Lifearray(tm) Software License Agreement

LIFEARRAY(TM) SOFTWARE LICENSE AGREEMENT


Between


diaDexus


and


INCYTE PHARMACEUTICALS, INC.


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This agreement ("Agreement") is entered into as of this ____ day of ________, 1999 (the "Effective Date") by and between diaDexus, a Delaware Limited Liability Company, having its principle place of business at 3303 Octavius Drive, Santa Clara, CA 95054 ("CUSTOMER") and Incyte Pharmaceuticals Inc., a Delaware corporation having its principal place of business at 3160 Porter Drive, Palo Alto, CA 94304 ("Incyte").


WHEREAS, Incyte has developed and owns certain computer software for use in the processing and analysis of microarray expression data either generated from Incyte microarrays or from other sources (third party expression data); and


WHEREAS, CUSTOMER desires to implement selected Incyte database and software products within a bioinformatics environment at CUSTOMER and CUSTOMER desires to have Incyte assist with such implementation described herein.


NOW, THEREFORE, Incyte and CUSTOMER hereby agree as follows:


1.0 DEFINITIONS.


When used in this Agreement, the following definitions shall apply:


1.1 "Access Term": means the period commencing on the Acceptance Date and
extending up until twelve (12) months (unless terminated earlier as
provided for in Article 7 (Term; Termination), during which CUSTOMER and
CUSTOMER Affiliates shall have access to the LifeArray(TM) Product(s)
pursuant to the terms and conditions of this Agreement. The Access Term may
be extended for an one (1) additional twelve (12) month period upon written
request made by CUSTOMER to Incyte to extend the Access Term. Such request
must be made prior to the expiration of the first twelve (12) month period
of the Access Term and will be under financial terms as found in Section
5.1.1 (Access Term Fees).


1.2 "Acceptance Date": means the date on which diaDexus provides written
confirmation of acceptance of installation of the LifeArray(TM) Product.


1.3 "CUSTOMER Affiliate(s)": means any corporation, firm, partnership, or
other legal entity, which directly or indirectly, is owned or under common
ownership by CUSTOMER to the extent of which the common stock or other
equity ownership thereof is One Hundred percent (100%) owned by CUSTOMER;
provided, however, that where local laws require a minimum percentage of
local ownership, the status of CUSTOMER Affiliate will be established if
CUSTOMER directly or indirectly owns or controls the maximum ownership
percentage that may, under such local laws, be owned or controlled by
foreign interests.


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1.4 "Incyte Technology": means proprietary know-how and patent rights with respect to the LifeArray(TM) Product(s) which is owned or controlled by Incyte and which Incyte has an unrestricted right to license without obligation of payment to a third party.


1.5 "Installation Site(s)": means the research facilities of CUSTOMER located at 3303 Octavius Drive, Santa Clara, California, that will have access to the LifeArray(TM) Product(s) and any alternate or additional sites requested by CUSTOMER in writing to Incyte during the Access Term in accordance with Section 1.2 (CUSTOMER Affiliate) above and 4.1 (License Grant) below, subject to appropriate provisions of this Agreement, including Articles 4.0 (Intellectual Property and License Grants), 5 (Schedule of Payments) and 7.0 (Term; Termination).


1.6 "Integration Program" means the Integration Project(s) (defined below) and the Integration Specification (defined below) related thereto, that shall be undertaken in accordance with this Agreement.


1.7 "Integration Project" means the scope of the Integration Specification for each individual project(s), as reasonably agreed to and undertaken by CUSTOMER and Incyte, with respect to the implementation and integration of the LifeArray Product(s), including such modifications as may be mutually agreed in writing between the parties, all of which shall be deemed incorporated into this Agreement as if set forth herein. The Integration Specifications for such Integration Project(s) shall include:


(a) mutually agreed written statements of work with specific requirements,
project report provisions, timetables for development and implementation
and acceptance criteria; and


(b) mutually agreed project cost and payment schedules in accordance with
the provisions of Section 5.3 (Consulting Services);


(c) mutually agreed maintenance and support services; and


(d) mutually agreed to exclusivity provisions with regard to items that
are truly unique and specific to CUSTOMER and not generic in nature.


1.8 "Integration Specifications" means the systems integration specifications developed by Incyte in cooperation with CUSTOMER, and as the same may be hereafter supplemented or modified in writing by the parties, on which Incyte will rely in modifying, adapting or otherwise altering the LifeArray(TM) Product(s) for installation and implementation at the Installation Site(s).


1.9 "LifeArray(TM) Product(s)": means Incyte's set of proprietary software modules providing analysis and data-management tools for handling complex array


2 4 information from multiple sources, together with related software and documentation including all additions, enhancements and modifications by Incyte, all of which are made available by Incyte in object code format on a non-exclusive basis to CUSTOMER and CUSTOMER Affiliates.


1.10 "Party": means CUSTOMER or Incyte and, when used in the plural, shall mean CUSTOMER and Incyte.


1.11 "Research Field of Use": means all research and development applications of the LifeArray(TM) Product(s) that are internal to CUSTOMER and CUSTOMER Affiliates in compliance with Section 3.3.5 (Modifications) and/or Article 7.0 (Term; Termination). The Research Field of Use does not include the right to sell the LifeArray(TM) Product(s), including Modifications, or the sale or license of data analysis services, or the use of LifeArray(TM) Product(s) or Modifications to develop commercial database products or services.


1.12 "Software": as generally used herein, means software in various stages of development or any product thereof and includes without limitation the literal elements of a program (source code, object code, manuals, instructions or otherwise), its audiovisual components (menus, screens, structure and organization), any human or machine readable form of the program, and any writing or medium in which the program or information therein is stored, written or described, including without limitation, diagrams, flow charts, designs, drawings, specifications, models, data, development tools and routines, bug reports and customer information.


1.13 "Other Definitions": The following terms shall have the meanings assigned in the corresponding sections or subsections below:


"Confidential Information" 6.1 "Escrow Agent" 7.6 "Escrow Agreement" 7.6 "Escrowed Source Code" 7.6 "Integration Team" 2.2.1 "Modifications" 3.3.5 "Notice" 10.8


1.14 "Year 2000 Compliant": means:


(a) the product performs in a consistent manner and functions without
interruptions regardless of the date in time on which the product is
delivered, used and/or further distributed, whether before, on or after
January 1, 2000 and whether or not the dates are affected by leap years;


(b) the product, if computerized, accepts, calculates, compares, sorts,
extracts, sequences and otherwise processes date inputs and date values,
and returns and


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displays date values and performs, in a consistent manner regardless of the
dates used, whether before, on or after January 1, 2000;


(c) the product, if computerized, accepts and responds to two-digit
year-date input in a manner that resolves any ambiguities as to the
century in a defined, predetermined and appropriate manner;


(d) the product, if computerized, stores and displays data information in
ways that are unambiguous as to the determination of the century;


(e) the product will be delivered and the services will be scheduled and
performed in a timely manner without interruptions caused by the date in
time on which the product is ordered or is actually delivered or the
services are scheduled or actually performed under normal procedures in
the ordinary course, whether before, on or after January 1, 2000;


(f) Incyte is now planning and taking action to implement, and will
continue to implement, in a commercially reasonable manner, any and all
measures to continue to perform this Agreement according to its terms and
otherwise to meet the needs of its relationship with CUSTOMER, with
respect to Year 2000 Compliance of the LifeArray(TM) Product(s), including
without limitation those required for due performance and continued
performance without impairment due to interruption and/or disruption of
estimates, performance schedules, orders, confirmations, manufacture and
delivery of conforming products and/or services in a timely and efficient
manner to fulfill CUSTOMER's requirements and to enable CUSTOMER to deal
with its own business and its clients' needs and contract requirements, as
well as to invoice CUSTOMER and credit its payments in a timely and
accurate manner;


(g) Incyte will promptly provide to CUSTOMER, in response to CUSTOMER's
periodic requests for updates, information concerning Incyte's Year 2000
compliance program to the extent it affects performance of this Agreement
itself according to the terms hereof or affects the performance of the
product and/or services that are the subject matter of this Agreement and
might impair its supplier-customer relationship with CUSTOMER.


(h) CUSTOMER may cancel, refuse to order and/or take delivery, reject
and/or return non-complying goods and/or services and receive a full
refund or credit against invoices, as applicable.


(i) Incyte agrees to hold CUSTOMER harmless against any liability,
judgment, damages, loss or expense, including without limitation
reasonable counsel fees, resulting from Incyte's failure to meet the
requirements of any of the foregoing provisions.


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(j) In no event shall delays and failures caused by failures of Incyte,
its products or services to be fully Year 2000 Compliant constitute a force
majeure event or excuse Incyte from timely performance of its obligations.


2.0 INSTALLATION; SYSTEMS INTEGRATION


2.1 Installation. At a date and time mutually acceptable to the Parties, Incyte
agrees to provide CUSTOMER with on-site access to LifeArray[TM] Product(s)
at the Installation Site.


2.2 Integration Program. As required or desired, Incyte and CUSTOMER shall
reasonably agree upon the scope of the Integration Program to be undertaken
by Incyte with respect to the implementation and integration of the
LifeArray[TM] Product(s).


2.2.1 Integration Team. CUSTOMER and Incyte shall each designate
respective employees to work on the development of the Integration
Specifications and the Integration Project(s) (the "Integration Team").
Furthermore:


(a) CUSTOMER and Incyte shall cause their respective Integration
Teams to (i) consult with one another regularly by telephone,
electronic mail and any other reasonable remote means, and (ii)
make themselves available at mutually convenient times for in
person consultation, as reasonably required by the needs of the
project. In conjunction with the Integration Project(s), Incyte
and CUSTOMER may utilize those employees, contractors,
consultants and affiliates as deemed reasonably appropriate,
provided that each is made aware of and subject to the terms and
conditions of this Agreement. Except as agreed in Section 5.3
(Consulting Services), Incyte and CUSTOMER shall each be
responsible for its own out-of-pocket expenses incurred by it or
its respective personnel in connection with the Integration
Project(s).


(b) The parties acknowledge that the success of this
collaboration depends upon, among other things, full, frank and
timely disclosures and communications between the parties
regarding their respective efforts. Incyte and CUSTOMER will each
respectively use reasonable efforts to provide the other in a
prompt, clear and concise manner, all information that each Party
generates or develops pursuant to its obligations hereunder.


(c) In the event the joint Integration Team is unable to reach
agreement upon any decision within its area of responsibility,
Incyte and CUSTOMER agree that such decision shall be presented
to the president (or chief operating officer


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(COO) if there is no president) of each company for consideration
and resolution. If an issue remains unresolved after
consideration by the president (or COO if no president) of each
company, such issue shall be resolved in the manner described in
Section 7.5 (Dispute Resolution Procedures).


2.2.2 Management of Changes.


(a) CUSTOMER acknowledges that Incyte's performance is dependent
in part on CUSTOMER's actions. Accordingly, CUSTOMER will use
reasonable efforts to provide Incyte with such cooperation and
assistance of CUSTOMER as Incyte may reasonably request to
facilitate implementation of the Integration Project(s).


(b) If a Party proposes a change to previously agreed
Integration Specifications with respect to a given Integration
Project, the other Party will reasonably consider the proposed
change. However, any change authorization must be in writing and
must be signed by both parties to authorize implementation of any
such changes. In addition, if any such change would substantially
affect the economics of Incyte's performance, then: i) any dates
or time periods relevant to performance by Incyte hereunder,
shall be appropriately and equitably extended to account for any
delays resulting from such changes, and ii) the parties will
negotiate in good faith with respect to appropriate compensation
to Incyte in accordance with a reasonable proposal from Incyte
with respect to such changes.


2.2.3 Acceptance. After the Integration Project(s) have been received,
examined and/or tested by CUSTOMER and demonstrated to perform in
accordance with mutually agreed acceptance criteria, then CUSTOMER will
provide prompt written confirmation of acceptance of the Integration
Project(s) to Incyte and forwards to Incyte any payments due in accordance
with Article 5.0 (Schedule of Payments).


2.3 Support Services. During the term of the Access Term and subject to the payment terms of Section 5.1 (License Payment) and 5.2 (License Fees), Incyte agrees to provide support services to CUSTOMER and CUSTOMER Affiliates with respect to LifeArray(TM) Product(s) as described below at no additional cost, Incyte agrees to provide CUSTOMER with a full set of documentation for the LifeArray(TM) Product(s), including a complete description of LifeArray(TM) Product(s) logic and program schematics;


(a) at no additional cost, with respect to support of the LifeArray(TM)
Product(s) as installed, Incyte agrees to furnish reasonable
assistance to CUSTOMER and CUSTOMER Affiliates in the installation and
achievement of routine operation of the LifeArray(TM) Product(s) (and
updates and modifications thereof) at the Installation Site(s),
including reasonable, support, problem determination and


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resolution service by telephone and electronic mail during each
business day of the calendar year;


(b) at not additional cost, Incyte will reasonably maintain and support
the LifeArray(TM) Product(s) with respect to current releases of
applicable operating systems, database management systems, and any
applicable third party current vendor supported software programs,
including without limitation the software programs referenced in
Section 4.3 (Third Party Intellectual Property) below.


(c) at no additional cost, Incyte shall also furnish updates and current
releases of the LifeArray(TM) Product(s), and maintenance and support
as contemplated herein with respect to such updates and new releases.


(d) at CUSTOMER'S written request, maintenance and support of the
LifeArray(TM) Product(s) as modified under the Integration Program,
may be provided to CUSTOMER subject to additional terms, conditions
and fees as reasonably negotiated between the parties and based on
the modifications, adaptations or other altering of the LifeArray(TM)
Product(s) consistent with the Integration Programs;


2.4 Training.


(a) With respect to operation of the LifeArray(TM) Product(s), after the
Effective Date and at a time mutually agreeable to Incyte and CUSTOMER,
Incyte agrees to provide CUSTOMER with two (2) days of training at Incyte's
Palo Alto, California location.


(b) CUSTOMER may designate no more than eight (8) employees, or such
other number as mutually agreed, from each Installation Site to attend
training at Incyte with regard to 2.4(a) above.


(c) Each Party shall bear the out-of-pocket expenses of its employees.


(d) Additional training by Incyte for CUSTOMER may be mutually agreed to
by the parties. Any additional training shall be at times mutually
agreeable to the parties and at an additional cost to CUSTOMER (the cost
to be mutually agreed to between the Parties prior to such training).


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3.0 ACCESS RIGHTS, SOFTWARE USE RESTRICTIONS
AND SECURITY REQUIREMENTS


3.1 Access Rights.


(a) Incyte hereby grants to CUSTOMER and CUSTOMER Affiliates
non-exclusive access and the right to use the Life Array(TM)
Product(s) in the Research Field of Use solely for CUSTOMER's and
CUSTOMER Affiliate's own internal use, by authorized personnel of
CUSTOMER and CUSTOMER Affiliates, in secure work facilities at the
Installation Site(s) at CUSTOMERS and CUSTOMER Affiliate(s) locations
and in accordance with the terms and conditions of this Agreement.
CUSTOMER and CUSTOMER Affiliates shall have no access to or right to
use the LifeArray(TM) Product(s) except at an Installation Site under
the terms and conditions of this Agreement.


During the Access Term, CUSTOMER shall have the right, at its
discretion to: (i) designate one or more additional Installation
Site(s) for the LifeArray(TM) Product(s) subject to the payment terms
set forth in Sections 5.1 (License Payments) and 5.2 (License Fees);
and/or (ii) relocate the Installation Site(s) from time to time
without additional fees or costs (except as set forth in Section 5.3
(Consulting Services); provided that any such sites are in compliance
with appropriate provisions of this Agreement, including Articles 3.0
(Software Use Restrictions and Security Requirements) and 6.0
(Confidentiality). Any additional implementation or support services
provided by Incyte with respect to the LifeArray(TM) Product(s) at
such site(s) shall be in manner consistent with and under terms
consistent with those of comparable users of the LifeArray(TM)
Product(s).


3.2 Ownership. CUSTOMER hereby acknowledges that (i) Incyte has expended and
will expend significant resources and efforts to develop the LifeArray(TM)
Product(s); (ii) the LifeArray(TM) Product(s) represent highly valuable
and confidential assets of Incyte; (iii) Incyte is willing to grant
CUSTOMER and CUSTOMER Affiliates access to the LifeArray(TM) Product(s) in
reliance that CUSTOMER and CUSTOMER Affiliates shall protect the Software
from unauthorized disclosure and use; and (iv) except as otherwise
expressly provided under this Agreement, the LifeArray(TM) Product(s) at
all times during the term of this Agreement shall remain the sole and
exclusive property of Incyte.


3.3. Restrictions on Use of Software.


3.3.1 Designated CPUs. The LifeArray(TM) Product(s) shall only be installed
at the Installation Site(s) on a single hard disk(s) or the hard disk(s)
of a designated file server whereby multiple workstation(s) do not contain
copy(s) of LifeArray(TM) Product(s) installed, other than ephemerally, on
the workstation hard disk. A back-up


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10 computer or file server may be designated such that a copy of the LifeArray(TM) Product(s) may be installed on this computer in the event that the primary computer fails. Under no circumstances will the LifeArray(TM) Product(s) be installed on any designated CPU(s) which would allow unauthorized network access (e.g. third party access via the Internet). All other access to LifeArray(TM) Product(s), including access by facilities of CUSTOMER or CUSTOMER Affiliates other than those designated as Installation Sites is prohibited.


3.3.2 Disclosure. Except as permitted under subsection 3.3.5. (Modifications), CUSTOMER and CUSTOMER Affiliates shall not disclose Software, related source code or Confidential Information of Incyte or transfer the LifeArray(TM) Product(s), or any portion thereof, to any third party.


3.3.3 No Transfer. Except as provided under Section 3.3.5 (Modifications) or as otherwise agreed by Incyte in writing, CUSTOMER and CUSTOMER Affiliates shall not sublicense, sell, assign, convey, transfer, publish, display, copy, duplicate, adapt, merge, embed, disassemble, decompile, translate, reverse engineer or otherwise modify any portion of the LifeArray(TM) Product(s) (by any means whatsoever whether now known or hereafter invented) of the LifeArray(TM) Product(s). Furthermore, CUSTOMER and CUSTOMER Affiliates shall not remove any product identification, trademark or other notices.


3.3.4 Loss or Theft. CUSTOMER promptly shall notify Incyte of any loss, theft or unauthorized disclosure or use of LifeArray(TM) Product(s) which comes to CUSTOMER's attention.


3.3.5 Modifications. Solely for purposes of system integration and/or to facilitate data analysis and relational analysis, CUSTOMER, CUSTOMER Affiliates, or consultants may, as set forth below, adapt, reproduce, and modify such LifeArray(TM) Product(s) and prepare derivative works based on the LifeArray(TM) Product(s) and may incorporate information that is proprietary to CUSTOMER and CUSTOMER Affiliates (all the foregoing collectively, "Modifications"). All Modifications shall only be ...