Document:

EXHIBIT 10.45

 

CIPHERGEN
BIOSYSTEMS, INC.

 

STOCK
PURCHASE AGREEMENT

 

This STOCK
PURCHASE AGREEMENT (this “Agreement”), is made and entered
into as of July 22, 2005, by and among CIPHERGEN
BIOSYSTEMS, INC., a Delaware corporation (the “Company”), and
QUEST DIAGNOSTICS INCORPORATED (the “Purchaser”)
(each a “Party”
and together the “Parties”).

 

1.                                       Authorization of Sale of the Shares.

 

1.1                                 Shares of Common
Stock.  Subject to the terms and
conditions of this Agreement, the Company has authorized the sale to the
Purchaser of 6,225,000 shares (the “Shares”) of common stock (the “Common
Stock”) of the Company and the Warrant (as defined in Section 1.2) for
an aggregate purchase price of $15,000,000.00.

 

1.2                                 Warrant to Purchase
Common Stock.  Purchaser shall in
addition receive a warrant for 2,200,000 additional shares of Common Stock,
with an exercise price of $3.50 per share, in the form attached hereto as Exhibit A
(the “Warrant,” the Shares and Warrant collectively being referred to as
the “Securities”). The Warrant shall be exercisable on a cashless
basis.  The computation of the number of
shares underlying the Warrant, and the exercise price thereof, has been based
on the Black Scholes value of the Warrant. The parties agree that the
consideration for the Warrant represents $2.5 million of the aggregate
consideration.

 

1.3                                 Limitation on Sale
of Shares.  Notwithstanding the
foregoing, if the number of Shares purchased pursuant to Section 1.1, but
excluding the number of shares underlying the Warrant purchased pursuant to Section 1.2,
exceeds 19.9% of the Company’s Common Stock outstanding at the date of the
Closing, the number of Shares purchased pursuant to this Agreement, and the
consideration to be paid therefor, shall be reduced so that Purchaser’s
ownership does not exceed 19.9% of the Company’s Common Stock outstanding at
the date of the Closing.

 

2.                                       Agreement to Sell and Purchase the Securities.

 

2.1                                 Purchase and Sale.  Subject to the terms and conditions of this
Agreement, the Purchaser agrees to purchase, and the Company agrees to sell and
issue to the Purchaser, at the Closing, the Securities.

 

2.2                                 Purchase Price.  Subject to Section 1.3 hereof, the
aggregate purchase price of the Securities to be sold hereunder shall be
$15,000,001.47.

 

3.                                       Delivery of the Shares and Warrants at Closing.

 

3.1                                 Closing.  The completion of the purchase and sale of
the Securities (the “Closing”) shall occur at the offices of Wilson
Sonsini Goodrich & Rosati, PC, counsel to the 

 

 

Company, at
650 Page Mill Road, Palo Alto, California 94304 at 9:00 a.m. local
time on July 22, 2005 or such other time and date as may be agreed by the
parties (the “Closing Date”).

 

3.2                                 Issuance and
Delivery.  At the Closing, the
Company shall authorize (i) its transfer agent to issue to the Purchaser
one or more stock certificates registered in the name of the Purchaser, or in
such nominee name(s) as designated by the Purchaser in writing, representing
the number of Shares set forth in Section 1.1 above, and (ii) the
issuance of a Warrant registered in the name of the Purchaser, or in such
nominee name(s) as designated by the Purchaser in writing, for the purchase of
the number of shares of Common Stock set forth in Section 1.2 above.  The stock certificates representing the
Shares (the “Certificates”), and the stock certificates issued upon the
Purchaser’s exercise of the Warrant, shall each bear the following legend
referring to the fact that the Securities were sold in reliance upon the
exemption from registration provided by Section 4(2) of the Securities
Act of 1933, as amended (the “Securities Act”), and Rule 506 under
the Securities Act:

 

THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), AND HAVE BEEN ISSUED AND SOLD IN RELIANCE
UPON THE EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 4(2) OF THE
ACT AND RULE 506 PROMULGATED UNDER THE ACT. 
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO DISTRIBUTION OR RESALE, AND MAY NOT BE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACE OF 1933, AS
AMENDED, OR PURSUANT TO RULE 144 UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

 

The Company will deliver
the Certificates in such denominations as requested by the Purchaser against
delivery of payment for the Shares by the Purchaser.

 

3.3                                 Company’s
Obligation to Close.  The Company’s
obligation to complete the purchase and sale of the Securities shall be subject
to the following conditions, any one or more of which may be waived by the
Company:

 

(a)                                  receipt by the
Company of same-day funds in the full amount of the purchase price for the
Securities being purchased under this Agreement; and

 

(b)                                 the accuracy in all
material respects of the representations and warranties made by the Purchaser
and the fulfillment in all material respects of those undertakings of the
Purchaser to be fulfilled before the Closing.

 

3.4                                 Purchaser’s
Obligation to Close.  The Purchaser’s
obligations to accept delivery of such stock certificates and Warrant, and to
pay for the Securities, shall be subject to the 

 

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following
conditions, any one or more of which may be waived in writing by the Purchaser
with respect to the Purchaser’s obligation:

 

(a)                                  the representations
and warranties made by the Company in this Agreement shall be accurate in all
material respects and the undertakings of the Company shall have been fulfilled
in all material respects on or before the Closing;

 

(b)                                 there shall have been
no suspension of trading or listing of the Company’s shares of Common Stock on
the NASDAQ National Market;

 

(c)                                  the Company’s board
of directors having passed resolutions exempting the purchase of the Securities
from (i) the Company’s rights plan; and (ii) the application of Section 203
of the Delaware General Corporation Law; and

 

(d)                                 the Company shall have
delivered to the Purchaser a certificate executed by its Chief Executive
Officer and Chief Financial Officer, dated as of the Closing Date, in
substantially the form attached hereto as Exhibit B, to the effect
that the representations and warranties of the Company set forth in Section 5
hereof are true and correct in all material respects as of the date of this
Agreement and as of the Closing Date, and that the Company has complied in all
material respects with all the agreements and satisfied all the conditions in
this Agreement on its part to be performed or satisfied on or before the
Closing Date.

 

(e)                                  Wilson Sonsini
Goodrich & Rosati, PC, counsel to the Company, shall have delivered a
legal opinion to the Purchaser reasonably satisfactory to the Purchaer and
counsel to the Purchaser.

 

4.                                       Registration Rights.

 

4.1                                 Demand Registration.

 

(a)                                  Subject to subsection (c) hereof,
if the Company receives a written request from the Purchaser that the Company
effect any registration with respect to all or a part of the Shares or the
Common Stock resulting from the exercise of the Warrant (the Shares and Common
Stock resulting from the exercise of the Warrant are collectively referred to
as the “Registrable Securities”), the Company shall:

 

(i)                                     As soon as
practicable, but in no event later than ninety (90) days following the receipt
of such request, prepare and file with the Securities and Exchange Commission
(the “SEC”) a registration statement on Form S-3 (the “Registration
Statement”) relating to the resale of the Registrable Securities by the
Purchaser from time to time through the automated quotation system of NASDAQ or
the facilities of any national securities exchange on which the Common Stock of
the Company is then traded or in privately negotiated transactions;

 

(ii)                                  Subject to receipt of
necessary information from the Purchaser, used its commercially reasonable
efforts to cause the SEC to notify the Company of its willingness to declare
the Registration Statement effective within ninety (90) days after the
Registration 

 

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Statement is
filed by the Company, and notify the Purchaser of such notification from the
SEC within three (3) business days of receipt;

 

(iii)                               Promptly prepare and
file with the SEC such amendments and supplements to the Registration Statement
and the prospectus used in connection therewith as may be necessary to keep
each Registration Statement effective until the earlier of (i) 120 days
following the date on which the registration first became effective, or (ii) such
time as all Registrable Securities held by the Purchaser have been sold
pursuant to a registration statement (the “Registration Period”);

 

(iv)                              So long as the
Registration Statement is effective covering the resale of Registrable
Securities owned by the Purchaser, furnish to the Purchaser with respect to the
Common Stock registered under the Registration Statement such reasonable number
of copies of prospectuses and such other documents as the Purchaser may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Registrable Securities by the Purchaser;

 

(v)                                 File documents
required of the Company for normal blue sky clearance in states specified in
writing by the Purchaser; provided, however, that the company shall not be
required to qualify to do business in any jurisdiction in which it is not now
so qualified;

 

(vi)                              Bear all expenses in
connection with the procedures in subsection (a) of this section 4.1
and the registration of the Registrable Securities pursuant to the Registration
Statement, other than fees and expenses, if any, of counsel or other advisers
to the Purchaser or brokerage fees and commissions incurred by the Purchaser,
if any.  Notwithstanding anything to the
contrary herein, the Company shall not be required to pay for any expenses of
any registration proceeding if the registration request is subsequently
withdrawn at the request of the Purchaser unless the Purchaser agrees to
forfeit their right to a demand registration pursuant to hereto; and

 

(vii)                           Notwithstanding the
foregoing, (i) the Company shall not be obligated to effect a registration
pursuant to this Section 4.1 during the period starting with the date
sixty (60) days prior to the Company’s estimated date of filing of, and ending
on a date sixty (60) days following the effective date of, a registration
statement pertaining to an underwritten public offering of the Company’s
securities, provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective and
that the Company’s estimate of the date of filing such registration statement
is made in good faith, and (ii) if the Company shall furnish to such
Holders a certificate signed by the President of the Company stating that in
the good faith judgment of the Board of Directors it would be seriously
detrimental to the Company or its shareholders for a registration statement to
be filed in the near future, then the Company’s obligation to use its best
efforts to file a registration statement shall be deferred for a period not to
exceed one hundred twenty (120) days.

 

(viii)                        If the Purchaser intends to
distribute the Registrable Securities covered by their demand by means of an
underwriting, they shall so advise the Company as part of their demand made
pursuant to this Section 4.1, and the Company shall include such
information in 

 

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the notice
referred to in Section 4.1(a) above. 
The Company shall, together with the Purchaser, enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected by the Purchaser and reasonably satisfactory to the Company.  If the underwriter has not limited the number
of Registrable Securities to be underwritten, the Company may include
securities for its own account (or for the account of other shareholders) in
such registration if the underwriter so agrees and if the number of Registrable
Securities that would otherwise have been included in such registration and
underwriting will not thereby be limited.

 

(b)                                 With a view to making
available to Purchaser the benefits of Rule 144 under the Securities Act (“Rule 144”)
(or its successor rule) and any other rule or regulation of the SEC that
may at any time permit Purchaser to sell the Registrable Securities to the
public without registration, the Company covenants and agrees to: (i) make
and keep public information available, as those terms are understood and
defined in Rule 144, until such date as all of Purchaser’s Registrable
Securities shall have been resold; (ii) file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and under the Securities Exchange Act of 1934 (the “Exchange
Act”); and (iii) furnish to Purchaser upon request, as long as Purchaser
owns any Securities, (A) a written statement by the Company that it has
complied in all material respects with the reporting requirements of the
Securities Act and the Exchange Act, and (B) such other information as may
be reasonably requested in order to avail Purchaser of any rule or
regulation of the SEC that permits the selling of such Registrable Securities
without registration;

 

(c)                                  The Company shall not
be obligated to effect, or to take any action to effect, any registration
pursuant to this Section 4.1:

 

(i)                                     During the first
twelve (12) months following the Closing Date;

 

(ii)                                  During the one
hundred eighty (180) day period following the effective date of the first
Registration Statement filed pursuant to this Section 4.1;

 

(iii)                               After the Purchaser has
made two (2) demands for registration pursuant to this Section 4.1,
and such demands have been declared or ordered effective by the SEC;

 

(iv)                              If Purchaser holds 3% or
less of the outstanding Common Stock of the Company, after the date on which the
Purchaser is able to immediately sell all Registrable Securities held or
entitled to be held by the Purchaser under Rule 144; or

 

(v)                                 At any time after the
tenth anniversary of the date of this Agreement; provided
however, should the Company postpone an offering pursuant to Section 4.1(a)(vii),
or suspend an offering by the issuance of a Suspension Notice (as such term is
defined herein) the expiration date hereof shall be extended by the time of
such postponement or suspension (as applicable).

 

4.2                                 Piggy-Back
Registration.

 

(a)                                  If, at any time prior
to the date which is two (2) years from the date hereof, the Company
proposes to file with the SEC a registration statement relating to an offering
of

 

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any of its
securities for its own account or the account of security holders exercising
their demand registration rights (other than on Form S-4 or Form S-8
or their then equivalents relating to securities to be issued solely in
connection with an acquisition of any entity or business or equity securities
issuable in connection with stock option or other employee benefit plans), the
Company shall promptly send to the Purchaser written notice of the Company’s
intention to file such a registration statement and of such Purchaser’s rights
under this Section 4.2 and, if within fifteen (15) days after receipt of
such notice, such Purchaser shall so request in writing, the Company shall
include in such registration statement all or any part of the Registrable
Securities such Purchaser requests to be registered.  No right to registration of Registrable
Securities under this Section 4.2 shall be construed to limit any
registration rights granted under Section 4.1.

 

(b)                                 The Company shall bear
and pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 4.2, including all registration, filing, and
qualification fees, printers and accounting fees relating or apportionable
thereto, and the reasonable fees and expenses of counsel for Purchaser.

 

(c)                                  If the registration
of which the Company gives notice is for a registered public offering involving
an underwriting, the Company shall so indicate in the notice given pursuant to
this Section 4.2.  In such event the
right of any Purchaser to registration pursuant to this Section 4.2 shall
be conditioned upon Purchaser’s agreeing to participate in such underwriting
and in the inclusion of such Purchaser’s Registrable Securities in the
underwriting to the extent provided herein. 
The Purchaser shall (together with the Company and the other holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company or by other holders exercising
any demand registration rights. 
Notwithstanding any other provision of this Section 4.2, if the
underwriter determines that marketing factors require a limitation of the
number of shares to be underwritten, the underwriter may exclude some or all
Registrable Securities or other securities from such registration and
underwriting (hereinafter an “Underwriter Cutback”).  In the event of an Underwriter Cutback, the
Company shall so advise the Purchaser and the other holders distributing their
securities through such underwriting, and the number of Registrable Securities
that may be included in the registration and underwriting shall be allocated in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by the Purchaser and those certain Holders having piggy-back
registration rights set forth in the Fourth Amended and Restated Investors
Rights Agreement dated as of March 3, 2000 at the time of filing the
registration statement.  If the Purchaser
disapproves of the terms of any such underwriting, the Purchaser may elect to
withdraw therefrom by written notice to the Company and the underwriter.  Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration.

 

4.3                                 Indemnification.  In the event any Registrable Securities are
included in a Registration Statement under this Section 4:

 

(a)                                  To the extent
permitted by law, the Company will indemnify and hold harmless the Purchaser,
each of the Purchaser’s officers, directors and agents, each person who
participates in the offering of the Registrable Securities, including
underwriters (as defined in the Securities Act) and each person, if any, who
controls the Purchaser (or other participating person) 

 

6

 

within the
meaning of the Securities Act, or the Exchange Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Securities Act, the Exchange Act, or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a “Violation”): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rule 434,
of the Rules and Regulations, or the prospectus, in the form first filed
with the SEC pursuant to Rule 424(b) of the Regulations, or filed as
part of the Registration Statement at the time of effectiveness if no Rule 424(b) filing
is required (the “Prospectus”), or any amendment or supplement thereto (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, or the Exchange Act, or any state
securities law; and the Company will pay to the Purchaser or controlling
person, any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this subsection 4.3(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based upon the Company’s
reliance upon written information furnished expressly for use in connection
with such registration by the Purchaser or an officer, director or agent
thereof,

 

(b)                                 To the extent
permitted by law, of the Purchaser will, if Registrable Securities held by such
Purchaser are included in the registration, indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Securities Act, the Exchange Act, or other federal, state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon the Company’s reliance upon written
information furnished by the Purchaser expressly for use in connection with
such registration; and the Purchaser will pay, as incurred, any legal or other
expenses reasonably incurred by the Company, in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided
however, that the indemnity agreement contained in this subsection 4.3(b) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Purchaser, which consent shall not be unreasonably withheld; provided, further,
that the amount of the indemnity shall be limited to the proceeds of sale
received by each Purchaser unless such indemnity obligation arises from a
Purchaser’s commission of fraud or intentional misrepresentation.

 

(c)                                  Promptly after
receipt by an indemnified party under this Section 4.3 of notice of the
commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 4.3, deliver to the indemnifying
party a written notice of the commencement thereof and the 

 

7

 

indemnifying
party shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing interests
between such indemnified party and any other party represented by such counsel
in such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section 4.3,
but the omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 4.3.

 

(d)                                 If the indemnification
provided for in this Section 4.3 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any
loss, liability, claim, damage, or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage, or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage,
or expense as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.

 

(e)                                  The obligations of
the Company, and Purchaser under this Section 4.3 shall survive the
completion of any offering of Registrable Securities in a registration
statement, as applicable, under this Section 4, and otherwise.

 

4.4                                 Further Obligations
of the Company.  Without limiting the
generality of the foregoing or of Section 7.10 hereof, whenever required
under this Section 4 to effect the registration of the Shares, the Company
shall, as expeditiously and as reasonably possible:

 

(a)                                  Keep the Purchaser
advised as to the initiation of each registration, qualification and compliance
and as to the completion thereof and furnish the Purchaser with a copy of each
Registration Statement, or supplement or amendment thereto, filed with the SEC.

 

(b)                                 Promptly furnish to
the Purchaser a draft Registration Statement, as applicable, and copies of all
such documents proposed to be filed therewith.

 

(c)                                  As promptly as
practicable after becoming aware of such event, notify the Purchaser in writing
of the happening of any event as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or 

 

8

 

omission to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and
deliver a copy of such supplement or amendment to the Purchaser (or such other
number of copies as the Purchaser may reasonably request).  The Company shall also promptly notify the
Purchaser in writing (i) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and when a Registration Statement or
any post-effective amendment has become effective (notification of such
effectiveness shall be delivered to the Purchaser by facsimile on the same day
of such effectiveness and by overnight mail), (ii) of any request by the
SEC for amendments or supplements to a Registration Statement or related
prospectus or related information, and (iii) of the Company’s reasonable
determination that a post-effective amendment to a Registration Statement would
be appropriate.

 

(d)                                 Notify the Purchaser
within a reasonable time upon (i) the receipt by the Company of any
notification with respect to the issuance by the SEC of any stop order
suspending the effectiveness of such registration statement or prospectus or
any amendment or supplement thereto or the initiation or threatening of any
proceeding for that purpose or (ii) the receipt by the Company of any
notification with respect to the suspension of the qualification of the
securities covered by such registration statement, for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purposes.

 

(e)                                  Use its best efforts
to prevent the issuance of any stop order or other suspension of effectiveness
of a registration statement, or the suspension of the qualification of any of
the Registrable Securities for sale in any jurisdiction and, if such an order
or suspension is issued, to obtain the withdrawal of such order or suspension
at the earliest possible moment and to notify the Purchaser of the issuance of
such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.

 

(f)                                    If requested by the
Purchaser, the Company shall (i) immediately incorporate in a prospectus
supplement or post-effective amendment such information as the Purchaser agrees
should be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
offering of the Registrable Securities to be sold in such offering; (ii) make
all required filings of such prospectus supplement or post-effective amendment
as soon as notified of the matters to be incorporated in such prospectus supplement
or post-effective amendment; and (iii) supplement or make amendments to
any Registration Statement or the related prospectus if requested by the
Purchaser.  In the event of:  (1) any request by the SEC or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement for amendments or supplements to a Registration
Statement or related prospectus or for additional information, (2) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (3) the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation of any proceeding for such purpose, or (4) any
event or circumstance which necessitates the making of any changes in the
Registration Statement or Prospectus, or any document incorporated or deemed to
be incorporated therein by reference, so that, in the case of the Registration
Statement, it will not 

 

9

 

contain any
untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, then
the Company shall deliver a certificate in writing to the Purchaser (the “Suspension Notice”)
to the effect of the foregoing (which notice will not disclose the content of
any material non-public information and will indicate the date of the beginning
and end of the intended period of suspension, if known), and, upon receipt of
such Suspension Notice, the Purchasers will discontinue disposition of
Registrable Securities covered by to the Registration Statement or Prospectus
(a “Suspension”)
until the Purchasers’ receipt of copies of a supplemented or amended Prospectus
prepared and filed by the Company, or until the Purchasers are advised in
writing by the Company that the current Prospectus may be used, and have
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in any such prospectus.  In the event of any Suspension, the Company
will use its commercially reasonable efforts to cause the use of the Prospectus
so suspended to be resumed as soon as possible after delivery of a Suspension
Notice to the Purchasers.  The Suspension
and Suspension Notice described in this Section 4.4(f) shall be held
in strictest confidence and shall not be disclosed by the Purchasers.

 

(g)                                 In the event of any
underwritten public offering, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the managing
underwriter of such offering including, without limitation causing to be
furnished to the Purchaser (i) a “cold comfort” letter of the Company’s
independent accountants as of the effective date of the registration statement
as to such matters as customarily are covered in accountant’s letters delivered
to underwriters in underwritten public offerings and (ii) an opinion of
counsel to the Company, as of the date of the closing of such underwritten
public offering, in the form customarily provided by issuer’s counsel in
underwritten public offerings of securities. 
The Purchaser shall also enter into and perform its obligations under
such an agreement.

 

(h)                                 In the event that Form S-3
is not available for sale of the Registrable Securities, then the Company (i) with
the consent of the Purchaser shall register the sale of the Shares on another
appropriate form; and (ii) the Company shall undertake to register the
Registrable Securities on Form S-3 as soon as such form is available,
provided that the Company shall maintain the effectiveness of the Registration
Statement then in effect until such time as a Registration Statement on Form S-3
covering the Registrable Securities has been declared effective by the SEC.

 

(i)                                     The Company shall
otherwise use its best efforts to comply with all applicable rules and
regulations of the SEC in connection with any registration hereunder.

 

5.                                       Representations, Warranties and Covenants of the Company.  Except as set forth on the Schedule of
Exceptions attached hereto as Exhibit C, the Company hereby
represents and warrants to the Purchaser as follows (which representations and
warranties shall be deemed to apply, where appropriate, to each subsidiary of
the Company):

 

5.1                                 Organization and
Qualification.  The Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware. 

 

10

 

The Company
has the corporate power and authority to own, lease and operate its properties
and to conduct its business as currently conducted and to enter into and
perform its obligations under this Agreement. 
The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify
would not, singly or in the aggregate, have an adverse effect on the condition,
financial or otherwise, or the earnings, assets or business affairs of the
Company.

 

5.2                                 Capitalization.

 

(a)                                  The authorized
capital stock of the Company consists of 80,000,000 shares of Common Stock and
5,000,000 shares of Preferred Stock.

 

(b)                                 As of June 30,
2005, the issued and outstanding capital stock of the Company consists of
29,631,428 shares of Common Stock. The shares of issued and outstanding capital
stock of the Company have been duly authorized and validly issued, are fully
paid and nonassessable and have not been issued in violation of any state or
federal laws, rules or regulations, or in violation of (and are not
otherwise subject to) any preemptive or other similar rights.

 

(c)                                  As of June 30,
2005, the Company has reserved 6,697,146 shares of Common Stock for issuance
upon the exercise of stock options granted or available for future grant under
the Company’s stock option plan.

 

(d)                                 As of June 30,
2005, the Company has reserved approximately 2,200,000 shares of Common Stock
for issuance upon the exercise of the Warrant.

 

(e)                                  As of June 30,
2005, the Company has reserved 274,291 shares of Common Stock for purchase
under the Company’s Employee Stock Purchase Plan.

 

(f)                                    As of June 30,
2005, there are 96,750 shares of Common Stock reserved for potential issuance
to Stanford Research Systems, Inc. under a development contract if certain
development milestones are met.

 

(g)                                 As of June 30,
2005 there are 3,264,987 shares of Common Stock reserved for potential issuance
upon conversion of certain outstanding 4.5% Convertible Senior Notes due September 1,
2008.

 

With the exception of the
foregoing, there are no outstanding subscriptions, options, warrants,
convertible or exchangeable securities or notes, or other rights granted to or
by the Company to purchase shares of Common Stock or other securities of the
Company and there are no commitments, or agreements to issue any shares of
Common Stock or any security convertible into or exchangeable for Common Stock.

 

5.3                                 Issuance, Sale and
Delivery of the Securities.

 

(a)                                  The Securities have
been duly authorized for issuance and sale to the Purchaser pursuant to this
Agreement and, when issued and delivered by the Company pursuant to 

 

11

 

this Agreement
against payment of the consideration set forth in this Agreement, will be
validly issued and fully paid and nonassessable and free and clear of all
pledges, liens and encumbrances.  The
Certificates evidencing the Shares are in due and proper form under Delaware
law.

 

(b)                                 The issuance of the
Securities is not subject to preemptive or other similar rights.  No further approval or authority of the
stockholders or the board of directors of the Company will be required for the
issuance and sale of the Securities to be sold by the Company as contemplated
in this Agreement.

 

(c)                                  Subject to the
accuracy of the Purchaser’s representations and warranties in Section 5 of
this Agreement, the offer, sale, and issuance of the Securities in conformity
with the terms of this Agreement constitute transactions exempt from the
registration requirements of Section 5 of the Securities Act and from the
registration or qualification requirements of the laws of any applicable state
or United States jurisdiction (including under NASD rules and
regulations).

 

5.4                                 No Defaults.  The Company is not in violation of its
certificate of incorporation or bylaws or in material default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract filed as an exhibit to the Company Documents (as
defined below) pursuant to Item 601 of Regulation S-K under the Securities and
Exchange Acts, or any other material contract, indenture, mortgage, loan
agreement, deed, trust, note, lease, sublease, voting agreement, voting trust,
or other instrument or material agreement to which the Company is a party or by
which it may be bound.

 

5.5                                 Due Execution,
Delivery and Performance.  This
Agreement has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.  The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated in this Agreement and the fulfillment of the
terms of this Agreement have been duly authorized by all necessary corporate
action and will not conflict with or constitute a breach of, or default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to, any contract, indenture,
mortgage, loan agreement, deed, trust, note, lease, sublease, voting agreement,
voting trust or other instrument or agreement to which the Company is a party
or by which it may be bound, or to which any of the property or assets of the
Company is subject, and will not trigger anti-dilution rights or other rights
to acquire additional equity securities of the Company, nor will such action
result in any violation of the provisions of the articles of incorporation or
bylaws of the Company or of any applicable statute, law, rule, regulation,
ordinance, decision, directive or order.

 

5.6                                 Governmental
Consents.  No registration,
authorization, approval, qualification or consent of any court or governmental
authority or agency or self-regulatory organization, including the National
Association of Securities Dealers (the “NASD”), is necessary in connection with
the execution and delivery of this Agreement or the offering, issuance or sale
of the Securities under this Agreement, except exemptive filings under
applicable federal and state securities laws.

 

12

 

5.7                                 Additional
Information.  The Company represents
and warrants that the information contained in the following documents (the “Company
Documents”) is or will be true and correct in all material respects as of
their respective final dates:

 

(a)                                  the Company’s annual
report on Form 10-K for the fiscal year ended December 31, 2004;

 

(b)                                 the Company’s
quarterly report on Form 10-Q for the fiscal quarter ended March 31,
2005; and

 

(c)                                  all other documents,
if any, filed by the Company with the SEC since March 31, 2005 pursuant to
the reporting requirements of the Exchange Act.

 

5.8                                 Eligibility for Form S-3.  The Company represents and warrants that on
the date hereof the Company meets the requirements for the use of Form S-3
for registration of the sale by the Purchasers of the Registrable Securities
and the Company has filed all reports required to be filed by the Company with
the SEC in a timely manner so as to obtain eligibility for the use of Form S-3.

 

5.9                                 No Change.  Since the filing with the SEC of the Company
Documents, (i) the Company has not incurred any material liabilities or
material obligations, indirect, or contingent, or entered into any material
oral or written agreement or other transaction which is not in the ordinary
course of business and which could reasonably be expected to cause a material
adverse change in the future earnings of the Company; (ii) the Company has
not sustained any material loss or interference with its businesses or
properties from fire, flood, windstorm, accident or other calamity not covered
by insurance; (iii) the Company has not paid or declared any dividends or
other distributions with respect to its capital stock and the Company is not in
default in the payment of principal or interest on any outstanding debt
obligations; and (iv) there has not been any change in the capital stock
of the Company other than the sale of the Securities hereunder and shares or
options issued pursuant to the Company’s stock option plan or employee stock
purchase plan and any options outstanding as of the date hereof, or
indebtedness, liens or claims (other than in the ordinary course of business).

 

5.10                           No Actions.  Except as disclosed in the Company Documents,
there are no legal or governmental actions, suits or proceedings pending or
threatened to which the Company is or may be a part or of which property owned
or leased by the Company is or may be the subject, or related to environmental
or discrimination matters, which actions, suits or proceedings, individually or
in the aggregate, might prevent or might reasonably be expected to materially
and adversely affect the transactions contemplated by this Agreement; and no
labor disturbance by the employees of the Company exists, or is threatened
which might reasonably be expected to have a material adverse effect. Except as
disclosed in the Company Documents, the Company is not a party to or subject to
the provisions of any injunction, judgment, decree or order of any court,
regulatory body administrative agency or other governmental body which could
reasonably be expected to cause a material adverse change in the future earnings
of the Company.

 

5.11                           Compliance.  To the Company’s knowledge, it is conducting
its business in compliance with all applicable laws, rules and regulations
of the jurisdictions in which it is 

 

13

 

conducting
business, including, without limitation, all applicable local, state and
federal environmental laws and regulations, the violation of which could
reasonably be expected to cause a material adverse change in the future
earnings of the Company.

 

5.12                           Intellectual Property.  Except as disclosed in the Company Documents,
(i) the Company believes it has the necessary trademark, trade name
rights, patent rights, copyrights, licenses, trade secret and other
intellectual property rights to conduct its business as it is being conducted
as of the date hereof and as specifically described in the Company Documents;
and, (ii) the Company has no knowledge of any infringement by it of
trademark, trade name rights, patent rights, copyrights, trade secret or any
other intellectual property rights of third parties, or of any claim made
against the Company regarding such an infringement, that in each case would be
expected to have a material adverse effect on the Company.

 

5.13                           Investment Company.  The Company is not an “investment company” or
an “affiliated person” of, or “promoter” or “principal underwriter” for an
investment company, within the meaning of the Investment Company Act of 1940,
as amended.

 

5.14                           Reporting Company; Listed
Securities.  The Company is a
reporting company and has filed all reports required to be filed by Sections
13(a), 14(a) or 15(d) of the Exchange Act, as amended, in a timely
manner during the preceding twelve (12) months and has been subject to such
filing requirements for the past twelve (12) months.  The Common Stock is quoted on the Nasdaq
National Market System (“NASDAQ”). 
There is no stop order suspending the trading of the Common Stock on
NASDAQ or any information which would result in the Common Stock from being
delisted from NASDAQ.  The Company will
continue to use commercially reasonable efforts to comply with all quantitative
and qualitative requirements of NASDAQ for NASDAQ market issuers, to the extent
such compliance is within the control of the Company.

 

6.                                       Representations,
Warranties and Covenants of the Purchaser.

 

6.1                                 Securities Law
Representations and Warranties.  The
Purchaser represents, warrants and covenants to the Company as follows:

 

(a)                                  The Purchaser is
knowledgeable, sophisticated and experienced in making, and is qualified to
make, decisions with respect to investments in shares representing an
investment decision like that involved in the purchase of the Securities, and
has requested, received, reviewed and considered all information it deems
relevant in making an informed decision to purchase the Securities.

 

(b)                                 The Purchaser is
acquiring the number of Securities set forth in Section 1 above in the
ordinary course of its business and for its own account for investment only and
has no present intention of distributing any of the Securities nor any
arrangement or understanding with any third parties regarding the distribution
of such Securities within the meaning of Section 2(11) of the Securities
Act; provided, however, that in making such representation, such Purchaser does
not agree to hold the Securities for any minimum or specific term and reserves
the right to sell, transfer or otherwise dispose of the Securities at any time
in accordance with the 

 

14

 

provisions of this
Agreement and with Federal and state securities laws applicable to such sale,
transfer or disposition.

 

(c)                                  The Purchaser will
not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a
pledge of) any of the Securities except in compliance with the Securities Act
and the rules and regulations promulgated thereunder.

 

(d)                                 The Purchaser has, in
connection with its decision to purchase the number of Shares set forth in Section 2
above, relied solely upon the Company Documents, the representations and
warranties of the Company contained in this Agreement, and the legal opinion
rendered by the Company’s counsel.

 

(e)                                  The Purchaser is an “accredited
investor” within the meaning of Rule 501 of Regulation D promulgated under
the Securities Act.

 

6.2                                 Due Execution,
Delivery and Performance.

 

(a)                                  This Agreement has
been duly executed and delivered by the Purchaser and constitutes a valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms.

 

(b)                                 The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated in this Agreement and the fulfillment of the terms of
this Agreement have been duly authorized by all necessary corporate action.

 

7.                                       Miscellaneous.

 

7.1                                 Survival of
Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Agreement, all representations and
warranties made by the Company and the Purchaser in this Agreement, in the
certificates for the Shares and in the Warrant shall survive for one (1) year
from the execution of this Agreement.

 

7.2                                 Notices.  All notices, requests, consents and other
communications under this Agreement shall be in writing, shall be mailed by
first-class registered or certified airmail, confirmed facsimile or nationally
recognized overnight express courier postage prepaid, and shall be delivered as
addressed as follows:

 

	
  (a)

  	
   

  	
  If to the Company, to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ciphergen
  Biosystems, Inc.

  
	
   

  	
   

  	
  6611 Dumbarton Circle

  
	
   

  	
   

  	
  Fremont, California
  94555

  
	
   

  	
   

  	
  Attn: Chief Executive
  Officer

  
	
   

  	
   

  	
  Telephone: (510) 505-2100

  
	
   

  	
   

  	
  Facsimile: (510) 505-2101

  

 

15

 

	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Wilson Sonsini
  Goodrich & Rosati, PC

  
	
   

  	
   

  	
  650 Page Mill Road

  
	
   

  	
   

  	
  Palo Alto, California
  94304

  
	
   

  	
   

  	
  Attn: Michael
  O’Donnell, Esq.

  
	
   

  	
   

  	
  Telephone: (650) 493-9300

  
	
   

  	
   

  	
  Facsimile: (650) 493-6811

  

 

or to such other person
at such other place as the Company shall designate to the Purchaser in writing;
and

 

If to the Purchaser, to:

 

Quest Diagnostics Incorporated.

1290 Wall Street West

Lyndhurst, N.J. 07071

Attention:  Chief Executive
Officer

Telephone: (201) 729-8319

Facsimile:  (201) 559-2258

 

With
copies to:

 

Quest Diagnostics Incorporated.

1290 Wall Street West

Lyndhurst, N.J. 07071

Attention:  General Counsel

Telephone: (201) 729-8319

Facsimile:  (201) 559-2258

 

and

 

Baker & McKenzie LLP

101 W. Broadway, 12th Floor

San Diego, CA 92101

Attention: Maria P. Sendra, Esq.

Telephone: (619) 236-1441

Facsimile: (619) 236-0429

 

Such notice shall be
deemed effectively given upon confirmation of receipt by facsimile, two
business days after deposit with such overnight courier.

 

16

 

7.3                                 Modification;
Amendment.  This Agreement may not be
modified or amended except pursuant to an instrument in writing signed by the
Company and Purchaser.

 

7.4                                 Headings.  The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.

 

7.5                                 Severability.  If any provision contained in this Agreement
should be held to be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained in
this Agreement shall not in any way be affected or impaired thereby.

 

7.6                                 Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the state of Delaware and the federal
law of the United States of America.

 

7.7                                 Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party to this
Agreement and delivered to the other parties.

 

7.8                                 Entire Agreement.  This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof
and thereof.  There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.

 

7.9                                 Waiver.   Failure of any party to exercise any right
or remedy under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof.

 

7.10                           Further Assurances.
Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

 

7.11                           8-K Filing and Publicity.  Section 16.8 of the Strategic Alliance
Agreement dated as of the date hereof between the parties is incorporated by
reference herein as if such section were stated in its entirety herein.

 

7.12                           No Broker’s Fee.  The Company shall not pay any broker’s or
finder’s fee or commission, and there are no brokers or finders entitled to
receive compensation in connection with the transaction contemplated herein.

 

17

 

[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

18

 

IN
WITNESS WHEREOF, the parties to this Agreement have caused
this Agreement to be executed by their duly authorized representatives as of
the day and year first above written.

 

 

	
   

  	
  CIPHERGEN BIOSYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William E. Rich

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  William
  E. Rich

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  QUEST DIAGNOSTICS INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Catherine T. Doherty

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Catherine
  T. Doherty

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President, Office of the Chairman

  

 

19

 

Exhibit A

 

FORM OF WARRANT

 

 

Exhibit B

 

OFFICER’S
CERTIFICATE

 

CIPHERGEN
BIOSYSTEMS, INC.

 

Pursuant to Section 3.4(d) of
the Ciphergen Biosystems, Inc. Stock Purchase Agreement dated July 22,
2005 (the “Agreement”), the undersigned hereby certify that:

 

1.                                       They
are the Chief Executive Officer and Chief Financial Officer of Ciphergen
Biosystems, Inc. (the “Company”).

 

2.                                       The
representations and warranties made by the Company in Article 5 of the
Agreement are true and correct in all material respects as of the date of this
certificate.

 

3.                                       The
Company has complied with all the agreements and satisfied all the conditions
in the Agreement on its part to be performed or satisfied on or before the date
of this certificate.

 

IN WITNESS WHEREOF, the
undersigned have executed this certificate as officers of the Company on July 22,
2005.

 

 

	
   

  	
  /s/ Dr. William E.
  Rich

  	
   

  
	
   

  	
  Dr. William E.
  Rich

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Matthew Hogan

  	
   

  
	
   

  	
  Matthew Hogan

  	
   

  
	
   

  	
  Chief Financial Officer

  	
   

  

 

 

EXHIBIT C

 

SCHEDULE OF
EXCEPTIONS

 

[None]EXHIBIT 10.46

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND HAVE BEEN ISSUED AND SOLD
IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 4(2) OF
THE ACT AND RULE 506 PROMULGATED UNDER THE ACT. 
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO DISTRIBUTION OR RESALE, AND MAY NOT BE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACE OF 1933, AS
AMENDED, OR PURSUANT TO RULE 144 UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

 

WARRANT

To
Purchase Common Stock of

CIPHERGEN
BIOSYSTEMS, INC.

 

July 22, 2005

 

THIS WARRANT CERTIFIES
that, for value received, Quest Diagnostics Incorporated (the “Holder”),
is entitled, upon the terms and subject to the conditions hereinafter set
forth, at any time on or prior to 5:00 P.M., Pacific Time on July 22,
2010 (the “Expiration Date”), but not thereafter, to subscribe for and
purchase, from Ciphergen Biosystems, Inc., a Delaware company (the “Company”),
Two Million Two Hundred Thousand (2,200,000) shares of common stock (the “Warrant
Stock”) of the Company (the “Warrant”).  The purchase price for one share of the
Company’s common stock under this Warrant shall equal $3.50 per share (the “Exercise
Price”).

 

The purchase price and
the number of shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein. The class and series of shares of capital stock
of the Company issuable upon exercise of this Warrant is also subject to
adjustment pursuant to Section 9 hereof.

 

1.                                       Exercise of Warrant.

 

(a)                                  The
purchase rights represented by this Warrant are exercisable by the Holder
hereof, in whole or in part, at any time before the Expiration Date, by the
surrender of this Warrant, and the Notice of Exercise annexed hereto duly
executed at the principal executive office of the Company (or such other office
or agency of the Company as it may designate by notice in writing to the Holder
hereof at the address of such Holder appearing on the books of the Company),
and upon payment of the purchase price of the Warrant Stock thereby purchased
(by cash or by check or bank draft payable to the order of the Company or by
cash wire transfer to the Company); whereupon the Holder of this Warrant shall
be entitled to receive a certificate for the number of Warrant Stock so purchased.  The Company agrees that if the Holder
surrenders this Warrant and tenders the purchase price on or prior to the
Expiration Date, the Warrant Stock so 

 

 

purchased
shall be and will be deemed to be issued to such Holder as the record owner of
such shares as of the date on which this Warrant was exercised as aforesaid.

 

(b)                                 In
lieu of exercising this Warrant by payment pursuant to paragraph 2(a) above,
the Holder may elect to receive Warrant Stock equal to the value of this
Warrant (or the portion thereof being exercised), at any time before the
Expiration Date, by surrender of this Warrant at the principal executive office
of the Company, together with the Notice of Conversion annexed hereto, in which
event the Company will issue to the Holder Warrant Stock according to the
following formula:

 

	
   

  	
  X = Y(A-B)

  	
   

  
	
   

  	
  A

  	
   

  

 

Where,

 

X     =      The
number of Warrant Stock to be issued to Holder;

 

Y     =      The
number of Warrant Stock for which the Warrant is being exercised;

 

A     =      The
fair market value of one share of Warrant Stock determined as set forth herein;
and

 

B     =      The
Exercise Price.

 

(i)             For purposes of this
subsection 1(b), the fair market value of a share of Warrant Stock is
defined as follows:

 

(1)                                  if
the exercise occurs at a time during which the Company’s common stock is traded
on a national securities exchange or on the Nasdaq National Market or are
actively traded over-the-counter, the fair market value of one common stock of
the Company means the average of the last reported or closing sale price for
the Company’s common stock on such exchange or market for the ten (10) trading
days ending one business day prior to the date of exercise of this Warrant; and

 

(2)                                  in
all other cases, the fair market value of one share of the Company’s common
stock shall be determined in good faith by the Company’s Board of Directors.

 

2.                                       Representations and Warranties of the Company.  The
Company hereby represents, warrants and covenants to the Holder as follows:

 

(a)                                  Issuance
of Shares.  As soon as reasonably
practicable after each exercise of this Warrant, in whole or in part, the Company
at its expense will cause to be issued in the name of and delivered to the
Holder hereof or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct:

 

(i)             a certificate or
certificates for the number of duly authorized, validly issued, fully paid and
nonassessable shares of Warrant Stock to which such Holder shall be entitled
upon such exercise.

 

 

(ii)          in case such exercise is
in part only, a new warrant or warrants calling in the aggregate on the face or
faces thereof for the number of shares of Warrant Stock equal (without giving
effect to any adjustment thereof) to the number of such shares called for on
the face of this Warrant minus the number of such shares designated by the
Holder upon such exercise as provided herein. 
Such new warrant or warrants shall contain the same terms and conditions
as this Warrant.

 

(b)                                 Valid
Issuance, Nonassessable.  This
Warrant, when issued and delivered in accordance with the terms hereof, and the
Warrant Stock, when issued pursuant to the terms hereof, shall be duly
authorized and validly issued. All Warrant Stock which may be issued upon the
exercise of rights represented by this Warrant will, upon exercise of this
Warrant, be fully paid and nonassessable and free from all taxes, liens and
charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).

 

(c)                                  Authorization.  The Company has full power and authority to
enter into this Warrant and to issue this Warrant under the terms and
conditions contained herein. This Warrant has been duly authorized, executed
and delivered by the Company and constitutes a valid and legally binding
obligation, enforceable in accordance with its terms.

 

(d)                                 Reservation
of Authorized Shares.  Through the
period the Warrant is outstanding, the Company shall reserve from its
authorized and unissued common stock a sufficient number of shares to provide
for the issuance of the Company’s common stock upon the exercise of this
Warrant (taking into consideration any adjustments as provided in Section 9
hereof).  If at any time the number of
authorized but unissued shares of the Company’s common stock shall be
insufficient to effect the exercise of the entire Warrant, the Company will use
commercially reasonable efforts to take such action as may, in the opinion of
its counsel or the opinion of counsel to the Holder, be necessary to increase
such authorized but unissued shares of common stock to a number sufficient to
cover the exercise of the entire Warrant. 
The shares of the Company’s common stock to be reserved for the purpose
of issuance upon exercise of this Warrant shall be registrable in accordance
with the terms and conditions of that certain Stock Purchase Agreement by and
among the Company and the Holder dated July 22, 2005 (the “SPA”).

 

3.                                       No Fractional Shares or Scrip.  No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant.  With
respect to any fraction of a share called for upon the exercise of this
Warrant, an amount equal to such fraction multiplied by the then current price
at which each share may be purchased hereunder shall be paid in cash to the
Holder of this Warrant upon exercise.

 

4.                                       Charges, Taxes and Expenses.  Issuance
of certificates for common stock of the Company upon the exercise of this
Warrant shall be made without charge to the Holder hereof for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company, and
such certificates shall be issued in the name of the Holder of this Warrant.

 

 

5.                                       No Rights or Liabilities as Stockholders.  This
Warrant does not entitle the Holder hereof to any voting rights or other rights
as a stockholder of the Company prior to the exercise thereof. In the absence
of affirmative action by Holder to purchase Warrant Stock by exercise of this
Warrant, no provisions of this Warrant, and no enumeration herein of the rights
or privileges of the Holder shall cause such Holder to be a stockholder of the
Company for any purpose.

 

6.                                       Exchange and Registry of Warrant.  The
Company shall maintain at its principal executive office or agency a registry
showing the name and address of the registered Holder of this Warrant.  This Warrant may be surrendered for exchange,
transfer or exercise, in accordance with its terms, at such office or agency of
the Company, and the Company shall be entitled to rely in all respects, prior
to written notice to the contrary, upon such registry.

 

7.                                       Loss, Theft, Destruction or Mutilation of Warrant.  Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dated as of such cancellation,
in lieu of this Warrant.

 

8.                                       Saturdays, Sundays, Holidays, etc.  If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday or a Sunday or shall be a
legal holiday, then such action may be taken or such right may be exercised on
the next succeeding day not a legal holiday.

 

9.                                       Adjustments.  The Exercise Price and the number
of Warrant Stock purchasable hereunder are subject to adjustment from time to
time as set forth in this Section 9.

 

(a)                                  Reclassification,
etc.  If the Company, at any time
while this Warrant, or any portion hereof, remains outstanding and unexpired by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant exist into the same or a
different number of securities or any other class or classes, this Warrant
shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with
respect to the securities that were subject to the purchase rights under this
Warrant immediately prior to such reclassification or other change and the
Exercise Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 9.

 

(b)                                 Subdivision or Combination of Shares.  In the event that the Company shall at any
time subdivide the outstanding securities as to which purchase rights
under this Warrant exist, or shall issue a stock dividend on the securities as
to which purchase rights under this Warrant exist, the
number of securities as to which purchase rights under this Warrant exist
immediately prior to such subdivision or to the 

 

 

issuance
of such stock dividend shall be proportionately increased, and the Exercise
Price shall be proportionately decreased, and in the event that the Company
shall at any time combine the outstanding securities as to which purchase
rights under this Warrant exist, the number of securities as to which purchase
rights under this Warrant exist immediately prior to such combination shall be
proportionately decreased, and the Exercise Price shall be proportionately
increased, effective at the close of business on the date of such subdivision,
stock dividend or combination, as the case may be.

 

(c)                                  Corporate
Reorganizations.  If at any time
after the date hereof there shall be a capital reorganization (other than a
combination or subdivision of Warrant Stock otherwise provided for herein), or
a merger or consolidation of the Company with or into another corporation, or
the sale of substantially all of the Company’s properties and assets to any
other person or entity, then, as a part of such reorganization, merger,
consolidation or sale, the Company shall take such steps so that the Holder
shall thereafter be entitled to receive, upon exercise of this Warrant, the
number of shares of stock or other securities, cash or property of the Company
or the successor entity resulting from such reorganization, merger,
consolidation or sale, to which the Holder of this Warrant would have been
entitled under the terms and conditions of such reorganization, merger,
consolidation or sale if this Warrant had been exercised prior to the record
date of such reorganization, merger, consolidation or sale.

 

(d)                                 Cash
Distributions.  The Company will make
no adjustment to the Exercise Price on account of cash dividends or interest on
the Warrant Stock.

 

(e)                                  Other
Distributions.  If the Company at any
time makes, or fixes a record date for the determination of holders of the
Company’s common stock entitled to receive any distribution payable in
securities of the Company, or any other securities or property other than cash
dividends, then and in each such event provision shall be made so that the
Holder hereof shall receive upon exercise of the Warrant, in addition to the
number of shares of the Company’s common stock issuable upon exercise of this
Warrant, the amount of such securities or property which such Holder would have
received had this Warrant been exercised on the date of such event and had such
Holder thereafter, during the period from the date of such event to and
including the date of exercise, retained such securities or property receivable
by such Holder as aforesaid during such period, subject to all other
adjustments called for such period under this Section 9 with respect to
the rights of the Holder.

 

(f)                                    No
Dilution or Impairment.  The Company
will not, by amendment of its certificate of incorporation or bylaws, or
through any consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant.

 

Without limiting the
generality of the foregoing, the Company (a) will take all such action as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of stock on the exercise of
the Warrants from time to time outstanding and (b) will not take any
action which results 

 

 

in any
adjustments of the Warrant Price if the total number of shares of Warrant Stock
issuable after the action upon the exercise of all of the Warrants would exceed
the total number of shares of Warrant Stock then authorized by the Company’s
certificate of incorporation and available for the purpose of issue upon such
exercise.

 

10.                                 Certificate of Adjustments.  In the
case of each adjustment or readjustment of the Warrant Price and/or the number
of Warrant Stock, the Company, at its expense, will promptly compute such
adjustment or readjustment in accordance with the terms hereof and cause a
certificate, signed by the Company’s chief financial officer, setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, to be delivered to the Holder of this
Warrant.  The Company will furnish or
cause to be furnished to such Holder a certificate setting forth:

 

(a)                                  Such
adjustments and readjustments;

 

(b)                                 The
Warrant Price at the time in effect and how it was calculated; and;

 

(c)                                  The
number of shares of Warrant Stock and the amount, if any, of other property at
the time receivable upon the exercise of the Warrant.

 

11.                                 Notice of Record Date.  In the
event of:

 

(a)                                  Any
taking by the Company of a record of the holders of any class of securities of
the Company for the purpose of determining the holders thereof who are entitled
to receive any dividend (other than a cash dividend payable out of earned
surplus at the same rate as that of the last such cash dividend theretofore
paid) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property;

 

(b)                                 Any
capital reorganization of the Company, any reclassification or recapitalization
of the Warrant Stock of the Company, any transfer of all or substantially all
of assets of the Company to any other person, any consolidation or merger involving
the Company, or any transaction contemplated in Section 9 above; or

 

(c)                                  Any
voluntary or involuntary dissolution, liquidation or winding-up of the Company;

 

the Company will deliver to the Holder of this Warrant
at least ten (10) business days prior to the date thereof , a notice
specifying:

 

(i)             As the case may be,
the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right; and the record date for determining stockholders
entitled to vote thereon.

 

(ii)          As the case may be, the
closing of any reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding-up, 

 

 

and the record date for determining stockholders
entitled to vote thereon and the time, if any such time is to be fixed, as of
which the holders of record of Warrant Stock shall be entitled to exchange
their shares of Warrant Stock for the securities or other property deliverable
upon such reorganization, consolidation, merger, transfer, dissolution
liquidation or winding-up.

 

12.                                 Restrictions on Transferability of Warrant.

 

(a)                                  Restrictions
on Transferability.  This Warrant and
the Warrant Stock issuable upon exercise of this Warrant shall not be sold,
assigned, transferred or pledged except in compliance with this Section 12.

 

(b)                                 Restrictive
Legend.  The certificate or
certificates evidencing the Warrant Stock issued upon exercise of this Warrant
shall be stamped or imprinted with a legend in substantially the following form
(in addition to any other legend reasonably requested by the Company or its
counsel in order to comply with applicable federal and state securities laws):

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND HAVE BEEN ISSUED AND SOLD
IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 4(2) OF
THE ACT AND RULE 506 PROMULGATED UNDER THE ACT. 
THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO DISTRIBUTION OR RESALE, AND MAY NOT BE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACE OF 1933, AS
AMENDED, OR PURSUANT TO RULE 144 UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

 

The Holder of this
Warrant, and each transferee thereof, consents to the Company making a notation
on its records and giving instructions to any transfer agent of the Warrant in
order to implement the restrictions on transfer established in this Section 12.  Notwithstanding anything to the contrary in
this Warrant, the Warrant Stock shall have registration rights as provided in Article 4
of the SPA.

 

(c)                                  Notice
of Proposed Transfers.  The Holder,
by acceptance of this Warrant and the Warrant Stock, agrees to comply in all
respects with the provisions of this Section 12(c).  The Holder agrees not to make any disposition
of all or any portion of the Warrant or the Warrant Stock unless and until (X)
there is then in effect a registration 

 

 

statement
under the Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement or (Y) the
disposition is otherwise being made in compliance with applicable federal and
state securities laws.

 

13.                                 Investment Representations and Covenants of the
Holder.  With respect to the acquisition of this
Warrant, the Holder hereby represents and warrants to the Company as follows:

 

(a)                                  Experience.  The Holder is capable of evaluating the
merits and risks of its investment in the Company and has the capacity to
protect its own interests.

 

(b)                                 Investment.  The Holder is acquiring this Warrant for
investment for its own account, not as a nominee or agent, and not with the
view to, or for resale in connection with, any distribution thereof.  The Holder understands that this Warrant has
not been, and will not be, registered under the Securities Act.

 

(c)                                  Rule 144.  The Holder acknowledges that the Warrant must
be held indefinitely unless exercised or subsequently registered under the
Securities Act, or unless an exemption from such registration is
available.  The Holder understands that
the Company is not under any obligation to register this Warrant.  The Holder is aware of the provisions of Rule 144
promulgated under the Securities Act that permit limited resale of securities
purchased in a private placement subject to satisfaction of certain conditions.

 

14.                                 Miscellaneous.

 

(a)                                  Governing
Law.  THIS AGREEMENT SHALL BE
GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO
ITS CONFLICT OF LAWS PRINCIPLES.

 

(b)                                 Waivers
and Amendments.  This Warrant and any
provisions hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by the party against which enforcement of the same
is sought.

 

(c)                                  Assignment.  This Warrant may be assigned or transferred
by the Holder to (i) an entity that acquires ownership, directly or
indirectly, of more than fifty percent (50%) of the voting securities of, or
possession of the right to vote, in the ordinary direction of its affairs, of
more than fifty percent (50%) of the voting interest in the Holder; (ii) an
entity that acquires all or substantially all of the assets of the Holder; or (iii) an
entity that is the resulting entity of a merger or consolidation of the
Holder.  Upon such transfer this Warrant
and all rights hereunder shall be transferred, in whole or in part, on the
books of the Company maintained for such purpose at the principal office of the
Company referred to above, by the Holder hereof in person, or by duly
authorized attorney, upon surrender of this Warrant properly endorsed and upon
payment of any necessary transfer tax or other governmental charge imposed on
such transfer. Upon any transfer, the Company shall issue and deliver to the
Holder a new warrant. Each taker and holder of this Warrant, by taking and
holding the same, consents and agrees that when this Warrant shall have been so
endorsed, the person in possession of this Warrant may be treated by the
Company, and all other persons dealing with this Warrant, as the 

 

 

absolute
owner hereof for any purpose and as the person entitled to exercise the rights
represented hereby, any notice to the contrary notwithstanding.  The terms and conditions of this Warrant
shall be binding upon any successors or assigns of the Company.  Upon transfer, the Holder shall have no
further liability to the Company or any third party.

 

(d)                                 Notices.  All notices and other communications required
or permitted hereunder shall be in writing and shall be delivered personally by
hand or by courier, mailed by United States first-class mail, postage prepaid,
or sent by facsimile directed to the party to be notified at the address or
facsimile number indicated for such person on the signature page hereof,
or at such other address or facsimile number as such party may designate by ten
(10) days’ advance written notice to the other parties hereto.  All such notices and other communications
shall be deemed given upon personal delivery, on the date of mailing, or upon
confirmation of facsimile transfer.

 

(e)                                  Counterparts.
 This Warrant may
be executed two counterparts, each of which shall be enforceable, and both of which
shall constitute one instrument.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF,
CIPHERGEN BIOSYSTEMS, INC. has caused this Warrant to be executed by its
officers thereunto duly authorized.

 

Dated: July 22, 2005

 

	
   

  	
   

  	
  CIPHERGEN BIOSYSTEMS,
  INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ William E. Rich

  	
   

  
	
   

  	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  William E. Rich

  	
   

  
	
   

  	
   

  	
  (Print Name)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
  (Title)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
  6611 Dumbarton
  Circle

  	
   

  
	
   

  	
   

  	
  Fremont, CA
  94555

  	
   

  
					

 

AGREED AND ACKNOWLEDGED:

QUEST DIAGNOSTICS INCORPORATED

 

	
  /s/ Catherine T. Doherty

  	
   

  
	
  (Signature)

  	
   

  
	
   

  	
   

  
	
  Catherine T. Doherty

  	
   

  
	
  (Print Name)

  	
   

  
	
   

  	
   

  
	
  Vice President, Office of the Chairman

  	
   

  
	
  (Title)

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
			

1290 Wall Street West

Lyndhurst, NJ 07071

Facsimile Number:

 

 

NOTICE
OF EXERCISE

 

To:                              CIPHERGEN
BIOSYSTEMS, INC.

 

(1)                                  The
undersigned hereby elects to purchase                                
shares of common stock (the “Shares”) of CIPHERGEN BIOSYSTEMS, INC. pursuant to
the terms of the attached Warrant, and tenders herewith payment of the purchase
price in full, together with all applicable transfer taxes, if any.

 

(2)                                  Please
issue a certificate of certificates representing said Shares in the name of the
undersigned or in such other name as is specified below:

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Print Name)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

(3)                                  The
undersigned represents that the aforesaid Shares are being acquired for the
account of the undersigned for investment and not with a view to, or for resale
in connection with, the distribution thereof and that the undersigned has no
present intention of distributing or reselling such shares.

 

	
   

  	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Print Name)

  

 

 

NOTICE
OF CONVERSION

 

TO:                            CIPHERGEN
BIOSYSTEMS, INC.

 

1.                                       The
undersigned hereby elects to convert the attached Warrant into                                  
common shares (the “Shares”) of CIPHERGEN BIOSYSTEMS, INC. pursuant to Section 1(b)of
such Warrant, which conversion shall be effected pursuant to the terms of the
attached Warrant.

 

2.                                       Please
issue a certificate or certificates representing the Shares in the name of the
undersigned or in such other name as is specified below:

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Print Name)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

3.                                       The
undersigned represents that the aforesaid Shares are being acquired for the
account of the undersigned for investment and not with a view to, or for resale
in connection with, the distribution thereof and that the undersigned has no
present intention of distributing or reselling such shares.

 

	
   

  	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Print Name)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}]]