to 31 December of a given year.

1.9       “Contract Year” shall mean the period 1 July to 30 June of a given year, except that the first Contract Year shall be the period from the Effective Date to 30 June 2006.

1.10     “Certificate of Conformance” shall mean documented evidence prepared by Clarient that a given Product meets the Product Specifications and Acceptance Criteria stated in Exhibits 1 and 2.

1.11     “Defect” or “Defective” shall mean that the Product does not substantially conform to the capital Product Specifications and Acceptance Criteria, stated in Exhibits 1 and 2.

1.12     “Date of Invoice” shall mean the date the invoice is issued by Clarient..

1.13     “Designated Representative” shall mean a third party agreed upon by the Parties to review or inspect essential and confidential information and/or documentation in order to support regulatory requirements.

1.14     “Effective Date” shall mean the last date of execution of this Agreement.

1.15     “Exclusive Field of Use” shall have the meaning set forth in Article 3.1.

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1.16     “Field of Use” shall have the meaning set forth in Article 3.

1.17     “Field Service Engineering” shall have the meaning set forth in Exhibit 11.

1.18     “FDA” shall mean the United States Food and Drug Administration and any successor agency thereto.

1.19     “Instruments” shall mean the Clarient ChromaVision ACIS II instrument for use within the field of image analysis and virtual microscopy, as defined in the Product Specifications in Exhibit 1 to this Agreement and the ACIS III instrument described in Exhibits 14 and 15, which Product Specifications may from time to time be amended by Clarient with DakoCytomation’s prior reasonable written consent.

1.20     “Intellectual Property” shall mean patents, trademarks, service marks, trade secrets, copyrights, know-how and related rights and knowledge.

1.21     “IVD Directive” shall mean Council Directive 98/79/EC of the European Parliament and of the Council of 27 October 1998 on in vitro diagnostic medical devices, as it may be amended from time to time.

1.22     “New Price” shall mean the Price the Parties have agreed upon to be used during the New Pricing Period.

1.23     “New Pricing Period” shall mean the Contract Year following the Pricing Period.

1.24     “Nonexclusive Field of Use” shall have the meaning set forth in Article 3.2.

1.25     “Order Confirmation” shall mean Clarient’s written confirmation of DakoCytomation’s Purchase Orders for the Products.

1.26     “Phase 1 of the Agreement” shall mean the period of time from 1 September 2005 until 30 June 2006 during which period the Products will be launched in the United States of America and Canada with DakoCytomation branding.

1.27     “Phase 2 of the Agreement” shall mean the period of time from 1 July 2006 or such other date as the Parties offer for sale on a world-wide basis the ACIS III Product, with DakoCytomation branding.

1.28     “Price(s)” shall mean the Prices specified in Exhibit 4 and Exhibit 11 and all subsequent changes hereto according to Article 6.

1.29     “Pricing Period” shall mean the period for which the Price has been agreed and fixed.

1.30     “Products” shall mean the reference to the Instruments and/or the Software delivered by Clarient to DakoCytomation under this Agreement.

1.31     “Product Specifications” means the Clarient internal manufacturing specifications, including technical and performance specifications and Acceptance Criteria relating to the characterization of the Products, a copy of which is attached hereto and incorporated herein by reference as Exhibits 1 and 2.

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1.32     “Purchase Order” shall mean any request for delivery of the Product.

1.33     “QSR” shall mean the Quality system regulation set forth at 21 C.F.R §820, as may be amended, which includes current Good Manufacturing Practices (“GMP”).

1.34     “Serious Incident” means an incident involving a Product which is reportable to a Competent Authority as defined in Article 5 of Annex III of the IVD Directive and the European Commission Medical Device Vigilance Guidelines or such other guidelines as may be issued from time to time or FDA reporting requirements.

1.35     “Significant Change” shall mean a change in the manufacturing, manufacturing procedures and/or in the production process that alters the Product Specification or registration under the In-Vitro Diagnostic Directive,  QSR or any other relevant regulation.

1.36     “Software” shall mean the Clarient ChromaVision Systems Automated Cellular Imaging System Software and all other included and additional Software related to the Instruments as specified in Exhibit 2 to this Agreement which Product Specifications may from time to time be amended by Clarient with DakoCytomation’s prior written reasonable consent that is delivered by Clarient to DakoCytomation under this Agreement either alone or together with the Instruments as well as any updates, upgrades and new generations of such software for the Instruments.

1.37     “Spare Parts” shall have the meaning ascribed to it is Article 24.1.

1.38     “Technical Services” shall have the meaning set forth in Exhibit 11 to this Agreement.

1.39     “USD” shall mean the official currency of the United States, US Dollars ($).

Article 2               Products

2.1       Clarient has developed the Instruments, and manufactures and markets the Instruments in accordance with the Product Specifications and Acceptance Criteria set forth in Exhibit 1.

2.2       Clarient has developed the Software, and manufactures and markets the Software in accordance with the Product Specifications and Acceptance Criteria set forth in Exhibit 2.

2.3       Clarient has marketed the Products in packages/combinations such that such Products are ready to use upon Clarient’s installation at end-user sites.

2.4       Exhibits 1 and 2 shall be amended and updated from time to time upon mutual written agreement between the Parties as soon as changes in the Product Specifications and Acceptance Criteria for the Instruments and the Software occur, e.g. after the completion of the development project.

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Article 3               Field of Use

3.1        Exclusive Field of Use.  The Parties agree that the Exclusive Field of Use under this Agreement shall be research and clinical applications in human in vitro diagnostics.

3.2       Nonexclusive Field of Use.  The Parties agree that the Nonexclusive Field of Use under this Agreement shall be comprised of Biotech and Pharmaceutical companies and their academic research partners using the Products for drug discovery and development purposes in the United States.

3.3       DakoCytomation shall have an exclusive option to extend the Exclusive Field of Use to cover veterinary health care.  The Parties will use commercially reasonable efforts to negotiate in good faith the terms for such an extension.   DakoCytomation may exercise such option at any time during the Term, provided, however, that the Parties shall have six (6) months following DakoCytomation’s exercise of such option to negotiate the terms of such extension.  If after such six (6) month period, the Parties have failed to reach agreement on the terms of the extension, the option shall expire and Clarient shall be free to offer the Products to one or more third parties for use in the field of veterinary health care.

Article 4               The Territory

4.1       The Territory shall be the whole world.

4.2       Notwithstanding article 4.1, with regards to any proposed sale of any Product to be installed in a country outside the United States, Canada, European Union and Japan, the Parties agree to discuss risks and determine the conditions, potential limitations and protections to be considered in connection with such installations.

Article 5               Appointment as Exclusive / Nonexclusive Distributor / Minimum Ordering Requirements

5.1        Clarient hereby appoints DakoCytomation and DakoCytomation hereby agrees to act as the exclusive distributor for the Products.  Clarient hereby agrees to refrain from distributing the Products within the Exclusive Field of Use in the Territory.

5.2        Clarient hereby appoints DakoCytomation and DakoCytomation hereby agrees to act as the nonexclusive distributor for the Products within the Nonexclusive Field of Use in the Territory.

5.3        DakoCytomation agrees to use commercially reasonable efforts and good faith in marketing the Products to maximize the sales of the Products.

5.4        From the Effective Date Clarient will refer to DakoCytomation current and prospective customers outside the United States and Canada within the Exclusive Field of Use.  In the event the Parties do not agree on which Party is responsible for a customer, then the Parties shall refer such dispute to the Head of US Sales for Clarient and the Vice President for Sales in the US for DakoCytomation.

5.5        Clarient will make available to DakoCytomation its sales force specialists in the Products to support DakoCytomation’s sales team for the ongoing sales efforts of DakoCytomation for a period of twenty-four (24) months or such other period as the Steering Committee determines.

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5.6        Notwithstanding article 5.1, Clarient may fulfill its obligations to those customers listed as Active Leads on the list of Clarient’s current and prospective customers in the Exclusive Field of Use, which shall be provided by Clarient to DakoCytomation within fifteen (15) Days of the Effective Date, provided that such Active Leads do not have binding offers from Clarient that expires more than ninety (90) days after the Effective Date and that such Active Leads place binding orders before the expiration of Clarient’s binding offers.  After the expiration of such offers to Clarient’s Active Leads, Clarient will refer to DakoCytomation its Active Leads within the Exclusive Field of Use.

5.7       During the Term of this Agreement, DakoCytomation may appoint third parties, including its Affiliates and independent distributors, to sell Products in accordance with the terms and conditions of this Agreement (collectively “Subdistributors”); provided that DakoCytomation shall (i) take such action as shall be reasonably necessary to advise each Subdistributor of DakoCytomation’s obligations under this Agreement; (ii) be liable for any breach by any such Subdistributor of this Agreement (as if such Subdistributors were parties to this Agreement) and for any violation of applicable laws or regulations by such Subdistributors; (iii) indemnify and hold Clarient harmless from and against any claims, causes of action, costs, penalties, losses or liabilities incurred by Clarient as a result of any breach, violation, use, infringement or misappropriation by or through such Subdistributors; and (iv) not allow any competitor of Clarient (as reasonably determined by Clarient) to be a Subdistributor.

5.8       Except as set forth in Article 5.6, neither Clarient nor any Affiliate controlled by Clarient shall supply the Products or competing products to the Products to end users or others for use within the Exclusive Field of Use or for resale for such use unless otherwise expressly stated in this Agreement or with the prior written consent of DakoCytomation.

5.9       During the Term, DakoCytomation shall purchase the Products exclusively from Clarient, and will not purchase, market, distribute, license or otherwise supply any competing products manufactured by any third party to end users or others.

5.10     Except as otherwise provided herein, DakoCytomation shall order (i) a minimum of 15 Instruments with included Software (including the 10 Instruments mentioned in Article 8.1) from Clarient in the first Contract Year of the Agreement; and (ii) a minimum of 40 Instruments with included Software in every Contract Year thereafter (the “Minimum Order Requirement”).

5.11     In the event DakoCytomation fails to fulfill the Minimum Order Requirement set forth in Article 5.10 in a Contract Year, DakoCytomation shall be entitled to cure such shortfall by issuing Purchase Orders within thirty (30) Calendar Days of the end of such Contract Year. In the event that DakoCytomation fails to cure such shortfall within such thirty (30) day cure period, Clarient may at its option, upon thirty (30) days written notice suspend or terminate the exclusive distribution relationship set forth in Article 5.1, in which case DakoCytomation shall become a non-exclusive distributor of the Products. Clarient shall provide such notice to DakoCytomation within thirty (30) days after the end of DakoCytomation’s thirty (30) day cure period.

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5.12     Article 5.11 shall not apply during the first Contract Year.

5.13     Within the Nonexclusive Field of Use, Clarient shall not directly or indirectly, through any subdistributor or otherwise appoint any Companies that DakoCytomation regards as competitors as subdistributors of the Products. Clarient shall notify DakoCytomation of the proposed appointment of any subdistributor and DakoCytomation shall promptly and reasonably determine whether such proposed subdistributor is a competitor.

5.14     To the extent Clarient has elected to suspend or terminate DakoCytomation’s exclusive distributorship according to Article 5.11, Article 5.13 shall apply only for Ventana Medical Systems Inc. and any of its Affiliates.

Article 6               Prices

6.1       The Prices to be paid by DakoCytomation for the Products are specified in the price list attached hereto and incorporated herein by reference as Exhibit 4 and shall be exclusive of VAT and transportation.

6.2       All Prices shall be stated in USD.

6.3       All Prices shall be renegotiated annually upon the written request of either Party no later than three (3) months prior to the beginning of every Contract Year and shall be valid for Pricing Periods of one Contract Year, provided that the first Pricing Period shall begin on the Effective Date and continue through 30 June 2006; thereafter a New Pricing Period shall take effect covering the following Contract Year.

6.4       During the last Calendar Quarter of each Contract Year of the Term after 2005, the Parties agree to enter into good faith discussions with the objective to agree upon a New Price on or before 1 June of such Contract Year.  During such negotiations the Parties shall give due consideration to the cost variations in raw materials and labor costs, quantities of the Products expected to be delivered during the previous and subsequent Pricing Periods and the necessity of marketing the Products at competitive prices.

6.5       If the Parties cannot reach an agreement on a New Price in accordance with clause 6.4, the prices prevailing shall remain in force for the New Pricing Period, provided that the Parties shall continue their efforts to agree on a New Price.  If agreement is not reached within the New Pricing Period, this Agreement shall automatically terminate by the end of such New Pricing Period and Clarient shall have no obligation to supply Products ordered prior to such termination for delivery after such termination.

6.6       Should neither Party request a price adjustment as described in 6.3, the prices then prevailing shall remain unchanged in the subsequent Pricing Period.

6.7       Notwithstanding article 6.3, Clarient may increase the Price Semi-Annually serving notice of two (2) months, provided that such increase does not exceed four percent (4%) and is justified by a significant change in price in raw materials and/or other documented production costs.  In the event that Clarient increases the Price of Products, DakoCytomation reserves the right to conduct a market analysis for a period of ninety (90) days to determine quantities of Products for purchase orders and forecasts.

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6.8       If Clarient increases the Price pursuant to Article 6.7 by more than four percent (4%) during any twelve (12) month period during the term of the Agreement, DakoCytomation shall not thereafter be required to comply with any obligations set forth in Article 5.10 and the binding portion of any forecast under Article 7.1 for the remainder of such Contract Year or such other period determined in good faith by the Steering Committee.

6.9       In the event of significant reductions in the price in raw materials and/or other documented production costs the Parties agree to enter into good faith negotiations in order to reduce the Price accordingly.

6.10     The Parties agree that DakoCytomation determines its own retail prices

6.11     DakoCytomation shall bear all cost and risks of collecting payments from its customers relating to the Products.

Article 7               Forecast

7.1        Once per Calendar Quarter DakoCytomation shall provide Clarient with a twelve (12) month rolling forecast for quantities of Instruments and Software required by DakoCytomation during the following twelve (12) calendar months. The first three months of such forecast will constitute a binding order of Instruments. The last nine (9) months of the forecast will not be binding on either Party and will be used only for planning purposes.  DakoCytomation’s binding forecasts will cover each Calendar Quarter of the Calendar Year. DakoCytomation will provide forecasts to Clarient not later than five (5) Business Days after the beginning of the Calendar Month prior to each Calendar Quarter, i.e. December, March, June and September.

7.2       Absent agreement of the Parties, the quantities ordered by DakoCytomation pursuant to Article 8 may not be less than the forecasted quantities in the binding purchase order portion of the forecast, but DakoCytomation may order pursuant to Article 8, quantities greater than forecast and Article 8.7 will apply to any order in excess of the forecast.

7.3       DakoCytomation’s first forecast for the first twelve (12) months following the Effective Date is described in Exhibit 4.

Article 8               Ordering and Supply Procedure

8.1       An initial Purchase Order from DakoCytomation to Clarient for ten (10) Instruments with included Software shall be issued upon the Parties’ signature of this Agreement.  Clarient undertakes to make delivery of such ten (10)  Instruments and Software within sixty (60) Calendar Days after the Effective Date.

8.2       During the term of this Agreement Purchase Orders issued are to be sent to:

Clarient, Inc.

▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇

▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

▇▇ ▇▇▇▇▇ California

United States of America

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8.3       Purchase Orders shall be issued by DakoCytomation’s purchasing department as defined by DakoCytomation and shall be consistent with the quantities and lead time stated hereunder and shall specify:

a.     The Instrument and Software number of each unit ordered.

b.     Quantities of each product number ordered.

c.     Price of each unit ordered.

d.     Delivery date for each unit ordered.

e.     Shipping address for each unit ordered.

8.4       All Purchase Orders shall refer to this Agreement.  In all other respects, the obligations and rights of the Parties will be governed by the terms and conditions of this Agreement and not the terms and conditions of any Purchase Order.

8.5       All Purchase orders shall be made by DakoCytomation in lots of at least five (5) Instruments with included Software at a time.

8.6       For Instruments with included Software in the binding portion of the forecast as set forth in Article 7.1, Clarient undertakes to meet such orders within sixty (60) Calendar Days from its receipt of the Purchase Order.

8.7       In the event DakoCytomation orders additional quantities of Products in excess of the quantities stated in the binding portion of its Article 7 forecast, Clarient will produce and deliver to DakoCytomation such additional quantities that (i) exceed DakoCytomation’s binding forecast by up to fifty percent (50%) within ninety (90) days of its receipt of the Purchase Order for such additional quantities, and (ii) within one hundred twenty (120) days of its receipt of the Purchase Order for additional quantities that exceed DakoCytomation’s binding forecast by more than fifty percent (50%). Notwithstanding the foregoing, Clarient’s delay in supplying Products under this Article shall be excused, if Clarient has supplied twenty-five (25) or more Instruments with in the Calendar Month in question or seventy-five (75) Instruments within the three (3) month period prior to such delay.

8.8       Clarient shall confirm in writing all Purchase Orders within three (3) Business Days of its receipt of such Purchase Order.  Clarient may reject a Purchase Order within two Business Days of its receipt of such Purchase Order, but otherwise a Purchase Order shall be deemed accepted by Clarient.    DakoCytomation shall give Clarient reasonably prompt written notice of any failure to supply Products within the time periods permitted by Articles 8.6 and 8.7.

8.9       Clarient’s confirmation of DakoCytomation’s Purchase Orders shall be faxed to the ordering DakoCytomation purchasing department and shall, as a minimum, include the following information:

•      Serial number (if available at the date of acknowledgement)

•      Date of delivery from Clarient’s warehouse

•      DakoCytomation’s Purchase Order number and any applicable reference

•      Lead time from date of order.

•      Shipping address

•      Unit cost

•      Unit quantity

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8.10     Unless otherwise notified by Clarient upon receipt of DakoCytomation’s Purchase Order, orders shall be delivered ready for transportation to the address specified in DakoCytomation’s Purchase Order.

8.11     Clarient shall decide, at its own discretion, which shipping agent to use and shall book shipment accordingly. However, during Phase 1 of the Agreement, Clarient will use the transportation procedure and invoice DakoCytomation the transport costs defined in Exhibit 6.

8.12     Clarient shall perform out-going quality control to confirm that Products delivered to DakoCytomation comply with the Product Specifications and Acceptance Criteria defined in Exhibits 1 and 2.

8.13     DakoCytomation shall not be obliged to perform incoming quality control, but will rely on the quality control performed by Clarient. Clarient shall perform quality control testing in accordance with the standards present in the market to confirm that Products meet the Product Specifications and Acceptance Criteria.  Clarient shall maintain complete records to the extent required by applicable laws and regulation, such as the IVD Directive.

8.14     A Certificate of Conformance prepared by Clarient is to follow each shipment of Products delivered to DakoCytomation under this Agreement.

8.15     Clarient hereby grants, and DakoCytomation hereby accepts, a worldwide, fully paid up, perpetual (subject to Article 8.23), non-transferable license to manufacture or have manufactured, use, develop and market all Products covered by this Agreement (including all necessary licenses and sub-licenses to any and all patents and patent applications, know-how and other rights to develop and modify the Products held by Clarient which relate to the Products) (i) exclusively as to the Exclusive Field of Use, and (ii) nonexclusively as to the Nonexclusive Field of Use; provided that DakoCytomation shall not be entitled to exercise any rights under the foregoing license:  (a) until DakoCytomation’s delivery of written notice to Clarient of the occurrence of a Supply Failure, which notice must be given before Clarient has cured such Supply Failure and within sixty (60) Calendar Days of such occurrence; (b) until DakoCytomation’s delivery of written notice to Clarient of the occurrence of a Supply Failure which has otherwise been excused for more than six (6) consecutive months by application of Article 38, which notice must be given before Clarient has cured such Supply Failure and within sixty (60) Calendar Days of such occurrence; or (c) (if not previously exercised) after the Term.  For the purposes of this Agreement a “Supply Failure” shall mean Clarient’s failure to supply Products ordered by DakoCytomation in accordance with Article 7 within sixty (60) Calendar Days after the expiry of the time limits set forth in Articles 8.6 and 8.7 for reasons other than (I) the cause or breach of DakoCytomation or a Subdistributor, (II) a bona fide dispute over the validity of a Purchase Order, (III) Clarient’s rejection of a defective Purchase Order, or (IV) as set forth in Article 38.

8.16     A list of patents and patent applications related to the Products, specifying the owners, is attached to this Agreement as Exhibit 7.

8.17     If DakoCytomation exercises the license granted pursuant to Article 8.15, and the exercise of such license is permitted by the occurrence of a Force Majeure event as set forth in Article 38, DakoCytomation shall pay to Clarient a license fee of (i) USD five thousand (5,000) for each Instrument delivered to DakoCytomation’s customers in the first twelve (12) months after the grant of such license, (ii) USD seven thousand five hundred (7,500) for each Instrument delivered to DakoCytomation’s customers in the next twelve (12) months after the grant of such license and (iii) USD ten thousand (10,000) for each Instrument delivered to DakoCytomation’s customers in the period thereafter, plus in each case make payment of the applicable Image Analysis Fee.

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8.18     If DakoCytomation exercises the license granted pursuant to Article 8.15, and the exercise of such license is pursuant to an event other than the occurrence of a Force Majeure event as set forth in Article 38, DakoCytomation shall pay to Clarient a license fee of USD five thousand (5,000) for each Instrument delivered to DakoCytomation’s customers after the exercise of such license.

8.19     DakoCytomation shall keep complete and accurate accounts of all Products used and marketed.  DakoCytomation shall not engage any competitor of Clarient to manufacture the products.

8.20     For so long as DakoCytomation manufactures or has manufactured any Instruments pursuant to the exercise of the license granted under Article 8.15, DakoCytomation shall provide Clarient with a sales report within sixty (60) Calendar Days after the end of each Calendar Year for each Instrument sold by DakoCytomation.

8.21     For a period of two (2) years after receiving any of the aforementioned reports from DakoCytomation, Clarient shall have the right to nominate an independent certified public accountant acceptable to DakoCytomation who shall have access to DakoCytomation’s records during business hours for the purpose of verifying the payments made to Clarient under this Agreement in the above-mentioned period. If Clarient wishes to audit DakoCytomation, such audit must be agreed with DakoCytomation. Such information shall be subject to Article 31.

8.22     Clarient shall fully co-operate with and assist DakoCytomation and/or third parties designated by DakoCytomation in such manufacture of the Products under a license to DakoCytomation under Article 8.15, e.g. by making available its personnel, books, records and other technical data needed for the process.

8.23     Clarient shall give DakoCytomation reasonable prior notice of any proposed cure of a Supply Failure.  In the event that Clarient believes it has cured the cause of the Supply Failure after DakoCytomation has elected to exercise its rights under the license granted in Article 8.15, then the Parties agree to negotiate in good faith Clarient’s resumption of manufacturing of the Products for DakoCytomation.   Further, in the event Clarient demonstrates that it can supply Products as required by Articles 8.6 and 8.7 after a Supply Failure caused by an event of Force Majeure, DakoCytomation shall not be entitled to exercise its rights under the license granted pursuant to Article 8.15 for such Supply Failure after the earlier to occur of (i) thirty-six (36) Calendar Months after such demonstration or (ii) Clarient’s payment to DakoCytomation of the reasonable costs DakoCytomation incurred to begin manufacture of the Products.

8.24     The license granted under Article 8.15, shall not affect Clarient’s right to use, have the right to manufacture or have manufactured, use or market the Products within the Nonexclusive Field of Use.

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Article 9               Terms of Delivery

9.1       Delivery terms shall be FOB (Free On Board) Clarient’s designated warehouse site (INCOTERMS 2000).

Article 10             Packaging

10.1     Clarient shall ensure that all Products are appropriately boxed, crated and/or packaged in a professional manner sufficient to ensure their integrity during transportation.

10.2     The cost of packaging is included in the Prices set forth in Article 6 of this Agreement.

Article 11             Labelling

11.1     Clarient shall label and ▇▇▇▇ the Products in accordance with the Product Specifications and in compliance with all applicable current regulatory requirements.

11.2     The “Shipment Documentation” shall include the following information (identification of the Product on delivery):

a)         Manufacturer

b)         Serial number

c)         Customer

d)         Safety notes and warnings

e)         Special instructions regarding handling and storage

f)          Quantity per trading unit and description

g)         Weight

h)         Notes for customs.

11.3     The cost of labeling is included in the Prices set forth in Article 6 of this Agreement.

Article 12             Terms of Payment

12.1     Clarient shall invoice DakoCytomation with each shipment of Products.

12.2     All invoices shall include the Price, VAT, local taxes and costs for transportation of the Products and include the information listed in Article 11.2.

12.3     All payments are due thirty (30) Calendar Days from the Date of Invoice. DakoCytomation will make all payments by bank transfer to Clarient’s bank:

12.4     Initial banking and transfer costs relative to payment of invoices shall be payable by DakoCytomation and receiving costs shall be payable by Clarient.

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12.5     Interest shall accrue after 30 Calendar Days from the Date of Invoice at the prevailing twelve (12) month London InterBank Offered Rate plus five percent (5%).

Article 13             Currency

13.1     Clarient shall invoice DakoCytomation in USD, and DakoCytomation shall make all payments in USD.

Article 14             Trademarks and Trade Names

14.1     DakoCytomation may sell and market the Products in the Territory and within the Exclusive Field of Use and Nonexclusive Field of Use under its own label, trade name/trademarks and in its own packaging under no specific limitation; subject to Article 14.4 below.  DakoCytomation may furthermore, at its own discretion, bundle the Products and market and sell the bundled Products in the Territory.

14.2     Subject to Article 14.4 below, the Products will be manufactured by Clarient and will carry the DakoCytomation trademarks “DAKOCYTOMATION” and Drop logo as set forth in Exhibit 8.

14.3     DakoCytomation hereby grants Clarient a nonexclusive, worldwide, fully paid-up free license to use the DakoCytomation trademarks and trade names set forth in Exhibit 8, in the manufacture, packaging and labeling of the Products in accordance with the terms of this Agreement.  This Agreement does not imply the grant of a license from DakoCytomation to Clarient to use any DakoCytomation trademarks or trade names for any other purpose.

14.4     Further, the Products will be sold by DakoCytomation under a combination of DakoCytomation’s trademarks listed in Exhibit 8 and Clarient’s trademarks listed in Exhibit 9, during Phase 1 of the Agreement e.g. as “DakoCytomation Clarient ChromaVision ACIS II”. The Parties shall mutually agree on the use of trademarks/trade names for the Products

14.5     Clarient hereby grants DakoCytomation a nonexclusive, world-wide, fully paid up license to use Clarient’s trademarks in Exhibit 9 for marketing, sale and support of the Products in accordance with the terms of this Agreement.  This Agreement does not imply the grant of a license from Clarient to DakoCytomation to use any Clarient trademarks or trade names for any other purpose. For the avoidance of doubt, the license granted by DakoCytomation to Clarient only applies to Products sold by Clarient to DakoCytomation under this Agreement.

14.6     A label and/or plate, not exceeding a size of 20 x 100mm, stating that “Manufactured by Clarient, Inc., California, United States of America for DakoCytomation Denmark A/S”, is to be affixed to the back of the Products.

14.7     The Parties shall mutually agree on the use of trademarks/trade names for the ACIS III Products marketed under Phase 2 of the Agreement.

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Article 15             Regulatory Matters

15.1     DakoCytomation shall obtain the relevant marketing licenses and fulfill any regulatory registration requirements for the Products to be marketed and sold by DakoCytomation in the European Union (“EU”) and all countries other than the United States (collectively, “ROW”).

15.2     For the ROW, DakoCytomation shall determine, in consultation with Clarient,  for which countries DakoCytomation shall seek marketing licenses and product registration.

15.3     For the ROW, all product registrations shall be made in DakoCytomation’s name and DakoCytomation shall either serve as or retain a third party, as appropriate in each such country, to be the Authorized Representative (as defined in the IVD Directive).

15.4     For the ROW, DakoCytomation shall pay all registration fees and DakoCytomation’s own costs in connection with obtaining marketing licenses and fulfilling registration requirements in each country.

15.5     In the event of any termination or expiration of this Agreement, DakoCytomation shall use commercially reasonable efforts to secure the transfer of all applicable registrations and licenses issued to DakoCytomation or its agents under this Article 15 to Clarient.  In the event of termination of this Agreement due to DakoCytomation’s breach, DakoCytomation shall pay any reasonable costs and fees associated with the transfer of such registrations and licenses to Clarient.

15.6     Clarient shall make whatever information Clarient is holding of relevance to DakoCytomation’s obtaining of relevant marketing licenses and/or fulfillment of regulatory registration requirements available to DakoCytomation or its Designated Representative upon demand in a timely manner at Clarient’s cost.

15.7     ▇▇▇▇▇▇ ▇▇▇▇▇ ▇ of the Agreement, Clarient shall maintain FDA approvals and/or clearances necessary to market and sell the Products as an in-vitro diagnostic device in the United States.  All such registrations shall be in Clarient’s name and shall be at Clarient’s cost.  At the completion of Phase 1 of the Agreement, the Parties will mutually agree in writing whether the applicable registrations and licenses issued to Clarient or its agents under this article shall be transferred to DakoCytomation and the conditions for such transfer. For Phase 2 of this Agreement, the Parties shall mutually agree on the Party to be responsible for the registration of the Products for in vitro diagnostic use with FDA in the United States.  The agreed upon terms for the ACIS III Products shall be set forth in a written Amendment to this Agreement, signed by duly authorized representatives of the Parties.

15.8     For purposes of regulatory compliance, Clarient shall allow representatives of DakoCytomation or its Designated Party to audit its facilities, quality systems and records related to the manufacture of Products once per Contract Year, (or more frequently as required by applicable law or regulation) upon 30 days prior written notification to Clarient.  Upon DakoCytomation’s written request, in the event of a time sensitive audit DakoCytomation will provide Clarient seventy-two (72) hour written notification.

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15.9     In the ROW, DakoCytomation shall prepare, maintain and distribute Material Safety Data Sheets for the Products.  In the United States, Clarient shall prepare, maintain and provide such Material Safety Data Sheets to DakoCytomation for any Clarient Product that requires this documentation.  Clarient shall provide DakoCytomation or its Designated Representative with information necessary for the preparation of such Material Safety Data Sheets.

15.10   DakoCytomation shall be responsible for all market surveillance activities, including reporting substantial changes to Product Specifications and quality systems, reporting Serious Incidents, handling complaints and customer notifications, and conducting product recalls or removals issued by authorities or mutually agreed upon by the Parties. If Clarient becomes aware of potential Serious Incidents, customer complaints or other information relevant to market surveillance activities, or the Product it shall provide this information to DakoCytomation promptly. If DakoCytomation becomes aware of potential Serious Incidents customer complaints or other information relevant to market surveillance activities, or the Product it shall provide this information to Clarient promptly.

15.11   Notwithstanding the provision in article 15.10, during Phase 1 of the Agreement, Clarient shall be responsible for all market surveillance activities in the United States and Canada, including, the reporting requirements of FDA.  If DakoCytomation becomes aware of information relevant to market surveillance activities, including without limitation, Adverse Events or customer complaints, it shall immediately notify Clarient.  If Clarient receives a customer complaint regarding the Products or the Products are subject to a product recall in the United States, Clarient shall investigate such customer complaint or product recall.  DakoCytomation shall assist Clarient as necessary in implementing any corrective action required, including without limitation, providing Clarient with a copy of its or its Affiliate or subdistributor’s customer list for Products.  DakoCytomation shall further assist Clarient in the notification, if any, to such customers related to such customer complaints and/or product recalls.

15.12   The Parties shall use commercially reasonable efforts to provide each other with the information required to obtain and maintain CE marking in accordance with the IVD Directive or other requirements enforced by a notified body or governmental authority. The other party shall use commercially reasonable efforts to provide such information to the other Party’s custody within ten Business Days upon the other Party’s written request.

Article 16             Warranty

16.1     Clarient hereby warrants for a period of fifteen (15) months from delivery to DakoCytomation or for a period of twelve (12) months from the delivery to the end user that the Products delivered are in conformity with the Product Specifications and Acceptance Criteria in Exhibits 1 and 2 and are free of Defects in workmanship and materials.

16.2     Clarient hereby warrants that the Products will be manufactured in accordance with the applicable regulations and statutory requirements in force in the United States, Canada, EU and Japan. In other countries, the provision in Article 4.2 shall apply.

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16.3     Clarient hereby warrants that it is in possession of all necessary rights, including but not limited to Intellectual Property Rights, covering the grant and supply of the Products in the United States, Canada, EU and Japan and warrants that it has the right and authority to supply the Products to DakoCytomation for the use intended under this Agreement. For Products delivered for other countries, the provision in Article 4.2 shall apply.

16.4     Clarient shall maintain at all times during the Term of this Agreement product liability insurance with a policy limit of not less than USD ten million (10,000,000) covering the Products.  If DakoCytomation manufactures pursuant to exercise of the license granted under Article 8.15, DakoCytomation undertakes to maintain the same level of insurance.

16.5     Beyond the warranties expressly stated herein, CLARIENT EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, GUARANTEES, OBLIGATIONS, LIABILITIES AND RIGHTS AND REMEDIES, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE WITH RESPECT TO THE MANUFACTURE AND USE OF THE PRODUCTS, INCLUDING BUT NOT LIMITED TO (a) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND (b) ANY OBLIGATION, RIGHT OR LIABILITY, CLAIM OR REMEDY FOR (i) LOSS OF USE, REVENUE OR PROFIT OR ANY OTHER DAMAGES; AND (ii) INDIRECT, SPECIAL CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY NATURE WHATSOEVER, HOWEVER CAUSED, AND UNDER ANY THEORY OF LIABILITY WHETHER BASED IN CONTRACT, WARRANTY, TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE), STRICT LIABILITY, STATUTORY OR OTHERWISE, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF CLARIENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

16.6     DakoCytomation shall not provide any end user with any rights or licenses in conflict with, or expansion of, the rights granted herein.  In selling the Products to end users, DakoCytomation shall use written agreements with use restrictions and other terms giving due consideration and respect to each Party’s standard end-user terms and experience with end-users, as well as the variations in risk and legal customs in different countries.  Without limiting the generality of the foregoing, each DakoCytomation End-User agreement relating to the Products shall (i) prohibit use of the Products for or via remote access to external customers of the End-User, such that the End-User may only use the Product for global cases (i.e., where the End-User’s staff physicians are performing prognosis, diagnosis or similar professional services) (the “Remote Access Use Restriction”) and (ii) shall permit Clarient (at its sole expense) to directly and independently enforce its rights related to the Remote Access Use Restriction as an intended beneficiary (unless prohibited by applicable law).  A Party discovering (or reasonably suspecting) an End-User violation of the Remote Access Use Restriction shall, within fifteen (15) days after such discovery (or reasonable suspicion), notify the other Party, identifying the End-User and the time, place and manner of the violation(s).  Except to the extent Clarient reasonably believes that such a delay would cause irreparable harm to its business, DakoCytomation shall have thirty (30) days after receipt of the foregoing notice to encourage and allow such End-User to cure any violation (in a manner reasonably satisfactory to Clarient) before Clarient may seek to independently enforce its rights relating to the Remote Access Use Restriction.  DakoCytomation agrees to cooperate with Clarient’s reasonable requests relating to the enforcement of Remote Access Use Restriction.

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Article 17             Liability; Indemnification

17.1     EXCEPT AS OTHERWISE SET FORTH HEREIN, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR INCIDENTAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES (collectively “Damages”) ARISING IN CONNECTION WITH THIS AGREEMENT, THE SCOPE OR ANY DOCUMENTS OR EXHIBITS RELATED THERETO.  IN NO EVENT SHALL CLARIENT’S LIABILITY UNDER THIS AGREEMENT EXCEED THE GREATEST OF (i) THE PAYMENTS RECEIVED BY CLARIENT UNDER THIS AGREEMENT IN THE TWELVE (12) MONTH PERIOD PRIOR TO THE EVENT OF LIABILITY IN QUESTION OR (ii) USD FOUR MILLION (4,000,000), OR (iii) USD TEN MILLION (10,000,000) IN THE CASE OF CLARIENT’S LIABILITY HEREUNDER FOR INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS OR TO ANY LOSS ARISING OUT OF PRODUCT LIABILITY CLAIMS, INCLUDING PERSONAL INJURY.

17.2     IN NO EVENT SHALL EITHER PARTY BE RESPONSIBLE FOR ANY DAMAGES CAUSED BY THE OTHER PARTY’S (A) ILLEGAL CONDUCT, (B) WILLFUL MISCONDUCT OR (C) VIOLATION OF THIS AGREEMENT (INCLUDING WITHOUT LIMITATION PRESCRIBED USE OF THE PRODUCTS).

17.3     Clarient shall indemnify DakoCytomation, its Affiliates and their respective officers from any loss, cost, damage or expense (a “Loss”) from any lawsuit, action, claim, demand, assessment or proceeding (a “Claim”) arising or occurring as a result of (i) infringement of third party Intellectual Property Rights, (ii) product liability claims, including personal injury or property damage proximately caused by Clarient’s gross negligence or intentional misconduct (iii) other personal injury or property damage caused by Clarient’s gross negligence or intentional misconduct, or any material Defect in a Product, or (iv) any violation of applicable law, rule or regulation by Clarient, in each case except to the extent (a) such Product was altered after it left Clarient’s control or (b) of the negligence, gross negligence or intentional misconduct of a party other than Clarient. Notwithstanding anything herein to the contrary, Clarient shall have no obligation with respect to any Loss or Claim to the extent that such Loss or Claim results from (I) DakoCytomation’s combination, operation or use of the Products with products, data or other materials not provided by Clarient outside the scope of this Agreement; (II) modifications of the Products that were not made or authorized by Clarient.

17.4     DakoCytomation shall indemnify Clarient, its Affiliates and their respective officers, directors and employees from any Loss or Claim arising or occurring as a result of (i) personal injury or property damage proximately caused by DakoCytomation’s gross negligence or intentional misconduct, or any modification by DakoCytomation or its agents to a Product, (ii) any violation of applicable law, rule or regulation by DakoCytomation, in each case except to the extent of the negligence, gross negligence or intentional misconduct of a party other than DakoCytomation, or (iii) infringement of third party Intellectual Property Rights by DakoCytomation. IN NO EVENT SHALL DAKOCYTOMATION’S LIABILITY UNDER THIS AGREEMENT FOR MATTERS OTHER THAN PAYMENT OF THE AMOUNTS INDICATED ON EXHIBIT 4 EXCEED THE GREATEST OF (i) THE PAYMENTS RECEIVED BY CLARIENT UNDER THIS AGREEMENT IN THE TWELVE (12) MONTH PERIOD PRIOR TO THE EVENT OF LIABILITY IN QUESTION OR (ii) USD FOUR MILLION (4,000,000), OR (iii) USD TEN MILLION (10,000,000) IN THE CASE OF DAKOCYTOMATION’S LIABILITY HEREUNDER FOR INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS OR TO ANY LOSS ARISING OUT OF PRODUCT LIABILITY CLAIMS, INCLUDING PERSONAL INJURY.

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17.5     If a claim for damages is lodged by a third party against one of the Parties, the affected Party shall forthwith inform the other Party hereof.  Each Party agrees to give prompt written notice to the other Party of the commencement of any action, suit or proceeding for which indemnification may be sought, and the indemnifying Party, through counsel reasonably satisfactory to the indemnified Party shall assume the defense thereof.  It has been agreed, however, that the indemnified Party shall be entitled to participate in any such action, suit or proceeding with counsel of its own choice, but at its own expense.  The indemnifying party shall not make any settlement offer or compromise without the indemnified party’s reasonable consent.

17.6     Each Party agrees to give promptly written notice to the other Party of the commencement of any action, suit or proceeding for which indemnification may be sought, and the indemnifying Party, through counsel reasonably satisfactory to the indemnified Party shall assume the defense thereof. It has been agreed, however, that the indemnified Party shall be entitled to participate in any such action, suit or proceeding with counsel of its own choice, but at its own expense.

Article 18             Complaints

18.1     DakoCytomation shall, no later than five (5) Business Days from discovery, give Clarient written notice of any Defect or other fault in or of a Product, and reject any Product that does not comply with the Product Specifications set forth in Exhibits 1 and 2.

18.2     In case the Products do not substantially meet the Product Specifications set forth in Exhibits 1 and 2 or should otherwise be Defective, DakoCytomation is authorized to withhold payment due without interest accruing until such Defect is cured.

18.3     Clarient shall repair or replace (at Clarient’s option) any Products, which DakoCytomation identifies as Defective.  In the event Clarient elects to replace a Defective product, DakoCytomation shall return such Defective Product clearly marked with DakoCytomation’s name and address.  Such returned Defective Products shall be carefully packed and sent to Clarient accompanied by a copy of Clarient’s invoice.  Clarient shall pay all costs concerning the return of such Defective product, thus Clarient shall be entitled to choose means of transportation and book transportation accordingly.

Article 19             Defects

19.1     If a Product is found to be Defective in accordance with the Product Specifications and Acceptance Criteria in Exhibits 1 or 2 to this Agreement, or is found to be Defective because of faulty workmanship or materials, and such reason is reported by DakoCytomation to Clarient in accordance with Article 18.1 during the Warranty Period stated in Article 16.1, the following provisions shall apply.

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19.2     During the Term, Clarient will repair Defects free of charge.  Clarient shall initiate such repairs as promptly as possible, but not more than one (1) week from Clarient’s receipt of DakoCytomation’s notification of the Defect.  In the event that the Product cannot be repaired within six (6) weeks after Clarient receives notice of the Defect, Clarient will replace the Product free of charge.

19.3     Delivery terms for any replacement shipments are DDP (Delivery Duty Paid) on the shipping address provided by DakoCytomation in the relevant Purchase Order (INCOTERMS 2000).  Clarient shall bear any freight, transportation and custom clearance fees related to such replacements.

19.4     Failure by Clarient to replace any Defective Product pursuant to Article 19.2 shall be deemed a material breach of the Agreement, which shall entitle DakoCytomation to have the Product manufactured at a third party’s production facility at Clarient’s choice for Clarient’s account according to the procedure set forth in Article 8.15 to 8.24 of this Agreement.

19.5     In case the delivered Product should not substantially meet the Product Specifications or Acceptance Criteria in Exhibits 1 and 2 or should otherwise be Defective after the period specified in Article 19.2, DakoCytomation may cancel the Purchase Order or the specific part of the Purchase Order concerning such Product.

Article 20             Installation

20.1     During Phase 1 of the Agreement, Clarient shall install the Products at end-user sites.

20.2     Clarient will invoice DakoCytomation for cost of travel, accommodations, travel allowances and installation time connected to installation services provided during Phase 1 of the Agreement according to the price list in Exhibit 10 to this Agreement.

20.3     The Payment Terms set forth in Article 12 of this Agreement shall apply to Installation Services.

20.4     ▇▇▇▇▇▇ ▇▇▇▇▇ ▇ of the Agreement, DakoCytomation shall make installation of the Products at end user sites.  DakoCytomation may elect to assume responsibility for installation of Products at end user sites at any time during the Term upon forty-five (45) days written notice to Clarient.

20.5     The Parties agree to discuss a continuation of Clarient’s handling of the Installation Services during a transition period after the commencement of Phase 2.

Article 21             After Sales Services

21.1     ▇▇▇▇▇▇ ▇▇▇▇▇ ▇ of the Agreement Clarient will perform all After Sales Services described in Exhibit 11.

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21.2     During Phase 1 of the Agreement, DakoCytomation may elect to assume the responsibility for performing After Sales Services. If DakoCytomation chooses to do so, DakoCytomation will consider employing Clarient personnel who performed such functions.

21.3     Clarient will invoice DakoCytomation for cost of travel, accommodations, travel allowances and Clarient personnel time connected to After Sales Services provided during Phase 1 of the Agreement according to the price list in Exhibit 11.

21.4     ▇▇▇▇▇▇ ▇▇▇▇▇ ▇ of the Agreement, DakoCytomation will perform all After Sales Services worldwide.

21.5     Notwithstanding the above, Clarient will provide access to the After Sales Services during the entire term of this Agreement.

21.6     Clarient will invoice DakoCytomation for Support Services according to the Price List in Exhibit 11.

21.7     The Payment Terms set forth in Article 12 of this Agreement shall apply to all After Sales Services mentioned in this article.

21.8     The Parties will mutually agree upon a continuation of Clarient’s handling of the After Sales Services during a transition period after the commencement of Phase 2.

Article 22             Training

22.1     During the Term of this Agreement Clarient shall train DakoCytomation employees on the use of the Products free of charge.  Clarient will provide training for DakoCytomation’s customers at the DakoCytomation training center at the DakoCytomation site located in Carpinteria, California (United States) for a fee of five hundred dollars (USD 500) per training session (unlimited participants) as described in Exhibit 10.

22.2     DakoCytomation shall request customer Training in writing with thirty (30) days written notice.

22.3     Clarient will provide training of DakoCytomation’s Service Engineers, including Service Engineers employed by DakoCytomation’s external Service Partners once per year during the entire Term for a fixed fee of one thousand five hundred dollars (USD $1,500) per training session (unlimited participants). Training will be provided at the DakoCytomation site determined by DakoCytomation.

22.4     DakoCytomation shall request Service Engineer Training in writing with forty-five (45) days written notice.  Clarient shall provide training free of charge to both sales and marketing employees of DakoCytomation in The United States and Europe.

22.5     Clarient will provide a comprehensive “Service Manual” for the Products to DakoCytomation’s Service Engineers within sixty (60) Calendar Days prior to DakoCytomation’s assuming service responsibility.

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22.6     Clarient will provide a one-time theoretical and hands-on training of a minimum of three days of DakoCytomation’s R&D and Marketing Staff and Country Product Managers free of charge that will take place in DakoCytomation’s location in Carpinteria, California, United States.

22.7     DakoCytomation is responsible for all additional expenses and providing facilities for training.  DakoCytomation will reimburse the travel and related expenses of Clarient’s representatives (subject to DakoCytomation’s reasonable, prior approval) as well as all of its own representatives.

Article 23             Image Analysis Fee

23.1     The Parties have agreed that Clarient will receive payment of an Image Analysis Fee as set forth on Exhibit 4 for each use of an image analysis algorithm by DakoCytomation’s customers/end-users in the United States.  The fee indicated on Exhibit 4 applies only to the current algorithms, and the Image Analysis Fee for any future assay algorithms shall be agreed upon by the Parties when such algorithms are released.

23.2     DakoCytomation shall only pay the Image Analysis Fee as long as DakoCytomation’s customers/end-users receive reimbursements from Centers for Medicare and Medical Services and/or third party payors (e.g. patient medical insurance).

23.3     In the event the reimbursement rate for Image Analysis changes, the Parties will mutually determine an appropriate adjustment to the Image Analysis Fee based principally on the ratio of the new reimbursement rate (CMS Prevailing Rate) to the reimbursement rate on the Effective Date.

23.4     In the event of significant changes in the market situation the Parties agree to enter into good faith negotiations in order to amend this Agreement accordingly.

Article 24             Spare Parts

24.1     For each Product, Clarient shall maintain at its premises an appropriate stock level of Spare Parts, covering all components of the Products.  Spare parts related to the Products shall hereinafter be referred to as the “Spare Parts”. A list of Clarient’s Spare Parts for the Instruments is included in Exhibit 4 to this Agreement.

24.2     Clarient shall have an unlimited obligation to supply the Spare Parts for the Products to DakoCytomation during the Term of this Agreement and five (5) years thereafter.

24.3     Clarient shall have an obligation to ship Spare Parts not later than two (2) Business Days after DakoCytomation has ordered them, to the destination specified by DakoCytomation.

24.4     The initial prices for the Spare Parts for Phase 1 are set forth in Exhibit 4.  Prices for Spare Parts for Phase 2 shall be negotiated in good faith at a later time.  Clarient shall notify any changes in the Spare Part prices in writing sixty (60) days in advance.  Spare Part orders made prior to such notification shall be made at previous prices.

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24.5     Clarient in Phase 1 of the Agreement shall make shipment of Spare Parts to DakoCytomation customers/end-users.

24.6     During the Phase 2 of this Agreement, DakoCytomation shall make shipment of Spare Parts to the end-users.

24.7     Clarient’s delivery of Spare Parts shall be subject to the terms of this Agreement.

24.8     Clarient shall notify and receive DakoCytomation’s written approval prior to using remanufactured parts in place of Spare Parts on the Products.

24.9     DakoCytomation shall be responsible for all Spare part obligations if it exercises its license under Article 8.15. In such event, Clarient shall assist DakoCytomation with assuming the Spare Part obligations by providing supplier lists and other reasonable documentation and assistance.

Article 25             Software, Updates and Maintenance

25.1     As stated in Article 2.2 of this Agreement, Clarient has developed manufactures and markets the Software to be used with the Instruments. The Product Specifications and Acceptance Criteria for the Software is enclosed hereto as Exhibit 2.

25.2     Clarient agrees to provide the Software to DakoCytomation and DakoCytomation’s customers subject to a perpetual, revocable, nonexclusive, world-wide, fully paid up, license to use, execute, display, perform and configure (within its designed parameters) the Software.

25.3     Clarient shall provide Software maintenance during the applicable warranty period for the Product, including development and creation of updates for the Software to cure software bugs and malfunctioning at no charge to DakoCytomation or its customers/end-users.

25.4     Clarient shall develop and provide upgraded versions of the Software, which may include additional or enhanced features, new functionalities and interfaces as well as new algorithms on an ongoing basis. The Parties will mutually agree upon the consideration, if any, that Clarient receives for such development work from DakoCytomation.

Article 26             Manuals, Brochures and Marketing Materials

26.1     Clarient shall provide for the Products:

i.      an appropriate “User Instruction/Operation Manual”. Each delivery of an instrument shall include such Manual as an integrated part of the Product which meets legal requirements.

ii.     an appropriate “Service Manual” allowing DakoCytomation’s service organization to professionally implement preventive and normal service interventions sixty (60) Calendar Days prior to DakoCytomation’s assuming service responsibility.

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26.2     Clarient shall provide a new Service Manual for each new instrument phase.

26.3     DakoCytomation shall have the right to review and suggest changes to the manuals prior to final print.

26.4     The above Manuals shall be produced by Clarient at Clarient’s cost and shall be supplied at Clarient’s cost in the German, English and French languages. The Manuals shall be printed with DakoCytomation branding

26.5     DakoCytomation shall pay the cost of translation of the Manuals into other languages if such translation is requested by DakoCytomation.

26.6     Brochures and other marketing material are DakoCytomation’s responsibility, provided that DakoCytomation shall provide advance copies of all such materials for Clarient’s review.

Article 27             Manufacturing

27.1     Clarient warrants manufacturing the Products according to FDA QSR Good Manufacturing Practices Regulations and that records of such compliance are at any time available for auditing by DakoCytomation or third party authorities.

27.2     Clarient will notify DakoCytomation in writing prior to implementing any change in the Products or manufacture thereof for DakoCytomation’s prior written approval.

27.3     Copies of the current and future “▇▇▇▇ of Goods” listing all components and manufacturing procedures for the Products will be officially transferred in escrow to the International Chamber of Commerce in Copenhagen, Denmark, or to another escrow agent, which can be approved by both Parties, such approval not to be unreasonably withheld.

Article 28             Inspection

28.1     Clarient will allow DakoCytomation to inspect Clarient’s facilities annually, upon reasonable prior notice, to determine Clarient’s compliance with regulatory and/or quality assurance standards.

28.2     DakoCytomation may, once per Calendar Quarter, have a DakoCytomation Quality Assurance/Quality Control responsible person inspect Clarient’s manufacturing site to confirm that the Products are manufactured according to the Good Manufacturing Practices Regulations set forth in Article 27 .

28.3     Any audit or inspection under this Article 28 or Article 15.8 shall be subject to the provisions of Article 31 and Clarient shall have the right to escort the inspection or audit team at its premises.

Article 29             Development project

29.1     In order to fulfill the evolving customer requirements/needs and to cope with the rapidly changing technology advances, Clarient and DakoCytomation have agreed to mutually develop the Products into next generation Products.

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29.2     Clarient will perform the research and development work under this Agreement. Clarient may engage subcontractors to assist in such work but shall secure from each such subcontractor confidentiality undertakings in accordance with Article 31.

29.3     The Parties have agreed to enter into a Development Project with the goal to develop the ACIS III Instrument and Software based on the current Clarient ChromaVision ACIS II instrument and software. The Product and Technical Specifications for the ACIS III Instrument and Software are set forth in Exhibit 14  to this Agreement. The Research and Development Project is defined in the Project Plan in Exhibit 15 to this Agreement.

29.4     The Parties agree that the enclosed version of Exhibits 14 and 15 is only preliminary. The Parties agree to negotiate a final version of Exhibits 14 and 15 within thirty (30) days of the Effective Date and that the final version of Exhibits 14 and 15 will supersede the current version of Exhibits 14 and 15 as soon as it is approved by both Parties in writing.  Furthermore, the Parties agree that the entire Agreement will cease (including cancellation of DakoCytomation’s initial Purchase Order described in Article 8.1) should the Parties not be able to agree on a final version of Exhibits 14 and 15 within thirty (30) days of the Effective Date. Any disputes regarding the finalization of Exhibits 14 and 15 shall be solved according to the Dispute Resolution Procedure set forth in article 29.9 below.

29.5     Notwithstanding the provisions herein, Clarient will initiate the research and development work within thirty (30) days of the Effective Date.

29.6     The Parties will mutually agree to any changes and amendments to Exhibits 14 and 15, including but not limited to all design files, project milestones and phase gate documentation. DakoCytomation shall participate in all design review, risk management and other general project management.

29.7     Clarient and DakoCytomation will appoint an individual as Project Executive to represent and bind Clarient and DakoCytomation, respectively, in connection with all aspects of the Research and Development Project described in Exhibits 14 and 15.

29.7.1         Before assigning an individual as Project Executive, Clarient and DakoCytomation will (i) introduce the individual to each other, (ii) provide the other with information reasonably requested regarding the work history and experience of the individual and (iii) discuss reasonable objections to such appointment.

29.7.2         Clarient and DakoCytomation will provide each other with at least thirty (30) Calendar Days notice before assigning a new Project Executive, unless the Project Executive (a) resigns from employment, (b) is dismissed by his employer, (c) fails to perform his obligations or (d) is unable to work.

29.8     Clarient and DakoCytomation will create a joint Steering Committee as described in Article 42 below.

29.9     If the Parties have a dispute regarding the Research and Development Project under this agreement, the following Dispute Resolution Procedure shall apply:

29.9.1         A dispute will initially be referred to the Project Executives.

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29.9.2         If the Project Executives cannot resolve the dispute within five (5) Business Days after their referral, the dispute will be referred to the Steering Committee.

29.9.3         If the Steering Committee cannot resolve the dispute within ten (10) Business Days after the referral, the dispute will be referred in writing to the CEO of DakoCytomation and the CEO of Clarient (jointly referred to as “Lead Executives”) for their review and resolution.

29.9.4         The Parties agree that neither Party may initiate formal proceedings for the resolution of such disputes before (i) the Lead Executives’ joint written conclusion that an amicable resolution to a dispute is unlikely, or (ii) thirty (30) days after the referral of a dispute to the Lead Executives.

29.9.5         The Parties will exercise good faith efforts to resolve any dispute related to the Research and Development Project.

29.9.6         The Parties agree the all written or oral statements and offers of settlement made in the course of the Dispute Resolution Procedure, , will (a) be confidential, (b) not be offered as evidence, disclosed, or used for any other purpose than the Dispute Resolution Procedure, and (c) not constitute an admission or waiver of any rights.

29.9.7         Each Party will promptly return to the other upon request any such written statements or offers including all copies hereof.

29.9.8         Except where clearly prevented by the nature of the dispute, Clarient and DakoCytomation agree to continue performing their respective obligations under this Agreement while a dispute is being resolved.+

29.10   The Parties have agreed that the following procedure shall apply with respect to the fulfillment of the Development Project and the Project Plan:

29.10.1       Clarient will give DakoCytomation written notice of fulfillment of Acceptance Criteria’s and Milestones and present its results to DakoCytomation.

29.10.2       DakoCytomation will carry out an evaluation of the results presented by Clarient within ten (10) Business Days.

29.10.3       DakoCytomation presents the results of the evaluation phase to Clarient, i.e. whether the Acceptance Criteria and Milestone has been met.

29.10.4       If Clarient has not met a Milestone, the Parties agree to enter into discussions in good faith with the purpose of accomplishing the outstanding Milestone.

29.11   Clarient is responsible for meeting the development Milestones and Acceptance Criteria set forth in Exhibits 14 and 15.

29.12   If Clarient fails to meet its objectives in each development Milestone and/or Acceptance Criteria, for reasons other than mutually agreed upon, the applicable Milestone payment shall be decreased by ten percent (10%).

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29.13   If Clarient has delays in the total Development Project timeline in excess of ninety (90) Calendar Days, (i) the Minimum Order Requirement in Article 5.10 shall be suspended until the completion of the Research and Development Project, and (ii) the total payments for Research and Development work set forth in Exhibit 4 shall be reduced by twenty-five percent (25%) after giving effect to any reductions already made pursuant to Article 29.12.

29.14   If Clarient has delays in excess of ninety (90) Calendar Days in the total Research and Development Project timeline or Clarient fails to perform its Research and Development obligations set forth in this Agreement caused by Clarient’s fault or gross negligence, DakoCytomation shall have the right to take over the Research and Development Project in its entirety according to the procedure stated in Articles 8.15 and 8.24

29.15   Clarient will receive compensation for Research and Development work under this Agreement as described in Exhibit 4 to this Agreement.

Article 30             Intellectual Property

30.1     Intellectual Property owned by or otherwise in the possession of a Party on the Effective Date, as well as any derivative works, enhancements or modifications thereof (“Pre-existing Intellectual Property”), shall remain the absolute, unencumbered property of that Party.

30.2     The Parties agree to maintain and defend all Pre-existing Intellectual Property owned by or otherwise in the possession of a Party on the Effective Date related to the Products during the Term of this Agreement.

30.3     The Parties agree to notify each other promptly of material infringements or possible infringements of Pre-existing Intellectual Property related to the Products , as well as any facts that may materially affect the validity, scope and enforceability of such Pre-existing Intellectual Property of which either Party becomes aware.

30.4     The Parties hereby grant each other rights to initiate legal actions for infringement of Intellectual Property related to the Products, including Intellectual Property created under this Agreement. If a Party desires to initiate legal actions for infringement of the other Party’s Intellectual Property related to the Products, the Party shall notify the other Party immediately in writing. If the other Party does not notify the Party of its intent to pursue legal actions within ninety (90) Calendar Days after receiving notice of the Party’s desire to file a suit, the Party shall be free to initiate the suit. The other Party shall have a continuing right to intervene in such suit. Each Party will bear its own costs in connection with such suit.

30.5     Any Intellectual Property created under the terms of this Agreement related to image analysis and execution hereof shall be owned by Clarient.

30.6     Any Intellectual Property created under the terms of this Agreement related to DakoCytomation’s specific implementation of the Products or integration of the Products with a product supplied by DakoCytomation shall be owned by to DakoCytomation (subject to Clarient’s ownership of its Pre-existing Intellectual Property).

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30.7     Subject to the licenses granted herein, each Party shall own all right, title and interest in and to its independently developed Intellectual Property.  The ownership to any other Intellectual Property created under the terms of this Agreement (excluding Pre-existing Intellectual Property) shall be determined in good faith by the Steering Committee, provided that if the Steering Committee cannot reach agreement as to such ownership, such Intellectual Property shall be jointly owned.  To the extent any Intellectual Property is jointly owned, neither party shall directly or indirectly use, distribute, sublicense market or disclose any such Intellectual Property to the competitors of the other party.

30.8     The Party owning any Intellectual Property created under the terms of this Agreement does hereby grant the other Party a worldwide, perpetual, fully paid up, irrevocable, non-transferable license to use such Intellectual Property (i) exclusively as to the Exclusive Field of Use, and (ii) nonexclusively as to the Nonexclusive Field of Use; provided that the licensee shall not directly or indirectly use, distribute, sublicense market or disclose any such Intellectual Property to the competitors of its owner.

30.9     In the event that a Party’s personnel are named as inventors in a patent application for Intellectual Property owned by the other Party, the Parties agree that they shall ensure that the patent rights can be assigned to the other Party and to effect such assignment.

30.10   The Parties agree to prosecute, maintain and defend their own Intellectual Property created under the terms of this Agreement during the term of this Agreement. The Parties will mutually agree in writing to the geographical scope of such prosecution. Each Party will bear its own costs related to prosecution, maintenance and defence of their Intellectual Property.

30.11   If Intellectual Property created under this Agreement is to be jointly owned by both Parties, the obligations to prosecute, maintain and defend such joint Intellectual Property will be determined in good faith by the Steering Committee, provided that if the Steering Committee cannot reach agreement as to such ownership, such obligations shall be joint and each Party will bear half of the costs related to prosecution, maintenance and defence of such joint Intellectual Property; provided further, however, that a Party may assign its rights to such Intellectual Property to the other Party in lieu of bearing any costs related to the prosecution, maintenance and defence of such joint Intellectual Property.

Article 31             Confidentiality

31.1     Each Party shall keep all information and know-how communicated to it or otherwise obtained from the other Party under or in respect of this Agreement secret and confidential and shall not disclose the same or any part thereof to any third party. Excepted here from is information:

a)         which is in the public domain at the time of disclosure,

b)         which is published or otherwise becomes part of the public domain through no fault of the Party receiving the information,

c)         which was in the possession of the receiving Party at the time of disclosure, as shown by competent evidence, or becomes available from a third party who has the right to disclose it,

d)         which has to be communicated to authorities or customers for the purpose of sale of the Product and is agreed by both Parties to be disclosed for those purposes.

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31.2     Both Parties hereto agree that this Agreement may be disclosed to the supervision authorities at their request, provided that the receiving party gives a reasonable prior notice to the disclosing party to allow it to seek protective or other court orders.

Article 32             Obligations to Inform

32.1     When information regarding potential reporting incidences has come to a Party’s knowledge, the Party shall inform the other Party within three (3) Business Days.

32.2     The Parties undertake to inform each other about any and all complaints related to the Products.

32.3     If a Party becomes aware of any other information regarding the Product, intellectual property rights or infringements of such regarding the Product that could be of importance to the other Party, such Party must promptly report such information to the other Party.

Article 33             Term and Termination

33.1     This Agreement becomes effective on the Effective Date and shall remain in force for 5 (five) years and shall be renegotiated prior to the termination date (the “Term”).

33.2     Neither Party may terminate this Agreement during the Term.

33.3     In the event that this Agreement is not extended or superseded by the Parties then the Parties agree to negotiate in good faith (i) the transfer, access or license to Pre-existing Intellectual Property, (ii) the transfer of any results and know-how from the Development Project, (iii) transfer of materials and documentation, and (iv) cooperation of the Parties in order to secure that both Parties can exploit the results from the Development collaboration within the Field of Use of this Agreement in the future.

33.4     In the event that either Party fails or becomes unable to substantially perform any of its obligations or undertakings to be performed under this Agreement, and such default is not otherwise addressed herein, the other Party shall provide to the non-performing Party a written notification of such default.

33.5     If such default is not cured within forty-five (45) Calendar Days to the mutual satisfaction of both Parties, the other Party shall have the right to terminate this Agreement without providing further notice and opportunity to cure for the non-performing Party.  If the default mentioned in Article 33.3 is lack of payment, the time frame defined in this Article 33.5 shall be ten (10) Business Days.

33.6     Termination of this Agreement shall not in any way affect the validity of any notice served to either Party prior to such termination becoming effective. If termination is caused by lack of payment, all Purchase Orders served and not yet delivered shall be terminated.

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33.7     The provisions of this Agreement shall without restriction continue to apply to the execution of such orders.

33.8     Either Party may with immediate effect terminate the Agreement in writing upon the occurrence of one or more of the events specified in Article 33.9. This Article 33.8 shall be limited by statutory rules applicable in the country where the situations listed below take effect.

33.9     The events are:

33.9.1         A Party passing a resolution for its winding-up or a court of competent jurisdiction making an order for the Breaching Party’s winding-up or dissolution.

33.9.2         The making of an administration order in relation to a Party or the appointment of a receiver or receiver and manager over, or the taking possession or sale by an encumbrance taking possession of or selling an asset of a Party.

33.9.3         Lasting material violation on the part of either Party hereto of its contractual obligations and failure to stop or remedy such violation despite a hortatory letter from the other Party.

33.10   In the event that DakoCytomation’s termination of this Agreement based on Clarient’s default or the existence of one of the events listed in Article 33.9, the Parties agree to be bound by and to follow the procedure in Articles 8.15 to 8.24 in order for DakoCytomation to maintain and secure DakoCytomation’s continuing production and further development of the Products and continuation of the Research and Development Projects described in Article 29.

33.11   Exercise of the right of termination afforded to either Party under this Agreement shall not prejudice any legal rights or remedies either Party may have against the other in respect of any breach of the terms of this Agreement.

33.12   The following Articles shall survive a termination: Article 12, Article 15, Article 16, Article 19, Article 30, Article 31, Article 32 and Article 43.

Article 34             General Provisions

34.1     This Agreement constitutes the entire understanding between the Parties with respect to the subject matter hereof, and supersedes and replaces all prior agreements, understandings, writings and discussions between the Parties relating to this subject matter.

34.2     Each of the Parties acknowledges and agrees that in entering into this Agreement it cannot rely on and shall have no remedy in respect of any statement, representation, warranty or understanding (whether negligently or innocently made) of a person (whether Party to this Agreement or not) other than expressly set out in this Agreement as a warranty.

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34.3     This Agreement shall be binding upon and inure to the benefit of and be enforceable by the Parties hereto and their respective successors and permitted assignees.

34.4     Any amendment of this Agreement must be agreed upon by both Parties and given in writing.

34.5     The failure of either Party at any time to require performance of any provision hereof shall in no manner affect its rights at a later time to enforce the same.

34.6     No term, provision or condition of this Agreement shall be waived unless such waiver is evidenced in writing and signed by the waiving Party.

34.7     Neither Party shall make any public statement or announcement regarding this Agreement or the other Party during the Term without the prior written consent of the other Party, provided that either may make any public filing or statement required by applicable law or stock exchange rule with prior written notice to the other Party.

Article 35             Assignment

35.1     The Parties shall not be entitled to transfer any rights and/or obligations under this Agreement to directly or indirectly affiliated companies or any third party without the other Party’s written consent, unless such transfer of ownership occurs in accordance with a transfer of entire business units.

Article 36             Right of First Refusal

36.1     If Clarient (i) intends to divest its entire business or the part of the business that is connected to this Agreement (“the Business”), or (ii) Clarient receives an unsolicited offer for the Business, DakoCytomation will have the right of first refusal to consider an acquisition of the Business.  In such case, Clarient will notify DakoCytomation thereof as soon as permissible under applicable law, fiduciary duties and other contractual obligations related to such divestiture.  Clarient shall provide DakoCytomation access to customary and appropriate due diligence materials in order for DakoCytomation to consider making a proposal to acquire the Business. If DakoCytomation formally indicates interest in the acquisition of the Business, Clarient shall evaluate such indications in good faith in light of applicable law, fiduciary duties and other contractual obligations. Furthermore, the Parties agree to separately negotiate detailed conditions for the acquisition of the Business in good faith.

36.2     If Clarient intends to have a third-party manufacture the Products under this Agreement, DakoCytomation shall have the right of first refusal to undertake such manufacturing, provided that DakoCytomation must meet the pricing, terms and conditions offered by a third party. The Parties agree to negotiate the detailed conditions for such manufacturing and necessary amendments to this Agreement in good faith.

Article 37             Change of Control

37.1     The Parties will not sell or otherwise transfer to a third party assets, which include the Products or the right to make, use, sell, market, develop and distribute the Products unless the other Party has first obtained an agreement from such transferee to be bound by the terms and conditions of this Agreement.

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Article 38             Force Majeure

38.1     All cases of force majeure (i.e. any event beyond the control of the Party concerned) which shall include, but not be restricted to, fire, flood, earthquake, explosion, riots, strike, lockout, terror, war and regulations of any governmental or local authority shall, for the duration of and to the extent of the effects caused by such disturbances, release the Parties from the performance of their contractual obligations herein.

38.2     Either Party shall notify the other Party without undue delay if there are any indications of any such incidents occurring, and the Parties shall discuss the effects of such incidents on this Agreement and the measures to be taken.

38.3     Both Parties shall use reasonable efforts to avoid or restrict any detrimental effects.

38.4     The Parties shall, as soon as it is reasonably possible, resume performance of their obligations. As soon as the effect of the obstacle arising from the force majeure has ended, the obligations of this Agreement shall once again come into effect and shall remain in force throughout the remainder of the duration thereof.

38.5     The duration of this Agreement shall not be extended by a period equivalent to the period for which it has been suspended.

38.6     If the performance in whole or in part of any obligation under this Agreement is delayed by reason of said force majeure event for a period exceeding six (6) months, (i) the Parties shall meet and review in good faith the desirability and conditions of terminating this Agreement, it being understood that neither Party shall be obliged to compensate the other in any way, and (ii) in lieu of termination of this Agreement, DakoCytomation may elect to exercise the license granted in Articles 8.15.

Article 39             Invalidity of the Agreement

39.1     In the event of one or several of the provisions of this Agreement being or becoming void or invalid, both Parties hereto undertake to replace such void or invalid provision or provisions by relative valid provisions, of which one would reasonably assume that the Parties hereto would have concluded the Agreement anyway, had such substitute provision or provisions been stipulated at the conclusion of this Agreement. Should it not be possible to find such valid provisions, the invalidity or voidness of any provision shall not affect the validity of this Agreement as a whole, unless the invalid or void provision is of such essential importance that one would reasonably assume that the Parties hereto would not have concluded this Agreement without the void or invalid provision or provisions.

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Article 40             Relationship of the Parties

40.1     Each Party shall conduct its business in that Party’s own name as an independent contractor. This Agreement does not create a joint venture, partnership, employment, agency or similar arrangements between the Parties. Neither Party has the right or power to act for or on behalf of the other Party or to bind the other Party in any respect whatsoever.

Article 41             Severability

41.1     Should the legality of any provision of this Agreement be brought into question because of a decision by a court of competent jurisdiction of any country in which this Agreement applies, DakoCytomation will discuss with Clarient in order to revise or delete the provision in question so as to comply with the decision of said court.

41.2     In the event that the terms and conditions of this Agreement are materially altered as a result of Article 41.1, the Parties shall renegotiate the terms and conditions of this Agreement in order to resolve any inequities.

Article 42             Management

42.1     Clarient and DakoCytomation will create a Steering Committee consisting of two employees from DakoCytomation and two employees from Clarient to provide the means of communication and oversee the management of the relationship under this Agreement.  Within sixty (60) Calendar Days after the Effective Date, the Parties will identify the members of the Steering Committee and will agree upon a process for replacement of the Steering Committee’s members.

42.2     The Steering Committee will meet on a quarterly basis and will have the following responsibilities:

42.2.1         Approve and monitor joint development activities during the Development Project described in Article 29,

42.2.2         Discuss and propose Prices, Costs of Goods Sold (COGS) etc.,

42.2.3         Discuss and resolve issues arising during the business relationship,

42.2.4         Discuss and propose possible amendments to this Agreement,

42.2.5         Participate in the Dispute Resolution Procedure described in article 29.9, and

42.2.6         Address issues as otherwise described in this Agreement.

Article 43             Governing Law

43.1     This Agreement is governed by and shall be construed according to the laws of the State of California (U.S.A.) as between two residents thereof without regard to the International Treaties and Conventions on Conflict of Law or its other conflict of laws principles.

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Article 44             Venue

44.1     The Parties agree that in case of a dispute between the Parties such dispute shall be sought to be resolved through negotiations between the Parties in the Steering Committee in good faith and in accordance with the Dispute Resolution Procedure described in article 29.9.

44.2     If a dispute between the Parties cannot be resolved by negotiations between the Parties such dispute shall be brought before the Federal District Court for the Southern District of New York, situated in New York, New York, U.S.A., which court shall have exclusive jurisdiction over any such dispute.

44.3     The language to be used in the proceedings shall be English.

Article 45             Headings and Titles

45.1     Headings and titles in this Agreement are for convenience purposes only and shall not in any way influence the construction, performance and enforcement of any of its provisions.

Article 46             Notice

46.1      Written notices required to be given under this Agreement shall be considered duly given (i) seven Calendar Days after the date mailed if mailed by first class mail, postage prepaid or (ii) two Business Days after the date dispatched by Federal Express or similar service, and addressed as follows (or to such address as a Party may subsequently advise the other for receipt of notices hereunder):

46.1.1         If to Clarient:

Clarient, Inc.

▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇

▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

▇▇ ▇▇▇▇▇ California

United States of America

Att.: ▇▇▇ ▇. ▇▇▇▇▇▇▇

46.1.2         If to DakoCytomation:

DakoCytomation ▇▇▇▇▇▇▇ ▇/▇

▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇

▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇

▇▇▇▇▇▇▇
Att.: Corporate Legal Affairs

With a copy to:

DakoCytomation California Inc.

▇▇▇▇ ▇▇▇ ▇▇▇▇

▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

▇▇▇▇▇▇ ▇▇▇▇▇▇

Att: Corporate Legal Affairs

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*****

This Agreement shall be made out in duplicate (2 originals) and each of the Parties hereto shall be handed one copy.

37

Clarient ChromaVision Systems

Automated Cellular Imaging System

ACIS II

Hardware Specification

The following is a detailed hardware specification for the ChromaVision ACIS 2. The purpose of this document is to specify the design and the limitations of the physical portions of the system including but not limited to the electronics, the optics, the mechanical functionality, the external appearance, the operating environment, etc. This document is intended to give guidance to the designers for future enhancements, to give information about the performance capabilities of the product to the users and programmers, and to give definitions of the capabilities for testing and verification purposes.

▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇   ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇   Tel ▇▇▇.▇▇▇.▇▇▇▇   Fax ▇▇▇.▇▇▇.▇▇▇▇
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

1

Block diagram of system

[***]

1.              Identification

1.1.           Trade Name:       ChromaVision Medical Systems, Inc.

1.2.           System Trade ▇▇▇▇:   Automated Cellular Imaging System™ or ACIS 2™

1.3.           Instrument Name:  ACIS 2™

1.4.           FDA Classification: JOY

2.              General Information

2.1.           Intended Use: The ChromaVision Automated Cellular Imaging System is intended to automatically measure, count, and/or quantify various colors and shapes in given specimens.

2.2.           Summary of System:   The system consists of: a host computer system that controls the system operation and interfaces; a Microscope Assembly (ACIS) that does the physical motions and optical collections required for sample acquisition; a carrier that accepts and holds the sample slides while the slides are processed.

2.3.           Brief Description of operation:  The operation of the system begins with the user first inserting appropriately stained microscope slides into carriers and feeding these carriers into the system input ▇▇▇▇▇▇. The input ▇▇▇▇▇▇ separates and advances the bottom slide carrier to the XY-stage system.   The slide carrier transport mechanism then positions the carrier onto the microscope stage, where each individual slide can be scanned sequentially according to a set of scanning instructions that is pre-entered into the computer.  The XY stage provides the necessary two-dimensional repositioning motion that allows the entire specimen area to be examined by the optical system. The Z axis stage provides the ability to focus on the specimen. The scanning process results in the creation and capture of relevant data, which is then processed by ChromaVision’s proprietary image processing software algorithms to yield a result/score for the slide.  Once the slides on a given carrier have been scanned, the carrier transport mechanism moves the carrier to the outfeed platform which deposits it into the output tray to complete the operation.  Data resulting from scans can be stored on the Tower PC Unit’s hard drive or the accompanying mass storage device (tape, DVD, etc).

2.4.           Limitations:  System only for use with slides prepared in accordance with the instructions that accompany the system.

2.5.           Contraindications:   Not to be used as a diagnostic device.

2.6.           Human Interface:  Operator interface is via keyboard, trackball (mouse), monitor and slide carrier.

3.              Classification:

3.1.           Regulatory:  Classified medical device to receive approval from the appropriate domestic and worldwide bodies, including but not limited to FDA, FCC, UL, CE, and ÓUL.

NOTE: The ACIS consists of three separate system functions. These functions are: 1: The Microscope system; 2: The Computer Tower system; 3: The Slide Carrier. Each of these systems has their own interfaces and specifications and therefore will be addressed separately for clarity.

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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4.              Automated Microscope Assembly (ACIS)

4.1.         Physical Characteristics

4.1.1.       Size:

4.1.1.1.       Width:   23”

4.1.1.2.       Depth:   20”

4.1.1.3.       Height:  18”

4.1.2.       Weight:     Not to exceed 125 lbs.

4.1.3.       Exterior Paint:  To match tower, or as required by CVSN

4.1.4.       Form/Shape:    Tabletop unit

4.1.5.       Exterior material:    Plastic (ABS, polycarbonate, fiberglass/polyester, etc)  UL Flammability rating 94V-2

4.1.6.       Labeling: Must be clearly marked with:

Manufacturer

Address

Model #

4.1.6.1.       Must have a location for marking Serial # and Date of Manufacture

4.1.6.2.       Must be marked to indicate UL & CE approvals

4.1.6.3.       Must be marked to indicate AC Input Voltage range

4.1.6.4.       Must be marked with Modification level

4.2.         Environment

4.2.1.       Operating Environment

4.2.1.1.       Temperature:  +65°F to +85°F (18°C to +29°C)

4.2.1.2.       Humidity: 30-80% non-condensing

4.2.1.3.       Moisture protection:  Normal laboratory environment

4.2.1.4.       Altitude:      Altitude up to 10,000ft

4.2.2.       Storage Environment

4.2.2.1.       Temperature:  4°F to +140°F (-15 to +60°C)

4.2.2.2.       Humidity: 10% to 90% non-condensing

4.2.2.3.       Altitude:      Altitude up to 15,000ft or pressure equivalent

4.2.3.       Shipping Environment

4.2.3.1.       Temperature:  4°F to +140°F (-15 to +60°C)

4.2.3.2.       Humidity: 10% to 90% non-condensing

4.2.3.3.       Shock:   20G (PK)

4.2.3.4.       Altitude:      [***] pressure equivalent

4.2.4.       Electrical Environments

4.2.4.1.       Input Voltage:   Ref. Section 4.3.2.1

4.2.4.2.       Surge/Transients:   Ref. Section 4.4

4.2.4.3.       Electromagnetic Compatibility: Ref. Section 4.4

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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4.3.         Interfaces

4.3.1.       Mechanical

4.3.1.1.       Carrier:  Reference Carrier Section 6

4.3.2.  Electrical Interface

4.3.2.1.   Input Power:  [***]

4.3.2.2.    Video Interface:  [***]

4.3.2.2.1.         Pinout

[***]

4.3.2.3.    [***] Serial interface, Standard, [***], [***]

4.3.2.4.    Motion control Interface

4.3.2.4.1.  [***]

4.3.3.       Human

4.3.3.1.  Carrier loading:   Easy and obvious access to loading the carriers into the instrument with no safety hazards.  Must be easily loaded without damage to the slide specimen. Must be polarized so that slide carrier is not installable upside down or inverted.

4.3.3.2.  Carrier unloading:  Easy unload access to carriers with no safety hazards to user or no damage to carrier/slide assembly while unloading.

4.3.3.2.  Power switch

4.3.3.2.1.                           Location:  Rear panel or sides of system so that it is not easy to accidentally turn off instrument but is easy to intentionally turn off.

4.3.3.2.2.                           Functionality:  Should completely remove all power from ACIS other than at input power cord and internal to Power Switch.

4.3.4.                     Operational

4.3.4.1.            Bar Code Scanner:

4.3.4.1.1.                           Must be able to decode standard bar codes on slides as carriers are passed through system

4.3.4.1.2.                           Standard bar codes includes: [***]

4.3.4.1.3.                           Minimum bar code size of [***]

4.3.4.1.4.                           Communication       [***]

4.4.                   Regulatory requirements

4.4.1.                     ▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇:   ▇▇▇▇-▇ Electrical Equipment for laboratory use

4.4.2.                     Shall meet requirements to receive CE ▇▇▇▇

4.4.2.1.            EMC – EN 50081-1, EN 50082-1

4.4.2.2.            SAFETY IEC 1010-1:  Safety requirements for electrical equipment for measurement, control and laboratory use.

4.4.3.                     FDA laboratory instrument

4.4.4.                     FCC CFR 47, Part 15, Subpart B for Class A digital devices

4.5.                   Subsection requirements

4.5.1.                     Z-stage

4.5.1.1.            Motion

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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4.5.1.1.1.         Minimum step resolution: [***]

4.5.1.1.2.         Accuracy/repeatability:  Return to within [***] micron of original point (backlash removed)

4.5.1.2.            Weight capability:  [***] including turret and objectives

4.5.1.3.            Actuator capability:  5 lbs. minimum

4.5.2.    XY stage

4.5.2.1.            Motion control

4.5.2.1.1.         Motion actuation: [***] step/rev, [***]mm pitch [***]

4.5.2.1.2.         Motion feedback:  [***]

4.5.2.1.3.         Motion Accuracy/repeatability: [***]

4.5.2.1.4.         Minimum step resolution:     [***]

4.5.2.2.      Carrier interface

4.5.2.2.1.         [***]

4.5.2.2.2.         Loading: Must accept carrier meeting requirements in Section 6

4.5.2.2.3.         Hold down:   [***]

4.5.2.2.4.         [***]

4.5.2.3.      Carrier Transport

4.5.2.3.1.         Positioning:  Must be able to repeat carrier position to within [***] mirons in X direction, [***] microns in Y direction or one field of view at [***] magnification.

4.5.2.3.2.         Speed: Must be able to move the carrier across XY stage at minimum of [***]mm/sec

4.5.2.3.3.         Torque:   Must be able to apply [***] oz-in of torque to the carrier for movement of the carrier across the stage.

4.5.3.                     Input section

4.5.3.1.  Capacity:   Must have capability to hold [***] carriers.

4.5.3.2.  Sense:  Must be able to determine if there are any carriers available for evaluation.

4.5.3.3.  Separation:   Must be able to separate and transport a single carrier at a time.

4.5.3.4.    Accessibility:    Easily loaded by user standing in the front of the instrument. Should be easily recognized that the ▇▇▇▇▇▇ is full as well as empty. Should also have sufficient access to unload any unprocessed carriers. Should present no safety hazards to the operator during loading or unloading.

4.5.4.       Output section

4.5.4.1.            Carrier movement: Must accept defined carrier from XY stage and deposit into outfeed tray.

4.5.4.2.            Sense:  Must be able to recognize that the output tray is full and notify software/control of full condition.

4.5.4.3.            Unloading:    User must be able to easily access and unload processed carriers.

4.5.4.4.            Capacity:   Must have the capability of storing the same number of carriers that the input ▇▇▇▇▇▇ can hold.

4.5.4.5.            Accessibility:  Easily unloaded by user standing in the front of the instrument. Should be easily recognized that the ▇▇▇▇▇▇ is full as well as empty. Should present no safety hazards to the operator during loading or unloading.

4.5.5.       Camera

4.5.5.1.            Minimum resolution:   [***] horizontal lines of resolution (TV lines).

4.5.5.2.            Signal/Noise:   [***] minimum.

4.5.5.3.            Pixel count:   minimum [***].

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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4.5.5.4.            Frame count:    Must supply at least [***] complete frames per second (or [***]  fields in [***]  interlaced mode).

4.5.6.                     Optical path

4.5.6.1.            Objectives

4.5.6.1.1.                           Dry, cover slip corrected, infinite conjugate design.

4.5.6.1.2.                           Min field coverage @ 4X:  [***].

4.5.6.1.3.                           Resolution at 60X: less than or equal to [***].

4.5.6.1.4.                           Transmission nonuniformity:   less than [***] objective to objective.

4.5.6.2.            Telan lens: [***] mm focal distance.

4.5.6.3.            Adjustability:Optical path must have adjustments to allow for optical path alignment throughout the entire optical path.  All non-adjustable points must [***].

4.5.6.4.            Linearity : [***] scale at 40X and 60X. Measurement made with camera’s [***].

4.5.7.                     Illumination source

4.5.7.1.            Light source:   Quartz Halogen light bulb, [***],[***],[***] lumens, [***] life hours min.

4.5.7.2.            Condenser:   Adjustable NA for F Number, Range [***] to [***] NA.

4.5.8.                     Turret assembly

4.5.8.1.            Objectives:   Minimum [***] standard ports.

4.5.8.2.            Drive:   Internal Drive for Objective selection.

4.5.8.3.            Weight:  Max turret weight [***].

4.5.9.                     Power supply

4.5.9.1.            Switching Power supply:   [***] ▇▇▇▇▇ minimum

4.5.9.2.            Outputs: [***],[***] minimum

4.5.9.3.            Approvals: UL, CE.

4.6.                         Maintenance requirements

4.6.1.                     Accessibility

4.6.1.1.            Must be able to access the following with cover in place (access door is acceptable):

Infeed ▇▇▇▇▇▇

Outfeed tray

Stage area

Light bulb

Power switch and cable

4.6.1.2.            Must be able to access the following with minimal difficulty (for adjustments, etc):

Camera

Objectives

XY stage

Motor Drivers

Fuses

Cabling

4.6.2.                     Adjustability

4.6.2.1.            XY stage

4.6.2.1.1.                           [***]

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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4.6.2.1.2.                           [***]

4.6.2.1.3.                           [***]

4.6.2.2.            Z stage

4.6.2.2.1.                           [***]

4.6.2.3.            Input module

4.6.2.3.1.                           [***]

4.6.2.4.            Output module

4.6.2.4.1.                           [***]

4.6.2.4.2.                           [***]

4.6.2.5.            Camera

4.6.2.5.1.                           [***]

4.6.2.5.2.                           [***]

4.6.3.                     Alignment requirements

4.6.3.1.            System should not need mechanical alignment more than [***] per year after initial installation alignments.

4.6.4.                     Periodic maintenance

4.6.4.1.            Should not require periodic maintenance more frequent than every [***] months, not including user maintenance (bulb replacement, daily calibrations, etc.).

4.6.5.                     Serviceability

4.6.5.1.            Must have access to all major components of instrument.

4.6.5.2.            Must be able to replace any defective electronic card within [***] hours.

4.6.5.3.            Must be able to replace any major component within [***] hours.

4.6.5.4.            Must have safe access to necessary adjustment areas.

4.6.6.                     Factory setup

4.6.6.1.            Initial Factory setup should take no longer than [***] hours to complete once instrument has been assembled.

4.6.7.                     Maintenance tooling

4.6.7.1.            Requires a minimum of tooling for periodic maintenance with very limited special tools needed.

4.6.7.2.            No tools required that could not fit in a briefcase and be easily transported to sites.

4.7.               Reliability

4.7.1.                     Carrier Transport:   1 jam or misfeed per [***] feeds

4.7.2.                     Bulb life:  [***] hours average useful life (minimum)

4.7.3.                     System MTBF: [***] ([***]) Note: This excludes alignment, calibration, or light bulb issues.

5.                   ACIS Host Tower Assembly

5.1.         Physical Characteristics - Tower Configuration

5.1.1.                     Weight:   Not to exceed 50 lbs.

5.1.2.                     Form/Shape:  Tower type PC case.

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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5.1.3.                     Exterior material:  Formed Metal, Plastic, UL Flammability rating 94V-2.

5.2.    Environment:  Reference section 4.2

5.3.      Interfaces

5.3.1.                     Mechanical

5.3.1.1.            Internal Printed circuit requirements

5.3.1.1.1.                           [***]

5.3.1.1.2.                           [***]

5.3.1.2.            External connections

5.3.1.2.1.                           Mouse/Trackball

5.3.1.2.2.                           Monitor

5.3.1.2.3.                           Serial com ports: one 9 pin D-sub connectors

5.3.1.2.4.                           Parallel:    [***]

5.3.1.3.            Feet: Supports suitable for desktop or floor usage

5.3.2.                     Electrical

5.3.2.1.            Serial Communication: 1 Standard DB9 RS232 comm ports, Male pins

5.3.2.2.            [***]

5.3.2.3.            Ethernet: [***]

5.3.2.4.            Video:  [***]

5.3.2.5.            Modem:  [***] type connector configured for destination country

5.3.2.6.            Input power: IEC320-C13  type connector

5.3.2.6.   Motion Control:  [***]

5.3.2.6.1.Pinout:    [***]

5.3.3.                     Human

5.3.3.1.            Monitor

5.3.3.2.            Mouse/Trackball

5.3.3.3.            Keyboard

5.3.3.4.            Power switch

5.3.3.5.            Reset button

5.3.3.6.            DVD/CD Input

5.3.3.7.            Tape drive input (opt)

5.3.3.8.            3 1/2 floppy input

5.3.4.                     Operational

5.3.4.1.      Serial port

5.3.4.2.      Video input card

5.4.    Regulatory requirements

5.4.1.                     UL Safety

5.4.2.                     CE ▇▇▇▇

5.4.3.                     FCC class A

5.4.4.                     CUL

5.4.5.                     Keyboard to meet local language requirements

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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5.5.         Operational requirements

5.5.1.                     CPU:  Dual Intel [***] minimum

5.5.2.                     Primary Hard Drive: [***] minimum

5.5.3.                     Tape: Backup 10 Gigabyte or greater (opt)

5.5.4.                     ▇-▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇:   1.44MB

5.5.5.                     DVD/CD +RW, 2.4x or greater, 4.7GB minimum

5.5.6.                     RAM:   512MB minimum

5.5.7.                     Monitor:  19” or greater, or digital flat screen

5.5.8.                     Keyboard:  Windows compatible

5.5.9.                     Mouse or Trackball:  Windows compatible

5.6.         Power Supply requirements

5.6.1                        Output Voltages:    +12, +5, -5, -12 VOC

5.6.2.                     Total Wattage: 250 Watt minimum, 300 Watt preferred

5.6.3.                     Input Voltages:   120 VAC & 240 VAC capable, 50 or 60 Hz

6.                   Slide Carrier

6.1.    Physical Characteristics

6.1.1.                     Size:   see figure 6.1.4.1

6.1.2.                     Weight:   .65 oz Minimum

6.1.3.                     Exterior:

6.1.3.1.            Color:   Bright white

6.1.3.2.            Texture:  63 microinches

6.1.4.                     Form/Shape:  see figure 6.1.4.1

6.1.5.                     Exterior material:  Molded Plastic,  UL Flammability rating 94V-2

6.2.    Environment

Reference Section 4.2

6.3.    Interfaces

6.3.1.                     Mechanical

6.3.1.1.            External

6.3.1.1.1.                           Feed Cam: Carrier must have accommodations to interact with feed cam.

6.3.1.1.2.                           Feed Belt: Carrier must accommodate for tab feed.

6.3.1.1.3.                           Stage feed belt: Carrier must have 1/5 pitch timing belt interface to feed onto stage.

6.3.1.1.4.                           Out feed tray: Carrier must have accommodations to hang in out feed tray.

6.3.1.1.5.                           Contacting: Carrier surface shall be made from a low friction material.

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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6.4.    Operational requirements

6.4.1.                     Must hold four slides.

6.4.2.                     Must be easy to handle as well as load and unload from the Microscope.

6.4.3.                     Slides must be easily and safely installed into carrier.

6.4.4.                     Slides must be easily and safely removed from carrier.

6.4.5.                     Must remain flat while on stage.

6.4.6.                     Interface surface flatness .030” (with slides loaded).

6.4.7.                     Slide retention method shall hold slide in a fixed position.

[***]

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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Clarient ChromaVision Systems

Automated Cellular Imaging System

ACIS II

Software Specification

[***]

▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇   ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇   Tel ▇▇▇.▇▇▇.▇▇▇▇
Fax ▇▇▇.▇▇▇.▇▇▇▇   ▇▇▇.▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

[***] Certain information comprising 13 pages has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1

EXHIBIT 4 – Prices, Payments and Forecast

ACIS II Instruments and Software:

The following product listings and prices reflect the ACIS II instruments and products being shipped from Clarient to DakoCytomation during and the agreed prices to be paid by DakoCytomation for the ACIS II instrument and software.  This list will need to be revised prior to the release of the ACIS III instrument.

ACIS II Product Part Numbers and Prices

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Optional Component Part Numbers and Prices

ACIS II Spare Parts

The following part numbers and prices reflect the fact that CLARiENT will be providing all on site instrument repair support until the launch of the ACIS III instrument and software.  A comprehensive parts list (with pricing) will be generated for the ACIS III instrument and software when the information becomes available.

ACIS II Spare Part Numbers and Prices

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Development Project – development of the ACIS III instrument and software

As stated in Article 29 of the Agreement, Clarient and DakoCytomation have entered into a research and development project with the goal to develop the ACIS III instrument and software. The Product and Technical Specifications for the ACIS III instrument and software are set forth in Exhibit 14 and 15 to the Agreement.

Clarient will receive a total payment from DakoCytomation for the research and development work of USD [***].

DakoCytomation’s total payments to Clarient for the research and development work is divided as follows:

Clarient will receive an up front fee for Research and Development work under this Agreement of USD [***].

Furthermore, Clarient will receive compensation for the research and development work by the following installments upon completion of the Acceptance Criteria and Milestones set forth in Exhibit 14 and 15 and DakoCytomation’s written approval of such completion:

[***]

DakoCytomation’s First Forecast:

The following forecast is intended for the ACIS II OEM System for Project Phase 1

ACIS IIInstrument Placements 2005 - 2006 (Units)

* Optional Research Software comprises of the Optional Analysis Modules from the ACIS II Price list above, i.e. analysis modules [***] and [***].

[***] Certain information on this page has been redacted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

EXHIBIT 6 – Transportation Procedures and Costs

The following procedure and prices reflect the fact that CLARIENT will be drop shipping the instruments directly to the DakoCytomation customer site during Phase 1. This procedure will need to be revisited prior to the release of the Phase 2 instrument.

Procedure

1.               DakoCytomation will provide CLARiENT with a 12 month rolling forecast for instruments, work stations and software applications.

2.               DakoCytomation will place Purchase in accordance with the provisions of the Agreement

3.               The forecast will be placed in FourthShift at CLARiENT for MRP scheduling.

4.               CLARiENT Manufacturing will purchase parts to forecast, build to the PO, and have finished goods ready to ship.

5.               CLARiENT will provide the DakoCytomation Quality Control Department with Certificate of Conformance (C of C) upon finishing manufacturing and testing.

6.               DakoCytomation will review the C of C and confirm all approved products via a signed faxed C of C to Clarient.

7.               CLARiENT will provide DakoCytomation Purchasing with all serial numbers and the C of Cs as confirmation of accepted product is moved into finished goods.

8.               DakoCytomation will send Sales Contract Order to CLARiENT accompanied by a completed copy of the Site Survey and Customer Profile, and instrument serial number assigned to that customer.

9.               CLARiENT order entry will confirm DakoCytomation Sales Contract Order with a written acknowledgement.

10.         CLARiENT Field Service will contact the DakoCytomation Account Manager and the customer to arrange a mutually convenient installation date.

11.         CLARiENT Field Service will contact DakoCytomation with a projected shipment and installation date for the system.

12.         CLARiENT Manufacturing will contact the carrier to arrange pickup and delivery of the instrument. CLARiENT is to use DakoCytomation’s shipping supplier account number.

13.         DakoCytomation will be billed directly by the shipper for the shipping costs.

14.         CLARiENT Field Services Engineer will install software applications requested by customer (as indicated on the DakoCytomation Sales Contract order) at the customer site.

NOTE: A procedure needs to be worked out when the installation of the ACIS needs to be co-ordinated with the installation of an Autostainer.

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EXHIBIT 7: List of Clarient Patents and Patent Applications