EXHIBIT 10.44

 

STRATEGIC ALLIANCE AGREEMENT

 

 

BETWEEN

 

 

QUEST DIAGNOSTICS INCORPORATED

 

 

AND

 

 

CIPHERGEN BIOSYSTEMS, INC.

 

 

DATED:  JULY 22, 2005

 

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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Table of Contents

 

1.

DEFINITIONS

 

 

 

 

2.

GENERAL

 

 

 

 

3.

RIGHTS OF EXCLUSIVITY

 

 

 

 

4.

PRESENTATION AND REVIEW OF PLANS; ELECTIONS BY QUEST DIAGNOSTICS

 

 

 

 

5.

DEVELOPMENT OF LICENSED LABORATORY TESTS

 

 

 

 

6.

COMMERCIALIZATION OF LICENSED LABORATORY TESTS AND TEST KIT SERVICES

 

 

 

 

7.

DEVELOPMENT OF TEST KITS

 

 

 

 

8.

COMMERCIALIZATION OF LICENSED LABORATORY TEST COMPONENTS AND TEST KITS

 

 

 

 

9.

PROVISION OF INSTRUMENTS, PROPRIETARY SUPPLIES AND TEST KITS

 

 

 

 

10.

RECORDS

 

 

 

 

11.

CONFIDENTIALITY

 

 

 

 

12.

PROPRIETARY RIGHTS AND LICENSES

 

 

 

 

13.

WARRANTIES

 

 

 

 

14.

INDEMNIFICATION AND LIMITATION OF LIABILITY

 

 

 

 

15.

TERM AND TERMINATION

 

 

 

 

16.

MISCELLANEOUS PROVISIONS

 

 

 

 

TABLE OF SCHEDULES

 

SCHEDULE A [a05-13769_1ex10d44.htm#Schedulea_180723]

DEFINITIONS [a05-13769_1ex10d44.htm#Schedulea_180723]

 

SCHEDULE B [a05-13769_1ex10d44.htm#Scheduleb_180741]

STRATEGY AND BUDGET [a05-13769_1ex10d44.htm#Scheduleb_180741]

 

SCHEDULE C [a05-13769_1ex10d44.htm#ScheduleC_153038]

REQUIRED CONTENTS FOR EACH PLAN [a05-13769_1ex10d44.htm#ScheduleC_153038]

 

SCHEDULE D [a05-13769_1ex10d44.htm#ScheduledRequiredContentsForThePl_180745]

REQUIRED CONTENTS FOR THE PLAN SUPPLEMENT
[a05-13769_1ex10d44.htm#ScheduledRequiredContentsForThePl_180745]

 

SCHEDULE E [a05-13769_1ex10d44.htm#ScheduleeRoyaltiesAndFeesToCipher_180747]

ROYALTIES AND FEES TO CIPHERGEN
[a05-13769_1ex10d44.htm#ScheduleeRoyaltiesAndFeesToCipher_180747]

 

SCHEDULE F [a05-13769_1ex10d44.htm#SchedulefRoyaltiesToQuestDiagnost_180750]

ROYALTIES TO QUEST DIAGNOSTICS
[a05-13769_1ex10d44.htm#SchedulefRoyaltiesToQuestDiagnost_180750]

 

SCHEDULE G [a05-13769_1ex10d44.htm#SchedulegListOfCiphergenPatents_180753]

LIST OF CIPHERGEN PATENTS
[a05-13769_1ex10d44.htm#SchedulegListOfCiphergenPatents_180753]

 

SCHEDULE H [a05-13769_1ex10d44.htm#SchedulehListOfCiphergenCollabora_180802]

LIST OF CIPHERGEN COLLABORATION AGREEMENTS
[a05-13769_1ex10d44.htm#SchedulehListOfCiphergenCollabora_180802]

 

SCHEDULE I [a05-13769_1ex10d44.htm#ListOfQuestDiagnosticsPatents_154426]

LIST OF QUEST DIAGNOSTICS PATENTS
[a05-13769_1ex10d44.htm#ListOfQuestDiagnosticsPatents_154426]

 

SCHEDULE J [a05-13769_1ex10d44.htm#SchedulejQuestNetworkMembers_180804]

QUEST NETWORK MEMBERS
[a05-13769_1ex10d44.htm#SchedulejQuestNetworkMembers_180804]

 

SCHEDULE K [a05-13769_1ex10d44.htm#SchedulekProteinchipProducts_180807]

PROTEINCHIP PRODUCTS
[a05-13769_1ex10d44.htm#SchedulekProteinchipProducts_180807]

 

 

i

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STRATEGIC ALLIANCE AGREEMENT

 

THIS STRATEGIC ALLIANCE AGREEMENT (“Agreement”) is made as of July 22, 2005 (the
“Effective Date”) between QUEST DIAGNOSTICS INCORPORATED a Delaware corporation
with offices at 1290 Wall Street West, Lyndhurst, New Jersey 07071 (“Quest
Diagnostics”), and CIPHERGEN BIOSYSTEMS, INC., a Delaware corporation with
offices at 6611 Dumbarton Circle, Fremont, California 94555 (“Ciphergen”).  Each
of Quest Diagnostics and Ciphergen may be referred to herein as a “Party” and
together as the “Parties.”

 

RECITALS:

 

A.                                   Quest Diagnostics is a leading provider of
diagnostic testing, information and services and has substantial experience in
the development and commercialization of products having Clinical Diagnostic
Applications (as such terms are defined below).

 

B.                                     Ciphergen develops, manufactures and
markets its ProteinChip Systems using its patented surface enhanced laser
desorption/ionization (“SELDI”) technology and also owns and operates a division
directed toward the development and commercialization of products for the field
of Clinical Diagnostics, including the discovery (principally through Ciphergen
Collaboration Agreements) of disease-specific Biomarkers and protein signatures
that could be utilized in Licensed Laboratory Tests and Test Kits (as such terms
are defined below).

 

C.                                     The Parties desire to collaborate in a
strategic alliance to develop and commercialize certain in vitro Licensed
Laboratory Tests and Test Kits on the terms and conditions set forth in this
Agreement.

 

D.                                    Contemporaneously herewith, the Parties
are entering into a Stock Purchase Agreement pursuant to which Quest Diagnostics
will acquire shares of Ciphergen’s Common Stock and warrants to acquire shares
of Ciphergen’s Common Stock to be issued by Ciphergen (the “Stock Purchase
Agreement”).

 

NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the Parties hereto, intending to be
legally bound, hereby agree as follows:

 

1.                                      DEFINITIONS.

 

Capitalized terms used in this Agreement will have the meanings respectively
ascribed to them in Schedule A hereto.

 

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(1)          ProteinChip® is a registered trademark of Ciphergen, but is written
in this Agreement without the circle-R mark for convenience.

 

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2.                                      GENERAL.

 

2.1                                 Strategic Alliance.  Pursuant to the terms
and conditions of this Agreement, the Parties hereby form a strategic alliance,
purely contractual in nature, and not to be construed as a joint venture of any
kind, all as set forth in and subject to the terms and conditions of this
Agreement (the “Strategic Alliance”).

 

2.2                                 Relationship of the Parties.  The
relationship of the Parties pursuant to this Agreement is that of independent
contractors.  Nothing in this Agreement is intended or will be deemed to
constitute a joint venture, partnership, agency or employer-employee
relationship between the Parties.  Neither Party will incur any debts or make
any commitments for the other Party.

 

2.3                                 Ciphergen Research and Development Efforts. 
Ciphergen has provided to Quest a strategic plan prepared by Ciphergen together
with a draft overall budget with respect to the activities that Ciphergen will
take in support of the activities in preparation for development of the plans
for Licensed Laboratory Tests pursuant to this Agreement.  During the Base Term,
Ciphergen will devote sufficient resources to prepare and present to Quest
Diagnostics three (3) Plans as contemplated by this Agreement.  Without limiting
the generality of the foregoing, Ciphergen shall use commercially reasonable
efforts to maintain and fund the Ciphergen Collaboration Agreements (including
supplying laboratory equipment, biochips and other supplies, in a manner
required by such agreements and otherwise consistent with past practice), use
commercially reasonable efforts to maintain its existing Biomarker Discovery
Center® laboratories currently devoted to activities directed toward discovery
of Biomarkers for Clinical Diagnostic applications, and use commercially
reasonable efforts to retain the employees identified in Schedule B,
substantially all of whose time will be involved with supporting the activities
of Ciphergen under this Agreement.  For clarity, Ciphergen may in its sole
discretion determine the specific employees that perform activities under this
Agreement and change such employees from time to time.  Subject to the
foregoing, Ciphergen in its sole discretion may continue its research and
development efforts, including such efforts related to any Ciphergen Platform
Technology, or other technologies.  Other than as provided below with respect to
Development Programs and Test Kit Development Programs, this Agreement does not
impose any research or development requirements upon Ciphergen with respect to
any particular Application.  For clarity, nothing herein is intended to prevent
Ciphergen from modifying its rights or, obligations under any Collaboration
Agreement or, subject to the terms of this Agreement (including without
limitation the restrictions under Article 3 and the licenses and restrictions
with respect to Ciphergen Collaboration IP under Article 12), otherwise
exercising any of its rights under any such Collaboration Agreement, in either
case in a manner that would not adversely impact Ciphergen’s ability to perform
its obligations under this Agreement.  Except as expressly provided herein,
nothing in this Agreement will be deemed by implication to restrict Ciphergen’s
development of other products and services within or outside the Field (provided
such development does not infringe upon any Intellectual Property of Quest
Diagnostics or any of its Affiliates).

 

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2.4                                 Quest Diagnostics Research and Development
Efforts.  Quest Diagnostics will use commercially reasonable efforts and provide
sufficient resources to develop Licensed Laboratory Tests on the basis of the
Development Elections, including by having personnel devoted to the development
of such tests as indicated in Schedule B, providing sample management expertise,
and providing regulatory advice.  In addition, Quest Diagnostics will provide to
Ciphergen certain funding pursuant to the terms of the Credit Agreement, the
proceeds of which can only be used to pay costs and expenses directly related to
the preparation of Plans and development activities contemplated by this
Agreement.  During the Term, Quest Diagnostics in its sole discretion may
continue its independent research and development efforts, including such
efforts related to any diagnostic testing, diagnostic information, and
diagnostic services (provided such development does not infringe upon any
Intellectual Property of Ciphergen or any of its Affiliates).  Other than as
provided below with respect to Development Programs and Test Kit Development
Programs, this Agreement does not impose any research or development
requirements upon Quest Diagnostics with respect to any Application.  Except as
expressly provided herein, nothing in this Agreement will be deemed by
implication to restrict Quest Diagnostics’ development of other products and
services within or outside the Field (provided such development does not
infringe upon any Intellectual Property of Ciphergen or any of its Affiliates).

 

2.5                                 Steering Committee.  The cooperation of the
Parties pursuant to this Agreement will be managed by a committee (the “Steering
Committee”), which will address issues relating to this Strategic Alliance,
including without limitation the selection of tests to be the subject of each
Plan, the review of budgets for each Plan, the assessment of each Plan and Plan
Supplement and any necessary modifications to the Ciphergen Platform Technology
to meet the requirements of the Clinical Diagnostics markets and FDA.  The
Steering Committee will also establish the objectives of the Parties with
respect to regulatory matters pertaining to Licensed Laboratory Tests and Test
Kits under this Agreement, including (i) matters relating to CPT coding by the
American Medical Association, reimbursement and coverage of Licensed Laboratory
Tests and Test Kit Services by the Centers for Medicare and Medicaid Services,
and matters relating to FDA and regulatory agency pre-market review of Test
Kits; and (ii) comparable matters in countries outside the United States.  The
Steering Committee will provide a written report, no less than once each
quarter, to each of the Parties regarding actions taken and proposed to be taken
with respect to this Strategic Alliance as well as results achieved and any
issues that need to be addressed by the Parties.  The Steering Committee will
consist of equal representation from each Party with at least two (2) and no
more than three (3) representatives appointed from time to time by each Party
(with contemporaneous notice to the other Party), for a total maximum of
six (6) members.  Each Party will have the right to remove, provide alternates
and substitute such representatives in its sole discretion, and reasonably
permit other of its employees to participate in meetings of the Steering
Committee as observers, subject to prior advance written notice.  All Steering
Committee members, alternates, substitutes, employees and observers will be
required to adhere to the same duties of confidentiality set forth in Article 11
hereof.  Any act of the Steering Committee as provided in this Agreement or
otherwise will require the approval of (a) a majority of the members present at
the meeting (or voting by proxy) and (b) at least one (1) member appointed by
each Party.  In the event of deadlock on any issue,

 

3

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such issue must be resolved by the mutual written agreement of the Parties. 
Notwithstanding the foregoing, the Steering Committee cannot bind either or both
Parties or amend the Agreement except as expressly agreed to by the Parties in
writing.  Meetings of the Steering Committee will occur with such frequency as
the Steering Committee will determine, but not less frequently than quarterly. 
Unless otherwise agreed, meetings of the Steering Committee will alternate
between the offices of the Parties.  The Steering Committee will keep and
maintain minutes of its proceedings, which will be approved by the Steering
Committee as provided above.  The Steering Committee may appoint one or more
working committees for purposes of coordinating the day-to-day activities
associated with the development of Licensed Laboratory Tests and Test Kits,
which working committees will operate with the same procedures as the Steering
Committee.

 

2.6                                 Reports and Access.  During the Base Term,
within thirty (30) days after the end of each calendar quarter, Ciphergen will
provide Quest Diagnostics with a written report with respect to (a) any
developments with respect to Licensed IP that may have a Clinical Diagnostic
Application; (b) if applicable, the expected timetable for developing Plans to
be presented to Quest Diagnostics, and additional preliminary information
regarding such Plans; and (c) financial information regarding the costs and
expenses incurred by Ciphergen in connection with this Agreement, as well as a
forecast (with comparison to the approved budget) regarding the costs and
expenses that Ciphergen expects to incur during the following twelve (12)
months, to the extent reasonably necessary to substantiate amounts loaned to
Ciphergen pursuant to the Credit Agreement.  Ciphergen additionally will provide
such additional information regarding such items as Quest Diagnostics reasonably
requests from time to time related to the Strategic Alliance.  Ciphergen will
consult with Quest Diagnostics in advance regarding any Applications for which
Ciphergen intends to develop a Plan.  Ciphergen will also provide Quest
Diagnostics with reasonable access to Ciphergen’s employees and the
collaborators under the Ciphergen Collaboration Agreements and such other
information as Quest Diagnostics reasonably requests regarding Biomarkers or
other intellectual property having potential Clinical Diagnostic Application
that are under review or consideration by Ciphergen or under the Ciphergen
Collaboration Agreements, in each case for inclusion or included in a Plan.

 

2.7                                 Base Term.  As used in this Agreement, “Base
Term” means the period beginning on the Effective Date and ending on the
earliest of:

 

(a)                                  the date that is three (3) years after the
Effective Date; or

 

(b)                                 the date Quest Diagnostics has Commercially
Launched three (3) Licensed Laboratory Tests under this Agreement. 

 

Notwithstanding the foregoing, the Parties shall continue activities after the
Base Term with respect to the development of a Licensed Laboratory Test and Test
Kit to the extent that a Plan has been accepted by Quest Diagnostics pursuant to
Section 4.3 during the Base Term but development activities have not been
completed during the Base Term for

 

4

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a Licensed Laboratory Test and/or a Test Kit with respect to such Plan.  This
obligation shall expire two (2) years after the end of the Base Term.

 

3.                                      RIGHTS OF EXCLUSIVITY.

 

3.1                                 In the Exclusive Territory.

 

(a)                                  Rights for the Licensed Laboratory Tests in
the Exclusive Territory.  Quest Diagnostics will have the exclusive right (even
as to Ciphergen) in the Exclusive Territory to market Licensed Laboratory Tests
developed pursuant to any Development Program and to perform such Licensed
Laboratory Tests through the Quest Network, subject to payment of royalties and
fees as provided in Section 6.3 and Article 9 hereof.  With respect to each
Licensed Laboratory Test, Quest Diagnostics’ exclusivity under this
Section 3.1(a) will expire upon the expiration of the Exclusive Period therefor
and thereafter become nonexclusive with respect to such Licensed Laboratory Test
in the Exclusive Territory.  During such Exclusive Period, Ciphergen will not
have the right to market or perform Licensed Laboratory Tests in the Exclusive
Territory.

 

(b)                                 Rights for the Test Kits in the Exclusive
Territory.  Quest Diagnostics will have the right (which will be exclusive
during the Exclusive Period for a particular Test Kit with respect to Commercial
Clinical Laboratories) in the Exclusive Territory to purchase such Test Kits
from Ciphergen, to market Test Kit Services, and to provide Test Kit Services
through the Quest Network, subject to payment of royalties and fees as provided
in Section 6.3 and Article 9 hereof.  With respect to each Test Kit, Quest
Diagnostics’ exclusivity under this Section 3.1(b) will expire upon the
expiration of the Exclusive Period therefor and thereafter become nonexclusive
with respect to such Test Kit in the Exclusive Territory.  During such Exclusive
Period, Ciphergen will not have the right to market or perform Test Kit Services
in the Exclusive Territory.  Notwithstanding the foregoing, Ciphergen will have
the exclusive right (even as to Quest Diagnostics) to manufacture and have
manufactured Test Kits and to market, distribute, sell, import, or otherwise
commercialize Test Kits in the Exclusive Territory solely for Permitted Sales,
as set forth in Section 8.1 hereof.

 

3.2                                 In the Non-Exclusive Territory.

 

(a)                                  Rights for the Licensed Laboratory Tests in
the Non-Exclusive Territory.  Quest Diagnostics will have a non-exclusive right
in the Non-Exclusive Territory to market Licensed Laboratory Tests developed
pursuant to any Development Program and to perform such Licensed Laboratory
Tests through the Quest Network, subject to payment of royalties and fees as
provided in Section 6.3 and Article 9 hereof. 

 

(b)                                 Rights for the Test Kits in the
Non-Exclusive Territory.  Quest Diagnostics will have a non-exclusive right in
the Non-Exclusive Territory to purchase Test Kits from Ciphergen, to market Test
Kit Services, and to provide Test Kit Services, in

 

5

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each case through the Quest Network and subject to payment of royalties and fees
as provided in Section 6.3 and Article 9 hereof.  Quest Diagnostics will not
have the right to manufacture, have manufactured, market, distribute, sell,
import, or otherwise commercialize any Test Kit in the Non-Exclusive Territory. 
Ciphergen will have the exclusive right (even as to Quest Diagnostics) to
manufacture, have manufactured, market, distribute, sell, import, or otherwise
commercialize Test Kits in the Non-Exclusive Territory.

 

3.3                                 In the Restricted Territory.

 

(a)                                  Rights for the Licensed Laboratory Tests in
the Restricted Territory.  Quest Diagnostics will also have a non-exclusive
right in the Restricted Territory to market Licensed Laboratory Tests developed
pursuant to any Development Program and perform such Licensed Laboratory Tests
through the Quest Network, subject to payment of royalties and fees as provided
in Section 6.3 and Article 9 hereof and subject to any rights granted by
Ciphergen to a Third Party in the Restricted Territory after the Effective Date
which have been noticed to Quest Diagnostics in accordance with this
Section 3.3(a).  Ciphergen may, in its sole discretion and at any time, grant
one or more Third Parties rights (whether exclusive, non-exclusive or otherwise)
to market, perform, or otherwise commercialize such Licensed Laboratory Test in
the Restricted Territory (“Restricted Territory Laboratory Test Rights”)
regardless of whether such Restricted Territory Laboratory Test Rights would
exclude Quest Diagnostics from having, partially or entirely, any rights to such
Licensed Laboratory Tests in any or all jurisdictions within the Restricted
Territory.  Ciphergen shall notify Quest Diagnostics in writing thirty (30) or
fewer days prior to the anticipated execution of any agreement (the “Anticipated
Execution Date”) pursuant to which Ciphergen intends to grant to a Third Party
Restricted Territory Laboratory Test Rights.  Thereafter, Ciphergen shall notify
Quest Diagnostics in writing of the actual execution of such agreement, which
notice shall describe the general scope of the Restricted Territory Laboratory
Test Rights, including if and how such Restricted Territory Laboratory Test
Rights restrict Quest Diagnostics’ rights with respect to Licensed Laboratory
Tests in the Restricted Territory granted under this Section 3.3(a), and such
restrictions shall be effective the later of thirty (30) days after the
Anticipated Execution Date or the effective date of such Third Party agreement.

 

(b)                                 Rights for the Test Kits in the Restricted
Territory.  Quest Diagnostics will have the non-exclusive right in the
Restricted Territory to purchase Test Kits from Ciphergen, to market Test Kit
Services, and to provide Test Kit Services, subject to payment of royalties and
fees as provided in Section 6.3 and Article 9 hereof and subject to any rights
granted by Ciphergen to a Third Party in the Restricted Territory after the
Effective Date which have been noticed to Quest Diagnostics in accordance with
this Section 3.3(b).  Ciphergen may, in its sole discretion and at any time,
grant one or more Third Parties rights (whether exclusive, non-exclusive or
otherwise) to purchase Test Kits from Ciphergen, market Test Kit Services,
and/or provide or otherwise commercialize Test Kit Services in the

 

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Restricted Territory (“Restricted Territory Test Kit Rights”) regardless of
whether such Restricted Territory Test Kit Rights would exclude Quest
Diagnostics from having, partially or entirely, from any rights to such Test
Kits in any or all jurisdictions within the Restricted Territory.  Ciphergen
shall notify Quest Diagnostics in writing by the Anticipated Execution Date
pursuant to which Ciphergen grants to a Third Party Restricted Territory Test
Kit Rights.  Thereafter, Ciphergen shall notify Quest Diagnostics in writing of
the actual execution of such agreement, which notice shall describe the general
scope of the Restricted Territory Test Kit Rights, including if and how such
Restricted Territory Test Kit Rights restrict Quest Diagnostics’ rights with
respect to Test Kits in the Restricted Territory granted under this
Section 3.3(b), and such restrictions shall be effective the later of thirty
(30) days after the Anticipated Execution Date or the effective date of such
Third Party agreement.  Quest Diagnostics will not have the right to
manufacture, have manufactured, market, distribute, sell, import, or otherwise
commercialize any Test Kit in the Restricted Territory.  Ciphergen will have the
exclusive right (even as to Quest Diagnostics) to manufacture, have
manufactured, market, distribute, sell, import, or otherwise commercialize Test
Kits in the Restricted Territory.

 

(c)                                  Samples from the Restricted Territory. 
Notwithstanding the provisions of Section 3.3(a) and (b) hereof, Quest
Diagnostics will have the right to perform Licensed Laboratory Tests and provide
Test Kit Services outside the Restricted Territory on patient samples
originating from the Restricted Territory.  For clarity and without limiting the
foregoing, Quest Diagnostics may conduct marketing and promotional activities in
the Restricted Territory in which Ciphergen has an agreement with one or more
Third Parties granting Restricted Territory Laboratory Test Rights or Restricted
Territory Test Kit Rights, as applicable, in such jurisdiction but only in
connection with the promotion of Quest Diagnostics’ overall testing capabilities
or the offer or sale of other tests performed by Quest Diagnostics or another
member of the Quest Network.

 

3.4                                 Non-Compete for Commercial Clinical
Laboratories in the Exclusive Territory.  During the Base Term, Ciphergen will
not license to any Commercial Clinical Laboratory any Ciphergen Licensed
Technology (whether or not within the Field) or otherwise collaborate with or
license to any Commercial Clinical Laboratory (including any Commercial Clinical
Laboratory outside the Exclusive Territory) any Intellectual Property with
respect to the development or performance of any Clinical Diagnostic Application
(whether or not within the Field and whether or not involving the use of
Ciphergen Licensed Technology), except to the extent that:

 

(a)                                  Quest Diagnostics makes a Pass Election
with respect to a Plan, or revokes a Development Election, involving such
Ciphergen Licensed Technology or other Intellectual Property (in which case
Ciphergen may pursue the Application on the terms provided in Section 4.6
hereof); or

 

(b)                                 The collaboration or license involves
activities within the Restricted Territory with a Third Party, which Third Party
does not own or manage (directly or

 

7

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through an Affiliate) a Commercial Clinical Laboratory in the United States, for
no more than one (1) Application once Ciphergen has presented the first plan to
Quest Diagnostics pursuant to Section 4.1 hereof (the “First Plan”), for no more
than two (2) Applications after Ciphergen has presented two (2) Plans to Quest
Diagnostics pursuant to Section 4.1 hereof and for any number of Applications
after Ciphergen has presented three (3) Plans to Quest Diagnostics pursuant to
Section 4.1, provided, however, that such Applications are not the subject of
any Development Programs or proposed Plans and are directed towards health
conditions for which the market opportunities in the Exclusive Territory are
insufficient to render the development of such Applications for the Exclusive
Territory commercially reasonable (e.g., [***]) and further provided that if
Ciphergen is to perform significant development or similar activities under any
such collaboration or license it can reasonably demonstrate that the performance
of such activities are not likely to interfere with the performance by Ciphergen
of its obligations under this Agreement; or

 

(c)                                  it constitutes a Permitted Sale of Test
Kits to Commercial Clinical Laboratories as permitted under Section 8.1 of this
Agreement.

 

3.5                                 Collaboration with other Diagnostics
Companies.  Except as contemplated by this Agreement, during the six (6) month
period after execution of this Agreement, Ciphergen will not establish any
collaboration, licensing or similar arrangement with any other commercial
Clinical Diagnostics company and thereafter Ciphergen will not take any actions
inconsistent with the terms of this Agreement.  During the Base Term, except as
contemplated by this Agreement, Ciphergen will not establish any collaboration,
licensing or similar arrangement with any other Commercial Clinical Laboratory
to develop any laboratory tests or to develop any FDA-cleared biochips, test
kits or supplies except to the extent that Ciphergen has presented a Plan with
respect to such arrangement to Quest Diagnostics and the Parties have been
unable to reach agreement on such arrangement within sixty (60) days of Quest
Diagnostics receipt of such Plan.  Notwithstanding the foregoing, Ciphergen may
license a commercial Clinical Diagnostics company (other than a Commercial
Clinical Laboratory) to manufacture or commercialize FDA-cleared biochips, test
kits or supplies based on Licensed Laboratory Tests developed pursuant to this
Strategic Alliance, subject to the rights of Quest Diagnostics under Article 8. 
Nothing contained in Section 3.2(a) or Section 3.3(a) shall be deemed to permit
Ciphergen to license any other Commercial Clinical Laboratory to develop any
Licensed Laboratory Test that is the subject of a Development Program or
proposed Plan under this Strategic Alliance (as opposed to licensing a
Commercial Clinical Laboratory in the Non Exclusive Territory or the Restricted
Territory to perform the applicable clinical laboratory tests using Proprietary
Supplies as to which Quest Diagnostics would be entitled to receive a fee on the
terms contemplated by Section 8.2(a)(ii)).

 

3.6                                 Non-Compete for Licensed Laboratory Tests
and Test Kits.  Quest Diagnostics and its Affiliates will not be under any
restriction from developing or commercializing any Clinical Laboratory Tests,
test kits or other products or services that may compete with

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

8

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any Licensed Laboratory Test or Test Kit that has been developed (or is under
development) under any Development Program, provided that such development does
not infringe any Intellectual Property of Ciphergen or its Affiliates.  During
the Exclusive Period for a Licensed Laboratory Test or Test Kit, Ciphergen and
its Affiliates will not develop or commercialize any Clinical Laboratory Tests,
test kits or other products or services that are directed at the same
Application as such Licensed Laboratory Test or Test Kit that has been developed
(or is under development) under any Development Program or establish any
collaboration, licensing or similar arrangement with any Clinical Diagnostics
Company (other than Quest Diagnostics) to do so.  Except as provided under this
Agreement, during the Base Term, Ciphergen shall not perform any Clinical
Laboratory Tests (except as reasonably necessary in connection with the
development of Test Kits).

 

3.7                                 Non-Solicitation.  For the period commencing
on the Effective Date and ending one (1) year following the date of the
commercialization of the last Test Kit commercialized under this Agreement,
neither Party will hire, solicit, induce, encourage or attempt to induce or
encourage any employee of the other Party who has been involved with this
Strategic Alliance governed by this Agreement to terminate his or her employment
with such other Party or to breach any other obligation to such other Party, and
each of the Parties hereto agrees to maintain an updated list of employees
deemed to be involved with this Strategic Alliance for purposes of this
Section 3.7, which list will be made available to the other Party at its
request.  

 

3.8                                 Third Party Conflicts.  Each Party will
ensure that its future agreements with Third Parties do not conflict with any
provision of this Agreement and have covenants that provide the other Party with
the rights expressly contemplated by this Agreement.

 

3.9                                 Ciphergen Customer Contracts.  During the
Base Term, Ciphergen will (consistent with Ciphergen’s past practices):

 

(a)                                  Except as otherwise provided herein,
include in its supply and related contracts a covenant restricting use of
instruments and supplies involving SELDI Technology to “research use only.”

 

(b)                                 Subject to subsection (c) hereof, use
commercially reasonable efforts to ensure that its instruments, biochips and
supplies involving SELDI Technology are not supplied to Commercial Clinical
Laboratories located outside the Restricted Territory (i.e., located in the
Exclusive Territory or Non-Exclusive Territory).  Ciphergen will cease providing
supplies to any such Commercial Clinical Laboratories located outside the
Restricted Territory to the extent the law permits.  Notwithstanding the
foregoing, Ciphergen shall have the right to continue to supply [***]
instruments, biochips and supplies involving SELDI Technology in accordance with
the [***] by and between [***] and Ciphergen, effective May 6, 2003 (the [***]),
and nothing in this Agreement is intended to limit or otherwise restrict
Ciphergen’s right to supply [***] in accordance with the [***]

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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(c)                                  Use commercially reasonable efforts to
obtain exclusive diagnostic rights for the Exclusive Territory with respect to
any Intellectual Property developed by Third Parties using instruments or
supplies involving SELDI Technology that are supplied by Ciphergen.

 

3.10                           Passive Sales.  To the extent required by law,
nothing in this Agreement shall prevent passive sales of Test Kits and Test Kit
Services in the applicable jurisdictions.

 

4.                                      PRESENTATION AND REVIEW OF PLANS;
ELECTIONS BY QUEST DIAGNOSTICS.

 

4.1                                 Identification of Applications; Preparation
of Plans.  During the Base Term, Ciphergen expects from time to time to discover
or otherwise identify Ciphergen Licensed Technology or other technology that
enables the development of an Application within the Field.  Ciphergen will use
commercially reasonable efforts to provide Quest Diagnostics with at least
three (3) Plans during the first two (2) years of the Base Term, with the first
Plan to be provided within three (3) months after the Effective Date and the
next two (2) Plans to be provided one (1) approximately every six (6) months
thereafter.  At such time as Ciphergen believes any Application has sufficient
supporting data, including data related to commercial potential, to render it
appropriate for development, Ciphergen will review with the Steering Committee
whether it would be appropriate to prepare a Plan for such Application.  The
intent of the Parties is for the Steering Committee to select the tests to be
developed based on medical need, market potential and likelihood of success. 
Following agreement by the Steering Committee of a particular Application,
Ciphergen will use commercially reasonable efforts to promptly prepare a Plan
for each such Application, and to obtain such consents under the Ciphergen
Collaboration Agreements necessary to effectuate the Plan.  Notwithstanding the
foregoing, the Parties agree that the Application for the First Plan will be
[***].

 

4.2                                 Presentation of Plans.  Promptly after
preparing any Plan, except as described below, Ciphergen will present and offer
the Plan to Quest Diagnostics for its review.

 

4.3                                 Review of Plans.  Within sixty (60) days
from the receipt of any Plan from Ciphergen, Quest Diagnostics will review such
Plan and use commercially reasonable efforts to provide Ciphergen with a Plan
Supplement with respect to such Plan.  Within ninety (90) days from the receipt
of any Plan from Ciphergen (a “Plan Review Period”), Quest Diagnostics will
determine whether to accept the Plan and make a Development Election or reject
the Plan and make a Pass Election for the Application.  In the event that the
Plan does not include the information required by Schedule C (a “Plan
Deficiency”) and Quest Diagnostics notifies Ciphergen of such deficiency within
thirty (30) days after receipt of the Plan, the Plan Review Period will not
begin until Ciphergen presents to Quest Diagnostics a Plan that remedies such
Plan Deficiency; provided, however, that if the Plan Deficiency is associated
with the preliminary assessment of the projected cost of obtaining freedom to
operate with respect to any Third Party patent rights related to Ciphergen
Licensed IP that may be desirable for the commercialization of the Licensed
Laboratory Test that is the subject of the Plan in the Exclusive Territory, then
the Plan will not be regarded as having a Plan Deficiency, the Plan Review
Period will be

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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extended by thirty (30) days, and the Parties will use commercially reasonable
efforts to cooperate and address such preliminary assessment.  If Quest
Diagnostics does not notify Ciphergen of a Plan Deficiency within thirty (30)
days after receipt of such Plan, the Plan will be deemed not to have a Plan
Deficiency.  During the Plan Review Period, Ciphergen will afford Quest
Diagnostics’ officers and employees full access to the information and data
related to such Plan and its corresponding Application, such access to include
meetings with such officers and employees of Ciphergen as Quest Diagnostics
reasonably requests, and Ciphergen will provide such additional information as
Quest Diagnostics reasonably requests related to the Application and the Plan as
promptly as practicable.  During the Base Term, the Steering Committee will have
the responsibility for making any appropriate modification to the Plan. 
Notwithstanding the foregoing, the Parties understand with respect to the First
Plan that time is of the essence and each Party shall use its commercially
reasonable efforts to expedite the preparation, delivery and acceptance process
for the First Plan.

 

4.4                                 Number and Revocation of Development
Elections; Development Programs.

 

(a)                                  Quest Diagnostics will have the right to
make only three (3) Development Elections in the aggregate during the Base Term,
unless otherwise agreed by the Parties.

 

(b)                                 Each Plan that results in a Development
Election that is not subsequently revoked in accordance with the terms hereof is
referred to herein as a “Development Program”.

 

(c)                                  Notwithstanding the foregoing, in the event
that Quest Diagnostics determines in good faith that a Development Program will
result in a Licensed Laboratory Test that is either medically infeasible or
commercially infeasible, then Quest Diagnostics will notify Ciphergen of such
determination and will provide the information used to reach such determination
within fifteen (15) days of reaching such determination.  The Steering Committee
will meet within thirty (30) days of such notification to discuss potential
remedies and amendments to the Development Program to ensure feasibility, unless
Ciphergen informs Quest Diagnostics in writing that such a meeting is not
required.  At any time that is at least fifteen (15) days after such Steering
Committee meeting or receipt of such notification by Ciphergen that a Steering
Committee meeting is not required, Quest Diagnostics may, at its sole
discretion, revoke the relevant Development Election with the effect that:

 

(i)                                     Quest Diagnostics will no longer have
any obligation to pursue the Development Program; and

 

(ii)                                  Quest Diagnostics will cease all
development activities with respect to such Development Program; and

 

(iii)                               Quest Diagnostics will have no obligations
under this Agreement with respect to such Development Program, including but not
limited to the

 

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payment of royalties and fees under Section 6.3 and Article 9 hereof; provided,
however, that the foregoing will in no event constitute (a) waiver of any rights
or remedies of Quest Diagnostics with respect to any breach or non-performance
by Ciphergen; or (b) waiver, assignment or transfer of any of Quest Diagnostics
ownership interest in Intellectual Property developed under such Development
Program by Quest Diagnostics; and

 

(iv)                              Subject to the foregoing and Section 4.6
below, Ciphergen may pursue development opportunities with respect to an
Application that is the subject of such Development Program with any Third
Party, provided that there is no other Development Program or proposed Plan that
addresses the same Application and such development does not infringe any
Intellectual Property of Quest Diagnostics or any of its Affiliates.

 

4.5                                 Effect of a Development Election.  In the
event that Quest Diagnostics, in its sole discretion, makes a Development
Election for a Plan during the applicable Plan Review Period, Quest Diagnostics
will have the exclusive right to develop the Licensed Laboratory Test, as
provided herein, that is the subject of such Plan and resulting Development
Program, provided that such Development Election is not subsequently revoked as
provided in Section 4.4(c). 

 

4.6                                 Effect of a Pass Election or Revocation of a
Development Election.  Notwithstanding anything to the contrary in this
Agreement, in the event Quest Diagnostics makes a Pass Election with respect to
any Plan or later revokes a Development Election as provided in Section 4.4(c),
Ciphergen may pursue, either individually or in collaboration with a Third
Party, any development and commercialization opportunities with respect to the
Application that is the subject of such Plan or such Development Election,
without any restriction or liability to Quest Diagnostics (to the extent such
development does not infringe any Intellectual Property of Quest Diagnostics or
any of its Affiliates), except to the extent there is an active Development
Program that addresses the same Application; provided, however, that Ciphergen
will not enter into any agreement with a Third Party Commercial Clinical
Laboratory for the development of an Application that was the subject of a Plan
hereunder on terms more favorable (when taken as a whole) than the most
favorable terms on which such Plan was offered to Quest Diagnostics pursuant to
this Article 4.

 

5.                                      DEVELOPMENT OF LICENSED LABORATORY
TESTS.

 

5.1                                 Quest Diagnostics to Develop the Licensed
Laboratory Tests.

 

(a)                                  For each Development Election, subject to
the provisions of Section 4.4(c) hereof, Quest Diagnostics will use commercially
reasonable efforts to develop the proposed Licensed Laboratory Test
substantially in accordance with the Development Program.  A Development Program
may be updated or otherwise modified from time to time by the Steering Committee
or its designee.

 

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(b)                                 In the event that Quest Diagnostics breaches
its obligations under Section 5.1(a) hereof, Ciphergen must give written notice
of such breach within sixty (60) days of Ciphergen becoming aware of such
breach.  If Quest Diagnostics fails to cure such breach within sixty (60) days
after being given such notice, the corresponding Development Election will be
deemed to be revoked, and the provisions of Sections 4.4(c)(i) through
4.4(c)(iv) hereof will apply.  Such deemed revocation of the Development
Election will be Ciphergen’s sole and exclusive remedy with respect to any
breach under Section 5.1(a) hereof.

 

5.2                                 Written Reports.  Quest Diagnostics will
provide to the Steering Committee written reports on the progress of each
Development Program at least once per calendar quarter.  Quest Diagnostics will
afford Ciphergen’s officers and employees reasonable access to the information
and data related to the development of each Licensed Laboratory Test, such
access to include meetings with the officers, directors and employees of Quest
Diagnostics with responsibility for the Development Program, and provide such
additional information as Ciphergen reasonably requests with respect to the
Development Program in a timely manner. 

 

5.3                                 Role of Ciphergen.  Ciphergen will provide
such reasonable assistance as Quest Diagnostics or the Steering Committee and
working committees reasonably request with respect to each Development Program,
including (at Ciphergen’s cost) (a) having appropriate employees of Ciphergen
present from time to time at the facility at which Quest Diagnostics is working
on any Development Program and providing access to any Separate IP or Technology
of Ciphergen relevant to the Development Program; and (b) using commercially
reasonable efforts to provide to Quest Diagnostics any specimens required to
support such development activities, subject to applicable laws and reasonable
availability of such specimens for such purposes.

 

5.4                                 Regulatory Issues.  The Steering Committee
may modify any Development Program to reflect changes in the regulatory
environment including, if necessary or strategically warranted, the pursuit of
regulatory approval or clearance of the corresponding Licensed Laboratory Test.

 

5.5                                 Costs of Development.  Each Party will be
responsible for its costs and expenses in connection with its obligations under
this Agreement, including in connection with supporting the development of
Licensed Laboratory Tests and Test Kits pursuant to this Agreement, and in
developing the Plans or the Plan Supplements, as the case may be.

 

5.6                                 Certain Regulatory Impediments.  In the
event that Quest Diagnostics develops or wishes to develop a Licensed Laboratory
Test pursuant to a corresponding Development Program but due to a change in law,
regulation, regulatory interpretation or otherwise, Quest Diagnostics cannot
perform the Licensed Laboratory Test unless the necessary medical devices,
consumables, components or other constituent parts (including but not limited to
reagents (including ASRs), instrumentation or software) for such Licensed
Laboratory Test is or are cleared or approved by the FDA, then upon notice from
Quest Diagnostics, Ciphergen will use commercially reasonable efforts to obtain
such clearance or approval as promptly as is commercially reasonable, and Quest
Diagnostics will

 

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support these efforts.  The above notwithstanding, Quest Diagnostics will not be
responsible for the cost of applying for or receiving FDA clearance or approval
for the instrumentation associated with the Licensed Laboratory Test or Test Kit
(including the cost of any clinical trials or other clinical proof required for
the FDA process), such cost being the sole responsibility of Ciphergen.

 

6.                                      COMMERCIALIZATION OF LICENSED LABORATORY
TESTS AND TEST KIT SERVICES.

 

6.1                                 Commercialization by Quest Diagnostics. 

 

(a)                                  During the Exclusive Period with respect to
a Test Kit for which Quest Diagnostics is precluded from performing the
corresponding Licensed Laboratory Test as set forth in
Section 12.2(a)(iv)(3) hereof, Quest Diagnostics at its cost will use
commercially reasonable efforts to market and perform the Test Kit Services in
the Exclusive Territory.  Any corporation, limited liability company,
partnership or other entity within the Quest Network will have the same rights
as Quest Diagnostics to market and perform Licensed Laboratory Tests and to
provide Test Kit Services as contemplated by this Agreement in accordance with
the terms and conditions of this Agreement, subject to payment to Ciphergen of
the royalties and fees specified in Section 6.3 and Article 9 hereof.

 

(b)                                 Quest Diagnostics may market a Licensed
Laboratory Test or Test Kit Service, in each case subject to the limitations set
forth in Section 3.3 hereof, for uses other than for the Application as
specified in the applicable Development Program, subject to such limitations as
are required by applicable law.

 

6.2                                 Pricing of Licensed Laboratory Tests and
Test Kits.  Quest Diagnostics will have the sole right to determine the prices
that it charges to Third Parties for Licensed Laboratory Tests and Test Kit
Services, including the right to determine whether any Licensed Laboratory Tests
or Test Kit Services are covered under [***].  Ciphergen will, if and to the
extent reasonably requested by Quest Diagnostics, meet with payers regarding the
reimbursement and coverage of Licensed Laboratory Tests and Test Kit Services by
such payers.

 

6.3                                 Royalties to Ciphergen.  Quest Diagnostics
will pay Ciphergen a royalty each calendar quarter for each Licensed Laboratory
Test or Test Kit used to provide a Test Kit Service that is covered by a Valid
Claim within the Patent Rights.  The fee will be determined as set forth in
Schedule E hereto. Quest Diagnostics will determine the fee payable on a
quarterly basis as of the end of each calendar quarter, with payment of the fee
being made within thirty (30) days after the end of such quarter.  Quest
Fee-For-Service Sales based on foreign revenue will be converted to U.S. dollars
at the rate of exchange published in The Wall Street Journal, Eastern U.S
Edition, on the last business day of each calendar quarter.  Quest Diagnostics
will provide Ciphergen, together with each payment under this Section 6.3, a
schedule detailing the calculation of the royalty, including without limitation
any calculation resulting from the conversion of foreign revenue to U.S. dollars
as set forth herein.

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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6.4                                 Third Party Patent Rights.

 

(a)                                  Ciphergen will use commercially reasonable
efforts to obtain, with the appropriate rights (if necessary) to sublicense to
Quest Diagnostics, any Third Party patent rights that are required to make, use
and commercialize Ciphergen Platform Technology to the extent necessary or
useful to allow Ciphergen Platform Technology to be used to develop, make, sell
or perform Licensed Laboratory Tests or sell and use Test Kits in accordance
with this Agreement.

 

(b)                                 Subject to the direction of the Steering
Committee, Ciphergen shall use commercially reasonable efforts to obtain, with
the appropriate rights to sublicense to Quest Diagnostics, any Third Party
patent rights that are required for the Quest Network to assemble, perform and
otherwise commercialize any Licensed Laboratory Test in accordance with this
Agreement to the extent that Ciphergen is not otherwise required to obtain such
Third Party patent rights pursuant to Section 6.4(a) hereof.  Quest Diagnostics
will, as appropriate, assist Ciphergen in fulfilling its obligations under this
Section 6.4(b).

 

(c)                                  In the event that Ciphergen is unable to
obtain sublicensable rights to one or more Third Party patents that are required
pursuant to Section 6.4(b) hereof, then, subject to the direction of the
Steering Committee, Quest Diagnostics (for its behalf) will use commercially
reasonable efforts to obtain the appropriate rights to such Third Party
patents.  Ciphergen will, as appropriate, assist Quest Diagnostics in fulfilling
its obligations under this Section 6.4(c). 

 

(d)                                 Subject to the direction of the Steering
Committee, Ciphergen will use commercially reasonable efforts to obtain any
Third Party patent rights that are required to make, use and commercialize (and
for the Quest Network or any Third Party to whom Ciphergen sells Test Kits to
use) any Test Kit in accordance with this Agreement to the extent that Ciphergen
is not otherwise required to obtain such Third Party patent rights pursuant to
Section 6.4(a) hereof.  Ciphergen may, at its discretion, obtain such rights in
conjunction with any license agreement entered pursuant to
Section 6.4(b) hereof.  Quest Diagnostics will, as appropriate, assist Ciphergen
in fulfilling its obligations under this Section 6.4(d).

 

6.5                                 Financial Obligations Associated with Third
Party Patent Rights.

 

(a)                                  Ciphergen Sole Responsibility.  Ciphergen
will be solely responsible for any payments associated with any Third Party
patent rights as to which Ciphergen is required to obtain pursuant to
Section 6.4(a) hereof and any payments associated with any Ciphergen
Collaboration Agreements, regardless of the manner in which any such payments
are calculated or paid.

 

(b)                                 Ciphergen Third Party Royalties related to
Licensed Laboratory Tests.  To the extent that Ciphergen is obligated under a
written agreement to pay, and does pay, any Ciphergen Third Party Royalty
pursuant to Section 6.4(b) hereof, Quest Diagnostics will reimburse Ciphergen
[***] of the amount of such

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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Ciphergen Third Party Royalty, such reimbursement to be added to the fee due to
Ciphergen under Section 6.3 hereof, subject to timely receipt of an invoice from
Ciphergen with respect to such payment.

 

(c)                                  Quest Third Party Royalties.  To the extent
that Quest Diagnostics is obligated under a written agreement to pay, and does
pay, any Quest Third Party Royalty pursuant to Section 6.4(c) hereof, Quest
Diagnostics will deduct [***] of the amount of such Quest Third Party Royalty
from the fee payable to Ciphergen under Section 6.3 hereof.  Quest Diagnostics
will provide Ciphergen with documentation supporting any such deductions at the
time at which the corresponding fee is paid.

 

(d)                                 Ciphergen Third Party Royalties related to
Test Kits.  To the extent that Ciphergen is obligated under a written agreement
to pay, and does pay, any Ciphergen Third Party Royalty pursuant to
Section 6.4(d) hereof as result of any Ciphergen sale or transfer of a Test Kit
to Quest Diagnostics during the Exclusive Period therefor, Quest Diagnostics
will reimburse Ciphergen [***] of the amount of such Ciphergen Third Party
Royalty, such reimbursement to be added to the fee due to Ciphergen under
Section 6.3 hereof, subject to timely receipt of an invoice from Ciphergen with
respect to such payment.  Quest Diagnostics will not be required to reimburse
any Ciphergen Third Party Royalty due with respect to any sale or transfer of a
Test Kit to a Third Party or any sale to the Quest Network after the Exclusive
Period therefor. 

 

(e)                                  Other Third Party Payments.  Ciphergen will
be solely responsible for any obligations pursuant to Section 6.4(b),
Section 6.4(c) or Section 6.4(d) hereof that do not accrue with each performance
of a Licensed Laboratory Test or each sale of a Test Kit (such as an up-front,
lump sum, and regular periodic payments not tied to the individual performances
of any Licensed Laboratory Test or the individual sale of any Test Kit) (“Other
Third Party Payment”). 

 

6.6                                 Inclusion in Cost of Goods.  For clarity,
all amounts payable to a Third Party and allocable to Platform Technology,
Licensed Laboratory Tests or Test Kits (or any component thereof) including
royalties and other payments for Intellectual Property rights will be included
in a Party’s cost of good sold therefor to the extent such amounts are expensed
by such Party in its consolidated financial statements prepared in accordance
with GAAP, except to the extent reimbursed or creditable to the other Party.

 

7.                                       DEVELOPMENT OF TEST KITS.

 

7.1                                 Ciphergen to Develop the Test Kits. 
Following the Commercial Launch of each Licensed Laboratory Test (or such
earlier time as Ciphergen deems appropriate), Ciphergen will, subject to the
infeasibility exception set forth below, use commercially reasonable efforts to
develop the corresponding Test Kit on a timely basis including obtaining
clearance or approval by the FDA or such other Regulatory Authorities for
marketing in the applicable jurisdiction as may be appropriate.  Such
development will be in accordance with a plan (including a budget and plans for
seeking appropriate regulatory approvals or clearances)

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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prepared by Ciphergen and approved by the Steering Committee (each a “Test Kit
Development Program”).  If either Party reasonably believes that the development
of a Test Kit hereunder will be or has become commercially or medically
infeasible or impractical, it may request in writing the Steering Committee to
review the same and provide the Steering Committee with relevant available
information and the Steering Committee shall promptly meet within thirty (30)
days of such request and review such information and make a determination with
respect thereto.  If the Steering Committee determines that the development of a
Test Kit hereunder is commercially or medically infeasible or impractical,
neither Party shall have any further obligations under this Agreement with
respect to such development.

 

7.2                                 Roles of the Parties.  The respective roles
of the Parties in connection with the development of any Test Kit will be as
specified in the Test Kit Development Program.  In general, Ciphergen will
assume primary responsibility for the development of each such Test Kit. 
Without limiting the generality of the foregoing, Ciphergen will be responsible
for the costs and expenses associated with seeking and obtaining clearance or
approval from the FDA and other domestic or foreign Regulatory Authorities, the
costs associated with clinical trials and obtaining specimens, royalties and
other fees paid to license any Third Party patent rights required to
commercialize a Test Kit (other than as provided in Section 6.5), and any market
research expenses associated with a Test Kit, as may be commercially reasonable
to implement the Test Kit Development Program.  Quest Diagnostics will provide
such reasonable assistance as Ciphergen may reasonably request with respect to
the Test Kit Development Program, including having appropriate employees of
Quest Diagnostics present from time to time at the facility at which Ciphergen
is working on any Test Kit Development Program and providing access to (i) any
Separate IP or Technology of Quest Diagnostics relevant to the Test Kit
Development Program and (ii) any Joint Know-How in Quest Diagnostics’
possession.  Ciphergen will afford Quest Diagnostics’ officers and employees
full access to the information and data related to the development of each Test
Kit, such access to include meetings with the officers, directors and employees
of Ciphergen with responsibility for the Test Kit Development Program, and
provide such additional information as Quest Diagnostics will reasonably request
related to the Test Kit Development Program as promptly as practicable. 
Likewise, Quest Diagnostics will afford Ciphergen’s officers and employees full
access to the information and data related to the development and performance of
each Test Kit and corresponding Licensed Laboratory Test (to the extent
allowable by applicable law), such access to include meetings with the officers,
directors and employees of Quest Diagnostics related thereto, and provide such
additional information as Ciphergen will reasonably request related to the Test
Kit Development Program as promptly as practicable.  Additionally upon the
request of Ciphergen, Quest Diagnostics agrees to act as a clinical trial site
for each Test Kit, subject to Ciphergen agreeing to reimburse Quest Diagnostics
for its direct costs and expenses with respect thereto.  Quest Diagnostics will
provide such additional assistance as the Steering Committee and any working
committees request.

 

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8.                                      COMMERCIALIZATION OF LICENSED LABORATORY
TEST COMPONENTS AND TEST KITS.

 

8.1                                 Restrictions.  As permitted by Article 3
hereof, Ciphergen will have the exclusive right to manufacture and have
manufactured Test Kits and Proprietary Supplies specifically intended for or
known by Ciphergen to be used for performance of Licensed Laboratory Tests or
any Clinical Laboratory Test that has the same or substantially similar
functionality to any such Licensed Laboratory Test.  Test Kits and Proprietary
Supplies specifically intended or known by Ciphergen to be used for performance
of Licensed Laboratory Tests or any Clinical Laboratory Test that has the same
or substantially similar functionality to any such Licensed Laboratory Test may
be marketed, distributed, sold or otherwise commercialized by Ciphergen only as
provided in this Section 8.1.  Ciphergen will have the exclusive right to use,
market, distribute, sell, import, or otherwise commercialize Test Kits as
follows (each a “Permitted Sale” and collectively “Permitted Sales”):

 

(a)                                  Sales to Quest Diagnostics.  To Quest
Diagnostics and members of the Quest Network.

 

(b)                                 Outside the Exclusive Territory.  To any
Third Party, including Commercial Clinical Laboratories, located outside the
Exclusive Territory (and only for use outside the Exclusive Territory).

 

(c)                                  Sales to Laboratories that are not
Commercial Clinical Laboratories.  To any laboratory that is not a Commercial
Clinical Laboratory (and only for use by such laboratory).  In the event that
Ciphergen becomes aware that any such laboratory, pursuant to any sales
contract, license, or other agreement with Ciphergen, is transferring any Test
Kits to a person or entity within the Exclusive Territory that is a Commercial
Clinical Laboratory, Ciphergen will, subject to typical breach-and-cure
provisions, terminate the agreement(s) under which such laboratory purchases and
uses Test Kits and cease selling Test Kits to such laboratory for a period of at
least one (1) year from the date of termination of the agreement(s) with the
respective laboratory.

 

(d)                                 After the Exclusive Period.  To any Third
Party not described in Sections 8.1(a), 8.1(b), or 8.1(c) hereof but only
following the applicable Exclusive Period.

 

(e)                                  Test Kit Components.  Ciphergen agrees
that, except to the extent that Quest Diagnostics agrees to an allocation as
provided in this Section 8.1(e), any Test Kit will be sold only as part of a
package that contains all of the components and instructions to perform the
corresponding Test Kit Service, excluding instruments and excluding any supplies
and other materials that are commonly available and not sold by or under license
from Ciphergen.  Notwithstanding the foregoing, in the event that Ciphergen
wishes to sell (directly or through a licensee) a Test Kit for which certain
components of the Test Kit that are not commonly available (such as certain
reagents) are or may be purchased separately from Ciphergen or a Third Party,
Quest Diagnostics agrees to negotiate in good faith to allow such

 

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sales, provided that the Parties are able to agree on a reasonable price
allocation for the various components of the Test Kit that may be purchased
separately.

 

8.2                                 Compensation to Quest Diagnostics. 

 

(a)                                  General.  Quest Diagnostics will be
entitled to receive from Ciphergen a fee for: 

 

(i)                                     each Test Kit derived from a Licensed
Laboratory Test developed by Quest Diagnostics and Proprietary Supplies
specifically intended for or known by Ciphergen to be used for performance of
Licensed Laboratory Tests or any Clinical Laboratory Test that has the same or
substantially similar functionality to any such Licensed Laboratory Test, in
each case that is sold by Ciphergen to any Third Party other than a member of
the Quest Network with respect to sales of Test Kits, on an Application basis,
for ten (10) years from the first commercial sale of a Test Kit for such
Application following clearance of the Test Kit for such Application by the FDA
or other Regulatory Authority; and

 

(ii)                                  other Proprietary Supplies to the extent
the same have been developed solely pursuant to the Strategic Alliance (or are
otherwise materially based on or embody any Intellectual Property of Quest
Diagnostics or any of its Affiliates) and are sold by Ciphergen to any Third
Party other than a member of the Quest Network, for ten (10) years from the
first commercial sale of such Proprietary Supplies.

 

Such fee will be determined as set forth in Schedule F hereto.  The fee will be
paid on a quarterly basis within thirty (30) days after the end of each calendar
quarter, with Ciphergen supplying Quest Diagnostics with a schedule providing
reasonable detail regarding the calculation of the fee, including Ciphergen Net
Sales during such quarter. 

 

(b)                                 Currency Adjustments.  Ciphergen Net Sales
received in foreign currency will be converted to U.S. dollars at the rate of
exchange published in The Wall Street Journal, Eastern U.S Edition, on the last
business day of each calendar quarter.  Ciphergen will provide Quest
Diagnostics, together with each payment under this Section 8.2, a
schedule detailing the calculation of Ciphergen Net Sales resulting from the
conversion of foreign revenue to U.S. dollars as set forth herein.

 

(c)                                  Quest Diagnostics Biomarker Royalties. 
Quest Diagnostics will be entitled to receive from Ciphergen a fee for each
product (other than a Test Kit) developed using Quest Diagnostics Biomarker IP
and sold by Ciphergen to any Third Party.  The fee will be determined as set
forth in Schedule F hereto.  The fee will be paid on a quarterly basis within
thirty (30) days after the end of each calendar quarter, with Ciphergen
supplying Quest Diagnostics with a schedule providing reasonable detail
regarding the calculation of the fee, including the Net Sales of such product
during such quarter.

 

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8.3                                 Commercialization.  Ciphergen at its cost
will use commercially reasonable efforts to market and sell Test Kits. 
Ciphergen will have the sole right to determine prices that it charges to Third
Parties for Test Kits, subject to the limitations set forth in Section 9.6
hereof.

 

9.                                      PROVISION OF INSTRUMENTS, PROPRIETARY
SUPPLIES AND TEST KITS.

 

9.1                                 Instruments.  Pursuant to an equipment loan
agreement to be entered into by the Parties on the Effective Date or promptly
thereafter and as part of a Supply Agreement (defined below), Ciphergen will
loan to Quest Diagnostics two (2) ProteinChip System Series 4000 instrument
systems and related servicing as needed for use in the development of Licensed
Laboratory Tests in accordance with the applicable Development Program, at no
cost to Quest Diagnostics (the “Loaned Instruments”). Ciphergen will also
provide to Quest Diagnostics Instruments and related servicing to perform
Licensed Laboratory Tests and Test Kit Services for a fee as determined in
Schedule E hereto.

 

9.2                                 Provision of Proprietary Supplies.  During
any period during which Quest Diagnostics is entitled to perform each Licensed
Laboratory Test under this Agreement, Ciphergen will, in accordance with the
applicable Supply Agreement, provide Quest Diagnostics with such supply of the
Proprietary Supplies as Quest Diagnostics will request from time to time and as
are necessary for Quest Diagnostics to perform such Licensed Laboratory Test. 
The fee for such Proprietary Supplies will be determined as set forth in
Schedule E hereto. 

 

9.3                                 Provision of Test Kits.  Following the
commercial availability of each Test Kit, Ciphergen will, in accordance with the
applicable Supply Agreement, provide Quest Diagnostics with such Test Kits as
Quest Diagnostics will request from time to time for purposes of providing Test
Kit Services hereunder.  The fee for such Test Kits will be determined as set
forth in Schedule E hereto.

 

9.4                                 Supply Agreement.  All Instruments,
Proprietary Supplies and Test Kits will be provided pursuant to the terms of one
or more separate supply agreements (each a “Supply Agreement”) to be negotiated
between the Parties at a later date.  Each such Supply Agreement will specify
the terms under which such Instruments, Proprietary Supplies and Test Kits may
be transferred by Quest Diagnostics or sold by Ciphergen to members of the Quest
Network and will have customary terms, consistent with the terms of this
Agreement.  Except as set forth in Section 9.7, Quest Diagnostics shall not have
the right to manufacture itself or through others or to obtain from Third
Parties any Instruments, Proprietary Supplies and/or Test Kits supplied to Quest
Diagnostics by Ciphergen pursuant to the Supply Agreement.

 

9.5                                 Priority for Supplies.  Quest Diagnostics
will be treated by Ciphergen as a high priority customer for deliveries of
quantities ordered in accordance with the appropriate Supply Agreements for
Proprietary Supplies and Test Kits.

 

9.6                                 Most Favored Customer Pricing. 
Notwithstanding any provision in this Agreement to the contrary:

 

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(a)                                  The payment to Ciphergen per Instrument for
performing Licensed Laboratory Tests and Test Kits Services will not be higher
than [***].

 

(b)                                 The payment to Ciphergen per Licensed
Laboratory Test in royalties and for Proprietary Supplies, in the aggregate,
will not be higher than [***].

 

(c)                                  The payment to Ciphergen per Test Kit
Service in royalties, if any, and for the corresponding Test Kit, in the
aggregate, [***].

 

For purposes of determining [***]

 

9.7                                 Escrow Agreement.  Simultaneously with the
execution of the applicable Supply Agreement, the Parties will enter into a
technology escrow agreement to protect Quest Diagnostics in the event that
Ciphergen fails to provide the Instruments, Proprietary Supplies or Test Kits to
Quest Diagnostics or otherwise materially breaches its obligations under this
Agreement and/or the Supply Agreement in a manner related to Ciphergen’s supply
obligations.

 

9.8                                 Third Party Suppliers.  For clarity, subject
to the other terms and conditions of this Agreement including Article 11,
Ciphergen shall have the right to fulfill all or part of its supply and support
obligations under this Agreement through one or more Third Parties; provided,
however, that Ciphergen shall: (a) remain primarily liable for such Third
Parties’ performance or non-performance of such supply and support obligations
and any breach of this Agreement by such Third Parties; (b) provide Quest
Diagnostics prompt written notice of its intent to engage each such Third Party;
and (c) engage such Third Parties solely pursuant to an enforceable written
agreement that (i) binds such Third Parties to the terms and conditions of this
Agreement and the applicable Supply Agreement (including any terms relating to
the quality and efficacy of the supply and support provided and the
establishment of an appropriate technology escrow agreement for any supplies to
be provided), (ii) is at least as protective of Quest Diagnostics’ and its
Affiliates’ as this Agreement (including Article 11), and (iii) specifically
provides that Quest Diagnostics is an intended third party beneficiary of such
agreement with respect to Ciphergen’s supply and support obligations as set
forth herein or in the applicable Supply Agreement.

 

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10.                               RECORDS.

 

10.1                           Records.  Each Party will maintain complete and
accurate records relating to all information reasonably required to calculate
royalties or other fees due from one Party to the other Party or otherwise
required to be included in any reports to be provided hereunder or arising from
such Party’s performance of its obligations hereunder.

 

10.2                           Audits.  During the term of this Agreement, each
Party will have the right, during normal business hours and upon reasonable
notice, to cause a mutually agreeable accounting firm or other appropriate
independent Third Party to inspect and audit the other Party’s records
referenced in Section 10.1 hereof pursuant to this Agreement, but no more often
than once per year.  Any such audit must be conducted within three (3) years
following the close of the year to which such records relate.  Each Party will
pay the other Party all amounts that such Party has underpaid the other Party as
revealed by any such audit, plus interest accrued thereon as provided in
Section 10.3 hereof (from the applicable original due date).  The costs of such
audits will be borne solely by the Party requesting the audit; provided,
however, that in the event such an audit reveals either a material failure by
the Party being audited or a failure to pay any amount due by more than ten
percent (10%), then the Party being audited will within thirty (30) days
reimburse the auditing Party for the reasonable out-of-pocket costs of such
audit.  All information learned as a result of any audit or inspection under
this Section 10.2 will be deemed to be Confidential Information of the audited
Party, subject to the terms and provisions of Article 11 hereof
(Confidentiality).

 

10.3                           Payments.  All amounts due hereunder are stated
in, and will be paid in, U.S. dollars in the form designated by the payee.  Late
payments hereunder will bear interest, from due date until paid, at a rate equal
to the lesser of (i) the prime rate, as reported in The Wall Street Journal,
Eastern U.S. Edition, on the date such payment is due, plus an additional two
percent (2%), or (ii) the maximum rate allowed under applicable law. 

 

10.4                           Taxes. All amounts due hereunder exclude all
applicable sales, use, and other taxes, and the Party making a payment hereunder
will be responsible for payment of all such taxes (other than taxes based on the
recipient’s income).

 

11.                               CONFIDENTIALITY.

 

11.1                           Definition of “Confidential Information”.  For
purposes of this Agreement, “Confidential Information” means all information
disclosed by one Party (“Disclosing Party”) to the other Party (“Receiving
Party”) hereunder, including but not limited to Application specifications,
data, know-how, formulations, Licensed Laboratory Test concepts, Research
Results, business and technical information, financial data, trade secrets,
processes, techniques, algorithms, programs, designs, drawings, and any other
information related to a Party’s present or future products, sales, suppliers,
customers, employees, investors or business; provided, however, that the term
Confidential Information will not include any information, or portion thereof
that the Receiving Party can reasonably document:

 

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(a)                                  which at the time of disclosure is in the
public domain; or

 

(b)                                 which, after disclosure, becomes part of the
public domain, by publication or otherwise, through no fault of the Receiving
Party; or

 

(c)                                  which at the time of disclosure is already
in the Receiving Party’s possession, and such prior possession can be properly
demonstrated by the Receiving Party; or

 

(d)                                 which is made available to the Receiving
Party by a Third Party, provided, however, that to the Receiving Party’s
knowledge, such information was not obtained by said Third Party, directly or
indirectly, from the Disclosing Party hereunder; or

 

(e)                                  which is developed by Receiving Party
independently of disclosure by or through the Disclosing Party as evidenced by
the Receiving Party’s records contemporaneous with such development.

 

11.2                           Restrictions.  During the term of this Agreement,
a Receiving Party may obtain Confidential Information from a Disclosing Party
that is highly valuable, the disclosure of which would be highly prejudicial to
the Disclosing Party.  The disclosure and use of Confidential Information will
be governed by the provisions of this Article 11. Neither Quest Diagnostics nor
Ciphergen will use the other’s Confidential Information except as expressly
permitted in this Agreement. Each Party agrees (i) that it will only disclose
the other Party’s Confidential Information to its own officers, employees,
consultants, and agents who will be bound by duties of confidentiality that are
no less restrictive than this Article 11, and then only if and to the extent
necessary to carry out their respective responsibilities under this Agreement or
in accordance with the exercise of its rights under this Agreement to the extent
such disclosure is reasonably necessary in (A) filing or prosecuting Patent
applications as set forth herein; (B) complying with the terms of agreements
with Third Parties existing as of the Effective Date or the terms of
collaboration and exclusive license agreements existing after the Effective Date
that are disclosed to the other Party in writing and pursuant to which the
Receiving Party first obtains rights to Patents or Technology licensed
hereunder; (C) prosecuting or defending litigation; or (D) complying with
applicable governmental regulations, obtaining regulatory approvals or otherwise
required by applicable law, and (ii) that any such disclosure will be limited to
the maximum extent possible consistent with such responsibilities and rights. 
Each Party will be responsible for a breach of the terms of this Section 11.2 by
the officers, employees, consultants or agents of such Party or any Third Party
to which it discloses hereunder.  Neither Party will disclose Confidential
Information of the other Party to any other Third Party without the other
Party’s prior written consent, and any such disclosure to a Third Party will be
pursuant to the terms of a non-disclosure agreement no less restrictive than
this Article 11.  Each Party will take such action to preserve the
confidentiality of the other Party’s Confidential Information as it would
customarily take to preserve the confidentiality of its own Confidential
Information of a similar nature (but in no event less than a reasonable standard
of care).  Each Party, upon the other Party’s request, will return all the
Confidential Information disclosed to it pursuant to this Agreement, including
all copies and extracts of documents,

 

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within sixty (60) days of the request, and in any event, promptly following the
expiration or termination of this Agreement; provided however that a Receiving
Party may retain a single copy of the Disclosing Party’s Confidential
Information solely for archival purposes to assure compliance with this
Agreement.  The restrictions on disclosure of Confidential Information contained
in this Article 11 will survive for five (5) years after the termination of this
Agreement.  Notwithstanding the foregoing, either Party may disclose
Confidential Information which is required to be disclosed by law, by a valid
order of a court or by order or regulation of a governmental agency including
but not limited to, regulations of the United States Securities and Exchange
Commission (the “SEC”), or in the course of litigation, provided that in all
cases the Receiving Party will give the other Party prompt notice of the pending
disclosure and will cooperate with the other Party if that Party desires to seek
an order maintaining the confidentiality of the Confidential Information.

 

11.3                           Injunctive Relief.  Each Party agrees that should
it breach or threaten to breach any provisions of this Article 11, the
Disclosing Party will suffer irreparable damages and its remedy at law will be
inadequate.  Upon any breach or threatened breach by the Receiving Party of this
Article 11, the Disclosing Party will be entitled to seek injunctive relief in
addition to any other remedy which it may have, without need to post any bond or
security.

 

11.4                           Termination of Prior Confidentiality Agreements. 
This Agreement supersedes the Confidentiality Agreement between Quest
Diagnostics and Ciphergen dated September 17, 2004 (the “Prior NDA”).  All
information exchanged between the Parties under the Prior NDA shall be deemed
Confidential Information of the Disclosing Party hereunder and shall be subject
to the terms of this Article 11.

 

12.                               PROPRIETARY RIGHTS AND LICENSES.

 

12.1                           Ownership of Intellectual Property.

 

(a)                                  Separate IP.  [***].  As used in this
Agreement, the “Separate IP” of a Party means any Intellectual Property:

 

(i)                                     that is Controlled by such Party or any
of its Affiliates prior to the Effective Date; or

 

(ii)                                  that is developed or invented by such
Party and/or its Affiliates after the Effective Date independently of the other
Party and its Affiliates, provided that such Intellectual Property is not an
Improvement to the other Party’s Separate IP or to any Joint IP; or

 

(iii)                               that is an Improvement to any Intellectual
Property referenced in (i) or (ii) of this Section 12.1(a) and that is developed
or invented solely by or on behalf of such Party or its Affiliates.

 

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(b)                                 Joint IP.  [***].  As used in this
Agreement, “Joint IP” means any Intellectual Property:

 

(i)                                     that is Jointly Developed or Jointly
Invented by the Parties, or their respective employees, agents or consultants,
after the Effective Date, provided that such Intellectual Property is not an
Improvement; or

 

(ii)                                  that is an Improvement to any Intellectual
Property referenced in subsection (i) of this Section 12.1(b); or

 

(iii)                               that is an Improvement to the Separate IP of
the other Party, whether developed or invented solely by or on behalf of a Party
or any of its Affiliates or jointly by the Parties or any of their respective
Affiliates.

 

Except as expressly provided in this Agreement (including as set forth in
Sections 12.2 and 12.3), it is understood that [***].

 

(c)                                  Licensing of Separate IP.  In the event
that a Party, under the terms of this Agreement sublicenses any Separate IP of
the other Party to a Third Party, the Party granting such sublicense will
procure that such Third Party sublicensee (each a “Sublicensee”) undertake and
agree in a written agreement to observe and perform all of the relevant
obligations provided in this Agreement of the Party granting each such
sublicense.  Such written agreement will expressly specify and provide that the
other Party hereto (Quest Diagnostics or Ciphergen, as the case may be) will be
an intended third party beneficiary of such written agreement, with the right
and legal standing to directly enforce such written agreement against the
Sublicensee.  A fully executed original of such written agreement will be
provided to such other Party within thirty (30) days after the execution and
delivery of such written agreement.  Each Party will act in good faith to
preserve and protect the Separate IP of the other Party and in connection with
any such sublicense to a Sublicensee.

 

(d)                                 Assignment of Rights.

 

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(i)                                     To the extent that the allocation of
rights, title and interests in and to any Intellectual Property specified in
Section 12.1 hereof does not automatically vest in the applicable Party, the
other Party (the “Assignor”) hereby assigns, transfers and conveys (and agrees
to assign, transfer and convey) to the other Party (the “Assignee”) such of the
Assignor’s right, title and interest in and to all such Intellectual Property as
is necessary to achieve such allocation.

 

(ii)                                  The Assignor will provide, at the
Assignee’s expense, all assistance reasonably required by the Assignee to
consummate, record and perfect the foregoing assignment, including, but not
limited to, signing all papers and documents necessary to register and/or record
such assignment with the United States Patent & Trademark Office, United States
Copyright Office, other state and federal agencies and all corresponding
government agencies and departments in all other countries, where applicable. 
Assignor hereby appoints Assignee as its attorney-in-fact to act as Assignor to
execute and file the papers and documents specified in this Section 12.1 if
Assignor is unwilling or unable to comply with the foregoing sentence of this
Section 12.1(d)(ii).

 

(iii)                               The foregoing assignment includes, without
limitation, all rights of attribution, paternity, integrity and all other
so-called “moral rights”.  To the extent such rights cannot be assigned, the
Assignor hereby agrees to waive and not assert, and will cause each of its
employees, agents and contractors to waive and not to assert, such rights
against Assignee or any of its permitted sublicensees.

 

12.2                           Grant of Licenses to and Use of Intellectual
Property by Quest Diagnostics.

 

(a)                                  Grant of Licenses to Quest Diagnostics. 
Subject to the terms and conditions of this Agreement, including without
limitation Article 3 hereof, Ciphergen hereby grants to Quest Diagnostics and
its Affiliates the following licenses:

 

(i)                                     Ciphergen IP.  Subject to
subsection (iv) hereof, with respect to each Licensed Laboratory Test, Ciphergen
hereby grants to Quest Diagnostics an exclusive (subject to
Section 12.2(a)(iv) below), perpetual (subject to Section 12.2(a)(iv) below),
worldwide, royalty-bearing (as provided in Section 6.3 hereof) license (with the
right to sublicense) under all Ciphergen Biomarker IP, Ciphergen Collaboration
IP and Ciphergen Platform IP to:  (A) use Instruments, and Proprietary Supplies
supplied by Ciphergen solely to develop and commercialize such Licensed
Laboratory Test; and (B) make, have made, use, sell, offer for sale, import and
otherwise exploit any and all subject matter within the Ciphergen Licensed
Technology that is not supplied to Quest Diagnostics by Ciphergen hereunder or
the applicable Supply Agreement or made generally commercially available to
Third Parties by Ciphergen, in each case [***]

 

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[***] to develop and commercialize such Licensed Laboratory Test.  In addition
and subject to subsection (iv) below, Ciphergen hereby grants to Quest
Diagnostics a non-exclusive license to make and have made Instruments and
Proprietary Supplies solely to the extent provided in the applicable technology
escrow agreement as described in Section 9.7.

 

(ii)                                  Collaboration IP Restrictions. 
Notwithstanding the foregoing, the license granted above with respect to the
Ciphergen Collaboration IP shall [***].  With respect to Collaboration
Agreements entered into on or after the Effective Date, Ciphergen shall use
commercially reasonable efforts to obtain for Quest Diagnostics the rights under
the Ciphergen Collaboration IP set forth in this Agreement.

 

(iii)                               Right to Compete.  Quest Diagnostics shall
have the right to license, develop and commercialize Clinical Laboratory Tests
that compete with any Licensed Laboratory Tests developed under this Agreement.

 

(iv)                              Limitations on License. 

 

(1)                                 The license granted to Quest Diagnostics
under this Section 12.2 with respect to a Licensed Laboratory Test shall
continue for the life of the Patent(s) Controlled by Ciphergen covering the
applicable Licensed Laboratory Test.

 

(2)                                 The license granted to Quest Diagnostics
with respect to a Licensed Laboratory Test under this Section 12.2 shall be
exclusive for Exclusive Period therefor, and non-exclusive thereafter.

 

(3)                                 Once Ciphergen offers for sale and sells a
Test Kit for the same Application as the corresponding Licensed Laboratory Test
and such Test Kit provides information that is substantially equivalent to all
of the material information provided by the corresponding Licensed Laboratory
Test, then:  (i) if such Licensed Laboratory Test is based on only Biomarkers
discovered and controlled by Quest Diagnostics, Quest Diagnostics shall not use
any Ciphergen Platform IP, Instruments or Proprietary Supplies to commercialize
such Licensed Laboratory Test, or (ii) if such test is based on any Biomarker
discovered and controlled by Ciphergen, Quest Diagnostics will no longer
commercialize such Licensed Laboratory Test.  The foregoing shall not limit
Quest Diagnostic’s ability to perform Test Kit Services using Test Kits supplied
by Ciphergen in accordance with its obligations under Article 9 hereof, to
exercise its rights under the escrow agreement as provided in Section 9.7
hereof, or to perform Licensed Laboratory Tests without territorial or other
restrictions in the event the release conditions under the escrow agreements are
satisfied.

 

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(4)                                 The license granted to Quest Diagnostics
under this Section 12.2 shall be non-exclusive in the Non-Exclusive Territory
and Restricted Territory and shall be subject to further restriction as set
forth in Section 3.3 with respect to the Restricted Territory.

 

(b)                                 Rights Retained by Ciphergen.  Ciphergen
shall retain all rights under the Ciphergen Licensed Technology, other than the
rights licensed to Quest Diagnostics in this Article 12, including the right to
develop and commercialize Test Kits corresponding to any Licensed Laboratory
Test.

 

12.3                           Grant of Licenses to and Use of Intellectual
Property by Ciphergen.

 

(a)                                  Grant of Licenses to Ciphergen.  Subject to
the terms and conditions of this Agreement, including without limitation
Article 3 hereof, Quest Diagnostics hereby grants to Ciphergen and its
Affiliates the following licenses:

 

(i)                                     Quest Diagnostics Biomarker IP.  Quest
Diagnostics will grant to Ciphergen an exclusive, perpetual, royalty-bearing (as
provided in Section 8.2(c) hereof) license (with the right to sublicense) under
Quest Diagnostics Biomarker IP to make, have made, use, sell, offer for sale,
import and otherwise exploit any and all Consumable Products, and have any and
all of the foregoing performed on its behalf, in each case solely for
applications other than developing and commercializing Clinical Laboratory
Tests.  For clarity, the foregoing license includes the right to practice any
method within the Quest Diagnostic Biomarker IP using such Consumable Product.

 

(ii)                                  Quest Diagnostics Retained Rights.  For
the avoidance of doubt, for each Biomarker covered under the foregoing license,
Quest Diagnostics reserves the right to develop and commercialize:(A) for Quest
Networks’ sole use, Clinical Laboratory Tests based on such Biomarker, and
(B) any product not constituting a Consumable Product. 

 

12.4                           Obtaining and Maintaining Patent Rights.

 

(a)                                  Ciphergen Patents.  Ciphergen will
maintain, in its sole discretion and at its cost and expense, the Patents within
the Ciphergen Licensed Technology (the “Ciphergen Patents”). With respect to any
patent application within the Ciphergen Patents that is filed after the
Effective Date, Ciphergen will, in its sole discretion, control the prosecution
and maintenance of any such patent application and will select the countries in
which any such patent application is filed.  Quest Diagnostics will provide
reasonable assistance to Ciphergen, at Ciphergen’s request, for any such patent
prosecution and maintenance activities.

 

(b)                                 Quest Patents.  Quest Diagnostics will
maintain, in its sole discretion and at its cost and expense, the Patents within
the Quest Diagnostics IP (the “Quest Diagnostics Patents”).  With respect to any
patent application within the Quest Diagnostics Patents that is filed after the
Effective Date, Quest Diagnostics will, in its sole discretion, control the
prosecution and maintenance of any such patent

 

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application and will select the countries in which any such patent application
is filed.  Ciphergen will provide reasonable assistance to Quest Diagnostics, at
Quest Diagnostics’ request, for any such patent prosecution and maintenance
activities.

 

(c)                                  Joint Patents.  The Steering Committee will
determine, with respect to any particular Joint IP, which Party (the “Initial
Prosecuting Party”) should have the first right to control the preparation,
filing, prosecution and maintenance of any Patents within such Joint IP (each, a
“Joint Patent”).  Except as otherwise provided in this Section 12.4(c), it is
understood that [***].  The Initial Prosecuting Party shall keep the other Party
fully informed as to the status of patent matters described in this
Section 12.4(c), including without limitation, by providing such other Party
copies of any substantive documents that the Initial Prosecuting Party receives
from any patent office promptly after receipt, including notice of all
interferences, reissues, re-examinations, oppositions or requests for patent
term extensions, and by providing such other Party the opportunity, reasonably
in advance of filing dates, to review and comment on any documents which will be
filed in any patent office, and incorporating all reasonable comments.  The
other Party shall reasonably cooperate with and assist the Initial Prosecuting
Party in connection with such prosecution activities, at the Initial Prosecuting
Party request, including without limitation by making scientists and scientific
records reasonably available to the Initial Prosecuting Party.  The other Party
shall promptly [***].

 

12.5                           Patent Litigation.

 

(a)                                  Ciphergen Patents.  [***].  If Quest
Diagnostics becomes aware that a Third Party may be infringing a Ciphergen
Patent, Quest Diagnostics will promptly notify Ciphergen in writing, providing
all information available to Quest Diagnostics

 

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regarding the potential infringement.  Ciphergen will take whatever, if any,
action it deems appropriate, in its sole discretion, against the alleged
infringer.  In the event Ciphergen elects to take action, Quest Diagnostics
will, at Ciphergen’s request and expense, cooperate and will cause its employees
to cooperate with Ciphergen in taking any such action, including, but not
limited to, cooperating with the prosecution or defense of any infringement suit
by Ciphergen. Quest Diagnostics will not take any action against any alleged
infringer without the written consent of Ciphergen.

 

(b)                                 Quest Diagnostics Patents.  [***].  If
Ciphergen becomes aware that a Third Party may be infringing a Quest Diagnostics
Patent, Ciphergen will promptly notify Quest Diagnostics in writing, providing
all information available to Ciphergen regarding the potential infringement. 
Quest Diagnostics will take whatever, if any, action it deems appropriate, in
its sole discretion, against the alleged infringer.  In the event Quest
Diagnostics elects to take action, Ciphergen will, at Quest Diagnostics’ request
and expense, cooperate and will cause its employees to cooperate with Quest
Diagnostics in taking any such action, including but not limited to, cooperating
with the prosecution or defense of any infringement suit by Quest Diagnostics.
Ciphergen will not take any action against any alleged infringer without the
written consent of Quest Diagnostics.

 

(c)                                  Joint Patents.  [***].  Each Party will
(i) select and retain counsel mutually acceptable to the other Party,
(ii) provide reasonable prior notice to the other Party of any settlement offer
that relates to the Joint Patents at question, and obtain from such other Party
its prior written consent to any such settlement to the extent that it relates
to Joint Patents, which consent will not be unreasonably withheld, and
(iii) not, except in the context of a settlement permitted pursuant to this
Section 12.5, fail or otherwise cease to defend such claims without first giving
the other Party reasonable notice and an opportunity to assume the control and
defense of such claims.  [***]

 

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[***]

 

(d)                                 Defense of Third Party Infringement Claims. 
If the development, manufacture, sale, use or importation of any Licensed
Laboratory Test or Test Kit or other activities of a Party pursuant to this
Agreement results in a claim, suit or proceeding alleging infringement of a
Third Party’s Patent against a Party (each, an “Infringement Action”), such
Party shall promptly notify the other Party hereto in writing.  The Party
subject to such Infringement Action shall have the [***].  Except as agreed in
writing by Quest Diagnostics, [***].  Likewise, except as agreed in writing by
Ciphergen, [***].  The Party subject to the Infringement Action agrees to [***].

 

(e)                                  Patent Notices.  Without limiting the
foregoing, each Party shall promptly notify the other Party in writing of any
communication it receives that offers to license or otherwise identifies a
Patent and in connection therewith mentions any: (i) Licensed Laboratory Test,
Test Kit or Technology embodied or practiced therein; and/or (ii) Application
(where such Application is the subject of a Plan, Development Program or Test
Kit Development Program).  Such notice shall be provided with a copy of the
applicable communication.

 

13.                               WARRANTIES.

 

13.1                           Representations, Warranties and Additional
Covenants.  Each Party as of the Effective Date represents and warrants to the
other Party as follows: 

 

(a)                                  Organization.  It is a corporation duly
organized and validly existing under the laws of the state or country of its
incorporation, and (a) has the complete and unrestricted power and right to
enter into this Agreement, perform its obligations hereunder, and subject to the
terms and conditions set forth herein, grant the rights, licenses, and
sublicenses provided for herein and (b) has taken all necessary action on its
part required to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder.

 

(b)                                 Authorization.  This Agreement has been duly
authorized, executed and delivered by such Party and constitutes a legal, valid
and binding obligation of such Party

 

--------------------------------------------------------------------------------

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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enforceable against such Party in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent transfer, or other similar
laws affecting the rights and remedies of creditors generally and by general
principles of equity, whether enforceability is considered a proceeding at law
or equity.

 

(c)                                  No Conflict.  The execution, delivery and
performance of this Agreement by such Party do not conflict with any agreement,
instrument or understanding, oral or written, to which such Party is a party or
by which such Party may be bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having authority over
such Party.

 

(d)                                 Consents.  All consents, approvals and
authorizations from all governmental authorities or other Third Parties required
to be obtained by such Party in connection with the execution and delivery of
this Agreement have been obtained.

 

(e)                                  No Brokers.  No person or entity has or
will have, as a result of the transactions contemplated by this Agreement, any
right, interest or valid claim against or upon such Party for any commission,
fee or other compensation as a finder or broker because of any act by such Party
or its agents.

 

(f)                                    Litigation.  As of the Effective Date,
there are no actions, suits or proceedings pending or, to the best of the
Party’s knowledge, threatened against such Party, at law or in equity, at or
before any federal, state, municipal or other governmental agency or authority
(i) relating to such Party’s Separate IP that is expected to be used in
connection with this Agreement or (ii) relating to the transactions contemplated
by this Agreement or (iii) that could reasonably be expected to materially
affect the ability of such Party to enter into this Agreement or to perform its
obligations hereunder.                                               

 

(g)                                 Rights to Information and Inventions.  Each
Party has or will obtain from its employees and agents all rights to information
and inventions that relate to Intellectual Property invented or otherwise
developed by such employees and agents pursuant to this Agreement, such that
each Party will receive from the other Party the licenses and other rights
granted to such Party hereunder, without additional payment obligations.

 

13.2                           Disclaimer.  THE WARRANTIES SET FORTH IN THIS
ARTICLE 13 ARE PROVIDED IN LIEU OF, AND EACH PARTY HEREBY DISCLAIMS, ALL OTHER
WARRANTIES, EXPRESS AND IMPLIED, RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. EACH PARTY’S WARRANTIES
UNDER THIS AGREEMENT ARE SOLELY FOR THE BENEFIT OF THE OTHER PARTY AND MAY BE
ASSERTED ONLY BY THE OTHER PARTY AND NOT BY ANY AFFILIATE, LICENSEE OR CUSTOMER
OF THE OTHER PARTY.  Each Party will

 

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be solely responsible for any representations and warranties made by it to any
Third Party.

 

14.                               INDEMNIFICATION AND LIMITATION OF LIABILITY.

 

14.1                           Indemnification by Ciphergen.  Ciphergen will
defend, indemnify and hold Quest Diagnostics and its Affiliates, and each of
their respective directors, officers, employees, and agents harmless from and
against any and all claims, suits or demands for liability, damages, losses,
costs and expenses (including the reasonable costs and expenses of attorneys and
other professionals) (collectively, “Claims”) arising from or related to:

 

(a)                                  Ciphergen’s breach of any of its
representations, warranties or covenants in this Agreement; or

 

(b)                                 the gross negligence or willful misconduct
of Ciphergen; or

 

(c)                                  claims by a Third Party that any of the
materials supplied, licensed or otherwise provided by Ciphergen to Quest
Diagnostics under this Agreement (including, without limitation, any ProteinChip
Products), or the use or exploitation thereof as contemplated under this
Agreement, infringes upon or misappropriates any intellectual property rights;

 

(d)                                 claims by a Third Party with respect to any
representation or warranty made by Ciphergen or any of its Affiliates or their
respective sublicensees to such Third Party (with respect to any Technology or
Intellectual Property of Quest or otherwise).

 

Notwithstanding the foregoing, Ciphergen’s obligation to indemnify under this
Section 14.1 shall not extend to Claims to the extent they arise from any
activity that Quest Diagnostic would be obligated to indemnify Ciphergen for
pursuant to Section 14.2.

 

14.2                           Indemnification by Quest Diagnostics.  Quest
Diagnostics will defend, indemnify and hold Ciphergen and its Affiliates, and
each of their respective directors, officers, and employees, and agents harmless
from and against any and all Claims arising from or related to:

 

(a)                                  Quest Diagnostics’ breach of any of its
representations, warranties or covenants in this Agreement; or

 

(b)                                 the gross negligence or willful misconduct
of Quest Diagnostics;

 

(c)                                  claims by a Third Party with respect to any
representation or warranty made by Quest Diagnostics or any of its Affiliates or
their respective sublicensees to such Third Party (with respect to any
Technology or Intellectual Property of Ciphergen or otherwise).

 

33

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Notwithstanding the foregoing, Quest Diagnostics’ obligation to indemnify under
this Section 14.2 shall not extend to Claims to the extent they arise from any
activity that Ciphergen would be obligated to indemnify Quest Diagnostics for
pursuant to Section 14.1.

 

14.3                           Procedure. A person or entity that intends to
claim indemnification under this Article 14 (an “Indemnitee”) will promptly
notify the other Party (the “Indemnitor”) of any Claim in respect of which the
Indemnitee intends to claim such indemnification, and the Indemnitor will assume
the defense thereof whether or not such Claim is rightfully brought; provided,
however, that an Indemnitee will have the right to retain its own counsel, with
the fees and expenses to be paid by the Indemnitee, unless Indemnitor does not
assume the defense, in which case the reasonable fees and expenses of counsel
retained by the Indemnitee will be paid by the Indemnitor. The Indemnitee, and
its employees and agents, will cooperate fully with the Indemnitor and its legal
representatives in the investigations of any Claim. The Indemnitor will not be
liable for the indemnification of any Claim settled or compromised by the
Indemnitee without the written consent of the Indemnitor.

 

14.4                           Limitation of Liability.  EACH PARTY SPECIFICALLY
DISCLAIMS ALL LIABILITY FOR AND WILL IN NO EVENT BE LIABLE FOR ANY INCIDENTAL,
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EXPENSES, LOST PROFITS, LOST
SAVINGS, INTERRUPTIONS OF BUSINESS OR OTHER PUNITIVE DAMAGES OF ANY KIND OR
CHARACTER WHATSOEVER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR RESULTING
FROM THE DEVELOPMENT, PROVIDING, MANUFACTURE, HANDLING, MARKETING, SALE,
DISTRIBUTION OR USE OF TESTS OR TEST KITS.  

 

14.5                           Maximum Damages.  IN NO EVENT WILL CIPHERGEN’S
TOTAL AGGREGATE LIABILITY FOR ALL CLAIMS ARISING OUT OF OR RELATED TO THIS
AGREEMENT EXCEED THE AMOUNTS PAID BY QUEST DIAGNOSTICS TO CIPHERGEN PURSUANT TO
SECTION 6.3 AND ARTICLE 9 HEREOF DURING THE TWELVE (12) MONTH PERIOD IMMEDIATELY
PRECEDING THE EVENT GIVING RISE TO SUCH LIABILITY.  IN NO EVENT WILL QUEST
DIAGNOSTICS’ TOTAL AGGREGATE LIABILITY FOR ALL CLAIMS ARISING OUT OF OR RELATED
TO THIS AGREEMENT EXCEED THE AMOUNTS PAID BY CIPHERGEN TO QUEST DIAGNOSTICS
PURSUANT TO SECTION 8.2 HEREOF DURING THE TWELVE (12) MONTH PERIOD IMMEDIATELY
PRECEDING THE EVENT GIVING RISE TO SUCH LIABILITY.

 

14.6                           Period for Claims. NO ACTION, REGARDLESS OF FORM,
ARISING OUT OF OR RELATED TO BREACH OF ANY REPRESENTATION, WARRANTY OR COVENANT
UNDER THIS AGREEMENT MAY BE BROUGHT BY EITHER PARTY MORE THAN TWO (2) YEARS
AFTER SUCH PARTY HAS KNOWLEDGE OF THE OCCURRENCE THAT GAVE RISE TO THE CAUSE OF
SUCH ACTION.

 

14.7                           Application of Limits.  THE FOREGOING LIMITATIONS
SHALL APPLY REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT,

 

34

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STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY WAS ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES AND NOTWITHSTANDING THE FAILURE OF ANY REMEDY OF ITS ESSENTIAL
PURPOSE.

 

15.                               TERM AND TERMINATION.

 

15.1                           Term. The term of this Agreement (the “Term”)
will commence on the Effective Date and will continue in effect thereafter until
terminated as set forth herein or until all of the payment obligations of both
Parties hereunder have been fully fulfilled.  (For clarity, the Term will have
an equal or longer duration than the Base Term.)

 

15.2                           Termination for Cause.  If either Party
materially violates, breaches or fails to perform any term or covenant of this
Agreement, then the other Party may give written notice of such default (a
“Notice of Default”) to such Party.  If such Party does not cure such default
within ninety (90) days of the date of a Notice of Default, the other Party will
have the right to terminate this Agreement by a second written notice (a “Notice
of Termination”) to such Party.  Such right to terminate is in addition to all
other remedies available to such Party in equity or at law.

 

15.3                           Breach of Alliance Agreements.  If either Party
materially violates, breaches or fails to perform any term or covenant under any
of the Alliance Agreements, and fails to cure such material breach pursuant to
the terms of the respective Alliance Agreement, the non-breaching Party may
treat such material violation, breach or failure to perform as a breach of this
Agreement within the meaning of Section 15.2 hereof.  The foregoing shall not
expand or limit any remedies the non-breaching Party is entitled to under the
respective Alliance Agreement.

 

15.4                           Termination for Bankruptcy. Either Party may
terminate this Agreement immediately by delivery of written notice to the other
Party in the event the other Party makes an assignment for the benefit of
creditors or has a petition in bankruptcy filed for or against it that is not
dismissed within sixty (60) days of such filing.

 

15.5                           Other Termination Rights.  This Agreement may be
terminated by mutual written consent of the Parties or as provided in
Section 16.5.

 

15.6                           Effect of Termination.  Following the termination
or expiration of this Agreement, all rights granted to either Party herein will
immediately terminate, except as provided in Section 15.7 hereof and each Party
will promptly return all relevant records and materials in its possession or
control containing the other Party’s Confidential Information with respect to
which the former Party does not retain rights hereunder; provided, however, that
each Party may retain one archival copy of such records and materials solely to
be able to monitor and perform its obligations that survive under this Agreement
and may destroy (in lieu of returning) any other records prepared by such Party
that contain the other Party’s Confidential Information.

 

15.7                           Survival.  Notwithstanding any other provisions
of this Agreement, any liability or obligation of either Party to the other for
acts or omissions prior to the termination or

 

35

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expiration of this Agreement will survive the termination or expiration of this
Agreement.  Without limiting the foregoing, in addition:

 

(a)                                  Such termination or expiration will not
relieve either Party from its payment obligations pursuant to Article 6 hereof
(Commercialization of Licensed Laboratory Tests and Test Kit Services) and
Article 8 hereof (Commercialization of Test Kits).

 

(b)                                 The Parties’ rights and obligations under
Section 2.2 (Relationship of the Parties), Section 3.7 (Non-Solicitation),
Section 3.8 (Third Party Conflicts) (solely with respect to surviving
provisions), Article 11 (Confidentiality), Article 12 (Proprietary Rights and
Licenses), Article 14 (Indemnification and Limitation of Liability) and
Article 16 (Miscellaneous) and Sections 15.6 and 15.7 and the definitions
contained herein will survive termination or expiration of this Agreement in
perpetuity unless provided otherwise within the relevant Article or Section. 

 

16.                               MISCELLANEOUS PROVISIONS.

 

16.1                           Governing Law.  This Agreement will be governed
by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts to be executed and performed in that state and without
regard to the 1980 Convention on the International Sale of Goods.  Each of the
Parties hereby expressly submits to the personal jurisdiction of any court of
competent jurisdiction in California, Delaware, New York or New Jersey with
respect to any matter arising out of or in connection with this Agreement.

 

16.2                           Compliance with Law.  Each Party will comply with
all applicable international, federal, state and local laws, rules and
regulations in the exercise of its rights and performance of its obligations
under this Agreement.

 

16.3                           TRIAL WAIVERS.  TO THE EXTENT ALLOWED BY LAW, THE
PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER
OF THEM MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO (i) ANY AND ALL ISSUES
PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY ANY OF THE
PARTIES HERETO AGAINST ANY OTHER PARTY OR ITS SUCCESSORS WITH RESPECT TO ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, AND/OR (ii) ANY
CLAIM FOR INJURY OR DAMAGE, AND/OR (iii) ANY EMERGENCY OR STATUTORY REMEDY. 
THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT ANY OF THEM HAVE TO A TRIAL BY
JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN. 

 

16.4                           Costs and Expenses.  Except as otherwise
expressly provided in this Agreement, each Party will bear all costs and
expenses associated with the performance of such Party’s obligations under this
Agreement.

 

16.5                           Force Majeure.  Neither Party will be liable for
failure to perform, or delay in the performance of, its obligations under this
Agreement (other than payment obligations)

 

36

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when such failure or delay is caused by an event of Force Majeure.  For purposes
of this Agreement, a “Force Majeure Event” means any event or circumstance
beyond the reasonable control of the affected Party, including but not limited
to, war, terrorism, insurrection, riot, fire, flood or other unusual weather
condition, explosion, act of God, peril of the sea, strike, lockout or other
industrial disturbance, sabotage, accident, embargo, breakage of machinery or
apparatus, injunction, act of governmental authority, compliance with
governmental order on national defense requirements, or inability to obtain
fuel, power, raw materials, labor, or transportation facilities.  If, due to any
Force Majeure Event, either Party will be unable to fulfill its obligations
under this Agreement (other than payment obligations), the affected Party will
promptly notify the other Party of such inability and of the period during which
such inability is expected to continue. Either Party may terminate this
Agreement if the other Party is affected by a Force Majeure Event for more than
one (1) year.

 

16.6                           Notices.  Any notice, request, or communication
under this Agreement will be effective only if it is in writing and personally
delivered; sent by certified mail, postage pre-paid; or by nationally recognized
overnight courier with signature required, or sent by facsimile transmission
(receipt confirmed), addressed to the Parties at the addresses or sent to the
facsimile number stated below or such other persons addresses and/or facsimile
number as will be furnished in writing by any Party in accordance with this
Section 16.6.  Unless otherwise provided, all notices will be sent: 

 

If to Quest Diagnostics:

 

If to Ciphergen:

 

 

 

Quest Diagnostics Incorporated

 

Ciphergen Biosystems, Inc.

1290 Wall Street West

 

6611 Dumbarton Circle

Lyndhurst, New Jersey 07071

 

Fremont, California 94555

Fax: (201) 393-5903

 

Fax: (510) 505-2101

Attention: Chief Executive Officer

 

Attention: Chief Executive Officer

 

 

 

With copies to:

 

With a copy to:

 

 

 

Quest Diagnostics Incorporated

 

Wilson Sonsini Goodrich & Rosati

1290 Wall Street West

 

650 Page Mill Road

Lyndhurst, New Jersey 07071

 

Palo Alto, CA 94304

Fax: (201) 559-2258

 

Fax: (650) 493-6811

Attention: General Counsel

 

Attention: Michael O’Donnell

 

 

 

Baker & McKenzie LLP

 

 

101 W. Broadway, Ste. 1200

 

 

San Diego, CA 92101

 

 

Attention: Maria P. Sendra, Esq.

 

 

Fax: (619) 236-0429

 

 

 

If personally delivered, the date of delivery will be deemed to be the date on
which such notice, request or communication was given. If sent by certified
mail, the third business

 

37

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day after the date of mailing will be deemed the date on which such notice,
request or communication was given. If sent by overnight courier, the next
business day after the date of deposit with such courier will be deemed to be
the date on which such notice, request or communication was given.

 

16.7                           Use of Names.  Except as otherwise provided
herein, neither Party will have any right, express or implied, to use in any
manner the name or other designation of the other Party or any other trade name
or trademark of the other Party for any purpose without the prior written
consent of the other Party, except as may be required by applicable law or
regulation.

 

16.8                           Public Announcements.  As soon as practicable
after the execution of this Agreement, the Parties shall issue a joint press
release in the form agreed to by the Parties in writing immediately preceding
the execution of this Agreement (the “Joint Press Release”) to announce such
execution.  Simultaneously with the Joint Press Release, the Parties shall also
agree upon a corresponding question and answer outline for use in responding to
inquiries about this Agreement and the relationship of the Parties hereunder. 
The Parties also agree that the text of this Agreement and any other Alliance
Agreement executed as of the date hereof (excluding in each case the schedules
to the extent the Parties believe contains confidential competitive material)
may be filed as an exhibit to a current report on Form 8-K filed by Ciphergen
with the SEC and an exhibit to a Schedule 13D filed by Quest Diagnostics with
the SEC.  Except as aforesaid and except for such additional disclosure as is
deemed necessary, in the reasonable judgment of a Party, to comply with
applicable laws or regulations, securities filings or the rules of the NYSE or
NASDAQ, no announcement, news release, public statement, publication, or
presentation relating to the existence of this Agreement, or the terms hereof,
will be made by either Party or its Affiliates without the other Party’s prior
written approval.  Each of the Parties agrees not to disclose to any Third Party
the terms and conditions of this Agreement without the prior approval of the
other Parties, except: (i) to advisors (including attorneys, financial advisors
and accountants) on a need to know basis, in each case under circumstances that
reasonably ensure the confidentiality thereof; or (ii) under circumstances that
reasonably ensure the confidentiality of the information, to the extent
necessary to comply with the terms of agreements with Third Parties existing as
of the Effective Date or the terms of collaboration and exclusive license
agreements existing after the Effective Date pursuant to which such Party first
obtains rights to Patents or Technology licensed hereunder, or to the extent
required by applicable law; provided, however, that if a Party is required by
applicable law to make any such disclosure of the terms or conditions of this
Agreement, it will give reasonable advance notice to the other Party of such
disclosure requirement and will use its reasonable efforts to seek confidential
treatment of such terms and conditions.  Notwithstanding the preceding sentence,
after the Joint Press Release has been issued, each of the Parties may disclose
to any Third Party any of the information contained in the Joint Press Release
or any such SEC filing.  In the event that additional disclosure is deemed
necessary, in the reasonable judgment of a Party, to comply with applicable laws
or regulations, securities filings or the rules of the NYSE or NASDAQ, the Party
making such announcement will provide the other Party with a copy of the
proposed text prior to such announcement sufficiently in advance of the
scheduled release

 

38

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of such announcement to afford such other Party a reasonable opportunity to
review and comment upon the proposed text and the timing of such disclosure.

 

16.9                           Entire Agreement; Amendment. This Agreement and
all Schedules attached hereto together with the Stock Purchase Agreement, the
Observer Rights Agreement, the Credit Agreement, the Security Agreement and any
Supply Agreement and technology escrow agreement entered into in accordance with
Article 9 hereof (collectively, the “Alliance Agreements”) contain the entire
agreement of the Parties relating to the subject matter hereof and supersede any
and all prior agreements, written or oral, between the Parties relating to the
subject matter of this Agreement, including without limitation the Prior NDA and
that certain Option Agreement between the Parties effective as of June 30,
2005.  This Agreement may not be amended unless agreed to in writing by both
Parties.

 

16.10                     Binding Effect.  This Agreement will be binding upon,
and the rights and obligations hereof will apply to each Party and its
successor(s) and permitted assigns.  The name of a Party appearing herein will
be deemed to include the names of such Party’s successors and permitted assigns
to the extent necessary to carry out the intent of this Agreement.

 

16.11                     Waivers.  The rights of either Party under this
Agreement may be exercised from time to time, singularly or in combination, and
the exercise of one or more such rights will not be deemed to be in waiver of
any one or more of the other.  No waiver of any breach of a term, provision or
condition of this Agreement will be deemed to have been made by either Party
unless such waiver is addressed in writing and signed by an authorized
representative of that Party.  The failure of either Party to insist upon the
strict performance of any of the terms, provisions or conditions of this
Agreement, or to exercise any option contained in this Agreement, will not be
construed as a waiver or relinquishment for the future of any such term,
provision, condition or option or the waiver or relinquishment of any other
term, provision, condition or option.

 

16.12                     Severability.  If a final judicial or arbitral
determination is made that any provision of this Agreement is unenforceable,
this Agreement will be rendered void only to the extent that such determination
finds such provisions unenforceable, and such unenforceable provisions will be
automatically reconstituted and become a part of this Agreement, effective as of
the date first written above, to the maximum extent they are lawfully
enforceable.

 

16.13                     Assignment.  Neither Party may assign its rights or
delegate its obligations under this Agreement, in whole or in part, to any Third
Party without the prior written consent of the other Party, which consent will
not be unreasonably withheld.  Notwithstanding the foregoing, each Party may
assign its rights and delegate its obligations under this Agreement to an
Affiliate or to a Third Party successor, whether by way of merger, sale of all
or substantially all of its assets or the acquisition by a Third Party of stock
[***] to such Party’s business which this Agreement pertains, without the other
Party’s prior written consent, unless in the case of a proposed assignment by
Ciphergen during the Base Term, the Third Party successor is a Commercial
Clinical Laboratory, in which case the written consent of Quest Diagnostics will
be required.  As a condition to any

 

--------------------------------------------------------------------------------

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

39

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permitted assignment hereunder, the assignor must guarantee the performance of
any assignee to the terms and obligations of this Agreement.  Any assignment not
in accordance with this Section 16.13 will be void.

 

16.14           Headings.  The descriptive headings of this Agreement are for
convenience only, and will be of no force or effect in construing or
interpreting any of the provisions of this Agreement. 

 

16.15           Counterparts. This Agreement may be executed in two
counterparts, each of which will constitute an original document, but both of
which will constitute one and the same instrument.

 

16.16           Further Assurances.  Each Party hereby agrees to duly execute
and deliver, or cause to be duly executed and delivered such further instruments
and do and cause to be done such further acts and things, including without
limitation, the filing of such additional assignments, agreements, documents and
instruments, that may be necessary or as the other Party hereto may at any time
and from time to time reasonably request in connection with this Agreement or in
connection with any legal or regulatory requirements, including without
limitation the certification and financial control requirements under the
Sarbanes-Oxley Act of 2002 or to carry out more effectively the provisions and
purposes hereof or to better assure and confirm unto such other Party its rights
and remedies under this Agreement.

 

16.17           No Third Party Rights.  No provision of this Agreement will be
deemed or construed in any way to result in the creation of any rights or
obligations in any other individual group, entity or organization not a Party to
this Agreement.

 

16.18           Survival of Non-Debtor Rights.  The intent and effect of the
grant of each license in Article 12 hereof and otherwise in this Agreement is to
create a present license grant and right in favor of the licensee Party as to
such license, subject to the terms and conditions of this Agreement.  Subject to
any contrary and nonwaivable requirements of applicable law, the Parties intend
for the license grants herein to be construed in a manner which preserves (to
the maximum extent) for the licensee Parties each of the benefits of the bargain
set forth in this Agreement, rather than in a manner that may leave the
provision voidable, rejectable or otherwise terminable or unenforceable by
operation of applicable law.  Without limitation of the foregoing, the Parties
intend that the rights of a non-debtor Party should survive to the maximum
extent permitted by applicable law, notwithstanding a rejection of this
Agreement by a debtor Party pursuant to Section 365 of Title 11 of the United
States Code.

 

[Remainder of this page left blank intentionally]

 

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IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement as of the Effective Date.

 

 

Quest Diagnostics:

 

QUEST DIAGNOSTICS INCORPORATED

A Delaware corporation

 

 

By:

/s/ Catherine T. Doherty

 

 

 

Name:

Catherine T. Doherty

 

 

 

Title:

Vice President, Office of the Chairman

 

 

Ciphergen:

 

CIPHERGEN BIOSYSTEMS, INC.

A Delaware corporation

 

 

By:

/s/ William E. Rich

 

 

 

Name:

William E. Rich

 

 

 

Title:

President and Chief Executive Officer

 

 

41

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SCHEDULE A

 

DEFINITIONS

 

As used in the Agreement, the following terms will have the meanings
respectively ascribed to them:

 

“Affiliate” means, with respect to any Party, any entity controlling, controlled
by, or under common control with such Party, during and for such time as such
control exists.  For these purposes, “control” will refer to the ownership,
directly or indirectly, of at least fifty percent (50%) of the voting securities
or other ownership interest of the relevant entity.

 

“Agreement” means this Strategic Alliance Agreement.

 

“Alliance Agreements” has the meaning specified in Section 16.9 hereof.

 

“Anticipated Execution Date” has the meaning specified in Section 3.3(a) hereof.

 

“Application” means a Clinical Diagnostic assay or test that has a specified
intended use or uses including any uses permitted under Section 6.1(b) hereof.

 

“ASR” means an analyte-specific reagent as defined in 21 CFR 864.4020. 

 

“Assignee” has the meaning specified in Section 12.1(d)(i) hereof.

 

“Assignor” has the meaning specified in Section 12.1(d)(i) hereof.

 

“Base Term” has the meaning specified in Section 2.7 hereof.

 

“Biomarker” means any: (a) nucleic acid (whether DNA, RNA or otherwise), protein
or organic molecule; (b) set of nucleic acids, proteins and/or organic molecules
or (c) profile (i.e., presence and/or quantity) of the items described in
clauses (a) or (b).  As used herein, the term “protein” refers to any
polypeptide and the term “nucleic acid” refers to any nucleotide sequence, in
either case whether naturally occurring, synthesized, modified or otherwise.

 

“Biomarker Patent” means any Patent claiming: (a) compositions of matter of
(i) any Biomarker or (ii) any reagent or reagent product for detection,
quantification or other analysis of such Biomarker (e.g., an antibody) (such
reagent or reagent product, a “Biomarker Reagent”); (b) methods of use of any
Biomarker or Biomarker Reagent; (c) methods, processes or apparatuses for
detecting, quantifying or characterizing Biomarkers; or (d) methods, processes
or apparatuses for synthesis or manufacture of any Biomarker or Biomarker
Reagent.

 

“Capitated” means an arrangement with a Third Party in which Quest Diagnostics
or an Affiliate is paid a fixed payment per month, per member, or per life
covered (regardless of whether or not Quest Diagnostics or such Affiliate
performs one or more Licensed Laboratory Tests or Test Kit Services and
regardless of whether the Third Party receives an itemized invoice with respect
to the number of Licensed Laboratory Tests or Test Kit Services performed), so
that

 

A-1

--------------------------------------------------------------------------------

 

Quest Diagnostics or such Affiliate does not receive reimbursement for Licensed
Laboratory Tests or Test Kit Services on a Fee for Service basis.

 

“Ciphergen” has the meaning specified in the preamble hereto.

 

“Ciphergen Biomarker IP” means all Patents (including Biomarker Patents) and
other Technology embodied in or relating to Biomarkers, that are Controlled by
Ciphergen or any of its Control Affiliates during the Base Term.

 

“Ciphergen Collaboration Agreements” means, collectively, any and all of
Ciphergen’s existing collaboration agreements and that are listed in Schedule H
hereto as of the Effective Date, and all amendments thereof from time to time,
together with other similar agreements between Ciphergen and any Third Party in
effect during the Base Term directed to the discovery of Biomarkers (and all
amendment thereof).  Ciphergen shall update Schedule H from time to time, on
written notice to Quest Diagnostics.

 

“Ciphergen Collaboration IP” means any and all Patents and Technology Controlled
by Ciphergen or any of its Control Affiliates during the Base Term that is
developed under any Ciphergen Collaboration Agreement or that constitutes an
Improvement thereof.

 

“Ciphergen Licensed Technology” means any and all Ciphergen Biomarker IP,
Ciphergen Collaboration IP and Ciphergen Platform IP that are reasonably
necessary or desirable for Quest Diagnostics to: (a)  perform its obligations
under each Development Program and Test Kit Development Program; (b) use
instruments and Proprietary Supplies supplied by Ciphergen (or its designee) in
accordance with the applicable Supply Agreement, (c) perform Licensed Laboratory
Tests, or (d) use Test Kits supplied by Ciphergen (or its designee) to perform
Test Kit Services; in each case subject to the terms and conditions of this
Agreement.

 

“Ciphergen Net Sales” means the Net Sales of Test Kits of Ciphergen and its
Affiliates.

 

“Ciphergen Patents” has the meaning specified in Section 12.4(a) hereof.  A list
of certain Ciphergen Patents as of the Effective Date is attached hereto as
Schedule G.  Such list is not intended to be exclusive and shall not limit the
scope of Quest Diagnostics’ licenses under Article 12.  Ciphergen shall update
Schedule G from time to time, on written notice to Quest Diagnostics.

 

“Ciphergen Platform IP” means any Patents or Technology embodied in the
Ciphergen Platform Technology, that is Controlled by Ciphergen or any of its
Control Affiliates during the Base Term.

 

“Ciphergen Platform Technology” means any proprietary method developed by
Ciphergen for making or using Deep Proteome Products and ProteinChip Products,
and any Improvements thereto.

 

“Ciphergen Third Party Royalty” means any royalty or other payment that is made
by Ciphergen to a Third Party to fulfill its obligations under this Agreement
and that accrues with each performance of a Licensed Laboratory Test or each
sale of a Test Kit but excluding,

 

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however, any royalty payment for which Ciphergen is responsible pursuant to
Section 6.5(a) hereof.

 

“Claims” has the meaning specified in Section 14.1 hereof.

 

“Clinical Diagnostic” means, in connection with clinical medical practice, the
assaying, testing, or determination outside of a living organism of one or more
Biomarkers in or on any test sample for the purpose of identifying,
characterizing, defining, or diagnosing a disease state or other condition in
humans or animals, including without limitation determining the state of an
individual’s health to treat or prevent disease as well as the screening,
prognosis, therapeutic monitoring, and/or evaluation of the progression of any
disease or other condition.

 

“Clinical Laboratory Test” means any:  (a) reagent or reagent product comprising
a general purpose reagent or any ASR intended for performance of a Clinical
Diagnostic procedure; and (b) any method or process for use of such reagent,
which is validated by a particular entity internally, solely for use internally
by such entity.

 

“COMMERCIAL CLINICAL LABORATORY” MEANS ANY CLINICAL LABORATORY (I.E., ANY ENTITY
WHICH PERFORMS ANALYSIS OF SPECIMENS DERIVED FROM HUMANS FOR THE PURPOSE OF
PROVIDING INFORMATION FOR THE DIAGNOSIS, PREVENTION OR TREATMENT OF DISEASE, OR
THE ASSESSMENT OF HEALTH, “CLINICAL LABORATORY TESTING”) THAT DOES NOT FALL
WITHIN ANY OF THE FOLLOWING CATEGORIES: (I) A LABORATORY CONTAINED WITHIN A
HOSPITAL THAT SERVICES SUCH HOSPITAL’S INPATIENTS, OUTPATIENTS AND OUTREACH
PROGRAMS OR (II) A LABORATORY USING OR EMPLOYING CIPHERGEN’S PRODUCTS SOLELY FOR
RESEARCH OR DEVELOPMENT PURPOSES.  NOTWITHSTANDING THE FOREGOING, A [***] SHALL
BE CONSIDERED A COMMERCIAL CLINICAL LABORATORY.  FOR PURPOSES OF THIS AGREEMENT,
“HOSPITAL” WILL BE DEEMED TO INCLUDE OTHER SIMILAR TREATMENT CENTERS (E.G.,
URGENT CARE CENTERS AND CHRONIC CARE FACILITIES).

 

“COMMERCIAL LAUNCH” MEANS THE FIRST PERFORMANCE OF A LICENSED LABORATORY TEST BY
QUEST DIAGNOSTICS OR ANY OF ITS AFFILIATES ON A COMMERCIAL BASIS FOR A THIRD
PARTY, UNLESS THE PERFORMANCE IS FOR THE PRIMARY PURPOSE OF EVALUATING CONSUMER
ACCEPTANCE.  “COMMERCIALLY LAUNCHED” SHALL HAVE ITS CORRELATIVE MEANING.

 

“COMMERCIALIZE” MEANS THE MARKETING, PROMOTING, LEASING, DISTRIBUTION, OFFERING
FOR SALE OR SALE OF A PRODUCT OR SERVICE.

 

“Confidential Information” has the meaning specified in Section 11.1 hereof.

 

“Consumable Product” means any product consisting solely of devices, reagents or
other physical components, in each case intended for single- or limited-time use
or otherwise consumed in the utilization thereof;  and for clarity excludes
instrumentation hardware and associated software.

 

“Controlled” means, with respect to a particular item, information, material, or
Patent or other Intellectual Property right, that a Party (“Licensor”) possesses
the right, whether directly or indirectly, and whether by ownership, license,
contract or otherwise, to assign or grant a license, sublicense or other right
to or under such item, information, material, or Patent or other

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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Intellectual Property rights as provided for herein to the other Party (the
“Licensee”) without giving rise to any of the following: (i) a violation of the
terms of any written agreement with any Third Party (a) entered into as of the
Effective Date or (b) if entered into after the Effective Date pursuant to which
the same was first acquired, licensed or otherwise created by the Licensor
hereunder.

 

“Control Affiliate” [***] will refer to the ownership, directly or indirectly,
of at least fifty percent (50%) of the voting securities or other ownership
interest of the relevant entity.

 

“Credit Agreement” means the credit agreement dated as of the date hereof
between Quest Diagnostics and Ciphergen.

 

“Deep Proteome Product” means that suite of proprietary products and
Technology:  (a) that are [***] and (b) that either (i) are in existence or
under development by Ciphergen as of the Effective Date (including [***] as each
exists as of the Effective Date); or (ii) constitute any Improvements to the
foregoing or any replacement products or Technologies therefor made generally
available by Ciphergen during the Base Term.

 

“Development Election” means the election by Quest Diagnostics to develop a
proposed Clinical Laboratory Test pursuant to a Plan submitted by Ciphergen as
provided in Section 4.3 hereof.

 

“Development Program” has the meaning specified in Section 4.4(b) hereof.

 

“Disclosing Party” has the meaning specified in Section 11.1 hereof.

 

“Effective Date” has the meaning specified in the preamble hereto.

 

“Exclusive Period” has the meaning specified in Schedule E hereto.

 

“Exclusive Territory” means (a) the United States of America (and its
possessions and territories), Mexico and the United Kingdom and (b) any other
country outside the Restricted Territory in which Quest Diagnostics operates a
clinical laboratory at the time that a Test Kit is first commercialized;
provided, however, in the case of clause (b), that such country shall not be
considered part of the Exclusive Territory (but shall instead be considered as
part of the Non-Exclusive Territory) with respect to a particular Test Kit if
Quest Diagnostics has not given written notice to Ciphergen of its clinical
laboratory presence in such country prior to the time that Ciphergen executes an
agreement with a Commercial Clinical Laboratory in such country to sell the
applicable Test Kit (when available) to such Commercial Clinical Laboratory.

 

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(2)                                  [***]

                                                ***                          
Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the commission. ***

 

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“FDA” means the United States Food and Drug Administration, or the successor
thereto.

 

“Fee-for-Service” means an arrangement with a Third Party in which, subject to
satisfying any applicable billing requirements, Quest Diagnostics or an
Affiliate is to be paid a fee for each Licensed Laboratory Test or Text Kit
Service performed.

 

“Field” means all potential Clinical Diagnostics.

 

“First Plan” has the meaning specified in Section 3.4(b) hereof.

 

“Force Majeure” has the meaning specified in Section 16.5 hereof.

 

“GAAP” means then-current generally accepted accounting principles in the United
States as established by the Financial Accounting Standards Board or any
successor entity or other entity generally recognized as having the right to
establish such principles and similar cost accounting principles, in each case
consistently applied.

 

“Improvement” means any patentable or non-patentable invention, discovery,
technology, or information of any type whatsoever, including without limitation
any method, process, technical information, or Know-How, that when referring to
Improvements to a Party’s Separate IP, necessarily infringes the respective
Party’s Separate IP or is conceived, developed, or reduced to practice using
solely the respective Party’s Separate IP.

 

“Indemnitee” has the meaning specified in Section 14.3 hereof.

 

“Indemnitor” has the meaning specified in Section 14.3 hereof.

 

“Instrument” means the instruments using SELDI Technology that are made
generally available from time to time by Ciphergen.

 

“Intellectual Property” means Patents, patent applications, know-how,
copyrights, trade secrets, and trademarks, including without limitation Know-How
and Patent Rights.

 

“Joint IP” has the meaning specified in Section 12.1(b) hereof.

 

“Joint Know-How” means all Know-How that is now or at any time during the Term
of this Agreement Controlled, in whole or part, by both (i) Ciphergen or any of
its Affiliates and (ii) Quest Diagnostics or any of its Affiliates.

 

“Joint Patent” has the meaning specified in Section 12.4(c) hereof.

 

“Joint Press Release” has the meaning specified in Section 16.8 hereof.

 

“Jointly Developed” means, with respect to a particular item, including without
limitation information, that such item is created, discovered, obtained,
derived, or developed by both Parties’ employees or consultants.

 

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“Jointly Invented” means, with respect to a particular item, including without
limitation information, that is a patentable invention, both Parties’ employees
or consultants are considered inventors of such item under 35 U.S.C. § 1 et seq.
and as interpreted by the U.S. Patent and Trademark Office and the United States
courts.

 

“Know-How” means all Research Results, trade secrets, and proprietary,
non-patented inventions, discoveries, data, instructions, processes, formulas,
and information (including without limitation chemical, physical and analytical,
safety, manufacturing, and quality control data and information) created,
discovered, obtained, derived, or developed in connection with and as part of a
Plan, a Plan Supplement, a Development Program, or a Test Kit Development
Program.  Know-How does not include any inventions within the Patent Rights.

 

                                                “Licensed Application” has the
meaning specified in Schedule F hereto.

 

“Licensed Laboratory Test” means a Clinical Laboratory Test developed pursuant
to a Development Election made during the Plan Review Period (regardless of
whether the development of any such Licensed Laboratory Test is completed during
or after the Base Term).

 

“Net Sales” means the total amount invoiced to a Third Party on the sale,
distribution or other transfer of a product, performance of a service or the
sale or other transfer of data from the use of such product or performance of
such service (the “Licensed Element”) by Ciphergen and its Affiliates or any
entity within the Quest Network (each, a “Seller”) less the following all as
calculated in accordance with GAAP: (i) [***] (ii) [***] and (iii) [***].

 

(a)                                  For clarity, Net Sales shall exclude [***]
provided that if [***], Net Sales shall include [***]

 

(b)                                 In the event that the Licensed Element
(other than a Licensed Laboratory Test or Test Kit Service) is sold in
combination with another product, component, service or data (without which the
combination would have a lower value) and for which no royalty would be due
hereunder if sold separately (the “Combination Element”), Net Sales from such
combination for purposes of calculating the amounts due hereunder shall be
calculated by multiplying the Net Sales of the combination by the fraction
[***].  In the event that a substantial number of such separate sales were not
made during the previous calendar quarter then the Net Sales shall be as
reasonably allocated as mutually agreed between such

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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Licensed Elements and such Combination Elements based upon their relative
importance and proprietary protection.  For these purposes, [***] (including,
without limitation, product transferred in connection [***].

 

“Non-Exclusive Territory” means any country that is not included in the
definition of Exclusive Territory or Restricted Territory. 

 

“Notice of Default” has the meaning specified in Section 15.2 hereof.

 

“Notice of Termination” has the meaning specified in Section 15.2 hereof.

 

“Other Third Party Payment” has the meaning specified in Section 6.5(e) hereof.

 

“Outreach Testing” means Clinical Laboratory Testing performed for a patient who
is not (at the time such Clinical Laboratory Testing is performed) receiving
other non-diagnostic health care services administered by the associated
hospital system or any affiliated entities.  For this purpose, services provided
in a physician’s office are not considered healthcare services administered by a
hospital system or any affiliated entity even if the physician’s office is
located in a medical building that is part of a hospital complex. 

 

“Pass Election” means an election by Quest Diagnostics not to pursue the
development of a proposed Licensed Laboratory Test pursuant to a Plan submitted
by Ciphergen as provided in Section 4.6 hereof.

 

“Patent” means any of the following, whether existing now or in the future
anywhere in the world: (i) any issued Letters Patent, including without
limitation inventor’s certificates, utility model, substitutions, extensions,
confirmations, reissues, re-examination, renewal or any like governmental grant
for protection of inventions; and (ii) any pending application for any of the
foregoing, including without limitation any continuation, divisional,
substitution, additions, continuations-in-part, provisional and converted
provisional applications.

 

“Patent Rights” means the rights under any Ciphergen Patents, Quest Diagnostics
Patents and Joint Patents.

 

“Permitted Sale(s)” has the meaning specified in Section 8.1 hereof.

 

“Plan” means each plan developed by Ciphergen that describes the proposed
development and commercialization of an Application within the Field.  Each Plan
will include without limitation the elements specified in Schedule C.

 

“Plan Deficiency” has the meaning specified in Section 4.3 hereof.

 

“Plan Review Period” has the meaning specified in Section 4.3 hereof.

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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“Plan Supplement” means each plan developed by Quest Diagnostics that
supplements a Plan developed by Ciphergen.  Each Plan Supplement will include
without limitation the elements specified in Schedule D.

 

“Proprietary Supplies” means the supplies needed to assemble and perform a
Licensed Laboratory Test, including, but not limited to, biochips, ASRs, array
components, and supplies (such as buffers and reagents) that are not commonly
available, but excluding instrumentation and commonly available (i) laboratory
equipment and (ii) supplies and (iii) buffers and reagents and (iv) sample
collection/shipping materials.

 

“ProteinChip Products” means that suite of proprietary products based on the
SELDI Technology marketed or under development by Ciphergen as of the Effective
Date including (i) the hardware system for polypeptide detection and
quantification (the “ProteinChip System”), (ii) the proprietary software bundled
or associated with or for use of or on the ProteinChip System, including the
Biomarkers Pattern, CiphergenExpress (collectively, the “ProteinChip Software”),
(iii) the test arrays and other consumables for use on the ProteinChip System
(collectively, “ProteinChip Consumables”), (iv) robotic systems for use with the
ProteinChip System (collectively, “ProteinChip Robotics”) and (v) other
proprietary accessories for use with the ProteinChip System (collectively,
“ProteinChip Accessories”), (all as described in more detail on Schedule K) as
each exists as of the Effective Date together with any Improvements thereto or
any replacement products or Technologies therefor available during the Base
Term.

 

“Quest Diagnostics” has the meaning specified in the preamble hereto.

 

“Quest Diagnostics Biomarker IP” means all Biomarker Patents, and other
Technology that are Controlled by Quest Diagnostics or any of its Control
Affiliates during the Base Term and that cover Biomarkers discovered by Quest
Diagnostics using ProteinChip Products during the Base Term.

 

“Quest Diagnostics IP” means all Patents and Technology that cover or are
embodied in Clinical Diagnostic Applications and that are Controlled by Quest
Diagnostics or any of its Control Affiliates during the Base Term.

 

“Quest Diagnostics Patents” has the meaning specified in
Section 12.4(b) hereof.  Set forth in Schedule I attached hereto is a list of
certain Quest Diagnostics Patents as of the Effective Date.  Such list is not
intended to be exclusive and shall not limit the scope of Ciphergen’s licenses
under Article 12. Quest Diagnostics shall update Schedule I from time to time,
on written notice to Ciphergen.

 

“Quest Fee-for-Service Sales” means the Net Sales from all Licensed Laboratory
Tests and Test Kit Services performed by the Quest Network and billed on a
Fee-for-Service basis.

 

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(3)          Biomarker Pattern™ is a trademark of Ciphergen, but is written in
this Agreement without the TM mark for convenience.

 

(4)          CiphergenExpress™ is a trademark of Ciphergen, but is written in
this Agreement without the TM mark for convenience.

 

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Amounts invoiced or received for non-cash consideration will be valued at fair
market value.  Revenues from clinical laboratory tests and anatomic pathology
services that are not Licensed Laboratory Tests or Test Kit Services will be
ignored even if such other test or services are performed with respect to the
same Requisition as are Licensed Laboratory Tests and Test Kit Services.

 

“Quest Gross Margin” has the meaning specified in Schedule E.

 

“Quest Network” means (i) Quest Diagnostics, and (ii) all Affiliates of Quest
Diagnostics, and (iii) any corporation, limited liability company, partnership
or other entity in which Quest Diagnostics or an Affiliate of Quest Diagnostics
holds at least a one third (1/3) interest in the equity and profits and losses
of such corporation, limited liability company, partnership or other entity on a
fully-diluted basis, but [***].  The members of the Quest Network are set forth
on Schedule J.  Quest Diagnostics agrees to update Schedule J from time to time,
on written notice to Ciphergen.

 

“Quest Third Party Royalty” means any royalty payment that is made by Quest
Diagnostics to a Third Party to fulfill its obligations under this Agreement and
that accrues with each performance of a Licensed Laboratory Test or Test Kit
Service but excluding, however, any royalty payment for which Ciphergen is
responsible pursuant to Section 6.5(a) hereof.

 

“Restricted Territory Laboratory Test Rights” has the meaning specified in
Section 3.3(a) hereof.

 

“Restricted Territory Test Kit Rights” has the meaning specified in
Section 3.3(b) hereof.

 

“Receiving Party” has the meaning specified in Section 11.1 hereof.

 

“Regulatory Authority” means any governmental or regulatory authority,
department, body or agency or any court, tribunal, bureau, commission or other
similar body, whether federal, state, county or municipal, including the FDA.

 

“Requisition” means a form accompanying a specimen that specifies the test or
tests that the ordering physician directs to be performed, which form may be
customized for a particular physician or practice to include tests that tend to
be ordered frequently by such physician or practice.

 

“Research Data” means all data, analytical results, case report forms, other
clinical data, inventions, and any other information (including without
limitation algorithms), obtained, created, discovered, developed, derived, or
conceived and reduced to practice in connection with a Development Program or a
Test Kit Development Program.

 

“Research Materials” mean all tangible property, including, without limitation,
assay materials and clinical samples, created, invented, obtained, discovered,
developed, or derived, or the sole function or utility of which is discovered or
determined, in the course of performing a Development Program or a Test Kit
Development Program.

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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“Research Results” means all Research Data and Research Materials.

 

“Restricted Territory” means Japan, the People’s Republic of China and Taiwan
(Republic of China).

 

“SEC” has the meaning specified in Section 11.2 hereof.

 

“SELDI Technology” means any and all Patents claiming or Technology relating to
Surface Enhanced Laser Desorption/Ionization as generally described in U.S.
Patent Nos.  5,719,060 or 6,579,719, in each case Controlled by Ciphergen or its
Control Affiliates during the Base Term.

 

“Separate IP” has the meaning specified in Section 12.1(a) hereof.

 

“Steering Committee” has the meaning specified in Section 2.5 hereof.

 

“Stock Purchase Agreement” has the meaning specified in the Recitals.

 

“Strategic Alliance” has the meaning specified in Section 2.1.

 

“Sublicensees” has the meaning specified in Section 12.1(c) hereof.

 

“Supply Agreement” has the meaning specified in Section 9.4 hereof.

 

                                                “Technology” means any and all
technology and technical information, including without limitation data,
inventions (whether or not patented or patentable), knowledge, ideas,
developments, prototypes, invention disclosures, designs, processes, sequences,
methods, techniques, materials, instructions, formulas, compositions,
chemistries, algorithms, know-how, research, modifications, software, drawings,
equipment, protocols, configuration and process information, specifications,
models, works of authorship, improvements, and any other technical subject
matter.

 

“Term” has the meaning specified in Section 15.1 hereof.

 

“Test Kit” means a kit, biochip or other supply developed by Ciphergen pursuant
to a Test Kit Development Program for an Application that corresponds to a
Licensed Laboratory Test developed by Quest Diagnostics and cleared or approved
by the FDA or other Regulatory Authority, as relevant, for marketing in the
applicable jurisdiction.  A Test Kit will include components and instructions
required for performing such Application.

 

“Test Kit Development Program” has the meaning specified in Section 7.1 hereof.

 

“Test Kit Service” means a clinical laboratory test that is performed by a
member of the Quest Network or a Third Party using a Test Kit that (a) has been
approved or cleared by the FDA or other applicable Regulatory Authority for
marketing in the applicable jurisdiction, if necessary, and (b) has been
developed by Ciphergen pursuant to a Test Kit Development Program.

 

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“Test Kit Supplies” means the materials and supplies included in a Test Kit,
including any biochips, buffers, reagents, and other supplies.

 

“Third Party” means any person or entity other than Ciphergen, Quest
Diagnostics, or any of their respective Affiliates.

 

“[***]” has the meaning specified in Section 3.9(b) hereof.

 

“Valid Claim” means either (i) a claim of an issued and unexpired Patent that
has not been held revoked, unenforceable or invalid by a court or administrative
or other government agency of competent jurisdiction and that has not been
admitted to be invalid or unenforceable through reissue, reexamination,
disclaimer or otherwise, or (ii) a claim of a pending Patent application which
claim was filed in good faith and has not been abandoned or disallowed without
the possibility of appeal.

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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SCHEDULE B

 

PERSONNEL

 

Gail Page will serve as the initial chair of the Steering Committee.

 

Quest Diagnostics will use commercially reasonable efforts to have at least
[***] devoted to the development of such Licensed Laboratory Tests, which
employees will be under the direction of a senior scientific professional of
Quest Diagnostics.

 

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***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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SCHEDULE C

REQUIRED CONTENTS FOR EACH PLAN

 

A PLAN WILL INCLUDE THE FOLLOWING ELEMENTS:

 

1.               PURPOSE: THE PURPOSE OF THE PROPOSED LICENSED LABORATORY TEST
AND TARGETED PATIENTS.

 

2.               PRELIMINARY RESULTS FROM RELEVANT COLLABORATIONS, INTERNAL
DISCOVERIES AND DEVELOPMENT EFFORTS, OR OTHER ACQUIRED INTELLECTUAL PROPERTY
WHICH INDICATE USEFUL BIOMARKERS FOR THE PROPOSED LICENSED LABORATORY TEST.

 

3.               IDENTIFICATION OF BIOMARKERS OR MICROARRAYS USED TO PERFORM THE
ANALYSIS.  THIS INFORMATION WILL BE PRESENTED IN THE FORMAT OF A SCIENTIFIC
PAPER WITH ALL PROTOCOLS, METHODS, AND STATISTICAL ANALYSIS REQUIRED FOR
PUBLICATION IN A PEER REVIEWED MEDICAL JOURNAL.

 

4.               A minimum of [***] well-characterized disease associated
samples must be included in a blinded study, as well as appropriate control
specimens, in such prescribed analysis.

 

5.               In the event FDA clearance is required prior to
commercialization, protocols for clinical trials will be designed and reviewed
by the FDA prior to beginning such trials.

 

6.               Patent landscape (including a reasonable freedom to operate
analysis) and, if necessary, a preliminary assessment of the projected cost of
obtaining freedom to operate with respect to any Third Party Patents that may be
desirable or necessary to license for the commercialization the proposed
Licensed Laboratory Test.

 

7.               Preliminary proposed Test Kit Development Program (subject to
amendment by the Steering Committee) including, in brief, the contents listed
above, as well as, criteria for determining whether to proceed with the
development of such proposed Test Kit.

 

8.               Anticipated pricing and economic rationale.

 

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(5)                                  To be included if an FDA application is
contemplated.

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

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SCHEDULE D

REQUIRED CONTENTS FOR THE PLAN SUPPLEMENT

 

A PLAN SUPPLEMENT WILL INCLUDE THE FOLLOWING ELEMENTS:

 

1. Market research and market estimates for the United States, including
evaluation of the current and anticipated competitive landscape for the proposed
Licensed Laboratory Test.

 

2. Timelines/Milestones.

 

3. Market strategies, branding, market launch and post-launch support plan.

 

4. Regulatory strategies.

 

5. Pricing and reimbursement strategies.

 

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SCHEDULE E

ROYALTIES AND FEES TO CIPHERGEN

 

1.                                       The fee for any Instruments provided by
Ciphergen that are used for performing Licensed Laboratory Tests or Test Kits
Services shall be a [***].

 

2.                                       For each Licensed Laboratory Test and
(but only during the Exclusive Period with respect to any Test Kit corresponding
to such Licensed Laboratory Test) each Test Kit Service, Quest Diagnostics will
pay Ciphergen a royalty equal to [***].  Ciphergen will be responsible for any
royalties due under the Ciphergen Collaboration Agreements.  The royalty will be
reduced by [***] of any royalties due from Quest Diagnostics to any other Third
Parties to the extent provided in Section 6.5.  There will be no such royalty
due under Licensed Laboratory Tests and Test Kit Services that are covered by
[***].

 

3.                                       During the Exclusive Period with
respect to any Test Kit Service, Quest Diagnostics will pay Ciphergen for any
Proprietary Supplies and Test Kits provided by Ciphergen to Quest Diagnostics
and its affiliates in an amount equal to Ciphergen’s then-current list price
less a [***] provided, however, the cost for [***] provided for the purpose of
developing laboratory tests or FDA-cleared biochips, test kits and supplies
shall be provided at [***]. 

 

4.                                       Notwithstanding the provision of
Paragraph 2 of this Schedule E, to the extent that Quest Diagnostics determines
that the aggregate fees paid by Quest Diagnostics to Ciphergen for any royalties
and any Proprietary Supplies or Test Kits (together with any royalties due to
Third Parties) exceed [***], Quest Diagnostics will provide Ciphergen with
written notice of such determination.  Upon receiving such notice, Ciphergen
will negotiate in good faith with Quest Diagnostics regarding an amendment to
the royalty and fees with the intent that the fees payable by Quest Diagnostics
(including any royalties due to Third Parties) will [***], provided, however,
that the aggregate fees for the particular Licensed Laboratory Test or Test Kit
Service will not be reduced such that

 

--------------------------------------------------------------------------------

*  For purposes of determining the [***] for a particular item, items
transferred (a) [***], (b) pursuant to [***] existing as of the Effective Date
or agreements entered into after the Effective Date primarily for [***], (c) for
[***] (d) for use for [***] or (e) as part of a [***] will not be considered.

 

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the commission. ***

 

 

E-1

--------------------------------------------------------------------------------

 

Ciphergen’s gross margin percentage (i.e., [net revenues – COGS]/net revenues])
is less than [***].  In the case that both conditions cannot be met, the Parties
will negotiate an equitable adjustment to the pricing to reflect the overall
economic sharing under the Agreement.

 

5.                                       Quest Diagnostics will provide such
information as Ciphergen reasonably requests with respect to the calculation of
Quest Gross Margin relating to the Licensed Laboratory Tests and Test Kit
Services.  Any such adjustment will be retroactive only to the beginning of the
calendar quarter in which the notice was given under this Schedule E and will
not be made more often than every four (4) calendar quarters.  The scope of any
negotiations under this Paragraph 5 of this Schedule E will include mechanisms
for monitoring future fees paid by Quest Diagnostics pursuant to this
Schedule E.  In the event that the royalties and fees payable to Ciphergen under
this Schedule E have been revised pursuant to this Paragraph 5 and such fees in
any four (4) consecutive calendar quarters are projected to be less than or have
been less than [***] on all applicable Licensed Laboratory Tests and Test Kit
Services, then Quest Diagnostics will negotiate in good faith with Ciphergen
regarding an amendment to this Schedule E with the intent that the royalties and
fees payable by Quest Diagnostics pursuant to this Schedule E will equal
approximately [***] on all applicable Licensed Laboratory Tests and Test Kit
Services in the aggregate, provided that Ciphergen’s gross margin percentage
[***]. 

 

6.                                       Quest Diagnostics will pay Ciphergen
for any Proprietary Supplies and Test Kits [***].

 

7.                                       Following the Exclusive Period with
respect to any Test Kit Service, Quest Diagnostics will pay Ciphergen for any
Test Kits or Test Kit Supplies [***] and no separate royalty shall be paid. 

 

8.                                       The “Exclusive Period” shall mean,
(i) with respect to each Test Kit or corresponding Test Kit Service, the period
beginning on the date such Test Kit is first Commercialized and ending on the
third (3rd) anniversary of the date that such Test Kit was cleared or approved
by the FDA in the United States; there will be three or more different Exclusive
Periods (one for each Test Kit developed under the Strategic Alliance) unless
the timing (as to the first Commercialization and the clearance by the FDA) is
the same for two or more of the Test Kits developed under the Strategic
Alliance; and (ii) with respect to each

 

--------------------------------------------------------------------------------

*  For purposes of determining the [***] for a particular item, items
transferred (a) as [***], (b) pursuant to [***] existing as of the Effective
Date or agreements entered into after the Effective Date primarily for [***],
(c) for [***] (d) for use for [***] (e) as part of a [***] will not be
considered.

 

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the commission. ***

 

E-2

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Licensed Laboratory Test, five (5) years following the Commercial Launch of such
Licensed Laboratory Test in the Exclusive Territory.

 

9.                                       “Quest Gross Margin” means, on a
particular Licensed Laboratory Test or Test Kit Service basis, Quest
Fee-For-Service Sales less the corresponding cost of sales (i.e., cost of goods
(services) sold for such Licensed Laboratory Test or Test Kit Service (including
Licensed Laboratory Tests and Test Kit Services that are covered by Capitated
arrangements determined in accordance with GAAP and in any event excluding
corporate overhead, sales and marketing expenses and any Third Party royalties
paid by the applicable member of the Quest Network (but excluding any royalties
owing to Ciphergen))).

 

E-3

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SCHEDULE F

ROYALTIES TO QUEST DIAGNOSTICS

 

1.                                       Ciphergen will pay to Quest Diagnostics
a royalty equal to [***] of Test Kits for a period of ten (10) years from the
date of the commercialization of Test Kits that are sold to Third Parties.

 

2.                                       With respect to any revenues received
in connection with the exercise of any rights under the licenses granted
pursuant to Section 12.3 (the “Licensed Applications”), Ciphergen shall pay
Quest Diagnostics a royalty of [***] for such Licensed Applications (or [***])
after the third anniversary of the Commercial Launch of such Licensed
Applications and royalty-free prior thereto. 

 

3.                                       For purposes of the foregoing, “Net
Licensing Revenues” means all amounts actually received by Ciphergen or its
Affiliates from a sublicensee in consideration for a sublicense under Quest
Biomarker IP, net of all withholding or similar taxes (paid or payable) with
respect to such amounts, including, license fees, milestones payments and
license maintenance fees, but specifically excluding consideration received
(a) as [***], (b) for the [***], (c) for the sale of [***], (d) as a [***],
(e) as [***], (f) for [***], (g) for the [***] and (h) amounts [***] to which
the Agreement pertains;  [***] shall mean a [***]; and “Fair Market Value” shall
mean the amount equal to: (i) if the capital is traded on a national exchange
(e.g., NYSE, NASDAQ or similar regulated exchange), then the lesser of (A) the
closing sale price of a share of such capital stock as reported on the national
exchange on the trading day immediately prior to announcement of the applicable
transaction or (B) average closing sale price of a share of such capital stock
as reported on the national exchange for the five (5) trading days immediately
preceding, and the five (5) trading days including and following, the date of
the announcement of the applicable transaction; or (ii) if the capital stock is
not traded on a national exchange, then the most-recent price per share paid by
any financial investor for such equity security or a substantially similar
equity security (e.g., in the case of Series B Preferred, Series A Preferred
would be substantially similar), provided, however for purposes of clause
(ii) [***], (II) [***].

 

--------------------------------------------------------------------------------

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

F-1

--------------------------------------------------------------------------------

 

SCHEDULE G

LIST OF CIPHERGEN PATENTS

 

 

 

Ciphergen File
No.

 

Ctry

 

Genealogy

 

Serial No.

 

Filing Date

 

Inventors

 

Status/Expected
Actions

 

Ownership

 

 

 

 

 

 

 

 

 

 

 

 

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

--------------------------------------------------------------------------------

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

G-1

--------------------------------------------------------------------------------

 

SCHEDULE H

LIST OF CIPHERGEN COLLABORATION AGREEMENTS

 

Collaborator

 

Agreement

 

Effective Date or
Date

[***]

 

[***]

 

[***]

 

--------------------------------------------------------------------------------

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

 

H-1

--------------------------------------------------------------------------------

 

SCHEDULE I

LIST OF QUEST DIAGNOSTICS PATENTS

 

[TO COME]

 

I-1

--------------------------------------------------------------------------------

 

SCHEDULE J

QUEST NETWORK MEMBERS

 

Quest Diagnostics Incorporated (DE)

 

[***]

 

--------------------------------------------------------------------------------

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

J-1

--------------------------------------------------------------------------------

 

[***]

 

--------------------------------------------------------------------------------

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

J-2

--------------------------------------------------------------------------------

 

SCHEDULE K

PROTEINCHIP PRODUCTS

 

Item
Number

 

Product Description

 

UOM

 

Price

 

Discount%

 

Discount Price

 

Systems

 

 

 

 

 

 

 

 

 

Z500-0010

 

ProteinChip® System Series 4000, Enterprise AutoBiomaker Edition (115 V)

 

each

 

$

[***]

 

[***]

 

$

[***]

 

Z500-0011

 

ProteinChip System Series 4000, Enterprise Edition (115 V)

 

each

 

$

[***]

 

[***]

 

[***]

 

Z330-0030

 

Biomek® 3000 with ProteinChip Integration Package

 

each

 

$

[***]

 

[***]

 

[***]

 

Hardware Accessories

 

 

 

 

 

 

 

 

 

A102-0005

 

Dell Pentium Workstation

 

each

 

$

[***]

 

[***]

 

[***]

 

A400-0010

 

Dell Pentium Server

 

each

 

$

[***]

 

[***]

 

[***]

 

A102-0001

 

Flat Panel Monitor

 

each

 

$

[***]

 

[***]

 

[***]

 

A101-0001

 

Color Printer

 

each

 

$

[***]

 

[***]

 

[***]

 

A300-0010

 

Hand-held Bar Code Scanner for Personal Computer

 

each

 

$

[***]

 

[***]

 

[***]

 

A301-0010

 

Uninterruptible Power Supply, 120 V

 

each

 

$

[***]

 

[***]

 

[***]

 

Software

 

 

 

 

 

 

 

 

 

 

 

SW304-0030

 

CiphergenExpress Biomarker Edition

 

5 seats

 

$

[***]

 

[***]

 

[***]

 

SW304-0020

 

CiphergenExpress Data Manager

 

5 seats

 

$

[***]

 

[***]

 

[***]

 

SW302-0050

 

CiphergenExpress Software Per-Named User License Extension

 

1 seat

 

$

[***]

 

[***]

 

[***]

 

SW303-0020

 

CiphergenExpress Biomarker Analysis Module, for Series 4000 Personal System

 

1 seat

 

$

[***]

 

[***]

 

[***]

 

Consumables & Accessories

 

 

 

 

 

 

 

 

 

C503-0011

 

Cassette Compatible Bioprocessor (Blue)

 

each

 

$

[***]

 

[***]

 

[***]

 

C503-0012

 

96-well Bioprocessor Reservoir, Cassette Compatible

 

Pkg of 5

 

$

[***]

 

[***]

 

[***]

 

C503-0013

 

96-well Bioprocessor ProteinChip Cassette, Pkg of 5

 

Pkg of 5

 

$

[***]

 

[***]

 

[***]

 

C503-0007

 

96-well Bioprocessor Reservoir & Gasket, Pkg of 5 (for Black Processor)

 

Pkg of 5

 

$

[***]

 

[***]

 

[***]

 

C503-0008

 

Bioprocessor, 8-well, A-H Format

 

each

 

$

[***]

 

[***]

 

[***]

 

C503-0009

 

8-well Replacement Bioprocessor Reservoir, A-H Format

 

each

 

$

[***]

 

[***]

 

[***]

 

C503-0010

 

8-well Replacement Bioprocessor Gasket, A-H Format

 

Pkg of 2

 

$

[***]

 

[***]

 

[***]

 

C201-0001

 

Array Reaction Tubes

 

Pkg of 50

 

$

[***]

 

[***]

 

[***]

 

C201-0002

 

ProteinChip® Array Forceps

 

each

 

$

[***]

 

[***]

 

[***]

 

C573-0080

 

Q10 ProteinChip Array, A-H Format

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

C573-0075

 

CM10 ProteinChip Array, A-H Format, Pkg of 12

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

K203-0003

 

Expression Difference Mapping Kit – CM ProteinChip Arrays & Buffer”

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

C573-0078

 

IMAC30 ProteinChip Array, A-H Format, Pkg of 12

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

 

--------------------------------------------------------------------------------

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

K-1

--------------------------------------------------------------------------------

 

Item
Number

 

Product Description

 

UOM

 

Price

 

Discount%

 

Discount Price

 

K203-0002

 

Expression Difference Mapping Kit – IMAC ProteinChip Arrays & Buffer Set

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

C573-0065

 

H50 ProteinChip Array, A-H Format, Pkg of 12

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

K203-0001

 

Expression Difference Mapping Kit – H50 ProteinChip Arrays & Buffer

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

C573-0028

 

H4 ProteinChip Array, A-H Format, Pkg of 12

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

C573-0081

 

SEND ID ProteinChip Array, A-H Format, Pkg of 12

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

C553-0082

 

RS100 ProteinChip Array, A-H Format, Pkg of 6

 

Pkg of 6

 

$

[***]

 

[***]

 

[***]

 

C573-0045

 

PS20 ProteinChip Array, A-H Format, Pkg of 12

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

C553-0044

 

PS10 ProteinChip Array, A-H Format, Pkg of 12

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

C573-0043

 

NP20 ProteinChip Array, A-H Format, Pkg of 12

 

Pkg of 12

 

$

[***]

 

[***]

 

[***]

 

C553-0033

 

Gold Chip, A-H Format, Single Chip

 

each

 

$

[***]

 

[***]

 

[***]

 

K200-0001

 

Expression Difference Mapping Kit – H50 Buffer

 

each

 

$

[***]

 

[***]

 

[***]

 

K200-0005

 

Expression Difference Mapping Kit – H50 Buffer, 1 liter size

 

each

 

$

[***]

 

[***]

 

[***]

 

K2000-0002

 

Expression Difference Mapping Kit – IMAC Buffer Set

 

each

 

$

[***]

 

[***]

 

[***]

 

K200-0006

 

Expression Difference Mapping Kit – IMAC Binding Buffer, 1 liter size

 

each

 

$

[***]

 

[***]

 

[***]

 

K2000-0008

 

Expression Difference Mapping Kit – IMAC Charging Solution, 200 mL size

 

each

 

$

[***]

 

[***]

 

[***]

 

K2000-0009

 

Expression Difference Mapping Kit – IMAC Neutralizing Solution, 200 mL size

 

each

 

$

[***]

 

[***]

 

[***]

 

K2000-0003

 

Expression Difference Mapping Kit – CM Low Stringency Buffer

 

each

 

$

[***]

 

[***]

 

[***]

 

K2000-0007

 

Expression Difference Mapping Kit – CM Low Stringency Buffer, 1 liter size

 

each

 

$

[***]

 

[***]

 

[***]

 

K2000-0004

 

Expression Difference Mapping Kit – CM High Stringency Buffer

 

each

 

$

[***]

 

[***]

 

[***]

 

K100-0007

 

Expression Difference Mapping Kit – Serum Fractionation

 

each

 

$

[***]

 

[***]

 

[***]

 

K100-0008

 

Replacement Buffers for K100-0007

 

each

 

$

[***]

 

[***]

 

[***]

 

K100-0010

 

Expression Difference Mapping Kit – U9 buffer

 

each

 

$

[***]

 

[***]

 

[***]

 

K100-0005

 

ProteinChip Antibody Capture Kit

 

each

 

$

[***]

 

[***]

 

[***]

 

C300-0001

 

EAM, CHCA

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C300-0002

 

EAM, SPA, Pkg of 20

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C300-0003

 

EAM, EAM-1, Pkg of 20

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C300-0004

 

EAM Kit, Assortment

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C100-0005

 

All-in-1 Peptide Standard

 

each

 

$

[***]

 

[***]

 

[***]

 

C100-0007

 

All-in-1 Protein Standard II

 

each

 

$

[***]

 

[***]

 

[***]

 

 

--------------------------------------------------------------------------------

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

K-2

--------------------------------------------------------------------------------

 

Item
Number

 

Product Description

 

UOM

 

Price

 

Discount%

 

Discount Price

 

C100-0001

 

Calibrant Kit, Protein Mw Standards (10), Pkg of 20 (2 of each standard)

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C100-0002

 

Calibrant Kit, Peptide MW Standards (7), Pkg of 14 (2 of each standard)

 

Pkg of 14

 

$

[***]

 

[***]

 

[***]

 

C100-0006

 

Human Serum Control

 

 

 

$

[***]

 

[***]

 

[***]

 

C540-0019

 

IDM Affinity Beads, 200 reactions

 

 

 

$

[***]

 

[***]

 

[***]

 

C5400-0017

 

Q Ceramic HyperD® F Spin Columns,

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C540-0018

 

Q Ceramic HyperD® F Filtration Plate

 

 

 

$

[***]

 

[***]

 

[***]

 

C540-0024

 

CM Ceramic HyperD® F Spin Columns, Pkg of 20

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C540-0025

 

DEAE Ceramic HyperD® F Spin Columns, Pkg of 20

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C540-0026

 

S Ceramic HyperD® F Spin Columns, Pkg of 20

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C540-0027

 

IMAC HyperCel Spin Columns

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C540-0027

 

MEP HyperCel Spin Columns

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C540-0028

 

MEP HyperCel Spin Columns

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C540-0029

 

Blue Trisacryl® Spin Columns, Pkg of 20

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

C540-0030

 

Methyl Ceramic HyperD® F Columns, Pkg of 20

 

Pkg of 20

 

$

[***]

 

[***]

 

[***]

 

Maintenance

 

 

 

 

 

 

 

 

 

P300-0006

 

Service Agreement, ProteinChip Systems, Series 4000 Enterprise Editions, 12
month

 

Each

 

$

[***]

 

[***]

 

[***]

 

P300-0003

 

Service Agreement, ProteinChip Systems, Series 4000 Enterprise Editions, 24
month

 

Each

 

$

[***]

 

[***]

 

[***]

 

Training & Consulting

 

 

 

 

 

 

 

 

 

A600-0010

 

ProteinChip Applications Guide

 

Each

 

$

[***]

 

[***]

 

[***]

 

PUB-0074

 

Expression Difference Mapping Protocol Guide”

 

Each

 

$

[***]

 

[***]

 

[***]

 

PUB-0075

 

Protein Identification & Characterization Protocol Guide

 

Each

 

$

[***]

 

[***]

 

[***]

 

PUB-0076

 

Interaction Discovery Mapping Protocol Guide”

 

Each

 

$

[***]

 

[***]

 

[***]

 

 

--------------------------------------------------------------------------------

***                           Confidential treatment requested pursuant to a
request for confidential treatment filed with the Securities and Exchange
Commission. Omitted portions have been filed separately with the commission. ***

 

K-3

--------------------------------------------------------------------------------