Exhibit 10.52

LYNX THERAPEUTICS, INC.

EMPLOYEE AGREEMENT
for
Mary L. Schramke, Ph.D., MBA

     This Employment Agreement (“Agreement”) by and between Mary L. Schramke,
Ph.D., MBA (“Ms. Schramke”) and LYNX THERAPEUTICS, INC., a Delaware corporation
(the “Company”), is entered into and is effective as of January 29, 2003 (the
“Effective Date”).

     WHEREAS, the Company desires to employ Ms. Schramke to provide personal
services to the Company, and wishes to provide Ms. Schramke with certain
compensation and benefits in return for her services; and

     WHEREAS, Ms. Schramke wishes to be employed by the Company and provide
personal services to the Company in return for certain compensation and
benefits;

     NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:

     1. EMPLOYMENT BY THE COMPANY.

          1.1 Subject to the terms set forth herein, the Company agrees to
employ Ms. Schramke in the position of Sr. Director, Business Development,
reporting to the Vice President of Business Development, and Ms. Schramke hereby
accepts such employment effective as of January 29, 2003. During the term of her
employment with the Company, Ms. Schramke will devote her best efforts and
substantially all of her business time and attention (except for vacation
periods permitted by the Company’s general employment policies, reasonable
periods of illness or other incapacities permitted by the Company’s general
employment policies, and as otherwise provided herein) to the business of the
Company.

          1.2 Ms. Schramke shall serve in a managerial capacity and shall
perform such duties as are customarily associated with her then current title.

          1.3 The employment relationship between the parties is “at will,”
which means that either party may terminate the relationship at any time, with
or without cause and with or without advance notice. The employment relationship
between the parties shall also be governed by the general employment policies
and practices of the Company, including those relating to protection of
confidential information and assignment of inventions, except that when the
terms of this Agreement differ from or are in conflict with the Company’s
general employment policies or practices, this Agreement shall control.

     2. COMPENSATION.

          2.1 Salary. Ms. Schramke shall receive for services to be rendered
hereunder an annualized base salary of One Hundred Eighty-Five Thousand U.S.
Dollars ($185,000), payable on the Company’s normal payroll schedule, and
subject to standard payroll deductions and withholdings.

1.

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          2.2 Stock Option. Subject to approval by the Board, the Company will
grant Ms. Schramke a nonstatutory stock option (the “Option”) to purchase Seven
Thousand (7,000) shares of the common stock of the Company (the “Common Stock”)
pursuant to the Company’s 1992 Stock Option Plan (the “Plan”), as amended. The
exercise price per share of the Option will be the Fair Market Value (as defined
in the Plan) per share of the Common Stock on the date of grant. Except as
otherwise provided herein, the Option will vest and become exercisable over five
(5) years, with Twenty Percent (20%) of the shares covered by the Option vesting
and becoming exercisable on the first year anniversary of the date of grant and
the remaining Eighty Percent (80%) of the shares covered by the Option vesting
and becoming exercisable in Forty-Eight (48) equal monthly installments
thereafter, in accordance with the Company’s standard vesting and exercisability
policy, as long as Ms. Schramke remains in continuous service with the Company.
The Option will be subject to the terms of the Plan and Ms. Schramke’s
corresponding Stock Option Grant Notice and Stock Option Agreement.

          2.3 Transaction Bonus. For the period beginning on the Effective Date
of this Agreement and ending on December 31, 2003 (the “Transaction Bonus
Period”), Ms. Schramke shall be eligible to participate in the Business
Development Bonus Plan, attached hereto as Exhibit A.

          2.4 Standard Company Benefits. Ms. Schramke shall be entitled to all
rights and benefits for which she is eligible under the terms and conditions of
the standard Company benefits and compensation practices which may be in effect
from time to time and provided by the Company to its employees generally,
including but not limited to health benefit plans. Ms. Schramke also shall be
eligible to participate in the Company’s 401(k) Plan, including eligibility for
a monthly matching contribution by the Company on Ms. Schramke’s behalf, in an
amount equal to that contributed by Ms. Schramke up to a maximum annual matching
contribution of Seven Hundred Fifty Dollars ($750). Ms. Schramke shall be
provided specific information concerning these Company benefits upon
commencement of her employment.

     3. PROPRIETARY INFORMATION OBLIGATIONS.

          3.1 Agreement. Ms. Schramke agrees to execute and abide by the
Employee Proprietary Information and Inventions Agreement attached hereto as
Exhibit B.

          3.2 Remedies. Ms. Schramke’s duties under the Employee Proprietary
Information and Inventions Agreement shall survive termination of her employment
with the Company. Ms. Schramke acknowledges that a remedy at law for any breach
or threatened breach by her of the provisions of the Employee Proprietary
Information and Inventions Agreement would be inadequate, and she therefore
agrees that the Company shall be entitled to injunctive relief in case of any
such breach or threatened breach.

     4. OUTSIDE ACTIVITIES.

          4.1 Except with the prior written consent of the President and Chief
Executive Officer, Ms. Schramke will not during the term of this Agreement
undertake or engage in any other employment, occupation or business enterprise,
other than ones in which Ms. Schramke is a passive investor. Ms. Schramke may
engage in civic and not-for-profit activities so long as such activities do not
materially interfere with the performance of her duties hereunder.

2.

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          4.2 Except as permitted by Section 4.3, Ms. Schramke agrees not to
acquire, assume or participate in, directly or indirectly, any position,
investment or interest known by her to be adverse or antagonistic to the
Company, its business or prospects, financial or otherwise.

          4.3 During the term of her employment by the Company, except on behalf
of the Company, Ms. Schramke will not directly or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate, representative,
consultant, or in any capacity whatsoever engage in, become financially
interested in, be employed by or have any business connection with any other
person, corporation, firm, partnership or other entity whatsoever which were
known by her to compete directly with the Company, throughout the world, in any
line of business engaged in (or planned to be engaged in) by the Company;
provided, however, that anything above to the contrary notwithstanding, she may
own, as a passive investor, securities of any competitor corporation, so long as
her direct holdings in any one such corporation shall not in the aggregate
constitute more than One Percent (1%) of the voting stock of such corporation.

     5. TERMINATION OF EMPLOYMENT.

          5.1 Termination Without Cause.

               (a) The Company shall have the right to terminate Ms. Schramke’s
employment with the Company at any time without cause or advance notice.

               (b) In the event Ms. Schramke’s employment is terminated without
Cause (as defined in section 5.2) by the Company, or by any successor or
acquiring entity upon or after an Asset Sale, Merger, Consolidation, or Reverse
Merger (as defined in the Lynx Therapeutics, Inc. 1992 Stock Option Plan, as
amended), Ms. Schramke shall be eligible to receive severance compensation,
calculated as specified herein, provided that, Ms. Schramke executes a general
release of any and all claims she may have against the Company, which general
release shall be in a form acceptable to the Company. The amount of severance
compensation that Ms. Schramke shall receive shall be calculated pursuant to the
following schedule: (a) if the termination occurs on or prior to the first year
anniversary of Ms. Schramke’s hire date, she shall receive an amount equal to
three (3) months of her base salary, subject to standard payroll deductions and
withholdings, and paid in a lump sum; (b) if the termination occurs after the
first year anniversary of Ms. Schramke’s hire date, she shall receive an amount
equal to at least one (1) month of her base salary, subject to standard payroll
deductions and withholdings, and paid in a lump sum. (“Severance”). The
Severance shall be the only severance, benefit, or cash compensation, other than
accrued wages, to which Ms. Schramke shall be entitled from the Company in the
event of a termination without Cause. In the event, however, that a successor or
acquiring entity is obligated to pay Severance to Ms. Schramke, such Severance
shall be in addition to any equity compensation or benefits for which
Ms. Schramke may be eligible under the Lynx Therapeutics, Inc. 1992 Stock Option
Plan, as amended.

          5.2 Termination for Cause.

               (a) The Company shall have the right to terminate Ms. Schramke’s
employment with the Company at any time for Cause.

               (b) “Cause” for termination shall mean: (a) indictment or
conviction of any felony or of any crime involving dishonesty; (b) participation
in any fraud or act of dishonesty against the Company; (c) Ms. Schramke’s
failure to perform her duties to the Company in a satisfactory

3.

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manner; (d) intentional damage to any property of the Company; or (e) conduct by
Ms. Schramke which in the good faith and reasonable determination of the
President and Chief Executive Officer demonstrates lack of fitness to serve.

               (c) In the event Ms. Schramke’s employment is terminated at any
time for Cause, Ms. Schramke will not be entitled to Severance or any other
compensation or benefit other than accrued wages.

          5.3 Voluntary or Mutual Termination.

               (a) Ms. Schramke may voluntarily terminate her employment with
the Company at any time, after which no further compensation will be paid to
Ms. Schramke.

               (b) In the event Ms. Schramke voluntarily terminates her
employment, she will not be entitled to Severance or any other such compensation
or benefit, other than accrued wages.

     6. NONINTERFERENCE.

          While employed by the Company, and for two (2) years immediately
following the termination of her employment, Ms. Schramke agrees not to
interfere with the business of the Company by soliciting, attempting to solicit,
inducing, or otherwise causing any employee of the Company to terminate her or
her employment in order to become an employee, consultant or independent
contractor to or for any competitor of the Company.

     7. COOPERATION WITH COMPANY.

          7.1 Cooperation Obligation. During and after Ms. Schramke’s
employment, Ms. Schramke will cooperate with the Company in responding to the
reasonable requests of the Company’s Chairman of the Board, Chief Executive
Officer or General Counsel, in connection with any and all existing or future
litigation, arbitrations, mediations or investigations brought by or against the
Company or its affiliates, agents, officers, directors or employees, whether
administrative, civil or criminal in nature, in which the Company reasonably
deems Ms. Schramke’s cooperation necessary or desirable. In such matters, Ms.
Schramke agrees to provide the Company with reasonable advice, assistance and
information, including offering and explaining evidence, providing sworn
statements, and participating in discovery and trial preparation and testimony.
Ms. Schramke also agrees to promptly send the Company copies of all
correspondence (for example, but not limited to, subpoenas) received by Ms.
Schramke in connection with any such legal proceedings, unless Ms. Schramke is
expressly prohibited by law from so doing. The failure by Ms. Schramke to
cooperate fully with the Company in accordance with this Section 7 will be a
material breach of the terms of this Agreement which will result in all
commitments of the Company to pay Severance to Ms. Schramke under Section 5.1
(b) becoming null and void.

          7.2 Expenses and Fees. The Company will reimburse Ms. Schramke for
reasonable out-of-pocket expenses incurred by Ms. Schramke as a result of her
cooperation with the obligations described in Section 7.1, within thirty (30)
days of the presentation of appropriate documentation thereof, in accordance
with the Company’s standard reimbursement policies and procedures. After
termination of Ms. Schramke’s employment, the Company will also pay Ms. Schramke
a reasonable fee in the amount of $200 per hour for the time Ms. Schramke
devotes to matters as requested by the Company under Section 7.1 (“the Fees”).
The Company will not deduct or withhold any amount from

4.

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the Fees for taxes, social security, or other payroll deductions, but will
instead issue an IRS Form 1099 with respect to the Fees. Ms. Schramke
acknowledges that in cooperating in the manner described in Section 7.1, she
will be serving as an independent contractor, not a Company employee, and she
will be entirely responsible for the payment of all income taxes and any other
taxes due and owing as a result of the payment of Fees. Ms. Schramke hereby
indemnifies the Company and its officers, directors, agents, attorneys,
employees, shareholders, subsidiaries, and affiliates and holds them harmless
from any liability for any taxes, penalties, and interest that may be assessed
by any taxing authority with respect to the Fees, with the exception of the
employer’s share of employment taxes subsequently determined to be applicable,
if any.

     8. GENERAL PROVISIONS.

          8.1 Notices. Any notices provided hereunder must be in writing and
shall be deemed effective upon the earlier of personal delivery (including
personal delivery by facsimile) or the third day after mailing by first class
mail, to the Company at its primary office location and to Ms. Schramke at her
address as listed on the Company payroll.

          8.2 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction in order to most closely
effectuate the parties’ intentions.

          8.3 Waiver. If either party should waive any breach of any provisions
of this Agreement, she or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.

          8.4 Complete Agreement. This Agreement and its Exhibits constitute the
entire agreement between Ms. Schramke and the Company and it is the complete,
final, and exclusive embodiment of their agreement with regard to this subject
matter. It is entered into without reliance on any promise or representation
other than those expressly contained herein, and it cannot be modified or
amended except in writing signed by a member of the Company’s Board.

          8.5 Counterparts. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.

          8.6 Headings. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.

          8.7 Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Ms. Schramke and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Ms. Schramke may not assign any of her duties hereunder and she may
not assign any of her rights hereunder without the written consent of the
Company, which shall not be withheld unreasonably.

5.

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          8.8 Attorney’s Fees. If either party hereto brings any action to
enforce her or its rights hereunder, the prevailing party in any such action
shall be entitled to recover her or its reasonable attorneys’ fees and costs
incurred in connection with such action.

          8.9 Governing Law. All questions concerning the construction, validity
and interpretation of this Agreement will be governed by the law of the State of
California. Ms. Schramke hereby expressly consents to the personal jurisdiction
of the state and federal courts located in Alameda County, California for any
lawsuit filed there against Ms. Schramke by the Company arising from or related
to this Agreement.

          IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year written below.

              LYNX THERAPEUTICS, INC.
 
       

  By:   /s/ Kathy A. San Roman

     

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      Kathy A. San Roman

      Vice President, Human Resources & Administration
 
       

  Date:   January 29, 2003
 
       
Accepted and agreed this 31st day of January 2003.
       
 
       
/s/ Mary L. Schramke
      February 18, 2003

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Mary L. Schramke, Ph.D., MBA
      Start Date          

6.

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EXHIBIT A

(LYNX LOGO) [f03577f0357700.gif]

BUSINESS DEVELOPMENT BONUS PLAN

1. OBJECTIVE

To develop and implement a Business Development Bonus Plan (“Bonus Plan”)
designed to motivate the Business Development employees, enhance teamwork and
reward effective efforts in achieving individual and team contributions as they
relate to meeting the Company’s revenue and cash flow objectives.

2. EFFECTIVE DATE AND SCOPE OF COVERAGE

This Bonus Plan covers the period of April 1, 2003 to December 31, 2003 (the
“Transaction Bonus Period”). It represents the entire agreement between you and
the Company on this subject, and supersedes all prior bonus compensation
programs or other bonus or commissions arrangements of the Company and all other
previous oral or written statements or agreements to you regarding any bonus or
commissions.

3. ELIGIBILITY

Business Development employees are eligible to participate in the Bonus Plan
only if they are designated as an eligible employee in writing, signed by a
Company officer. All eligible employees must sign the Bonus Plan to participate
in the Bonus Plan. The Company reserves the right to transfer or remove a
participant from the Plan at any time and for any reason, upon written notice to
the participant.

4. QUALIFYING TRANSACTIONS; EARNED TRANSACTION BONUSES

During the Transaction Bonus Period, the participants in the Bonus Plan shall be
eligible to receive a cash bonus equal to a certain percentage (identified
below) of revenue-based customer payments received and recorded by the Company
from any transactions between unaffiliated third parties and the Company (a
“Transaction”) that are identified, initiated and completed by the Business
Development group during the Transaction Bonus Period (the “Transaction Bonus”).
Transaction Bonuses, if any, shall be paid within thirty (30) calendar days
after the Company records receipt of the customer payments. The Company will
determine, in its sole discretion, when and if customer payments are received
and recorded. Participants must be employed as a Business Development employee
in good standing at the time that the customer payment is received and recorded
by the Company to earn the related Transaction Bonus. Transaction Bonuses earned
but not yet paid upon termination of employment or removal from the Bonus Plan
will be paid on the normal Transaction Bonus payment schedule. No other
Transaction Bonuses will be paid following termination of employment or removal
from the Bonus Plan. Transaction Bonuses are subject to standard payroll
deductions and withholdings.

The Company reserves the right to accept and reject customers, contracts or
orders. No Transaction Bonuses will be paid for any rejected customers,
contracts or orders.

5. BONUS CALCULATION

Each participant’s Transaction Bonus amount will be equal to either a Lead or
Group percentage of the customer payments received and recorded by the Company
from Transactions during the Transaction Bonus Period. The Lead percentage is
equal to 0.50% of the received and recorded customer payments, and applies to
the participant if the participant was the lead or primary person who
identified, initiated and completed the Transaction (the “Lead”). The Group
percentage is equal to 0.25% of the received and recorded customer payments, and
applies to

 

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(LYNX LOGO) [f03577f0357700.gif]

BUSINESS DEVELOPMENT BONUS PLAN

participants who do not qualify as the Lead. Only one participant can qualify as
the Lead on any single Transaction. The Company’s Vice President of Business
Development will determine, in his or her sole discretion, which participant
qualifies as the Lead. As Sr. Director of Business Development, your percentage
is equal to 0.50% of received and recorded customers payments.

6. PLAN ADMINISTRATION AND INTERPRETATION ; TERMINATION OF PLAN

The Vice President of Business Development will administer and interpret the
Bonus Plan. The Company reserves the right to change, suspend or terminate the
Bonus Plan at any time and for any reason, upon written notice to the
participants. Any changes to or termination of the Bonus Plan must be in writing
signed by a duly authorized officer of the Company.

7. BONUS DISPUTES

A Bonus Review Board will be established to review and decide any disputes
arising under this Bonus Plan that are not resolved by the Vice President of
Business Development. The Bonus Review Board shall consist of the Company’s
Chief Executive Officer, Chief Financial Officer, and Vice President of Human
Resources. Any participant with an issue related to the Bonus Plan that is not
resolved by the Vice President of Business Development shall provide a written
request for review to the Vice President of Human Resources, who shall convene
the Bonus Review Board to resolve the issue. All decisions of the Bonus Review
Board are final and binding.

8. AT-WILL EMPLOYMENT

Nothing in this Bonus Plan is intended to alter the at-will nature of your
employment, i.e., your right or the Company’s right to terminate your employment
at will, at any time with or without cause or advance notice.

ACKNOWLEDGEMENT AND ACCEPTANCE

I have read and understood the provisions of this Bonus Plan and hereby accept
its terms.

     

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Signature
  Date
 
   

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Print Name
   

 

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EXHIBIT B

Lynx Therapeutics, Inc.

EMPLOYEE PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT

     In consideration of my employment or continued employment by Lynx
Therapeutics, Inc. (the “Company”), and the compensation now and hereafter paid
to me, I hereby agree as follows:

1. NONDISCLOSURE

     1.1 Recognition of Company’s Rights; Nondisclosure. At all times during my
employment and thereafter, I will hold in strictest confidence and will not
disclose, use, lecture upon or publish any of the Company’s Proprietary
Information (defined below), except as such disclosure, use or publication may
be required in connection with my work for the Company, or unless an officer of
the Company expressly authorizes such in writing. I will obtain Company’s
written approval before publishing or submitting for publication any material
(written, verbal, or otherwise) that relates to my work at Company and/or
incorporates any Proprietary Information. I hereby assign to the Company any
rights I may have or acquire in such Proprietary Information and recognize that
all Proprietary Information shall be the sole property of the Company and its
assigns.

     1.2 Proprietary Information. The term “Proprietary Information” shall mean
any and all confidential and/or proprietary knowledge, data or information of
the Company. By way of illustration but not limitation, “Proprietary
Information” includes tangible and intangible information relating to antibodies
and other biological materials, cell lines, samples of assay components, media
and/or cell lines and procedures and formulations for producing any such assay
components, media and/or cell lines, formulations, products, processes,
know-how, designs, formulas, methods, developmental or experimental work,
clinical data, improvements, discoveries, plans for research, new products,
marketing and selling, business plans, budgets and unpublished financial
statements, licenses, prices and costs, suppliers and customers, and information
regarding the skills and compensation of other employees of the Company.
Notwithstanding the foregoing, it is understood that, at all such times, I am
free to use information which is generally known in the trade or industry, which
is not gained as result of a breach of this Agreement, and my own skill,
knowledge, know-how and experience to whatever extent and in whichever way I
wish.

     1.3 Third Party Information. I understand, in addition, that the Company
has received and in the future will receive from third parties confidential or
proprietary information (“Third Party Information”) subject to a duty on the
Company’s part to maintain the confidentiality of such information and to use it
only for certain limited purposes. During the term of my employment and
thereafter, I will hold Third Party Information in the strictest confidence and
will not disclose to anyone (other than Company personnel who need to know such
information in connection with their work for the Company) or use, except in
connection with my work for the Company, Third Party Information unless
expressly authorized by an officer of the Company in writing.

     1.4 No Improper Use of Information of Prior Employers and Others. During my
employment by the Company I will not improperly use or disclose any confidential
information or trade secrets, if any, of any former employer or any other person
to whom I have an obligation of confidentiality, and I will not bring onto the
premises of the Company any unpublished documents or any property belonging to
any former employer or any other person to whom I have an obligation of
confidentiality unless consented to in writing by that former employer or
person. I will use in the performance of my duties only information which is
generally known and used by persons with training and experience comparable to
my own, which is common knowledge in the industry or otherwise legally in the
public domain, or which is otherwise provided or developed by the Company.

2. ASSIGNMENT OF INVENTIONS.

     2.1 Proprietary Rights. The term “Proprietary Rights” shall mean all trade
secret, patent, copyright, mask work and other intellectual property rights
throughout the world.

     2.2 Prior Inventions. Inventions, if any, patented or unpatented, which I
made prior to the commencement of my employment with the Company are excluded
from the scope of this Agreement. To

 

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preclude any possible uncertainty, I have set forth on Exhibit B (Previous
Inventions) attached hereto a complete list of all Inventions that I have, alone
or jointly with others, conceived, developed or reduced to practice or caused to
be conceived, developed or reduced to practice prior to the commencement of my
employment with the Company, that I consider to be my property or the property
of third parties and that I wish to have excluded from the scope of this
Agreement (collectively referred to as “Prior Inventions”). If disclosure of any
such Prior Invention would cause me to violate any prior confidentiality
agreement, I understand that I am not to list such Prior Inventions in Exhibit B
but am only to disclose a cursory name for each such invention, a listing of the
party(ies) to whom it belongs and the fact that full disclosure as to such
inventions has not been made for that reason. A space is provided on Exhibit B
for such purpose. If no such disclosure is attached, I represent that there are
no Prior Inventions. If, in the course of my employment with the Company, I
incorporate a Prior Invention into a Company product, process or machine, the
Company is hereby granted and shall have a nonexclusive, royalty-free,
irrevocable, perpetual, worldwide license (with rights to sublicense through
multiple tiers of sublicensees) to make, have made, modify, use and sell such
Prior Invention. Notwithstanding the foregoing, I agree that I will not
incorporate, or permit to be incorporated, Prior Inventions in any Company
Inventions without the Company’s prior written consent.

     2.3 Assignment of Inventions. Subject to Sections 2.4, and 2.6, I hereby
assign and agree to assign in the future (when any such Inventions or
Proprietary Rights are first reduced to practice or first fixed in a tangible
medium, as applicable) to the Company all my right, title and interest in and to
any and all Inventions (and all Proprietary Rights with respect thereto) whether
or not patentable or registrable under copyright or similar statutes, made or
conceived or reduced to practice or learned by me, either alone or jointly with
others, during the period of my employment with the Company. Inventions assigned
to the Company, or to a third party as directed by the Company pursuant to this
Section 2, are hereinafter referred to as “Company Inventions.”

     2.4 Nonassignable Inventions. This Agreement does not apply to an Invention
which qualifies fully as a nonassignable Invention under Section 2870 of the
California Labor Code (hereinafter “Section 2870”). I have reviewed the
notification on Exhibit A (Limited Exclusion Notification) and agree that my
signature acknowledges receipt of the notification.

     2.5 Obligation to Keep Company Informed. During the period of my employment
and for six (6) months after termination of my employment with the Company, I
will promptly disclose to the Company fully and in writing all Inventions
authored, conceived or reduced to practice by me, either alone or jointly with
others. In addition, I will promptly disclose to the Company all patent
applications filed by me or on my behalf within a year after termination of
employment. At the time of each such disclosure, I will advise the Company in
writing of any Inventions that I believe fully qualify for protection under
Section 2870; and I will at that time provide to the Company in writing all
evidence necessary to substantiate that belief. The Company will keep in
confidence and will not use for any purpose or disclose to third parties without
my consent any confidential information disclosed in writing to the Company
pursuant to this Agreement relating to Inventions that qualify fully for
protection under the provisions of Section 2870. I will preserve the
confidentiality of any Invention that does not fully qualify for protection
under Section 2870.

     2.6 Government or Third Party. I also agree to assign all my right, title
and interest in and to any particular Company Invention to a third party,
including without limitation the United States, as directed by the Company.

     2.7 Works for Hire. I acknowledge that all original works of authorship
which are made by me (solely or jointly with others) within the scope of my
employment and which are protectable by copyright are “works made for hire,”
pursuant to United States Copyright Act (17 U.S.C., Section 101).

     2.8 Enforcement of Proprietary Rights. I will assist the Company in every
proper way to obtain, and from time to time enforce, United States and foreign
Proprietary Rights relating to Company Inventions in any and all countries. To
that end I will execute, verify and deliver such documents and perform such
other acts (including appearances as a witness) as the Company may reasonably
request for use in applying for, obtaining, perfecting, evidencing, sustaining
and enforcing such Proprietary Rights and the assignment thereof. In addition, I
will execute, verify and deliver assignments of such Proprietary Rights to the
Company or its designee. My obligation to assist the Company with respect to
Proprietary Rights relating to such Company Inventions in any and all countries
shall continue beyond the

 

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termination of my employment, but the Company shall compensate me at a
reasonable rate after my termination for the time actually spent by me at the
Company’s request on such assistance.

In the event the Company is unable for any reason, after reasonable effort, to
secure my signature on any document needed in connection with the actions
specified in the preceding paragraph, I hereby irrevocably designate and appoint
the Company and its duly authorized officers and agents as my agent and attorney
in fact, which appointment is coupled with an interest, to act for and in my
behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding paragraph with
the same legal force and effect as if executed by me. I hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever, which I
now or may hereafter have for infringement of any Proprietary Rights assigned
hereunder to the Company.

3. RECORDS. I agree to keep and maintain adequate and current records (in the
form of notes, sketches, drawings and in any other form that may be required by
the Company) of all Proprietary Information developed by me and all Inventions
made by me during the period of my employment at the Company, which records
shall be available to and remain the sole property of the Company at all times.

4. ADDITIONAL ACTIVITIES. I agree that during the period of my employment by the
Company I will not, without the Company’s express written consent, engage in any
employment or business activity which is competitive with, or would otherwise
conflict with, my employment by the Company. I agree further that for the period
of my employment by the Company and for one (l) year after the date of
termination of my employment by the Company I will not, either directly or
through others, solicit or attempt to solicit any employee, independent
contractor or consultant of the company to terminate his or her relationship
with the Company in order to become an employee, consultant or independent
contractor to or for any other person or entity.

5. NO CONFLICTING OBLIGATION. I represent that my performance of all the terms
of this Agreement and as an employee of the Company does not and will not breach
any agreement to keep in confidence information acquired by me in confidence or
in trust prior to my employment by the Company. I have not entered into, and I
agree I will not enter into, any agreement either written or oral in conflict
herewith.

6. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I will
deliver to the Company any and all drawings, notes, memoranda, specifications,
devices, formulas, and documents, together with all copies thereof, and any
other material containing or disclosing any Company Inventions, Third Party
Information or Proprietary Information of the Company. I further agree that any
property situated on the Company’s premises and owned by the Company, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without notice. Prior to
leaving, I will cooperate with the Company in completing and signing the
Company’s termination statement.

7. LEGAL AND EQUITABLE REMEDIES. Because my services are personal and unique and
because I may have access to and become acquainted with the Proprietary
Information of the Company, the Company shall have the right to enforce this
Agreement and any of its provisions by injunction, specific performance or other
equitable relief, without bond and without prejudice to any other rights and
remedies that the Company may have for a breach of this Agreement.

8. NOTICES. Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as the
party shall specify in writing. Such notice shall be deemed given upon personal
delivery to the appropriate address or if sent by certified or registered mail,
three (3) days after the date of mailing.

9. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ of the
Company, I hereby consent to the notification of my new employer of my rights
and obligations under this Agreement.

10. GENERAL PROVISIONS.

     10.1 Governing Law; Consent to Personal Jurisdiction. This Agreement will
be governed by and construed according to the laws of the State of California,
as such laws are applied to agreements entered into and to be performed entirely
within California between California residents. I hereby expressly consent to
the personal jurisdiction of the state and federal courts located in Alameda
County, California for any lawsuit filed there against me by Company arising
from or related to this Agreement.

 

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     10.2 Severability. In case any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to duration, geographical scope, activity or subject, it shall be construed
by limiting and reducing it, so as to be enforceable to the extent compatible
with the applicable law as it shall then appear.

     10.3 Successors and Assigns. This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors, and its assigns.

     10.4 Survival. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.

     10.5 Employment. I agree and understand that nothing in this Agreement
shall confer any right with respect to continuation of employment by the
Company, nor shall it interfere in any way with my right or the Company’s right
to terminate my employment at any time, with or without cause.

     10.6 Waiver. No waiver by the Company of any breach of this Agreement shall
be a waiver of any preceding or succeeding breach. No waiver by the Company of
any right under this Agreement shall be construed as a waiver of any other
right. The Company shall not be required to give notice to enforce strict
adherence to all terms of this Agreement.

     10.7 Entire Agreement. The obligations pursuant to Sections 1 and 2 of this
Agreement shall apply to any time during which I was previously employed, or am
in the future employed, by the Company as a consultant if no other agreement
governs nondisclosure and assignment of inventions during such period. This
Agreement is the final, complete and exclusive agreement of the parties with
respect to the subject matter hereof and supersedes and merges all prior
discussions between us. No modification of or amendment to this Agreement, nor
any waiver of any rights under this Agreement, will be effective unless in
writing and signed by the party to be charged. Any subsequent change or changes
in my duties, salary or compensation will not affect the validity or scope of
this Agreement.

     This Agreement shall be effective as of the first day of my employment with
the Company, namely: February 18, 2003.

     I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED OUT EXHIBIT B TO THIS AGREEMENT.

 
Dated: 2/18/03
 
/s/ Mary L. Schramke

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(Signature)
 
Mary L. Schramke

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(Printed Name)
 
ACCEPTED AND AGREED TO:
 
LYNX THERAPEUTICS, INC.

     
By:
  /s/ Cristina Alves

 

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Title:
  HR Coordinator

 
25861 Industrial Blvd

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(Address)
 
Hayward, CA 94545
 
Dated: 2/18/03

 

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EXHIBIT A

LIMITED EXCLUSION NOTIFICATION

     THIS IS TO NOTIFY you in accordance with Section 2872 of the California
Labor Code that the foregoing Agreement between you and the Company does not
require you to assign or offer to assign to the Company any invention that you
developed entirely on your own time without using the Company’s equipment,
supplies, facilities or trade secret information except for those inventions
that either:

     1. Relate at the time of conception or reduction to practice of the
invention to the Company’s business, or actual or demonstrably anticipated
research or development of the Company; or

     2. Result from any work performed by you for the Company.

     To the extent a provision in the foregoing Agreement purports to require
you to assign an invention otherwise excluded from the preceding paragraph, the
provision is against the public policy of this state and is unenforceable.

     This limited exclusion does not apply to any patent or invention covered by
a contract between the Company and the United States or any of its agencies
requiring full title to such patent or invention to be in the United States.

     I ACKNOWLEDGE RECEIPT of a copy of this notification.

         

  By:   Mary L. Schramke

     

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      (PRINTED NAME OF EMPLOYEE)
 
       

  Date:   2/19/03
WITNESSED BY:
       
 
       
Cristina Alves
       

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(PRINTED NAME OF REPRESENTATIVE)
       
 
       
Lynx Therapeutics, Inc. 
      Effective Date: 11/01/01
Employee Handbook
       

 

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EXHIBIT B

TO: Lynx Therapeutics, Inc.

FROM: Mary L. Schramke

DATE: 2/19/03

SUBJECT: Previous Inventions

1. Except as listed in Section 2 below, the following is a complete list of all
inventions or improvements relevant to the subject matter of my employment by
Lynx Therapeutics, Inc. (the “Company”) that have been made or conceived or
first reduced to practice by me alone or jointly with others prior to my
engagement by the Company:

         

  x   No inventions or improvements.
 
       

  o   See below:
 
       

     

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o Additional sheets attached.

     2. Due to a prior confidentiality agreement, I cannot complete the
disclosure under Section 1 above with respect to inventions or improvements
generally listed below, the proprietary rights and duty of confidentiality with
respect to which I owe to the following party(ies):

             

  Invention or Improvement   Party(ies)   Relationship
1.
 

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2.
 

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3.
 

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o Additional sheets attached.

         
Lynx Therapeutics, Inc. 
      Effective Date: 11/01/01
Employee Handbook