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. ***


 





















 


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

  	
  DEFINITIONS

  	
   

  
	
  SCHEDULE B

  	
  STRATEGY AND BUDGET

  	
   

  
	
  SCHEDULE C

  	
  REQUIRED CONTENTS FOR EACH PLAN

  	
   

  
	
  SCHEDULE D

  	
  REQUIRED CONTENTS FOR THE PLAN SUPPLEMENT

  	
   

  
	
  SCHEDULE E

  	
  ROYALTIES AND FEES TO CIPHERGEN

  	
   

  
	
  SCHEDULE F

  	
  ROYALTIES TO QUEST DIAGNOSTICS

  	
   

  
	
  SCHEDULE G

  	
  LIST OF CIPHERGEN PATENTS

  	
   

  
	
  SCHEDULE H

  	
  LIST OF CIPHERGEN COLLABORATION AGREEMENTS

  	
   

  
	
  SCHEDULE I

  	
  LIST OF QUEST DIAGNOSTICS PATENTS

  	
   

  
	
  SCHEDULE J

  	
  QUEST NETWORK MEMBERS

  	
   

  
	
  SCHEDULE K

  	
  PROTEINCHIP PRODUCTS

  	
   

  
				



 


i





















 


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.


 










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


 





















 


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).


 


2





















 


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





















 


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





















 


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





















 


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


 


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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


 










***                           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





















 


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 [***]


 










***                           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


 










***                           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. ***


 


10





















 


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


 


11





















 


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.


 


12





















 


(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


 


13





















 


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.


 










***                           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


 










***                           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. ***


 


15





















 


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)


 










***                           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. ***


 


16





















 


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.


 


17





















 


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


 


18





















 


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.


 


19





















 


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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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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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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the Securities and Exchange Commission. Omitted portions have been filed
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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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the Securities and Exchange Commission. Omitted portions have been filed
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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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the Securities and Exchange Commission. Omitted portions have been filed
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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


 


28





















 


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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the Securities and Exchange Commission. Omitted portions have been filed
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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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the Securities and Exchange Commission. Omitted portions have been filed
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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


 










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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


 


32





















 


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





















 


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





















 


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





















 


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





















 


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





















 


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





















 


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





















 


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]


 


40





















 


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





















 


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,


 


A-2





















 


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


 










***                           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.


 










                                                (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


 










***                           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.


 










***                           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.


 










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


 


(4)          CiphergenExpressTM
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.


 










***                           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. ***


 


A-9





















 


“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.


 


A-10





















 


“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.


 










***                           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. ***


 


A-11





















 


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.


 










***                           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. ***


 


B-1





















 


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.


 










(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. ***


 


C-1





















 


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.


 


D-1





















 


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





















 


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





















 


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. ***


 


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