EXHIBIT 10.47


 


CREDIT AGREEMENT


 


BY AND BETWEEN


 


QUEST DIAGNOSTICS INCORPORATED


 


AND


 


CIPHERGEN BIOSYSTEMS, INC.


 





















 


CREDIT AGREEMENT


 


THIS CREDIT
AGREEMENT (this “Agreement”) is made and effective on the 22nd day of
July, 2005, by and between Ciphergen Biosystems, Inc., a Delaware
corporation (“Borrower” or “the Company”), and Quest Diagnostics
Incorporated, a Delaware corporation (the “Lender” or “Quest
Diagnostics”).


 


WHEREAS,
the Company and Quest Diagnostics have entered into a Strategic Alliance Agreement
dated as of the date hereof (the “Strategic Alliance Agreement”) related
to the development of laboratory tests; and


 


WHEREAS,
Borrower wishes to obtain from Lender and Lender wishes to grant to Borrower a
line of credit in the principal amount of ten million dollars ($10,000,000)
(the “Maximum Principal Obligation”).


 


NOW,
THEREFORE, in consideration of the foregoing premises and the covenants
contained herein, the parties agree as follows:


 


1.                                       THE LOAN.


 


1.1                                 Loan.


Subject
to the terms contained herein, Lender hereby agrees to loan to Borrower (the
total principal amounts loaned pursuant to this Section 1.1 are referred
to as the “Loan”) an aggregate principal amount equal to the Maximum Principal
Obligation of ten million dollars ($10,000,000).


 


1.2                                 Use of Loan Proceeds.


The
proceeds of the Loan shall only be used to pay the costs and expenses directly
related to the preparation of the Plans and the activities contemplated by the
strategic alliance as more fully set forth in the Strategic Alliance Agreement.


 


1.3                                 Procedure for Disbursement.


1.3.1                        Disbursements under the Loan shall be made in
increments of four hundred sixteen thousand six hundred sixty six dollars and
66 cents ($416,666.66) on the last day of each 


 


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month during the twenty four (24) month period
ending after the date of this Agreement. 
Prior to each disbursement, Borrower shall provide to Lender a
certification by the Chief Executive Officer or Chief Financial Officer as to: (a) the
completeness and accuracy at the time of the certification of the
representations and warranties contained in Article 3; and (b) the
absence of any default hereunder.


 


1.3.2                        Amounts distributed under this Agreement shall be
delivered by Lender to Borrower or its order in cash or cash equivalent,
provided that Borrower shall have previously executed and delivered to Lender one
or more Revolving Promissory Notes in the form attached hereto as Schedule A (the “Note”) promising to pay amounts
borrowed in accordance with the terms of the Note and this Agreement.


 


1.4                                 Interest.


Subject
to Section 1.5.3, interest shall accrue on the average daily balance of
all amounts loaned to Borrower at an annual rate equal to the Prime Rate plus
0.5% until such time as the Loan is forgiven or repaid in accordance with Section 1.5.2.  Interest shall be calculated on the basis of
the actual number of days elapsed over a year of 365 days (or 366, if
applicable).  Prime Rate means the per
annum rate of interest established from time to time by Bank of America as its
Prime Rate.  Any change in the interest
rate resulting from a change in the Prime Rate shall become effective as of
12:01 a.m. of the Business Day on which each change in the Prime Rate is
announced by Bank of America.  The Prime
Rate is a reference rate used by Bank of America in determining interest rates
on some loans which may be priced at, above or below such announced rate and is
not intended to be the lowest rate of interest charged on any extension of
credit to any debtor.


 


1.5                                 Repayment.


1.5.1                        Termination of Agreement.  All rights
and obligations under this Agreement, including but not limited to Borrower’s
obligations of repayment and Lender’s rights under Section 4 shall
survive, and remain in full force and effect, until all principal and interest and
any other amounts due Lender hereunder are fully paid.  Borrower shall have the right to terminate
this Agreement upon two (2) business days notice and payment in full of
all principal and interest and other amounts, if any,  due Lender under this Agreement.


 


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1.5.2                        Loan to be Forgiven Upon Achievement of Milestones;
Repayment of Principal and Interest.   Provided no Event of Default has occurred
and is continuing, the Loan shall be forgiven to the extent that Borrower
achieves certain milestones with respect to three Plans presented pursuant to
the strategic alliance as set forth in the Strategic Alliance Agreement.  In the event Borrower fails to achieve
certain milestones as set forth on Schedule B,
the principal amount outstanding related to each milestone not achieved shall
be due and payable to Lender in one lump sum on the fifth anniversary of the
date of this Agreement.  Except to the
extent the Loan is forgiven, beginning on the first Business Day of the month
following the date of this Agreement, Borrower shall pay to Lender, on a
monthly basis and at such time as any principal is prepaid or paid at maturity,
all accrued and unpaid interest on the Loan. 
All payments of principal and interest shall be paid to Lender by wire
transfer.  Payment by wire transfer
should be made to Bank of New York, New York, NY, ABA Number 021000018, Account
Name: Quest Diagnostics Incorporated, Account Number: 8900159464.


 


1.5.3                        Late Payment.


Except
to the extent the Loan is forgiven, failure to pay any part of the principal, interest
or other amount owing hereunder or under any Note within five (5) days
after the day on which such payment becomes due and payable shall automatically
cause the interest rate on such overdue payment(s) of principal and/or (to the
extent permitted by applicable law) interest to be increased by two percent
(2%) per annum over the Prime Rate under Section 1.4 (the “Default Rate
of Interest”), provided, however, that the imposition of the Default Rate
of Interest shall not be construed as a waiver of default, or diminish or
otherwise alter or restrict Lender’s right to declare this Agreement in default
and to exercise such other rights and remedies as it shall possess under this
Agreement or under law.


 


1.5.4                        Prepayment.


Borrower
may, at any time, or from time to time, prepay any part of the Loan’s principal
amount then outstanding together with interest accrued on the amount prepaid to
the date of prepayment.


 


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2.                                       RECORDS AND REPORTS.


 


2.1                                 Accounting.


Borrower
shall cause to be kept full and proper books of records and accounts, in which
full, true, and proper entries will be made of all dealings, business and
affairs of Borrower which in any way affect or pertain to the operation of
Borrower.   Borrower shall keep its books
and records in the manner conforming to generally accepted accounting
principles.


 


2.2                                 Inspection of Records.


Upon
five (5) business days notice, so long as Lender is subject to
confidentiality requirements that are adequate under applicable law, Borrower
shall provide Lender or any of its duly authorized representatives access,
during normal working hours, to any financial books, documents, papers and
records for the purposes of audit, examination or evaluation.  Borrower further agrees to furnish copies of
such financial papers and documents to Lender as it may reasonably require from
time to time.


 


2.3                                 Notice of Event of Default.


Immediately
upon becoming aware of the existence of any Event of Default as defined in Section 4.1
herein, or event which with notice, lapse of time, or both, would become an
Event of Default, the Borrower shall provide to Lender a notice describing its
nature and any action the Borrower is taking (or proposes to take) in
connection therewith.


 


3.                                       REPRESENTATIONS, WARRANTIES AND COVENANTS OF
BORROWER.


 


3.1                                 Representations and Warranties.  Borrower
represents and warrants that:


3.1.1.                     Borrower is a corporation duly organized, validly
existing, in good standing and possessing all powers and authority to own its
property and to conduct the business in which it is engaged as well as all
other rights and privileges generally granted by the State of Delaware.  Borrower is
qualified to do business in the State of California.  The activities of Borrower do not make it
necessary that it be qualified as a foreign corporation in any other state
except where the failure to be so qualified could not reasonably be expected to
have a material adverse effect on the business conducted by Borrower.


 


3.1.2                        Borrower shall remain at all times in compliance in
all material respects with the requirements of federal and state and local laws
applicable to Borrower’s business.


 


3.1.3                        Borrower is not in violation of, or in default (nor
has any event occurred which with notice, lapse of time, or both, would
constitute a violation or default) in the 


 


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performance of any obligation, agreement or condition
contained in the organizational documents of Borrower or in violation or
default of any agreement or instrument to which Borrower is a party or by which
it may be bound or to which any of its property or assets are subject, or any
law, order, rule, regulation, writ, authorization, injunction or decree of any
government, governmental instrumentality or court, domestic or foreign, which
default or violation would have a material adverse effect on Borrower or its
business.


 


3.1.4                        There are no consents or approvals required under
the state or federal law to effect the transactions contemplated by this
Agreement.  No other authorization,
approval, order, exemption or other action of any court or governmental body of
the United States or of any state or other jurisdiction thereof is required to
effect the transactions contemplated by this Agreement.


 


3.1.5                        This Agreement has been duly authorized, executed
and delivered by Borrower and, upon due acceptance by Lender, will constitute
the valid and legally binding obligation of Borrower enforceable in accordance
with its terms against Borrower, subject as to enforcement remedies applicable
to bankruptcy, insolvency, moratorium and other laws affecting the rights of
creditors generally and to equitable principles.


 


3.1.6                        The execution and delivery of this Agreement by
Borrower and the fulfillment of the terms set forth herein do not violate any
statute, regulation or other law of the United States, the State of California
or of any other state or jurisdiction of the United States applicable to
Borrower, or any valid and enforceable order, judgment or decree of any court
or governmental body of the United States, or of any state or other
jurisdiction thereof, which violation would have a material adverse effect on the
business of Borrower.


 


3.1.7                        The execution and delivery of this Agreement by
Borrower and the performance by Borrower of its obligations hereunder do not
conflict with, or result in a breach of, any of the terms or provisions of, or
constitute a default under, the organizational documents of Borrower or any
other agreement or instrument to which Borrower is a party or by which it may
be bound or to which any of its property or assets are subject, or result in
the creation or imposition of any Lien, charge or encumbrance upon any of the
property or assets of Borrower (except for the Liens in favor of Lender granted
under the Security Agreement), except for any breach or default which could not
reasonably be expected to have a material adverse effect on the business of
Borrower.


 


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3.1.8                        Borrower has and will maintain and, upon request,
will provide to Lender copies of, policies of insurance in amounts customarily
carried by similarly situated companies, including but not limited to public
liability, fire and theft, workers compensation, directors and officers
liability and professional liability. 
Borrower agrees that it has, and shall maintain, such policies with
reputable insurers qualified to do business in the State of California.  Copies of all policies and certificates of
insurance required hereby shall be maintained by Borrower and shall be open to
inspection by Lender at all reasonable times. 
In the event Borrower fails to maintain such insurance coverage and such
failure continues for 60 days after Borrower becomes aware thereof, such
failure shall constitute an Event of Default under the provisions of this
Agreement unless waived by Lender.


 


4.                                       DEFAULTS AND REMEDIES.


 


4.1                                 Defaults.


For
the purpose of this Agreement, each of the following events is hereby defined
as and are declared to be an “Event of Default”:


 


4.1.1                        Failure to make due and punctual payment of any part
of the principal amount outstanding and interest accrued thereon on the date
any such payment becomes due for any reason, and the continuance thereof for a
period of five (5) days after receipt of notice thereof from Lender;


 


4.1.2                        Failure of Borrower to comply with the requirements
of Section 6;


 


4.1.3                        Any warranty, representation or other statement of
Borrower contained in this Agreement, the Security Agreement, any Note or the
Strategic Alliance Agreement, or any certification called for by any such
document shall have been false or misleading in any material respect when made;


 


4.1.4                        The occurrence of any of the following with respect
to Borrower (i) a court or governmental agency having jurisdiction in the
premises shall enter a decree or order for relief in respect of Borrower in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator, administrator or similar official of Borrower
or for any substantial part of its Property or ordering the winding up or
liquidation of , or an administrator in respect of, its affairs; or (ii) an



 


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involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect is commenced against
Borrower and such petition remains unstayed and in effect for a period of 60
consecutive days; or (iii) Borrower shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator, administrator
or similar official of such Person or any substantial part of its Property or
make any general assignment for the benefit of creditors; or (iv) Borrower
shall admit in writing its inability to pay its debts as they become due;


 


4.1.6                        Failure to perform or observe any other covenants,
agreements or conditions prescribed in this Agreement, the Security Agreement,
any Note or the Strategic Alliance Agreement and the continuance thereof for a
period of fifteen (15) days after receipt of notice thereof by Borrower from
Lender (unless a shorter notice period is specified for such failure in such
agreement);


 


4.1.7                        Failure of Borrower or any Subsidiary to make any
payment in respect of any Material Debt when due or within any applicable grace
period;


 


4.1.8                        Any event or condition shall occur which results in
the acceleration of the maturity of any Material Debt prior to its stated
maturity; or


 


4.1.9                        Any event or condition shall occur which results in
the acceleration of the maturity of any Material Debt prior to its stated
maturity;


 


4.2                                 Remedies and Rights of Lender.


4.2.1
Upon an Event of Default, as defined in Section 4.1, other than a payment
Event of Default as specified in Section 4.1.1 above, and if such default
continues unremedied for thirty (30) days, Lender may, at its option, terminate
Lender’s obligations hereunder and declare the whole principal amount
outstanding together with interest accrued thereon to become immediately due
and payable, together with any costs, including attorneys’ fees, of collecting
payment.  Upon a payment Event of Default,
as specified above in Section 4.1.1, Lender may at its option, declare the
principal amount outstanding, together with interest accrued thereon, to become
immediately due and payable together with any costs, including attorneys’ fees,
of collecting payment.  The 


 


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provisions of this Agreement shall constitute a
contract between Borrower and Lender and Lender may sue to recover the
outstanding principal amount and interest accrued thereon which has not been
paid according to the terms of this Agreement, together with such costs and
attorneys’ fees as Lender may incur in collecting payment or enforcing the
terms of this Agreement.


 


4.2.2                        Any remedy of Lender as provided herein shall be in
addition to any remedy provided by law or equity and shall be cumulative and
concurrent, and may be pursued singly, successively or together at the sole
discretion of Lender, and may be exercised as often as occasion therefor shall
occur; and the failure to exercise any such remedy shall in no event be
construed as a waiver of the right to exercise the same in the event of any
subsequent default or breach, nor shall it be deemed to be a waiver of its
right subsequently to commence an action.


 


5.                                       SECURITY INTEREST


 


The
obligations of Borrower under this Loan Agreement shall be secured by a first
priority Lien on the Collateral granted to Lender under the Security Agreement.


 


6.                                       NEGATIVE COVENANTS


 


Borrower
hereby covenants and agrees that so long as this Agreement is in effect and
until the Loan, together with interest, fees and other obligations then due and
payable hereunder, have been paid in full:


 


6.1                                 Restricted Payments


Neither
the Borrower nor any of its Subsidiaries will declare or make, or agree to
declare or make, any Restricted Payment.


 


6.2                                 Liens


The
Borrower will not, nor will it permit its Subsidiaries to, contract, create,
incur, assume or permit to exist any Lien with respect to the Collateral, other
than Permitted Liens.


 


7.                                       TERM.


 


The
term of this Agreement shall end on the fifth anniversary of the date of this
Agreement. The termination of this Agreement shall not affect Borrower’s
obligation of repayment pursuant to 


 


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Section 1.5 and, until all outstanding principal,
interest and late fees have been repaid, Lender’s rights under Section 4.


 


8.                                       GENERAL PROVISIONS.


 


8.1                                 Notices.
Any notices, requests and other communications hereunder will be in writing and
will be deemed given on the date of delivery, if delivered personally, by
facsimile transmission, or by overnight courier, or three (3) days after
mailing, if sent by registered or certified United States mail, postage prepaid
and return receipt requested, in each case addressed as follows:


 


	
  To
  the Borrower:

  	
   

  	
  Ciphergen
  Biosystems, Inc.

  
	
   

  	
   

  	
  6611
  Dumbarton Circle

  
	
   

  	
   

  	
  Fremont,
  CA 94555

  
	
   

  	
   

  	
  Attention:
  William E. Rich, CEO

  
	
   

  	
   

  	
  Telephone:
  (510) 493-9300

  
	
   

  	
   

  	
  Facsimile:
  (510) 505-2101

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Wilson
  Sonsini Goodrich & Rosati

  
	
   

  	
   

  	
  Professional
  Corporation

  
	
   

  	
   

  	
  650
  Page Mill Road

  
	
   

  	
   

  	
  Palo
  Alto, CA 94304-1050

  
	
   

  	
   

  	
  Attention:
  Michael O’Donnell, Esq.

  
	
   

  	
   

  	
  Telephone:
  (650) 493-9300

  
	
   

  	
   

  	
  Facsimile:  (650) 493-6811

  
	
   

  	
   

  	
   

  
	
  To
  Lender:

  	
   

  	
  Quest
  Diagnostics Incorporated

  
	
   

  	
   

  	
  Treasury
  Department

  
	
   

  	
   

  	
  1290
  Wall Street West

  
	
   

  	
   

  	
  Lyndhurst,
  NJ 07071

  
	
   

  	
   

  	
  Attention:
  Treasurer

  
	
   

  	
   

  	
  Telephone:
  (201) 729-8390

  
	
   

  	
   

  	
  Facsimile:
  (201) 729-8905

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Quest
  Diagnostics Incorporated

  
	
   

  	
   

  	
  1290
  Wall Street West

  
	
   

  	
   

  	
  Lyndhurst,
  NJ 07071

  
	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
  Telephone:
  (201) 729-8319

  
	
   

  	
   

  	
  Facsimile:
  (201) 559-2258

  



 


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except
that any of the foregoing may from time to time by written notice to the others
designate another address which will thereupon become its effective address for
the purposes of this section.  Any notice
delivered by facsimile will be confirmed by a written notice delivered in the
mails, by overnight courier or personally; provided that the foregoing
will not affect the time for when such facsimile notice will have been
considered to have been delivered, such delivery being determined as provided
in the first sentence of this Section 8.1.


 


8.2                                 Absolute Obligation.  The
obligations of Borrower to pay the amounts not forgiven hereunder shall be
absolute and unconditional without defense or set-off by reason of any default
by Lender under this Agreement or any other agreement or of any default by
Quest Diagnostics Incorporated or any of its Affiliates under any agreement
between Quest Diagnostics Incorporated or any of such Affiliates and Borrower,
or for any other reason.


 


8.3                                 Incorporation by Reference.  The
provisions contained in Sections 16.2 through 16.18 of the Strategic Alliance
Agreement are incorporated by reference herein except that any references
therein to the Strategic Alliance Agreement will be deemed to be references to
this Agreement and any references therein to the Members will be deemed to be
references to the parties hereto.


 


9.                                       DEFINITIONS


 


As
used in this Agreement, the following terms shall have the meanings herein
specified unless the context otherwise requires.  Defined terms herein shall include in the
singular number the plural and in the plural the singular:


 


“Business
Day” means any day other than a Saturday, a Sunday, a legal holiday or a
day on which banking institutions are authorized or required by law or other
governmental action to close in Lyndhurst, New Jersey and Fremont, California.


 


“Closing
Date” means the date of this Agreement.


 


“Collateral”
has the meaning given to such term in the Security Agreement.


 


“Debt”
of any Person means without duplication (i) all indebtedness for borrowed
money of such person; (ii) all obligations issued, undertaken or assumed
by such Person as the deferred purchase price of property or services (other
than trade payables and accrued expenses); (iii) all unpaid reimbursement
obligations in respect of letters of credit that are not reimbursed within
three 


 


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Business Days (such as, for example, unpaid
reimbursement obligations in respect of a drawing under a letter of credit); (iv) all
obligations of such Person evidenced by notes, bonds (other than bid or
performance bonds), debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of Property or
businesses; (v) all indebtedness of such Person created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
Property (other than operating leases)); (vi) all capital lease
obligations of such Person; (vii) all indebtedness of other persons
referred to in clauses (i) through (vi) above secured by (or for
which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in Property (including accounts
and contracts rights) owned by such Person, whether or not such Person has
assumed or become liable for the payment of such indebtedness (provided that the amount of indebtedness shall
be deemed to be limited to the lesser of the fair market value of such Property
and the principal amount outstanding if such Person has not assumed or become
liable for the payment of such indebtedness); (viii) bankers’ acceptances;
and (ix) all guaranty obligations of such Person in respect of
indebtedness or obligations of any other Person of the kinds referred to in
clauses (i) through (viii) above. 
Debt shall not include accounts extended by suppliers in the ordinary
course of business in connection with the purchase of goods and services.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
thereunder, all as the same may be in effect from time to time.   References to sections of ERISA shall be
construed also to refer to any successor sections.


 


“GAAP”
means generally accepted accounting principles in the United States applied on
a consistent basis.


 


“Governmental
Authority” means any Federal, state, local, provincial or foreign court or
governmental agency, authority, instrumentality or regulatory body.


 


“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
security interest, encumbrance, lien (statutory or otherwise), preference,
priority or charge of any 


 


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kind, including, without limitation, any agreement
to give any of the foregoing, any conditional sale or other title retention
agreement, and any lease in the nature thereof (other than operating leases).


 


“Material
Debt” means Debt of the Borrower and/or one of more of its Subsidiaries in
an aggregate principal amount equal to or exceeding $5,000,000.


 


“Permitted
Liens” means (i) any Lien in favor of Lender; and (ii) any Liens
against the Collateral existing as of the date hereof and disclosed in writing
to, and approved by, Lender.


 


“Person”
means any individual, partnership, joint venture, firm, corporation, limited
liability company, association, trust or other enterprise (whether or not
incorporated), or any Governmental Authority.


 


“Plan”
shall have the meaning set forth in the Strategic Alliance Agreement between
Lender and Borrower.


 


“Property”
means any right, title or interest in or to any property or asset of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.


 


“Restricted
Payment” means (i) any dividend or other distribution (whether in
cash, securities or other property) on any shares of the capital stock of the
Borrower (except dividends or distributions payable solely in shares of its
capital stock), or (ii) any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, defeasance or acquisition of (a) any
shares of the capital stock of the Borrower or any Subsidiary owned by any
Person other than the Borrower or any Subsidiary, or (b) any option,
warrant or other right to acquire shares of the capital stock of the Borrower
or any Subsidiary (but not including (i) payments of principal, premium
(if any) or interest made pursuant to the convertible debt securities prior to
conversion, (ii) any payments of cash in lieu of fractional shares upon
conversion of any convertible security or exercise of any warrant or other
right to acquire shares or upon any stock split or combination, stock dividend
or business combination; (iii) acquisitions of capital stock of Borrower,
in connection with either (A) the exercise of stock options or warrants by
way of cashless exercise, or (B) in connection with the satisfaction of
withholding tax obligations related to the exercise of stock options; (iv) payments
in connection with the repurchase of capital stock of Borrower from any
officer, director, employee or consultant upon the resignation, termination, or
death of such employees, directors, or consultants; and (v) in connection
with any acquisition, (A) acceptance of the return of capital stock of
Company


 


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constituting a portion of the purchase price in
settlement of indemnification claims, or (B)  payments or distributions to
dissenting stockholders pursuant to applicable law).


 


“Security
Agreement” means that certain Patent Security Agreement dated as of the
date hereof between Lender, as secured party, and Borrower, as grantor,
covering the Collateral.


 


“Subsidiary”
means, as to any Person, (a) any corporation more than 50% of whose stock
of any class or classes having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation (irrespective of whether
or not at the time, any class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such person
directly or indirectly through Subsidiaries has more than a 50% equity interest
at any time.


 


 


[Remainder of page intentionally
left blank.]


 


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IN
WITNESS WHEREOF, each of the parties hereto have set their hands as of the date
first written above.


 


 


	
  QUEST DIAGNOSTICS INCORPORATED,

  
	
  a
  Delaware corporation

  
	
   

  
	
  By:

  	
   /s/
  Catherine T. Doherty

  	
   

  
	
   

  
	
  Name:

  	
   Catherine
  T. Doherty

  	
   

  
	
   

  
	
  Title:

  	
    Vice
  President, Office of the Chairman

  	
   

  
	
   

  
	
   

  
	
  CIPHERGEN
  BIOSYSTEMS, INC.,

  
	
  a
  Delaware corporation

  
	
   

  
	
  By:

  	
   /s/ William E. Rich

  	
   

  
	
   

  
	
  Name:

  	
    William
  E. Rich

  	
   

  
	
   

  
	
  Title:

  	
   President
  and Chief Executive Officer

  	
   

  
					



 


 


[Signature page to Credit Agreement]


 


15





















 


SCHEDULE A


 


PROMISSORY NOTE


 


Fremont,
California


July 22,
2005


 


Ciphergen
Biosystems, Inc., a Delaware corporation (the “Borrower”), for
value received, hereby promises to pay to Quest Diagnostics Incorporated (“Lender”),
to the extent not forgiven under the terms of the Credit Agreement executed as
of the date hereof between Borrower and Lender (the “Credit Agreement”),
the unpaid principal balance up to the Maximum Principal Obligation of ten
million dollars ($10,000,000), and to pay interest (computed on the basis of a
365-day year, or 366 if applicable, actual days elapsed) on the unpaid
principal balance hereof, computed in accordance with the terms of the Credit
Agreement, until the principal amount hereof shall become due and payable; and
to pay interest on any overdue principal and (to the extent permitted by
applicable law) on any overdue payment of interest, at the rate specified in
the Credit Agreement.


 


Payments
of principal and interest shall be made to Lender as specified in the Credit
Agreement.


 


This
Promissory Note is issued pursuant to the Credit Agreement and is entitled to
the benefits thereof.


 


Under
certain circumstances, as specified in the Credit Agreement, the principal of
the Promissory Note may be declared due and payable in the manner and with the
effect provided in said Agreement.


 


All
loans made by Lender to Borrower pursuant to this Promissory Note and all
payments and prepayments on account of principal shall be noted by Lender on
the Schedule attached hereto and made part hereof; provided, however, that
the failure of Lender to make any such notation shall not limit or otherwise
affect the obligation of Borrower hereunder.


 


This
Promissory Note and the Credit Agreement are governed by and construed in
accordance with Delaware law.


 


IN
WITNESS WHEREOF, Borrower has caused this Note to be executed in its name and
on its behalf as of July 22, 2005.


 


	
   

  	
  Ciphergen
  Biosystems, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  William E. Rich

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   William
  E. Rich

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   President
  and Chief Executive Officer

  	
   

  
						



 


16





















 


SCHEDULE


 


Loans
Made Under the Foregoing Note and Payments and Prepayments on Account of the
Principal Thereof


 


	
  Date

  	
   

  	
  Principal 

  Amount 

  of Loan

  	
   

  	
  Amount 

  Principal 

  Paid

  	
   

  	
  Unpaid 

  Principal 

  Balance

  	
   

  	
  Notation 

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


17





















 


SCHEDULE B


 


FORGIVENESS MILESTONES


 


Upon
occurrence of each milestone set forth in the table below (each, a “Forgiveness
Milestone”) the corresponding amount shall be forgiven from the Loan amount,
provided however, if the amount then outstanding under the Loan upon occurrence
of such Forgiveness Milestone is less than the amount to be forgiven, then
Quest Diagnostics shall pay such additional amount to Ciphergen in accordance
with Section 10.3 of the Strategic Alliance Agreement within thirty (30)
days of (i) occurrence of such Forgiveness Milestone, if such Forgiveness
Milestone is achieved by a Quest Network member or (ii) receipt of the
Occurrence Notice (as defined below) for such Forgiveness Milestone, if such of
the Forgiveness Milestone is achieved by Ciphergen; provided further that such
additional amount shall be subject to the use restrictions set forth in Section 1.2
(during the Base Term) and the Maximum Principal Obligation hereunder shall be
reduced by such additional amount. 
Without limiting the generality of the foregoing, it is understood that
Lender’s aggregate obligation to loan funds to Borrower under the Credit
Agreement and to pay any additional amounts under this Schedule B by
reason of any Forgiveness Milestone is limited to $10,000,000.  Capitalized terms not defined herein have the
meaning set forth in the Strategic Alliance Agreement.


 


	
  Forgiveness Milestone

  	
   

  	
  Amount of Loan to be Forgiven

  
	
  Upon completion of all
  validation, regulatory communication and medically acceptable accuracy for
  the applicable Application which allows the each of the first three (3) Licensed
  Laboratory Test to be commercialized, but no later than the first
  Commercialization of each such Licensed Laboratory Test by any Quest Network
  member.

  	
   

  	
  $1,000,000 for each Licensed Laboratory Test, for a
  possible total forgiveness of $3,000,000

  
	
   

  	
   

  	
   

  
	
  Upon FDA clearance of
  the first Test Kit, but no later than the first Commercialization of the
  first Test Kit by either Ciphergen or any Quest Network member.

  	
   

  	
  $3,000,000 for the first Test Kit

  
	
   

  	
   

  	
   

  
	
  Upon FDA clearance of
  each of the following two (2) Test Kits, but no later than the first
  Commercialization of each such Test Kit by either Ciphergen or any Quest
  Network member

  	
   

  	
  $2,000,000 for each Test Kit, for a possible total
  forgiveness of $4,000,000

  
	
   

  	
   

  	
   

  
	
  Total Potential Forgiveness:

  	
   

  	
  $10,000,000

  



 


Upon
occurrence of a Forgiveness Milestone the Party achieving such milestone shall
promptly notify the other Party hereto in writing (each, an “Occurrence Notice”).  In the case of Ciphergen, such Occurrence
Notice shall include reasonable documentation substantiating the occurrence of the
Forgiveness Milestone.


 


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