Clarient (CLRT)

In March 2007, we sold our Technology business to Zeiss in the ACIS Sale for an aggregate purchase price of $12.5 million, consisting of $11 million in cash and up to an additional $1.5 million in contingent purchase price, which is payable in whole or in part (if at all) subject to satisfaction of certain post-closing conditions relating to intellectual property.  We cannot assure that those conditions will be satisfied and, as a result, we may be paid only a portion or none of such contingent consideration.

The ACIS Sale resulted in the transfer of our legacy business of developing, manufacturing and marketing the ACIS system, and, as a result, we will no longer derive revenues from that business, including revenues under our distribution agreement with Dako (which we assigned to Zeiss in connection with the transaction). We also transferred our patent portfolio and other intellectual property of the Technology business to Zeiss and while we have retained a license to certain patent rights, copyrights and software, our use of those intellectual property rights is limited to the field of use specified in the license agreement. We also agreed not to compete with Zeiss in connection with the development, production and sale of imaging instruments for a period of 42 months following the closing date and, as a result, our business will be restricted from engaging in those activities during that period.

23

In March 2007, we sold our Technology business to Zeiss in the ACIS Sale for an aggregate purchase price of $12.5 million, consisting of $11 million in cash and up to an additional $1.5 million in contingent purchase price, which is payable in whole or in part (if at all) subject to satisfaction of certain post-closing conditions relating to intellectual property.  We cannot assure that those conditions will be satisfied and, as a result, we may be paid only a portion or none of such contingent consideration.

The ACIS Sale resulted in the transfer of our legacy business of developing, manufacturing and marketing the ACIS system, and, as a result, we will no longer derive revenues from that business, including revenues under our distribution agreement with Dako (which we assigned to Zeiss in connection with the transaction). We also transferred our patent portfolio and other intellectual property of the Technology business to Zeiss and while we have retained a license to certain patent rights, copyrights and software, our use of those intellectual property rights is limited to the field of use specified in the license agreement. We also agreed not to compete with Zeiss in connection with the development, production and sale of imaging instruments for a period of 42 months following the closing date and, as a result, our business will be restricted from engaging in those activities during that period.

In addition, the transfer of our Technology business to Zeiss may result in disruptions to our business. For example, we are required to provide certain transition services to Zeiss until September 2007 which could significantly divert the time and resources of our management and other personnel. In addition, we may encounter difficulties in effecting the transfer of the assets of the Technology business to Zeiss and in connection with the separation of the Technology business from our other operations.

In connection with the ACIS Sale, we also made customary representations and warranties to Zeiss and we retained certain pre-closing liabilities relating to the Technology business. As a result, we may have future indemnification obligations to Zeiss in the event of a breach of such representations or if there are third party claims relating thereto or to the liabilities that we retained.

In March 2007, we sold our Technology business to Zeiss in the ACIS Sale for an aggregate purchase price of $12.5 million, consisting of $11 million in cash and up to an additional $1.5 million in contingent purchase price, which is payable in whole or in part (if at all) subject to satisfaction of certain post-closing conditions relating to intellectual property.  We cannot assure that those conditions will be satisfied and, as a result, we may be paid only a portion or none of such contingent consideration.

The ACIS Sale resulted in the transfer of our legacy business of developing, manufacturing and marketing the ACIS system, and, as a result, we will no longer derive revenues from that business, including revenues under our distribution agreement with Dako (which we assigned to Zeiss in connection with the transaction). We also transferred our patent portfolio and other intellectual property of the Technology business to Zeiss and while we have retained a license to certain patent rights, copyrights and software, our use of those intellectual property rights is limited to the field of use specified in the license agreement. We also agreed not to compete with Zeiss in connection with the development, production and sale of imaging instruments for a period of 42 months following the closing date and, as a result, our business will be restricted from engaging in those activities during that period.

In addition, the transfer of our Technology business to Zeiss may result in disruptions to our business. For example, we are required to provide certain transition services to Zeiss until September 2007 which could significantly divert the time and resources of our management and other personnel. In addition, we may encounter difficulties in effecting the transfer of the assets of the Technology business to Zeiss and in connection with the separation of the Technology business from our other operations.

In connection with the ACIS Sale, we also made customary representations and warranties to Zeiss and we retained certain pre-closing liabilities relating to the Technology business. As a result, we may have future indemnification obligations to Zeiss in the event of a breach of such representations or if there are third party claims relating thereto or to the liabilities that we retained.

In March 2007, we sold our Technology business to Zeiss in the ACIS Sale for an aggregate purchase price of $12.5 million, consisting of $11 million in cash and up to an additional $1.5 million in contingent purchase price, which is payable in whole or in part (if at all) subject to satisfaction of certain post-closing conditions relating to intellectual property.  We cannot assure that those conditions will be satisfied and, as a result, we may be paid only a portion or none of such contingent consideration.

The ACIS Sale resulted in the transfer of our legacy business of developing, manufacturing and marketing the ACIS system, and, as a result, we will no longer derive revenues from that business, including revenues under our distribution agreement Dako (which we assigned to Zeiss in connection with the transaction). We also transferred our patent portfolio and other intellectual property of the Technology business to Zeiss and while we have retained a license to certain patent rights, copyrights and software, our use of those intellectual property rights is limited to the field of use specified in the license agreement. We also agreed not to compete with Zeiss in connection with the development, production and sale of imaging instruments for a period of 42 months following the closing date and, as a result, our business will be restricted from engaging in those activities during that period.

In addition, the transfer of our Technology business to Zeiss may result in disruptions to our business. For example, we are required to provide certain transition services to Zeiss until September 2007 which could significantly divert the time and resources of our management and other personnel. In addition, we may encounter difficulties in effecting the transfer of the assets of the Technology business to Zeiss and in connection with the separation of the Technology business from our other operations.

In connection with the ACIS Sale, we also made customary representations and warranties to Zeiss and we retained certain pre-closing liabilities relating to the Technology business. As a result, we may have future indemnification obligations to Zeiss in the event of a breach of such representations or if there are third party claims relating thereto or to the liabilities that we retained.