<PAGE>
                                                                   EXHIBIT 10.78

           *** TEXT MARKED ...***...IN SECTION 9.2 OMITTED AND FILED SEPARATELY.
          CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SEC. 280.80(b)(4) AND
                                 SEC. 240.24b-2


                  SETTLEMENT AND NONEXCLUSIVE LICENSE AGREEMENT


THIS SETTLEMENT AND NONEXCLUSIVE LICENSE AGREEMENT ("Agreement"), dated as of
January 10, 2001, is entered into by and between Incyte Genomics, Inc., a
Delaware corporation, with offices at 3160 Porter Drive, Palo Alto, California
94304 ("Incyte"), and Gene Logic, Inc., a Delaware corporation, with offices at
708 Quince Orchard Road, Gaithersburg, Maryland 20878 ("Gene Logic"). Incyte and
Gene Logic may each be referred to herein individually as a "Party" and
collectively as the "Parties".

                                   WITNESSETH

        WHEREAS, Incyte has the right to grant licenses under certain patents
and patent applications regarding RNA amplification and bioinformatics.

        WHEREAS, Incyte has agreed to grant a nonexclusive license to Gene Logic
under certain of these patents and patent applications for the purposes of, and
subject to the terms and conditions of this Agreement.

        WHEREAS, Incyte and Gene Logic have agreed to settle the litigations
between Incyte and Gene Logic filed as Case Nos. C 99-05180 MJJ (ENE) (JL) (the
"First Action") and C-00-04627 SBA (the "Second Action") in the United States
District Court for the Northern District of California (collectively the
"Actions"), based on the terms herein.

        NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the Parties hereby agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

In this Agreement the following words and expressions have the following
meanings:

1.1     "AFFILIATE" shall mean any corporation, firm, limited liability company,
        partnership or other entity that is controlled by Gene Logic. For the
        purpose of this definition, control means ownership of one hundred
        percent (100%) of the shares of stock entitled to vote for the election
        of directors, in the case of a corporation, or one hundred percent
        (100%) of the equity interests in the case of any other type of legal
        entity, status as a general partner in any partnership. Notwithstanding
        the foregoing, for purposes of this Agreement, the term "Affiliate"
        shall not include Affymetrix, Inc. ("Affymetrix"), Perlegen
        Sciences, Inc. ("Perlegen") or Applera Corporation ("Applera").

1.2     "CLINICAL DIAGNOSTICS" shall mean the performance of FDA-approved
        clinical diagnostic test(s) on a human tissue or other human biological
        sample, the results



                                       1
<PAGE>

        of which are provided to health care providers for use in the clinical
        management of individual patients.

1.3     "CONTROL" OR "CONTROLLED" shall mean possession of the ability to grant
        the licenses or sublicenses or to make the assignments as provided for
        herein without violating the terms of any agreement or other arrangement
        with any Third Party.

1.4     "EFFECTIVE DATE" shall mean the date first set forth above.

1.5     "END USER" shall mean any corporate entity or individual to whom Gene
        Logic directly sells or otherwise provides Gene Expression Information
        for use in research and development, including clinical development of
        pharmaceuticals and Clinical Diagnostics.

1.6     "LAYTON FIELD OF USE ACTIVITIES" shall mean the preparation of samples
        by Gene Logic for gene expression analysis for research and development
        of pharmaceutical and diagnostic products and services, specifically
        including uses in clinical trials by Gene Logic or End Users. For
        purposes of clarification, Gene Logic and End Users have the right to
        commercialize such pharmaceutical and diagnostic products and services
        developed pursuant to the first sentence of this Section 1.6; provided
        that such products or services would not otherwise infringe the Layton
        Patents. End Users may commercialize pharmaceutical and diagnostic
        products and/or services developed using the Gene Expression Information
        generated by Gene Logic under the license granted herein but are not
        themselves granted any license to practice the inventions claimed in the
        Layton Patents hereunder. Notwithstanding the foregoing, the Layton
        Field of Use Activities specifically excludes (a) making, having made,
        using, selling, offering for sale, or otherwise providing Clinical
        Diagnostics; (b) making, having made, selling, offering for sale, or
        otherwise providing Layton Kits; (c) high throughput sequencing; and (d)
        genotyping, SNP detection and SNP discovery.

1.7     "GENE EXPRESSION INFORMATION" shall mean information generated by Gene
        Logic concerning the presence, absence and/or abundance of messenger RNA
        molecules in a biological sample.

1.8     "GENOTYPING" shall mean the determination of sequence variation of
        genetic markers in DNA, including sequence variation in SNPs ("single
        nucleotide polymorphisms"), subject to the following limitation: the
        term "genotyping" specifically excludes generation of Gene Expression
        Information.

1.9     "INCYTE PATENTS" shall mean (a) U.S. Patent No. 6,023,659, "Database
        System Employing Protein Function Hierarchies For Viewing Biomolecular
        Sequences" issued February 8, 2000, (b) all patents and patent
        applications, including provisional applications whether or not filed
        more than one year ago, Controlled by Incyte as of the Effective Date or
        during the term of this Agreement that claim benefit under 35 USC
        Sections 119 and/or 120 of any application or provisional application to
        which the patent identified in (a) claims benefit under 35 USC Sections




                                       2
<PAGE>

        119 and/or 120; (c) all continuations, continuations-in-part, divisions
        or provisionals of any application that matured into the patent included
        in (a) or (b); (d) all patents issuing from any patent application,
        including any provisional application included in (b) or (c); (e) all
        foreign counterparts of any of the foregoing, and the patents issuing
        therefrom; and (f) all reissues and re-examinations of any of the
        foregoing and the patents issuing therefrom.

1.10    "LAYTON KITS" shall mean combined sets of reagents whose use would
        infringe one or more claims of the Layton Patents.

1.11    "LAYTON PATENTS" shall mean (a) U.S. Patent No. 5,716,785, "Processes
        for Genetic Manipulations Using Promoters" issued February 1, 1998; U.S.
        Patent No. 5,891,636, "Processes for Genetic Manipulations Using
        Promoters" issued April 6, 1999, (b) all patents and patent
        applications, including provisional applications whether or not filed
        more than one year ago, Controlled by Incyte as of the Effective Date or
        during the term of this Agreement that claim benefit under 35 USC
        Sections 119 and/or 120 of any application or provisional application to
        which the patent identified in (a) claims benefit under 35 USC Sections
        119 and/or 120; (c) all continuations, continuations-in-part, divisions
        or provisionals of any application that matured into the patent included
        in (a) or (b); (d) all patents issuing from any patent application,
        including any provisional application included in (b) or (c); (e) all
        foreign counterparts of any of the foregoing, and the patents issuing
        therefrom; and (f) all reissues and re-examinations of any of the
        foregoing and the patents issuing therefrom.

1.12    "LICENSED PATENTS" shall mean the Incyte Patents and the Layton Patents.

1.13    "THIRD PARTY" shall mean any person or entity other than Incyte, Gene
        Logic or Gene Logic's Affiliates.

                                    ARTICLE 2
                                  LICENSE GRANT

2.1     LAYTON PATENTS NON-EXCLUSIVE LICENSE GRANT. Subject to the terms of this
        Agreement, Incyte hereby grants to Gene Logic and its Affiliates and
        Gene Logic and its Affiliates accept from Incyte a non-exclusive, fully
        paid up, non-transferable (except as permitted under Section 11.7),
        revocable only as permitted under Section 9.2, world-wide license under
        the Layton Patents limited to the Layton Field of Use Activities, said
        license being subject to the provisions of Section 1.6, without the
        right to sublicense or any sublicense being implied.

2.2     INCYTE PATENTS NON-EXCLUSIVE LICENSE GRANT. Subject to the terms of this
        Agreement, Incyte hereby grants to Gene Logic and its Affiliates and
        Gene Logic and its Affiliates accept a non-exclusive, fully paid up,
        non-transferable (except as permitted under Section 11.7), revocable
        only as permitted under Section 9.2, worldwide license under the Incyte
        Patents for all uses (excluding resale of any



                                       3
<PAGE>

        Third Party database product), said license being without the right to
        sublicense or any sublicense being implied.

2.3     NO EXTENSION OF RIGHTS TO SUPPLIERS. The non-exclusive license grants of
        Sections 2.1 and 2.2 hereof do not extend any right under the Licensed
        Patents to any Third Party that supplies any product or service covered
        by the Licensed Patents or used by Gene Logic under the licenses granted
        herein, including any supplier of Layton Kits, gene expression
        microarrays or Gene Expression Information except for Third Parties
        supplying reagents other than Layton Kits for purposes of Gene Logic's
        use under Section 2.1.

2.4     THIRD PARTY LITIGATION. Gene Logic may not, under any circumstances,
        rely on the licenses granted through this Agreement to preclude Incyte
        from taking any legal action for infringement of the Licensed Patents
        against any Third Party, including obtaining injunctive relief that
        would bar such Third Party from providing to Gene Logic any product or
        service covered by a valid claim under the Licensed Patents including
        any Layton Kit, gene expression microarray, or Gene Expression
        Information except for Third Parties supplying reagents other than
        Layton Kits for purposes of Gene Logic's use under Section 2.1.

                                    ARTICLE 3
                            DISMISSAL OF THE ACTIONS

3.1     DISMISSAL OF THE ACTIONS. The Parties shall have their counsel execute
and submit a Stipulation and [Proposed] Order of Dismissal of the Actions in the
form attached as Exhibit A within three (3) business days of the payment
specified in Section 5.1 of this Agreement. The Parties agree that the
Stipulation and [Proposed] Order of Dismissal shall not preclude the right of
Incyte to bring suit against Gene Logic or Gene Logic's Affiliates in the United
States District Court for the Northern District of California if this Agreement
is breached by Gene Logic in one or more causes of action including an action
for infringement of the Licensed Patents, and an action for breach of contract.
The Parties agree that the stipulation and [Proposed] Order of Dismissal shall
not preclude the right of Gene Logic to bring suit against Incyte in the United
States District Court for the Northern District of California if this Agreement
is breached by Incyte in one or more causes of action, including an action for
breach of contract.

                                    ARTICLE 4
                             ADDITIONAL OBLIGATIONS

4.1     RELEASE. Incyte and Gene Logic for themselves and for their parents,
subsidiaries, agents, servants, successors, assigns, and representatives,
including but not limited to, officers, directors, employees, and attorneys
and/or any other related or affiliated corporation or entity, hereby mutually
release each other from any and all claims, causes of action, potential
counterclaims, suits, demands, obligations, promises, liabilities, and damages
of any kind whatsoever, whether at law or equity, whether known or unknown,
which they, or any of them, had or may have had as of the Effective Date



                                       4
<PAGE>

against each other arising out of any dispute, claim or counterclaim of any
nature whatsoever arising directly or indirectly or in any way related to the
claims asserted in the Actions and from the commencement, prosecution, defense
and dismissal of the Actions.

4.2     CAL. CIVIL CODE SECTION 1542. The Parties expressly waive any right or
        benefit to Section 1542 of the California Civil Code which provides:

        A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
        KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
        RELEASE, WHICH IF KNOWN TO HIM, MUST HAVE MATERIALLY AFFECTED HIS
        SETTLEMENT WITH THE DEBTOR.

The Parties, being aware of the above code section, also waive any right or
benefit to which they may be entitled under any other similar statute or common
law principle to the extent permitted by law.

4.3     COVENANT NOT TO SUE. Each party hereby covenants that for a period of
        twelve months from the Effective Date, and provided that the other Party
        is not in material breach of this Agreement, neither Party will
        institute any action for patent infringement against the other Party.
        Each Party also agrees that, during the twelve-month period provided by
        this Section 4.3, appropriate representatives of each Party will make a
        good faith effort to meet with each other to explore licensing and
        cross-licensing of the Parties' respective intellectual property as well
        as other business opportunities that may exist.

4.4     DISPUTE RESOLUTION. Each Party hereby agrees that for a period of
        twenty-four months following the termination of the twelve-month period
        provided under Section 4.3 hereof, and provided that the Agreement has
        not been terminated, each Party will provide the other Party ninety-days
        notice before instituting any action for patent infringement against the
        other Party. During the ninety-day notification period provided by this
        Section 4.4, the Parties shall attempt in good faith to settle the
        issues raised by the notice either by submitting the issues raised by
        the notice to appropriate senior management representatives of each
        party in an effort to effect a mutually acceptable resolution thereof or
        by agreeing to a binding alternative dispute resolution procedure by
        which those issues may be resolved. In the event no mutually acceptable
        resolution of the issues raised by the notice is achieved and no
        mutually acceptable procedure for alternative dispute resolution is
        agreed upon within the ninety-day period provided by this Section 4.4,
        then either party shall be entitled to seek final settlement of such
        Dispute by any administrative or judicial mechanism which may be
        available.

4.5     ISSUE PRECLUSION: INFRINGEMENT OF LAYTON PATENTS BY ACCUSED PROTOCOLS.
        Gene Logic will not assert in any litigation with Incyte, or any
        successor to Incyte, that Gene Logic's use of its current and past
        protocols for amplifying RNA for gene expression analysis (e.g., Eastman
        Exhibit 21, GL 68518-68523)



                                       5
<PAGE>

        accused of infringement in the claim charts in the First Action does not
        infringe the Layton Patents. The Parties agree that the provisions of
        this Section 4.5 will have issue preclusive effect. Based on the
        previous sentence, it is the Parties' specific intent that this
        Agreement and the dismissal of the Actions pursuant hereto shall be
        binding on and shall absolutely bar and preclude Gene Logic, Gene
        Logic's Affiliates, or any entity that acquires Gene Logic from
        contesting any issue concerning the infringement of such patents by such
        protocols or any insubstantial variation of such protocols in any
        judicial proceeding on any claim.

4.6     ISSUE PRECLUSION: VALIDITY AND ENFORCEABILITY OF LAYTON PATENTS. Gene
        Logic will not assert in any litigation with Incyte, or any successor to
        Incyte, that the Layton Patents are invalid or unenforceable. The
        Parties agree that the provisions of this Section 4.6 will have issue
        preclusive effect as to the validity and enforceability of the Layton
        Patents. Based on the previous sentence, it is the Parties' specific
        intent that this Agreement and the dismissal of the Actions pursuant
        hereto shall be binding on and shall absolutely bar and preclude Gene
        Logic, Gene Logic's Affiliates, or any entity that acquires Gene Logic
        from contesting any issue concerning the validity and enforceability of
        those patents in any judicial proceeding on any claim. Gene Logic
        further agrees to remain neutral in any action or proceeding contesting
        the validity or enforceability of those patents, e.g. by responding to
        court order or subpoena. This Section 4.6 shall not apply if the Layton
        Patents are held invalid or unenforceable by a court decision that is
        not appealable or from which no appeal is taken.

4.7     USE OF AGREEMENTS, PRECLUSIONS, OR DISCOVERY IN SUBSEQUENT LITIGATIONS.
        Incyte may rely on and offer in evidence the agreements and preclusions
        set forth in Sections 4.5 and 4.6 in any litigation that involves the
        Layton Patents against Gene Logic, Gene Logic's Affiliates, or any
        entity that acquires Gene Logic. Incyte shall not use, rely on, or offer
        into evidence such agreements and preclusions in any litigation
        involving the Layton Patents against Affymetrix. Gene Logic agrees that
        in the ongoing litigation between Incyte and Affymetrix concerning the
        Layton Patents filed as Case No. C-OO-3210 MJJ in the United States
        District Court for the Northern District of California, Gene Logic will
        promptly respond to written discovery requests by producing all
        earlier-produced documents and deposition transcripts to both Affymetrix
        and Incyte, except that it reserves the right (i) to object to the
        production of documents and transcripts that it independently determines
        lack relevance to the Affymetrix suit and (ii) to object to production
        of any documents on grounds of joint privilege with Affymetrix if Gene
        Logic is requested by Affymetrix to do so. Regardless, Gene Logic agrees
        that it will produce without objection the documents and deposition
        transcript excerpts itemized in Exhibit B attached hereto. Any and all
        such production shall be made pursuant to Northern District of
        California Local Rule 16-6 until the ultimate entry of an appropriate
        protective order in the Affymetrix suit. Gene Logic further agrees to
        "meet and confer" with Incyte to attempt to promptly resolve any
        objections Gene Logic might have to production of any such information
        or documents in the above-styled Affymetrix litigation. The



                                       6
<PAGE>

        provisions of Section 9.2 of this Agreement shall not be applicable to
        this Section 4.7.

                                    ARTICLE 5
                                     PAYMENT

5.1     PAYMENT. Based on the consideration provided in this Agreement, Gene
        Logic shall pay to Incyte, no later than ten (10) days after the
        Effective Date, the sum of Nine Million U.S. dollars (U.S.
        $9,000,000.00) by electronic wire transfer in immediately available
        funds to such account as Incyte shall designate by written notice to
        Gene Logic, which sum shall be non-refundable and which notice shall be
        provided no later than the Effective Date.

                                    ARTICLE 6
                                 CONFIDENTIALITY

6.1     CONFIDENTIALITY OBLIGATION. Notwithstanding any other provision herein
        to the contrary, including, without limitation, the provisions of
        Section 4.7, Incyte and Gene Logic each agree that, without the prior
        written consent of the other Party or unless required by law, it shall
        not disclose to any Third Party the terms of this Agreement or any
        confidential information regarding the other Party or the business of
        the other Party which has been made available to it (the "Protected
        Information"), except as provided in Sections 6.2 and 6.3 of this
        Article and except that (i) the terms of this Agreement may be disclosed
        to outside legal counsel, provided that such outside legal counsel agree
        to maintain the Protected Information in confidence and (ii) Incyte may
        disclose to the Third Party licensor of the Layton Patents such terms of
        this Agreement as are necessary to be disclosed to such Third Party
        licensor under the terms of the license agreement between Incyte and
        such Third Party license, provided that such Third Party licensor agrees
        to maintain the Protected Information in confidence. Disclosure solely
        consisting of the existence of this Agreement and Gene Logic's status as
        a non-exclusive licensee under the Licensed Patents are specifically not
        within the confidentiality obligation imposed by this Section 6.1.

6.2     STATUE, REGULATION OR JUDICIAL PROCEEDING. Notwithstanding any other
        provision of this Article 6, if either Party is required by statute,
        rule or regulation, including the rules and regulations of the
        Securities and Exchange Commission, or by force of law, to disclose the
        Protected Information, the disclosing Party shall promptly notify the
        other Party of such requirement and shall seek an appropriate protective
        order to preserve the confidential status of the Protected Information.
        The disclosing Party shall give the other Party reasonable notice of
        such protective order, and shall obtain the other Party's consent to
        disclose the Protected Information pursuant to such protective order,
        which consent shall not be unreasonably withheld. Disclosure of the
        Protected Information in such proceedings shall take place only under
        the terms provided in the appropriate protective order. If, in the
        absence of a protective order or the receipt of a waiver of the
        confidential status of the Protected Information from the other Party,
        the



                                       7
<PAGE>

        disclosing Party is nonetheless, compelled to disclose Protected
        Information pursuant to a legal proceeding, such party, after notice to
        the other Party, may disclose such Protected Information pursuant to
        such legal proceeding, and shall not be in breach of this Agreement.

6.3     SURVIVAL. The above obligations of confidentiality shall survive
        expiration or termination of this Agreement.

                                    ARTICLE 7
                       PATENT PROSECUTION AND ENFORCEMENT

7.1     PATENT PROCUREMENT. As between Incyte and Gene Logic only, Incyte shall
        have the sole right (in Incyte's sole discretion), but not the
        obligation, at its own expense, to control the preparation, filing,
        prosecution, maintenance and enforcement of the Licensed Patents,
        provided, however, that Incyte shall promptly notify Gene Logic, in
        writing, upon the issuance, expiration, invalidation, abandonment,
        disclaimer or lapse of any valid claim included within the Licensed
        Patents.

7.2     PATENT ENFORCEMENT. Incyte shall have no obligation to take any action
        whether through the institution of legal proceedings or otherwise with
        respect to any infringement or suspected infringement of the Licensed
        Patents. Without prejudice to any separate agreement that may be or have
        been reached between the Parties, if Incyte in its sole discretion
        decides to take any such action against any Third Party it shall do so
        at its own cost, and Gene Logic shall have no claim to any sums received
        by Incyte in connection with taking any such action.

                                    ARTICLE 8
                       WARRANTIES AND WARRANTY DISCLAIMERS

8.1     REPRESENTATIONS AND WARRANTIES OF EACH PARTY. Each Party hereby
        represents and warrants to the other that:

        (a)     it is a corporation or entity duly organized and validly
                existing under the laws of the state or other jurisdiction
                of its incorporation or formation;

        (b)     the execution, delivery and performance of this Agreement by
                such Party has been duly authorized by all requisite corporate
                action and does not require any shareholder action or approval;

        (c)     it has the power and authority to execute and deliver this
                Agreement and to perform its obligations hereunder;

        (d)     the execution, delivery and performance by such Party of this
                Agreement and its compliance with the terms and provisions
                hereof does not and will not conflict with or result in a breach
                of any of the terms and provisions of or constitute a default
                under (a) a loan agreement, guaranty, financing




                                       8
<PAGE>

                agreement, agreement affecting a product or other agreement or
                instrument binding or affecting it or its property; (b) the
                provisions of its charter or operative documents or bylaws; or (
                c) any order, writ, injunction or decree of any court or
                governmental authority entered against it or by which any of its
                property is bound; and

        (e)     it shall at all times comply with all applicable material laws
                and regulations relating to its activities under this Agreement.

8.2     ADDITIONAL REPRESENTATIONS AND WARRANTIES OF INCYTE. In addition to the
        representations and warranties made by Incyte under Section 8.1 above,
        Incyte hereby further represents and warrants to Gene Logic that:

        (a)     as of the Effective Date, the Licensed Patents are existing and,
                to the best of its knowledge, those issued patents included
                within the Licensed Patents are not invalid or unenforceable, in
                whole or in part;

        (b)     it has the full right, power and authority to grant all of the
                right, title and interest in the licenses granted to Gene Logic
                under this Agreement; and

        (c)     it Controls the Licensed Patents and its grant of the licenses
                to Gene Logic hereunder does not violate the rights of any Third
                Party and does not and will not constitute a material breach or
                other violation of any agreement between Incyte and any Third
                Party.

8.3     LEGAL COUNSEL. Each Party hereby further represents and warrants to the
        other Party that it has been represented by legal counsel in connection
        with this Agreement and acknowledges that it has participated in the
        drafting hereof In interpreting and applying the terms and provisions of
        this Agreement, the Parties agree that no presumption shall exist or be
        implied against the Party which drafted such terms and provisions.

8.4     DISCLAIMER. Incyte makes no warranty, representation or undertaking:

        (a)     as to the efficacy or usefulness of the Licensed Patents or any
                discovery or invention covered thereby;

        (b)     that any pending patent application included within the Licensed
                Patents will proceed to grant of a patent;

        (c)     that the exploitation of the Licensed Patents, or the exercise
                of any rights licensed hereunder, will not infringe any
                intellectual property or other rights of any Third Party; or

        (d)     as imposing any obligation on Incyte to bring or prosecute
                actions or proceedings against Third Parties for infringement or
                to defend any actions or proceedings for revocation of any of
                the Licensed Patents.



                                       9
<PAGE>
        ADDITIONALLY, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ANY AND
        ALL RIGHTS LICENSED AND PATENTS MADE AVAILABLE BY INCYTE TO GENE LOGIC
        ARE LICENSED OR MADE AVAILABLE "AS IS". INCYTE MAKES NO REPRESENTATIONS
        OR WARRANTIES OF ANY KIND (OTHER THAN AS SET FORTH IN THIS ARTICLE 8)
        AND INCYTE DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
        ANY IMPLIED WARRANTIES OF QUALITY, MERCHANTABILITY, FITNESS FOR A
        PARTICULAR PURPOSE OR NONINFRINGEMENT.

                                    ARTICLE 9
                              TERM AND TERMINATION

9.1     TERM. This Agreement and the license granted under hereby shall be
        effective as of the Effective Date and unless terminated earlier in
        accordance with this Article 9 shall continue in force on a country by
        country basis until the last to expire of the Licensed Patents in such
        country.

9.2     TERMINATION FOR CAUSE. This Agreement may be terminated by written
        notice by either Party at any time during the term of this Agreement for
        a material breach by the other Party, which breach remains uncured for
        sixty (60) days from receipt of the written notice of breach. Gene Logic
        will not initiate any legal action based on any material breach alleged
        by Incyte for a period of seventy five (75) days after its receipt of
        notice of breach from Incyte. Incyte will not initiate any legal action
        based on any material breach alleged by Gene Logic for a period of
        seventy five (75) days after its receipt of notice of breach from Gene
        Logic. This Agreement may also be terminated by Incyte if Gene Logic,
        Gene Logic's Affiliates, or an entity acquiring Gene Logic infringes any
        of the Layton Patents outside the scope of the Layton Field of Use
        Activities, or induces End Users to infringe any of the Layton Patents.
        If Gene Logic disputes any claim by Incyte that Gene Logic has
        materially breached this Agreement, and if a court subsequently
        determines that Gene Logic materially breached this Agreement, then the
        license granted under this Agreement shall terminate, and Gene Logic
        shall immediately pay Incyte liquidated damages in the amount of . . .
        *** . . . dollars ($. . . *** . . .), in addition to any other remedies
        available to Incyte at law or in equity. If Gene Logic disputes any
        claim by Incyte that Gene Logic has materially breached this Agreement,
        and if a court subsequently determines that Gene Logic has not
        materially breached this Agreement or if Gene Logic claims that Incyte
        has materially breached this Agreement and Incyte disputes same, and a
        court subsequently determines that Incyte has materially breached this
        Agreement, then the licenses granted under this Agreement shall remain
        in effect pursuant to the terms of this Agreement, and Incyte shall
        immediately pay Gene Logic . . . *** . . . dollars ($. . . *** . .
        .), in addition to any other remedies available to Gene Logic at law or
        inequity. If Gene Logic claims that Incyte has materially breached this
        Agreement and Incyte disputes same, and a Court subsequently determines
        that Incyte has not materially breached this Agreement,

*** CONFIDENTIAL TREATMENT REQUESTED

                                       10
<PAGE>

        then Gene Logic shall immediately pay Incyte . . . *** . . . dollars
        ($. . . *** . . .)in addition to any other remedies available to
        Incyte at law or equity.

9.3     EFFECTS OF TERMINATION. No termination of this Agreement shall in any
        way affect Gene Logic's obligations pursuant to Article 3 to pay the
        amounts specified prior to such termination of this Agreement.
        Furthermore, no termination of this Agreement shall in any way affect
        (i) the obligations of Gene Logic under Sections 4.5, 4.6 and 4.7 if
        this Agreement is terminated based on a material breach by Gene Logic,
        or (ii) the Parties' respective obligations under Articles 6, 10 and 11.

                                   ARTICLE 10
                                 INDEMNIFICATION

10.1    INDEMNIFICATION BY GENE LOGIC. Gene Logic shall defend, indemnify and
        hold Incyte its directors, officers and employees (each an "Incyte
        Indemnified Party") harmless from all losses, liabilities, damages and
        expenses, including reasonable attorneys' fees and costs (collectively,
        a "Liability") which the Incyte Indemnified Party may incur, suffer or
        be required to pay resulting from or arising in connection with any
        claims, demands, actions or other proceedings by any Third Party based
        upon (a) any breach of any representation, warranty or covenant of Gene
        Logic under this Agreement, or (b) any use by or on behalf of Gene Logic
        of the Licensed Patents. Notwithstanding the foregoing, Gene Logic shall
        have no obligation under this Agreement to indemnify, defend or hold
        harmless any Incyte Indemnified Party with respect to claims, demands,
        costs or judgments which result from willful misconduct or negligent
        acts or omissions of Incyte, its affiliates, or any of their respective
        employees, officers, directors or agents.

10.2    INDEMNIFICATION BY INCYTE. Incyte shall defend, indemnify and hold Gene
        Logic, its Affiliates and each or their respective directors, officers
        and employees ( each an "Gene Logic Indemnified Party") harmless from
        any and all Liabilities which the Gene Logic Indemnified Party may
        incur, suffer or be required to pay resulting from or arising in
        connection with any claims, demands, actions or other proceedings by any
        Third Party based upon any breach of any representation, warranty or
        covenant of Incyte under this Agreement. Notwithstanding the foregoing,
        Incyte shall have no obligation under this Agreement to indemnify,
        defend or hold harmless any Gene Logic Indemnified Party with respect to
        claims, demands, costs or judgments which result from willful misconduct
        or negligent acts or omissions of Gene Logic, its Affiliates, or any of
        their respective employees, officers, directors or agents.

10.3    CONDITIONS TO INDEMNIFICATION. The obligations of the indemnifying Party
        under Sections 10.1 and 10.2 are conditioned upon the delivery of
        written notice to the indemnifying Party of any potential Liability
        promptly after the indemnified Party becomes aware of such potential
        Liability. The indemnifying Party shall have the right to assume the
        defense of any suit or claim related to the Liability if it has assumed
        responsibility for the suit or claim in writing; however,

*** CONFIDENTIAL TREATMENT REQUESTED

                                       11
<PAGE>

        if in the reasonable judgment of the indemnified Party, such suit or
        claim involves an issue or matter which could have a materially adverse
        effect on the business operations or assets of the indemnified Party,
        the indemnified Party may waive its rights to indemnity under this
        Agreement and control the defense or settlement thereof, but in no event
        shall any such waiver be construed as a waiver of any indemnification
        rights such Party may have at law or in equity. If the indemnifying
        Party defends the suit or claim, the indemnified Party may participate
        in (but not control) the defense thereof at its sole cost and expense.

10.4    SETTLEMENTS. Neither Party may settle a claim or action related to a
        Liability without the consent of the other Party, if such settlement
        would impose any monetary obligation on the other Party or require the
        other Party to submit to an injunction or otherwise limit the other
        Party's rights under this Agreement. Any payment made by a Party to
        settle any such claim or action shall be at its own cost and expense.

                                   ARTICLE 11
                                  MISCELLANEOUS

11.1    WAIVER. No failure or delay on the part of either Party to exercise any
        right or remedy under this Agreement shall be construed or operate as a
        waiver thereof, nor shall any single or partial exercise of any right or
        remedy preclude the further exercise of such right or remedy.

11.2    INDEPENDENT CONTRACTORS. It is understood that both Parties hereto are
        independent contractors and are engaged in the operation of their own
        respective businesses, and neither Party hereto is to be considered the
        agent or partner of the other Party for any purpose whatsoever. Neither
        Party has any authority to enter into any contracts or assume any
        obligations for the other Party or make any warranties or
        representations on behalf of the other Party. Neither Party shall act or
        describe itself as the agent of the other, nor shall it make or
        represent that it has authority to make any commitments on the other's
        behalf.

11.3    NOTICES. Any consent, notice or report required or permitted to be given
        or made under this Agreement by one of the Parties hereto to the other
        Party shall be in writing, sent to such other Party at its address and
        fax number indicated below, or to such other address as the addressee
        shall have last furnished in writing to the addresser, and shall be
        effective upon receipt by the addressee.



                                       12
<PAGE>

If to Incyte:               Incyte Genomics, Inc.
                            3174 Porter Drive
                            Palo Alto, California 94303
                            Attention: Lee Bendekgey, General Counsel
                            Fax: 650-845-4166

If to Gene Logic:           Gene Logic Inc.
                            708 Quince Orchard Road
                            Gaithersburg, Maryland 20878
                            Attention: J. Barry Buzogany, Esq., General Counsel
                            Fax: 301-987-1863

11.4    ANNOUNCEMENTS; USE OF NAMES. Incyte and Gene Logic each intend to
        separately announce the existence of this Agreement promptly following
        its execution in the forms attached as Exhibit C, subject to prior
        mutual written approval of any such announcement, which approval will
        not be unreasonably withheld. Except as contemplated by the last
        sentence or as may otherwise be required by law or regulation, neither
        Party shall make any public announcement concerning this Agreement or
        the subject matter hereof without the prior written consent of the other
        Party. In particular, and subject to the terms of this Section 11.4,
        neither party shall make any public announcement or public disclosure
        about the nature and content of this Agreement beyond the scope of the
        statement attached as Exhibit C; and any failure of a party to abide by
        such restriction shall be considered a material breach of this
        Agreement. If this Agreement is determined to be material to the
        business of Incyte (or Gene Logic) so that its disclosure is required by
        law or regulation, Gene Logic ( or Incyte) shall have the right to
        review and comment on the text of the disclosure prior to its release to
        the public or the filing with any government agency and the Party making
        such disclosure or filing agrees, at its own expense, to seek
        confidential treatment of those portions of this Agreement or such
        terms, as may be reasonably requested by the other Party.

11.5    PATENT MARKINGS AND LABELS. Gene Logic agrees to mark any database,
        other product or service of Gene Logic that is subject to this
        Agreement, with appropriate patent notices with respect to the Licensed
        Patents as may be reasonably requested by Incyte.

11.6    ENTIRE AGREEMENT. This Agreement sets out the entire agreement and
        understanding between the Parties relating to its subject matter and
        supersedes all prior oral or written representations, agreements,
        arrangements or understandings between them relating to such subject
        matter.

11.7    ASSIGNMENT BY GENE LOGIC. Gene Logic shall not directly or indirectly
        assign or otherwise transfer any of its rights or obligations under this
        Agreement, in whole or in part, whether voluntarily, by operation of law
        or otherwise, to any Third Party without Incyte's prior written consent.
        Notwithstanding the foregoing, Gene Logic may, without Incyte's consent,
        assign its rights and



                                       13
<PAGE>

        obligations hereunder to a successor to substantially all of the
        business of Gene Logic, other than the entities listed below, whether in
        a merger, sale of stock, sale of assets or other transaction, provided
        that the licenses granted under this Agreement shall apply only to the
        continued operation of Gene Logic's business as conducted prior to the
        closing of such merger, sale of stock, sale of assets or other
        transaction, and to no other activities of the successor entity, and
        provided that the terms of Sections 4.3 and 4.4 shall be of no force or
        effect if this Agreement is assigned or transferred to such successor
        entity. Under no circumstances will Gene Logic have the right to assign
        any rights under this Agreement to any individual or corporate entity
        which is involved in litigation concerning the Licensed Patents or has
        threatened in writing Incyte or Incyte's affiliates or any entity
        acquiring Incyte with litigation concerning the Licensed Patents. In
        addition, under no circumstances shall Gene Logic have the right to
        assign any rights or obligations under this Agreement to Affymetrix,
        Perlegen or Applera. Any purported assignment or transfer in violation
        of this Section 11.7 shall be void.

11.8    ASSIGNMENT BY INCYTE. Incyte may directly or indirectly assign or
        otherwise transfer any of its rights or obligations under this
        Agreement, in whole or in part, whether voluntarily, by operation of law
        or otherwise, to any Third Party without Gene Logic's consent.

11.9    GOVERNING LAW. This Agreement shall be governed by and construed in
        accordance with the local laws of the State of California, USA, without
        regard to the conflicts of law principles thereof.

11.10   PARTIAL INVALIDITY. If and to the extent that any court or tribunal of
        competent jurisdiction holds any of the terms or provisions of this
        Agreement, or the application thereof to any circumstances, to be
        invalid or unenforceable in a final nonappealable order, the Parties
        shall use their best efforts to reform the portions of this Agreement
        declared invalid to realize the intent of the Parties as fully as
        practicable, and the remainder of this Agreement and the application of
        such invalid term or provision to circumstances other than those as to
        which it is held invalid or unenforceable shall not be affected thereby,
        and each of the remaining terms and provisions of this Agreement shall
        remain valid and enforceable to the fullest extent of the law.

11.11   HEADINGS. The headings appearing herein have been inserted solely for
        the convenience of the Parties hereto and shall not affect the
        construction, meaning or interpretation of this Agreement or any of its
        terms and conditions.

11.12   FORCE MAJEURE. No failure or omission by the Parties hereto in the
        performance of any obligation of this Agreement (other than non-payment)
        shall be deemed a breach of this Agreement nor shall it create any
        liability if the same shall arise from any cause or causes beyond the
        reasonable control of the affected Party, including, but not limited to,
        the following, which for purposes of this Agreement shall be regarded as
        beyond the control of the Party in question: acts of nature;



                                       14
<PAGE>

        acts or omissions of any government; any rules, regulations, or orders
        issued by any governmental authority or by any officer, department,
        agency or instrumentality thereof; fire; storm; flood; earthquake;
        plague of epic proportion; accident; war; rebellion; insurrection; riot;
        invasion; strikes; and labor lockouts; provided that the Party so
        affected shall use its reasonable efforts to avoid or remove such causes
        of nonperformance and shall continue performance hereunder with the
        utmost dispatch whenever such causes are removed.

11.13   AMENDMENTS. No amendment, change, modification or alteration of the
        terms and conditions of this Agreement shall be binding upon either
        Party unless in writing and signed by the Party to be charged.

11.14   COUNTERPARTS. This Agreement may be executed in any number of
        counterparts, each of which shall be deemed an original and all of which
        together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties have executed this agreement as of the date
first set forth above.



GENE LOGIC, INC.


Signature:   /s/ Mark D. Gessler
          ------------------------------
             Mark D. Gessler
             President and Chief Executive Officer





INCYTE GENOMICS, INC.



Signature:   /s/ Lee Bendekgey
          ------------------------------
             Lee Bendekgey
             Exec Vice President, Corporate Secretary



                                       15
<PAGE>

                                LIST OF EXHIBITS


EXHIBIT A--STIPULATION AND [PROPOSED] ORDER OF DISMISSAL OF THE ACTIONS

EXHIBIT B--LIST OF DOCUMENTS AND DEPOSITION TRANSCRIPTS

EXHIBIT C--PRESS RELEASE











                                       16