Exhibit 10.19

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

DIAGNOSTICS LICENSE AGREEMENT

This DIAGNOSTICS LICENSE AGREEMENT (hereinafter “AGREEMENT”), is executed on the
9th day of December, 2004, between diaDexus, Inc., a Delaware Corporation, with
offices at 343 Oyster Point Boulevard, South San Francisco, California, USA
94080 (hereinafter “DIADEXUS”), and ICOS Corporation, a Delaware corporation
having its principal place of business at 22021 20th Avenue S.E., Bothell,
Washington, USA 98021 on behalf of itself and its AFFILIATES (hereinafter
“ICOS”).

WITNESSETH THAT:

WHEREAS, ICOS is the owner of all right, title and interest in certain patents
and patent applications relating to platelet-activating factor acetylhydrolase
(hereinafter “PAF-AH”);

WHEREAS, ICOS and DIADEXUS have entered into a [*] License Agreement, dated
December 6, 2000 under the PAF-AH patents for human diagnostic applications;

WHEREAS, subject to certain ICOS-retained rights RETAINED RIGHTS (as defined
below), ICOS wishes to grant DIADEXUS a license under the PAF-AH patents for
human diagnostic applications in accordance with the terms herein.

NOW, THEREFORE, in consideration of the covenants and obligations expressed
herein, and intending to be legally bound, the parties agree as follows:

 

1. DEFINITIONS

1.1        “AFFILIATE” means any corporation, firm, partnership or other entity,
whether de jure or de facto, that directly or indirectly through one or more
intermediaries’ controls, is controlled by or is under common control with a
party to this AGREEMENT. An entity shall be deemed to control another entity if
it (i) owns, directly or indirectly, at least fifty percent of the outstanding
voting securities or capital stock (or such lesser percentage which is the
maximum allowed to be owned by a foreign corporation in a particular
jurisdiction) of such other entity, or has other comparable ownership interest
with respect to any entity other than a corporation; or (ii) has the power,
whether pursuant to contract, ownership of securities or otherwise, to direct
the management and policies of the entity.

1.2        “CONFIDENTIAL INFORMATION” means all information, knowledge,
technology, methods, practices, formulas, procedures, designs, drawings, data,
and other valuable information of whatever nature, whether communicated in
writing, verbally or electronically, which is provided by one party to the other
party in connection with this AGREEMENT.

 

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1.3        “DIADEXUS LICENSED PRODUCTS” means diagnostic products or diagnostic
services of DIADEXUS, its AFFILIATES or its or their sublicensees, the
identification, research, development, use, manufacture, sale, offer for sale or
importation of which, but for the license granted to DIADEXUS by ICOS herein,
would infringe a VALID CLAIM.

1.4        “EFFECTIVE DATE” means the date upon which this AGREEMENT shall
become effective and binding upon the parties, which shall be the latest of 1)
execution date of this AGREEMENT or 2) the execution of a license agreement
between ICOS and GSK relating to therapeutic uses of the ICOS PATENTS.

1.5        “FIELD” means human diagnostic uses.

1.6        “GSK” shall mean Glaxo Group Limited doing business as
GlaxoSmithKline.

1.7        “ICOS PATENTS” means those patent applications (including any patents
issuing from such patent applications) and issued patents set out in Exhibit A
and any provisionals, divisionals, continuations, continuations-in-part,
reissues, reexaminations, extensions derived therefrom, as well as all foreign
patent applications and granted patents issuing therefrom, and all functional
counterparts and functional equivalents thereof including, but not limited to
substitutions, confirmations, registrations, revalidations, supplemental
protection certificates, administrative protection certificates (or other
governmental actions).

1.8        “ICOS RETAINED RIGHTS” means (i) the right of ICOS and its AFFILIATES
to use the ICOS PATENTS in the FIELD for internal research purposes only and
(ii) the right of ICOS to grant to a single THIRD PARTY CO-EXCLUSIVE LICENSEE at
all times a co-exclusive license to use the ICOS PATENTS in the FIELD with right
to sublicense.

1.9        “NET SALES” means the aggregate gross sales (“Gross Sales”) amount
actually invoiced by DIADEXUS or its AFFILIATES or its or their sublicensees for
the DIADEXUS LICENSED PRODUCTS less the following deductions relating to such
sales to the extent such deductions are consistent with the normal practice in
the diagnostic products industry:

(a)        trade, quantity and cash discounts and rebates and other discounts
actually allowed by

DIADEXUS;

(b)        any adjustments on account of price adjustments, billing errors,
rejected goods, damaged goods and returns, but only to the extent not previously
deducted from NET SALES;

(c)        credits, charge-backs and prime vendor rebates, fees, reimbursements,
and similar payments

 

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actually granted or given to wholesalers and other distributors, buying groups,
health care insurance carriers, pharmacy benefit management companies, health
maintenance organizations, other institutions or health care organizations or
other customers, but only to the extent not previously deducted from NET SALES;

(d)        rebates or other price reductions provided, based on sales by
DIADEXUS of DIADEXUS LICENSED PRODUCTS, to any governmental or regulatory
authority in respect of any state or federal Medicare, Medicaid or similar
programs, but only to the extent not previously deducted from NET SALES; and

e)        freight, insurance and other transportation costs associated with the
shipment of DIADEXUS LICENSED PRODUCTS from DIADEXUS to its customers if charged
separately.

Sales or other transfers of DIADEXUS LICENSED PRODUCTS between DIADEXUS and its
AFFILIATES and their sublicensees solely for: (A) internal research and
development purposes or (B) resale to THIRD PARTIES shall not count as NET
SALES. Sales or transfers of DIADEXUS LICENSED PRODUCTS by DIADEXUS AFFILIATES
and sublicensees to THIRD PARTIES shall count as NET SALES (at the price
invoiced by such AFFILIATES and sublicensees), provided, however, that sales or
transfers of DIADEXUS LICENSED PRODUCTS by DIADEXUS, its AFFILIATES and
sublicensees to a THIRD PARTY CO-EXCLUSIVE LICENSEE shall not count as NET SALES
if (i) such DIADEXUS LICENSED PRODUCTS are used for internal research and
development purposes purposes by such THIRD PARTY CO-EXCLUSIVE LICENSEE or
(ii) such DIADEXUS LICENSED PRODUCTS are resold or transferred by such THIRD
PARTY CO-EXCLUSIVE LICENSEE to THIRD PARTIES, and are NET SALES of such THIRD
PARTY CO-EXCLUSIVE LICENSEE for which a royalty is paid by such THIRD PARTY
CO-EXCLUSIVE LICENSEE at the time and price of such resale or transfer. In the
event that DIADEXUS sells DIADEXUS LICENSED PRODUCTS as part of a bundle or
group sale with other products not covered by this AGREEMENT, and DIADEXUS
provides a discount, allowance or rebate to the purchaser of such products based
on the invoiced prices for all products sold, such discount must be allocated
pro rata based on the selling prices of such products before taking into account
the discount, allowance or rebate on DIADEXUS LICENSED PRODUCTS provided as part
of such bundle. NET SALES on DIADEXUS LICENSED PRODUCTS transferred as a part of
a non-cash exchange shall be calculated at the customary sales price or fair
market value invoiced to THIRD PARTIES in an arms-length transaction.

1.10        “THIRD PARTY” or “THIRD PARTIES” means any party or parties,
respectively, other than DIADEXUS and ICOS and/or their AFFILIATES.

1.11        “THIRD PARTY CO-EXCLUSIVE LICENSEE” means any THIRD PARTY to whom
ICOS grants a co-exclusive license to use the ICOS PATENTS in the FIELD with a
right to sublicense.

1.12        “VALID CLAIM” shall mean a claim of an issued and unexpired ICOS
PATENT which has not lapsed, been abandoned with the United States Patent and
Trademark Office or its foreign equivalent or been held permanently revoked,
unenforceable or invalid by a decision of a court or other governmental agency
of competent jurisdiction, unappealable or unappealed within the time allowed
for appeal.

 

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2. GRANT OF LICENSE

2.1        As of the EFFECTIVE DATE and subject to ICOS RETAINED RIGHTS, ICOS
hereby grants to DIADEXUS a co-exclusive, royalty-bearing, worldwide license,
with the right to grant sublicenses (under Section 2.2 below), to use the ICOS
PATENTS in the FIELD, subject to the terms and conditions of this AGREEMENT, to
identify, research, develop, make, have made, use, sell, offer for sale, and
import DIADEXUS LICENSED PRODUCTS, and for the research and development of such
DIADEXUS LICENSED PRODUCTS. For the avoidance of doubt, the right of DIADEXUS to
grant sublicenses under the ICOS PATENTS in the FIELD is solely for the purpose
of having DIADEXUS LICENSED PRODUCTS identified, researched, developed, made,
used, sold, offered for sale, or imported for DIADEXUS or its AFFILIATES.
DIADEXUS does not have rights under the ICOS PATENTS for uses outside the FIELD.

2.2        The license granted in Section 2.1 shall be sublicensable by DIADEXUS
within the FIELD to any of its AFFILIATES and to any THIRD PARTY without the
consent of ICOS. Any sublicense granted by DIADEXUS to an AFFILIATE or to a
THIRD PARTY hereunder shall be consistent with all the terms and conditions of
this AGREEMENT. DIADEXUS shall provide ICOS a copy of any sublicense it grants,
with financial terms and other highly negotiated or sensitive terms redacted, at
its option, within thirty (30) days of the execution of such sublicense.
DIADEXUS shall remain liable to ICOS for its sublicensed AFFILIATES’ and
sublicensees’ compliance with the provisions of this AGREEMENT. The termination
of DIADEXUS’ rights hereunder shall automatically terminate any sublicense
granted thereon.

 

3. CONSIDERATION AND RECORDS RELATING THERETO

3.1        In consideration for the license granted to DIADEXUS under Section 2
of this AGREEMENT, DIADEXUS shall pay to ICOS the [*].

3.2        In consideration for the license granted to DIADEXUS under Section 2
of this AGREEMENT, DIADEXUS shall pay to ICOS:

(a) a royalty of [*], or

(b) a royalty of [*].

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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For clarity, no royalty otherwise payable under this Section 3.2 shall be
increased or decreased by the covenant not to sue set forth in Section 6.3.

Such royalty shall be payable for all NET SALES of DIADEXUS LICENSED PRODUCTS
occurring after the EFFECTIVE DATE and continuing for the TERM of this
AGREEMENT. For clarity, any products or services sold for administration in
humans for any in-vivo therapeutic or preventative purpose by or on behalf of
DIADEXUS, or any of its AFFILIATES or sublicensees shall not be subject to the
royalty obligation set forth in this Section 3.2.

3.3        Payments shall be made on a quarterly basis, within thirty (30) days
following the end of any calendar quarter of this AGREEMENT, in United States
dollars, to ICOS at its address as designated in the Notices Section herein. Any
withholding taxes required by law on remittance of the royalty payments shall be
deducted from the royalty paid and documentation of such withholding shall be
furnished along with original copies of all official receipts for such taxes.
Any tax paid or required to be withheld by DIADEXUS for the benefit of ICOS on
account of any royalties or other payments payable to ICOS under this AGREEMENT
shall be deducted from the amount of royalties or other payments otherwise due.
DIADEXUS shall secure and send to ICOS proof of any such taxes withheld and paid
by DIADEXUS for the benefit of ICOS, and shall, at ICOS’s request, provide
reasonable assistance to ICOS in recovering such taxes.

ICOS warrants that it is resident for tax purposes in the United States and that
ICOS is entitled to relief from United Kingdom income tax under the terms of the
double tax agreement between the UK and the United States. ICOS shall notify
DIADEXUS immediately in writing in the event that ICOS ceases to be entitled to
such relief. DIADEXUS may pay royalty income and any other payments under this
AGREEMENT to ICOS by deducting tax at a rate specified in the double tax treaty
between the UK and the United States. ICOS agrees to indemnify and hold harmless
DIADEXUS against any loss, damage, expense or liability arising in any way from
a breach of the above warranties or any future claim by a UK tax authority or
other similar body alleging that DIADEXUS was not entitled to deduct withholding
tax on such payments at source at the treaty rate. If any royalties hereunder
are based on NET SALES converted from foreign currency, such conversion shall be
made by using the exchange rate as listed in the Wall Street Journal on the last
business day of the calendar quarter to which such royalty payments relate. Late
payment shall bear interest equivalent to the annual prime rate plus two percent
(2%), calculated daily on the basis of a three hundred sixty (360) day year.

3.4        Each payment shall be accompanied by a report setting forth an
accounting of total NET SALES of DIADEXUS, its AFFILIATES and its sublicensees,
including a reporting of any applicable deductions, allowances, charges, and
transfers as provided for in the definition of NET SALES.

3.5        DIADEXUS shall keep and maintain (and shall require all of its
AFFILIATES and its or their sublicensees to keep and maintain) complete,
accurate, and continuous records regarding NET SALES and the calculation
thereof, for a period of three (3) years following the end of the calendar year
to which such records pertain.

 

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3.6        The records kept by DIADEXUS and its AFFILIATES and its or their
sublicensees shall be made available upon reasonable notice during normal
business hours for examination not to exceed once per calendar year by one or
more auditors of ICOS’s choosing, who shall be permitted upon their premises to
make and retain copies of any and all parts of said records, including invoices
that are relevant to any payment or report required hereunder. Any amount found
to have been owed but not paid shall be paid promptly, including the interest
(as provided for in Section 3.3). In the event any such audit shows an
underpayment of five percent (5%) or more, ICOS shall be reimbursed for its
out-of-pocket expense regarding such audit.

 

4. CONFIDENTIALITY

4.1        All CONFIDENTIAL INFORMATION disclosed by one party to the other
shall remain the property of the disclosing party and, during the term of the
AGREEMENT and for ten (10) years thereafter, such CONFIDENTIAL INFORMATION shall
be maintained by the receiving party in confidence with the same degree of care
it applies with its own CONFIDENTIAL INFORMATION, and in any event no less than
a reasonable standard of care. Either party may disclose the CONFIDENTIAL
INFORMATION of the other party on a need-to-know basis to the receiving party’s
AFFILIATES, and its or their directors, officers, employees, agents or
consultants, to the extent such disclosure is reasonably necessary in connection
with the receiving party’s activities as expressly authorized by this AGREEMENT
and the receiving party’s AFFILIATES, directors, officers, employees,
contractors or consultants are bound by similar obligations of confidence. Each
party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the other party’s CONFIDENTIAL INFORMATION. Notwithstanding the
foregoing provisions of section 4.1, DIADEXUS may disclose CONFIDENTIAL
INFORMATION to GSK for the sole purpose of advancing DIADEXUS’s commercial
development of DIADEXUS LICENSED PRODUCTS under this AGREEMENT and may receive
ICOS CONFIDENTIAL INFORMATION from GSK if it treats such CONFIDENTIAL
INFORMATION as CONFIDENTIAL INFORMATION disclosed by ICOS under the terms of
this AGREEMENT.

4.2        Nothing in this Section 4 shall in any way restrict the rights of
either party to use, disclose or otherwise deal with any information disclosed
hereunder which:

    (i)      can be demonstrated to have been in the public domain as of the
date of execution of this AGREEMENT or enters into the public domain through the
term of this AGREEMENT through no act or omission of the receiving party; or

    (ii)      can be demonstrated to have been known to the receiving party
prior to the execution of this AGREEMENT, to the extent evidenced by written
records; or

 

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    (iii)      can be demonstrated to have been rightfully received by the
receiving party after disclosure under this AGREEMENT from a THIRD PARTY that
has a right to make such a disclosure; or

    (iv)      shall be required to be disclosed by applicable law, rule or
regulation, by order of a United States governmental authority or by a court of
competent jurisdiction; provided that the receiving party shall use reasonable
efforts to obtain confidential treatment of such information by the agency or
party and/or to limit the scope of such required disclosure and give the other
party prompt written notice and sufficient opportunity to object, time
permitting, to such disclosure; or

    (v)      can be demonstrated to have been independently developed by
employees, agents or consultants of the receiving party who have not had access
to CONFIDENTIAL INFORMATION provided to the receiving party hereunder, to the
extent evidenced by written records.

4.3        In the event that a court or other legal or administrative tribunal,
directly or through an appointed master, trustee or receiver, assumes partial or
complete control over the assets of a party to this AGREEMENT based on the
insolvency or bankruptcy of such party, the bankrupt or insolvent party shall
promptly notify the court or other tribunal (i) that CONFIDENTIAL INFORMATION
received from the other party under this AGREEMENT remains the property of the
other party and (ii) of the confidentiality obligations under this AGREEMENT. In
addition, the bankrupt or insolvent party shall, to the extent permitted by law,
take all steps necessary or desirable to maintain the confidentiality of the
other party’s CONFIDENTIAL INFORMATION and to ensure that the court, other
tribunal or appointee maintains such information in confidence in accordance
with the terms of this AGREEMENT.

4.4        No public announcement or other disclosure to THIRD PARTIES
concerning the terms of this AGREEMENT shall be made, either directly or
indirectly, by any party to this AGREEMENT, except as may be legally required or
as may be required for recording purposes, or as may be expressly or impliedly
permitted to ensure fulfillment of this AGREEMENT, without first obtaining the
approval of the other party and agreement upon the nature and text of such
announcement or disclosure. The party desiring to make any such public
announcement or other disclosure shall inform the other party of the proposed
announcement or disclosure in reasonably sufficient time prior to public
release, and shall provide the other party with a written copy thereof, in order
to allow such other party to comment upon such announcement or disclosure. Each
party agrees that it shall cooperate fully with the other with respect to all
disclosures regarding this AGREEMENT to the Securities and Exchange Commission
and any other governmental or regulatory agencies. ICOS agrees that DIADEXUS may
disclose the terms of this AGREEMENT, if required, to the Securities and
Exchange Commission and any other governmental or regulatory agency, if
DIADEXUS’ request for confidential treatment of such terms is denied or
otherwise modified to require such disclosure. To the extent not inconsistent
with the preceding sentence, this authorization does not extend to disclosure of
any other information, including without limitation (i) the identities of the
parties or potential participants to this AGREEMENT, (ii) the amount or timing
of any payments hereunder, or (iii) the existence or status of any negotiations,
or any other term or structure of the transactions contemplated hereby, all of
which shall

 

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remain and be treated as CONFIDENTIAL INFORMATION of the party to which is
relates. Neither party shall issue any press release or other public statement
regarding this AGREEMENT without the prior written consent of the other party.

 

5. TERM AND TERMINATION

5.1        Unless otherwise terminated in accordance with this Article 5, the
term of this AGREEMENT shall commence on the EFFECTIVE DATE and shall expire
when there is no longer a VALID CLAIM (the “TERM”). Upon the expiration of this
AGREEMENT but not its termination, provided that DIADEXUS has paid the
consideration to ICOS that is due and accrued as of such expiration date,
DIADEXUS shall have the right to continue to practice the subject matter recited
in the claims of the ICOS PATENTS within the FIELD after the TERM without any
consideration due to ICOS.

5.2        If either party materially fails or neglects to perform covenants or
provisions of this AGREEMENT (“default”) and if such default is not corrected
within sixty (60) days after receiving written notice of such default, the
non-defaulting party shall have the right to terminate this AGREEMENT by giving
additional written notice of intent to terminate this AGREEMENT, so long as such
additional notice of termination is given within six (6) months of the date the
first notice of default was sent, and unless the defaulting party corrects such
default before the expiration of such six (6) month term. Upon termination of
this AGREEMENT pursuant to this Section 5.2, all licenses granted hereunder and
all royalty obligations shall terminate.

5.3        This AGREEMENT shall terminate in relation to the rights granted to a
party under this AGREEMENT if, at any time, whether voluntarily or not, the
party: (a) files in any court or agency pursuant to any statute or regulation of
any state or country, a petition in bankruptcy or insolvency or for
reorganization or for an arrangement or for the appointment of a receiver or
trustee of the other party or of its assets, (b) proposes a written agreement of
composition or extension of its debts, (c) is served with an involuntary
petition against it, filed in any insolvency proceeding, and such petition shall
not be dismissed within sixty (60) days after the filing thereof, (d) if the
other party shall propose or be a party to any dissolution or liquidation,
(e) makes an assignment for the benefit of creditors, or (f) suffers any
proceeding analogous to the above under any statute or regulation of any state
or country.

5.4        Notwithstanding the bankruptcy of ICOS, DIADEXUS shall be entitled,
at its sole discretion, to elect to retain its rights hereunder, in their
entirety, including the licenses granted herein by ICOS, subject to DIADEXUS’
obligations herein, including its obligation to make payments and reports to
ICOS (or its successor in interest, heir, administrator or assign) and nothing
herein shall terminate ICOS’s or its successor’s, heir’s, administrator’s or
assign’s right to enforce its rights against DIADEXUS therein.

 

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5.5        The parties hereby acknowledge and agree that any license granted
under or pursuant to this AGREEMENT is, and will otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code, a license of right to
“intellectual property” as defined under Section 101 of the U.S. Bankruptcy
Code. ICOS agrees that, with regard to the licenses granted to DIADEXUS
hereunder, DIADEXUS, as a licensee of such rights under this AGREEMENT, will
retain and may fully exercise all of their rights and elections under the U.S.
Bankruptcy Code.

 

6. PATENT FILINGS, INDEMNITY, COVENANT NOT TO SUE

6.1        ICOS shall, at its own cost and expense, and in its sole discretion,
prepare, file, prosecute, defend, enforce, and maintain the ICOS PATENTS
licensed hereunder.

     In the event ICOS does not prepare, file, prosecute, defend, enforce or
maintain any of the ICOS PATENTS, DIADEXUS shall have the right, but not the
obligation, to do so, at its own cost, pursuant to the terms of the co-exclusive
license agreement entered into between DIADEXUS and ICOS. In such event, all
costs associated with the preparation, filing, prosecution, defense, enforcement
and/or maintenance of any such ICOS PATENTS shall be offset against royalties
owed by DIADEXUS to ICOS. Further, in the event DIADEXUS exercises its option
hereunder, ICOS shall cooperate with DIADEXUS in the most efficient an
expeditious manner possible, to ensure DIADEXUS maintains the maximum protection
and potential commercial benefit from such ICOS PATENTS and shall execute and
deliver all documents reasonably required to evidence or record DIADEXUS’ rights
to prepare, file, prosecute, defend, enforce and/or maintain such ICOS PATENTS.
Any recovery or damages derived from any action or suit relating to the
enforcement or defense of the ICOS PATENTS shall be retained by DIADEXUS.

     In the event DIADEXUS does not exercise its option to take up or progress
the preparation, filing, prosecution, defense, enforcement or maintenance of any
such ICOS PATENTS, the THIRD PARTY CO-EXCLUSIVE LICENSEE shall have the right,
but not the obligation, to do so, at its own cost, without prejudice to its
rights in respect of breach of contract in such circumstance.

6.2        Indemnification Each party shall on behalf of itself and its
AFFILIATES and its or their sublicensees (collectively “Indemnifying Party”)
indemnify, hold harmless, and defend the other party, its AFFILIATES, officers,
directors, employees, agents and consultants (“Indemnified Party”) from and
against any and all claims, losses, damages, and/or liability of whatsoever kind
or nature, as well as all costs and expenses, including, without limitation,
reasonable attorneys’ fees and court costs (collectively “Losses”) which arise
or may arise at any time out of or in connection with: (a) the Indemnifying
Party’s breach under Section 7 of its Warranties and Representations; or (b) any
act or omission of gross negligence or willful misconduct of the Indemnifying
Party. Where requested by a party, the other party shall, at the requesting
party’s cost and expense, cooperate fully

 

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with the requesting party and its legal representatives in the investigation and
defense of the action. In the event of a settlement, the Indemnifying Party
shall obtain the consent of the Indemnified Party before agreeing to any
settlement that imposes restrictions which are inconsistent with the rights and
obligations of the Indemnified Party. Neither party shall be liable to indemnify
the other party hereunder for any loss, damage, cost and expense to the extent
resulting from (x) the gross negligence or willful misconduct or wrongdoing of
the other party or its AFFILIATES/sublicensees or (y) any breach by the other
party of its representations, warranties, covenants or agreements hereunder.
DIADEXUS shall on behalf of itself and its AFFILIATES/sublicensees further
indemnify, hold harmless, and defend ICOS, its AFFILIATES, officers, directors,
employees, agents and consultants from and against any and all Losses which
arise or may arise at any time out of or in connection with any DIADEXUS
LICENSED PRODUCT.

6.3        Covenant Not to Sue. ICOS will not assert the ICOS PATENTS in the
FIELD against DIADEXUS or its AFFILIATES or any of its or their sublicensees,
successors, heirs, administrators or permitted assigns with regard to any
activities licensed hereunder including any such activities that may have
occurred prior to the EFFECTIVE DATE. Nothing contained in this Section 6.3
shall be deemed to constitute the grant of a license broader in scope than the
license provided in Section 2, whether express or implied, of any kind or
require any payment of any kind. This Section 6.3 shall be binding upon the
sublicensees, successors, heirs, administrators, executors and permitted assigns
of the respective parties,

 

7. WARRANTIES AND REPRESENTATIONS

7.1        ICOS warrants and represents that:

    (a)        it and/or one of its AFFILIATES owns the entire right, title and
interest in the ICOS PATENTS;

    (b)        regardless of any distribution of ownership of ICOS PATENTS among
ICOS and its AFFILIATES, ICOS owns sufficient right, title and interest in each
of the ICOS PATENTS to convey all rights contemplated hereunder;

    (c)        it does not, as of the EFFECTIVE DATE, own or control any patents
or patent applications that dominate such ICOS PATENTS;

    (d)        to the best of its knowledge, as of the EFFECTIVE DATE, there are
no additional patents or patent applications specifically relating to PAF-AH
owned or controlled by ICOS; and

    (e)        it has not received notice as of the EFFECTIVE DATE that the
practice of the ICOS PATENTS infringes or misappropriates the rights or
intellectual property of any THIRD PARTY or any notice of any pending or
threatened litigation alleging such infringement or misappropriation.

 

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7.2        Each party represents and warrants that:

    (a)        the execution and delivery of this AGREEMENT has been duly
authorized and no further approval, corporate or otherwise, is required in order
to execute this binding AGREEMENT;

    (b)        it shall comply with any applicable international, national, or
local laws and regulations in its performance under this AGREEMENT; and

    (c)        its rights and obligations under this AGREEMENT do not conflict
with any contractual obligations or court or administrative order by which it is
bound.

7.3        NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED,
STATUTORY, OR OTHERWISE THAT IS NOT EXPRESSLY SET FORTH IN THIS AGREEMENT AND
EXPRESSLY DISCLAIMS ALL WARRANTIES NOT EXPRESSLY SET FORTH IN THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE, OR ANY IMPLIED WARRANTIES ARISING FROM ANY COURSE OF DEALING, USAGE, OR
TRADE PRACTICE. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NOTHING IN THIS
AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN WITH
RESPECT TO THE SCOPE, VALIDITY OR ENFORCEABILITY OF THE ICOS PATENTS; THAT ANY
PATENT WILL ISSUE BASED UPON ANY OF THE PENDING PATENT RIGHTS; OR THAT THE
MANUFACTURE, USE, SALE, OFFER FOR SALE OR IMPORTATION OF THE DIADEXUS LICENSED
PRODUCTS WILL NOT INFRINGE PATENT OR PROPRIETARY RIGHTS OF ANY THIRD PARTY. IN
NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR LOSS OF PROFITS, LOSS OF
USE, OR ANY OTHER CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE DAMAGES.

 

8. FORCE MAJEURE

If the performance of any part of this AGREEMENT by either party, or of any
obligation under this AGREEMENT, is prevented, restricted, interfered with or
delayed by reason of any cause beyond the reasonable control of the party liable
to perform, unless conclusive evidence to the contrary is provided, the party so
affected shall, upon giving written notice to the other party, be excused from
such performance to the extent of such prevention, restriction, interference or
delay, provided that the affected party shall use its reasonable best efforts to
avoid or remove such causes of non-performance and shall continue performance
with the utmost dispatch whenever such causes are removed. When such
circumstances arise, the parties shall discuss what, if any, modification of the
terms of this AGREEMENT may be required in order to arrive at an equitable
solution.

 

9. GOVERNING LAW

This AGREEMENT shall be construed and enforced in accordance with, and the
rights of the parties hereto shall be governed by, the laws of the State of
Delaware, without reference to conflicts of law principles except that questions
affecting the construction and effect of any patent shall be determined by the
law of the country of such patent. In any litigation arising under or relating
to this AGREEMENT, the prevailing party shall be entitled to recover reasonable
attorney’s fees and litigation costs.

 

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10. WAIVER OF BREACH

The failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect its rights at a later time to enforce
the same. No waiver by either party of any condition or term in any one or more
instances shall be construed as a further or continuing waiver of such condition
or term or of another condition or term. A valid waiver must be executed in
writing and signed by the party granting such waiver.

 

11. SEPARABILITY

11.1      In the event any portion of this AGREEMENT is or shall be held by a
court or tribunal of competent jurisdiction to be illegal, void or ineffective,
the remaining portions hereof shall remain in full force and effect.

11.2      If any of the terms or provisions of this AGREEMENT are in conflict
with any applicable statute or rule of law, then such terms or provisions shall
be deemed inoperative to the extent that they may conflict therewith and shall
be deemed to be modified to conform to such statute or rule of law.

11.3      In the event that the terms and conditions of this AGREEMENT are
materially altered as a result of Paragraphs 11.1 or 11.2, the parties will
renegotiate the terms and conditions of this AGREEMENT to resolve any
inequities.

 

12. ENTIRE AGREEMENT

This AGREEMENT, entered into as of the date written above, constitutes the
entire agreement between the parties relating to a diagnostics license to the
subject matter hereof in the FIELD and supersedes all previous writings and
understandings including the [*] License Agreement, dated December 6, 2000. No
terms or provisions of this AGREEMENT shall be varied or modified by any prior
or subsequent statement, conduct or act of either of the parties, except that
the parties may amend this AGREEMENT by written instruments specifically
referring to and executed in the same manner as this AGREEMENT.

 

13. NOTICES

Notices required or permitted under this AGREEMENT shall be in writing and sent
by overnight express mail (e.g., FedEx) and shall be deemed to have been
properly served to the addressee upon receipt of such written communication, to
the following addresses of the parties:

If to ICOS:

ICOS Corporation

22021 20th Avenue S.E.

Bothell, Washington 98021, U.S.A.

Attention: Intellectual Property Dept.

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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If to DIADEXUS:

diaDexus, Inc.

343 Oyster Point Boulevard

South San Francisco, CA 94080

Attention: CEO

 

14. ASSIGNMENT

This AGREEMENT and the terms and conditions hereof and the licenses herein
granted herein shall be binding upon and shall inure to the benefit of the
successors, heirs, administrators, executors and permitted assigns of the
respective parties. Neither this AGREEMENT nor any of the rights and obligations
hereunder shall be assignable by either party without the prior written consent
of the other provided, however, that either party may assign this AGREEMENT or
any part of its rights and obligations hereunder, to any AFFILIATE or to any
corporation with which it may merge or consolidate, or in a transfer of all or
substantially all of its assets to which this AGREEMENT relates, without
obtaining the consent of the other party.

 

15. RIGHTS AND DUTIES UPON TERMINATION; SURVIVING PROVISIONS

Termination of this AGREEMENT in accordance with the provisions hereof shall not
limit remedies which may be otherwise available in law or equity to either
party. The provisions of Articles 4, 9, 10, 11, 12, 13, 14, 15, and 16, and
Sections 5.1, 5.2, 6.2, and 6.3 (unless this AGREEMENT is terminated by ICOS in
accordance with Section 5.2 for DIADEXUS’ material breach) of this AGREEMENT
shall survive any termination or expiration of this AGREEMENT in accordance with
their respective terms and conditions, and shall survive for their stated term
where a term is stated, and shall survive indefinitely if no term is stated.

 

16. RELATIONSHIP OF PARTIES.

For the purposes of this AGREEMENT, each party is an independent contractor and
not an agent, partner, joint venture, or employee of the other party. Neither
party shall have authority to make any statements, representations, or
commitments of any kind, or to take any action which shall be binding on the
other party, except as may be explicitly provided for herein or otherwise
authorized in writing.

 

17. EXECUTION IN COUNTERPARTS

This AGREEMENT may be executed in any number of counterparts, and by facsimile,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties, through their authorized officers, have
executed this DIAGNOSTIC LICENSE AGREEMENT as of the date first written above.

 

DIADEXUS, INC.     ICOS CORPORATION BY:  

        /s/ Mohan S. Iyer

    BY:  

         [ILLEGIBLE]

TITLE:   Mohan S. Iyer     TITLE:   VP, Business Development   V.P. Business
Development       December 9, 2004   diaDexus, Inc.      

 

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EXHIBIT A

ICOS PATENTS AT SIGNING

[*]

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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