Exhibit 10.13


 


 


*** Confidential Treatement Requested. Confidential
portions of this document have been redacted and have been separately filed
with the Commission.


 


 


PCR


PATENT LICENSE AGREEMENT


 


 


BY AND BETWEEN


 


 


ROCHE MOLECULAR SYSTEMS, INC.


 


 


AND


 


 


EXPRESSION DIAGNOSTICS


 

















 


PATENT
LICENSE AGREEMENT


 


(HUMAN)


 


CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Background

  	
   

  	
   

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1

  	
   

  	
  Definitions

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2

  	
   

  	
  Grant

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3

  	
   

  	
  Additional Limitations & Acknowledgment re
  Diagnostic Products

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4

  	
   

  	
  Royalties, Records and Reports

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5

  	
   

  	
  Technology Notification

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6

  	
   

  	
  Diligence

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7

  	
   

  	
  Term and Termination

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8

  	
   

  	
  Confidentiality-Publicity

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9

  	
   

  	
  Compliance

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10

  	
   

  	
  Assignment

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11

  	
   

  	
  Negation of Warranties and Indemnity

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12

  	
   

  	
  General

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attachments:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attachment I

  	
   

  	
  List of Licensed Technology

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attachment II

  	
   

  	
  Combination Services

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attachment III

  	
   

  	
  Summary Royalty Report Form

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attachment IV

  	
   

  	
  Collection Rate

  	
   

  	
   

  



 


1

















 


PATENT
LICENSE AGREEMENT


 


(Human)


 


This Agreement is made by
and between


 


Roche Molecular Systems,
Inc., 4300 Hacienda Drive, Pleasanton, California 94588

(hereafter referred to as “RMS”)


 


and


 


Expression Diagnostics, 750
Gateway Boulevard, South San Francisco, California 94080

(hereafter referred to as “ED”)


 


hereafter individually
referred

to as a “Party” or collectively as “The Parties”


 


********


 


BACKGROUND


 


A.                      RMS owns and
has the right to grant licenses to practice under certain United States Patents
describing and claiming, inter alia,  nucleic acid amplification processes
known as polymerase chain reaction (“PCR”), homogeneous PCR, and RT-PCR (“reverse
transcription PCR”).


 


B.                        ED desires
to obtain a non-exclusive license from RMS to use the Licensed Technology to
perform certain PCR-based human in vitro clinical
laboratory services, and RMS is willing to grant such a license to ED on the
terms and subject to the conditions provided exclusively in this Agreement.


 


NOW,
THEREFORE, for and in consideration of the mutual covenants contained herein,
RMS and ED agree as follows:


 

















 


1.                          Definitions


 


For the purpose of this
Agreement, and solely for that purpose, the terms set forth hereinafter shall
be defined as follows:


 


1.1                    The term “Affiliate” shall mean with respect to a
given Party:


 


a)                        an
organization which, directly or indirectly, controls such Party;


 


b)                       an
organization which is, directly or indirectly, controlled by such Party; or


 


c)                        an
organization which is controlled, directly or indirectly, by the ultimate
parent company which controls, directly or indirectly, such Party.


 


For purposes of this
paragraph, “control” shall mean the ownership of fifty percent (50%) or more of
the voting stock or equity interests of an organization or otherwise having the
power to govern or direct the financial and the operating policies or to
appoint the management of such organization.


 


With respect to RMS, the
term “Affiliate” shall not include Genentech, Inc., 1 DNA Way, South San
Francisco, California 94080-4990, U.S.A. (“Genentech”) nor Chugai
Pharmaceutical Co., Ltd, 1-9, Kyobashi 2-chome, Chuo-ku, Tokyo, 104-8301 Japan
(“Chugai”).


 


1.2                    “Combination Service” shall mean a Licensed
Service offered in combination with another non-PCR testing service or together
with a non-testing service(s) such as a specialized interpretive service or a
consultative service (e.g., genetic counseling) as part of a package, where the
Licensed Service is not separately billed.


 


1.3                    “Diagnostic Product” shall mean an
assemblage of reagents, including but not limited to reagents packaged in the
form of a kit, useful in performing a Licensed Service.


 


1.4                    “Effective Date” shall mean the date on
which the last signatory to this Agreement signs this Agreement.


 


1.5                    “Licensed Field” shall mean the field of
clinical laboratory services that detect the presence, absence and/or quantity
of a nucleic acid sequence for the detection, diagnosis, confirmation,
prognosis, management and/or treatment of a human disease or condition,
including, but not limited to, such services: to identify predisposition to
disease, disease susceptibility, confirm disease, predict therapeutic effectiveness
or monitor disease progress; used in the course of human clinical trials; for
Parentage Determination; and for tissue transplant typing, including testing
performed on animal tissue intended for use in xenotransplantation. Licensed
Field shall specifically exclude any services performed for the screening of
blood and/or blood products.


 


3

















 


1.6                    “Licensed
Service(s)” shall mean the performance by ED of an in vitro procedure within the Licensed
Field which utilizes the Licensed Technology. Licensed Services include, but
are not limited to, any combination of the steps of collecting a sample for
analysis, isolating nucleic acid sequences from the sample, amplifying one or
more desired sequences, analyzing the amplified material, including sequence
analysis, and reporting the results.


 


1.7                    “Licensed Technology” shall mean, subject
to the following limitations, the Valid Claims of the United States patents
listed in Attachment I to this Agreement and any reissue or reexamination
patents thereof. No rights under any kit claims of such patents are included in
this definition or licensed under this Agreement. With the exception of the
reaction mixture claims of United States Patents Nos. 5,804,375, 5,693,517, 5,476,774
and 6,127,155, the plasmid claims of the 5,476,774 patent, the primer claims of
United States Patent No. 5,573,906, and the probe claims of United States
Patent No. 5,110,920, no rights under any apparatus, device, composition of
matter, reagent or substance claims of such patents are included in this
definition or licensed under this Agreement.


 


1.8                    “Net Service Revenues” shall mean the gross
invoice price for the Licensed Services performed by ED (or the fair market
value for any nonmonetary consideration which ED agrees to receive in exchange
for Licensed Services), less the following deductions where they are factually
applicable and are not already reflected in the gross invoice price:


 


a)                        discounts
allowed and taken, in amounts customary in the trade (which shall include the
difference between the dollar amount charged by ED for a Licensed Service and
the Medicare and/or Medicaid Limits of Allowance and/or reimbursement
limitations of a Third Party insurance program); and


 


b)                       actual bad
debt which bad debt ED can prove and document that it was reasonable and
diligent in its efforts to collect payment.


 


1.8.1           The Net Service
Revenues of those Licensed Services that are performed by ED for any person,
firm or corporation controlling, controlled by or under common control with ED,
or enjoying a special course of dealing with ED, shall be determined based on
the average selling price of such Licensed Services to all Third Parties during
the period in question.


 


1.8.2           It is hereby understood
and agreed that, to the extent feasible, Licensed Services and Combination
Services shall at all times be invoiced, listed and billed by ED as a separate
item in ED’s invoices, bills and reports to customers. Net Service Revenues for
determining royalties with respect to a Licensed Service which is part of a
Combination Service shall be determined by multiplying the gross invoice price
of the Combination Service, less applicable deductions, by the appropriate
fraction in Attachment II hereto. The fraction specified in Attachment II for a
particular Licensed Service included in a Combination Service shall be set by
RMS after consultation


 


4

















 


with ED, as accurately
reflecting the value contributed by the Licensed Service to the overall value
of the Combination Service as offered by ED, and as provided in Section 2.4.
Attachment II hereto shall be modified as new Combination Services are
identified and new royalty-bearing fractions set, and as set forth in Section
2.4.


 


1.9                    “Parentage Determination” shall mean
analysis of human genetic material to ascertain whether two or more individuals
are biologically related, but specifically excludes analysis of forensic
evidence for a sexual assault investigation.


 


1.10              “Territory” shall mean the United States
and its possessions and the Commonwealth of Puerto Rico.


 


1.11              “Third Party” shall mean an entity other
than an Affiliate of either Party to this Agreement.


 


1.12              “Valid Claim” shall mean a claim of a
patent which has not expired or been disclaimed, cancelled, held invalid or
held unenforceable by a decision of a court or other governmental agency of
competent jurisdiction, from which no further appeal is possible or has been
taken within the time period provided under applicable law for such an appeal.


 


2.                          Grant


 


2.1                    Grant.
Upon the terms and subject to the conditions and restrictions of this
Agreement, RMS hereby grants to ED, and ED hereby accepts from RMS, a
royalty-bearing, non-exclusive, personal, non-transferable license under the
Licensed Technology solely to perform Licensed Services within the Territory.


 


2.2                    Performance
of Licensed Services Only. The Licensed Technology may be used solely for
the performance of Licensed Services and for no other purpose whatsoever, and
no other right, immunity or license is granted to ED expressly, impliedly or by
estoppel.


 


2.3                    Personal
License. ED expressly acknowledges and agrees that the license granted
hereunder is personal to ED alone and ED shall have no right to sublicense,
assign or otherwise transfer or share its rights under the foregoing license.


 


2.4                    Combination
Service(s). For each Combination Service that ED intends to offer pursuant
to this Agreement, and at least sixty (60) days before ED intends to offer any
such Combination Service, ED shall:


 


a)                        notify RMS
of such proposed Combination Service, such notice to include a complete and
detailed description of the proposed Combination Service; and


 


b)                       obtain from
RMS a duly authorized agreement, in the form of Attachment II hereto, for such
Combination Service, which agreement shall indicate the fraction or


 


5

















 


*** Confidential material redacted and filed
separately with the Commission.


 


percentage of the package
price of such Combination Service, less appropriate deductions, on which
royalties shall be paid hereunder.


 


For any Combination
Service(s) for which ED has not satisfied the criteria set forth in subsections
(a) and (b) above, the royalty payable on such Combination Service shall be
assessed on 100% of the package price of such Combination Service, less
applicable deductions. As to all other Licensed Services offered by ED which
are not part of a Combination Service, ED agrees to inform RMS of the
availability from ED of each such Licensed Service within thirty (30) days
after ED commences offering the Licensed Service.


 


2.5                    Credit for
Licensed Technology Rights. RMS hereby grants to ED the right and ED
accepts and agrees to credit RMS as the source of its Licensed Technology rights
in ED’s promotional materials and any other materials intended for distribution
to Third Parties as follows:


 


“This service is
performed pursuant to an agreement with Roche Molecular Systems, Inc.”


 


3.                          Additional
Limitations and Acknowledgment Regarding Diagnostic Products


 


ED acknowledges and
agrees that the license rights granted hereunder are for the performance of
Licensed Services only and do not include any right to make, have made, import,
offer to sell or sell any products, including apparatuses, devices, PCR
reagents, kits or Diagnostic Products. ED further acknowledges and agrees that
RMS and its Affiliates are in the business of providing clinical laboratory
testing services and the commercial sale of diagnostic testing systems, kits
and reagents and therefore may compete directly with ED’s business.


 


4.                          Royalties,
Records and Reports


 


4.1                    Royalties.
For the rights and privileges granted under Section 2.1 of this Agreement, ED
shall pay to RMS royalties equal to *** percent (***%) of ED’s Net Service
Revenues.


 


No royalty is due on
PCR-based assays performed solely for the purpose of evaluating a procedure to
be used as a Licensed Service after validation.


 


No royalty is due on
assays performed with Roche labeled diagnostic kits or Third Party diagnostics
kits licensed by Roche, which convey human diagnostic label license rights to
end users.


 


4.2                    Reports.
ED shall deliver to RMS, within forty-five (45) days after the end of and for
each quarterly calendar period during the Term, i.e. the three (3) month
periods that are January 1 through March 31, April 1 through June 30, July 1
through September 30, and October 1 through December 31 (each a “Reporting
Period”), a true and accurate royalty report (“Royalty Report”). Each Royalty
Report shall indicate the number of Licensed Services performed during the
relevant Reporting Period and the detail specified on the “Summary Royalty
Report,” a copy of which is attached hereto as Attachment III, or on a form


 


6

















 


generated by ED which
duplicates the format of the Summary Royalty Report. If no royalties are due
for a given Royalty Period, it shall be so reported. The correctness and
completeness of each Royalty Report shall be attested to in writing by an authorized
representative of ED.


 


In the event ED is unable
to calculate Net Service Revenues as prescribed in Section 1.8, ED shall so
inform RMS, and upon RMS’s written consent, ED shall calculate royalties as
follows:


 


Upon receipt by RMS of
satisfactory documentation verifying ED’s actual percentage of gross billings
for Licensed Services and/or Combination Services collected for ED’s most
recently ended fiscal year (the “Collection Rate”), subject to the provisions
of Section 2.4 above, ED shall be permitted to calculate Net Service Revenues
taking into account the Collection Rate. As of the Effective Date, ED hereby
represents and confirms to RMS that its Collection Rate for its fiscal year
ending NA was NA percent (NA%), which rate is specified in
Attachment IV. During the Term of this Agreement, and within ninety (90) days
after the end of each ED fiscal year, ED shall deliver to RMS satisfactory
documentation that verifies the then Collection Rate. If ED’s Collection Rate
varies by at least five percent (5%) from the rate stated in Attachment IV, RMS
shall amend Attachment IV accordingly. Should ED fail to provide the required
updated documentation, ED shall calculate Net Service Revenues and royalties
due as prescribed in Sections 1.8 and 2.4 for the remaining Term of the
Agreement.


 


Simultaneously with the
delivery of each Royalty Report, ED shall pay to RMS the royalty due under this
Agreement for the period covered by such report. All payments due RMS hereunder
shall be payable in United States currency and sent together with the Royalty
Report by the due date to the following address:


 


Roche Molecular Systems,
Inc.

P.O. Box 100858 

Pasadena, CA 91189-0858


 


or to any other address
that RMS may advise in writing.


 


4.3                    Inspection.
Within ten (10) days after RMS’s written request to ED, an accounting firm
selected by RMS (including, but not limited to, RMS’s normal certified public
accounting firm), may, at RMS’s own expense (except as provided below), inspect
the records, books of account and any other materials of ED pertaining to the
transactions and matters contemplated by this Agreement and/or the Royalty
Reports required in Section 4.2 above, provided that any accounting firm will
hold such records in strict confidence, except as necessary to report to RMS
and ED on ED’s compliance with the terms, conditions and restrictions of this
Agreement. If such an inspection shows an underpayment by ED to RMS by more
than ten percent (10%) for any Reporting Period, ED will pay, in addition to
the amount due, plus interest, the accounting firm’s reasonable fees and
expenses.


 


7

















 


4.4                    Prior Licensed Services. Licensed Services performed by ED prior to
execution of this Agreement shall be subject to the royalties described in this
Agreement and shall be reported and due to RMS with the first Royalty Report
due provided under Section 4.2. Provided, however, that where this Agreement
replaces an existing license agreement, the royalty obligations of ED under
this Agreement commence the first day of the month in which this Agreement is
executed.


 


4.5                    Past Due Amounts Bear Interest. If ED shall fail to pay any amount
specified under this Agreement after the due date thereof, the amount owed
shall bear interest at the lower of (i) the Citibank, N.A. base lending rate
(aka, the “Prime Rate”), or (ii) the maximum rate allowed by applicable law,
from the due date until paid.


 


4.6                    Survival. The provisions of this Section 4 shall survive any termination or
expiration of this Agreement.


 


5.                          Technology Notification


 


5.1                    Notification. With respect to any invention, improvement
or discovery (hereinafter referred to as “Discoveries” in this Section) of ED
made after entering into this Agreement and resulting from work conducted under
or in conjunction with this Agreement and being applicable to the Licensed
Technology, if ED decides to license said Discoveries to Third Parties, then ED
agrees to provide to RMS, unless not possible due to ED’s pre-existing
commitments to Third Parties relating to said Discoveries, a reasonable
opportunity to negotiate a license to use said Discoveries in PCR-based
Diagnostic Products and services. Such Discoveries may include, but are not
limited to, improvements of the Licensed Technology or in the performance of
Licensed Services, modifications to or new methods of performing the Licensed
Services, including the automation of the PCR process or of the Licensed
Services.


 


5.2                    Agreement re Discovery. Any agreement reached between The Parties
as a result of ED’s notification to RMS of a Discovery pursuant to Section 5.1
hereto shall be upon terms and conditions negotiated in good faith by The
Parties.


 


6.                          Diligence


 


ED shall exercise
reasonable diligence in developing, testing, validating, documenting, promoting
and performing the Licensed Services. In the course of such diligence, ED shall
implement appropriate procedures and take appropriate steps including, upon
reasonable written request of RMS, furnishing RMS with representative copies of
all promotional material relating to the Licensed Services.


 


7.                          Term and Termination


 


7.1                    Term of Agreement. This Agreement shall commence on the
Effective Date and, unless terminated earlier as provided herein, shall
terminate on the date of expiration of the last to


 


8

















 


expire of the patents
included within the Licensed Technology, which patent contains at least one
Valid Claim covering the performance of a Licensed Service.


 


7.2                    ED
Termination for Convenience. Notwithstanding any other Section of this
Agreement, ED may terminate this Agreement for any reason on thirty (30) days’
written notice to RMS.


 


7.3                    Termination
for Change of Control, Etc. RMS shall have the right to terminate this
Agreement and the license rights granted herein immediately upon written notice
to ED upon any material change in the ownership or control of ED or of its
assets or in the event ED breaches the provisions of Section 10 below.


 


7.4                    Termination
for Insolvency, Etc. This Agreement and the license rights granted
hereunder to ED shall automatically terminate upon: (a) an adjudication of ED
as bankrupt or insolvent, or ED’s admission in writing of its inability to pay
its obligations as they mature; or (b) an assignment by ED for the benefit of
creditors; or (c) ED’s applying for or consenting to the appointment of a
receiver, trustee or similar officer for any substantial part of its business
or property, or such a receiver, trustee or similar officer’s appointment
without the application or consent of ED, if such appointment shall continue in
effect for a period of ninety (90) days; or (d) ED’s instituting (by petition,
application, answer, consent or otherwise) any bankruptcy, insolvency
arrangement or similar proceeding relating to ED or its business or property
under the laws of any jurisdiction; or (e) the institution of any such
proceeding (by petition, application, answer, consent or otherwise) against ED,
if such proceeding shall remain in effect for a period of ninety (90) days; or
(f) the issuance or levy of any judgment, writ, warrant of attachment or
execution or similar process against a substantial part of the property of ED,
if such judgment, writ, or similar process shall not be released, vacated or
fully bonded within ninety (90) days after its issue or levy; or (g) the loss
of ED’s federal or state licenses, permits or accreditation necessary for the
operation of ED as a health care institution.


 


7.5                    Termination
for Change of Status. If ED is a government institution or a non-profit entity,
this Agreement and the license rights granted to ED herein shall automatically
terminate within thirty (30) days of ED’s reclassification as a non-government
institution, or as a for-profit entity pursuant to the applicable provisions of
the United States Internal Revenue Code, 26 U.S.C. Upon such termination, ED
may request a new license pursuant to the same terms and conditions then being
offered to other for-profit institutions, although RMS is not obligated by
anything contained in this Agreement to grant such a license.


 


7.6                    Termination
for Breach. Upon any breach of or default by ED of a material term under
this Agreement, RMS may terminate this Agreement upon thirty (30) days’ written
notice to ED. Said termination shall become effective at the end of the
thirty-day period, unless during said period ED fully cures such breach or
default.


 


7.7                    Effects of
Termination. Upon termination of this Agreement as provided herein, all
license rights and immunities granted to ED hereunder shall terminate and revert
to or be retained by RMS. To the extent RMS has licensed technology or know-how
of ED pursuant to


 


9

















 


Section 5 hereto; those
licenses shall remain in force according to their terms. Other provisions of
this Agreement which by their nature would reasonably be expected to survive
termination shall so survive. Termination of this Agreement shall not relieve
either Party from any duty or obligation that had accrued prior to termination.
Each Party shall retain all of its rights and remedies in respect of any breach
or default by the other party of the terms, conditions and provisions of this
Agreement.


 


7.8                    Duty to
Report and Pay Royalties Survives. ED’s obligations to report to and pay
royalties to RMS as to the Licensed Services performed under the Agreement
prior to termination or expiration of the Agreement shall survive such
termination or expiration.


 


8.                          Confidentiality-Publicity


 


8.1                    Publicity.
Except as otherwise specifically provided in Section 2.5, ED agrees to obtain
RMS’s written approval before distributing any written information, such as a
press release, to Third Parties which contains references to RMS or this
Agreement. RMS’s approval shall not be unreasonably withheld or delayed and, in
any event, RMS’s decision shall be rendered within three (3) weeks of receipt
of the written information. Once approved, such materials, or abstracts of such
materials, which do not materially alter the context of the material originally
approved may be reprinted during the Term of the Agreement without further
approval by RMS unless RMS has notified ED in writing of its decision to
withdraw permission for such use.


 


8.2                    Confidentiality
Obligations. Each Party agrees that any financial, legal or business information
or any technical information marked “Confidential” or “Proprietary” and
disclosed to it (the “Receiving Party”) by the other (the “Disclosing Party”)
in connection with this Agreement, shall be considered the confidential and
proprietary information of the Disclosing Party, and the Receiving Party shall
not disclose same to any Third Party and shall hold it in confidence for a
period of five (5) years and will not use it other than in the performance of
this Agreement, provided, however, that any information, know-how or data which
is orally disclosed to the Receiving Party shall not be considered confidential
and proprietary unless such oral disclosure is stated to be confidential or
proprietary prior to disclosure and is reduced to writing and given to the
Receiving Party in written form within thirty (30) days after the oral
disclosure thereof. Such confidential and proprietary information shall
include, without limitation, marketing and sales information, commercialization
plans and strategies, research and development work plans, and technical
information such as patent applications, inventions, trade secrets, systems,
methods, apparatus, designs, tangible material, organisms and products and
derivatives thereof.


 


8.3                    Exceptions.
The above obligations of confidentiality and restrictions on use shall not be
applicable to the extent:


 


a)                        such
information is general public knowledge or, after disclosure hereunder, becomes
general or public knowledge through no fault of the Receiving Party;


 


10

















 


b)                       such
information can be shown by the Receiving Party by its written records to have
been in its possession, with no obligation of confidentiality to a Third Party,
prior to receipt thereof hereunder;


 


c)                        such information
is received by the Receiving Party from any Third Party for use or disclosure
by the Receiving Party without any obligation of confidentiality or restriction
on use, provided, however, that information received by the Receiving Party
from any Third Party funded by the Disclosing Party (e.g. consultants,
subcontractors, etc.) shall not be released from confidentiality under this
exception;


 


d)                       such
information was independently developed by the Receiving Party without use of
the information of the Disclosing Party; or


 


e)                        the
disclosure of such information is required or desirable to comply with or
fulfill applicable law or court process, governmental requirements, submissions
to governmental bodies, or the securing of regulatory approvals.


 


8.4                    Confidentiality
of Agreement. Each Party shall, to the extent reasonably practicable,
maintain the confidentiality of this Agreement and its provisions and shall
refrain from making any public announcement or disclosure of the terms of this
Agreement without the prior written consent of the other Party, except to the
extent a Party concludes in good faith that such disclosure is required under
applicable law or regulations, in which case the other Party shall be notified
in advance.


 


9.                          Compliance
with Law


 


In exercising any and all
rights and in performing its obligations hereunder, ED shall comply fully with
any and all applicable laws, regulations and ordinances and shall obtain and
keep in effect all applicable licenses, permits and other governmental approvals,
whether at the federal, state or local levels, necessary or appropriate to
perform the Licensed Services and carry on its activities hereunder and ED
hereby agrees to defend, indemnify and hold RMS and its Affiliates harmless
from and against any and all liability, demands, damages, expenses (including
attorneys’ and experts’ fees) and losses suffered or incurred by RMS or its
Affiliates arising from, resulting from or otherwise concerning any breach by
ED of its obligations under this Section 9. ED agrees to refrain from making
any material misstatements or activities about the Licensed Technology licensed
hereunder that will have an adverse effect on the business reputation of RMS.
RMS may advise ED of any such material misstatements or activities and ED will
have thirty (30) days to correct such material misstatements or activities.


 


10.                    Assignment


 


This Agreement shall not
be assigned or transferred by ED (including by merger, operation of law or in
any other manner including, without limitation, any purported assignment or
transfer that


 


11

















 


might arise from a sale
or transfer of ED’s business or assets) without the express written consent of
RMS. RMS may assign all or any part of its rights and obligations under this
Agreement at any time without the consent of ED. ED agrees to execute such
further acknowledgments or other instruments as RMS may reasonably request in
connection with any such assignment.


 


11.                    Negation of
Warranties and Indemnity


 


11.1             Nothing in this
Agreement shall be construed as:


 


a)                         a
warranty or representation by RMS as to the validity or scope of any patent
included within the Licensed Technology;


 


b)                        a warranty
or representation that the use of the Licensed Technology and/or the performance
of Licensed Services are or will be free from infringement of patents of Third
Parties;


 


c)                         an
obligation to bring or prosecute actions or suits against Third Parties for
infringement; or


 


d)                        conferring
by implication, estoppel or otherwise any license, right or immunity under any
patents or patent applications of RMS other than those patents specified in
Licensed Technology, regardless of whether such other patents and patent
applications are dominant or subordinate to the patents in Licensed Technology.


 


11.2              RMS MAKES NO EXPRESS
OR IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT.


 


11.3              ED shall assume full
responsibility for its use of the Licensed Technology and shall defend,
indemnify and hold RMS and its Affiliates harmless from and against all
liability, demands, damages, expenses (including attorneys’ and experts’ fees)
and losses for death, personal injury, illness, errors, property damage or any
other injury or damage, including any damages or expenses arising in connection
with state or federal regulatory action (collectively “Damages”), arising or
resulting from or otherwise concerning the use by ED, including its officers,
directors, agents and employees, of the Licensed Technology or the performance
of the Licensed Services except, and only to the extent, that such Damages are
caused solely by the negligence or willful misconduct of RMS.


 


12.                    General


 


12.1              Entire Agreement.
This Agreement constitutes the entire agreement between The Parties as to the
subject matter hereof, and all prior negotiations, representations, agreements
and understandings are merged into, extinguished by and completely expressed by
it. This


 


12

















 


Agreement may be modified
or amended only by a writing executed by an authorized officer of each of The
Parties.


 


12.2              Notice. Any
notice required or permitted to be sent hereunder shall be given by hand
delivery, by registered, express or certified mail, return receipt requested,
postage prepaid, or by nationally recognized private express courier or by
confirmed facsimile to the other Party at the address listed below, or to such
other addresses of which a Party may so notify the other. Notices will be
deemed given when hand delivered if by hand delivery, or when received if by
any other authorized method.


 


	
  If
  to RMS:

  	
   

  	
  Roche Molecular Systems, Inc.

  
	
   

  	
   

  	
  1145 Atlantic Avenue, Suite 100

  
	
   

  	
   

  	
  Alameda, California 94501

  
	
   

  	
   

  	
  Attn: Licensing Department

  
	
   

  	
   

  	
   

  
	
  RMS
  cc:

  	
   

  	
  Roche Molecular Systems, Inc.

  
	
   

  	
   

  	
  1145 Atlantic Avenue, Suite 100

  
	
   

  	
   

  	
  Alameda, California 94501

  
	
   

  	
   

  	
  Attn: Sr. Vice President, General Counsel

  
	
   

  	
   

  	
   

  
	
  If
  to ED:

  	
   

  	
  Expression Diagnostics

  
	
   

  	
   

  	
  750 Gateway Boulevard, Suite H

  
	
   

  	
   

  	
  South San Francisco, CA 94080

  
	
   

  	
   

  	
  Attn: CFO

  



 


12.3              Governing Law.
This Agreement is subject to and shall be construed and enforced in accordance
with the law of the State of California, U.S.A., excluding its conflict of laws
rules and except as to any issue concerning the validity, scope or
enforceability of any patent within the Licensed Technology, which issue shall
be determined in accordance with the applicable patent laws of the United
States.


 


12.4              Arbitration.
All disputes, claims or controversies arising between the Parties concerning
this Agreement or the matters or transactions contemplated herein shall be
settled by final and binding arbitration conducted in San Francisco, California
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association, in accordance with the following procedural process:


 


a)                        The
arbitration tribunal shall consist of three arbitrators. In the request for
arbitration and the answer thereto, each Party shall nominate one arbitrator
and the two arbitrators so named will then jointly appoint a third neutral
arbitrator as chairman of the arbitration tribunal. If the two arbitrators so
named are unable to appoint a third neutral arbitrator, the third neutral
arbitrator shall be appointed by the American Arbitration Association in
accordance with the procedures contained in the Commercial Arbitration Rules.


 


13

















 


b)                       The
decision of the arbitration tribunal shall be final and binding and judgment
upon such decision may be entered in any court of competent jurisdiction for
judicial acceptance of such an award and enforcement. Each Party hereby submits
itself to the jurisdiction of the courts of the place of arbitration, but only
for the entry of judgment with respect to the decision of the arbitrators
hereunder.


 


12.5              No Conflict with
Law. Nothing in this Agreement shall be construed so as to require the
commission of any act contrary to law, and wherever there is any conflict
between any provision of this Agreement or concerning the legal right of The
Parties to enter into this Agreement and any statute, law, ordinance or treaty,
the latter shall prevail, but in such event the affected provisions of the
Agreement shall be curtailed and limited only to the extent necessary to bring
it within the applicable legal requirements. In any event, all other provisions
of this Agreement shall be deemed valid and enforceable to the fullest extent
possible.


 


12.6              Superceding
Agreement. Concurrent with the execution of this Agreement, and effective
as of the Effective Date herein, any existing agreement between The Parties
which grants rights to PCR technology to ED to perform human diagnostic testing
services, is hereby superceded and replaced in its entirety by this Agreement.


 


IN WITNESS WHEREOF, The
Parties hereto have set their hands and seals and duly executed this Agreement
on the date(s) indicated below, to be effective as of the Effective Date as
defined herein.


 


	
  ROCHE
  MOLECULAR SYSTEMS, INC.

  	
  EXPRESSION
  DIAGNOSTICS

  
	
   

  	
   

  
	
  By:

  	
  /s/ Melinda Griffith

  	
   

  	
  By:

  	
  /s/ Avi Kulkarni

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Melinda Griffith

  	
   

  	
  Name:

  	
  Avi Kulkarni

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Sr. Vice President
  & General Counsel

  	
  Title:

  	
  VP & CFO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  Nov 8, 2004

  	
   

  	
  Date:

  	
  Nov 16, 2004

  	
   

  



 


 


	
  Apprv’d As To Form 

  RMS LAW DEPT.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
				



 


14














 


FIRST AMENDMENT TO PCR PATENT LICENSE AGREEMENT


 


This Amendment (“Amendment”), effective as of    ,
2007 is made by and between Expression Diagnostics, Inc. (“ED”), a Delaware corporation having its
registered office at 3260 Bayshore Blvd., Brisbane, CA 94005, and Roche
Molecular Systems, Inc., a Delaware corporation having its registered office at
4300 Hacienda Drive, Pleasanton, California 94588, (“RMS”).


 


WHEREAS, the
parties entered into the PCR Patent License Agreement dated November 16, 2004
by and between ED and RMS (the “Agreement”);


 


WHEREAS, ED and
RMS desire to make certain changes to the Agreement to allow ED to sell
securities on public markets as specified below; and


 


NOW THEREFORE, in
consideration of the covenants and conditions contained herein, the parties
agree as follows:


 


1.         Section 7.3 of the
Agreement is hereby amended and restated in its entirety to read as follows:


 


“Termination for
Change of Control, Etc. RMS shall have the right to terminate this
Agreement and the license rights granted herein immediately upon written notice
to ED upon any material change in the ownership or control of ED or of its
assets or in the event ED breaches the provisions of Section 10 below; provided
that RMS shall not have the right to terminate this Agreement and the license
rights granted herein based upon (a) any consolidation, business combination,
or merger effected exclusively to change the domicile or name of ED, (b) any
consolidation, business combination, or merger in which the holders of capital stock
of ED immediately prior to such consolidation, business combination, or merger
continue to hold at least 50% of the voting power of the capital stock of ED or
the surviving or acquiring entity following the transaction and (c) any
issuance of capital stock of ED, whether by private or public offering by ED,
conversion of debt, or the exercise of warrants in a transaction or series of
related transactions whose primary purpose is to raise capital for ED.”


 


2.         Section 10 of the
Agreement is hereby amended by adding the following sentence to the end of
Section 10:


 


“Notwithstanding anything
to the contrary herein, ED shall not be in breach of this Section 10 based upon
(a) any consolidation, business combination, or merger effected exclusively to
change the domicile or name of ED, (b) any consolidation, business combination,
or merger in which the holders of capital stock of ED immediately prior to such
consolidation, business combination, or merger continue to hold at least


 


1

















 


50% of the voting power
of the capital stock of ED or the surviving or acquiring entity following the
transaction and (c) any issuance of capital stock of ED, whether by private or
public offering by ED, conversion of debt, or the exercise of warrants in a
transaction or series of related transactions whose primary purpose is to raise
capital for ED.”


 


3.         Defined terms shall have
the meaning assigned to them in the Agreement. Except as expressly and
unambiguously stated herein, no other changes are made to the Agreement. All
other terms and conditions of the Agreement shall remain in full force and
effect.


 


IN WITNESS WHEREOF, the
parties have caused this Amendment to be executed by their duly authorized
representatives.


 


	
  EXPRESSION DIAGNOSTICS, 

  INC.

  	
   

  	
  ROCHE MOLECULAR 

  SYSTEMS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Vikram Jog

  	
   

  	
   

  	
  /s/ Henry A. Erlich

  	
   

  
	
  Signature

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VIKRAM
  JOG

  	
   

  	
   

  	
  HENRY
  A. ERLICH

  	
   

  
	
  Name

  	
   

  	
  Name

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CFO

  	
   

  	
   

  	
  VP,
  DISCOVERY RESEARCH

  	
   

  
	
  Title

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7/9/07

  	
   

  	
   

  	
  JUNE
  28, 07

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  
						



 


 


	
  Apprv’d As to Form 

  RMS LAW DEPT.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  	
   

  
						



 


2