Sample Business Contracts

cc:

Schering Corporation

RE:

Termination and Release of Collaborative Agreements, GEM Services Agreement and Custom Sequencing Services Agreement

(i)

the two Collaborative Agreements, each dated as of September 30, 1998, by and between Incyte Genomics, Inc., formerly known as Incyte Pharmaceuticals, Inc. (“Incyte”), and each of Schering-Plough Ltd. (“SPL”) and Schering Corporation (“SC”), respectively, and each as amended on November 14, 2000 (collectively, the “Collaborative Agreements”);

(ii)

the Incyte Custom Sequencing Services Agreement, dated as of September 25, 2001, by and between Incyte and Schering-Plough Research Institute (“SPRI”) (the “Sequencing Agreement”); and

(iii)

the GEM Services Agreement, dated as of September 30, 1998, by and between Incyte and SPRI, as amended on November 14, 2000 (the “GEM Agreement”)

1.

Effective as of the last date of signature appearing below (the “Termination Date”), the parties hereby terminate the Agreements in their entirety. Except as expressly set forth in this letter of agreement, no provisions of any of the Agreements (including any provisions therein that are expressly identified in the Agreements as surviving termination) shall be of any further force or effect. Without limiting the foregoing, and for clarification purposes only, the parties agree that, as of the Termination Date:

All licenses and other rights (including without limitation all licenses granted pursuant to Section 3 of the Collaborative Agreements) granted pursuant to the Agreements are hereby rescinded.

Incyte shall own all right, title and interest in and to the Gene Products and the Incyte Technology provided to SPL and SC, or their Affiliates, under the Collaborative Agreements.

2.

Except as expressly set forth in paragraph A.5 of this letter of agreement, nothing herein shall be construed as granting or conveying (by implication, estoppel or otherwise) (i) to Schering or its Affiliates any license, title or other right in or to any of Incyte’s patent applications, patents, trademarks or other intellectual property of Incyte (including without limitation the Incyte Patent Rights and Incyte Know-How), or (ii) to Incyte or its Affiliates any license, title or other right in or to any of Schering’s patent applications, patents, trademarks or other intellectual property.

3.

Schering hereby represents and warrants to Incyte that as of the Termination Date Schering and its Affiliates does not have any ongoing research and development programs ***. Schering further represents and warrants to Incyte that as of the Termination Date it has not discovered or developed any Products through use of the ***.

4.

Effective as of the Termination Date, Schering shall (i) immediately discontinue any and all use of all LifeSeq Database Products and Database Information, (ii) promptly remove the LifeSeq Database Products from each Installation Site and Remote Site, and (iii) promptly return to Incyte and/or destroy and certify in writing to Incyte as to such destruction, all copies of the LifeSeq Database Products and Database Information in its possession or control, including all components thereof.

5.

Schering and its Affiliates shall retain the right to use any and all data, information and materials received from Incyte under the GEM Services Agreement or the Sequencing Agreement for any and all purposes. This will include, without limitation, the right to retain and use data and information (including data and information derived from LifeSeq Database Products) necessary to identify the sequences of the GEM Elements contained in any GEM Arrays provided to Schering under the GEM Services Agreement.

6.

The parties’ rights and obligations under Sections 4.4, 7, 8 and 9 of the GEM Services Agreement and under Sections 2, 3 and 4 of the Sequencing Agreement shall survive and remain in full force and effect after the Termination Date.

1.

In consideration for the releases granted by Schering hereunder, Incyte shall pay to Schering a total of *** U.S. dollars (USD $ ***). Such amount shall be payable in *** equal installments of *** dollars each ***, with the *** such payment due within three (3) business days after the Termination Date and the *** payment due on or before ***. All such payments shall be made by wire transfer of immediately available funds to an account designated by Schering.

1.

Schering, on behalf of itself, its Affiliates, and its and their respective officers, directors, employees, agents, successors and assigns hereby forever and irrevocably releases and discharges Incyte, its Affiliates, and its and their respective officers, directors, employees, agents, successors and assigns from and against any and all suits, claims, counterclaims, causes of action or demands arising out of, in connection with, or relating to, any of the Agreements which Schering has asserted or could have asserted under the Agreements, and with respect to all debts, costs, expenses, damages, losses, injuries and liabilities, of whatever kind or nature, in law or equity, related thereto.

2.

Incyte, on behalf of itself, its Affiliates, and its and their respective officers, directors, employees, agents, successors and assigns hereby forever and irrevocably releases and discharges Schering, its Affiliates, and its and their respective officers, directors, employees, agents, successors and assigns from and

against any and all suits, claims, counterclaims, causes of action or demands arising out of, in connection with, or relating to, any of the Agreements which Incyte has asserted or could have asserted under the Agreements, and with respect to all debts, costs, expenses, damages, losses, injuries and liabilities, of whatever kind or nature, in law or equity, related thereto.

3.

The parties have each been fully advised of the contents of Section 1542 of the Civil Code of the State of California (“§1542”), which reads as follows:

1.

This letter of agreement may be executed in counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same document.

2.

None of the parties shall make any press release, disclosure or other form of public statement or disclose to any third party the existence, or the terms and conditions, of this letter of agreement without the prior written consent of the other parties, except to the extent specifically required by law or regulation, or where the specific content of the public statement or disclosure is already public knowledge.

3.

This letter of agreement shall be governed, interpreted and construed for all purposes in accordance with the laws of the State of Delaware, without reference to the conflicts of law principles thereof.

4.

This letter of agreement constitutes and contains the entire understanding of the parties, and cancels and supersedes any and all prior agreements, understandings, representations or negotiations, whether written or verbal, between the parties with respect to the subject matter hereof.