Document:

Exhibit 10.54

 

MANAGEMENT SERVICES
AGREEMENT

 

by and
between

 

CLARIENT,
INC. (“Manager”)

 

and

 

CLARIENT
PATHOLOGY SERVICES, INC. (“Group”)

 

 

MANAGEMENT SERVICES
AGREEMENT

 

This
MANAGEMENT SERVICES AGREEMENT (this “Agreement”) is
entered into as of July 1, 2008 (the “Execution Date”),
by and between CLARIENT PATHOLOGY SERVICES, INC., a California professional
corporation (“Group”), and CLARIENT, INC., a
Delaware corporation (“Manager”).  Group and Manager are sometimes referred to
in this Agreement as a “Party” or,
collectively, as the “Parties.”

 

RECITALS

 

A.            Group employs or contracts with
physicians licensed to practice medicine in the State of California
(collectively, “Group Practitioners”, and each, a “Group Practitioner”)
and provides specialty pathology services and related activities.

 

B.            Manager is the sole shareholder of
Clarient Diagnostic Services, Inc., a clinical laboratory licensed under
the Federal Clinical Laboratory Improvement Amendments of 1988 and by the State
of California (the “Lab”).

 

C.            Lab and Group have entered into a
Professional Services Agreement, dated July 1, 2008 (the “PSA”).

 

D.            Group and Manager believe that
Manager’s provision of the services identified in this Agreement will enhance
Group’s ability to provide high quality, efficient medical services.

 

AGREEMENT

 

THE
PARTIES AGREE AS FOLLOWS:

 

ARTICLE I.

MANAGER’S OBLIGATIONS

1.1          Financial Management Services.  Manager shall provide financial management
services necessary and appropriate for Group’s operations, including accounting,
bookkeeping, operation and capital budgeting, tax matters, accounts receivable
and accounts payable processing, and electronic data processing.  All business records, papers and documents
shall remain the sole property of Group, shall be available for inspection by
Group at all reasonable times, and shall be delivered to Group upon any
termination or expiration of this Agreement. 
Manager shall be entitled to retain a complete copy of all such
documents upon any termination or expiration of this Agreement.

 

1.2          Contracting Services.  Manager shall negotiate the terms and
conditions of and execute on Group’s behalf all business agreements, including
all agreements with lenders, vendors and consultants.

 

1.3          Day-to-Day Services.  Manager shall furnish or obtain all
telephones, paging devices, office services (including secretarial, duplication
and facsimile services) and any other services of a similar nature reasonably
necessary in connection with the day-to-day operations of Group.

 

 

1.4          Attorney-in-Fact. 
Group appoints Manager (and any subcontractor designated by Manager) as
Group’s lawful attorney-in-fact for the following purposes (and shall execute
the power of attorney attached as Exhibit 1.4):

 

(a)   Collections.  To collect all
revenue from whatever source, including accounts receivable, due to Group from
Lab under the PSA (“Collections”),
and to receive all Collections on Group’s behalf and to sue for and give
satisfaction for monies due on account and to withdraw any claims, suits or
proceedings pertaining to or arising out of Manager’s or Group’s right to
collect such accounts;

 

(b)   Endorsement.  To take possession of
and endorse in Group’s name any notes, checks, money orders, insurance payments
and any other instruments received as Collections; and

 

(c)   Banking Powers.  To deposit all
Collections directly into a bank account held in Group’s name at a banking
institution mutually selected by Manager and Group.  Manager (and any subcontractor designated by
Manager) shall have the right to make withdrawals from such account to pay all
costs and expenses incurred in the operation of Group, including payment of the
Management Fee as set forth in Section 3.1, and to fulfill all other terms
of this Agreement.

 

1.5          Supplies. 
Manager shall arrange for non-medical supplies necessary for the proper
and efficient operation of the Lab to be delivered to Group.

 

1.6          Support Personnel. 
Manager shall provide to Group the support services of non-licensed
personnel as reasonably required to support Group’s business operations in
connection with the PSA (“Support Personnel”).

 

(a)   Hiring and Termination. 
Manager shall have the right to hire and terminate all Support
Personnel.

 

(b)   Compensation and Employee Benefits. 
Except as otherwise agreed between Manager and Group, Manager shall have
the right to determine and pay compensation payable to all Support Personnel,
including salaries, deferred compensation, fringe benefits, bonuses, health
insurance, long-term disability and group life insurance, workers’ compensation
insurance, unemployment insurance, retirement benefits and any other benefits
that Support Personnel may receive. 
Manager shall be responsible for all employee record keeping, payroll
accounting (including social security and other payroll tax reporting), income
tax withholding, social security and other payroll taxes, forms processing,
payroll and Internal Revenue Service filings and records storage and retrieval
on behalf of all Support Personnel.

 

(c)   Supervision and Training of Support Personnel. 
Manager shall manage and supervise all Support Personnel, and shall
arrange for training.

 

1.7          Reports. 
Manager shall provide Group with financial statements relating to Group
operations (“Group Financial Statements”) on
an annual basis.  Group shall, at its
sole discretion and expense, have the right to conduct an independent audit of
Group Financial Statements.

 

2

 

1.8          Books and Records; Confidentiality.  All patient reports, financial records, corporate
records, personnel files, written procedures and other such items relating to
the business and activities of Group (“Group Records”)
shall be the property of Group.  Upon any
termination or expiration of this Agreement, Manager shall, at Group’s request,
transmit all Group Records to Group or to any other party designated by
Group.  Manager shall have a right to
copy all records prior to transmittal, at its expense, subject to applicable
law.  With respect to patient reports,
copying shall only be as applicable law requires, permits, or in connection
with a malpractice action involving Manager. 
Manager and Group shall comply with all applicable laws concerning the
confidentiality of all Group Records. 
Manager and its employees shall keep confidential all statistical,
financial, and personnel data relating to the business of Group and Group
Practitioners except for any data that becomes publicly available, or any data
to which the public has the legal right of access, or that may be rightfully
obtained from third parties.

 

1.9          Insurance.  Manager shall assist Group in obtaining
malpractice coverage, as set forth in Section 4.1.

 

1.10        Manager’s Right to Subcontract. 
Manager may subcontract with other persons or entities for any of
the services that Manager is required to perform under this Agreement.

 

1.11        Exclusive Authority.  Manager shall have the exclusive authority to
perform all of its duties set forth in this Agreement.

 

ARTICLE II.

GROUP’S RIGHTS AND
OBLIGATIONS

2.1          Assistance with Collections.  Group shall provide Manager with complete and
accurate charge slips, claims or encounter reports specifically identifying
services rendered, service and diagnosis codes in a form and substance as
indicated by Manager from time-to-time. 
Group shall assist Manager, upon Manager’s request, with all necessary
steps for Manager to manage and administer the financial aspects of the Group,
including handling Collections.

 

2.2          Group Governing Documents.  Prior to the execution of this Agreement,
Group shall provide to Manager for its review and approval the following
governing and operational documents (“Governing Documents”):  Group’s articles of incorporation, bylaws and
shareholders’ agreements.  Group shall
consistently and uniformly utilize the Governing Documents in the conduct of
its business and shall comply with and require performance of all of the
provisions contained in the Governing Documents.  Group hereby agrees that, after Manager’s
approval of the Governing Documents, Group shall not revise or modify or
terminate any of the Governing Documents, or enter into any new agreement or
arrangement affecting the ownership or voting of Group’s equity securities or
partnership interests (as applicable), without Manager’s prior written
approval.

 

2.3          Merger or Sale of Group.

 

(a)   Merger or Sale Restrictions. 
Group acknowledges that Manager has agreed to enter into this Agreement
based upon the skills, qualifications, experience, and characteristics of Group
and that any material change in Group’s operations, ownership, control or
qualifications may be harmful to Manager’s interests under this Agreement.  In recognition of 

 

3

 

Manager’s dependence on Group’s ability to maintain its skills,
qualifications, experience, and characteristics, Group agrees that during the
term of this Agreement, and any extensions thereto, it shall not enter into a
merger or consolidation with another medical group or any other legal entity (“Merger”) without Manager’s prior written consent.  Group further agrees that during the term of
this Agreement, and any extensions thereto, it shall not enter into a sale,
conveyance, pledge, exchange, assignment, hypothecation, encumbrance or other
transfer of any equity interest (including but not limited to shares) or assets
comprising five percent (5%) or more of the equity interests or assets of the
Group (“Sale”) without Manager’s prior written
consent.  Any purported Merger or Sale
without Manager’s written consent shall be void and shall constitute a breach
of this Agreement.

 

(b)   Consent Procedure. 
In connection with each consent requested by Group for a Merger or Sale,
Group shall submit to Manager the terms of the proposed transaction, the
identity of the parties to the transaction, the proposed documentation for the
transaction and all other information reasonably requested by Manager
concerning the proposed transaction.

 

2.4          Non-Compete. 
Throughout the term of this Agreement, Group shall not itself provide
management services that are substantially similar to services provided by
Manager or any of the services provided by Manager to other parties.  In addition, Group shall not secure the
management services of any other provider.

 

ARTICLE III.

COMPENSATION

3.1          Management Fee. 
Group shall pay to Manager a monthly amount determined in accordance
with the terms of Exhibit 3.1
(the “Management Fee”), together with any
deferred or delinquent amounts due and payable by Group to Manager for any
prior period.

 

3.2          Timing and Manner of Payment.  Manager shall execute payment of Management
Fee by Group in accordance with Section 1.4(c) above.

 

3.3          Unpaid Management Fees.  Group shall treat as an account payable, and
Manager shall treat as an account receivable, any amounts that are payable to
Manager pursuant to Section 3.1 but are not yet paid to Manager.

 

3.4          Additional Compensation.  Manager and Group may, from time to time,
agree that Manager shall provide to Group items or services not described in
this Agreement (“Additional Support”).  Any agreement to provide Additional Support
to Group shall be in writing and shall be in the form of an amendment to this
Agreement signed by the Parties.  If
Manager provides Additional Support to Group, Group shall pay additional
compensation to Manager, the amount of which shall be set forth in any such
amendment.

 

3.5          Periodic Adjustments.  The Parties recognize that the Services may
change in size and scope over the term of the Agreement which may necessitate
adjusting the fees provided for herein. 
Therefore, the parties shall review the compensation no less frequently
than annually if changes in services by Manager warrant such more frequent
review, and may agree in writing to modification of the compensation.  Such review shall consider the scope of the
operations pursuant to this Agreement at the time of the review, changes in the
purchasing power of money, 

 

4

 

the size of the
Support Personnel workforce and the expenses and risks to the Parties
performing this Agreement.

 

3.6          Post-Termination Fee.  Upon any termination of this Agreement prior
to the Expiration Date (as defined in Section 6.1, below), Group shall pay
to Manager any accrued but unpaid Management Fee and all other monies owed to
Manager pursuant to this Agreement.

 

ARTICLE IV.

INSURANCE AND INDEMNITY

4.1          Malpractice Liability Insurance.  Group shall obtain and continuously maintain
professional malpractice liability insurance coverage, issued by an insurance
company licensed or otherwise qualified to issue professional liability
insurance policies or coverage in the State of California, and acceptable to
Manager, in the amount of at least One Million Dollars ($1,000,000) per
occurrence or claim and Three Million Dollars ($3,000,000) in the annual aggregate
for the acts and omissions of Group and each Group Practitioner.  At Manager’s option and expense, Manager
shall be listed as an additional insured on such professional liability
insurance policy, if such coverage is available.  Such coverage shall provide for a date of
placement preceding or coinciding with the Effective Date of this Agreement.

 

4.2          Certificate of Insurance.  On or before the Effective Date, Group shall
provide Manager with an original certificate evidencing professional malpractice
liability insurance coverage, and shall provide Manager with proof of continued
professional malpractice liability insurance coverage on an annual basis (or as
periodically requested by Manager). 
Group shall provide Manager with no less than thirty (30) days’ prior
written notice of cancellation or any material change in such professional
malpractice liability insurance coverage.

 

4.3          Tail Coverage. 
If Group’s professional malpractice liability insurance is provided on a
claims-made basis, upon the expiration or termination of this Agreement for any
reason, Group shall continuously maintain such insurance or purchase from an
insurance company licensed or otherwise qualified to issue professional
liability insurance policies or coverage in the State of California, and
acceptable to Manager, extended reporting period (i.e., “tail”) coverage for the longest extended reporting period
then available to ensure that insurance coverage in the amount set forth in Section 4.1
of this Agreement is maintained for claims which arise from professional
services provided by Group and any Group Practitioner during the term of this
Agreement.  This Section shall
survive any termination or expiration of this Agreement.

 

5

 

4.4          Indemnification by Group.  Group shall indemnify, defend and hold
harmless Manager against:  (a) any
and all liability arising out of Group’s failure to comply with the terms of
this Agreement, and any injury, loss, claims, or damages arising from the negligent
operations, acts, or omissions of Group or Group’s employees relating to or
arising out of Group’s practice or this Agreement; and (b) any and all
costs and expenses, including reasonable legal expenses, incurred by or on
behalf of Manager in connection with the defense of such claims.

 

4.5          Hold Harmless. 
Manager shall be responsible for its own acts and omissions and the acts
and omissions of its employees and agents. 
Manager shall not be responsible for the acts and omissions of Group or
Group’s employees and agents in carrying out this Agreement.  Manager shall not be liable for any judgment,
settlement, award, fine or otherwise, which arises out of the acts and
omissions of Group, or its employees and agents, under this Agreement.  To the extent Manager utilizes its own
equipment, products, or other personal property in the performance of its
obligations under this Agreement, Manager shall ensure that such equipment,
product, or other personal property is suitable and fit for the purpose intended
by Manager, free from defects which may damage Group, and otherwise operates in
accordance with applicable government standards and safety regulations.

 

4.6          Cooperation between the Parties.

 

(a)   The Parties
recognize that, during the term of this Agreement and for a period thereafter,
certain risk management issues, legal issues, claims or actions may arise that
involve or could potentially involve the Parties and their respective employees
and agents.  The Parties further
recognize the importance of cooperating with each other in good faith when such
issues, claims or actions arise, to the extent such cooperation does not
violate any applicable laws, cause the breach of any duties created by any
policies of insurance or programs of self-insurance, or otherwise compromise
the confidentiality of communications or information regarding the issues,
claims or actions.  As such, the Parties
hereby agree to cooperate in good faith, using their best efforts, to address
such risk management and claims handling issues in a manner that strongly
encourages full cooperation between the Parties.

 

(b)   The Parties
further agree that if a controversy, dispute, claim, action or lawsuit (each,
an “Action”) arises with a third-party
wherein both the Parties are included as defendants, each Party shall promptly
disclose to the other Party in writing the existence and continuing status of
the Action and any negotiations relating thereto.  Each Party shall make every reasonable
attempt to include the other Party in any settlement offer or
negotiations.  In the event the other
Party is not included in the settlement, the settling Party shall immediately
disclose to the other Party in writing the acceptance of any settlement and
terms relating thereto.

 

ARTICLE V.

RELATIONSHIP BETWEEN THE
PARTIES

5.1          Independent Contractor.  Manager is and shall at all times be an
independent contractor with respect to Group in meeting Manager’s
responsibilities under this Agreement. 
Nothing in this Agreement is intended nor shall be construed to create a
partnership, employer-

 

6

 

employee or joint
venture relationship between Manager and Group or between Manager and any Group
Practitioner.

 

5.2          Limitation on Control.  Manager shall neither have nor exercise any
control or direction over the professional medical judgment of Group or any
Group Practitioner, or the methods by which Group or any Group Practitioner
performs professional medical services; provided, however, that
Group and Group Practitioners shall be subject to and shall at all times comply
with the bylaws, guidelines, policies and rules of Manager.  Neither Party shall have any right, power or
authority to act for or enter into binding agreements on behalf of the other
Party, except as specifically set forth in this Agreement.

 

ARTICLE VI.

TERM AND TERMINATION

6.1          Term.  This Agreement shall become effective on July 1,
2008 (the “Effective Date”), and shall continue
until June 30, 2018 (the “Expiration Date”),
subject to the termination provisions of this Agreement.  This
Agreement shall automatically renew for two (2) additional terms of five (5) years
each, unless either Party gives the other Party written notice of its intention
not to renew this Agreement at least thirty (30) calendar days prior to the
expiration of the then current term.

 

6.2          Termination.

 

(a)   Each Party shall have the right to
terminate this Agreement upon a material breach of this Agreement by the other
Party where the breach is not cured within ninety (90) calendar days after
Party gives written notice of the breach to the breaching Party.

 

(b)   Notwithstanding
the foregoing, upon Group’s failure to timely pay the Management Fee (as set
forth on Exhibit 3.1), Manager shall be entitled to terminate this
Agreement upon ten (10) days’ written notice to Group.

 

6.3          Rights upon Termination.  Upon any termination or expiration of this
Agreement as set forth in Section 6.1, all rights and obligations of the
Parties shall cease except those rights and obligations that have accrued or
expressly survive such termination or expiration.

 

6.4          Return of Property. 
Upon any termination or expiration of this Agreement as set forth in Section 6.1,
Group shall immediately return and surrender to Manager all property of
Manager, in good condition, normal wear and tear excepted, free and clear of
any lien, security interest, claim or encumbrance of any kind, unless
previously agreed to in writing by Manager.

 

ARTICLE VII.

TRADE SECRETS, TRADENAMES
AND SERVICE MARKS

7.1          Trade Secrets. 
During the term of this Agreement, Group and Group Practitioners will
have access to and become acquainted with confidential information and trade
secrets of Manager, including information and data relating to payor contracts
and accounts, clients, billing practices and procedures, business techniques
and methods, strategic plans, 

 

7

 

operations and
related data (collectively, “Trade Secrets”).  All Trade Secrets are the property of Manager
and used in the course of Manager’s business, and shall be proprietary
information protected under the Uniform Trade Secrets Act.  Group shall not, and shall cause Group
Practitioners not to, disclose to any person or entity, directly or indirectly,
either during the term of this Agreement or at any time thereafter, any Trade
Secrets, or use any Trade Secrets other than in the course of meeting Group’s
obligations under this Agreement.

 

7.2          Tradenames and Service Marks.  Manager may adopt one or more tradenames or
service marks.  Group authorizes Manager
to associate such tradenames or service marks with Group’s name on any
correspondence or other public or private communication or advertisement, and
Group agrees that Manager may utilize such tradenames and service marks with
other physicians who are employed by or contract with Group to provide medical
services.  During the term of this
Agreement, Group shall not, absent Manager’s prior written consent, use such
tradenames or service marks.  Group
further agrees that upon any termination or expiration of this Agreement, Group
shall not use such tradenames or service marks or contest Manager’s sole and
exclusive ownership and right to the use of such tradenames or service marks.

 

7.3          Injunctive Relief. 
Group acknowledges that any violation of the provisions of this Article will
cause Manager irreparable injury. 
Accordingly, Manager may enforce such provisions by seeking injunctive
or other equitable relief in addition to any other remedies available at law.  If a court of competent jurisdiction declares
any of the provision of this Article to be too broad to be specifically
enforced, such provisions shall be enforced to the maximum extent permitted by
law.

 

ARTICLE VIII.

GENERAL PROVISIONS

8.1          Amendment. 
This Agreement may be modified or amended only by mutual written
agreement of the Parties.  Any such
modification or amendment must be in writing, dated, signed by the Parties and
attached to this Agreement.

 

8.2          Assignment. 
Except for assignment by Manager to an entity owned, controlled by, or
under common control with Manager, neither Party may assign any interest or
obligation under this Agreement without the other Party’s prior written
consent.  Subject to the foregoing, this
Agreement shall be binding on and shall inure to the benefit of the Parties and
their respective successors and assigns.

 

8.3          Attorneys’ Fees. 
If either Party brings an action for any relief or collection against
the other Party, declaratory or otherwise, arising out of the arrangement
described in this Agreement, the losing Party shall pay to the prevailing Party
a reasonable sum for attorneys’ fees and costs actually incurred in bringing
such action, all of which shall be deemed to have accrued upon the commencement
of such action and shall be paid whether or not such action is prosecuted to
judgment.  Any judgment or order entered
in such action shall contain a specific provision providing for the recovery of
attorneys’ fees and costs incurred in enforcing such judgment.  For the purpose of this Section, attorneys’
fees shall include fees incurred in connection with discovery, post judgment
motions, contempt proceedings, garnishment and levy.

 

8

 

8.4          Waiver of Statute of Limitations.  The Parties expressly waive the four (4) year
statute of limitations for civil actions upon written contracts set forth in
California Code of Civil Procedure Section 337, and agree that the
statutory period for any actions under this Agreement shall run for eight (8) years
as permitted by California Code of Civil Procedure Section 360.5.

 

8.5          Authorized Persons. 
Whenever any consent, approval or determination of a Party is required
pursuant to this Agreement, the consent, approval or determination shall be
rendered on behalf of the Party by the person or persons duly authorized to do
so, which the other Party shall be justified in assuming means any officer of
the Party rendering such consent, approval or determination, or the Party’s
board of directors.

 

8.6          Choice of Law. 
This Agreement shall be construed in accordance with and governed by the
laws of the State of California, except choice of law rules that would
require the application of the laws of any other jurisdiction.

 

8.7          Compliance with Laws.  Group and Group Practitioners shall comply
with applicable laws, ordinances, codes and regulations of federal, state and
local governments, including laws that require Group and Group Practitioners to
disclose any economic interest or relationship with Manager.

 

8.8          Confidentiality. 
Neither Party shall disclose any of the terms of this Agreement to any
person or entity, other than its attorneys and accountants, without the prior
written consent of the other Party, unless and only to the extent such
disclosure is required by law.

 

8.9          Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

 

8.10        Entire Agreement. 
This Agreement is the entire understanding and agreement of the Parties
regarding its subject matter, and supersedes any prior oral or written
agreements, representations, understandings or discussions between the
Parties.  No other understanding between the
Parties shall be binding on them unless set forth in writing, signed and
attached to this Agreement.

 

8.11        Exhibits. 
The attached exhibits, together with all documents incorporated by
reference in the exhibits, form an integral part of this Agreement and are
incorporated into this Agreement wherever reference is made to them to the same
extent as if they were set out in full at the point at which such reference is
made.

 

8.12        Force Majeure. 
Except with respect to obligations imposed with regard to payment of the
Management Fee and other charges to be paid by Group under this Agreement,
neither Party is liable for nonperformance or defective or late performance of
any of its obligations under this Agreement to the extent and for such periods
of time as such nonperformance, defective performance or late performance is
due to reasons outside such Party’s control, including acts of God, war
(declared or undeclared), action of any governmental authority, riots,
revolutions, fire, floods, explosions, sabotage, nuclear incidents, lightning,
weather, earthquakes, storms, sinkholes, epidemics, failure of utilities, or
strikes.

 

9

 

8.13        Further Assurances. 
Each Party shall, at the reasonable request of the other Party, execute
and deliver to the other party all further instruments, assignments, assurances
and other documents, and take any actions as the other Party reasonably
requests in connection with the carrying out of this Agreement.

 

8.14        Headings. 
The headings in this Agreement are intended solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.

 

8.15        Interruption of Services.  Notwithstanding any provision in this
Agreement to the contrary, Manager shall not be liable to Group in damages or
otherwise for any failure, interruption or curtailment of any building service
or utility (including without limitation heating, plumbing, electrical systems,
security systems, communication systems, and fire protection and detection
systems).  Manager shall not be liable to
Group for any injury or damage to Group or Group’s business, or any loss of
income, or from damage to the goods, wares, merchandise or other property of
Group, Group’s employees, invitees, patients or any other person in or about
the Lab, or for injury to the person of Group’s employees, agents or
contractors (collectively, “Damages”),
whether such Damages are caused by or result from fire, steam, electricity,
gas, water or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, electrical systems, wires, appliances, plumbing, heating,
air conditioning, lighting fixtures, security systems, communication systems,
or fire protection and detection systems, whether such Damages result from
conditions arising in, on or upon the Lab or in, on or upon other portions of
the building of which the Lab is a part or from other sources or places
(including without limitation windstorm, hurricane or rainstorm), and
regardless of whether the cause of such Damages or the means of repairing such
Damages is inaccessible to Group. 
Manager shall not be liable for any Damages arising from any act or
neglect of any other tenant of the building (if any) in which the Lab is
located.

 

8.16        No Third-Party Beneficiary Rights.  The Parties do not intend to confer and this
Agreement shall not be construed to confer any rights or benefits to any
person, firm, group, corporation or entity other than the Parties.

 

8.17        Notices.  All
notices or communications required or permitted under this Agreement shall be
given in writing and delivered personally or sent by United States registered
or certified mail with postage prepaid and return receipt requested or by
overnight delivery service (e.g., Federal Express, DHL).  Notice is deemed given when sent, if sent as
specified in this Section, or otherwise deemed given when received.  In each case, notice shall be delivered or
sent to:

 

If to Manager, addressed
to:

 

Clarient, Inc.

31 Columbia 

Aliso Viejo, CA 92656

Attention:  Senior Vice President & Chief Financial Officer

 

10

 

If to Group, addressed
to:

 

Clarient Pathology Services, Inc.

31 Columbia 

Aliso Viejo, CA 92656

Attention:  Kenneth J. Bloom, MD, FCAP

 

Either Party may provide for a different address by
notifying the other Party of such change as provided for in this Section.

 

8.18        Severability. 
If any provision of this Agreement is determined to be illegal or
unenforceable, that provision shall be severed from this Agreement, and such
severance shall have no effect upon the enforceability of the remainder of this
Agreement unless the purpose of this Agreement is thereby destroyed.

 

8.19        Waiver.  No
delay or failure to require performance of any provision of this Agreement
shall constitute a waiver of that provision as to that or any other
instance.  Any waiver granted by a Party
must be in writing to be effective, and shall apply solely to the specific
instance expressly stated.

 

8.20        Meaning of Certain Words.  Wherever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine, or neuter forms, and the singular form of nouns shall include the
plural and vice versa.

 

8.21        Participation in Federal and State Programs.  Neither Group nor any of the Group
Practitioners is debarred, suspended, excluded or otherwise ineligible to
participate in any federal or state health care program.

 

[signature page follows]

 

11

 

The Parties have executed this Agreement on the
Execution Date.

 

	
   

  	
  MANAGER

  
	
   

  	
   

  
	
   

  	
  CLARIENT, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Raymond J. Land

  
	
   

  	
  By: Raymond J. Land

  
	
   

  	
  Its Chief Financial
  Officer and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GROUP

  
	
   

  	
   

  
	
   

  	
  CLARIENT
  PATHOLOGY SERVICES, INC.,

  
	
   

  	
  a California
  professional corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kenneth J.
  Bloom

  
	
   

  	
  Kenneth J.
  Bloom, MD, FCAP,

  
	
   

  	
  President

  

 

12

 

Exhibit 1.4

 

POWER OF ATTORNEY

 

BY THIS POWER OF ATTORNEY (this “Power of
Attorney”), executed as of July       ,
2008, CLARIENT PATHOLOGY SERVICES, INC., a California professional corporation
(“Group”) appoints CLARIENT, INC., a
Delaware corporation (“Manager”) as
Group’s attorney-in-fact to perform the following acts in Group’s name and
place:

 

1.             To take all steps necessary and appropriate to collect
all claims for payment for professional services rendered by Group;

 

2.             To endorse all checks made payable to Group in
connection with the professional services rendered by Group; and

 

3.             To negotiate and execute all business agreements on
Group’s behalf.

 

By this Power of Attorney, Group also grants Manager
full authority to perform any act necessary and appropriate to the exercise of
the foregoing purposes and to accomplish those purposes set forth in the
Management Services Agreement (the “Agreement”)
between Group and Manager dated as of the date of this Power of Attorney, and
ratifies every act that Manager may lawfully perform by virtue of this Power of
Attorney.

 

This Power of Attorney shall be effective as of the Effective
Date of the Agreement and shall terminate upon the expiration or termination of
the Agreement.

 

By this Power of Attorney, Group grants Manager the
authority to determine, in Manager’s sole discretion, the time, manner and
purpose for which any power conferred upon Manager in this Power of Attorney
shall be exercised, as well as the conditions, provisions and covenants of any
instruments which may be executed by Manager pursuant to this Power of
Attorney.

 

	
   

  	
  GROUP

  
	
   

  	
   

  
	
   

  	
  /s/ Kenneth J.
  Bloom

  
	
   

  	
   

  
	
   

  	
  Kenneth J.
  Bloom, MD, FCAP,

  
	
   

  	
  President

  

 

 

Exhibit 3.1

 

MANAGEMENT
FEE

 

During the term of
this Agreement, on or before the seventh (7th) day of each month following the month
during which services have been rendered, Group shall pay to Manager a
Management Fee of Eighty Thousand Dollars ($80,000.00) per month.Exhibit 10.55

 

PROFESSIONAL SERVICES
AGREEMENT

 

by and between

 

CLARIENT DIAGNOSTIC
SERVICES, INC. (“Lab”)

 

and

 

CLARIENT PATHOLOGY
SERVICES, INC. (“Group”)

 

 

PROFESSIONAL SERVICES
AGREEMENT

 

This
PROFESSIONAL SERVICES AGREEMENT (this “Agreement”) is
entered into as of July 1, 2008 (the “Execution Date”),
by and between CLARIENT DIAGNOSTIC SERVICES, INC., a Delaware corporation (“Lab”), and CLARIENT PATHOLOGY SERVICES, INC., a California
professional corporation (“Group”).  Lab and Group are sometimes referred to in
this Agreement as a “Party” or,
collectively, as the “Parties.”

 

RECITALS

 

A.            Group provides medical services
including, without limitation, the professional component of specialty
pathology services and related activities.

 

B.            Lab
is a clinical laboratory licensed under the Federal Clinical Laboratory
Improvement Amendments of 1988 and by the State of California, and desires to
access the Services in connection with its provision of the technical component
of certain specialty pathology services.

 

C.            Group is a professional corporation
organized under the laws of the State of California, consisting of employees
and contractors (collectively, “Group Physicians” and
each, a “Group Physician”), each of whom is a
physician duly licensed and qualified to practice medicine in the State of
California.  Each Group Physician is
board certified for the practice of medicine in the specialty of pathology (the
“Specialty”).

 

D.            Clarient, Inc., the sole
shareholder of Lab, (the “Manager”), and
Group have entered into a Management Services Agreement, dated as of July 1,
2008 (the “MSA”), and Manager has agreed to
perform management services under the MSA in consideration of Group providing
Services (as defined below) under this Agreement.

 

E.             Lab and Group desire that Group
provides professional Specialty procedures, on the terms and conditions
described herein.

 

AGREEMENT

 

THE
PARTIES AGREE AS FOLLOWS:

 

ARTICLE
I.

GROUP’S OBLIGATIONS

 

1.1          Professional Services.  Group shall provide the professional services
set forth in Exhibit 1.1 (the “Professional Services”), upon the terms and subject to the
conditions set forth in this Agreement.

 

1.2          Additional Services.  Group shall provide to Lab those additional
services set forth in Exhibit 1.2
(the “Additional Services”), upon the terms
and subject to the conditions 

 

1

 

set forth in this Agreement.  The
Professional Services and the Additional Services are sometimes referred to
collectively in this Agreement as the “Services.”

 

1.3          Qualifications. 
Each Group Physician shall be duly licensed and
qualified to practice medicine in the State of California.  Each Group Physician shall be board certified
in the Specialty.  A Group Physician
shall, when applicable, initiate the process of becoming board certified no
later than the Effective Date or the date on which the Group Physician joined
Group, whichever is the later to occur. 
The Group Physician shall actively and diligently pursue completion of
this process throughout the term of this Agreement and exercise his or her best
efforts to complete this process and become board certified at the earliest
date reasonably possible.  Group hereby
represents that all Group Physicians providing Professional Services as of the
Effective Date of this Agreement are board certified.

 

1.4          Lab Staffing. 
Group shall ensure staffing of the Lab by qualified
Group Physicians at the minimum staffing levels and in accordance with the
staffing patterns set forth in Exhibit 1.4.  Group shall adjust such staffing levels
and/or staffing patterns, as requested by Lab from time to time, after
consultation with Group, to be reasonably necessary and appropriate for the
provision of the Professional Services and the operation of the Lab.

 

1.5          Performance Standards.  Group and each Group
Physician shall, as applicable

 

(a)           comply with all
policies, rules and regulations of Lab;

 

(b)           participate in
continuing education as necessary to maintain licensure, professional
competence and skills commensurate with the standards of the medical community
and as otherwise required by the medical profession; and

 

(c)           comply with all
applicable standards and recommendations of The Joint Commission or other
applicable accreditation and regulatory bodies.

 

1.6          Notification of Certain Events.  Group shall notify Lab in
writing within twenty-four (24) hours after Group or any Group Physician is
debarred, suspended, excluded or otherwise ineligible to participate in any
federal or state health care program.

 

1.7          Patient Reports. 
Group shall prepare and deliver to Lab for safekeeping
a complete report for each patient which complies both as to form and
timeliness with the established requirements of Lab.  Group and Lab shall cooperate mutually in the
completion of claim forms as may be required by insurance carriers or others
responsible for reimbursement.

 

ARTICLE
II.

DUTIES OF LAB

 

2.1          Staff.  Lab
shall, at its own expense, provide the services of licensed registered and
vocational nurses, pathology technologists and other non-physician technicians
and assistants necessary for the cost-efficient operation of Lab.  Lab shall, after consultation with Group,
have sole discretion with regard to selection and retention of these personnel
and to determine levels of staffing. 
Control and direction of these personnel for medical matters shall rest
with Group.

 

2

 

2.2          Support Services. 
Lab shall, at its own expense, provide services such
as heat, water, electricity, telephone, laundry, housekeeping, and other
support services.

 

2.3          Space.  Lab
shall make available for the use of Group the space that is now or may be
hereafter occupied by Lab.

 

2.4          Equipment and Supplies.  Lab shall, at its own
expense, provide all expendable and non-expendable equipment, drugs, supplies,
furniture and fixtures for the use of Group as are necessary for the
cost-efficient operation of Lab.  This
equipment shall meet all electrical, engineering, and other safety standards required
by law and/or relevant Lab policies.  Lab
shall, at its own expense, keep and maintain this equipment in good order and
repair and replace this equipment or any part of it which becomes worn out or
is mutually determined to be obsolete.

 

ARTICLE
III.

COMPENSATION

 

3.1          Fees.  During
the term of this Agreement, on or before the twenty-first (21st) day of each
month during which Services have been rendered, Lab shall pay Group Two Hundred
and Fifty Thousand Dollars ($250,000.00) per month.

 

3.2          Adjustment. Upon an adjustment of
the staffing levels (as set forth in Section 1.4 above), the compensation
rate shall be adjusted, by mutual agreement of the Parties.  Each year, in consideration of the expenses
incurred by Group for Services provided under this Agreement, the compensation
rate shall be adjusted, by mutual agreement of the Parties.

 

3.3          Billing for Professional Services Performed at Lab;
Global Billing.  Group
acknowledges that Lab shall have the sole and exclusive right to bill and
collect for the Professional Services rendered under this Agreement.  Lab shall bill and collect for such
Professional Services and any and all related technical services provided by
Lab on a global fee basis, at its own expense and under its own provider
number.  Consequently, Group has, and
shall have, no claims as a third-party beneficiary, or otherwise, for any
compensation or other amounts from third-party payors.  Group shall seek and obtain compensation for
the performance of Professional Services only from Lab.  Group shall not bill, assess or charge any
fee, assessment or charge of any type against any other person or entity for
Professional Services provided.  Group
hereby assigns to Lab all right, title and interest in any accounts receivable
generated by the provision of Professional Services under this Agreement, to
the extent permitted by applicable law. 
Accordingly, Lab shall be the sole owner of the accounts receivable for
any and all of the Professional Services performed under this Agreement.  Group shall promptly deliver to Lab any and
all compensation, in whatever form, that is received by Group for Professional
Services performed under this Agreement.

 

ARTICLE
IV.

INSURANCE AND INDEMNITY

 

4.1          Group Malpractice Liability Insurance.  Group shall obtain and
continuously maintain professional malpractice liability insurance coverage,
issued by an insurance company 

 

3

 

licensed or otherwise qualified to issue professional liability
insurance policies or coverage in the State of California, and acceptable to
Lab, in the amount of at least One Million Dollars ($1,000,000) per occurrence
or claim and Three Million Dollars ($3,000,000) in the annual aggregate for the
acts and omissions of Group and each Group Physician.  Such coverage shall provide for a date of
placement preceding or coinciding with the Effective Date of this Agreement.

 

4.2          Group Certificate of Insurance.  On or before the Effective
Date, Group shall provide Lab with an original certificate evidencing
professional malpractice liability insurance coverage, and shall provide Lab
with proof of continued professional malpractice liability insurance coverage
on an annual basis (or as periodically requested by Lab) on behalf of each
Group Physician.  Group shall provide Lab
with no less than thirty (30) calendar days’ prior written notice of
cancellation or any material change in such professional malpractice liability
insurance coverage.

 

4.3          Group Tail Coverage. 
If Group’s professional malpractice liability
insurance is provided on a claims-made basis, upon the expiration or
termination of this Agreement for any reason, Group shall continuously maintain
such insurance or purchase from an insurance company licensed or otherwise
qualified to issue professional liability insurance policies or coverage in the
State of California, and acceptable to Lab, extended reporting period (i.e., “tail”)
coverage for the longest extended reporting period then available to ensure
that insurance coverage in the amount set forth in Section 4.1 is
maintained for claims which arise from services provided by Group or Group
Physicians during the term of this Agreement. 
This Section shall survive any termination or expiration of this
Agreement.

 

4.4          Indemnification by Group.  Group and each Group Physician shall indemnify,
defend and hold harmless Lab against:  (i) any
and all liability arising out of Group’s failure to comply with the terms of
this Agreement, and any injury, loss, claims, or damages arising from the
negligent operations, acts, or omissions of Group or Group’s employees relating
to or arising out of their Services or this Agreement; and (ii) any and
all costs and expenses, including reasonable legal expenses, incurred by or on
behalf of Lab in connection with the defense of such claims.

 

4.5          Hold Harmless. 
Lab shall be responsible for its own acts and
omissions and the acts and omissions of its employees and agents.  Lab shall not be responsible for the acts and
omissions of Group or Group’s employees and agents in carrying out this
Agreement.  Lab shall not be liable for
any judgment, settlement, award, fine or otherwise, which arises out of the
acts and omissions of Group, or its employees and agents, under this
Agreement.  To the extent Lab utilizes
its own equipment, products, or other personal property in the performance of
its obligations under this Agreement, Lab shall ensure that such equipment,
product, or other personal property is suitable and fit for the purpose
intended by Lab, free from defects which may damage Group, and otherwise operates
in accordance with applicable government standards and safety regulations.

 

4

 

ARTICLE
V.

RELATIONSHIP BETWEEN THE PARTIES

 

5.1          Independent Contractors.  Group and the Group Physicians are and shall
at all times be independent contractors with respect to Lab in meeting Group’s
responsibilities under this Agreement. 
Nothing in this Agreement is intended nor shall be construed to create a
partnership, employer-employee or joint venture relationship between Lab and
Group or Lab and any Group Physician.

 

5.2          Limitation on Control.  Lab shall neither have nor exercise any
control or direction over Group’s or any Group Physician’s professional medical
judgment or the methods by which Group or any Group Physician performs
professional medical services; provided, however, that Group and
Group Physicians shall be subject to and shall at all times comply with the
applicable guidelines, policies and rules.

 

5.3          Practice of Medicine.  Group and Lab acknowledge that Lab is neither
authorized nor qualified to engage in any activity which may be construed or
deemed to constitute the practice of medicine. 
To the extent that any act or service required of, or reserved to, Lab
in this Agreement is construed or deemed to constitute the practice of
medicine, the performance of such act or service by Lab shall be deemed waived
or unenforceable, unless this Agreement can be amended to comply with the law,
in which case the Parties shall make such amendment.

 

5.4          Form 1099 or W-2.  If required to do so under applicable law, Lab
shall issue an Internal Revenue Service Form 1099 or Form W-2 to
Group.

 

5.5          Exclusive Services.  For the term of the Agreement, all
Professional Services described in Section 1.1 shall be performed by Group
Physicians on an exclusive basis.  All
professional services other than those described in Section 1.1 shall be
open services, except as otherwise determined by Lab.

 

5.6          Agent of Group.  Kenneth J. Bloom, MD, FCAP, shall serve as
the Group’s sole and exclusive agent for purposes of communicating with Lab
concerning the rights of Group pursuant to this Agreement.  Group shall be bound by all actions and
agreements made by this agent.  Group may
designate, from time to time, a new agent of Group, pursuant to written notice
to Lab.

 

5.7          Full-Time Service and Noncompetition.  During the term of this Agreement, neither
Group nor any Group Physician shall, without first obtaining the prior written
consent of Lab, participate as individuals, partners, shareholders, employees,
or contractors in any partnership, firm, or corporation that owns, operates,
provides services to, becomes financially interested in, or otherwise
affiliates with any person, partnership, firm, or corporation that engages in
or facilitates the performance of Professional Services at any location other
than Lab which is located within a twenty-five (25) mile radius from Lab.  Group acknowledges that, as of the Effective
Date, it does not maintain any practice location independent of Lab and that it
shall notify Lab prior to establishing any such location.

 

5

 

5.8          Physician Compensation Arrangements.  Group represents and warrants to Lab that the
compensation paid or to be paid by Group to any physician is and will at all
times be fair market value for services and items actually provided by such
physician, not taking into account the value or volume of referrals or other
business generated by such physician for Lab or any affiliate.  Group further represents and warrants to Lab
that Group has and will at all times maintain a written agreement with each
physician receiving compensation from Group.

 

5.9          Merger or Sale of Group.

 

(a)   Merger or Sale Restrictions. 
Group acknowledges that Lab has agreed to enter into this Agreement
based upon the skills, qualifications, experience, and characteristics of Group
and that any material change in Group’s operations, ownership, control or
qualifications may be harmful to Lab’s interests under this Agreement.  In recognition of Lab’s dependence on Group’s
ability to maintain its skills, qualifications, experience, and
characteristics, Group agrees that during the term of this Agreement, and any
extensions thereto, it shall not enter into a merger or consolidation with
another medical group or any other legal entity (“Merger”)
without Lab’s prior written consent. 
Group further agrees that during the term of this Agreement, and any
extensions thereto, it shall not enter into a sale, conveyance, pledge,
exchange, assignment, hypothecation, encumbrance or other transfer of any
equity interest (including but not limited to shares) or assets comprising five
percent (5%) or more of the equity interests or assets of the Group (“Sale”) without Lab’s prior written consent.  Any purported Merger or Sale without Lab’s
written consent shall be void and shall constitute a breach of this Agreement.

 

(b)   Consent Procedure. 
In connection with each consent requested by Group for a Merger or Sale,
Group shall submit to Lab the terms of the proposed transaction, the identity
of the parties to the transaction, the proposed documentation for the
transaction and all other information reasonably requested by Lab concerning
the proposed transaction.

 

5.10        Purchase Option/Obligation.

 

(a)   Upon
termination of this Agreement by Lab for any reason, Lab shall be entitled (but
not obligated) to purchase all tangible or intangible assets of Group (the “Purchase Option”). 
Lab shall notify Group of its intention to exercise the Purchase Option
within thirty (30) days after the termination of this Agreement.

 

(b)   Upon
termination of this Agreement by Group for any reason or by Manager because of
a breach by Group of this Agreement, Lab shall be entitled (but shall not be
obligated) to require Group to purchase any tangible or intangible asset of Lab
used solely in the operation of Group (the “Purchase Obligation”).  Lab shall notify Group of its intention to
exercise the Purchase Obligation within thirty (30) days after the termination
of this Agreement.

 

(c)   The
purchase price for any purchase under this Section 5.10 shall be
determined by an appraiser selected by the Parties, who is an MAI or an ASA
appraiser with experience in valuing assets used in connection with the
management of medical practices and the provision of medical services.  Each party agrees to negotiate in good faith
the terms other 

 

6

 

than the purchase price of the sale/purchase.  The purchasing Party shall obtain any
required financing for such purchase.

 

ARTICLE
VI.

TERM AND TERMINATION

 

6.1          Term.  This Agreement shall become effective on July 1,
2008 (the “Effective Date”), and shall continue
until June 30, 2018 (the “Expiration Date”),
subject to the termination provisions of this Agreement.  This
Agreement shall automatically renew for two (2) additional terms of five (5) years
each, unless either Party gives the other Party written notice of its intention
not to renew this Agreement at least thirty (30) calendar days prior to the expiration
of the then current term.

 

6.2          Termination by Lab.  Lab shall have the right to terminate this
Agreement upon the occurrence of any one or more of the following events:

 

(a)           material breach of
this Agreement by Group or any Group Physician where the breach is not cured
within thirty (30) calendar days after Lab gives written notice of the breach
to Group; or

 

(b)           neglect of
professional duty by Group in a manner that poses an imminent danger to the
health or safety of any individual, or violates Lab’s policies, rules and
regulations.

 

6.3          Termination by Group.  Group shall have the right to terminate this
Agreement immediately upon a material breach of this Agreement by Lab where the
breach is not cured within thirty (30) calendar days after Group gives written
notice of the breach to Lab.

 

6.4          Return of Property.  Upon any termination or expiration of this
Agreement, Group shall immediately return to Lab all of Lab’s property,
including Lab’s equipment, supplies, furniture, furnishings and patient records,
which is in Group’s possession or under Group’s control.

 

ARTICLE
VII.

GENERAL PROVISIONS

 

7.1          Amendment.  This Agreement may be modified or amended
only by mutual written agreement of the Parties.  Any such modification or amendment must be in
writing, dated and signed by the Parties and attached to this Agreement.

 

7.2          Assignment.  Except for assignment by Lab to an entity
owned, controlled by, or under common control with Lab, neither Party may
assign any interest or obligation under this Agreement without the other Party’s
prior written consent.  Subject to the
foregoing, this Agreement shall be binding on and shall inure to the benefit of
the Parties and their respective successors and assigns.

 

7.3          Attorneys’ Fees.  If either Party brings an action for any
relief or collection against the other Party, declaratory or otherwise, arising
out of the arrangement described in this Agreement, the losing Party shall pay
to the prevailing Party a reasonable sum for attorneys’ fees 

 

7

 

and costs actually incurred in bringing such action, including without
limitation fees incurred in arbitration, at trial, on appeal and on any review
therefrom, all of which shall be deemed to have accrued upon the commencement
of such action and shall be paid whether or not such action is prosecuted to
judgment.  Any judgment or order entered
in such action shall contain a specific provision providing for the recovery of
attorneys’ fees and costs incurred in enforcing such judgment.  For the purpose of this Section, attorneys’
fees shall include fees incurred in connection with discovery, post judgment
motions, contempt proceedings, garnishment and levy.

 

7.4          Compliance with Laws.  The Parties shall comply with all applicable laws,
ordinances, codes and regulations of federal, state and local governments,
applicable to the performance of this Agreement including without limitation
laws that require Group to disclose any economic interest or relationship with
Lab.

 

7.5          Confidentiality.  Neither Party shall disclose any of the terms
of this Agreement to any person or entity (other than its attorneys or
accountants) without the prior written consent of the other Party, unless and
only to the extent such disclosure is required by law.

 

7.6          Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

 

7.7          Entire Agreement. 
This Agreement is the entire understanding and
agreement of the Parties regarding its subject matter, and supersedes any prior
oral or written agreements, representations, understandings or discussions
between the Parties.  No other
understanding between the Parties shall be binding on them unless set forth in
writing, signed and attached to this Agreement.

 

7.8          Exhibits.  The attached exhibits, together with all
documents incorporated by reference in the exhibits, form an integral part of
this Agreement and are incorporated into this Agreement wherever reference is
made to them to the same extent as if they were set out in full at the point at
which such reference is made.

 

7.9          Force Majeure. 
Neither Party shall be liable for nonperformance or
defective or late performance of any of its obligations under this Agreement to
the extent and for such periods of time as such nonperformance, defective
performance or late performance is due to reasons outside such Party’s control,
including acts of God, war (declared or undeclared), action of any governmental
authority, riots, revolutions, fire, floods, explosions, sabotage, nuclear
incidents, lightning, weather, earthquakes, storms, sinkholes, epidemics, or
strikes.

 

7.10        Governing Law.  This Agreement shall be construed in
accordance with and governed by the laws of the State of California.

 

7.11        Headings.  The headings in this Agreement are intended
solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.

 

7.12        Meaning of Certain Words.  Wherever the context may
require, any pronouns used in this Agreement shall include the corresponding
masculine, feminine, or neuter forms, and the singular form of nouns shall
include the plural and vice versa.

 

8

 

7.13        No Third-Party Beneficiary Rights.  The Parties do not intend
to confer, and this Agreement shall not be construed to confer, any rights or
benefits to any person, firm, group, corporation or entity other than the
Parties.

 

7.14        Notices.  All notices or communications required or
permitted under this Agreement shall be given in writing and delivered
personally or sent by United States registered or certified mail with postage
prepaid and return receipt requested or by overnight delivery service (e.g.,
Federal Express, DHL).  Notice shall be
deemed given when sent, if sent as specified in this Section, or otherwise
deemed given when received.  In each
case, notice shall be delivered or sent to:

 

If to Lab, addressed to:

 

Clarient Diagnostic Services, Inc.

31 Columbia 

Aliso Viejo, CA 92656

Attention: 
Senior Vice President &
Chief Financial Officer

 

If to Group, addressed to:

 

Clarient Pathology Services, Inc.

31 Columbia 

Aliso Viejo, CA 92656

Attention: 
Kenneth J. Bloom, MD, FCAP

 

7.15        Participation in Federal and State Programs.  Group hereby represents
that neither it nor any Group Physician is debarred, suspended, excluded or
otherwise ineligible to participate in any federal or state health care
program.

 

7.16        Right of Offset.  Group hereby expressly authorizes Lab, at Lab’s
sole discretion, to the fullest extent allowed by applicable law, at any time
and from time to time, to set off and/or withhold from Group’s compensation
payable pursuant to this Agreement, any sum or sums necessary to satisfy all or
any portion of any outstanding and delinquent obligation owed by Group to Lab
from any other financial arrangement Group may have with Lab, its subsidiaries
or Affiliates, or for any other services or space or equipment rental Lab, its
subsidiaries or Affiliates, may provide or have provided to Group.  Without limiting the generality of the
foregoing, this provision is intended to permit Lab to apply any compensation
payable to Group for services rendered pursuant to this Agreement to any
outstanding loan or rental obligations owed by Group to Lab.

 

7.17        Severability.  If any provision of this Agreement is
determined to be illegal or unenforceable, that provision shall be severed from
this Agreement, and such severance shall have no effect upon the enforceability
of the remainder of this Agreement.

 

7.18        Trade Secrets.  During the term of this Agreement, Group will
have access to and become acquainted with confidential information and trade
secrets of Lab, including 

 

9

 

information and data relating to payor contracts and accounts, clients,
patients, patient groups, patient lists, billing practices and procedures,
business techniques and methods, strategic plans, operations and related data
(collectively, “Trade Secrets”).  All Trade Secrets are the property of Lab and
used in the course of Lab’s business, and shall be proprietary information
protected under the Uniform Trade Secrets Act. 
Group shall not disclose to any person or entity, directly or
indirectly, either during the term of this Agreement or at any time thereafter,
any Trade Secrets, or use any Trade Secrets other than in the course of
providing the Services under this Agreement. 
All documents that Group prepares, or Trade Secrets that might be given
to Group in the course of providing the Services under this Agreement, are the
exclusive property of Lab, and, without the prior written consent of Lab, shall
not be removed from Lab’s premises.

 

7.19        Waiver.  No
delay or failure to require performance of any provision of this Agreement
shall constitute a waiver of that provision as to that or any other
instance.  Any waiver granted by a Party
must be in writing to be effective, and shall apply solely to the specific
instance expressly stated.

 

[signature page follows]

 

10

 

The
Parties have executed this Agreement on the Execution Date.

 

	
   

  	
  LAB

  
	
   

  	
   

  
	
   

  	
  CLARIENT
  DIAGNOSTIC SERVICES, INC., a

  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Raymond Land

  
	
   

  	
  By:

  	
  Raymond Land

  
	
   

  	
  Its

  	
  Chief Financial
  Officer and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GROUP

  
	
   

  	
   

  
	
   

  	
  CLARIENT
  PATHOLOGY SERVICES, INC.,

  
	
   

  	
  a California
  professional corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kenneth J.
  Bloom

  
	
   

  	
  Kenneth J.
  Bloom, MD, FCAP,

  
	
   

  	
  President

  
				

 

11

 

Exhibit 1.1

 

PROFESSIONAL SERVICES TO
BE PROVIDED BY GROUP

 

Group shall perform
Specialty services and provide appropriate reports and laboratory
interpretative services as required by Lab. 
At a minimum, Lab shall require Group to provide, and Group shall
provide, all Professional Services, including interpretative services, to
permit Lab to bill globally for the services that Lab currently furnishes and
will furnish during the term of this Agreement. 
Group shall ensure that the Professional Services are performed in a
timely manner, as set forth in applicable laws and regulations and any
third-party payor program in which Lab participates.

 

 

Exhibit 1.2

 

ADDITIONAL SERVICES TO
BE PROVIDED BY GROUP

 

Group shall:

 

(a)                                  participate
in risk management, quality assurance and peer review programs, as reasonably
requested by Lab;

 

(b)                                 assist
Lab management with all preparation for, and conduct of, any inspections and
on-site surveys of Lab conducted by governmental agencies or accrediting
organizations;

 

(e)                                  cooperate
with Lab in all litigation matters affecting Group or Lab, consistent with
advice from Group’s legal counsel; and

 

(f)            cooperate
and comply with Lab’s policies and procedures which are pertinent to patient
relations, quality assurance, scheduling, billing, collections and other
administrative matters and cooperate with Lab’s efforts to bill and collect
fees for services rendered to Lab’s patients. 
All business transactions related to the Services provided by Group,
such as enrollment, verification and billings, shall be conducted by and in the
name of Lab.

 

 

Exhibit 1.4

 

STAFFING PATTERN

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00156-of-00352.parquet"}]]