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                                                                   Exhibit 10.31

THIS AGREEMENT is made on 16 March, 2000


BETWEEN

(1)   OXFORD GENE TECHNOLOGY IP LIMITED a company incorporated in England and
      Wales under number 3845467, whose registered office is at 12 School Road,
      Kidlington, Oxford OX5 2HB, England ("OGT"); and

(2)   ROSETTA INPHARMATICS, INC., a Delaware corporation whose principal
      executive offices are at 12040 115th Ave, NE, Kirkland, WA 98034, USA
      ("ROSETTA")

RECITALS

(A)   OGT controls patents and pending applications relating to Nucleic Acid
      Arrays (as defined herein) and related technology.

(B)   OGT has agreed to grant and Rosetta has agreed to take a license under
      such patents subject to and in accordance with the terms of this
      Agreement.

(C)   Rosetta has exclusively licensed to Agilent Technologies, Inc., a Delaware
      corporation (as successor in interest to certain holdings of the
      Hewlett-Packard Company) ("AGILENT"), certain Inkjet Patents pursuant to
      that certain Gene Expression Collaboration Agreement dated as of October
      1, 1999 (the "ROSETTA/AGILENT COLLABORATION AGREEMENT") between Rosetta
      and Agilent.

(D)   Agilent may, with the consent of Rosetta and pursuant to the
      Rosetta/Agilent Collaboration Agreement, sublicense certain of its rights
      in, to and under the Inkjet Patents.

(E)   Oxford Gene Technology (operations) Ltd. ("OGT OPERATIONS") (a
      Wholly-owned Subsidiary of OGT) and Agilent have entered into a Supply
      Agreement and License dated as of December 6, 1999 (the "OGT/AGILENT
      AGREEMENT") pursuant to which Agilent has, subject to the consent of
      Rosetta, sublicensed certain of its rights in, to and under the Inkjet
      Patents.

(F)   Rosetta will consent to the sublicense to OGT Operations by Agilent of
      certain rights in, to and under the Inkjet Patents subject to and in
      accordance with the terms and conditions of this Agreement.

OPERATIVE PROVISIONS

1. DEFINITIONS AND INTERPRETATIONS

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

      "AFFILIATE" of a Party means any present or future Entity that Controls,
      is Controlled by, or is under the Control of the same Entity or Entities
      as, the Party, but only for so long as such Control continues;

      "ARRAY MAKER" means a device designed to fabricate Nucleic Acid Arrays;

      "CALENDAR QUARTER" means a period of three months ending on 31 March, 30
      June, 30 September or 31 December;

      "CONTROL(S)(LED)" means with respect to an Entity, the possession,
      directly or indirectly, of more than fifty per cent (50%) of the issued
      share capital or other issued stock or securities of, or the voting power
      in, such Entity;

      "COVERED BY A VALID CLAIM" means, in relation to a product, that its
      manufacture, importation, Supply or use would, and in relation to a
      process, that its practice would, but for the licenses herein or, in the
      case of OGT, but for the licenses in the OGT/Agilent Agreement, infringe a
      Valid Claim;

      "DATABASE" means a collection of information derived from one or more
      Nucleic Acid Arrays, which is licensed for value to multiple third
      parties, but does not include a database for internal use exclusively by
      an Entity;

      "EFFECTIVE DATE" means the date first set forth above;

      "END-USER" means an end-user of Royalty-Bearing Services Supplied by
      Rosetta;

      "ENTITY" means any natural or legal person, partnership, association or
      governmental authority;

      "EXCLUDED FIELDS" means any of the following activities:

            (a)   the use of a [***]

            (b)   the exercise of any of the rights licensed under this
                  Agreement for the purposes of [***]; and

            (c)   [***]

      "INCYTE EXPRESSION DATABASE" means a Database consisting entirely or
      substantially of gene expression data and containing at least five hundred
      data points, where a single data point is data relating to the level of
      expression of one gene in one sample;

      "INKJET DEPOSITION" means a method for the fabrication of Nucleic Acid
      Arrays on a solid support by deposition of a pre-synthesized
      oligonucleotide on such solid support


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

                                       2
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      at a specific location using an inkjet printing device to deliver to
      defined locations on the surface of the solid support such pre-synthesized
      oligonucleotides;

      "IN-SITU INKJET SYNTHESIS" means a method for the fabrication of Nucleic
      Acid Arrays on a solid support by synthesizing by chemical means
      individual nucleic acids directly on such solid support at specific
      locations on the Nucleic Acid Array using an inkjet printing device to
      deliver to defined locations on the surface of the solid support
      precursors for or reagents which allow mononucleotide additions.

      "INSTRUMENT" means readers, fluids stations, hybridization devices, sample
      logging, handling and processing systems, detection and measurement
      equipment, computer work stations (and associated software) and other
      instruments or systems used in the preparation or use of Nucleic Acid
      Arrays or the extraction or processing of data from Nucleic Acid Arrays;

      "INKJET PATENTS" means all the rights held by Rosetta on the date of the
      OGT/Agilent Agreement or acquired by Rosetta during the term of the
      OGT/Agilent Agreement which are licensed to Agilent under the
      Rosetta/Agilent Collaboration Agreement and which cover instrumentation
      and methods for making Nucleic Acid Arrays. Inkjet Patents includes
      patents required for the general use of an Array Maker to make Nucleic
      Acid Arrays but excludes patents relating to particular Nucleic Acid
      Arrays, Nucleic Acid Array or probe design, or probe sequences, provided,
      however, if the Inkjet Patents are licensed to OGT Operations or any
      successor to its business under Clauses 4.3 or 4.4, the reference to the
      term of the OGT/Agilent Agreement shall be to the Term;

      "LICENSED PROCESS" means any process, method or procedure which is Covered
      by a Valid Claim;

      "LICENSED PRODUCT" means a Nucleic Acid Array and any component thereof,
      an Instrument, kit, reagent, computer software or other product, apparatus
      or composition of matter of whatever nature which is Covered by a Valid
      Claim, but not including a Database or other information (other than a
      Database or information which is an integral part of a product);

      "NET SALES" means amounts invoiced by Rosetta or OGT, as the case may be,
      or an Affiliate of either on all arm's-length sales of Royalty Bearing
      Services to a party which is not an Affiliate of the supplying Party, less
      the following deductions from such gross amounts which are actually
      incurred, to the extent that they are reasonable and customary:

            (a)   credits or allowances actually granted, rejection of results
                  derived from the Supply of Royalty Bearing Services, and
                  retroactive price reductions;

            (b)   freight, postage, shipping, customs duties and insurance
                  charges;

            (c)   normal and customary trade, cash and quantity discounts,
                  allowances and credits;


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

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            (d)   sales, value added or similar taxes measured by the invoice
                  amount, when included in invoice;

            (e)   charge back payments and rebates granted to managed health
                  care organizations or to federal, state and local governments,
                  their agencies, and purchasers and reimbursers;

            (f)   commissions paid to third parties other than sales personnel
                  and sale representatives or sales agents; and

            (g)   rebates (or equivalents thereof) granted to or charged by
                  national, state or local governmental authorities in countries
                  other than the United States.

      The value of Royalty-Bearing Services Supplied or used by Rosetta or OGT,
      as the case may be, or an Affiliate of either for quality control purposes
      shall not be included in the calculation of Net Sales. Net Sales will
      include technology access fees paid specifically in consideration of
      access to Royalty-Bearing Services.

      Except as otherwise provided above, if Rosetta or OGT, as the case may be,
      or an Affiliate of either makes any Supply to commercial third parties of
      Royalty-Bearing Services for other than monetary value in whole or in
      part, or otherwise than at arm's length, such Supply shall be considered a
      Supply hereunder for accounting and royalty purposes. Net Sales for any
      such non-monetary transfer shall be calculated using the average realised
      price for the Royalty-Bearing Service charged by Rosetta or OGT or their
      respective Affiliates, as the case may be, during the royalty-paying
      period in which such Supply occurs. If no such price is ascertainable, Net
      Sales will be the fully-burdened cost to Rosetta or OGT or their
      respective Affiliates, as the case may be, of providing the
      Royalty-Bearing Service multiplied by [***].

      Except as otherwise provided in Clause 6 hereof in respect of Rosetta, and
      Clause 7 hereof in respect of OGT, in the event that a Royalty-Bearing
      Service is Supplied in combination with other apparatus, products,
      services, software or information, or in any other combination, and the
      Royalty-Bearing Service is not separately valued on the invoice or other
      document evidencing such Supply, the Net Sales of the Royalty-Bearing
      Service shall be calculated using the price generally charged by Rosetta
      or OGT or their respective Affiliates, as the case may be, for the
      Royalty-Bearing Service during the royalty-paying period in question when
      Supplied separately. If both the Royalty-Bearing Service and the other
      components of the combination product or service may be invoiced
      separately but are being Supplied at a combination price which is less
      than the total if invoiced separately then the Net Sales of the
      Royalty-Bearing Service shall be calculated by multiplying the invoice
      amount for the combination by a fraction the numerator of which is the
      price generally charged by Rosetta or OGT or their respective Affiliates,
      as the case may be, for the Royalty-Bearing Service during the
      royalty-paying period in question, and the denominator of which is the sum
      of amounts generally charged by Rosetta or OGT or their respective
      Affiliates, as the case may be, for the Royalty-Bearing Service and such
      other components during the royalty-paying period in question. Where the
      Royalty-Bearing


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

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      Service has not previously been Supplied separately, does not have an
      invoice price and is Supplied in combination as above, then Net Sales for
      the purposes of calculating royalty will be calculated using the
      fully-burdened cost to Rosetta or OGT or their respective Affiliates, as
      the case may be, of providing of the Royalty-Bearing Service multiplied by
      [***];

      "NUCLEIC ACID ARRAY" means an array of nucleic acids attached to a solid
      support;

      "PATENT RIGHTS" means [***] and all continuations, continuations-in-part,
      divisionals, re-examinations and reissues, and any patents issuing
      therefrom or claiming common priority thereto, together with any other
      patents which issue to OGT, or which otherwise come into the ownership
      or under the control of OGT [***] and which OGT has the right to license,
      and which relate, but only to the extent that they relate, to the general
      use of Nucleic Acid Arrays, including methods for making or analyzing
      Nucleic Acid Arrays and for creating Rosetta Ratio-based Databases, but
      excluding therefrom any such patents that relate but only to the extent
      that they relate to instrumentation for the reading of Nucleic Acid
      Arrays, the design of probes for use on Nucleic Acid Arrays, particular
      sequences used on Nucleic Acid Arrays, software used in instrumentation
      for reading Nucleic Acid Arrays or in probe design, microfluidics or the
      control or assurance of the quality of Nucleic Acid Arrays;

      "ROSETTA RATIO-BASED DATABASE" means a Database containing relative levels
      of expressed genes within or between cells wherein such Database may be
      built from data where measurements from one RNA sample are compared with
      those from another RNA sample; provided, however, a Rosetta Ratio-based
      Database shall in no event include an Incyte Expression Database;

      "RESOLVER SOFTWARE" means Rosetta's software package with the features set
      forth in EXHIBIT A;

      "ROYALTY-BEARING SERVICE" means any service which comprises the use by the
      provider of the service of one or more Licensed Processes or Licensed
      Products, including the licensing or Supply of, or rendition of services
      related to, Rosetta Ratio-based Databases or other information which was
      generated or a substantial proportion of which was generated by the use of
      one or more Licensed Products or Licensed Processes;

      "SUPPL(Y)(IED)(YING)" means sell, supply, lend, let out on hire, lease or
      any other disposal, and in the case of services, includes the provision of
      access to information;

      "TERM" means the period of time from the Effective Date to and
      including the date of the last to expire of [***] and all
      continuations, continuations-in-part, divisionals, re-examinations and
      reissues, and any patents issuing therefrom or claiming common priority
      thereto;

* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

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      "VALID CLAIM" means a claim of an issued and subsisting patent in the OGT
      Patent Rights or the Inkjet Patents, as the case may be, which claim has
      not been finally held to be invalid or unenforceable in a proceeding from
      which no further appeal may be taken within the time limit for taking such
      appeal; and

      "WHOLLY-OWNED SUBSIDIARY" of a Party means an Entity of which the Party
      possesses, directly or indirectly, one hundred per cent (100%) (or the
      maximum amount permitted by law) of the issued share capital or other
      issued stock or securities, or the voting power, but only while such
      possession continues.

1.2 In this Agreement:

      (a)   references to clauses are to the clauses of this Agreement;

      (b)   references to the Parties are to the parties to this Agreement;

      (c)   headings are used for convenience only and do not affect its
            interpretation;

      (d)   references to the singular include the plural and vice versa;

      (e)   references to the masculine include the feminine;

      (f)   references to a statutory provision include references to the
            statutory provision as modified or re-enacted or both from time to
            time and to any subordinate legislation made under the statutory
            provision; and

      (g)   references to the agreed form mean to a form agreed between the
            parties prior to the date hereof and initialed by each of them.

2.    GRANT OF RIGHTS TO ROSETTA BY OGT

2.1   Subject to the terms of this Agreement, OGT hereby grants to Rosetta and
      Rosetta accepts, a non-exclusive, royalty-bearing, worldwide sub-license
      under the OGT Patent Rights to manufacture, have manufactured and use
      Nucleic Acid Arrays for internal purposes only, to create and contribute
      to the creation of Rosetta Ratio-based Databases, and to Supply and offer
      for Supply Royalty-Bearing Services, in each case in all fields other than
      the Excluded Fields.

2.2   OGT will on or about each anniversary of the Effective Date notify Rosetta
      in writing of any patents in the OGT Patent Rights which have issued or
      been granted in the preceding 12 months. Any failure to so notify Rosetta
      will have no effect on the rights granted hereunder.

2.3   No implied right or license is granted to Rosetta under the OGT Patent
      Rights, including the right to grant sub-licenses. Other than as expressly
      granted herein, no licenses or right to grant sub-licenses either by
      estoppel, implication or otherwise are granted herein.


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

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2.4   The licenses and other rights granted to Rosetta under this Agreement
      extend to all Wholly-owned Subsidiaries of Rosetta, subject to such
      Wholly-owned Subsidiaries undertaking in writing to OGT to accept all
      corresponding obligations, exceptions and limitations. In particular,
      Rosetta undertakes not to carry out during the Term any activities which
      fall within the Excluded Fields.

3.    ROSETTA CONSENT TO SUBLICENSE UNDER OGT/AGILENT AGREEMENT

3.1   Subject to the terms of this Agreement, Rosetta hereby consents to the
      sublicense to OGT Operations by Agilent under the OGT/Agilent Agreement of
      certain of Agilent's rights in, to and under the Inkjet Patents, but only
      to the extent of the licenses granted in the OGT/Agilent Agreement.

3.2   Rosetta will on or about each anniversary of the Effective Date notify OGT
      in writing of any patents in the Inkjet Patents which have issued or been
      granted in the preceding 12 months. Any failure to so notify Rosetta will
      have no effect on the rights granted under the OGT/Agilent Agreement.

3.3   No implied right or license is granted to OGT under the Inkjet Patents,
      nor is any consent given hereby to a sublicense to the Inkjet Patents. No
      license or right to grant sub-licenses either by estoppel, implication or
      otherwise are granted nor is any consent to a further sublicense granted
      hereby.

3.4   The consent provided by Rosetta to the sublicense to OGT Operations by
      Agilent hereunder shall extend to all Wholly-owned Subsidiaries of OGT,
      subject to such Wholly-owned Subsidiaries undertaking in writing to
      Rosetta to accept all corresponding obligations, exceptions and
      limitations.

4.    ROSETTA'S OBLIGATIONS

4.1   In Rosetta's contracts with End-Users of Royalty-Bearing Services,
      End-Users shall agree not to sell, or otherwise provide to any third party
      in exchange for value, data derived from or contained in any Rosetta
      Ratio-based Database created by Rosetta, or of which Rosetta substantially
      contributed to the creation ("END-USER DATA"); provided, however, nothing
      herein shall be construed as preventing or restricting an End-User's right
      to provide access to End-User Data to a third party with which such
      End-User has a Collaboration, or if the End-User Data is intended by the
      End-User for use in the diagnosis and monitoring of a human disease, state
      or condition of a particular person. A "Collaboration," as used herein,
      means a bona fide scientific collaboration between an End-User and a third
      party under a written contract and research plan in a specified area, in
      which (a) such third party receives biological materials and/or
      proprietary information of End-User or End-User receives biological
      materials and/or proprietary information of the third party, (b) End-User
      obtains significant proprietary rights if significant intellectual
      property is generated in the collaboration, (c) the collaboration is
      within End-User's normal business model but only to the extent End-User's
      normal business model does not include the provision of


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

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      nucleic acid hybridization services or products or database distribution
      services or products for third parties, (d) End-User and its collaborator
      provide significant scientific input to the collaboration in addition to
      End-User Data, wherein significant scientific input includes, for example,
      material input to experimental design, material contributions to
      experimental execution and material data analysis and (e) the End-User
      Data are used primarily to facilitate End-User's research, development, or
      commercialization of particular molecules, classes of molecule, or
      therapeutic areas. A Collaboration shall not include an arrangement in
      which an End-User provides Royalty-Bearing Services on a fee-for-service
      or similar basis.

4.2   Except as otherwise provided below, Rosetta agrees to indemnify and hold
      OGT harmless from and against any losses, liabilities, damages and
      expenses (including reasonable attorney's fees and costs) suffered or
      incurred, and claims made, in connection with third party claims, demands,
      actions or other proceedings for personal injuries or any product recall
      to the extent caused by (a) any and all uses or Supply of Royalty-Bearing
      Services by Rosetta or its Affiliates, (b) any manufacturing defect in any
      Licensed Products manufactured by or on behalf of Rosetta or (c) any other
      act or omission of Rosetta in connection with the Supply of
      Royalty-Bearing Services except to the extent such losses, liabilities,
      damages and expenses (including reasonable attorney's fees and costs)
      result from the recklessness or intentional misconduct of OGT.

4.3   In the event that for any reason the OGT/Agilent Agreement shall terminate
      or expire, Rosetta shall, to the extent that it shall not at such time be
      prohibited, contractually or otherwise, license to OGT Operations or any
      successor to its business the Inkjet Patents on the same terms and
      conditions as the consent provided for herein for a period equal to the
      remainder of the Term hereunder.

4.4   Rosetta shall provide notice to OGT promptly upon any expiration or
      termination of the Rosetta/Agilent Collaboration Agreement, and upon any
      such expiration or termination Rosetta shall, to the extent that it shall
      not at such time be prohibited, contractually or otherwise, license to OGT
      Operations or any successor to its business the Inkjet Patents on the same
      terms and conditions as the consent provided for herein for a period equal
      to the remainder of the Term.

4.5   Rosetta agrees to license to OGT Operations on the same terms as the
      Inkjet Patents (including Clause 13.2), for the Term, all patents or other
      intellectual property rights which it owns or controls during the Term
      (other than the Inkjet Patents) which cover, but only to the extent that
      they cover, instrumentation and methods for making Nucleic Acid Arrays,
      but not including any patent rights which cover, but only to the extent
      they cover, instrumentation for the reading of Nucleic Acid Arrays, the
      design of probes for use on Nucleic Acid Arrays, particular sequences used
      on Nucleic Acid Arrays, software used in instrumentation for reading
      Nucleic Acid Arrays or in probe design, microfluidics or the control or
      assurance of the quality of Nucleic Acid Arrays.

4.6   Rosetta agrees to comply promptly and in full with all requests by Agilent
      made pursuant to and in accordance with the Rosetta/Agilent Collaboration
      Agreement to enable Agilent to comply with its relevant obligations to OGT
      Operations under the


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

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      OGT/Agilent Agreement, including in the manufacture and supply of Array
      Makers and the provision of technical support in relation to such Array
      Makers, subject to OGT complying with its corresponding obligations.
      Rosetta further agrees with OGT itself to comply with such obligations of
      Agilent under the OGT/Agilent Agreement both during the subsistence of
      that Agreement and in the event that that Agreement is terminated for any
      reason, subject always to OGT complying with its correponding obligations.

5.    OGT'S OBLIGATIONS

5.1   Except as otherwise provided below, OGT agrees to indemnify and hold
      Rosetta harmless from and against any losses, liabilities, damages and
      expenses (including reasonable attorney's fees and costs) suffered or
      incurred, and claims made, in connection with third party claims, demands,
      actions or other proceedings to the extent caused by (a) any and all uses
      of Inkjet Patents by OGT or its Affiliates, (b) any manufacturing defect
      in any Licensed Products manufactured by or on behalf of OGT or its
      Affiliates or (c) any other act or omission of OGT or its Affiliates in
      connection with the use of Licensed Products or the Supply of
      Royalty-Bearing Services except to the extent such losses, liabilities,
      damages and expenses (including reasonable attorney's fees and costs)
      result from the recklessness or intentional misconduct of Rosetta.

5.2   OGT agrees to cause OGT Operations to strictly abide by the terms and
      conditions of the OGT/Agilent Agreement, and OGT agrees to provide notice
      to Rosetta promptly upon any expiration or termination of the OGT/Agilent
      Agreement. In no event will OGT use, or permit its Affiliates to use, any
      process or method Covered by a Valid Claim of the Inkjet Patents to
      fabricate for supply to any single third party customer during any
      calendar year greater than [***] Nucleic Acid Arrays of a single design as
      those terms are further elaborated in the OGT/Agilent Agreement.

5.3   [***]

6.    CONSIDERATION PAID BY ROSETTA

6.1   Within seven days after the Effective Date, Rosetta will pay to OGT a
      licence fee in the sum of [***]. The licence fee will not be creditable
      against royalty or other payments due to OGT under this Agreement. In
      addition, Rosetta will within seven days after the Effective Date,
      pursuant to the Common Stock Issuance Agreement attached hereto as
      EXHIBIT B, issue to OGT [***] shares of its common stock, par value
      $0.001.

* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

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6.2   Rosetta shall pay to OGT (i) [***] related to the Supply by Rosetta of
      Royalty Bearing Services substantially all of which consist of the
      generation of data derived directly from Nucleic Acid Arrays and the
      supply of such data to a single user and (ii) [***] related to the
      Supply by Rosetta of all other Royalty Bearing Services whether or not
      provided with Rosetta software, tools, annotated information or other
      economically material services.

6.3   Rosetta will on request provide to OGT, at Rosetta's fully-burdened cost,
      one copy of its Resolver Software for use by OGT for one year from the
      date of delivery to OGT, and all maintenance related to such Resolver
      Software will be provided to OGT by Rosetta without charge during such
      one-year period. In addition, Rosetta will provide at the time of delivery
      of the Resolver Software to OGT, at Rosetta's fully-burden cost, all
      third-party hardware and software configurations necessary for operation
      of the Resolver Software. If OGT shall elect to continue its use and
      operation of Resolver Software beyond a period of one year from its
      delivery to OGT, Rosetta shall provide maintenance and support services to
      OGT at such rates as shall be consistent with licenses of Resolver
      Software to licensees similarly situated to OGT.

6.4   If during the Term it is necessary or desirable for Rosetta to obtain a
      license from any third party ("THIRD PARTY LICENSE") other than an
      Affiliate or continue in effect any license in existence as of the
      Effective Date with any person other than an Affiliate in order to avoid
      infringing such third party's patent(s) in the course of Rosetta's Supply
      of Royalty-Bearing Services, the amounts payable under Clause 6.2 hereof
      shall be reduced by the amount of the royalties paid under the Third Party
      License, provided that the amounts payable by Rosetta to OGT shall not be
      reduced by more than [***] of the amount which would have been payable
      in the absence of this clause 6.4.

7.    CONSIDERATION PAID BY OGT

7.1   In consideration for the consent by Rosetta to the sublicense of the
      Inkjet Patents under the OGT/Agilent Agreement, OGT shall pay to Rosetta
      [***] related to the Supply by OGT of all Royalty Bearing Services.

7.2   If during the Term it is necessary or desirable for OGT to obtain a
      license from any third party ("THIRD PARTY LICENSE") other than an
      Affiliate or continue in effect any license in existence as of the
      Effective Date with any person other than an Affiliate in order to avoid
      infringing such third party's patent(s) in the course of OGT's Supply of
      Royalty-Bearing Services, the amounts payable under Clause 7.1 hereof
      shall be reduced by the amount of the royalties paid under the Third Party
      License, provided that the amounts payable by OGT to Rosetta shall not be
      reduced by more than [***] of the amount which would have been payable
      in the absence of this clause 7.1.

* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

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8.    PAYMENT TERMS

8.1   Amounts due under this Agreement shall be paid within [***] of the end
      of each Calendar Quarter in respect of amounts that have accrued during
      that Calendar Quarter pursuant to the provisions of Clause 6 and 7, and
      within [***] of the end of the Term.

8.2   All sums due under this Agreement:

      (a)   are exclusive of Value Added Tax or other sales tax which where
            applicable will be paid by the paying party;

      (b)   will be paid in US Dollars to the credit of a bank account nominated
            by the payee;

      (c)   shall be made without deduction of income tax or other taxes,
            charges or duties that may be imposed, except and so far as the
            paying Party is required to deduct the same to comply with
            applicable laws, in which case the parties will co-operate in all
            reasonable respects necessary to take advantage of such double
            taxation agreements as may be available; and

      (d)   shall be made by the due date, failing which the recipient party may
            charge interest on any outstanding amount on a daily basis at a rate
            equivalent to [***] per year above the Barclays Bank plc base
            lending rate then in force.

8.3   If at any time during the Term a Party is prohibited from making any of
      the payments required hereunder by a governmental authority in any country
      then such Party will within the prescribed period for making such payments
      in the appropriate manner use its best endeavors to secure from the proper
      authority in the relevant country permission to make such payments and
      will make them within seven days of receiving such permission. If such
      permission is not received within 30 days of such Party making a request
      for such permission then the Party to whom such payment is owed may
      request the other Party to deposit the payments due in the currency of the
      relevant country either in a bank account designated by such Party within
      such country or such royalty payments will be made to an Affiliate
      designated by such Party and having offices in the relevant country.

8.4   Each payment made hereunder shall be accompanied by a statement setting
      out the total Net Sales for which amounts shall have accrued under Clause
      6 or Clause 7, as the case may be, during the period to which the royalty
      payment relates.

8.5   Each Party will keep for a minimum period of [***] from the time
      of creation at its normal place of business detailed and up-to-date
      records and accounts showing the value of Royalty-Bearing Services
      Supplied by it sufficient to ascertain the amounts due under this
      Agreement. Each Party will make such records and accounts available, on
      reasonable notice, for inspection no more than once in any calendar year
      during local business hours by an independent chartered or certified
      accountant from a firm of accountants nominated by each party and
      acceptable to other for the sole


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

                                       11
<PAGE>

      purpose of verifying the accuracy of any statement or report given to the
      other pursuant hereto. The accountant will be required to keep
      confidential all information learnt during any such inspection, and only
      to disclose to the other party such details as may be necessary to report
      on the accuracy of the statement or report. A Party requesting an audit
      will be responsible for the accountant's charges unless the accountant is
      satisfied that there is an underpayment of more than [***] in the
      period audited, in which case the audited party will pay its reasonable
      charges in respect of that inspection.

9.    PATENT INFRINGEMENT AND ENFORCEMENT

9.1   If Rosetta detects or suspects any infringement of the OGT Patent Rights,
      and if OGT detects or suspects any infringement of the Inkjet Patents,
      each Party will promptly notify the other and provide all details within
      its knowledge with respect to the same. Each of Rosetta and OGT will
      cooperate and provide the other with all assistance requested for the
      purpose of any such action brought by the other with respect to any such
      infringement or suspected infringement.

9.2   No Party will be under any obligation by virtue of this Agreement to take
      any action whether through the institution of legal proceedings or
      otherwise with respect to any infringement or suspected infringement of
      the OGT Patent Rights in the case of OGT, or Inkjet Patents in the case of
      Rosetta; provided, however, if a party in its absolute discretion decides
      to take any such action, then without prejudice to any separate agreement
      that the Parties may enter into, or have entered into, it will do so at
      its own costs and the other Party will have no claim to any sums received.

10.   CONFIDENTIALITY

10.1  Each Party ("RECEIVING PARTY") undertakes:

      (a)   to maintain as secret and confidential all technical and commercial
            information obtained directly or indirectly from the other Party
            ("DISCLOSING PARTY") in the course of or in anticipation of this
            Agreement (including the terms and conditions of this Agreement) and
            to respect the Disclosing Party's rights therein;

      (b)   to use the same exclusively for the purposes of this Agreement; and

      (c)   to disclose the same only to those of its employees, contractors,
            consultants to whom and to the extent that such a disclosure is
            reasonably necessary for the purposes of this Agreement and related
            agreements between the Parties or their Affiliates.

10.2  The provisions of clause 10.1 will not apply to information which the
      Receiving Party can demonstrate by reasonable, written evidence:


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

                                       12
<PAGE>

      (a)   was, prior to its receipt by the Receiving Party from the Disclosing
            Party, in the possession of the Receiving Party without an
            obligation of confidentiality; or

      (b)   is subsequently disclosed to the Receiving Party without any
            obligations of confidence by a third party who has not derived it
            directly or indirectly from the Disclosing Party; or

      (c)   is or becomes generally available to the public through no act or
            default of the Receiving Party or its agents, employees, Affiliates
            or sublicensees; or

      (d)   the Receiving Party is required to disclose by or to the courts of
            any competent jurisdiction, or to any government, regulatory agency
            or financial authority, provided that the Receiving Party shall

            (i)   inform the Disclosing Party as soon as is reasonably
                  practicable, and

            (ii)  at the Disclosing Party's request seek to persuade the court,
                  agency or authority to have the information treated in a
                  confidential manner, where this is possible under the court,
                  agency or authority's procedures; or

      (e)   is independently developed by Recipient without the aid,
            application, or use of information received from the Disclosing
            Party, as can be demonstrated by written records created at the time
            of such independent development; or

      (f)   in the case of information disclosed by OGT to Rosetta, is disclosed
            to actual or potential End-Users of Royalty-Bearing Services, in so
            far as such disclosure is reasonably necessary to promote the use of
            Licensed Products or the Supply of Royalty-Bearing Services,
            provided that the End-Users sign a written confidentiality
            undertaking at least as restrictive as clauses 10.1 and 10.2.

10.3  The Receiving Party will procure that all of its employees, contractors
      and sublicensees pursuant to this Agreement (if any) who could have access
      to any of the Disclosing Party's information to which clause 10.1 applies
      shall be made aware of and subject to these obligations and shall have
      entered into written undertakings of confidentiality at least as
      restrictive as clauses 10.1 and 10.2 and which apply to the Disclosing
      Party's information.

11.   WARRANTIES AND WARRANTY DISCLAIMERS

11.1  Each Party warrants to the other that it has the full right and power to
      enter into this Agreement. OGT further warrants that it is entitled to
      license the OGT Patent Rights as licensed herein and has not previously
      assigned them or entered into any agreement relating to them which might
      affect its ability to license the OGT Patent Rights in accordance with the
      provisions of this Agreement.


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

                                       13
<PAGE>

11.2  Each Party acknowledges that in entering into this Agreement it does not
      do so in reliance on any representation, warranty or other provision
      except as expressly provided in this Agreement and any conditions,
      warranties or other terms implied by statute or common law are excluded
      from this Agreement to the full extent permitted by law.

11.3  Notwithstanding anything contained herein to the contrary, OGT does not
      give any warranty, representation or undertaking:

      (a)   as to the efficacy or usefulness of the OGT Patent Rights or any
            inventions claimed therein;

      (b)   that any of the OGT Patent Rights are or will be valid or subsisting
            or (in the case of applications) will proceed to grant;

      (c)   that the exploitation of any the OGT Patent Rights or the
            manufacture or use of Licensed Products or the Supply of
            Royalty-Bearing Services or the exercise of any other rights
            licensed hereunder, will not infringe any other intellectual
            property or other rights of any other Entity; or

      (d)   as imposing any obligation on OGT to bring or prosecute actions or
            proceedings against third parties for infringement or to defend any
            actions or proceedings for revocation of any the OGT Patent Rights.

11.4  Notwithstanding anything contained herein to the contrary, Rosetta does
      not give any warranty, representation or undertaking:

      (a)   as to the efficacy or usefulness of the Inkjet Patents or any
            inventions claimed therein;

      (b)   that any of the patent rights comprising Inkjet Patents are or will
            be valid or subsisting or (in the case of applications) will proceed
            to grant;

      (c)   that the exploitation of any the Inkjet Patents or the manufacture,
            use or sale of Nucleic Acid Arrays, will not infringe any other
            intellectual property or other rights of any other Entity; or

      (d)   as imposing any obligation on Rosetta to bring or prosecute actions
            or proceedings against third parties for infringement or to defend
            any actions or proceedings for revocation of any the Inkjet Patents.

11.5  IT IS UNDERSTOOD AND AGREED BETWEEN THE PARTIES THAT, EXCEPT AS EXPRESSLY
      PROVIDED IN THIS AGREEMENT, ANY AND ALL RIGHTS LICENSED, CONSENTS GRANTED
      AND INFORMATION MADE AVAILABLE BY ONE PARTY TO THE OTHER IS LICENSED,
      GRANTED AND MADE AVAILABLE "AS IS". NEITHER PARTY MAKES ANY
      REPRESENTATIONS OR WARRANTIES (OTHER THAN THE WARRANTY IN CLAUSE 11.1) OF
      ANY KIND, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO SUCH RIGHTS, CONSENT
      OR INFORMATION, INCLUDING BUT NOT LIMITED TO


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

                                       14
<PAGE>

      ANY REPRESENTATION OR WARRANTY CONCERNING THE PERFORMANCE OF ANY LICENSED
      PRODUCT OR ROYALTY-BEARING SERVICE. EACH PARTY DISCLAIMS ALL WARRANTIES,
      EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF QUALITY,
      MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

12.   DURATION AND TERMINATION

12.1  This Agreement and the licenses granted under it will come into effect on
      the Effective Date and unless terminated earlier in accordance with this
      clause will continue in force until expiration of the Term.

12.2  Subject to the next following sentence, if Rosetta is in breach of any
      payment obligation under this Agreement or is in material breach of any
      other term or condition of this Agreement, OGT may give written notice to
      Rosetta specifying the breach and requiring its remedy. If the breach has
      not been remedied within a period of [***] from service of the notice to
      Rosetta, OGT will have the right to terminate the licences granted to
      Rosetta under this agreement. In no event will OGT have the right to
      terminate this Agreement or the licences granted to Rosetta under this
      Agreement by reason of any breach by Rosetta of the prohibition in this
      Agreement relating to Incyte Expression Databases.

12.3  Either party may terminate the licences granted to the other under this
      Agreement immediately by written notice if an interim order is applied for
      or made, or a voluntary arrangement approved, or if a petition for a
      bankruptcy order is presented or a bankruptcy order is made against the
      other party or if a receiver or trustee in bankruptcy is appointed or a
      voluntary arrangement is proposed or approved or an administration order
      is made, or a receiver or administrative receiver is appointed of any of
      the other party's assets or undertaking or a winding-up resolution or
      petition is passed or presented (otherwise than for the purposes of
      reconstruction or amalgamation) or if any circumstances arise which
      entitle the court or a creditor to appoint a receiver, administrative
      receiver or administrator or to present a winding-up petition or make a
      winding-up order of other similar or equivalent action is taken against or
      by such other party by reason of its insolvency or in consequence of debt.

12.4  OGT may terminate the licences granted to Rosetta under this Agreement
      forthwith by written notice to Rosetta if any Entity or group of Entities
      which does not have Control of Rosetta at the Effective Date acquires
      Control (other than pursuant to the public offering of such Entity's
      securities) during the Term hereof and within thirty (30) days of such
      acquisition such Entity or Entities has not or have not agreed with OGT in
      writing that any patent rights which cover instrumentation and methods for
      making Nucleic Acid Arrays, but not including any patent rights which
      cover instrumentation for the reading of Nucleic Acid Arrays, the design
      of probes for use on Nucleic Acid Arrays, particular sequences used on
      Nucleic Acid Arrays, software used in instrumentation for reading Nucleic
      Acid Arrays or in probe design, microfluidics or the control or assurance
      of the quality of Nucleic Acid Arrays, which are owned or controlled by it
      or them or by any of its or their Affiliates, are licensed to OGT and its
      Affiliates on substantially the same licensing terms as the Inkjet


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

                                       15
<PAGE>

      Patents are licensed to OGT under the OGT/Agilent Agreement for the Term,
      except that no payment by OGT shall be due, except for royalties
      rightfully due under Valid Claims of third party patent rights of amounts
      not exceeding those payable by OGT hereunder.

12.5  On termination of the licences granted to Rosetta under this Agreement by
      OGT pursuant to Clause 12.3:

      (a)   Rosetta will no longer be licensed to exploit in any way, either
            directly or indirectly, any of the OGT Patent Rights;

      (b)   Rosetta will consent to the cancellation of any formal licence
            granted to it, or of any registration of it in any register, in
            relation to any of the OGTPatent Rights;

      (c)   subject as provided in this clause 12.5, and except in respect of
            any accrued rights, OGT will be under any no further obligation to
            Rosetta under this Agreement; and

      (d)   the provisions of clause 10 will survive termination of this
            Agreement indefinitely.


13.   GENERAL

13.1  This Agreement may only be amended in writing signed by duly authorized
      representatives of the Parties.

13.2  The obligations of Rosetta hereunder will run in favor of the successors
      and permitted assigns of OGT, and the obligations of OGT hereunder will
      run in favor of the successors and permitted assigns of Rosetta. Neither
      Party may assign, mortgage, charge or otherwise transfer its rights under
      this Agreement in whole or part to any third party without the prior
      written consent of the other, provided, however, either Party may assign
      all of its rights and obligations under this Agreement to any party to
      which it transfers all or substantially all of its assets and business
      related to Nucleic Acid Arrays, provided that in either case the assignee
      undertakes to be bound by and perform the obligations of the assignor
      under this Agreement and provided further that where at the time of such
      assignment the assignee or any Affiliates of the assignee own or control
      patent rights in the field of Nucleic Acid Array technology the assignee
      or relevant Affiliate agrees that such patent rights which cover
      instrumentation and methods for making Nucleic Acid Arrays, but not
      including any patent rights that cover instrumentation for the reading of
      Nucleic Acid Arrays, the design of probes for use on Nucleic Acid Arrays,
      particular sequences used on Nucleic Acid Arrays, software used in
      instrumentation for reading Nucleic Acid Arrays or in probe design,
      microfluidics or the control or assurance of the quality of Nucleic Acid
      Arrays, will be licensed to the other Party hereunder on substantially the
      same licensing terms as provided hereunder in the event of an assignment
      by OGT or, in the event of an assignment by Rosetta, on substantially the
      same terms as provided OGT under the OGT/Agilent Agreement, in each case
      for the Term except that no


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

                                       16
<PAGE>

      additional payment shall be due, except for royalties rightfully due under
      Valid Claim(s) of third party patent rights of amounts no greater than
      under this Agreement or the OGT/Agilent Agreement, as the case may be.
      Neither Party will have the right to assign this Agreement or any rights
      hereunder if it is insolvent or any other circumstances described in
      clauses 12.2 or 12.3 applies to it. In no event will any Party's rights or
      obligations hereunder be assigned or assignable by any bankruptcy
      proceedings. Nothing in this clause affects the continued existence or
      validity of this Agreement as a result of any change in the Entity or
      Entities having Control of either Party. . 13.3 No failure or delay on the
      part of either Party to exercise any right or remedy under this Agreement
      will be construed or operate as a waiver thereof, nor will any single or
      partial exercise of any right or remedy preclude the further exercise of
      such right or remedy.

13.4  Neither Party will act or describe itself as the agent of the other, nor
      will it make or represent that it has authority to make any commitments on
      the other's behalf.

13.5  Any notice to be given under this Agreement will be given in writing and
      will be sent by first class internal mail or air mail, or by fax
      (confirmed by first class internal mail or air mail) to the address of the
      relevant Party, or to the relevant fax number, set out below, or such
      other address or fax number as that Party may from time to time notify to
      the other Party in accordance with this clause 13.5:

            OGT:             Oxford Gene Technology IP Limited
                             12 School Rd
                             Kidlington
                             Oxford
                             OX5 2HB
                             Attn.  Company Secretary
                             Fax: # 44 (0)1865 379310

            The Licensee:    Rosetta Inpharmatics, Inc
                             12040 115th Avenue NE
                             Kirkland, WA  98034

      Notices sent as above shall be deemed to have been received three working
      days after the date of posting (in the case of inland first class mail),
      or seven working days after the date of posting (in the case of air mail),
      or on the next working day after transmission (in the case of faxed
      messages, but only if a transmission report is generated by the sender's
      fax machine recording a message from the recipient's fax machine,
      confirming that the fax was sent to the number indicated above and
      confirming that all pages were successfully transmitted).

13.6  Each Party agrees to execute, acknowledge and deliver such further
      instruments, and do all further similar acts, as may be necessary or
      appropriate to carry out the purposes and intent of this Agreement.


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

                                       17
<PAGE>

13.7  Neither Party shall make any press or other public announcement concerning
      any aspect of this Agreement, or make any use of the name of the other
      Party in connection with or in consequence of this Agreement, without the
      prior written consent of the other Party, except to the extent required by
      applicable laws or regulations, in which case the Party obligated to make
      the disclosure shall use reasonable efforts to notify the other Party
      prior to such disclosure.

13.8  This Agreement sets out the entire agreement between the Parties or their
      Affiliates relating to its subject matter and supersedes all prior oral or
      written agreements, arrangements or understandings between them relating
      to such subject matter. Save in the case of fraud, the Parties acknowledge
      they are not relying on any representation, agreement, term or condition
      which is not set out in this Agreement.

13.9  If any clause or part of any clause in this Agreement is declared invalid
      or unenforceable by the judgement or decree by consent or otherwise of any
      court or authority of competent jurisdiction from whose decision no appeal
      is or can be taken, all other clauses or parts of clauses contained in
      this Agreement will remain in full force and effect and will not be
      affected thereby for the term of this Agreement, but the Parties will
      negotiate appropriate amendments to this Agreement with a view to
      restoring the balance of commercial interests as it stood prior to such
      invalidity or unenforceability being declared.

13.10 This Agreement is made and will be construed in accordance with the laws
      of England and Wales and, subject to Clause 13.11, the Parties submit to
      the exclusive jurisdiction of the English courts.

13.11 All disputes, differences or questions arising out of this Agreement or as
      to the rights or obligations of the Parties under it or in connection with
      its construction, validity or subsistence, and any claim by either Party
      that the other infringes its patent rights by exceeding the scope of the
      licences granted hereunder or in respect to OGT, the OGT/Agilent
      Agreement, may be referred to arbitration by a single arbitrator to be
      agreed between the Parties, having the appropriate expertise to deal with
      any technical, scientific or legal issues involved in the arbitration. If
      the Parties are unable to agree on the arbitrator within a period of 60
      days of a Party proposing arbitration to the other Party either Party may
      request that an arbitrator is appointed by the President for the time
      being of the Law Society of England and Wales having due regard to any
      representations made to him as to the appropriate qualifications of such
      arbitrator. The arbitration shall take place in Seattle, Washington, and
      will be in accordance with rules and procedures agreed between the Parties
      or in default of agreement determined by the arbitrator. Neither Party may
      commence legal proceedings against the other (including seeking injunctive
      relief) in relation to any matter the subject of possible arbitration
      under this clause unless it has first served written notice on the other
      Party and the other Party has not requested arbitration within a period of
      60 days after service of such notice. There will be no right of appeal to
      or review by the courts of any decision of the arbitrator in any
      arbitration pursuant to this clause.


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

                                       18
<PAGE>

ATTESTATIONS


OXFORD GENE TECHNOLOGY IP LIMITED

Signature:______________________

Print Name:_____________________

Title:__________________________


ROSETTA INPHARMATICS, INC.

Signature:______________________

Print Name:_____________________

Title:__________________________


* Material has been omitted pursuant to a request for confidential treatment,
  and such material has been filed separately with the SEC.

                                       19
<PAGE>

                              Dated 16 March, 2000

                      (1) OXFORD GENE TECHNOLOGY IP LIMITED

                                       and

                         (2) ROSETTA INPHARMATICS, INC.

                 -----------------------------------------------

                                LICENSE AGREEMENT

                ------------------------------------------------