Document:

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                            EXCLUSIVE PATENT LICENSE

                                    AGREEMENT

                                                                    CONFIDENTIAL

         This license agreement (this "Agreement") is effective as of this 1st
day of September, 1997 (the "Effective Date"), by and between the University of
Washington, a public institution of higher education having administrative
offices in Seattle, Washington ("UW") and Rosetta Biosystems, Inc., a company
organized and existing under the laws of the State of Delaware and having a
place of business at 12040 115th Avenue NE, Kirkland, WA 98034 ("Licensee").

1.       PREAMBLE

         1.1 UW has developed and owns or is in possession of certain technology
("INVENTION," defined further below) relating to a novel inkjet technology for
the synthesis of oligonucleotides.

         1.2 UW desires that the INVENTION be used as soon as possible in the
public interest, and to this end desires to transfer the INVENTION to a company
capable of commercially exploiting the INVENTION.

         1.3 Licensee desires, for the purpose of commercial exploitation, to
acquire a license to certain patent rights in and to the INVENTION and to
receive certain technical information relating to the INVENTION.

         1.4      Licensee and UW therefore agree to the terms as set forth
herein.

2.       DEFINITIONS

         2.1 Terms defined in this Definitions Article, and parenthetically
defined elsewhere in this Agreement, shall throughout this Agreement have the
meaning here or there provided. Defined terms may be used in the singular or in
the plural, as sense shall require. Terms defined in this Definition Article
will be printed in capital letters for ease of reference.

         2.2 "INVENTION" shall mean a novel inkjet technotogy for the synthesis
of oligonucleotides on glass or silicon surfaces that provides a proprietary
solution with solvent that allows reagent delivery from the inkjet heads, as
recorded in UW's internal files as [***].

         2.3 "LICENSED PATENTS' shall mean United States Patent applications
listed below and any Patents issued from such, together with all corresponding
foreign patents now issued or issued during the term of this Agreement, which
relate to the INVENTION, and all reissues, reexaminations, extensions,
divisionals, continuations, and continuations-in-part thereof:

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

                                      -1-

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<TABLE>
<CAPTION>

         APPLICATION #              COUNTRY          FILING DATE                TITLE
         <S>                        <C>              <C>                        <C>

            [***]                    U.S.             [***]                    "Solvent for Oligonucleotide Synthesis and Methods
                                                                               of Use"

            in preparation           U.S.                                      "Automated Synthesis of Biopolymer Arrays"

</TABLE>

         2.4 "TECHNICAL INFORMATION" shall mean any technical facts, data, or
advice, written or oral (in the form of information contained in patents and
patent applications, reports, letters, drawings, specifications, testing
procedures, training and operational manuals, bills of materials, photographs
and the like) relating to the INVENTION and owned or in the possession of UW.

         2.5 "LICENSED SUBJECT MATTER" shall mean any subject matter, including
but not limited to products and processes, covered in whole or in part by any
issued, unexpired patent claim or a claim in a pending patent application
contained in the LICENSED PATENTS in the country in which said subject matter is
made, used, or sold.

         2.6 "NET SALES REVENUE" means the amount actually received by Rosetta,
or its assignee, distributor, reseller or other entity in the distribution chain
from an end user for products (but not processes) covered in whole or in part by
any issued, unexpired patent claim or a claim in a pending patent application
contained in the LICENSED PATENTS in the country in which said subject matter is
made, used, or sold, less, at a minimum, returns and customary trade discounts
actually taken, outbound freight, value added, sales or use taxes and custom
duties.

         With respect to COMBINATION PRODUCTS, NET SALES REVENUE shall equal the
amount actually received by Rosetta, or its assignee, distributor, reseller or
other entity in the distribution chain from an end user for products (but not
processes) covered in whole or in part by any issued, unexpired patent claim or
a claim in a pending patent application contained in the LICENSED PATENTS in the
country in which said subject matter is made, used, or sold, multiplied by a
fraction the numerator of which shall be the gross selling price of the LICENSED
SUBJECT MATTER as sold separately and the denominator of which shall be the
gross selling price of the COMBINATION PRODUCT including the LICENSED SUBJECT
MATTER. If there is no established current gross selling price for the LICENSED
SUBJECT MATTER, then for purposes of calculating NET SALES REVENUE, the standard
costs (calculated in accordance with GAAP) of manufacturing of the LICENSED
SUBJECT MATTER shall be used to determine the percentage of sales attributable
to the LICENSED SUBJECT MATTER.

         2.7 "TERRITORY" shall mean worldwide.

         2.8 "SUBLICENSE" shall mean the present, future or contingent transfer
of any License, option, first right to negotiate or other right in the LICENSED
PATENTS OR

*  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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LICENSED SUBJECT MATTER in whole or in part.

         2.9 "AGGREGATE ROYALTY" shall mean the total of all royalty obligations
owed by LICENSEE to third parties on NET SALES REVENUE, expressed as a
percentage of NET SALES REVENUE.

         2.10 "COMBINATION PRODUCT' shall mean LICENSED SUBJECT MAT1'ER that is
sold in combination with one or more other products.

3.       GRANT

         3.1 UW hereby grants to Licensee, and Licensee accepts, an exclusive,
royalty-bearing license, with the right to sublicense, under the LICENSED
PATENTS to import, make, have made, use, sell, offer for sale and have sold
LICENSED SUBJECT MATTER in the TERRITORY.

         3.2 The license granted above is subject to a reserved non-exclusive
license in UW to make, have made, and use products, processes, or other subject
matter covered by LICENSED PATENTS for UW's, own research and instructional
purposes in all fields of use independent of funding source.

4.       SUBLICENSING

         4.1 During the term of exclusivity of the license granted in this
Agreement, Licensee shall have the right to grant sublicenses to LICENSED
PATENTS at royalty rates and with other terms and conditions not less favorable
to UW than those required of Licensee by this Agreement.

         4.2 Any and all sublicenses in and to LICENSED PATENTS granted by
Licensee shall be subject to the prior approval of UW, which shall not be
unreasonably withheld.

         4.3 Licensee agrees to forward to UW a copy of any and all fully
executed sublicense agreements pertaining to LICENSED PATENTS within thirty (30)
days of the date of execution of said sublicenses.

5.       TECHNICAL INFORMATION

         5.1 UW, by no later than November 1, 1997, shall provide to Licensee
copies of all patents and patent applications comprising LICENSED PATENTS.

         5.2 UW agrees to disclose to Licensee any other TECHNICAL INFORMATION,
not obtained by UW under conditions of confidentiality, in UW's possession as of
the Effective Date or during the term of this Agreement that in UW's judgment is
necessary or useful to the commercial exploitation of LICENSED PATENTS.

         5.3 LICENSEE agrees to keep any TECHNICAL INFORMATION received from UW
and identified by UW as confidential under conditions of strict secrecy and to
use the same

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

                                      -3-

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degree of care Licensee would for its own confidential TECHNICAL INFORMATION,
but no less than reasonable care, to protect UW's confidential TECHNICAL
INFORMATION from disclosure to unauthorized third parties.

6.       DILIGENCE

         [***]

7.       PATENT PROSECUTION AND COST RECOVERY

         7.1 UW shall have sole control over the prosecution of any and all
patent applications, whether pending or not yet filed at the time of execution
of this Agreement, in LICENSED PATENTS, and of the maintenance and other
management of any and all issued patents in LICENSED PATENTS. UW shall keep
Licensee informed of the status of any and all patents and patent applications
comprising LICENSED PATENTS, consult with Licensee regarding the prosecution and
maintenance of the LICENSED PATENTS, and shall provide Licensee with the
opportunity to advise UW on courses of action, filing and prosecution of patent
applications relating to the INVENTIONS and all reissues, reexaminntions,
extensions, divisionals, continuations, and continuations-in-part thereof, and
management of patents in LICENSED PATENTS (including the opportunity to appear
before patent examiners together with UW's patent counsel); provided, however,
that UW will have the right to make final determinations with respect to such
prosecution and maintenance.

         7.2 Licensee agrees to reimburse UW for all reasonable fees and costs
relating to the filing and prosecution of patent applications, and maintenance
of LICENSED PATENTS, whether incurred prior to the execution of this Agreement
or during the term of this Agreement Such fees and costs shall not include costs
incurred by the University in the use of its own resources, such as employee
time, and shall not extend to patenting fees and costs incurred by UW after
termination of this Agreement. Licensee agrees to pay invoices for such fees and
costs submitted by UW upon receipt of any such invoice. Alternatively, UW may
choose to have its patent counsel submit invoices directly to Licensee for
payment.

8.       LICENSING FEES; ROYALTIES; EQUITY

         8.1 Licensee shall pay to UW a non-refundable, non-creditable annual
license maintenance fee of [***] due and payable on each anniversary of the
Effective Date.

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

                                      -4-

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         8.2 Licensee shall pay to UW an earned royalty of [***] less the
AGGREGATE ROYALTY, down to a minimum of [***], of NET SALES REVENUE.

         8.3 Licensee shall pay to UW a non-refundable annual minimum royalty
of [***] each January 31 following the first commercial sale of LICENSED
SUBJECT MATTER, which minimum royalty shall be fully creditable against the
royalties set forth in Section 8.2 incurred in the twelve (12) months
succeeding such January 31.

         8.4 Licensee shall pay to UW [***] of licensing fees, royalty, and
other income (collectively, "Sublicense Revenue") derived from sublicenses
granted by Licensee in and to LICENSED PATENTS, due and payable within thirty
(30) days of the end of each calendar quarter in which such Sublicense
Revenue is received by Licensee; provided that in no event shall payments
made in exchange for equity or for research funding be included in the
definition of Sublicense Revenue.

          8.5 No multiple royalties shall be payable to UW because any LICENSED
SUBJECT MATTER, its manufacture, use, or sale are or shall be covered by more
than one patent application or issued patent included as part of LICENSED
PATENTS.

          8.6 Upon occurrence of the following events, Licensee will issue
shares of its Common Stock to UW in the following amounts: (a) 90,000 shares
upon execution of this Agreement, (b) 15,000 shares upon issuance of the first
U.S. patent covering the LICENSED SUBJECT MATTER, and (c) 15,000 shares upon the
earlier of (i) first commercial sale by of a product incorporating the LICENSED
SUBJECT MATTER or (ii) one or more sublicenses by Licensee of the LICENSED
SUBJECT MATTER in a transaction or series of transactions where the aggregate
value of the compensation (i.e., up-front license fees, research funding and/or
equity) to Licensee is greater than $1,000,000.

          Where this Agreement provides for the issuance of a specified number
of shares of Licensee's Common Stock at a point after the Effective Date, the
number of and type of shares so specified shall be adjusted from time to time to
take into consideration the occurrence of certain events, including stock
dividends, stock splits, and reverse stock splits.

 9.       PAYMENT AND REPORTS

          9.1 Licensee shall pay earned royalties to UW quarterly within thirty
(30) days of March 31, June 30, September 30, and December 31 of each year.

         9.2 With each payment, Licensee shall include a report setting forth
such particulars of the business conducted by Licensee and any sublicensees
during the preceding calendar quarter as shall be pertinent to royalty
accounting as specified in this Agreement. The report shall include at least (a)
the number of units of LICENSED SUBJECT MATTER manufactured, used, or sold; (b)
gross amounts billed or invoiced for LICENSED SUBJECT MATTER; (c) names and.
addresses of any and all sublicensees; (d) discounts and allowances; and (e)
calculation of total royalties due UW.

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

                                      -5-

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          9.3 Until Licensee or any sublicensee engages in commercial use or
sale of LICENSED SUBJECT MATTER, Licensee shall prepare and submit to UW within
thirty (30) days of June 30 and December 31 of each year a report regarding the
progress of Licensee and any sublicensees in developing LICENSED SUBJECT MA1TER
for commercial exploitation. Said report shall include such particulars as are
necessary to demonstrate compliance with diligence obligations set forth in the
Diligence Article of this Agreement.

         9.4 On or before the ninetieth (90th) day following the close of
Licensee's fiscal year, Licensee shall provide UW with Licensee's certified
financial statements for the preceding fiscal year, including, at a minimum, a
Balance Sheet and an Operating Statement

         9.5 All payments required under this Agreement shall be made in U.S.
dollars by check or money order payable to the University of Washington, and
delivered to UW as specified in this Agreement.

         9.6 Licensee agrees to pay a late fee for any overdue payment due UW
under terms of this Agreement. The late fee shall be computed as [***] of the
outstanding, unpaid balance. The payment of such a late fee shall not
foreclose or limit UW from exercising any other rights it may have as a
consequence of the lateness of any payment.

10.      RECORD KEEPING

         10.1 Licensee shall keep complete and accurate records and books of
account containing all information necessary for the computation and
verification of the amounts to be paid hereunder. Licensee shall keep these
records and books for a period of three (3) years following the end of the
accounting period to which the information pertains.

         10.2 Licensee agrees, at the request of UW with reasonable prior
notice, to permit one or more accountants selected by UW ("Accountant") to have
access to Licensee's records and books of account during ordinary working hours
to audit with respect to any payment period ending prior to such request, the
correctness of any report or payment made under this Agreement, or to obtain
information as to the payments due for any such period in the case of failure of
the Licensee to report or make payment pursuant to the terms of this Agreement.

         10.3 The Accountant shall not disclose to UW any information relating
to the business of Licensee except that which is necessary to inform UW of: (a)
the accuracy or inaccuracy of Licensee's reports and payments; (b) compliance or
noncompliance by Licensee with the terms and conditions of this Agreement, and
(c) the extent of any inaccuracy or noncompliance.

         10.4 Should the Accountant believe there is an inaccuracy in any of the
Licensee's payments or noncompliance by the Licensee with any of such terms and
conditions, the Accountant shall have the right to make and retain copies
(including photocopies) of any pertinent portions of the records and books of
account.

         10.5 In the event that Licensee's royalties calculated for any
semi-annual period are under reported by more than [***], the costs
of any audit and review initiated by UW

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

                                      -6-

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will be borne by Licensee; but, otherwise, UW shall bear the costs of any audit
initiated by UW.

11.      THIS SECTION INTENTIONALLY LEFT BLANK

12.      TERM AND TERMINATION OF AGREEMENT

         12.1 This Agreement shall be in full force and effect commencing on the
Effective Date and shall remain in effect for twenty (20) years or until the
expiration of the last RENI~INING LICENSED PATENTS, whichever is later, unless
the Agreement is otherwise terminated pursuant to the terms and conditions of
this Agreement.

         12.2 If Licensee breaches any material obligation imposed by this
Agreement (other than the obligations set forth in Section 6 which are governed
by the termination provisions set forth in Section 6) then UW may, at its
option, send a written notice that it intends to terminate the license granted
by this Agreement. If Licensee does not cure the breach within thirty (30) days
from the notice date, then UW shall have the right to terminate this Agreement.

         12.3 UW shall have the right to terminate this Agreement and the
license granted to Licensee hereinabove, effective immediately upon prior
written notice of termination to Licensee in the event that (a) Licensee seeks
liquidation, reorganization, dissolution or winding-up of itself, is insolvent
or evidence exists as to its insolvency, or Licensee makes any general
assignment for the benefit of its creditors; (b) a petition is filed by or
against Licensee, or any proceeding is initiated by or against Licensee, or any
proceeding is initiated against Licensee as a debtor, under any bankruptcy or
insolvency law, unless the laws then in effect void the effectiveness of this
provision; or (c) a receiver, trustee, or any similar officer is appointed to
take possession, custody, or control of all or any part of Licensee's assets or
property, then UW may, at its option, send a written notice that it intends to
terminate the license granted by this Agreement.

         12.4 Licensee shall have a right to terminate this Agreement with or
without cause, upon [***] prior written notice to UW.

         12.5 The provisions under which this Agreement may be terminated shall
be in addition to any and all other legal remedies which either party may have
for the enforcement of any and all terms hereof, and do not in any way limit any
other legal remedy such party may have.

         12.6 Termination of this Agreement shall terminate all rights and
licenses granted to Licensee relating to LICENSED PATENTS.

         12.7 Upon termination of this Agreement, any and all existing
SUBLICENSE agreement shall be immediately assigned to UW and UW agrees to
maintain such SUBLICENSE agreement in full force to the extent that UW is
capable of performing as a licensor in place of Licensee.

         12.8 Termination by UW or Licensee under the options set forth in this
Agreement

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

                                      -7-

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shall not relieve Licensee from any financial obligation to UW accruing prior to
or after termination or from performing according to any and all other
provisions of this Agreement expressly agreed to survive termination.

         12.9 In the event that there remain no valid, enforceable, and
infringed LICENSED PATENTS, Licensee and any sublicensees shall have no further
obligation to pay royalties therein or to account to UW therefor.

13.      NOTICES

         13.1 Any notice or other communication required or permitted to be
given by either party hereto shall be deemed to have been properly given and be
effective upon the date of delivery if delivered in writing to the respective
addresses set forth below, or to such other address as either party shall
designate by written notice given to the other party. If notice or other
communication is given by facsimile transmission, said notice shall be confirmed
by prompt delivery of the hard copy original.

         13.2 All correspondence regarding this Agreement should be addressed as
follows.

      In the case of Licensee:

                Postal Address:   Rosetta BioSystems, Inc.
                                  12040 115th Avenue NE
                                  Suite 210
                                  Kirkland, WA 98034
                                                  Attn: John King

                with a copy to:   Venture Law Group
                                  4750 Carillon Point
                                  Kirkland, WA 98033
                                  Attn: William W. Ericson
                                  Facsimile (425) 739-8750

      In the case of UW:

                Postal Address:   University of Washington
                                  Director of Technology Transfer
                                  Office of Technology Transfer, Box 354810
                                  Seattle, WA 98195
                                  USA

                Street Address:   University of Washington
                                  Director of Technology Transfer
                                  Office of Technology Transfer
                                  1101 N.E. 45th Street, Suite 200
                                  Seattle, WA 98105-6099

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

                                      -8-

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                                  USA
                                  Facsimile: (206) 685-4767

14.      PROPRIETARY RIGHTS. Licensee will not, by performance under this
Agreement, obtain any ownership interest in LICENSED PATENTS or any other
proprietary rights or information of UW, its officers, inventors, employees,
students, or agents.

15.      PATENT MARKING. Licensee shall mark, and shall require any sublicensee
to mark, any and all material forms of LICENSED SUBJECT MATTER or packaging
pertaining thereto made and sold by Licensee (and/or by its sublicensees) in the
United States with an appropriate patent marking identifying the pendency of any
U.S. patent application and/or any issued U.S. or foreign patent forming any
part of LICENSED PATENTS. All LICENSED SUBJECT MATTER shipped to or sold in
other countries shall be marked in such a manner as to provide constructive
notice to potential infringers pursuant to the patent laws and practice of the
country of manufacture or sale.

16.      PATENT INFRINGEMENT

          16.1 Each party shall promptly inform the other party of any alleged
infringement of LICENSED PATENTS by a third party, and provide any available
evidence thereof.

          16.2 During the term of exclusivity of the license granted hereunder,
and subject to UW's written approval (such approval not to be untimely or
unreasonably withheld), Licensee shall have the first right to settle any
alleged infringement of LICENSED PATENTS by securing cessation of the
infringement, instituting suit against the infringer, or entering into a
sublicensing agreement in and to relevant patents in LICENSED PATENTS. To enjoy
said first right, Licensee must initiate bona fide action to settle any alleged
infringement within ninety (90) days of receiving UW's approval. After Licensee
has recovered its reasonable attorney's fees and other expenses directly related
to any action, suit, or settlement for infringement of LICENSED PATENTS, UW and
License shall divide any remaining damages, awards, or settlement proceeds in
the following manner:

                           UW          twenty-five percent (25%)
                           Licensee    seventy-five percent (75%)

provided, however, that any payment by an alleged infringer as consideration for
the grant of a sublicense shall be handled according to the royalty provisions
for sublicenses set forth in this Agreement.

          16.3 If Licensee chooses to institute suit against an alleged
infringer during the term of exclusivity as provided in this Agreement, Licensee
may do so in UW's name (if required by law, otherwise, in Licensee's name) but
at Licensee's sole expense, and UW shall, but at Licensee's expense for UW's
direct associated expenses, fully and promptly cooperate and assist Licensee in
connection with any such suit.

         16.4 If Licensee fails, within ninety (90) days of receiving UW's
approval, to secure

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

                                      -9-

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cessation of the infringement, institute suit against the infringer, or provide
to UW satisfactory evidence that Licensee is engaged in bona fide negotiation
for the acceptance by infringer of a sublicense in and to relevant patents in
LICENSED PATENTS, UW upon written notice to Licensee may assume full right and
responsibility to secure cessation of the infringement, institute suit against
the infringer, or secure acceptance of a sublicense from Licensee in and to
relevant patents in LICENSED PATENTS, approval for which sublicense Licensee
shall not unreasonably withhold.

          16.5 If UW in accordance with the terms and conditions of this
Agreement chooses to institute suit against an alleged infringer, UW may bring
such suit in its own name (or, if required by law, in its and Licensee's name)
and at its own expense, and Licensee shall, but at UW's expense for Licensee's
direct associated expenses, fully and promptly cooperate and assist UW in
connection with any such suit. Any and all damages, awards, or settlement
proceeds arising from such a UW-initiated action shall be UW's.

          16.6 Neither Licensee nor UW is obligated under this Agreement to
institute a suit against an alleged infringer of LICENSED PATENTS.

17.      PATENT VALIDITY

         17.1 If any claim challenging the validity or enforceability of any of
LICENSED PATENTS shall be brought against Licensee, Licensee shall promptly
notify UW. UW, at its option, shall have the right, within thirty (30) days
after notification-by Licensee of such action, to intervene and take over the
sole defense of the claim at UW's expense.

          17.2 If Licensee challenges the validity or enforceability of any of
LICENSED PATENTS, Licensee agrees not to suspend any payments due UW until such
time as that patent in LICENSED PATENTS is determined to be invalid or
enforceable by final judgment of a court of competent jurisdiction from which no
appeal can be or is taken.

18.      USE OF NAMES. Nothing contained in this Agreement shall be construed as
conferring any right to use in advertising, publicity or other promotional
activities any name, trade name, trademark or other designation of a party
hereto including any contraction, abbreviation or simulation of any of the
foregoing, unless the express written permission of the other party has been
obtained. Licensee hereby expressly agrees not to use the name "University of
Washington" without prior written approval from UW.

19.      REPRESENTATION AND WARRANTIES

         19.1 UW represents and warrants that it has the right to grant the
license in and to LICENSED PATENTS and disclose the TECHNICAL INFORMATION set
forth in this Agreement.

         19.2     Nothing in this Agreement shall be construed as:

                   (a) A representation or warranty by UW as to the
patentability, validity,

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

                                      -10-

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scope, or usefulness of LICENSED PATENTS; or

                   (b) A representation or warranty by UW that anything made,
used, sold, or otherwise disposed of under any license granted in this Agreement
is or will be free from infringement of patents or other proprietary rights not
included in LICENSED PATENTS.

          19.3 UW EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, WHETHER EXPRESS OR
IMPLIED, PERTAINING TO THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OF THE INVENTION, LICENSED SUBJECT MATTER, TECHNICAL INFORMATION, OR ANYTHING
ELSE LICENSED, DISCLOSED, OR OTHERWISE PROVIDED TO LICENSEE UNDER THIS
AGREEMENT. UW'S TOTAL LIABILITY UNDER THIS AGREEMENT IS LIMITED TO THE COSTS AND
FEES PAID TO UW UNDER THIS AGREEMENT.

20.      INDEMNIFICATION. Licensee agrees to indemnify, hold harmless and
defend UW, its officers, inventors, employees, students, and agents, against any
and all claims, suits, losses, damages, costs, fees and expenses resulting from
or arising out of exercise of this Agreement including, but not limited to, any
damages, losses or liabilities whatsoever with respect to death or injury to any
person and damage to any property arising from the possession, use, or operation
of LICENSED SUBJECT MATTER by Licensee or its sublicensees or any customers,
users, or others affected by LICENSED SUBJECT MATTER in any manner whatsoever.
Such indemnification shall not apply to acts or omission by UW, its employees,
agents, successors or assigns. This indemnification clause shall survive the
termination of this Agreement.

21.      APPLICABLE LAWS

          21.1 Licensee agrees to abide by all applicable federal, state, and
local laws and regulations pertaining to the management and commercial
deployment of LICENSED SUBJECT MATTER under this Agreement.

          21.2 LICENSED SUBJECT MATTER may be subject to restrictions concerning
the export of products or technical data from the United States. Accordingly,
Licensee agrees that Licensee shall not export or re-export, directly or
indirectly, any LICENSED SUBJECT MATTER to any country for which the United
States Government or other competent authority at the time of export requires an
export license or other approval, without first obtaining such license or
approval from the appropriate governmental authority.

          21.3 If any dispute shall arise under this Agreement, other than a
bona fide dispute concerning the validity and/or scope of LICENSED PATENTS, the
prevailing party shall be entitled to its reasonable attorney's fees and costs
of litigation and appeal.

22.      NON-BINDING MEDIATION; LITIGATION.

          22.1 Any and all disputes arising between the parties relating to the
making or performance of this Agreement shall be resolved in the following order
of preference: (i) by good faith negotiation between representatives of UW and
Licensee who have authority to fully and

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

                                      -11-

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finally resolve the dispute; (ii) if necessary, by non-binding mediation at a
location acceptable to both parties using a neutral mediator having experience
with the industry in accordance with the Rules of the Center for Public
Resources (with the costs therefor shared equally); or (iii) as a last resort
only, by litigation, provided that any suit, action, or proceeding arising out
of or relating to this Agreement shall be decided in King County, Washington.

          22.2 Nothing herein shall preclude either party from taking whatever
actions in equity are necessary to prevent immediate, irreparable harm to its
interests. Otherwise, the procedures set forth in this Section 22 are exclusive
and shall be fully exhausted prior to the initiation of any litigation.

          22.3 Any questions, claims, disputes, remedies or procedural matters
shall be governed exclusively by the laws of the State of Washington, without
regard to the principles of conflicts of law.

23.      GENERAL

          23.1 If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not be in any way affected or impaired thereby.

          23.2 No omission or delay of either party hereto in requiring due and
punctual fulfillment of the obligations of any other party hereto shall be
deemed to constitute a waiver by such party of its rights to require such due
and punctual fulfillment, or of any other of its remedies hereunder.

          23.3 No amendment or modification hereof shall be valid or binding
upon the parties unless it is made in writing, cites this Agreement, and signed
by duly authorized representatives of UW and Licensee.

                   23.4 The headings of the several sections of this Agreement
are inserted for convenience and reference only, and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement

                   23.5 This Agreement embodies the entire understanding of the
parties and supersedes all previous communications, representations, or
understandings, either oral or written, between the parties relating to the
subject matter hereof.

24.      ASSIGNMENT.

                   24.1 Assignment by Licensee. Licensee may not assign, or make
any other transfer with the effect of an assignment, of all of its rights,
privileges, obligations, and duties under this Agreement to any third party,
without the prior written consent of UW, which consent shall not be unreasonably
withheld provided, however, Licensee may make an assignment

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

                                      -12-

<PAGE>

without consent if such assignment is to an Affiliate or is a part of the sale
of the entire business of Licensee or of that part of the business involving
substantially all of the LICENSED SUBJECT MATTER. Licensee shall give UW prior
written notice of an assignment which requires the consent of UW. UW will
respond in writing within fifteen (15) days of receipt of the notice and the
absence of any response within the time period shall constitute approval.
Licensee shall give UW written notice of an assignment which does not require
UW's consent within fifteen (15) days of such assignment.

                   24.2 Assignment by UW. UW may not assign, or make any other
transfer with the effect of an assignment, of all of its rights, privileges,
obligations, and duties under this Agreement to any third party, without the
prior written consent of Licensee, which consent shall not be unreasonably
withheld. Licensee will respond in writing within fifteen (15) days of receipt
of the notice and the absence of any response within the time period shall
constitute approval.

                            [SIGNATURE PAGE FOLLOWS]

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

                                      -13-

<PAGE>

         IN WITNESS WHEREOF, UW and Licensee have executed this Agreement, in
duplicate originals but collectively evidencing only a single contract, by their
respective duly authorized officers, on the dates hereinafter written.

LICENSEE                                             UNIVERSITY OF WASHINGTON

By: /s/: John J. King, II                            By: /s/: DC Miller
   --------------------------------                      ---------------------
Name: John J. King, II                               Name: DC Miller
      -----------------------------                        -------------------
Title: Sr. Vice President & COO                      Title: Director
       ----------------------------                         ------------------
Date: 9/4/97                                         Date: Sept. 4, 1997
      -----------------------------                        -------------------

UNIVERSITY OF WASHINGTON PERSONNEL:

The below-named personnel understand and concur with this Agreement.

By: /s/: Alan Blanchard                              By:
   --------------------------------                      ---------------------
Name: Alan Blanchard                                 Name:
      -----------------------------                        -------------------
Title: Senior Fellow                                 Title:
       ----------------------------                         ------------------
Date: 5-Sept.-97                                     Date:
      -----------------------------                        -------------------

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

<PAGE>
                                                                EXHIBIT 10.19

              AMENDMENT NO. 1 TO EXCLUSIVE PATENT LICENSE AGREEMENT

                          Dated as of January 28, 1998

         UNIVERSITY OF WASHINGTON (herein called "UW"), a public institution of
higher education having administrative offices in Seattle, Washington, and
ROSETTA INPHARMATICS, INC., (herein called "LICENSEE"), formerly known as
Rosetta Biosystems, Inc., a company organized and existing under the laws of the
State of Delaware and having a place of business at 12040-115th Avenue
Northeast, Kirkland, Washington 98034, hereby agree, effective January 28, 1998,
to amend and revise the Exclusive Patent License Agreement (the "AGREEMENT") by
and between UW and Licensee dated as of September 1, 1997, as set forth below.

         1.          On page 2, Paragraph 2.3:

             (a) under the column headed "Application #", replace "in
                preparation" with "to be assigned (attorney docket no.
                P-UW-2328)";

             (b) under the column headed "Filing Date", replace the blank space
                with [***];

             (c) under the column headed "Title", replace "Automated Synthesis
                of Biopolymer Arrays" with [***]; and

             (d) add a new column entitled "Inventor", and under this new
                column, insert the name [***] in the respective
                row corresponding to each listed application.

         1.  On page 8, Section 13, Notices, replace "Rosetta Biosystems, Inc."
             with "Rosetta Inpharmatics, Inc."

         2.  All other terms and conditions of the Agreement remain in full
             force and effect.

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of January 28, 1998.

     ROSETTA INPHARMATICS, INC.      UNIVERSITY OF WASHINGTON

     By: /s/ John J. King, II        By: /s/ Robert C. Miller
        ------------------------        ------------------------
         John J. King, II               Robert C. Miller

     SENIOR VICE PRESIDENT AND       DIRECTOR AND ASSOCIATE VICE PROVOST CHIEF
     OPERATING OFFICER             FOR RESEARCH
     --------------------------    --------------------------------------------
     Title                                Title

     FEBRUARY 3, 1998                   FEBRUARY 18, 1998
     --------------------------         -----------------------------------
     Date                               Date

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

                                                               Exhibit 10.20

[GRAPHIC OMITTED]

                         LEASE MANAGEMENT SERVICES, INC.

                                      COPY

                          EQUIPMENT FINANCING AGREEMENT

                                  Number 10819

THIS EQUIPMENT FINANCING AGREEMENT NUMBER 10819 ("Agreement") is dated as of the
date set forth at the foot hereof and is between LEASE MANAGEMENT SERVICES,
INC., ("Secured Party") and ROSETTA BIOSYSTEMS, INC., ("Debtor").

1.   EQUIPMENT; SECURITY INTEREST. The terms and conditions of this Agreement
cover each item of machinery, equipment and other property (individually an
"Item" or "Item of Equipment" and collectively the "Equipment") described in a
schedule now or hereafter executed by the parties hereto and made a part hereof
(individually a "Schedule" and collectively the "Schedules"). Debtor hereby
grants Secured Party a security interest in and to all Debtor's right, title and
interest in and to the Equipment under the Uniform Commercial Code, such grant
with respect to an Item of Equipment to be as of Debtor's execution of a related
Equipment Financing Commitment referencing this Agreement or, if Debtor then has
no interest in such Item, as of such subsequent time as Debtor acquires an
interest in the Item. Such security interest is granted by Debtor to secure
performance by Debtor of Debtor's obligations to Secured Party hereunder and
under any other agreements under which Debtor has or may hereafter have
obligations to Secured Party. Debtor will ensure that such security interest
will be and remain a sole and valid first lien security interest subject only to
the lien of current taxes and assessment not in default but only if such taxes
are entitled to priority as a matter of law.

2.   DEBTOR'S OBLIGATIONS. The obligations of Debtor under this Agreement
respecting an Item of Equipment, except the obligation to pay installment
payments with respect thereto which will commence as set forth in Paragraph 3
below, commence upon the grant to Secured Party of a security interest in the
Item. Debtor's obligations hereunder with respect to an Item of Equipment and
Secured Party's security interest therein will continue until payment of all
amounts due, and performance of all terms and conditions required hereunder
provided, however, that if this Agreement is in default said obligations and
security interest will continue during the continuance of said default. Upon
termination of Secured Party's security interest in an Item of Equipment,
Secured Party will execute such release of interest with respect thereto as
Debtor reasonably requests.

3.   INSTALLMENT PAYMENTS AND OTHER PAYMENTS. Debtor will repay advances Secured
Party makes on account of the Equipment in installment payments in the amounts
and at the times set forth in the Schedules, whether or not Secured Party has
rendered an invoice therefor, at the office of Secured Party set forth at the
foot hereof, or to such person

<PAGE>

ROSETTA BIOSYSTEMS, INC.
EQUIPMENT FINANCING AGREEMENT 10819
PAGE 2 OF 11

and/or at such other place as Secured Party may from time to time designate by
notice to Debtor. Any other amounts required to be paid Secured Party by Debtor
hereunder are due upon Debtor's receipt of Secured Party's invoice therefor and
will be payable as directed in the invoice. Payments under this Agreement may be
applied to Debtor's then accrued obligations to Secured Party in such order as
Secured Party may choose.

4.   NET AGREEMENT; NO OFFSET, SURVIVAL. This Agreement is a net agreement, and
Debtor will not be entitled to any abatement of installment payments or other
payments due hereunder or any reduction thereof under any circumstance or for
any reason whatsoever. Debtor hereby waives any and all existing and future
claims, as offsets, against any installment payments or other payments due
hereunder and agrees to pay the installment payments and other amounts due
hereunder as and when due regardless of any offset or claim which may be
asserted by Debtor or on its behalf. The obligations and liabilities of Debtor
hereunder will survive the termination of the Agreement.

5.   FINANCING AGREEMENT. THIS AGREEMENT IS SOLELY A FINANCING AGREEMENT. DEBTOR
ACKNOWLEDGES THAT THE EQUIPMENT HAS OR WILL HAVE BEEN SELECTED AND ACQUIRED
SOLELY BY DEBTOR FOR DEBTOR'S PURPOSES, THAT SECURED PARTY IS NOT AND WILL NOT
BE THE VENDOR OF ANY EQUIPMENT AND THAT SECURED PARTY HAS NOT MADE AND WILL NOT
MAKE ANY AGREEMENT, REPRESENTATION OR WARRANTY WITH RESPECT TO THE
MERCHANTABILITY, CONDITION, QUALIFICATION OR FITNESS FOR A PARTICULAR PURPOSE OR
VALUE OF THE EQUIPMENT OR ANY OTHER MATTER WITH RESPECT THERETO IN ANY RESPECT
WHATSOEVER.

6.   NO AGENCY. DEBTOR ACKNOWLEDGES THAT NO AGENT OF THE MANUFACTURER OR OTHER
SUPPLIER OF AN ITEM OF EQUIPMENT OR OF ANY FINANCIAL INTERMEDIARY IN CONNECTION
WITH THIS AGREEMENT IS AN AGENT OF SECURED PARTY. SECURED PARTY IS NOT BOUND BY
A REPRESENTATION OF ANY SUCH PARTY AND, AS CONTEMPLATED IN PARAGRAPH 27 BELOW,
THE ENTIRE AGREEMENT OF SECURED PARTY AND DEBTOR CONCERNING THE FINANCING OF THE
EQUIPMENT IS CONTAINED IN THIS AGREEMENT AS IT MAY BE AMENDED ONLY AS PROVIDED
IN THAT PARAGRAPH.

7.   ACCEPTANCE. Execution by Debtor and Secured Party of a Schedule covering
the Equipment or any Items thereof will conclusively establish that such
Equipment has been included under and will be subject to all the terms and
conditions of this Agreement. If Debtor has not furnished Secured Party with an
executed Schedule by the Earlier of fourteen (14) days after receipt thereof or
expiration of the commitment period set forth in the applicable Equipment
Financing Agreement, Secured Party may terminate its obligation to advance funds
as to the applicable Equipment.

                                      -2-
<PAGE>

ROSETTA BIOSYSTEMS, INC.
EQUIPMENT FINANCING AGREEMENT 10819
PAGE 3 OF 11

8.   LOCATION; INSPECTION; USE. Debtor will keep, or in the case of motor
vehicles, permanently garage and not remove from the United States, as
appropriate, each Item of Equipment in Debtor's possession and control at the
Equipment Location designated in the applicable Schedule, or at such other
location to which such Item may have been moved with the prior written consent
of Secured Party. Whenever requested by Secured Party, Debtor will advise
Secured Party as to the exact location of an Item of Equipment. Secured Party
will have the right to inspect the Equipment and observe its use during normal
business hours, subject to Debtor's security procedures and to enter into and
upon the premises where the Equipment may be located for such purpose. The
Equipment will at all times be used solely for commercial or business purposes
and operated in .a careful and proper manner and in compliance with all
applicable laws, ordinances, rules and regulations, all conditions and
requirements of the policy or policies of insurance required to be carried by
Debtor under the terms of this Agreement and all manufacturer's instructions and
warranty requirements. Any modifications or additions to the Equipment required
by any such governmental edict or insurance policy will be promptly made by
Debtor.

9.   ALTERATIONS; SECURITY INTEREST COVERAGE. Without the prior written consent
of Secured Party, Debtor will not make any alterations, additions or
improvements to any Item of Equipment which detract from its economic value or
functional utility, except as may be required pursuant to Paragraph 8 above.
Secured Party's security interest in the Equipment will include all
modifications and additions thereto and replacements and substitutions therefor,
in whole or in part. Such reference to replacements and substitutions will not
grant Debtor greater rights to replace or substitute than are provided in
Paragraph 11 below or as may be allowed upon the prior written consent of
Secured Party.

10.  MAINTENANCE: Debtor will maintain the Equipment in good repair, condition
and working order. Debtor will also cause each Item of Equipment for which a
service contract is generally available to be covered by such a contract which
provides coverage's typical to property of the type involved and is issued by a
competent servicing entity.

11.  LOSS AND DAMAGE; CASUALTY VALUE. In the event of the loss of, theft of,
requisition of, damage to or destruction of an Item of Equipment ("Casualty
Occurrence"), Debtor will give Secured Party prompt notice thereof and will
thereafter place such Item in good repair, condition and working order,
provided, however, that if such Item is determined by Secured Party to be lost,
stolen, destroyed or damaged beyond repair, is requisitioned or suffers a
constructive total loss as defined in any applicable insurance policy carried by
Debtor in accordance with Paragraph 14 below, Debtor, at Secured Party's option,
will (a) replace such Item with like Equipment in good repair, condition and
working order whereupon such replacement equipment will be deemed such Item for
all purposes hereof or (b) pay Secured Party the "Casualty Value" of such Item
which will equal the total of (i) all installment payments and other amounts due
from Debtor to Secured Party at the time of such payment and (ii) future
installment payments due with respect to such Item with each such payment
including any final uneven payment discounted at a rate equal to the discount
rate of the Federal Reserve Bank of San Francisco from the date due to the date
of such payment.

                                      -3-
<PAGE>

ROSETTA BIOSYSTEMS, INC.
EQUIPMENT FINANCING AGREEMENT 10819
PAGE 4 OF 11

Upon such replacement or payment, as appropriate, this Agreement and Secured
Party's security interest will terminate with, and only with, respect to the
Item of Equipment so replaced or as to which such payment is made in accordance
with Paragraph 2 above.

12.  TITLING; REGISTRATION. Each item of Equipment subject to title registration
laws will at all times be titled and/or registered by Debtor as Secured Party's
agent. and attorney-in-fact with full power and authority to resister (but
without power to affect title to) the Equipment in such manner and in such
jurisdiction or jurisdictions as Secured Party directs. Debtor will promptly
notify Secured Party of any necessary or advisable retitling and/or
reregistration of an Item of Equipment in a jurisdiction other than the one in
which such Item is then titled and/or registered. Any and all documents of title
will be furnished or caused to be furnished Secured Party by Debtor within sixty
(60) days of the date any titling or registering or restating or reregistering,
as appropriate, is directed by Secured Party.

13.  TAXES. Debtor will make all filings as to and pay when due all personal
property and other ad valorem taxes and all other taxes, fees, charges and
assessments based on the ownership or use of the Equipment and will pay as
directed by Secured Party or reimburse Secured Party for all other taxes,
including, but not limited to, gross receipt taxes (exclusive of federal and
state taxes based on Secured Party's net income, unless such net income taxes
are in substitution for or relieve Debtor from any taxes which Debtor would
otherwise be obligated to pay under the terms of this Paragraph 13), fees,
charges and assessments whatsoever, however designated, whether based on the
installment payments or other amounts due hereunder, levied, assessed or imposed
upon the Equipment or otherwise related hereto or to the Equipment, now or
hereafter levied, assessed or imposed under the authority of a federal, state,
or local taxing jurisdiction, regardless of when and by whom payable. Filings
with respect to such other amounts will, at Secured Party's option, be made by
Secured Party or by Debtor as directed by Secured Party.

14.  INSURANCE. Debtor will procure and continuously maintain all risk insurance
against loss or damage to the Equipment from any cause whatsoever for not less
than the full replacement value thereof naming Secured Party as Loss Payee. Such
insurance must be ma form and with companies approved by Secured Party, must
provide at least thirty (30) days advance written notice to Secured Party of
cancellation, change or modification in any term, condition, or amount of
protection provided therein, must provide full breach of warranty protection and
must provide that the coverage is "primary coverage" (does not require
contribution from any other applicable coverage). Debtor will provide Secured
Party with an original policy or certificate evidencing such insurance. In the
event of an assignment of this Agreement of which Debtor has notice, Debtor will
cause such insurance to provide the same protection to the assignee as its
interests may appear. The proceeds of such insurance, at the option of the
Secured Party or such assignee, as appropriate, will be applied toward (a)
repair or replacement of the appropriate Item or Items of Equipment, (b) payment
of the Casualty Value thereof and/or (c) payment of, or as provision for,
satisfaction of any other accrued obligations of Debtor hereunder. Debtor hereby
appoints Secured Party as Debtor's attorney-in-fact with full power and
authority to do all things, including, but not limited to, making claims,
receiving payments and endorsing documents, checks or drafts, necessary to
secure payments due under any policy contemplated hereby on

                                      -4-
<PAGE>

ROSETTA BIOSYSTEMS, INC.
EQUIPMENT FINANCING AGREEMENT 10819
PAGE 5 OF 11

account of a Casualty Occurrence. Debtor and Secured Party contemplate that the
jurisdictions where the Equipment will be located will not impose any liability
upon Secured Party for personal injury and/or property damage resulting out of
the possession, use, operation or condition of the Equipment. In the event
Secured Party determines that such is not or may not be the case with respect to
a given jurisdiction, Debtor will provide Secured Party with public liability
and property damage coverage applicable to the Equipment in such amounts and in
such form as Secured Party requires.

15.  SECURED PARTY'S PAYMENT. If Debtor falls to pay any amounts due hereunder
or to perform any of its other obligations under this Agreement, Secured Party
may, at its option, but without any obligation to do so, pay such amounts or
perform such obligations, and Debtor will reimburse Secured Party the amount of
such payment or cost of such performance, plus interest at 1.5% per month.

16.  INDEMN1TY. Debtor does hereby assume liability for and does agree to
indemnify, defend, protect, save and keep harmless Secured Party from and
against any and all liabilities, losses, damages, penalties, claims, actions,
suits, costs, expenses and disbursements, including court costs and legal
expenses, of whatever kind and nature, imposed on, incurred by or asserted
against Secured Party (whether or not also indemnified against by any other
person) in any way relating to or arising out of this Agreement or the
manufacture, financing, ownership, delivery, possession, use, operation,
condition or disposition of the Equipment by Secured Party or Debtor, including,
without limitation, any claim alleging latent and other defects, whether or not
discoverable by Secured Party or Debtor, and any other claim arising out of
strict liability in tort, whether or not in either instance relating to an event
occurring while Debtor remains obligated under this Agreement, and any claim for
patent, trademark or copyright infringement. Debtor agrees to give Secured Party
and Secured Party agrees to give Debtor notice of any claim or liability hereby
indemnified against promptly following learning thereof.

17.  DEFAULT. Any of the following will constitute an event of default
hereunder: (a) Debtor's failure to pay when due any installment payment or other
amount due hereunder, which failure continues for ten (10) days after the due
date thereof; (b) Debtor's default in performing any other obligation, term or
condition of this Agreement or any other agreement between Debtor and Secured
Party or default under any further agreement providing security for the
performance by Debtor of its obligations hereunder provided such default has
continued for more than twenty (20) days, except as provided in (c) and (d)
hereinbelow, or, without limiting the generality of subparagraph (1)
hereinbelow, default under any lease or any mortgage or other instrument
contemplating the provision of financial accommodation applicable to the real
property where an Item of Equipment is located; (c) any writ or order of
attachment or execution or other legal process being levied on or charged
against any Item of Equipment and not being released or satisfied within ten
(10) days; (d) Debtor's failure to comply with its obligations under Paragraph
14 above or any transfer by Debtor in violation of Paragraph 21 below; (e) a
non-appealable judgment for the payment of money in excess of $100,000 being
rendered by a court of record against Debtor which Debtor does not discharge or
make provision for discharge in accordance with the terms thereof within ninety
(90) days from the date of entry thereof, (f)

                                      -5-
<PAGE>

ROSETTA BIOSYSTEMS, INC.
EQUIPMENT FINANCING AGREEMENT 10819
PAGE 6 OF 11

death or judicial declaration of incompetency of Debtor, if an individual; (g)
the filing by Debtor of a petition under the Bankruptcy Code or any amendment
thereto or under any other insolvency law or law providing for the relief of
debtors, including, without limitation, a petition for reorganization,
arrangement or extension, or the commission by Debtor of an act of bankruptcy;
(h) the filing against Debtor of any such petition not dismissed or permanently
stayed within thirty (30) days of the filing thereof; (i) the voluntary or
involuntary making of an assignment of substantial portion of its assets by
Debtor for the benefit of creditors, appointment of a receiver or trustee for
Debtor or for any of Debtor's assets, institution by or against Debtor or any
other type of insolvency proceeding (under the Bankruptcy Code or otherwise) or
of any formal or informal proceeding for dissolution, liquidation, settlement of
claims against or winding up of the affairs of Debtor, Debtor's cessation of
business activities or the making by Debtor of a transfer of all or a material
portion of Debtor's assets or inventory not in the ordinary course of business;
(j) the occurrence of any event described in parts (e), (f), (g), (h) or (i)
hereinabove with respect to any guarantor or other party liable for payment or
performance of this Agreement; (k) any certificate, statement, representation,
warranty or audit heretofore or hereafter furnished with respect hereto by or on
behalf of Debtor or any guarantor or other party liable for payment or
performance of this Agreement proving to have been false in any material respect
at the time as of which the facts therein set forth were stated or certified or
having omitted any substantial contingent or unliquidated liability or claim
against Debtor or any such guarantor or other party; (1) breach by Debtor of any
lease or other agreement providing financial accommodation under which Debtor or
its property is bound; or (m) a transfer of effective control of Debtor, if an
organization.

18.  REMEDIES. Upon the occurrence of an event of default, Secured Party will
have the rights, options, duties and remedies of a Secured Party, and Debtor
will have the rights and duties of a debtor, under the Uniform Commercial Code
(regardless of whether such Code or a law similar thereto has been enacted in a
jurisdiction wherein the rights or remedies are asserted) and, without limiting
the foregoing, Secured Party may exercise any one or more of the following
remedies: (a) declare the Casualty Value or such lesser amount as may be set by
law immediately due and payable with respect to any or all Items of Equipment
without notice or demand to Debtor; (b) sue from time to time for and recover
all installment payments and other payments then accrued and which accrue during
the pendency of such action with respect to any or all Items of Equipment; (c)
take possession of and, if deemed appropriate, render unusable any or all Items
of Equipment, without demand or notice, wherever same may be located, without
any court order or other process of law and without liability for any damages
occasioned by such taking of possession and remove, keep and store the same or
use and operate or lease the same until sold; (d) require Debtor to assemble any
or all Items of Equipment at the Equipment Location therefor, or at such
location to which such Equipment may have been moved with the written consent of
Secured Party or such other location in reasonable proximity to either of the
foregoing as Secured Party designates; (e) upon ten (10) days notice to Debtor
or such other notice as may be required by law, sell or otherwise dispose of any
Item of Equipment, whether or not in Secured Party's possession, in a
commercially reasonable manner at public or private sale at any place deemed
appropriate and apply the new proceeds of such sale, after deducting all

                                      -6-
<PAGE>

ROSETTA BIOSYSTEMS, INC.
EQUIPMENT FINANCING AGREEMENT 10819
PAGE 7 OF 11

costs of such sale, including, but not limited to, costs of transportation,
repossession, storage, refurbishing, advertising and brokers' fees, to the
obligations of Debtor to Secured Party hereunder or otherwise, with Debtor
remaining liable for any deficiency and with any excess being returned to
Debtor; (f) upon thirty (30) days notice to Debtor, retain any repossessed or
assembled Items of Equipment as Secured Party's own property in full
satisfaction of Debtor's liability for the installment payments due hereunder
with respect thereto, provided that Debtor will have the right to redeem such
Items by payment in full of its obligations to Secured Party hereunder or
otherwise or to require Secured Party to sell or otherwise dispose of such.
Items in the manner set forth in subparagraph (e) hereinabove upon notice to
Secured Party within such thirty (30) day period; or (g) utilize any other
remedy available to Secured Party under the Uniform Commercial Code or similar
provision of law or otherwise at law or in equity.

No right or remedy conferred herein is exclusive of any other right- or remedy
conferred herein or by law; but all such remedies are cumulative of every other
right or remedy conferred hereunder or at law or in equity, by statute or
otherwise, and may be exercised concurrently or separately from time to time.
Any sale contemplated by subparagraph (e) of this Paragraph 18 may be adjourned
from time to time by announcement at the time and place appointed for such sale,
or for any such adjourned sale, without further published notice, Secured Party
may bid and become the purchaser at any such sale. Any sale of an Item of
Equipment, whether under said subparagraph or by virtue of judicial proceedings,
will operate to divest all right, title, interest, claim and demand whatsoever;
either at law or in equity, of Debtor in and to said item and will be a
perpetual bar to any claim against such Item, both at law and in equity, against
Debtor and all persons claiming by, through or under Debtor.

19.  DISCONTINUANCE OF REMEDIES. If Secured Party proceeds to enforce any right
under this Agreement and such proceedings are discontinued or abandoned for any
reason or are determined adversely, then and in every such case Debtor and
Secured Party will be restored to their former positions and rights hereunder.

20.  SECURED PARTY'S EXPENSES. Debtor will pay Secured Party all costs and
expenses, including attorney's fees and court costs and sales costs not offset
against sales proceeds under Paragraph 18 above, incurred by Secured Party in
exercising any of its rights or remedies hereunder or enforcing any of the
terms, conditions or provisions hereof. This obligation includes the payment or
reimbursement of all such amounts whether an action is ultimately filed and
whether an action is ultimately dismissed.

21.  ASSIGNMENT. Without the prior written consent of Secured Party, Debtor will
not sell, lease, pledge or hypothecate, except as provided in this Agreement,
any Item of Equipment or any interest therein or assign, transfer, pledge, or
hypothecate this Agreement or any interest in this Agreement or permit the
Equipment to be subject to any lien, charge or encumbrance of any nature except
the security interest of Secured Party contemplated hereby. Debtor's interest
herein is not assignable and will not be assigned or transferred by operation of
law. Consent to any of the foregoing prohibited acts applies only in the given
instance and is not a consent to any subsequent like act by Debtor or any other
person.

                                      -7-
<PAGE>

ROSETTA BIOSYSTEMS, INC.
EQUIPMENT FINANCING AGREEMENT 10819
PAGE 8 OF 11

All rights of Secured Party hereunder may be assigned, pledged, mortgaged,
transferred or otherwise disposed of; either in whole or in part, without notice
to Debtor but always, however, subject to the rights of Debtor under this
Agreement. If Debtor is given notice of any such assignment, Debtor will
acknowledge receipt thereof in writing. In the event Secured Party assigns this
Agreement or the installment payments due or to become due hereunder or any
other interest herein, whether as security for any of its indebtedness or
otherwise, no breach or default by Secured Party hereunder or pursuant to any
other agreement between Secured Party and Debtor, should there be one, will
excuse performance by Debtor of any provision hereof, it being understood that
in the event of such default or breach by Secured Party that Debtor will pursue
any rights on account thereof solely against Secured Party. No such assignee,
unless such assignee agrees in writing, will be obligated to perform any duty,
covenant or condition required to be performed by Secured Party in connection
with this Agreement.

Subject always to the foregoing, this Agreement inures to the benefit of, and is
binding upon, the heirs, legatees, personal representative, successors and
assigns of the parties hereto.

22.  MARKINGS; PERSONAL PROPERTY. If Secured Party supplies Debtor with labels,
plates, decals or other markings stating that Secured Party has an interest in
the Equipment, Debtor will affix and keep the same prominently displayed on the
Equipment or will otherwise mark the Equipment or its then location or
locations, as appropriate, at Secured Party's request to indicate Secured
Party's security interest in the Equipment. The Equipment is, and at all times
will remain, personal property notwithstanding that the Equipment or any Item
thereof may now be, or hereafter become, in any manner affixed or attached to,
or embedded in, or permanently resting upon real property or any improvement
thereof or attached in any manner to what is permanent as by means of cement,
plaster, nails, bolts, screws or otherwise. If requested by Secured Party,
Debtor will obtain and deliver to Secured Party waivers of interest or liens in
recordable form satisfactory to Secured Party from all persons claiming any
interest in the real property on which an Item of Equipment is or is to be
installed or located.

23.  LATE CHARGES. Time is of the essence in this Agreement and if any
Installment Payment is not paid within ten (10) days after the due date thereof;
Secured Party shall have the right to add and collect, and Debtor agrees to pay:
(a) a late charge on and in addition to, such Installment Payment equal to five
percent (5%) of such Installment Payment or a lesser amount if established by
any state or federal statute applicable thereto, and (b) interest on such
Installment Payment from thirty (30) days after the due date until paid at the
highest contract rate enforceable against Debtor under applicable law but never
to exceed eighteen percent (18%) per annum.

24.  NON-WAIVER. No covenant or condition of this Agreement can be waived except
by the written consent of Secured Party. Forbearance or indulgence by Secured
Party in regard to any breach hereunder will not constitute a waiver of the
related covenant or condition to be performed by Debtor.

25.  ADDITIONAL DOCUMENTS. In connection with and in order to perfect and
evidence the security interest in the Equipment granted Secured Party hereunder
Debtor will

                                      -8-
<PAGE>

ROSETTA BIOSYSTEMS, INC.
EQUIPMENT FINANCING AGREEMENT 10819
PAGE 9 OF 11

execute and deliver to Secured Party such financing statements and similar
documents as Secured Party requests. Debtor authorizes Secured Party where
permitted by law to make filings of such financing statements without Debtor's
signature. Debtor further will furnish Secured Party (a) on a timely basis,
Debtor's future financial statements, including Debtor's most recent annual
report, balance sheet and income statement, prepared in accordance with
generally accepted accounting principles, which reports, Debtor warrants, shall
fully and fairly represent the true financial condition of Debtor (b) any other
information normally provided by Debtor to the public and (c) such other
financial data or information relative to this Agreement and the Equipment,
including, without limitation, copies of vendor proposals and purchase orders
and agreements, listings of serial numbers or other identification data and
confirmations of such information, as Secured Party may from time to time
reasonably request. Debtor will procure and/or execute, have executed,
acknowledge, have acknowledged, deliver to Secured Party, record and file such
other documents and showings as Secured Party deems necessary or desirable to
protect its interest in and rights under this Agreement and interest in the
Equipment. Debtor will pay as directed by Secured Party or reimburse Secured
Party for all filing. search, title report, legal and other fees incurred by
Secured Party in connection with any documents to be provided by Debtor pursuant
to this Paragraph or Paragraph 22 and any further similar documents Secured
Party may procure.

26.  DEBTOR'S WARRANTIES. Debtor certifies and warrants that the financial data
and other information which Debtor has submitted, or will submit, to Secured
Party in connection with this Agreement is, or will be at time of delivery, as
appropriate, a true and complete statement of the matters therein contained.
Debtor further certifies and warrants: (a) this Agreement has been duly
authorized by Debtor and when executed and delivered by the person signing on
behalf of Debtor below will constitute the legal, valid and binding obligation,
contract and agreement of Debtor enforceable against Debtor in accordance with
its respective terms; (b) this Agreement and each and every showing provided by
or on behalf of Debtor in connection herewith may be relied upon by Secured
Party in accordance with the terms thereof notwithstanding the failure of Debtor
or other applicable party to ensure proper attestation thereto, whether by
absence of a seal or acknowledgment or otherwise; (c) Debtor has the right,
power and authority to grant a security interest in the Equipment to Secured
Party for the uses and purposes herein set forth and (d) each Item of Equipment
will, at the time such Item becomes subject hereto, be in good repair, condition
and working order.

27.  ENTIRE AGREEMENT. This instrument with exhibits and related documentation
constitutes the entire agreement between Secured Party and Debtor and will not
be amended, altered or changed except by a written agreement signed by the
parties.

28.  NOTICES. Notices under this Agreement must be in writing and must be mailed
by United States mail, certified mail with return receipt requested, duly
addressed, with postage prepaid, to the party involved at its respective address
set forth at the foot hereof or at such other address as each party may provide
on notice to the other from time to time. Notices will be effective when
deposited. Each party will promptly notify the other of any change in that
party's address.

                                      -9-
<PAGE>

ROSETTA BIOSYSTEMS, INC.
EQUIPMENT FINANCING AGREEMENT 10819
PAGE 10 OF 11

29.  GENDER, NUMBER: JOINT AND SEVERAL LIABILITY. Whenever the context of this
Agreement requires, the neuter gender includes the feminine or masculine and the
singular number includes the plural; and whenever the words "Secured Party" are
used herein, they include all assignees of Secured Party, it being understood
that specific reference to "assignee" in Paragraph 14 above is for further
emphasis. If there is more than one Debtor named in this Agreement, the
liability of each will be joint and several.

30.  TITLES. The titles to the Paragraphs of this Agreement are solely for the
convenience of the parties and are not an aid in the interpretation of the
instrument.

                                      -10-
<PAGE>

ROSETTA BIOSYSTEMS, INC.
EQUIPMENT FINANCING AGREEMENT 10819
PAGE 11 OF 11

31.  GOVERNING LAW; VENUE. This Agreement will be governed by and construed in
accordance with the laws of the State of California. Venue for any action
related to the Agreement will be in an appropriate court in San Mateo County,
California, to which Debtor consents, or in another court selected by Secured
Party which has jurisdiction over the parties. In the event any provision hereof
is declared invalid, such provision will be deemed severable from the remaining
provisions of this Agreement, which will remain in full force and effect.

32.  TIME. Time is of the essence of this Agreement and for each and all of its
provisions.

In WITNESS WHEREOF, the undersigned have executed this Agreement as of September
10, 1997.

DEBTOR:
ROSETTA BIOSYSTEMS, INC.
12040 115th Avenue, NE Suite 210
Kirkland, WA 98034

By: /s/
   --------------------------------
Title: SR. VICE PRESIDENT
      ------------------------------

SECURED PARTY:
LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA  94025

By: /s/
   ----------------------------------
Title: EVP/GENERAL MANAGER
      -------------------------------

                                      -11-

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