Document:

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                                                                    EXHIBIT 10.5

                            CONFIDENTIAL TREATMENT
                            ----------------------

ORCHID BIOSCIENCES, INC. HAS REQUESTED THAT THE MARKED PORTIONS OF THIS DOCUMENT
    BE ACCORDED 406 CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE
                      SECURITIES ACT OF 1933, AS AMENDED.

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
             EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

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                            COLLABORATION AGREEMENT

                                 BY AND BETWEEN

                            ORCHID BIOCOMPUTER, INC.

                                      AND

                                AFFYMETRIX, INC.

                               NOVEMBER 05, 1999

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                            COLLABORATION AGREEMENT

          This COLLABORATION AGREEMENT (this "Agreement"), effective as of
November 5, 1999 (the "Effective Date"), is by and between Orchid Biocomputer,
Inc., a Delaware corporation having a place of business at 303 College Road
East, Princeton, New Jersey 08540 (hereinafter referred to as "ORCHID") and
Affymetrix, Inc., a Delaware corporation having its principal place of business
at 3380 Central Expressway, Santa Clara, California 95051 (hereinafter referred
to as "AFFYMETRIX").

      The Parties hereby agree as follows:

1.    DEFINITIONS
      -----------
      As used in this Agreement, the following terms, whether used in the
singular or plural, shall have the following meanings:

      1.1 "AFFYMETRIX Collaboration Technology" means any Technology developed
or conceived by employees of or consultants to AFFYMETRIX alone or jointly with
Third Parties, during the Term in the conduct of the Collaboration.

      1.2 "Affiliate" of a Party means any corporation or other business entity,
which controls, is controlled by, or is under common control with, a Party. For
purposes of this Section, "control" shall mean direct or indirect ownership of
more than 50% of the voting interest or economic interest in a corporation or
more than 50% of the equity interests in the case of any other entity, or such
other relationship whereby a party controls or has the right to control the
Board of Directors or equivalent governing body of a corporation or other
entity.

      1.3 "Approved Instruments" means one or more AFFYMETRIX scanners and
associated instruments and software, as such instrumentation is then
commercially available from AFFYMETRIX.

      1.4 "Clinical Use" means any use of a Product as part of the prevention,
diagnosis or treatment of any disease or condition in a patient and all
government (i.e., FDA or equivalent foreign governmental body) regulated
diagnostic uses in which the result is used in treatment of such patient.

      1.5 "Collaboration" means the Product research, development and
commercialization program jointly conceived, planned, organized, controlled and
performed by ORCHID and AFFYMETRIX pursuant to this Agreement.

      1.6 "Combination Kit" means any Custom Kit that contains Primers more than
50% of which are identical to Primers contained in any part of any Standard Kits
existing at the time of launch of such Custom Kit, or any combination of
Standard Kits existing at the time of launch of such Custom Kit.

      1.7 "Collaboration Management Committee" or "CMC" means the committee
defined in Section 2 to aid in the joint collaborative effort to develop and
commercialize Products.

      1.8 "Commercial Probe Arrays" means TAG Arrays sold by AFFYMETRIX to Third
Parties in conjunction with (although they may be separately packaged from) an
ORCHID OEM Kit.

      1.9 "Confidential Information" means all information and materials,
patentable or otherwise, of a Party and which is disclosed by or on behalf of
such Party (the "Disclosing Party") to the other Party (the "Receiving Party")
or developed, learned or obtained by the Receiving Party in connection with the
Collaboration or otherwise under this Agreement, including, but not limited to,
business, technical or financial information, DNA sequences, vectors, cells
substances, formulations, techniques, methodology, equipment, data,

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reports, know-how, preclinical and clinical trials and the results thereof,
sources of supply, patent positioning and business plans, including any negative
developments, whether or not related to the Collaboration.

      1.10 "Contract Year" means any year during the Term of this Agreement
commencing on the Effective Date or any anniversary of the Effective Date and
ending on the anniversary thereof.

      1.11 "Control" or "Controlled" means, with respect to any Technology, the
possession by a Party of the ability to grant a license or sublicense of such
Technology as provided herein without violating the terms of any agreement or
arrangement between such Party and any Third Party.

      1.12 "Custom Kit" means a kit consisting of certain Reagents, certain
Primers that have been customized by Orchid or Orchid's subcontractors for use
in the Field of Use and an End User License, and shall not include use of or
refer to any use of TAG Arrays other than for genotyping with GBA.

      1.13 "Custom Kit Information" means [*]

      1.14 "End User" means any Third Party licensed to use a Product pursuant
to an End User License received in connection with the purchase by such Third
Party of a Product.

      1.15 "End User License" means a limited non-transferable license in form
and substance as set forth in Schedule 1.15 hereto, granted by ORCHID to End
                              -------------
Users under ORCHID End User Technology to use only the amount of the material
included in the Product in the Field of Use.

      1.16 "Field of Use" means [*]

      1.17 "Generic Kit" means a kit consisting of Reagents and an End User
License.

      1.18 "Joint Technology" means any Technology (i) developed or conceived by
employees of or consultants to one Party as a result of the use by such Party of
Technology of the other Party or any Joint Technology or (ii) jointly developed
by employees of or consultants to both ORCHID and AFFYMETRIX in the conduct of
the Collaboration.

      1.19 "Net Sales" [*]

      1.20 "ORCHID End User Technology" means Technology Controlled by ORCHID as
of the Effective Date that is useful to practice the End User License, as listed
or described on Schedule 1.20 attached hereto.
                -------------

      1.21 "ORCHID OEM Kits" means Standard Kits or Generic Kits.

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      1.22 "ORCHID Licensed Technology" means Technology Controlled by ORCHID
and its Affiliates as of the Effective Date that is useful in the Field of Use,
as listed or described on Schedule 1.22 attached hereto. ORCHID represents and
                          -------------
warrants that the items listed on Schedule 1.22 hereto comprise all of the
                                  -------------
ORCHID Licensed Technology as of the Effective Date of this agreement. As of the
Effective Date the Orchid Licensed Technology does not require payment of
royalties to third parties. Orchid and its Affiliates will amend this Schedule
1.22 from time to time to keep it current. ORCHID and its Affiliates warrant
that all Controlled Technology for carrying out the marketing, sale, and other
disposition of Products will be included in the ORCHID Licensed Technology.

      1.23 "ORCHID Collaboration Technology" means any Technology developed or
conceived by employees of or consultants to ORCHID alone or jointly with Third
Parties, during the Term in the conduct of the Collaboration.

      1.24 "Product" means any of a Standard Kit, a Custom Kit and/or a Generic
Kit.

      1.25 "Party" means AFFYMETRIX or ORCHID; "Parties" means AFFYMETRIX and
ORCHID .

      1.26 "Primer" means GBA primers [*]

      1.27 "Project Director(s)" means the senior scientists for the
Collaboration designated from time to time by AFFYMETRIX and ORCHID.

      1.28 "Reagent" means buffers, enzymes and terminators (but not Primers)
useful in GBA.

      1.29 "Research Purposes" means the detection and analysis of SNPs in
samples, such definition includes all non-government (i.e., FDA or equivalent
foreign governmental body) regulated diagnostic uses.

      1.30 "SNP" means Single Nucleotide Polymorphism.

      1.31 "Standard Kit" means a kit consisting of Reagents, CMC Approved
Primers for use in the Field of Use and an End User License.

      1.32 "Technology" means and includes all inventions, discoveries,
improvements, trade secrets and proprietary methods and materials, whether or
not patentable, including but not limited to, samples of, methods of production
or use of, and structural and functional information pertaining to, chemical
compounds, proteins or other biological substances; other data; formulations;
techniques; and know-how; including any negative results.

      1.33 "GBA" means Genetic Bit Analysis, or single nucleotide primer
extension methods designed to detect the identity of a single nucleotide at a
predetermined location in the DNA of a sample.

      1.34 "TAG Array" means a tag array GeneChip probe array. [*]

      1.35 "TAG Assay" means any assays for hybridization to a TAG Array.

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      1.36 "Term" means the period beginning on the Effective Date and ending on
the fifth anniversary thereof unless otherwise extended or terminated as
provided herein.

      1.37 "Specifications" means the specifications for ORCHID OEM Kits
established by the CMC and set forth on Schedule 1.37 attached hereto, as such
                                        -------------
specifications may be amended from time to time by the CMC.

      1.38 "Third Party" means any person or entity other than ORCHID and
AFFYMETRIX and their respective Affiliates.

      1.39 "Workplan" means any CMC-approved plan for collaborative research and
development of Products to be conducted under this Agreement. The Initial
Workplan is set forth in Schedule 1.39 to this Agreement and shall commence upon
                         -------------
approval by the newly formed CMC.

2.    THE COLLABORATION
      ------------------

      2.1 Purpose.

      The purpose of the Collaboration is to develop, manufacture, market and
sell (i) Products, and (ii) software applications for Approved Instruments all
as set forth in Schedule 1.39. The purpose of the Collaboration may be modified
and/or extended upon mutual agreement of the Parties in writing.

      2.2 Collaboration Management Committee and General Operations.

            (a) CMC. Each Party shall appoint a Project Director who shall serve
                ---
      as such Party's primary liaison with the other Party to discuss technical
      matters pertaining to the Collaboration. The Parties shall also establish
      the CMC composed of two or more representatives appointed by AFFYMETRIX
      and two or more representatives appointed by ORCHID. A Party's
      representatives shall serve at the discretion of such Party and may be
      replaced at any time by such Party. Each Party, by its representative(s),
      shall have one vote on the CMC. The CMC will coordinate the joint
      collaborative efforts to achieve the purpose of the Collaboration. The CMC
      will have general responsibility for directing both the commercial
      development of ORCHID OEM Kits developed and supplied hereunder, and the
      research effort of the Collaboration, and for monitoring the work done and
      costs incurred pursuant to the Collaboration. In addition, the CMC shall
      establish the mechanism and procedures through which each Standard Kit is
      approved for, and developed under, the Collaboration; [*] The initial
      meeting of the CMC shall occur no later then 30 days after the Effective
      Date of this Agreement, and among other things, such initial meeting shall
      consist of formal approval of the Initial Workplan (and each of the
      parties hereby agrees to cause its representatives on the CMC to vote in
      favor of such Initial Workplan, without modification.) The CMC will review
      the Workplans for the subsequent Contract Years during the Term of the
      Collaboration at least 60 days prior to the start of each subsequent
      Contract Year and make any modifications as may be required prior to
      granting its approval.

            (b) Meetings. During the Collaboration, the CMC shall meet at least
                --------
      quarterly. The site of CMC meetings shall alternate between the offices of
      AFFYMETRIX and ORCHID (or any other site or by teleconference as mutually
      agreed upon by the CMC). Whenever any action by the CMC is called for
      hereunder during a time period in which the CMC is not scheduled to meet,
      a representative of either Party may cause the CMC to take the action in
      the requested time period by calling a special meeting or written
      agreement to take such by action without a meeting. The proceedings of all
      meetings of the CMC shall be summarized in writing and sent to both
      Parties. The Party hosting the meeting shall be responsible for the
      preparation and circulation of such summaries. Draft summaries shall be
      issued in final form only upon approval by the CMC at a subsequent meeting
      or as evidenced by the signature of a majority of the representatives of
      the CMC. Each Party shall bear all expenses of their respective CMC
      representatives related to their participation on the CMC and attendance
      at CMC meetings.

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            (c) Collaboration Operations. The Collaboration shall be conducted
                ------------------------
      at and/or coordinated from the facilities of each Party under the
      supervision and direction of its Project Director. Each Party shall be
      responsible for the administrative management, fiscal control, and
      expenses incurred by it for tasks assigned to it in each Workplan. Each
      Party shall assemble a team of scientists, engineers, technical associates
      and/or assistants. So long as the Collaboration continues, any Party
      performing work under a Workplan that is funded by the other Party shall
      periodically (at least quarterly) provide to the other Party written
      progress reports summarizing the technical progress of such work, and
      associated costs relating to such work. Each Party also shall provide the
      other Party through the CMC with additional oral progress reports as
      requested from time to time by the other Party.

            (d) Generic Kit and Standard Kit Proposals. During the Term,
                --------------------------------------
      AFFYMETRIX may designate up to [*] Standard Kits that are each
      comprised of a standard assay with up to [*], and other components, all of
      which are selected by AFFYMETRIX, and the transfer price of such new
      Standard Kits. Schedule 1.39 more particularly identifies such kits
                     -------------
      including the markers and transfer price [*] and shall be deemed Standard
      Kits that have been approved by the CMC, except that such transfer prices
      shall be [*], and the parties shall use all commercially reasonable
      efforts to promptly complete development of such kits and the CMC shall
      agree on the transfer price. In addition, during the Term of the
      Collaboration, either Party may, in its sole discretion, propose that new
      Generic Kits or new Standard Kits be developed by the Collaboration by
      providing written notice thereof (including the transfer price of each
      such kit) to the CMC (such notice being referred to herein as the "New Kit
      Notice"), which notice shall include a reasonable description of the
      proposed specifications, components and the transfer price of such new
      Generic Kit or Standard Kit. If ORCHID is the Party proposing the
      development of a new Generic Kit or Standard Kit, and Affymetrix does not,
      within sixty (60) days after receipt of such New Kit Notice expressly
      agree to co-develop the new Generic Kit or Standard Kit described therein,
      then ORCHID may pursue development of the new Generic Kit or Standard Kit
      independently of AFFYMETRIX (provided that no express or implied license
      to AFFYMETRIX intellectual property is conveyed thereby.) If AFFYMETRIX is
      the Party proposing the development of a new Generic Kit or a new Standard
      Kit, and Orchid does not, within sixty (60) days after receipt of such New
      Kit Notice expressly agree to co-develop the new Generic Kit or new
      Standard Kit described therein, then AFFYMETRIX may pursue development of
      the new Generic Kit or new Standard Kit independently of ORCHID,and the
      licenses granted to AFFYMETRIX under Section 3.1 (and Section 4.1(b))
      shall include the right to directly and indirectly develop, make, use,
      market, sell and distribute such kits. In such case, AFFYMETRIX shall pay
      ORCHID a royalty of [*] of Net Sales of such kit unless the Parties agree
      in writing to a lower rate; provided, that [*] provided that reductions
      shall roll forward, if necessary, so that payments to ORCHID are not
      reduced to less than [*] of what they would have been in the absence of
      this provision.

            (e) Custom Kits. ORCHID shall provide AFFYMETRIX with quarterly
                -----------
      written reports containing Custom Kit Information relating to Custom Kits
      sold by ORCHID; subject, in each case, to any confidentiality obligations
      of ORCHID to such customers of such Custom Kits. Either Party will be free
      to use it to promote the sale of other products or services with such
      information.

                  (i) Royalties on Combination Kits. ORCHID shall pay to
                      -----------------------------
            AFFYMETRIX a per kit royalty on ORCHID's Net Sales of Combination
            Kits equal to [*] of Net Sales of each Combination Kit, reduced by
            the fraction:
            [*]

                  (ii) Conversion of Custom Kits to Standard Kits. ORCHID agrees
                       ------------------------------------------
            that, at AFFYMETRIX's option upon written notice to ORCHID at any
            time after the Conversion Date (as defined below), any Custom Kit
            sold to a given customer or group of customers for which sales in
            any Contract Year

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            exceeds [*] will, effective the first day of the first
            calendar quarter following the Contract Year in which such event
            occurred (the "Conversion Date") become a Standard Kit (each, a
            "Converted Kit"); provided that, the Parties hereby agree that (i)
                              -------------
            under no circumstances shall a Custom Kit convert to a Converted Kit
            if such conversion would violate the terms of the applicable
            agreement between ORCHID and such customer or customers or if such
            Custom Kit contains primers for the analysis of SNPs that are owned
            either by such customer or owned by ORCHID but limited to use by
            such customer, and are subject to restrictions on use by third
            parties (provided, however, ORCHID shall use commercially reasonable
            efforts to ensure that any primers contained in such Custom Kits are
            free of restrictions on use), and (ii) Custom Kits shall convert to
            Converted Kits on an individual basis, with reference to the
            Specifications of such Custom Kit. If, with respect to a Converted
            Kit, the CMC concludes that at the Conversion Date ORCHID has not
            recovered the [*] incurred by ORCHID in developing such Custom Kit,
            then the CMC may require AFFYMETRIX to pay a conversion fee in an
            amount not to exceed [*]) in an amount and payment schedule
            determined by the CMC. ORCHID may until the end of the sixth month
            following immediately after the Conversion Date sell its inventory
            of Converted Kits. Thereafter, ORCHID will cease all distribution
            activities relating to such Converted Kit, and shall transfer all
            remaining inventory of Converted Kits to AFFYMETRIX at the transfer
            price established for such Converted Kit by the CMC. Once a
            conversion occurs, the parties will negotiate reasonable commercial
            performance standards for AFFYMETRIX's sales of Converted Kits.

                  (iii) Standard Kits Analyte Specific Reagents Status. Within
                        ----------------------------------------------
            180 days after commercial release of each Standard Kit, but not
            before nine month anniversary of the Effective Date, ORCHID will use
            all commercially reasonable efforts to ensure that each Standard Kit
            shall be manufactured as an analyte specific reagent in accordance
            with 21 CFR 864. In addition, ORCHID will use all commercially
            reasonable efforts to take all steps necessary or desirable to
            ensure that the Standard Kits manufactured and sold hereunder meet
            other applicable standards, such as ISO 9000, as soon as
            practicable.

      2.3 Specific Development Duties.

      (a) Development Obligations. The Parties shall use commercially reasonable
          -----------------------
efforts to fulfill their respective obligations as set forth in each Workplan in
accordance with the time schedules set forth therein. AFFYMETRIX and ORCHID
agree to work cooperatively and expeditiously to make such modifications to the
design of Products as may be required to reduce total costs and/or improve
Product performance. Notwithstanding the foregoing, it is hereby agreed that
ORCHID shall have sole responsibility for the development of Custom Kits. With
respect to the Initial Workplan, ORCHID shall be responsible for over-all ORCHID
OEM Kit development, including, assay development and optimization,
amplification technology development, and regulatory approval, as the CMC
determines to be appropriate. Specifically ORCHID shall (1) develop generic and
standard TAG Assays with consultation from Affymetrix, (2) provide AFFYMETRIX
the GBA specific analysis algorithms as set forth in Schedule 1.39, and (3)
assist AFFYMETRIX in integrating the foregoing into the AFFYMETRIX Approved
Instrument systems. With respect to the Initial Workplan, AFFYMETRIX shall be
responsible for TAG Array design and production and Approved Instrument software
integration and analysis.

      (b) Development Costs of ORCHID OEM Kits, Custom Kits and Certain Standard
          ----------------------------------------------------------------------
Kits. As between the Parties, (i) ORCHID shall be responsible for all
----
development costs and expenses associated with the development of the ORCHID
Generic Kits (exclusive of any internal development costs and expenses incurred
by AFFYMETRIX), (ii) the Parties shall share all development costs and expenses
associated with the development of Standard Kits for which development has been
approved by the CMC in the manner and proportion agreed upon by the CMC and
(iii) AFFYMETRIX shall be responsible for all of its own development costs and
expenses associated with the development of the software for the ORCHID OEM
Kits. With respect to any Kit developed pursuant to Section 2.2(d), the Party
developing such Standard Kit shall be solely responsible for all costs and
expenses associated with developing such Standard Kit.

      (c) Training. ORCHID will provide AFFYMETRIX reasonable training in the
          --------
use of ORCHID OEM Kits at ORCHID's facility in Princeton, New Jersey. It is
anticipated that such training will take place over approximately a two- week
period and will involve two scientists from AFFYMETRIX and 2 scientists from
ORCHID. AFFYMETRIX will provide ORCHID reasonable training in the use of its TAG
Arrays at AFFYMETRIX's facility in Santa Clara, California. It is anticipated
that such training will take place over

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approximately a two-week period and will involve 2 scientists from ORCHID and
two scientists from AFFYMETRIX

      (d) Use of Instruments and TAG Arrays During Development. During
          ----------------------------------------------------
development of an ORCHID OEM Kit pursuant to a Workplan, ORCHID may purchase TAG
Arrays and Approved Instruments from AFFYMETRIX; provided, that any TAG Arrays
purchased from AFFYMETRIX may be used only to perform internally (without the
assistance of Third Party unless AFFYMETRIX gives its prior written agreement)
the development activities expressly described in the Workplan, and for no other
purpose. AFFYMETRIX agrees to sell such items to ORCHID at the list prices set
forth in Schedule 2.3(d). All payments due hereunder to AFFYMETRIX shall be paid
to AFFYMETRIX within thirty (30) days following of the date of the applicable
AFFYMETRIX invoice.

3.    DISTRIBUTION AND MARKETING
      --------------------------

      3.1 Marketing Rights and Responsibilities.

      (a) ORCHID OEM Kit License Grants. ORCHID hereby grants AFFYMETRIX, under
          -----------------------------
the ORCHID Licensed Technology and upon the terms and subject to the conditions
specified herein, an exclusive, non-transferable, worldwide, royalty-free right
and license to (a) use ORCHID OEM Kits internally for research and development
purposes, and (b) directly and indirectly offer for sale, market, distribute,
demonstrate and sell ORCHID OEM Kits.

      (b) ORCHID Information License Grant. ORCHID hereby grants AFFYMETRIX
          --------------------------------
under ORCHID's intellectual property rights, and upon the terms and subject to
the conditions specified herein, an exclusive, non-transferable, worldwide,
royalty-free right and license to use, reproduce and modify information and
materials provided by ORCHID to create marketing and related sales materials for
the Orchid OEM Kits, and to directly and indirectly distribute such information
and materials (whether in modified or unmodified form) to third parties.

      (c) The transfer price for ORCHID OEM Kits developed under the Initial
Workplan and to be paid by AFFYMETRIX to ORCHID is set forth in Schedule 2.3(d)
                                                                ---------------
attached hereto, which transfer price may be reviewed every Contract Year during
the Term by ORCHID upon sixty (60) days written notice to AFFYMETRIX. The
transfer price to be paid to ORCHID by AFFYMETRIX for ORCHID OEM Kits developed
under other Workplans shall be established and set forth in such Workplans.
AFFYMETRIX may from time to time request a discount for ORCHID OEM Kits with
respect to large volume customers or other special situations and the Parties
shall negotiate any such discount in good faith. AFFYMETRIX shall assume the
risk of payment from purchasers of ORCHID OEM Kits and AFFYMETRIX shall be free
to determine the price at which it resells ORCHID OEM Kits to such purchasers.
In the event AFFYMETRIX sells an ORCHID OEM Kit for more than [*] then
AFFYMETRIX agrees to pay ORCHID an amount equal to [*] provided, however, that
if AFFYMETRIX sells an ORCHID OEM Kit for more [*], then AFFYMETRIX agrees to
pay ORCHID an additional amount equal to [*] No employee or representative of
ORCHID shall have any authority to dictate to AFFYMETRIX or its dealers the
resale prices for ORCHID OEM Kits or in any way to inhibit their pricing
discretion with respect to ORCHID OEM Kits; provided, that, AFFYMETRIX shall
                                            --------  ----
remain liable and responsible for the performance and observance of all of its
authorized dealer's duties and obligations in accordance with the terms of this
Agreement. AFFYMETRIX shall have responsibility for marketing and providing
support directly to customers for ORCHID OEM Kits.

            (i) During the Term of this Agreement, AFFYMETRIX shall obtain
      ORCHID OEM Kits exclusively from ORCHID and may not and therefore shall
      not manufacture ORCHID OEM Kits except as otherwise permitted by this
      Agreement.

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            (ii) The Parties hereby acknowledge and agree that all sales of
      ORCHID OEM Kits to AFFYMETRIX shall be controlled by the terms contained
      in this Agreement and the terms and conditions of the respective business
      forms of the Parties shall not form part of this Agreement.

      (d) Minimum Sales Amounts. The CMC will establish minimum sales amounts
          ---------------------
for ORCHID OEM Kits at least thirty (30) days prior to the end of each Contract
Year during the Term for the following Contact Year, which minimum sales shall
be included in the Initial Workplan and in each subsequent Workplan approved by
the CMC. If AFFYMETRIX does not achieve established minimum sales amounts for
two consecutive calendar quarters, then ORCHID, in its sole discretion, may
convert the exclusive license granted pursuant to section 3.1(a) to a
non-exclusive license with respect to that certain ORCHID OEM Kit. AFFYMETRIX
may terminate its exclusive license or convert said licenses to a non-exclusive
license at any time. In the event that the license is converted to a
non-exclusive license pursuant to this section, AFFYMETRIX's minimum sales
requirements for such ORCHID OEM Kit will no longer apply.

      (e) Marketing and Distribution of Custom Kits. Except as otherwise
          -----------------------------------------
described in this Agreement, ORCHID shall be solely responsible for
manufacturing, marketing and distributing Custom Kits to customers throughout
the world.

      (f) Customer Ordering Procedure; Website. ORCHID may provide a website for
          ------------------------------------
customers to order Custom Kits. If customer indicates on such website that
customer desires to purchase an ORCHID OEM Kit, ORCHID shall transfer such
customer to AFFYMETRIX's designated website through a hyperlink in the manner
requested by AFFYMETRIX and to the location within AFFYMETRIX's website
designated by AFFYMETRIX. If a customer indicates that it desires to purchase a
Custom Kit, and ORCHID desires to sell such customer a Custom Kit, ORCHID shall
within 5 days of receipt of such order provide to AFFYMETRIX all Custom Kit
Information related to such customer's purchase (including, but not limited to
projected delivery dates) to enable AFFYMETRIX to coordinate sale of applicable
AFFYMETRIX products to such customer. At such time, ORCHID shall provide
AFFYMETRIX with the complete written specifications of such Custom Kit, subject
in each such case to any confidentiality obligation ORCHID may have to any Third
Party (and provided that ORCHID shall use commercially reasonable efforts to
minimize such obligations), which information AFFYMETRIX may use to determine
appropriate instrumentation and to promote the sale of other AFFYMETRIX
products. To the extent that such information is Confidential Information of
ORCHID, AFFYMETRIX shall not disclose such information to any third party. In
addition, to assist AFFYMETRIX with its marketing efforts with respect to the
Custom Kits, ORCHID shall on a regular basis (at least once each calendar
quarter) provide AFFYMETRIX with current marketing and sales information
relating to the Custom Kits, which may include research, analysis, customer and
distribution information and competitive analysis, to the extent not subject to
confidentiality obligations to Third Parties. All such materials shall remain
the property of ORCHID. AFFYMETRIX also shall be responsible for distributing
and selling the TAG Arrays and Approved Instruments identified in Schedule 1.39
as required for use of such Custom Kits to purchasers of Custom Kits, provided
that such customers order and pay for such items according to AFFYMETRIX's
standard terms and conditions therefor.

      (g) Joint Marketing Activities. Through the CMC, the Parties shall
          --------------------------
coordinate all marketing and promotion of Products and tag arrays distributed by
the respective Parties to potential customers of SNP analysis products.

      3.2 Product Maintenance and Support.
          -------------------------------

      (a) Generic Kit and Standard Kit. The CMC shall determine the specific
          ----------------------------
mechanics of providing maintenance and support for the products marketed and
distributed pursuant to this Agreement. However, AFFYMETRIX shall be generally
responsible for front-line customer support for all Products except the Custom
Kits, and ORCHID shall provide backline support, as and when requested by
AFFYMETRIX, for ORCHID OEM Kits. Specifically, ORCHID shall provide such support
directly to one or more designated support managers of AFFYMETRIX. With respect
to ORCHID OEM Kits, ORCHID shall provide support and maintenance services to
AFFYMETRIX as further specified by and consistent with the level of support
provided by AFFYMETRIX with respect to AFFYMETRIX instruments, and there shall
be no fee to ORCHID (other than the transfer price for the kits) for rendering
such support.

                                     Page 8
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                                                                  Execution Copy

      (b) Custom Kits. ORCHID shall have responsibility for marketing and
          -----------
supporting Custom Kits. ORCHID shall use commercially reasonable efforts to
market (including, without limitation, inclusion of the Custom Kits in ORCHID's
catalogs and other promotional materials), distribute and support the Custom
Kits (including installation, training, and agrees to provide reasonable support
for customers and AFFYMETRIX as reasonably requested by AFFYMETRIX), and shall
use commercially reasonable efforts to meet market demands for Custom Kits, and
to provide support for Custom Kits. However, AFFYMETRIX shall provide backline
support, as and when requested by ORCHID for AFFYMETRIX instruments and tag
arrays used by purchasers of Custom Kits. Specifically, AFFYMETRIX shall provide
such support directly to one or more designated support managers of ORCHID
consistent with the level of support provided by AFFYMETRIX with respect to
AFFYMETRIX Approved instruments and Tag Arrays, and there shall be no fee to
AFFYMETRIX for rendering such support. If at any time during the Term of this
Agreement, ORCHID elects to discontinue or transfer to a third party the
manufacture, sale or marketing any Custom Kit pursuant to this Agreement, ORCHID
shall notify AFFYMETRIX in writing, and AFFYMETRIX shall have 30 days to advise
ORCHID of its interest in manufacturing and/or distributing and selling such
Custom Kit during the Term. If AFFYMETRIX advises ORCHID of its interest, then
the Parties shall negotiate for 60 days in good faith to determine the
appropriate royalty or other fee (if any) that AFFYMETRIX shall pay to ORCHID.
If the parties cannot reach agreement within such period, then ORCHID may
discontinue manufacture and sale of such Custom Kit or transfer such kit to a
third party, provided that if ORCHID elects to transfer such kit to a third
party, the royalty or other fees paid by such third party must be higher than
the royalty or other fees last offered by AFFYMETRIX.

      (c) Reports. Each Party shall provide the other Party with such
          -------
information about their respective products and services as is reasonably
necessary to support the development and marketing of technical support
materials, and the training of technical support personnel for ORCHID OEM Kits.
(d) Rights to Sell Kits. ORCHID represents, warrants and covenants that the
restrictions set forth in the Security Agreement dated September 11, 1998 by and
among ORCHID and GeneScreen, Inc. ("GeneScreen Security Interest") are the only
restrictions imposed on ORCHID with respect to the manufacture, use,
distribution, modification or sale by AFFYMETRIX or use by AFFYMETRIX's end
users of ORCHID OEM Kits or the Custom Kits. In the event that the obligations
of ORCHID with respect to any such restriction is reduced, ORCHID shall promptly
notify AFFYMETRIX, and promptly provide AFFYMETRIX with any information
requested by AFFYMETRIX with respect to such restriction. If Orchid believes
that it needs to access third party intellectual property in order to avoid
encumbering its ability to sell Orchid OEM Kits to AFFYMETRIX, it will discuss
this with the CMC. If no CMC agreement is reached within 30 days, then Orchid
can enter into a license at its discretion, provided that Affymetrix's rights
under this agreement will not be limited by such license.

      (d) Rights to Sell Kits. ORCHID represents, warrants and covenants that
          -------------------
the restrictions set forth in the [*] are the only restrictions imposed on
ORCHID with respect to the manufacture, use, distribution, modification or sale
by AFFYMETRIX or use by AFFYMETRIX's end users of ORCHID OEM Kits or the Custom
Kits. In the event that the obligations of ORCHID with respect to any such
restriction is reduced, ORCHID shall promptly notify AFFYMETRIX, and promptly
provide AFFYMETRIX with any information requested by AFFYMETRIX with respect to
such restriction. If Orchid believes that it needs to access third party
intellectual property in order to avoid encumbering its ability to sell Orchid
OEM Kits to AFFYMETRIX, it will discuss this with the CMC. If no CMC agreement
is reached within 30 days, then Orchid can enter into a license at its
discretion, provided that Affymetrix's rights under this agreement will not be
limited by such license.

[*]

4.    MANUFACTURING
      -------------

      4.1 Forecast and Supply.
          -------------------

      (a) Forecasts. At the end of each calendar quarter during the term of this
          ---------
agreement, AFFYMETRIX shall submit to ORCHID a [*] month rolling
forecast of its then current estimates of its requirements of ORCHID OEM Kits.
AFFYMETRIX's forecasts shall reflect its good-faith expectations of customer
demand and AFFYMETRIX shall act in a commercially reasonable manner to schedule
orders to avoid creating production capacity problems for ORCHID. At the end of
each calendar quarter during the Term of this Agreement, ORCHID shall submit to
AFFYMETRIX a [*] month rolling forecast of its then current estimates of
sales of Custom Kit, which forecast shall be delineated by prospective customer,
so as to permit AFFYMETRIX to validate such customers and reasonably anticipate
the quantities of AFFYMETRIX products that

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                                                                  Execution Copy

AFFYMETRIX may make available that are associated with such Custom Kit. ORCHID's
forecasts shall reflect its good-faith expectations of customer demand.

      (b) Supply. ORCHID shall supply ORCHID OEM Kits to AFFYMETRIX in
          ------
accordance with the purchase orders submitted to ORCHID by AFFYMETRIX, including
the delivery schedules specified therein; provided, that ORCHID shall not be
required to fill any purchase orders from AFFYMETRIX requesting a delivery date
earlier than [*] after receipt of such orders by ORCHID. ORCHID will maintain
adequate production capacity to ensure delivery of ORCHID OEM Kits in accordance
with such purchase orders and shall ensure that ORCHID OEM Kits meet the
Specifications set by the CMC. ORCHID hereby grants AFFYMETRIX a, worldwide,
non-transferable, non-exclusive license under ORCHID Licensed Technology, to,
(1) develop Generic Kits and Standard Kits as authorized in Section 2.2(d), (2)
make, have made, and use (which use includes the right to modify) Orchid OEM
Kits and (3) distribute, market and sell such ORCHID OEM Kits ("OEM License")
pursuant to the license granted to AFFYMETRIX as set forth in Section 3.1 (a).
AFFYMETRIX agrees to forbear from the use and exercise of the OEM License unless
and until ORCHID fails to fill any purchase order within [*] after receipt of
such order, ORCHID has otherwise breached this Agreement, or ORCHID sells
substantially all of ORCHID's business that relates to the subject matter of
this Agreement to a third party which Affymetrix believes in good faith
materially competes with Affymetrix, or which Affymetrix believes in good faith
could not or would not satisfy its obligation hereunder. If AFFYMETRIX' use and
exercise of the OEM License is caused by ORCHID'S failure to fill a purchase
order (and no other reason), AFFYMETRIX' forbearance shall be reinstated once
ORCHID demonstrates to the reasonable satisfaction of AFFYMETRIX (which shall
not be unreasonably withheld) that ORCHID is again able to fill purchase orders
within the time limits set forth in Section 4.1. During the time that AFFYMETRIX
is not forbearing from use and exercise of the OEM License, ORCHID shall provide
promptly (at no charge) to AFFYMETRIX or an approved third party designated by
AFFYMETRIX, all technical assistance and information as reasonably required to
enable AFFYMETRIX, or said third party, to supply OEM Kits as set forth in this
Section. During the time that AFFYMETRIX is not forbearing from use and exercise
of the OEM License, AFFYMETRIX will pay ORCHID a royalty of [*] of Net Sales of
ORCHID OEM Kits which fall under the new OEM License (which royalty shall be
subject to reduction in the manner and scope described in Section 2.2(d)) unless
the Parties agree in writing to a lower rate; provided, further, however, that
if AFFYMETRIX'S use and exercise of the OEM License is caused by ORCHID'S
failure to fill a purchase order (and no other reason), and ORCHID resumes
manufacture of ORCHID OEM Kits under this Section, then the transfer price paid
by AFFYMETRIX for such ORCHID OEM Kits shall be reduced by [*] until such time
as AFFYMETRIX has recovered an amount equal to any costs and expenses incurred
to exercise the OEM License (including any royalties paid under this Section.)

      (c) Packaging; Delivery. The ORCHID OEM Kits delivered hereunder shall be
          -------------------
packaged as set forth in Schedule 4.1(c), with the names and logos of both
Parties prominently displayed on each package. ORCHID shall pack such items in
standard shipping containers in the manner requested by AFFYMETRIX. ORCHID shall
assist AFFYMETRIX in obtaining any desired insurance (in amounts that AFFYMETRIX
shall determine) and transportation, via air freight unless otherwise specified
in writing, to any destinations specified in writing from time to time by
AFFYMETRIX. [*]

      (d) Payment. ORCHID shall invoice AFFYMETRIX for all ORCHID OEM Kits on or
          -------
after the date specified for delivery in AFFYMETRIX's purchase order for such
items. AFFYMETRIX shall pay all amounts specified in such invoice not later than
thirty (30) days following the date of such invoice. Any undisputed amounts not
paid when due under this Agreement shall be subject to a late fee equal to [*]
of the outstanding amount or the maximum rate permitted by law, whichever is
less.

      (e) Audit. In keeping with established bookkeeping and accounting
          -----
practices, each Party shall maintain, for a period of [*] following
the end of the Contract Year, complete and accurate books and records fully
adequate to confirm the accuracy of the royalties, fees or commissions paid and
payable under this Agreement. Each of the Parties shall have the right, [*] per
calendar year, or more frequently if an examination determines that there has
been an underpayment of more than [*], during regular business hours and upon
[*] prior written notice, to have its independent auditors make such
examination as necessary to

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                                                                  Execution Copy

verify said records and books of account. In the event that such examination
reveals an underpayment of royalties, fees or commissions payable hereunder, all
such additional royalties, fees or commissions, as the case may be, together
with interest from the date when such additional royalties, fees or commissions
would have been due shall be paid within thirty (30) days of written notice from
the auditing party of such discrepancy. Any such audit shall be at the auditing
Party's sole expense and performed by a nationally recognized, "Big Five"
accounting firm under reasonable obligations of confidentiality. In the event
that an underpayment of more than [*] is discovered, then audited Party will
reimburse the auditing Party's reasonable costs of the audit.

      4.2  Acceptance/Rejection of Deliverables.
           ------------------------------------

      (a) Testing. AFFYMETRIX shall , in conjunction with the CMC, develop
          -------
processes for evaluation and testing of ORCHID OEM Kits to be delivered
hereunder. Such processes may from time to time be reflected or incorporated in
the applicable Specifications for ORCHID OEM Kits. Orchid shall provide
certificates of analysis certifying completion of said testing and indicating
parameters defined by the CMC.

      (b) Acceptance Procedure; Inventory Carry. Upon delivery of any shipment
          -------------------------------------
of ORCHID OEM Kits to AFFYMETRIX, AFFYMETRIX shall promptly inspect the same and
shall notify ORCHID in writing no later than [*] after receipt of each such
shipment if any such shipment is found, on reasonable inspection, to be short
against order or fails to conform to the Specifications during said [*] period.
AFFYMETRIX may reject any portion of any shipment of ORCHID OEM Kits that does
not fully conform with the Specifications. If any shipment or portion thereof is
rejected by AFFYMETRIX, ORCHID shall use diligent efforts, at AFFYMETRIX's
request, to provide replacement ORCHID OEM Kits to AFFYMETRIX or to correct any
defects in such shipment as may be reasonably requested by AFFYMETRIX. Unless
ORCHID requests the return of a rejected shipment within [*] of receipt of
AFFYMETRIX's notice of rejection, AFFYMETRIX shall destroy such shipment
promptly and provide ORCHID with a certification of such destruction. To ensure
that the Parties can supply all third party requirements with accepted ORCHID
OEM Kits, ORCHID shall at all times maintain an inventory of ORCHID OEM Kits
that is equal to at least [*] of the quantities of such products sold during the
preceding calendar quarter; if no quantities of a product have been sold in the
preceding calendar quarter, the ORCHID shall maintain an inventory level equal
to at least [*] of AFFYMETRIX's forecasted quantities of such product for the
current calendar quarter. In addition, AFFYMETRIX may upon ninety (90) days'
prior notice to ORCHID elect to terminate AFFYMETRIX's obligations to purchase,
and ORCHID's obligations to supply, any such inventoried product. Any ORCHID OEM
Kit that does not meet all of the quality control and quality assurance
requirements, and any ORCHID OEM Kit that does not conform to Specifications as
set forth in this Agreement, shall not be considered delivered.

      4.3  Governmental Approval.
           ---------------------

      (a) The Parties agree to ascertain and comply with all applicable laws and
regulations and standards of industry or professional conduct in connection with
the use, distribution or promotion of Products, including without limitation,
those applicable to exportation, importation, product claims, labeling,
approvals, registrations and notifications. In addition, ORCHID agrees to obtain
AFFYMETRIX's prior written consent to all claims, labels, instructions,
packaging or the like for ORCHID OEM Kits, which consent shall not be
unreasonably withheld.

      (b) The Parties agree to keep (and make reasonably available for the other
party's use and copying) for five years after termination of this Agreement (or
longer if required by applicable law) records of all Product sales and customers
sufficient to adequately administer a recall of any Products and to cooperate
fully in any decision by the Parties to recall, retrieve and/or replace any such
Products.

5.    OWNERSHIP; LICENSES
      -------------------

      5.1 OWNERSHIP. Subject to Section 5.2 of this Agreement, ORCHID shall have
          ---------
sole and exclusive ownership of all right, title and interest in and to all
ORCHID Collaboration Technology. AFFYMETRIX shall have sole and exclusive
ownership of all right, title and interest in and to all AFFYMETRIX
Collaboration

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                                                                  Execution Copy

Technology. ORCHID and AFFYMETRIX shall each own an undivided one-half interest
(without an obligation of accounting) in all Joint Technology.

      5.2 CERTAIN IMPROVEMENTS. Notwithstanding the foregoing, (a) if ORCHID
          --------------------
creates, invents or otherwise develops any improvements to TAG Assays (each a
"TAG Improvement"), then (i) ORCHID shall (and hereby does) assign and transfer
to AFFYMETRIX all right, title and interest in and to such TAG Improvement, and
all related intellectual property rights Controlled by ORCHID related thereto,
(ii) AFFYMETRIX shall (A) grant to ORCHID a non-exclusive, non-transferable,
royalty-free license to exploit such TAG Improvement for ORCHID's internal use,
and (B) shall include internal use rights to use such TAG Improvement within the
licenses granted to Product customers, and (iii) to the extent that AFFYMETRIX
grants any Third Party a license to exploit the TAG Improvements, AFFYMETRIX
shall pay ORCHID a royalty of [*] of the Net Sales (which royalty shall be
subject to reduction in the manner and scope described in Section 2.2(d))
received by AFFYMETRIX from (and only from) use of such TAG Improvements until
ORCHID has received an aggregate of [*], at which time no further royalties or
other fees shall be due or owing ORCHID in respect of such TAG Improvement; and
(b) if AFFYMETRIX creates, invents or otherwise develops any improvements to GBA
(each a "GBA Improvement"), then (i) AFFYMETRIX shall (and hereby does) assign
and transfer to ORCHID all right, title and interest in and to such GBA
Improvement, and all related intellectual property rights Controlled by
AFFYMETRIX related thereto, (ii) ORCHID shall (A) grant to AFFYMETRIX a non-
exclusive, non-transferable, royalty-free license to exploit such GBA
Improvement for AFFYMETRIX's internal use and (B) shall include internal use
rights to use such GBA Improvements within the licenses granted to Product
customers, and (iii) to the extent that ORCHID grants any Third Party a license
to exploit the GBA Improvements, ORCHID shall pay AFFYMETRIX a royalty of [*] of
the Net Sales (which royalty shall be subject to reduction in the manner and
scope described in Section 2.2(d)) received by ORCHID from (and only from) use
of such GBA Improvements until AFFYMETRIX has received an aggregate of [*], at
which time no further royalties or other fees shall be due or owing AFFYMETRIX
in respect of such GBA Improvement. This Section 5 does not (by implication or
otherwise) extend to either party any license to any other intellectual property
or technology such as any underlying technology in any TAG Improvement or GBA
Improvement. Notwithstanding anything to the contrary, neither party shall have
any rights, licenses or obligations, whether express or implied, except as
expressly set forth in this Agreement.

6.    CONFIDENTIAL INFORMATION
      ------------------------

      6.1 CONFIDENTIALITY. ORCHID and AFFYMETRIX each recognize that the other
          ---------------
party's Confidential Information constitutes highly valuable and proprietary
confidential information. ORCHID and AFFYMETRIX each agree that during the Term
of the Collaboration and for [*] thereafter, it will keep confidential, and will
cause its employees, consultants, Affiliates and licensees and sublicensees to
keep confidential, and shall not transfer to any Third Party, any Confidential
Information of the other Party that is disclosed or transferred to it, or to any
of its employees, consultants, Affiliates and licensees and sublicensees,
pursuant to or in connection with this Agreement, except to the extent that
disclosure, or transfer, is reasonably required in accordance with the
performance of this Agreement. Each Receiving Party's nondisclosure obligation
shall not apply to information that is (i) known to the Receiving Party at the
time of disclosure thereof (as shown by written documentation); (ii) at the time
of disclosure, or thereafter, is generally publicly available without the fault
of the Receiving Party; (iii) subsequently disclosed to the Receiving Party, its
employees, or other duly designated representatives, by any Third Party not
under a secrecy obligation to the Disclosing Party; (iv) independently developed
by the Receiving Party without reference to Confidential Information of the
Disclosing Party; (v) required, by law, regulation or action of any governmental
agency or authority, to be disclosed; or (vi) disclosed by the Receiving Party
with the prior written consent of the Disclosing Party.

      6.2 NON-DISCLOSURE. ORCHID and AFFYMETRIX each agree that any disclosure
          --------------
of the Confidential Information to any of its officers, employees, consultants
or agents or of any of its Affiliates and licensees and sublicensees shall be
made only if and to the extent necessary to carry out its rights and
responsibilities under this Agreement, shall be limited to the maximum extent
possible consistent with such rights and responsibilities and shall only be made
to persons who are bound by written confidentiality obligations to maintain the
confidentiality thereof and not to use such Confidential Information except as
expressly permitted by this Agreement. Each Party shall take such action, and
shall cause its Affiliates and licensees and sublicensees to take

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                                                                  Execution Copy

such action, to preserve the confidentiality of each other's Confidential
Information as it would customarily take to preserve the confidentiality of its
own Confidential Information, and in no event, less than reasonable care.

      6.3 EMPLOYEES AND CONSULTANTS. ORCHID and AFFYMETRIX each represent that
          -------------------------
all of its employees and the employees of its Affiliates, and any consultants to
such party or its Affiliates, participating in the Collaboration's activities
who shall have access to Confidential Information of the other Party are bound
by written obligations to maintain such information in confidence and not to use
such information except as expressly permitted herein. Each Party agrees to
enforce confidentiality obligations to which its employees and consultants (and
those of its Affiliates) are obligated.

      6.4 PUBLICITY. Neither Party shall disclose the existence or the terms or
          ---------
conditions of this Agreement without the express prior written consent of the
other Party, and then only pursuant to the terms authorized by such other Party;
provided, however, that either Party may make such a disclosure to the extent
required by law or by the requirements of any nationally recognized securities
exchange, quotation system or over-the-counter market on which such Party has
its securities listed or traded. The Parties, upon the execution of this
Agreement, will agree to a news release with respect to the Collaboration for
publication in general circulation and industry periodicals. Once any written
statement is approved for disclosure by both Parties, either Party may make
subsequent public disclosure of the contents of such statement without the
further approval of the other Party.

7.    TERM AND TERMINATION
      --------------------

      7.1 TERM. Unless earlier terminated in accordance with the provisions of
          ----
Section 7.2 or Section 7.3, this Agreement shall remain in effect during the
Term of this Agreement. This Agreement will renew for additional terms of one
(1) year each upon notice by either Party to the other in writing at least
ninety (90) days prior to the expiration of the Term or any extension thereof
that it wishes to renew this Agreement.

      7.2 TERMINATION FOR BREACH. Each Party shall be entitled (but not
          ----------------------
required) to terminate this Agreement by written notice to the other Party in
the event that the other Party shall be in default of any of its obligations
hereunder or if the other Party shall have breached a covenant, representation
or warranty made in this Agreement, and shall fail to remedy any such default
within thirty (30) days of receipt of notice in the case of a breach of any
payment term of this Agreement and sixty (60) days in the case of any other
breach.

      7.3 TERMINATION FOR INSOLVENCY. The Agreement may be terminated by a Party
          --------------------------
for cause immediately upon the occurrence of any of the following events: (a) If
the other Party ceases to do business, or otherwise terminates it business
operations; or (b) the other Party shall seek protection under any bankruptcy,
receivership, trust deed, creditors arrangement, composition or comparable
proceeding, or if any such proceeding is instituted against the other. All
rights and licenses granted under this Agreement are deemed to be, for purposes
of 365(n) of the United States Bankruptcy Code, license or rights to
"intellectual property" as defined by Section 101(56) of the United States
Bankruptcy Code and the parties will retain any may fully exercise all of their
rights and licenses under this Agreement, including the right to make or have
made, sell or have sold Products. The parties agree to relief from automatic
stay provisions under Section 362 of the Bankruptcy Code.

      7.4 EFFECT OF TERMINATION. Upon any termination or expiration of this
          ---------------------
Agreement, neither Party shall be relieved of any obligations incurred prior to
such termination. Notwithstanding any termination or expiration of this
Agreement, the rights and obligations of the Parties under Sections 4.1(e), 5,
6, 7, 8, 10 and 11 shall survive and continue to be enforceable. Upon any
termination of this Agreement, each Party shall promptly return to the other
Party all written Confidential Information, and all copies thereof, of the
other, except for one copy thereof that may be retained by a Party's legal
department for archival purposes or to exercise rights described above that
survive termination. Neither Party shall incur any liability or compensation
obligation whatsoever for any damage (including, without limitation, damage to
or loss of goodwill or investment), loss or expenses of any kind suffered or
incurred by the other (or for any compensation to the other) arising from or
incident to any termination of this Agreement by such Party that complies with
the terms of the Agreement whether or not such Party is aware of any such
damage, loss or expenses.

                                    Page 13
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8.    INDEMNIFICATION AND INSURANCE
      -----------------------------

      8.1 ORCHID INDEMNITY. ORCHID agrees to defend AFFYMETRIX and its
          ----------------
Affiliates, their agents, directors, officers and employees ("AFFYMETRIX
Indemnitees"), at ORCHID's cost and expense, and will indemnify and hold
harmless AFFYMETRIX Indemnitees from and against any and all losses, liability,
damages, costs and expenses (including, but not limited to attorneys' fees and
expenses (collectively, "Claims") (except in cases where such Claims result from
a material breach of this Agreement or willful misconduct on the part of
AFFYMETRIX) arising from or relating to (1) any alleged infringement by
AFFYMETRIX [or its customers] of any Third Party intellectual property or
proprietary rights solely attributable to AFFYMETRIX's sale or customer's use as
intended, of all or any part of the ORCHID OEM Kits or Custom Kits (including
but not limited to Reagents) or (2) any recall of any ORCHID OEM Kits or (3)
ORCHID's breach of any representation or warranty of ORCHID set forth in this
Agreement or (4) any other materials supplied by ORCHID hereunder, or (5) death
or any injury to any person or damage to property as a result of the possession
or use of any ORCHID OEM Kits or Custom Kits.

      8.2 AFFYMETRIX INDEMNITY. Subject to the obligations of ORCHID set forth
          --------------------
in 8.1 above, AFFYMETRIX agrees to defend ORCHID and its Affiliates, their
agents, directors, officers and employees ("ORCHID Indemnitees"), at
AFFYMETRIX's cost and expense, and will indemnify and hold harmless ORCHID
Indemnitees from and against any and all Claims (except in cases where such
Claims result from a material breach of this Agreement or willful misconduct on
the part of ORCHID) arising from or relating to (1) any alleged infringement
attributable to ORCHID's sales to AFFYMETRIX of ORCHID OEM Kits or sales of
Custom Kits (provided, however, that such indemnity shall be limited to Claims
of infringement caused by Approved Instruments and TAG Arrays except to the
extent that such Claim arises from or relates to any combination of the ORCHID
OEM Kits or Custom Kits with any Approved Instrument or the TAG Array) or (2)
any recall of any an Affymetrix instrument or Commercial Probe Arrays delivered
to a customer in conjunction with ORCHID OEM Kits, or (3) AFFYMETRIX's breach of
any representation or warranty of AFFYMETRIX set forth in this Agreement or (4)
any other materials supplied by AFFYMETRIX hereunder (provided, however, that
such indemnity shall not include any Claims of infringement arising from or
relating to any combination of the ORCHID OEM Kits or Custom Kits with any
Approved Instrument or the TAG Array except to the extent that such Claim would
have existed in the absence of such combination), or (5) death or any injury to
any person or damage to property as a result of the possession or use of any
Instrument or Commercial Probe Array delivered to a customer in conjunction with
ORCHID OEM Kits.

      8.3 PROCEDURE. In the event of any such claim, the Party seeking indemnity
          ---------
shall promptly notify the indemnifying Party in writing of the claim and the
indemnifying Party shall have the right, to manage and control, at its sole
expense, the defense of the claim and the settlement thereof. The indemnified
Party shall cooperate with the indemnifying Party and may, at its option and
expense, be represented in any such action or proceeding. The indemnifying Party
shall not be liable for any settlements, litigation costs or expenses incurred
by the indemnified Party without the indemnifying Party's written authorization.
Notwithstanding the foregoing, unless and until ORCHID achieves annual revenues
of [*] million, AFFYMETRIX shall have the right at their expense, but not the
obligation to defend the AFFYMETRIX Indemnitees against any claim of
infringement without tendering defense thereof to ORCHID; provided, however,
that ORCHID may participate in such defense at its own expense

      8.4 INSURANCE. Each Party agrees to use its best efforts to procure and,
          ---------
at all times during the term of this Agreement, to maintain in full force and
effect general liability insurance coverage of at least [*] per occurrence and
at least [*] aggregate (with a deductible of no more than [*] aggregate per year
and which policy names the other Party as a named insured). Each Party, upon
request of the other Party, will supply such other Party with appropriate
certificates of insurance evidencing the foregoing insurance.

9.    REPRESENTATIONS AND WARRANTIES
      ------------------------------

      9.1 Each of the Parties represents and warrants to the other Party as
follows:

                                    Page 14

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

<PAGE>
                                                                  Execution Copy

      9.2 The execution and delivery of this Agreement and the performance of
the transactions contemplated hereby and thereby have been duly authorized by
all appropriate corporate action, and the Party has all requisite power and
authority to enter into this Agreement and to perform its obligations hereunder
and thereunder, and each representation of this Agreement constitutes a valid
and binding obligation of each Party, enforceable against each Party in
accordance with its terms.

      9.3 The performance by the Party of any of the terms and conditions of
this Agreement on its part to be performed does not and will not constitute a
breach of any other agreement or understanding, whether written or oral, to
which it or any of its affiliates is a party.

      9.4 The Party has the right to convey all technical information and
technology conveyed hereunder and that the information and technology so
conveyed does not violate the trade secret rights or copyrights of a third party
and to its knowledge, does not violate the patent or trademark rights of a third
party.

      9.5 The Party has used reasonable commercial efforts to ensure the quality
of the materials and data provided hereunder.

10.   DISPUTE RESOLUTION
      ------------------

      10.1 SENIOR OFFICIALS. In the event of any controversy or claim relating
           ----------------
to, arising out of or in any way connected to any provision of this Agreement
("Dispute"), either Party may, by notice to the other Party, have such dispute
referred to their respective senior officials designated below or their
successors, for attempted resolution by good faith negotiations within thirty
(30) days after such notice is received. Said designated employees are as
follows:

       For ORCHID:      CEO

       For AFFYMETRIX:  CEO

      10.2 MEDIATION. In the event the designated senior officials are not able
           ---------
to resolve any such dispute within the thirty (30) day period, either Party may
invoke the provisions of this Section 11.2 by initiating mediation of the
Dispute under the then correct Center for Public Resources Procedure for
Mediation of Business Disputes. Once mediation is initiated by one Party, the
other Party shall participate in and conduct the mediation procedures in good
faith. If a negotiator intends to be accompanied at a telephone conference or a
meeting by an attorney, the negotiator for the other Party shall be given at
least three (3) days notice of such intention, and may also be accompanied by an
attorney. All negotiations pursuant to this clause are confidential and shall be
treated as compromise and settlement negotiations for the purposes of the
Federal Rules of Evidence and any state rules of evidence. All applicable
statutes of limitations and defenses based on the passage of time shall be
tolled while the negotiation and mediation procedures set forth in this Section
10.2 are pending. The Parties will take such action, if any, as may be
reasonably required to effectuate such tolling.

      10.3 ARBITRATION. Any Dispute that is not resolved pursuant to Section
           -----------
10.2 shall be finally resolved by final and binding arbitration. Whenever a
Party shall decide to institute arbitration proceedings, it shall give written
notice to that effect to the other Party. The Party giving such notice shall
refrain from instituting the arbitration proceedings for a period of ten (10)
days following such notice to allow the Parties to attempt to resolve the
dispute between themselves. If the Parties are still unable to resolve the
dispute, the Party giving notice may institute the arbitration proceeding under
the rules of the American Arbitration Association ("AAA Rules"). Arbitration
shall exclusively and solely be held in San Francisco, California. The
arbitration shall be conducted before a single arbitrator mutually chosen by the
Parties, but if the parties have not agreed upon a single arbitrator within
fifteen (15) days after notice of the institution of the arbitration proceeding,
then the arbitration will be conducted by a panel of three arbitrators. In such
case, each Party shall within thirty (30) days after notice of the institution
of the arbitration proceedings appoint one arbitrator. The presiding arbitrator
shall then be appointed in accordance with AAA Rules. No arbitrator (nor the
panel of arbitrators) shall have the power to award punitive

                                    Page 15
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                                                                  Execution Copy

damages or any award of multiple damages under this Agreement and such awards
are expressly prohibited. Decisions of the arbitrator(s) shall be final and
binding on the Parties.

      10.4 Notwithstanding the foregoing, if within ten (10) days of the first
occasion when the Parties' representatives meet with the arbitrator(s) either
Party gives notice by written designation of any matter relating solely to the
validity or scope of any patent as being subject to the Patent Exception
referred to above, then the matter so designated shall be set aside by the
arbitrator(s) and shall not be decided by them, provided that the matter so
designated constitutes a matter of which a United States District Court would
have jurisdiction pursuant to 28 U.S.C. (S) 1338(a), whether by way of action
for declaratory judgment or otherwise, and provided further that such matter is
submitted by the designating Party for decision by such court upon a complaint
filed within thirty (30) days of such designation, to be decided as such court
may determine. The sole jurisdiction and venue for actions related to the
subject matter hereof shall be the California state and U.S. federal courts
located in San Francisco, California. In such case, the nondesignating Party may
elect (no later than the date on which it files its answer to the complaint in
the District Court) to refer the entire matter in controversy to such court, but
if such Party does not make such election the arbitrator(s) shall proceed to
decide the remaining matter before them to the extent feasible and shall take
such other action in such regard as they deem appropriate. Judgment on the award
of the arbitrator(s) may be entered in any court having jurisdiction thereof.

      10.5 Except to the extent entry of judgment and any subsequent enforcement
may require disclosure, all matters relating to the arbitration, including the
award, shall be held in confidence by the Parties.

11.   MISCELLANEOUS.
      -------------

      11.1 Except as otherwise provided in this Agreement, neither this
Agreement nor any of the rights or obligations hereunder may be assigned by
either Party without the prior written consent of the other Party, except that
either Party may assign to an Affiliate, or to a party who acquires all or
substantially all of the relevant business relating to the subject matter of
this Agreement by merger, acquisition, sale of assets or otherwise.

      11.2 This Agreement shall be governed by and interpreted in accordance
with the laws of California (without regard to its or any other jurisdiction's
choice of law principles).

      11.3 Except as expressly and unambiguously provided herein, no right,
express or implied, is granted by this Agreement to either Party to use in any
manner the name of the other or any other trade name or trademark of the other
in connection with the performance of this Agreement.

      11.4 In the event that either Party is prevented from performing or is
unable to perform any of its obligations under this Agreement due to any act of
God; fire; casualty; flood; war; strike; lockout; failure of public utilities;
injunction or any act, exercise, assertion or requirement of governmental
authority; epidemic; destruction of production facilities; riots; insurrection;
inability to procure or use materials, labor, equipment, transportation or
energy; or any other cause beyond the reasonable control of the Party invoking
this Section if such Party shall have used its best efforts to avoid such
occurrence, such Party shall give notice to the other Party in writing promptly,
and thereupon the affected Party's performance shall be excused and the time for
performance shall be extended for the period of delay or inability to perform
due to such occurrence.

      11.5 The waiver by either Party of a breach or a default of any provision
of this Agreement by the other Party shall not be construed as a waiver of any
succeeding breach of the same or any other provision, nor shall any delay or
concession on the part of either Party to exercise or avail itself of any right,
power or privilege that it has or may have hereunder operate as a waiver of any
right, power or privilege by such Party.

      11.6 Any notice or other communication in connection with this Agreement
must be in writing and if by mail, by certified mail, return receipt requested,
and shall be effective when delivered to the addressee at the address listed
below or such other address as the addressee shall have specified in a notice
actually received by the addressor.

                                    Page 16
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                                                                  Execution Copy

            If to AFFYMETRIX:

            Affymetrix, Inc.
            3380 Central Expressway
            Santa Clara, California 95051
            Attention:  President

            With a copy to:

            Affymetrix, Inc.
            3380 Central Expressway
            Santa Clara, California 95051
            Attention:  General Counsel

            If to ORCHID:

            303 College Road East
            Princeton, New Jersey 08540
            Attention:  President

            With a copy to:

            Mintz, Levin, Cohn, Feris, Glovsky and Popeo, D.C.
            One Financial Center
            Boston, MA
            Attention:  Jeff Wiesen, Esq.

            11.7 Unless otherwise expressly stated to be business days, all
      references to days shall mean calendar days; provided, however, that if
      the last date or the deadline for the giving of notice or performance of
      any other act or fulfillment or satisfaction of any condition set forth in
      this Agreement shall fall on a day which is not a business day, then the
      time for the giving of such notice or performance of such act or
      fulfillment or satisfaction of such condition shall be extended to the
      next business day. As used herein, the term "business days" shall mean all
      days other than Saturdays, Sundays or state or federal holidays.

            11.8 Nothing herein shall be deemed to constitute either Party as
      the agent or representative of the other Party, or both Parties as joint
      venturers or partners for any purpose. Each Party shall be an independent
      contractor, not an employee or partner of the other Party, and the manner
      in which a Party renders its services under this Agreement shall be within
      such Party's sole discretion. Neither Party shall be responsible for the
      acts or omissions of the other Party, and neither Party will have
      authority to speak for, represent or obligate the other Party in any way
      without prior written authority from the other Party.

            11.9 This Agreement and the Schedules hereto (which Schedules are
      deemed to be a part of this Agreement for all purposes) contain the full
      understanding of the Parties with respect to the subject matter hereof and
      supersede all prior understandings and writings relating thereto. No
      waiver, alteration or modification of any of the provisions hereof shall
      be binding unless made in writing and signed by the Parties by their
      respective officers thereunto duly authorized.

            11.10 The headings contained in this Agreement are for convenience
      of reference only and shall not be considered in construing this
      Agreement.

            11.11 In the event that any provision of this Agreement is held to
      be unenforceable because it is invalid or in conflict with any law of any
      relevant jurisdiction, the validity of the remaining provisions shall not
      be affected, and there shall be substituted for the provision at issue a
      valid, legal and operative provision as similar as possible to the
      provision at issue.

                                    Page 17
<PAGE>
                                                                  Execution Copy

            11.12 This Agreement shall be binding upon and inure to the benefit
      of the Parties hereto and their successors and permitted assigns.

            11.13 None of the provisions of this Agreement shall be for the
      benefit of or enforc eable by any third party.

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

            11.15 The Parties hereto acknowledge and agree that: (i) each party
      and its counsel reviewed and negotiated the terms and provisions of this
      Agreement and have contributed to its revision; (ii) the rule of
      construction to the effect that any ambiguities are resolved against the
      drafting party shall not be employed in the interpretation of this
      Agreement; and (iii) the terms and provisions of this Agreement shall be
      construed fairly as to all parties hereto and not in a favor of or against
      any party, regardless of which party was generally responsible for the
      preparation of this Agreement.

          IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed in their names by their properly and duly authorized officers or
representatives as of the date first above written.

AFFYMETRIX, INC.                       ORCHID BIOCOMPUTER, INC.

By: /s/ Stephen Fodor, Ph.D            By: /s/ Dale R. Pfost, Ph.D.
    -----------------------------          -----------------------------
        Stephen Fodor, Ph.D                    Dale R. Pfost, Ph.D.

 Its: Chief Executive Officer          Its: Chief Executive Officer
      ---------------------------           ----------------------------

Date: November 16, 1999                Date: November 5, 1999
      ---------------------------            ---------------------------

                                    Page 18
<PAGE>
                                                                  Execution Copy

SCHEDULE 1.13
-------------

TRANSFER OF CUSTOM KIT ORDER INFORMATION

For each custom kit order, Orchid will:
 . email to point of contact at AFFX
 . within 5 business days of receipt of custom order by Orchid
 . Orchid will notify customer of the obligation to notify AFFX
 . Email to include the following bill to and ship to information:
  . Customer name
  . Address
  . Phone number
  . Fax number
  . Email address
 . Size and nature of custom order (# samples, # snps, multiplex)
 . Delivery date for custom order

AS PART OF THE STANDING CMC AGENDA, ORCHID WILL PROVIDE TO AFFYMETRIX A LIST OF
SNPS ORDERED FOR CUSTOM KITS AND THE QUANTITY ORDERED FOR CONSIDERATION TO BE
INCLUDED IN FUTURE STANDARD KITS AND TO EVALUATE SIMILARITIES BETWEEN CUSTOM
KITS AND STANDARD KITS.  AFFYMETRIX MAY AUDIT ORCHID TO VERIFY THIS INFORMATION.

ORCHID's Obligations contained in this schedule are subject to any
confidentiality obligation ORCHID may have to any Third Party (provided that
ORCHID shall use commercially reasonable efforts to minimize such obligations)
and such information shall exclude ORCHID proprietary Primers and SNPs.

                                    Page 19
<PAGE>
                                                                  Execution Copy

SCHEDULE 1.15
-------------

END USER LICENSE

The purchase price of this product includes a limited, non-transferable license
under U.S. Patent 5,888,819 and its foreign counterparts owned by Orchid
Biocomputer, Inc. of Princeton NJ to use only this amount of the product to
practice Genetic Bit Analysis(TM) primer extension technology solely for use
with Affymetrix Tag Arrays in the Affymetrix GeneChip Systems for Research
Purposes and explicitly excludes use of this product for any clinical use or in
any other instrument.  Information about purchasing licenses to practice Genetic
Bit Analysis(TM) primer extension technology for clinical use or in other
systems may be obtained by contacting the Senior Director for Business
Development at Orchid Biocomputer, Inc. at (609) 750-2200.

                                    Page 20
<PAGE>
                                                                  Execution Copy

SCHEDULE 1.20
-------------

ORCHID END USER TECHNOLOGY

US Patent 5,888,819 (and all foreign counterparts thereof)

                                    Page 21
<PAGE>
                                                                  Execution Copy

SCHEDULE 1.22
-------------

ORCHID LICENSED TECHNOLOGY

US Patent 5,888,819

ORCHID LICENSED TECHNOLOGY includes any continuations, continuations-in-part,
divisionals, extensions, re-exams or re-issues and any foreign counterparts
thereof

                                    Page 22
<PAGE>
                                                                  Execution Copy

SCHEDULE 1.37
-------------

SPECIFICATIONS FOR ORCHID OEM KITS

Added to agreement as approved by CMC

                                    Page 23
<PAGE>
                                                                  Execution Copy

SCHEDULE 1.39
-------------

DEFINITION OF PRODUCTS AND WORKPLAN FOR COLLABORATION

Products from Orchid
--------------------

[*]

                                    Page 24

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

<PAGE>
                                                                  Execution Copy

[*]

                                    Page 25

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

<PAGE>
                                                                  Execution Copy

[*]

                                    Page 26

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

<PAGE>
                                                                  Execution Copy

[*]
                                    Page 27

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

<PAGE>

SCHEDULE 2.3(D)
---------------

PRICING AND TIMING

[*]

                                    Page 28

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

<PAGE>

                                                                  Execution Copy

SCHEDULE 4.1(C)
---------------

LABELING AND PACKAGING REQUIREMENTS

LABEL TO BE INCLUDED IN PACKAGING OF ALL ORCHID KITS

EXCEPT AS EXPRESSLY SET FORTH HEREIN, NO RIGHT TO COPY, MODIFY, DISTRIBUTE, MAKE
DERIVATIVE WORKS OF, PUBLICLY DISPLAY, MAKE, HAVE MADE, OFFER TO SELL, SELL, OR
IMPORT PROBE ARRAYS OR ANY OTHER PRODUCT PROVIDED HEREUNDER IS CONVEYED OR
IMPLIED BY THE PROBE ARRAYS, INSTRUMENTS, SOFTWARE, REAGENTS OR ANY OTHER ITEMS
PROVIDED HEREUNDER. ALL PRODUCTS (INCLUDING THE PROBE ARRAYS, INSTRUMENTS,
SOFTWARE, AND REAGENTS) DELIVERED HEREUNDER ARE LICENSED TO BUYER FOR RESEARCH
USE ONLY. THIS LIMITED LICENSE PERMITS ONLY THE USE BY BUYER OF THE PARTICULAR
PRODUCT(S) THAT BUYER PURCHASES FROM AFFYMETRIX OR ITS REPRESENTATIVE(S) AND
DOES NOT PERMIT THE USE OF SUCH PRODUCTS IN A MANNER OR IN CONNECTION WITH OTHER
PRODUCTS SUCH THAT THE INTELLECTUAL PROPERTY RIGHT(S) OF AFFYMETRIX OR ANY THIRD
PARTY ARE INFRINGED. IN PARTICULAR, NO RIGHT TO MAKE, HAVE MADE, IMPORT,
DISTRIBUTE, OR USE PROBE ARRAYS OTHER THAN THOSE OF AFFYMETRIX IS IMPLIED
THROUGH THE INSTRUMENTS OR SOFTWARE CONVEYED HEREUNDER.  BUYER AGREES NOT TO
EXCEED THE SCOPE OF THIS LIMITED LICENSE OR REUSE OR ALLOW ANYONE TO REUSE A
PROBE ARRAY.

LABEL FOR TAG ARRAY - TO BE INCLUDED IN PACKAGING.

Orchid Biocomputer, Inc. (Princeton NJ ("Orchid")) hereby notifies you that The
Genetic Bit Analysis (GBA(R)) primer extension technology is covered by patents
owned by Orchid.  Orchid has exclusive and non-exclusive licenses available for
various applications of the GBA(R) primer extension technology, and Orchid and
its licensees provide end-user licenses within their designated fields. These
licenses have different terms depending on the field, and different rules may
apply in different countries. In the US and most other nations, the user should
always have a proper license to perform GBA(R). THE PURCHASE OF THIS GENECHIP(R)
PROBE ARRAY DOES NOT EXPRESSLY OR IMPLICITLY GRANT ANY LICENSE TO THE GBA(R)
PRIMER EXTENSION TECHNOLOGY THROUGH THIS PURCHASE

A license for performing the GBA(R) primer extension technology which is covered
by U.S. Patent 5,888,819 and its foreign counterparts may be obtained directly
from Orchid or by the purchase of reagents kits from Affymetrix.

 . Labeling for Orchid Kit:  [Vern please fill in].  Add labeling for all kits
  that they can only be used with GeneChip probe arrays. Legal to define
  specific wording including limitations to RUO, patent references, etc.

 . Both company's logos on kit packaging for standard and generic kits

                                    Page 29
<PAGE>
                                                                  Execution Copy

                   AMENDMENT NO. 1 TO COLLABORATION AGREEMENT

     This Amendment No. 1 to Collaboration Agreement (this "Amendment") is made
                                                            ---------
as of this 12th day of November, 1999 (the "Amendment Effective Date"), by and
                                            ------------------------
between Orchid Biocomputer, Inc., a Delaware corporation with a principal place
of business at 101 College Road East, Princeton, New Jersey 08540 ("ORCHID") and
Affymetrix, Inc., a Delaware corporation with a principal place of business at
3380 Central Expressway, Santa Clara, California 95051  ("AFFYMETRIX").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Collaboration Agreement by and
between ORCHID and AFFYMETRIX dated as of November 5, 1999 (the "Agreement").
                                                                 ---------

     WHEREAS, the parties hereto desire to amend the Agreement as set forth
herein.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

     1.  Amendments.
         ----------

        1.1.  The definition of "Orchid Licensed Technology" contained within
 Section 1.22 of the Agreement is hereby amended by adding the following at the
 end of the first sentence thereof:

        "including without limitation the software and associated algorithms
        necessary to assign genotype and allele calls" .

        1.2.  Schedule 1.22 of the Agreement is hereby amended by adding the
 following:

        "U.S. Patent 5,762,876*

        *ORCHID agrees that, in addition to the licenses granted in Section 3.1
        and 4.2, AFFYMETRIX will have the royalty-free, perpetual right and
        license to directly and indirectly create and modify software
        embodiments of the above patent and to directly and indirectly use,
        distribute and license such embodiments (including the right to use and
        modify such embodiments) to third party customers of its Tag Arrays."

     2. Additional Warranties  ORCHID represents, warrants and covenants that
        ---------------------
there is no technology or intellectual property that ORCHID has not described to
Affymetrix in writing prior to the Effective Date (and which Affymetrix has
acknowledged receiving) that ORCHID contemplates or anticipates may be
incorporated into the Orchid Licensed Technology or may be necessary or useful
either for development, use, distribution or sale of the basic genotype and
<PAGE>
                                                                  Execution Copy

allele calling functionality of the Products, or for use of TAG Arrays or
Approved Instruments with Products.

     3. Miscellaneous.  Except as amended hereby, the Agreement shall remain in
        -------------
full force and effect.  This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original.

                  [Remainder of page intentionally left blank]

                                      31

<PAGE>
                                                                  Execution Copy

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

                              ORCHID BIOCOMPUTER, INC.

                              By:    /s/ Donald R. Marvin
                                     ----------------------------------------
                                     Donald R. Marvin

                              Title: Chief Operating Officer
                                     and Senior Vice President
                                     ----------------------------------------
                              Date:  November 12, 1999
                                     ----------------------------------------

                              AFFYMETRIX, INC.

                              By:    /s/ Stephen P.A. Fodor, Ph.D.
                                     ----------------------------------------
                                     Stephen P.A. Fodor, Ph.D.

                              Title: Vice President
                                     ----------------------------------------
                              Date:  November 18, 1999
                                     ----------------------------------------<PAGE>

                                                                    EXHIBIT 10.6

                            CONFIDENTIAL TREATMENT
                            ----------------------

ORCHID BIOSCIENCES, INC. HAS REQUESTED THAT THE MARKED PORTIONS OF THIS DOCUMENT
BE ACCORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT
                             OF 1933, AS AMENDED.

[*]  CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
             EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

                         LICENSE AND OPTION AGREEMENT

     LICENSE AND OPTION AGREEMENT (the "Agreement"), dated as of December 10,
1997 (the "Effective Date"), between SARNOFF CORPORATION, a New Jersey
corporation having its offices at 201 Washington Road, Princeton, New Jersey
08543 ("Sarnoff"), and ORCHID BIOCOMPUTER, INC., a Delaware corporation having
its offices at 201 Washington Road, Princeton, New Jersey 08543 ("Orchid").

     WHEREAS, Sarnoff is (and will be) the owner or licensee of rights in
certain existing and future Intellectual Property and certain Patent Rights
relating thereto.

     WHEREAS, Sarnoff is willing to grant to Orchid and Orchid desires to
acquire from Sarnoff, certain rights under such Intellectual Property and Patent
Rights for the purpose of allowing Orchid to research, develop, manufacture,
market, sell, import, lease and/or deliver, within the Orchid Field, Products
and Services.

     NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Sarnoff and Orchid, intending to be legally
bound, hereby agree as follows:

1.   Definitions.

     As used herein, capitalized terms shall have the respective meanings set
forth below:

     1.1. "Affiliate" means any corporation, firm, limited liability company,
partnership or other entity which directly or indirectly controls or is
controlled by or is under common control with a party to this Agreement.
"Control" means ownership of, or the ability to vote, directly or through one or
more Affiliates, fifty percent (50%) or more of the shares of stock entitled to
vote for the election of directors, in the case of a corporation, or fifty
percent (50%) or more of the equity interests in the case of any limited
liability company or other type of legal entity, status as a general partner in
any partnership, or any other arrangement whereby a party controls or has the
right to control the board of directors or equivalent governing body of a
corporation or other entity. Notwithstanding the foregoing, Sarnoff and SRI and
companies controlled by Sarnoff and SRI shall not be deemed to be Affiliates of
Orchid, and Orchid shall not be deemed to be an Affiliate of such entities for
purposes of this Agreement.

     1.2  "Ancillary Device" shall mean a detector or other device (but not a
Storage Device or Input/Output Device) that is specifically designed by Sarnoff
to interface with a Chip,
<PAGE>

Storage Device or Input/Output Device to the extent such detector or other
devices are incorporated in Delivered Chips and Instruments. Ancillary Devices
shall not include (without upper or lower limitations as to size or volume), (i)
generic robotic fluid delivery systems, (ii) transport through synthetic or
natural membranes, tubes or capillaries except when part of a Chip or
Input/Output Device, (iii) conventional, non-electrokinetic fluid pumping or
valving technology except when part of a Chip or Input/Output Device and (iv) 3D
microimaging and modeling.

     1.3.  "Chip" shall mean a microfabricated flat structure device in one or
more layers having a plurality of Microchannels or Microchannels and
Microchambers in the form of (A) arrays (containing at least (i) six (6)
Microchambers or (ii) two Circuits, each of which contains at least one Active
Element), or (B) at least one Circuit containing at least three (3) serially
connected Elements, at least one of which is an Active Element, to carry out or
enable synthesis, reactions, assays, analyses or sample preparation by
transporting or retaining aqueous or organic fluids that are solvents,
solutions, mixtures or suspensions, including those containing chemicals,
particles, membranes, membrane fragments, cells, cell components or other
biologically derived substances. "Microchannels" shall mean enclosed channels
having a cross section at least 10 microns by 10 microns and no more than 2
millimeters by 2 millimeters. "Microchambers" shall mean chambers having a
volume of at least 10 picoliters and no more than 10 microliters.

     1.4.  "Circuit" shall mean a combination of at least two (2) Elements.

     1.5.  "Combinatorial Chemistry" shall mean the synthesis of one or more
compounds as part of a process to create compounds or resynthesize known
compounds, where such compounds are to be used in clinical applications or in
the discovery, development, testing or optimization of molecules, materials, or
compounds, or mixtures thereof.

     1.6.  "Confidential Information" shall mean all proprietary confidential
technology disclosed by Sarnoff to Orchid or by Orchid to Sarnoff during the
term of this Agreement. For the purposes of this Agreement, Research Technology
shall be deemed Confidential Information of both Orchid and Sarnoff.

     1.7.  "Covered By" shall mean, with respect to any act, an act that would,
in the absence of a license provided hereunder, constitute an infringement of a
claim of a pending patent application, or a claim of an issued patent which has
not been held invalid or unenforceable by a court of competent jurisdiction in a
decision which is unappealable or the appeal period for which has expired
without an appeal being taken.

     1.8.  "Delivered Chips and Instruments" shall mean Chips and/or related
instruments based on the design of the Chips and related instruments that are
(i) delivered by Sarnoff under a Funded Research Program, (ii) delivered by
Sarnoff to SB under the SB Agreement, or (iii) delivered by Sarnoff to the
Government under NIST Control No. 7ONANB5HlO37 prior to June 30, 1997, or under
DARPA Control No. N66001-96-8630 prior to June 30, 1999.

     1.9  "Dynal Agreements" shall mean the proposed Joint Venture Master
Agreement between Orchid and Dynal, Inc. ("Dynal"), as executed, and the
agreements between Orchid and Dynal entered into pursuant thereto, pertaining to
the creation of a joint venture to combine

                                       2
<PAGE>

Orchid's chip technology and Dynal's bead technology to create "Cassettes" for
use in the h-vitro Diagnostic Field.

     1.10.  "Elements" shall mean any pump, Microchannel or Microchamber.  An
Element is "Active" if it is a pump or a Microchannel or a Microchamber in which
a chemical or binding reaction or physical separation by fractionation or
differentiation of various constituents within a sample by such parameters as
molecular size, binding affinity, charge or other physical properties occurs.
An Element is "Passive" if it is not Active, including without limitation,
Microchambers or Microchannels for storage, transport, analyses other than by
chemical or binding reaction, or division of a sample into multiple samples or
streams into multiple streams.

     1.11.  "Environmental Testing" shall mean the determination of the presence
or effect of molecular analytes, chemicals, microbes (including, without
limitation, viruses and bacteria), parasites or other harmful elements in the
environment utilizing nucleic acid-based analyses, immunoassays or functional
assays involving cells, cellular components or extra- or intra-cellular
interactions.

     1.12.  "Force Majeure" shall mean any act of God, any accident, explosion,
fire, storm, earthquake, flood, drought, peril of the sea, riot, embargo, war or
foreign, federal, state or municipal order of general application, seizure,
requisition or allocation, any failure or delay of transportation, shortage of
or inability to obtain supplies, equipment, fuel or labor or any other
circumstances or event beyond the reasonable control of the party relying upon
such circumstance or event.

     1.13.  "Funded Research Program" shall mean the research or development
activities under a research agreement for an Option Field in which, considering
each Option Field separately, Orchid or its designee reasonably acceptable to
Sarnoff agrees to [*]

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

                                       3
<PAGE>

     1.14.  "Input/Output Device" shall mean fluidic transport, fluid transfer
or fluid connection means which is specifically designed to bring a fluid to a
Chip or Storage Device or remove a fluid from a Chip or a Storage Device.

     1.15.  "Intellectual Property" shall mean proprietary technical or other
information, know-how, data, materials, devices, systems, software, trade
secrets, processes or formulations, and any and all Patent Rights thereon.

     1.16.  "In-vitro Diagnostic Field" shall mean [*]

     1.17.  "Licensed Technology" shall mean: (a) Intellectual Property licensed
or developed under the SB Agreement including Intellectual Property funded by
such agreements, but developed prior to August 30, 1995 and listed on Schedule
A; (b) Intellectual Property embodied in the deliverable "Chips" and
"Instruments" as defined in and developed under the SB Agreement; (c)
Intellectual Property (i) developed under NIST Contract No. 7ONANB5H 1037
through June 30, 1997, (ii) developed under DARPA Contract No. N66001-96-8630
through June 30, 1999, and listed on Schedule A and (iii) certain Intellectual
Property claiming technology relating to Chips developed by Sarnoff on or before
August 30, 1995 and listed on Schedule A, (d) Research Technology, (e)
Intellectual Property incorporated in devices or systems as part of a Funded
Research Program and (f) subject to any of Sarnoff's present or future third
party arrangements, Intellectual Property directed to Chips, Storage Devices and
Input/ Output Devices developed by Sarnoff and its wholly-owned subsidiaries
during the Option Period or during the term of any and all Funded Research
Programs at Sarnoff, and/or the research program under the SB Agreement, but
outside such programs and incorporated by Orchid into a Chip or a system
incorporating a Chip during the Option Period, or during the term of any and all
Funded Research Programs at Sarnoff, or the research program under the SB
Agreement and (g) Joint Inventions and Joint Patent Rights as defined in Section
2.6. Specifically excluded from Licensed Technology is the Intellectual Property
developed under DARPA Contract DABT63-95-C-0057 3D entitled "3D Microimaging".
Licensed Technology shall not include rights to general purpose electrical,
electronic, optical, electro-optical, mechanical or electro-mechanical
inventions.

     1.18.  "Life Science Field" means the Orchid Field, the Option Fields and
the use of Chips in the fields of the biological sciences, human healthcare,
animal healthcare or agriculture.

     1.19.  "Net Sales" shall mean [*]

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

                                       4
<PAGE>

     1.20.  "Non-Exclusive Licensed Technology" shall mean general purpose
electrical, electronic, optical, electro-optical, mechanical or electro-
mechanical inventions and devices to the extent such inventions and devices are
incorporated in Delivered Chips and Instruments, but not otherwise.

     1.21.  "Option Field(s)" shall mean [*]

     1.22.  "Option Period" means that period during which any Option exists as
defined in Section 2.3.

     1.23.  "Orchadyne" means Orchadyne, LLC, the limited liability company
created pursuant to the Dynal Agreements.

     1.24.  "Orchid Field" shall mean [*]

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

                                       5
<PAGE>

     1.25.  "Owned or Controlled" shall mean Intellectual Property which Sarnoff
owns, or under which Sarnoff is licensed and has the right to grant sublicenses
and/or grant immunity from suit. Intellectual Property "Owned or Controlled" as
of a certain date includes Intellectual Property first invented on or prior to
such date, and shall include all related patent applications and patents or
other intellectual property rights issuing thereon, whenever filed or obtained.

     1.26.  "Parties" means Sarnoff and Orchid.

     1.27.  "Partner" shall mean SB, Dynal, Orchadyne or any other Person with
whom Orchid shall have a written research and/or development agreement or other
collaborative arrangement whereby Orchid receives (a) ownership rights or
license rights in products or services based on or resulting from such research
and/or development, (b) royalty payments based on the sales of such products or
services, or (c) supply rights for such products.

     1.28.  "Party" means Sarnoff or Orchid.

     1.29.  "Patent Rights" shall mean rights (including, ,without limitation,
rights as licensee) Owned or Controlled, subject to Section 2.1.6 hereof, by
Sarnoff under (a) issued U.S. and foreign patents, (b) U.S. or foreign patent
applications, including any patent application constituting an equivalent,
counterpart, reissue, extension or continuation of any of the foregoing
applications (including, without limitation, a continuation in part or
divisional application), or (c) any patent issued or issuing upon any of the
foregoing applications.  A list of Patent Rights included in Licensed Technology
as of the date of this Agreement is attached hereto as Schedule A.

     1.30.  "Person" shall mean any individual, partnership, limited liability
company, corporation, firm, association, unincorporated organization, joint
venture, trust or other entity.

     1.31.  "Product" shall mean a Chip or a system incorporating a Chip with or
without Storage Devices, Input/Output Devices or Ancillary Devices developed
using, incorporating, utilizing, manufactured using, based upon, arising out of,
or derived from the Licensed Technology.

     1.32.  "Research Products" shall mean [*]

     1.33.  "Research Technology" shall mean Intellectual Property developed by
Sarnoff in Funded Research Programs.

     1.34.  "SB Agreement" shall mean the Development and License Agreement
executed by and among Orchid, Sarnoff and SmithKline Beecham PLC/SmithKline
Beecham Corporation as of August 30, 1995, as amended.

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

                                       6
<PAGE>

     1.35.  "Services" shall mean the performance of services for a fee
utilizing a Product, but shall not include performance of research or
development services.

     1.36.  "SmithKline Beecham" or "SB" shall mean SmithKline Beecham
PLC/SmithKline Beecham Corporation.

     1.37.  "SRr" shall mean SRI International, a California not for profit
corporation having its principal offices at 333 Ravenswood Avenue, Menlo Park,
CA 94025.

     1.38.  "Storage Device" shall mean a microfabricated flat structure device
containing Microchambers, but not Microchannels or other Elements, that is
either (i) specifically designed for interacting with or connecting to a Chip or
(ii) broadly useful with Chips and other devices or primarily designed to be
interfaced with micropipetting systems. A Storage Device of the type described
in clause (i) is referenced to herein as a Type 1 Storage Device. A Storage
Device described in clause (ii) is referred to herein as a Type 2 Storage
Device.

     1.39.  "Valid Claim" shall mean an unexpired claim of (i) any issued patent
which has not been finally declared invalid or unenforceable by a patent office
or by a court or other body of competent jurisdiction in any unappealed or
unappealable decision and which has not been lost through an interference or
opposition proceeding or (ii) any pending patent application which has not been
finally rejected by a patent office of competent jurisdiction in any unappealed
or unappealable decision and which has not been pending for more than four (4)
years.

2.   Grant of Rights.

     2.1.   Licenses to Orchid.

            2.1.1.  Exclusive Rights. Subject to the terms and conditions of
this Agreement, Sarnoff hereby grants to Orchid an exclusive, worldwide, right
and license under the Licensed Technology, with the right to sublicense, to
develop, have developed, make, have made, use, have used, import, have imported,
offer for sale, sell, have sold or lease, any Products, Storage Devices and/or
Input/Output Devices for Type 1 Storage Devices and Chips and/or to provide any
Services in the Orchid Field, provided, however, that with respect to Type 2
Storage Devices and Input/Output Devices for Type 1 Storage Devices, such
License shall only be exclusive for Licensed Technology described in clauses
(a)-(e) and (g) of Section 1.17 and further provided however with respect to the
exercised Option of the Option Field of Section 1.2 1(c), the license shall be
exclusive for the Life Science Field and non-exclusive for materials and
chemical research. In addition, the license granted under this Section 2.1.1
with regard to Ancillary Devices shall be limited to the designs of the
Ancillary Devices in the Delivered Chips and Instruments and shall include the
right to modify such designs using Orchid or third party Intellectual Property.

            2.1.2.  Non-Exclusive Rights.

                    2.1.2.1  Subject to the terms and conditions of this
Agreement, Sarnoff hereby grants to Orchid a non-exclusive, worldwide, right and
license under the Licensed Technology, with the right to sublicense, to develop,
have developed, make, have made, use,

                                       7
<PAGE>

have used, import, have imported, offer for sale, sell have sold or lease (a)
any Products, Storage Devices and Input/ Output Devices and provide any Services
(i) in those Option Fields for which Orchid has not exercised its Option
hereunder as provided in Section 2.3, and (ii) which use Chips to carry out
Combinatorial Chemistry for purposes not included in the Orchid Field provided
however that such license under this Section 2.1.2.1 (ii) outside the Life
Science Field shall be limited to use for industrial materials and chemicals and
shall be limited to Licensed Technology under Section 1.1 7(a)-(e) and (g).
However, the license granted under this Section 2.1.2.1 with regard to Ancillary
Devices shall be limited to the designs of the Ancillary Devices in the
Delivered Chips and Instruments and shall include the right to modify such
designs using Orchid or third party Intellectual Property. The licenses granted
pursuant to this Section 2.1.2 shall in no way be deemed to limit the scope of
any exclusive license granted pursuant to Section 2.1.1.

                    2.1.2.2  Subject to the terms and conditions of this
Agreement, Sarnoff hereby grants to Orchid a non-exclusive, worldwide, right and
license under Non-Exclusive Licensed Technology, with the right to sublicense,
to develop, have developed, make, have made, use, have used, import, have
imported, offer for sale, sell, have sold or lease any Products, Storage Devices
and Input/Output Devices and provide any Services (i) in the Orchid Field and in
those Option Fields for which Orchid has not exercised its Option hereunder as
provided in Section 2.3, and (ii) which use Chips to carry out Combinatorial
Chemistry for purposes not included in the Orchid Field to the extent such uses
of Chips is licensed under Section 2.1.2.1.

                    2.1.2.3  Subject to the terms and conditions of this
Agreement, Sarnoff hereby grants to Orchid a non-exclusive, worldwide, right and
license under LicensedTechnology, with the right to sublicense, to develop, have
developed, make, have made, use, have used, import, have imported, offer for
sale, sell, have sold or lease Input/ Output Devices for Type 2 Storage Devices
in the Orchid Field.

            2.1.3.  Bead Handling. Sarnoff and Orchid shall negotiate in good
faith regarding a license upon commercially reasonable, mutually agreeable terms
to develop, have developed, make, have made, use, have used, import, have
imported, offer for sale, sell, have sold or lease any instrument based on the
bead handling technology to be developed by Sarnoff in a program funded by or in
collaboration with Orchid and useful in connection with Chips. The license will
be governed by a separate agreement which will cover the scope of the license,
field of use, statement of work to be performed by Sarnoff, the specifications
and drawings of the bead handling instrument and all other terms. No license is
granted to Orchid for such bead handling instruments by this Agreement.

            2.1.4.  Additional Licenses. In addition to the Options set forth in
Section 2.3, at Orchid's request Sarnoff will negotiate in good faith with
Orchid at any time for the terms and conditions of an exclusive license in one
or more Option Fields which are not the subject of a current or past Funded
Research Program.

            2.1.5.  Restrictions on Licenses. All licenses granted to Orchid
hereunder and all restrictions under Section 2.2. are subject to (a) a non-
exclusive, worldwide, royalty-free license which the U.S. Government may retain
under any Intellectual Property whose development was funded by the U.S.
Government, (b) a worldwide, non-exclusive, royalty-free license to Sarnoff

                                       8
<PAGE>

and the U.S. Government to permit Sarnoff to engage in research. or .
development contracts or to prepare prototypes for the U.S. Government, and (c)
any rights previously granted to SmithKline Beecham under the SB Agreement.
Notwithstanding anything to the contrary in this Agreement, no licenses are
granted to Orchid under this Agreement to make, have made, use, sell, offer for
sale, lease or import (except as Ancillary Devices otherwise permitted
hereunder) printers, cameras, imaging systems or displays which employ Chips,
and materials for use with any of the foregoing.

            2.1.6.  Third-Party Technology. In the event that Sarnoff has
licensed from a third party any of the Licensed Technology, Sarnoff's license to
Orchid of such Licensed Technology is granted hereby to the extent that, and for
as long as, Sarnoff can provide such rights and subject to any royalty
obligations as hereinafter provided. Orchid shall be provided with timely notice
of the terms of any such license under which such sublicense is granted, and
Orchid may choose to accept or not accept such sublicense. To the extent that
the sale or other action by Orchid or its permitted sublicensees of Products or
Services would give rise to a royalty or other payment obligation by Sarnoff
under any license under which Orchid accepts a sublicense, Orchid shall pay and
require its sublicensees to pay such amount to Sarnoff or directly to the third
party if so requested by Sarnoff.

            2.1.7.  Algorithms.  Except as included in Licensed Technology,
access by Orchid to algorithms for data mining and for informatics is not
included in the licenses granted herein, but may be the subject of a separate
agreement, subject to any Sarnoff agreements with third parties.

            2.1.8.  Tangible Results.  All tangible instruments, devices,
prototypes or components thereof which are produced in Funded Research Programs
at Sarnoff funded by Orchid shall be owned by Orchid and delivered to Orchid no
later than upon completion of the relevant Funded Research Program.  Orchid
shall have the right to use and to reproduce all such instruments, devices,
prototypes or components under the terms of this Agreement.

     2.2.   Restrictions on Sarnoff's Other Businesses. Nothing in this
Agreement shall be interpreted to preclude Sarnoff or any of its subsidiaries or
licensees or sublicensees from engaging in their businesses; provided that
nothing in this Section 2.2 shall limit the exclusive grant to Orchid under
Section 2.1. Notwithstanding the foregoing, during the Option Period and the
duration of any Funded Research Program and for a period of ninety (90) days
after the last to terminate of the Funded Research Programs, Sarnoff and its
wholly-owned subsidiaries shall not:

     (a)    collaborate with or enter into any agreement to provide research
services or grant any license to any commercial third party for (i) designing or
modifying Chips or Input/ Output Devices for Chips for use in the Orchid Field
or any Option Field in which the Option continues to be in effect, (ii)
designing or modifying Type I Storage Devices or Input/ Output Devices for Type
1 Storage Devices that are customized or designed by Sarnoff for use with Chips
in the Orchid Field or any Option Field in which the Option continues to be in
effect, or (iii) designing or modifying Ancillary Devices, whether or not
incorporated in Delivered Chips and Instruments, that are designed or customized
by Sarnoff in collaboration with the third party while Sarnoff itself is in
possession of the third party's Chips as part of a joint effort to design or

                                       9
<PAGE>

optimize a system that includes Chips for use in the Orchid Field or any Option
Field in which the Option continues to be in effect; or

     (b)    sell products which contain Chips, Type 1 Storage Devices,
Input/Output Devices for Chips or Type 1 Storage Devices to any commercial third
party for use in the Orchid Field or any Option Field in which the Option
continues to be in effect.

The foregoing:

     (w)    shall not prevent Sarnoff or any of its subsidiaries from providing
services related to, or from developing, licensing or selling printers, cameras,
imaging systems or displays including but not limited to those which employ
Chips therein so long as they are not Ancillary Devices exclusively licensed to
Orchid or designed or customized in violation of 2.2(i)(a)(iii);

     (x)    shall not prevent Sarnoff or any of its subsidiaries from providing
services related to, or from developing, licensing or selling (a) Type 2 Storage
Devices, or (b) Ancillary Devices, Type 1 Storage Devices or Input/ Output
Devices for use outside the Orchid Field and any Option Field in which the
Option continues to be in effect or from developing, licensing or selling
products of general applicability which may be useful in the Orchid Field and
the Option Fields in which the Option continues to be in effect as long as such
products are not specifically designed or modified for use with Chips, Type 1
Storage Devices, or Input/ Output Devices for Chips or Type 1 Storage Devices,

     (y)    shall not require Sarnoff to prevent purchasers of such Ancillary
Devices, Storage Devices or Input/ Output Devices from using such Ancillary
Devices, StorageDevices or Input/ Output Devices in the Orchid Field and any
Option Field in which the Option continues to be in effect, and

     (z)    shall not require Sarnoff to prevent parties with whom Sarnoff
collaborates or provides research services or to whom Sarnoff grants any license
from modifying, for use in the Orchid Field or any Option Field in which the
Option remains in effect, products developed or licensed to them by Sarnoff, as
long as Sarnoff or its wholly-owned subsidiaries do not contribute to the
modification.

            2.2.1  Notwithstanding anything to the contrary in this Agreement,
this Agreement shall not be construed as any limitation or restriction on
Sarnoff's dry powder technology or on Sarnoff's right to grant any license to a
third party for its dry powder technology or its ability to apply or employ, or
collaborate with others to apply or employ, its dry powder technology for any
purpose.

     2.3.   Option to Orchid.

     Subject to the terms and conditions of this Agreement, Sarnoff hereby
grants Orchid the exclusive option to include one or more Option Fields in the
Orchid Field and to receive exclusive licenses in such Option Field(s) as
specified in Section 2.1 above (the "Option") as follows:

                                       10
<PAGE>

            2.3.1.  Option Exercise.  Any Option with respect to an Option Field
hereunder may be exercised by Orchid upon written notice and by timely entering
into an agreement for a Funded Research Program with Sarnoff relating to any
such Option Field during the Term of the Option as set forth below and upon
payment of the consideration as specified in Section 3.2 hereof

            2.3.2.  Term of Option.  The Option(s) set forth in this Section 2.3
shall continue for a period of four (4) years unless extended or sooner
terminated as provided below (the "Option Period"). In order to maintain Options
to all remaining unexercised Option Fields during the Option Period, upon each
anniversary of the Effective Date, Orchid shall be required to have entered into
at least one Funded Research Program agreement in one new Option Field for each
year that has elapsed since the Effective Date. Notwithstanding the foregoing,
in the event Orchid has exercised at least three (3) Options during the Option
Period, then the Option Period for the remaining Option may be extended at
Orchid's sole discretion for up three additional years upon payment of an Option
Extension Fee of [*] per remaining Option Field per year.

            2.3.3.  Loss of Option Rights.  Except as otherwise provided above,
if upon any anniversary of the Effective Date, Orchid shall have failed to
exercise at least one Option per year as set forth in Section 2.3.2 above,
Orchid shall lose rights to one of the remaining unexercised Option Fields. For
any two-year period during which Orchid has failed to exercise rights to at
least one Option Field, Orchid shall lose the rights to two of the remaining
unexercised Option Fields. Upon the occurrence of any such event, Orchid shall
have sixty (60) days in which to elect the Option Field or Fields to be removed
from its Option rights hereunder. If Orchid makes no such election, Sarnoff may,
within sixty (60) additional days, elect the Option Field(s) to be removed by
notice to Orchid. For any three-year period during which Orchid has failed to
exercise rights to at least one Option Field, Orchid shall lose the rights to
all of the remaining unexercised Option Fields. Failure by Orchid to comply with
the provisions of Section 3.2 or to fully fund and make payment for a Funded
Research Program in accordance with the agreement executed pursuant to Section
2.3.1 shall give Sarnoff the right to terminate this license in accordance with
the provisions of Section 7.2 for the corresponding Option Field.

            2.3.4.  Extension of Funded Research Programs.  Orchid shall have
the right to extend any Funded Research Program or to fund additional related
research at Sarnoff at Orchid's request upon reasonable terms to be negotiated
in good faith. Such extensions may include funding for the transfer of Licensed
Technology to the Combinatorial Chemistry Field, the In-vitro Diagnostic Field
or any other Option Field for which Orchid has an exclusive license hereunder.

            2.3.5.  Technology Audits.  Upon termination or expiration of each
Funded Research Program, Sarnoff and Orchid shall, within 90 days of such
termination or expiration, meet in good faith to compile a detailed list of all
Licensed Technology invented, or developed during the course of such Funded
Research Program or incorporated in devices or systems as part of such Funded
Research Program. Such list shall be mutually agreed between the parties and
appended to this Agreement as a description of the Licensed Technology
attributable to such Funded Research Program and licensed hereunder as Research
Technology. Sarnoff will provide reasonable assistance to Orchid to transfer all
of such Licensed Technology to Orchid.

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

                                       11
<PAGE>

     2.4.   No Waiver of Rights.  Notwithstanding any provision of this
Agreement, (a) the failure by Orchid to exercise any Option hereunder shall not
in any way affect any exclusive licenses granted to Orchid herein or any
licenses subsequently granted to Orchid by Sarnoff, and (b) the scope of any
licenses granted to Orchid in the SB Agreement shall not be limited or affected
in any way by this Agreement.

     2.5.   Provision of Services. For the duration of the Option Period, in
order to facilitate agreements with Partners for Funded Research Programs, in
connection with the licenses and rights granted herein to Orchid, Sarnoff agrees
to provide reasonable assistance to Orchid in the area of business development
in the Orchid Field and any available Option Fields as requested by Orchid.

     2.6.   Rights to Jointly Developed Inventions.

            2.6.1.  Joint Inventions Jointly Owned.  All right, title and
interest to any inventions or improvements within or outside the Orchid Field
jointly invented by the Parties prior to or during the term of this Agreement
shall be the joint property of the Parties ("Joint Inventions") unless otherwise
agreed in writing, and any resulting Patent Rights ("Joint Patent Rights") shall
be jointly owned.

            2.6.2.  Restrictions on Licensing Joint Inventions.  Unless
otherwise agreed in writing, without the prior written consent of Sarnoff,
Orchid shall not grant a license or other right to any third party to use or
practice outside the Orchid Field and those Option Fields for which Orchid has
not exercised its Option, any Joint Invention or Joint Patent Right, or to
develop, have developed, make, have made, use, have used, offer to sell, sell,
have sold, import, have imported, lease, or otherwise distribute any products or
deliver any services outside the Orchid Field Covered By Joint Patent Rights.
Unless otherwise agreed in writing, without the prior written consent of Orchid,
Sarnoff shall not grant a license or other right to any third party to use or
practice in the Orchid Field and those Option Fields for which the Orchid Option
has not expired, any Joint Invention or Joint Patent Right, or to develop, have
developed, make, have made, use, have used, offer to sell, sell, have sold,
import, have imported, lease or otherwise distribute any products or deliver any
services, within the Orchid Field Covered By Joint Patent Rights.

            2.6.3   Sarnoff Interest in Joint Inventions.  Sarnoff's interest in
Joint Inventions and Joint Patent Rights shall be deemed to be Licensed
Technology.

     2.7    Grant Back to Sarnoff.  To the extent permitted by present or future
agreements with third parties, Orchid hereby grants to Sarnoff a paid up,
royalty-free, non-exclusive license, with right to sublicense, to all
Intellectual Property relating to Chips, Storage Devices, and Input/ Output
Devices developed by Orchid during the term of the restrictions set forth in
Section 2.2, to develop, have developed, make, have made, use, have used,
import, have imported, offer for sale, sell have sold or lease products and
practice processes outside the Life Science Field. Such license shall survive
the termination or expiration of this Agreement.

                                       12
<PAGE>

3.   Consideration.

     3.1    License Consideration.  In consideration of the licenses and rights
granted herein, Orchid:

     (a)    has previously issued to Sarnoff an aggregate of 79,300 shares of
Common Stock, par value $.001, of Orchid, subject to the terms and conditions
set forth in the Shareholder Common Stock Purchase Agreement dated August 30,
1995 and 670,000 shares of Series A Convertible Preferred Stock, par value
$.001, of Orchid, subject to the terms and conditions set forth in the Series A
Convertible Preferred Stock Purchase Agreement dated August 30, 1995;

     (b)    shall issue to Sarnoff or to Sarnoff's designated employees Eighty
Two Thousand Five Hundred (82,500) shares of Common Stock, par value $.001, of
Orchid and One Hundred Sixty Seven Thousand Five Hundred (167,500) shares of
Series A Convertible Preferred Stock, par value $0.001, of Orchid in
consideration of the license granted hereunder in the In-vitro Diagnostic Field;
and

     (c)    shall pay Sarnoff royalties for Products and Services as set forth
in Section 3.4 and 3.5.

     3.2    Option Consideration.  Upon exercise of an Option with respect to
any Option Field, Orchid shall issue to Sarnoff or its designated employees
33,300 shares of Common Stock, par value $.001, of Orchid and shall issue to
Sarnoff 66,700 shares of Class A Preferred Stock, par value $.001, of Orchid.
Orchid shall also issue to Sarnoff or its designated employees an additional
50,000 shares of Common Stock, par value $.001, of Orchid for each year during
the term of the related Funded Research Program at the end of each funding year.

     3.3    Restrictions and Limits.  All shares of Common Stock or Preferred
Stock issued to Sarnoff pursuant to this Agreement shall contain restrictive
legends as determined by counsel to Orchid to be required under the securities
laws of the United States and the relevant states or any stock subscription
agreement and shall be subject to existing Shareholder Agreements and Charter or
By-Law limitations on transfer.

     3.4    Royalties under Exclusive License.  Except for Products which
incorporate no Licensed Technology other than Developed Technology (as defined
in the SB Agreement), and/or technology developed under the Dynal Agreements or
Services provided using such Products which incorporate no Licensed Technology
other than Developed Technology (as defined in the SB Agreement), and/or
technology developed under the Dynal Agreements, commencing on January 1 of the
calendar year following the date on which the percentage of Orchid stock
represented by the total shares of Series A Convertible Preferred Stock and
Common Stock issued to Sarnoff as set forth in Sections 3.1(a) and (b) and
Section 3.2 (the "Issued Shares"), and regardless of whether or not Sarnoff may
have sold all or a portion of such Issued Shares, drops below 20% of all shares
of capital stock of Orchid then outstanding (calculated by assuming conversion
of all outstanding convertible securities and exercise of all outstanding
warrants) (such January 1 being referred to herein as the "Royalty Commencement
Date"), in consideration of the exclusive licenses granted pursuant to Section
2.1.1 and the non-

                                       13
<PAGE>

exclusive licenses granted pursuant to Section 2.1.2 Orchid shall make payments
to Sarnoff of royalties as follows:

     (a) [*] of Net Sales by Orchid and its Affiliates of Products and Services
whose discovery, development, testing, manufacture, use, sale, importation,
lease or offer for sale would, but for the licenses granted hereunder, infringe
a Valid Claim of a Patent Right included in the Licensed Technology which is not
a Joint Patent Right and which is exclusively licensed hereunder, or whose
discovery, development, testing, manufacture, use, sale, importation, lease or
offer for sale directly employs or embodies proprietary Licensed Technology
which is not a Joint Invention and which is exclusively licensed hereunder,
provided however that for Products which incorporate Licensed Technology and
either Developed Technology (as defined in the SB Agreement), or technology
developed under the Dynal Agreements or Services provided using such Products,
the royalty rate shall be [*] of Net Sales;

     (b) [*] of Net Sales by Orchid and its Affiliates of Products and Services
whose discovery, development, testing, manufacture, use, sale, importation,
lease or offer for sale would, but for the licenses granted hereunder, infringe
a Valid Claim of a Joint Patent Right, but not any other Patent Right, which is
included in the Licensed Technology and which is exclusively licensed hereunder,
or whose discovery, development, testing, manufacture, use, sale, importation,
lease or offer for sale directly employs or embodies only such Licensed
Technology which is a Joint Invention and which is exclusively licensed
hereunder;

     (c) for (i) sales by any licensees or sublicensees of Orchid of any such
Products or Services as specified in Section 3.4(a) or (b), and (ii) payments
received by Orchid under a sublicense of exclusive Licensed Technology, Orchid
shall pay Sarnoff [*] of any non-refundable amounts received by Orchid from such
licensees or sublicensees, including but not limited to advanced and minimum
royalties, up front and milestone project and licensing fees (excluding equity
investments by licensees or sublicensees and excluding fees paid to Orchid in
any form which are required to be used for research or other services to be
performed by Orchid).

     3.5    Royalties under Non-exclusive License.  In consideration of the non-
exclusive licenses granted pursuant to Section 2.1.2, except for Products which
incorporate no Licensed Technology other than Developed Technology (as defined
in the SB Agreement), and/or technology developed under the Dynal Agreements or
Services provided using such Products which incorporate no Licensed Technology
other than Developed Technology (as defined in the SB Agreement), and/or
technology developed under the Dynal Agreements, Orchid shall make payments to
Sarnoff of royalties without regard to Sarnoff's ownership of Issued Shares as
follows:

     (a) [*] of Net Sales by Orchid and its Affiliates of Products and Services
whose discovery, development, testing, manufacture, use, sale, importation,
lease or offer for sale would, but for the licenses granted hereunder, infringe
a Valid Claim of a Patent Right included in the Licensed Technology which is not
a Joint Patent Right and which is non-exclusively licensed hereunder, or whose
discovery, development, testing,

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

                                       14
<PAGE>

manufacture, use, sale, importation, lease or offer for sale directly employs or
embodies proprietary Licensed Technology which is not a Joint Invention and
which is non-exclusively licensed hereunder, provided however that for Products
which incorporate Licensed Technology and either Developed Technology (as
defined in the SB Agreement), or technology developed under the Dynal Agreements
or Services provided using such Products, the royalty rate shall be [*] of Net
Sales; and

     (b) [*] of Net Sales by Orchid and its Affiliates of Products and Services
whose discovery, development, testing, manufacture, use, sale, importation,
lease or offer for sale would, but for the licenses granted hereunder, infringe
a Valid Claim of a Joint Patent Right, but not any other Patent Right, which is
included in the Licensed Technology and which is non-exclusively licensed
hereunder, or whose discovery, development, testing, manufacture, use, sale,
importation, lease or offer for sale directly employs or embodies only such
Licensed Technology which is a Joint Invention and which is non-exclusively
licensed hereunder; and

     (c) for (i) sales by any licensees or sublicensees of Orchid of any such
Products or Services as specified in Section 3.5(a) or (b) and (ii) payments
received by Orchid under a sublicense of non-exclusive Licensed Technology,
Orchid shall pay Sarnoff [*] of any non-refundable amounts received by Orchid
from such licensees or sublicensees, including but not limited to advanced and
minimum royalties, up front and milestone project and licensing fees (excluding
equity investments by licensees or sublicensees and excluding fees paid to
Orchid in any form which are required to be used for research or other services
to be performed by Orchid).

     (d) In addition, Orchid shall pay Sarnoff for each Option Field for which
Orchid has a non-exclusive license under Section 2.1.2 on the relevant date the
following minimum royalties for each Option Field: [*]. For Option Fields where
Orchid notifies Sarnoff, at least thirty (30) days prior to the minimum royalty
due date, that Orchid does not wish to maintain its non-exclusive license, no
minimum royalty payment shall be due and Orchid shall no longer have a non-
exclusive license for such Option Field.

     3.6  Royalty Reductions. In the event that royalties and fees paid to
Sarnoff pursuant to Section 3.4 or 3.5 shall become a significant factor in the
return realized by Orchid such as to substantially diminish its capability to
respond to competitive pressures in the market, the parties shall mutually agree
on a reasonable reduction in the royalties and fees payable under this Agreement
with respect to the affected Products and Services.  Factors to be considered in
agreeing on the royalty reduction shall include but not be limited to the profit
margin on such

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

                                       15
<PAGE>

Products and Services and on analogous and/or competitive Products and Services
and prices and expenditures therefor.

     3.7  Royalty Term.  Royalties hereunder shall be payable only until the
expiration of the last to expire of the Patent Rights covering a particular
Product or Service.  Thereafter, Orchid shall have a fully paid up, perpetual
non-exclusive license to all Licensed Technology for such Product or Service.

     3.8  Royalty Reporting Provisions.

     (a)  Orchid agrees to submit to Sarnoff within sixty (60) days after the
calendar quarters ending March 31, June 30, September 30, and December 31 of
each year in which royalties are due hereunder, reports setting forth for the
preceding three (3) month period at least the following information for Orchid,
its Affiliates and sublicensees:

          i)    total billings for Products sold;

          ii)   total billings for all Services provided or sold;

          iii)  deductions applicable to determine the Net Sales thereof;

          iv)   the amount of royalty due thereon; and with each such royalty
                report to pay the amount of royalty due.

     (b)  All such reports shall be maintained in confidence by Sarnoff, except
as required by law.

     (c)  All payments due hereunder shall be payable in United States dollars.
Conversion of foreign currency to U.S. dollars shall be made at the conversion
rate existing in the United States (as reported in The Wall Street Journal) on
the last working day of each royalty period.

     (d)  Any tax paid or required to be withheld by Orchid on account of
royalties payable to Sarnoff under this Agreement shall be deducted from the
amount of royalties otherwise due. Orchid shall secure and send to Sarnoff proof
of any such taxes withheld and paid by Orchid for the benefit of Sarnoff.

     (e)  If governmental regulations prevent remittances from a foreign country
with respect to sales made or fees received in that country, the obligation of
Orchid to pay royalties on such sales and/of fees shall be suspended until such
remittances are permitted. Sarnoff shall have the right, upon giving written
notice to Orchid, to receive payment in such country in local currency.

     3.9  Royalties to Third Parties. In the event Orchid becomes liable to pay
royalties or other amounts to any third party as a result of the sale of any
product or the delivery of any services by Sarnoff or any Affiliate of Sarnoff
under Section 6 of the SB Agreement or otherwise, then Sarnoff shall be liable
for all such royalties or other amounts and shall, at Orchid's option, either
pay such amounts directly to the third party or shall reimburse Orchid for such
royalties or other amounts within thirty (30) days after receipt of an invoice
from Orchid.

                                       16
<PAGE>

     3.10  Royalty Audits. Orchid shall keep complete, true and accurate books
of account and other appropriate records for the purpose of showing the amount
payable to Sarnoff by way of royalty and of cumulative Net Sales and otherwise
showing Orchid's compliance with Section 3 of this Agreement. Said books and the
supporting data and other documentation, including technical information
relevant to the determination of Orchid's obligations hereunder, shall be kept
at Orchid's principal office and maintained for three (3) years following the
end of the calendar year to which they pertain.  Such records, solely to the
extent relevant to the determination of Orchid's obligations under Section 3 of
this Agreement shall be open, upon reasonable notice and at reasonable times
during normal business hours, to the inspection by independent, certified public
accounts (to be selected solely by Sarnoff and reasonably acceptable to Orchid)
at Sarnoff's expense.  However, if a discrepancy of more than five percent (5%)
of royalties due Sarnoff is discovered by the inspection, then the cost of the
inspection shall be performed at Orchid's expense.

4.  Representations and Warranties.

    4.1.  Representations, Warranties and Covenants of Sarnoff. Sarnoff
represents, warrants and covenants to Orchid as follows:

          4.1.1.  Sarnoff is a corporation duly organized, validly existing and
in good standing under the laws of the State of New Jersey with corporate powers
adequate for executing and delivering, and performing its obligations under,
this Agreement;

          4.1.2.  The execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of Sarnoff;

          4.1.3.  This Agreement has been duly executed and delivered by Sarnoff
and is a legal, valid and binding obligation of Sarnoff, enforceable against it
in accordance with its terms;

          4.1.4.  The execution, delivery and performance of this Agreement does
not and will not conflict with or contravene any provision of the charter
documents or bylaws of Sarnoff or any material agreement, document, instrument,
indenture or other obligation of Sarnoff;

          4.1.5.  Sarnoff shall not enter into any agreement, make any
commitment, take any action or fail to take any action that would contravene any
material provision of, or materially derogate or restrict any of the rights and
licenses granted to Orchid under, this Agreement; and

          4.1.6.  Schedule A sets forth a list of all Patent Rights relating to
Licensed Technology Owned or Controlled by Sarnoff as of the Effective Date.  To
the best of Sarnoff's knowledge, all patents listed in Schedule A are valid and
in full force and all applications listed therein as pending have been
prosecuted in good faith as required by law and are in good standing.  To the
best of Sarnoff's knowledge, there has been no infringement by Sarnoff or its
Affiliates with respect to any patent rights of others in the conduct of the
research activities that have resulted in the existing Licensed Technology owned
by Sarnoff.  None of the patents or patent applications listed or described in
Schedule A is involved in any interference or opposition proceeding, and there
has been no written notice received by Sarnoff or any of its Affiliates that any
such proceeding will hereafter be commenced.  Also, included in Schedule A is a
list of all

                                       17
<PAGE>

licenses and license agreements relating to Licensed Technology. To the best of
Sarnoff's knowledge (i) all of the licenses listed or described in Schedule A
are legally valid and binding and in full force and effect, (ii) Sarnoff is not
in default under any such license, and (iii) there are no defaults by any other
party to any such license. None of Sarnoff's rights under any such license will
be impaired by the consummation of the transactions contemplated hereby. Except
for licenses granted under the SB Agreement and except as described in Schedule
A, Sarnoff has not granted any person or entity any right to use any of the
patents or patent applications listed therein in the Orchid Field or the Option
Fields.

           4.1.7.  Sarnoff shall diligently prosecute and maintain all Patent
Rights licensed to Orchid in accordance with the provisions set forth in Section
5.2 and shall not take or fail to take any actions which would impair such
Patent Rights without prior written notice to Orchid as provided in Section
5.2.4.

     4.2.  Representations, Warranties and Covenants of Orchid. Orchid
represents, warrants and covenants to Sarnoff as follows:

          4.2.1.  Orchid is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with corporate powers
adequate for executing and delivering, and performing its obligations under,
this Agreement;

          4.2.2.  The execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action on the part of Orchid;

          4.2.3.  This Agreement has been duly executed and delivered by Orchid
and is a legal, valid and binding obligation of Orchid, enforceable against
Orchid in accordance with its terms;

          4.2.4.  The execution, delivery and performance of this Agreement do
not and will not conflict with or contravene any provision of the charter
documents or bylaws of Orchid or any material agreement, document, instrument,
indenture or other obligation of Orchid; and

          4.2.5.  Orchid shall not enter into any agreement, make any
commitment, take any action or fail to take any action that would contravene any
material provisions of, or materially derogate or restrict any of the rights and
licenses granted to, Sarnoff under this Agreement.

5.   Disclosure of Licensed Technology.

     5.1. Documentation and Access.  Upon request by Orchid from time to time,
Sarnoff shall, within a reasonable time thereafter, deliver to Orchid copies of
reasonable documentation describing the Licensed Technology and Sarnoff shall
give access to and use reasonable efforts to keep Orchid apprised of all ongoing
and future Licensed Technology created or acquired by Sarnoff and its Affiliates
and subject to a license or Option to Orchid hereunder. In the event that Orchid
shall have reason to believe that Sarnoff has not complied with the requirements
of this Section 5.1, it shall so notify Sarnoff and Sarnoff shall be given a
reasonable opportunity to cure such non-compliance.

                                       18
<PAGE>

     5.2. Patents.

          5.2.1.  Patent Prosecution.

          Sarnoff shall, by qualified independent patent counsel, prepare, file,
prosecute and maintain patent applications, and maintain and enforce Patent
Rights included in the Licensed Technology in the countries of United States,
Canada, Australia, Europe Patent Office (designating Austria, France, Germany,
Spain, Ireland, Italy, Netherlands, Sweden, Switzerland, United Kingdom), Japan,
and Korea and such other countries as mutually agreed between Orchid and Sarnoff
and shall have all rights to otherwise deal in and to enforce rights associated
with Licensed Technology except as otherwise provided in Section 6.2. Sarnoff
shall provide Orchid with copies of all proposed patent and other applications
and filings and communications and give Orchid the reasonable opportunity to
comment thereon and Sarnoff will consider in good faith any comments provided to
Sarnoff by Orchid prior to filing. Sarnoff agrees to deliver to Orchid copies of
any communications with the applicable patent office, including without
limitation, all office actions and responses, each patent application and
filing, and each registration that issues thereon.

          5.2.2.  Cooperation. Orchid agrees to cause each of its employees and
agents to take all actions and to execute, acknowledge and deliver all
instruments or agreements reasonably requested by Sarnoff, and necessary for the
perfection, maintenance, enforcement or defense of Patent Rights as set forth
above.

          5.2.3. Financing of Costs. Orchid agrees to pay to Sarnoff [*] of
Sarnoff's reasonable out of pocket costs incurred in the preparation, filing,
translation, prosecution, issuance and maintenance of any such patent
applications or patents relating to Licensed Technology except for Licensed
Technology under Section 1.17(f) prepared or filed after the Effective Date and
[*] of the maintenance costs for such Patent Rights incurred by Sarnoff after
the Effective Date, provided that such prosecution is conducted as set forth in
Section 5.2.1 above. If Orchid declines in writing to pay to Sarnoff its [*]
share of the costs of a particular Patent Right in a particular country,
Orchid's license to such Patent Right in such particular country shall be
terminated as of the Due Date. If Orchid fails to pay to Sarnoff within thirty
(30) days from date of receipt of invoice (the "Due Date"), and such failure
continues for a period of 30 days after written notice to Orchid by Sarnoff of
such failure to pay, Orchid's license to such Patent Right in such particular
country shall be terminated as of the Due Date.

          5.2.4.  Election to Discontinue Prosecution.  Sarnoff may, with
respect to the Patent Rights, at any time, in its sole discretion decide that it
desires to discontinue its responsibility for the prosecution or maintenance of
a particular patent application or patent in one or more countries of Patent
Rights which are Licensed Technology under Section 1.17(a), (b), (c), (d), (e)
and (g).  In such event, Sarnoff shall notify Orchid promptly in writing of its
intention to discontinue responsibility for the prosecution or maintenance for
such patent application or patent, and, in any event, shall give such notice at
least sixty (60) days prior to the effective date of such proposed
discontinuance in order to permit Orchid to determine whether it wishes to
assume the responsibility therefor.  Orchid shall have the right and option, but
not the obligation, to assume responsibility for prosecution and maintenance of
such patent or patent

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

                                       19
<PAGE>

application which Sarnoff desires to discontinue. Orchid shall inform Sarnoff in
writing of its decision to assume responsibility for prosecution and maintenance
of such patent or patent application and Sarnoff shall execute and deliver such
documents and take such actions as are reasonably necessary or appropriate to
effect such assumption and transfer of responsibility in a timely and efficient
manner. In the event Orchid exercises such right, such patent or patent
application shall be assigned to Orchid and removed from operation of this
Agreement; provided that, Sarnoff shall have a royalty free, non-exclusive,
worldwide, right and license under such Licensed Technology with the right to
sublicense, to develop, have developed, make, have made, use, have used, import,
have imported, offer for sale, sell have sold or lease products and practice
processes outside the Orchid Field and the Option Fields so long as the Options
remain in effect and further provided that upon termination of this Agreement,
such patents and patent applications shall be assigned to Sarnoff. However, if
Sarnoff elects to use or sublicense a particular patent in a particular country
assigned by Sarnoff to Orchid under this Section 5.2.4, then Sarnoff shall pay
to Orchid one half of the out of pocket costs expended by Orchid in obtaining
and maintaining the particular patent in the particular country.

     5.3.  Confidential Information.  Any Party receiving or possessing
Confidential Information of the other Party shall use commercially reasonable
efforts to: (i) maintain the confidential and proprietary status of such
Confidential Information; (ii) keep such Confidential Information and each part
thereof within its possession or under its control sufficient to prevent any
activity with respect to the Confidential Information that is not specifically
authorized by this Agreement; (iii) prevent the disclosure of any Confidential
Information to any other Person; and (iv) ensure that such Confidential
Information is used only for those purposes specifically authorized herein;
provided, however, that such restriction shall not apply to any Confidential
Information which is (a) independently developed by the receiving Party without
reference to Confidential Information of the disclosing Party, (b) in the public
domain at the time of its receipt or thereafter becomes part of the public
domain through no fault of the receiving Party, (c) received by the receiving
Party without an obligation of confidentiality from a third party having the
right to disclose such information, (d) released from the restrictions of this
Section 5.3 by the express written consent of the disclosing Party, (e)
disclosed to any actual or prospective permitted assignee, Partner, investor,
licensee, sublicensee or subcontractor of either Sarnoff or Orchid (if such
actual or prospective assignee, Partner, investor, licensee, sublicense or
subcontractor is subject to the provisions of this Section 5.3 or comparable
provisions of other documents), or (f) required by law, statute, rule or court
order to be disclosed (the disclosing party shall, however, use commercially
reasonable efforts to obtain confidential treatment of any such disclosure and
shall notify the other party in writing of the request or requirement as soon as
feasible so that such other party may make timely effort to protect or limit the
conditions of disclosure of its Confidential Information). Without limiting the
generality of the foregoing, Sarnoff and Orchid each shall use its commercially
reasonable efforts to obtain confidentiality agreements from its respective
Partners, investors, licensees, sublicensees, subcontractors employees and
agents, similar in scope to this Section 5.3, to protect the Confidential
Information.

     5.4.  Permitted Disclosures. Notwithstanding the provisions of Section 5.3
hereof, Sarnoff and Orchid may, to the extent necessary, disclose and use
Confidential Information, consistent with the rights of Sarnoff and Orchid
otherwise granted hereunder (a) for the purpose of securing institutional or
government approval to clinically test or market any Product, or (b)

                                       20
<PAGE>

for the purpose of securing patent protection for an invention within the scope
of the Patent Rights. This Agreement and the terms hereof may be disclosed by
either Party only to a third party which executes an agreement requiring such
third party to maintain the confidentiality thereof

6.   Infringement.

     6.1.  Notification of Infringement.  Orchid and Sarnoff each shall notify
the other of any infringement or misappropriation by any Person of any Licensed
Technology rights in the Orchid Field and shall provide the other with the
available evidence, if any, of such infringement.  In such case, the respective
officers of Sarnoff and Orchid shall confer to determine in good faith an
appropriate course of action to enforce the Licensed Technology rights or
otherwise abate the infringement thereof.

     6.2.  Enforcement of Licensed Technology Rights.  If the parties have not
agreed on a course of action pursuant to Section 6.1, then if Orchid determines
that enforcement of the Licensed Technology rights in the Orchid Field is
appropriate, Orchid shall have the right, but not the obligation, at its own
expense, to take appropriate action to enforce such rights; provided, however,
that, if Orchid elects to so act, Sarnoff shall have the right to participate in
the enforcement of such rights by agreeing to bear a percentage of the costs of
such enforcement in such amount as the parties shall determine. All amounts
recovered in any action to enforce rights in Licensed Technology in the Orchid
Field undertaken by Orchid, whether by judgment or settlement, shall be retained
by Orchid after reimbursing the expenses borne by both parties in enforcing such
Licensed Technology rights.  If, within six (6) months after notice of
infringement, Orchid has not commenced action to enforce such rights or
thereafter ceases to diligently pursue such action, Sarnoff shall have the
right, at its expense, to take appropriate action to enforce such rights. Orchid
shall have the right to participate separately in such enforcement. All amounts
recovered in any action to enforce Licensed Technology rights undertaken by
Sarnoff solely at its expense, whether by judgment or settlement, shall be
retained by Sarnoff after reimbursing the expenses borne by both parties in
enforcing such Licensed Technology rights. Sarnoff and Orchid shall fully
cooperate with each other in the planning and execution of any action to enforce
rights. Sarnoff shall not enter into any settlement that includes the grant of a
license under, agreement not to enforce, or any statement prejudicial to the
validity or enforceability of any Licensed Technology in the Orchid Field
without the consent of the Orchid.

     6.3.  Disclaimer of Warranty; Consequential Damages.

           6.3.1.  SARNOFF EXPRESSLY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THE LICENSED TECHNOLOGY, INCLUDING, W1THOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

           6.3.2.  NEITHER PARTY TO THIS AGREEMENT SHALL BE ENTITLED TO RECOVER
FROM THE OTHER ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, MULTIPLE OR PUNITIVE
DAMAGES.

                                       21
<PAGE>

     6.4   Infringement. In the event that an action for patent infringement is
commenced against Orchid and/or its sublicensees, whether severally or jointly,
based on the manufacture, use or sale of any Product or Service in any country,
Orchid may, without limitation: (i) terminate and revert its license hereunder
to such Product or Service in such country, which shall be deemed an abandonment
of such Product or Service in such country, or (ii) defend such action on
behalf, of the appropriate parties at its own expense.

     6.5   Markings. Set forth in Exhibit A is a list of the Patent Rights,
which list shall be updated from time to time by Sarnoff Orchid shall refer to
this list and affix appropriate markings and legends on Products or Services
sold or distributed by or on behalf of Orchid using such Patent Rights.

     6.6   Limitations. Sarnoff makes no representations or warranties that the
rights granted to Orchid pursuant to Section 2.1 hereof may be exercised by
Orchid and its sublicensees without infringing any third party rights in any
country in the world. Sarnoff assumes no responsibility hereunder for the
manufacturing, product specifications, or end-uses of Products or Services by
Orchid or its customers or sublicensees.  No warranties made by Orchid in
connection with its Products or Services shall expressly or implicitly obligate
Sarnoff in any manner.

     6.7   Product Indemnification.  Subject to the provisions of this Section
6.7, Orchid agrees to defend, indemnify and hold harmless Sarnoff from any and
all damages arising from injury or damage to persons or property (including
without limitation, product liability or infringement of any proprietary rights)
resulting directly or indirectly from Orchid's use, development, manufacture,
licensing, marketing, sale or other disposition or any other commercial
exploitation of any Product or Service, except those which result from the gross
negligence or willful misconduct of Sarnoff.  Sarnoff shall promptly notify
Orchid of any claim which is to be indemnified hereunder and Orchid shall have
the sole right to defend, settle or compromise any such action or claim.

     7.    Term and Termination.

     7.1.  Term.  This Agreement shall be effective as of the Effective Date and
shall continue in full force and effect unless terminated by mutual agreement or
as set forth below.

     7.2.  Termination. In the event Orchid fails to make payments due
hereunder, Sarnoff shall have the right to terminate this Agreement upon ninety
(90) days' written notice, unless Orchid makes such payments within the ninety
(90) day notice period or unless any such payment is contested in good faith, in
which event Sarnoff shall not have the right to terminate this Agreement until
the matter is resolved in Sarnoff's favor pursuant to Section 13 hereof and
Orchid still fails to make any such payment for thirty (30) days after such
resolution.

     7.3.  Survival of Sublicenses.  In the event any license granted to Orchid
hereunder terminates for any reason, any sublicenses granted by Orchid under
this Agreement shall continue.

                                       22
<PAGE>

8.   No Implied Waivers; Rights Cumulative.

     The delay or failure of any Party at any time or times to require
performance of any provisions shall in no manner affect the rights at a later
time to enforce the same. No waiver by any Party of any condition or of the
breach of any term contained in this Agreement, whether by conduct, or
otherwise, in any one or more instances, shall be deemed to be, or considered
as, a further or continuing waiver of any such condition or of the breach of
such term or any other term of this Agreement.

9.   Force Majeure.

     Sarnoff and Orchid shall each be excused for any failure or delay in
performing any of its respective obligations under this Agreement, if such
failure or delay is caused by Force Majeure.

10.  Notices.

     All notices, requests and other communications to Sarnoff or Orchid
hereunder shall be in writing (including telecopy or similar electronic
transmissions), shall refer specifically to this Agreement and shall be
personally delivered, by registered mail or certified mail, return receipt
requested, postage prepaid or by reliable overnight courier service providing
evidence of receipt, in each case to the respective address specified below (or
to such address as may be specified in writing to the other party hereto):

     Sarnoff Corporation
     201 Washington Road
     Princeton, NJ 08543
     Attn:  Vice President, IP and Licensing

     With a copy to:

     Allen Bloom, Ph.D., Esq.
     Dechert Price & Rhoads
     Princeton Pike Corporate Center
     Princeton, NJ 08543-5218

     Orchid Biocomputer, Inc.
     201 Washington Road
     Princeton, NJ 08543
     Attn:  President

     With a copy to:

     Jeffrey M. Wiesen, Esq.
     Mintz, Levin, Cohn, Ferris,
     Glovsky and Popeo, P.C.
     One Financial Center
     Boston, MA 02111

                                       23
<PAGE>

     Any notice or communication given in conformity with this Section 12 shall
be deemed to be effective: (i) when received by the addressee, if delivered by
hand; (ii) three (3) days after mailing, if mailed; and (iii) one (1) business
day after delivery to a reliable overnight courier service providing evidence of
receipt.

11.  Successors and Assigns.

     The terms and provisions of this Agreement shall inure to the benefit of,
and be binding upon, Sarnoff, Orchid, and their respective successors and
assigns.

12.  Amendments.

     No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor any consent to any departure by Sarnoff or
Orchid therefrom, shall in any event be effective unless the same shall be in
writing specifically identifying this Agreement and the provision intended to be
amended, modified, waived, terminated or discharged and signed by Sarnoff and
Orchid, and each such amendment, modification, waiver, termination or discharge
shall be effective only in the specific instance and for the specific purpose
for which given.  No provision of this Agreement shall be varied, contradicted
or explained by any oral agreement, course of dealing or performance or any
other matter not set forth in an agreement in writing and signed by Sarnoff and
Orchid.

13.  Arbitration

     13.1.  The Parties shall attempt to resolve any dispute or controversy
arising under or relating to the interpretation or meaning of this Agreement by
good faith negotiations. Any matter that cannot be resolved by such good faith
negotiation shall be resolved by final and binding arbitration conducted by
three (3) arbitrators in Princeton, New Jersey, in accordance with the then-
current American Arbitration Association ("AAA") Commercial Arbitration Rules
(the "AAA Rules") as modified by this Section 13.

     13.2.  The arbitrators shall be selected by mutual agreement of the parties
or, failing such agreement, in accordance with the aforesaid AAA Rules.  At
least one (1) of the arbitration panel shall be reasonably familiar with the
industry in which Orchid operates.  The parties shall bear the costs of the
arbitrators equally.

     13.3.  The parties shall have the right of limited pre-hearing discovery,
in accordance with the U.S. Federal Rules of Civil Procedure, as then in effect,
for a period not to exceed sixty (60) days.

     13.4.  As soon as the discovery is concluded, but in any event with thirty
(30) days thereafter, the arbitrators shall hold a hearing in accordance with
the AAA Rules.  Thereafter, the arbitrators shall promptly render a written
decision, together with a written opinion setting forth in reasonable detail the
grounds for such a decision.

     13.5.  Judgment may be entered in any court of competent jurisdiction to
enforce the award entered by the arbitrator.

                                       24
<PAGE>

     13.6.  The duty of the parties to arbitrate any dispute hereunder shall
survive expiration or termination of this Agreement for any reason.

14.  Governing Law.

     This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey.

15.  Severability.

     If any provision hereof should be held invalid, illegal or unenforceable in
any respect in any jurisdiction, then, to the fullest extent permitted by law,
(a) all other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (b) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of such provision in any other jurisdiction. To the
extent permitted by applicable law, Sarnoff and Orchid hereby waive any
provision of law that would render any provision hereof prohibited or
unenforceable in any respect.

16.  Headings.

     Headings used herein are for convenience only and shall not in any way
affect the construction of, or be taken into consideration in interpreting, this
Agreement.

17.  Execution in Counterparts.

     This Agreement may be executed in any number of counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute one and the same
instrument.

18.  Interpretation.

     The parties hereto acknowledge and agree that (i) each Party and its
counsel reviewed and negotiated the terms and provisions of this Agreement and
have contributed to its revision; (ii) the rule of construction to the effect
that any ambiguities are resolved against the drafting Party shall not be
employed in the interpretation of this agreement; and (iii) the terms and
provisions of this Agreement shall be construed fairly as to all Parties hereto
and not in a favor of or against any Party, regardless of which Party was
generally responsible for the preparation of this Agreement.

19.  Entire Agreement.

     This Agreement, together with any agreements referenced herein,
constitutes, on and as of the date hereof, the entire agreement of Sarnoff and
Orchid with respect to the licensing or transfer of technology from Sarnoff to
Orchid and all prior or contemporaneous understandings or agreements, whether
written or oral, between Sarnoff and Orchid with respect to such subject matter
are hereby superseded in their entirety except for the SB Agreement. In the case
of any conflict between the terms of this Agreement and the SB Agreement, the SB
Agreement shall govern.

                                       25
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this License Agreement
to be duly executed under seal and delivered as of the date first above written.

          SARNOFF CORPORATION

     By: /s/ Carmen A. Catanese, Ph.D.
         ------------------------------
             Carmen A. Catanese, Ph.D.

     Title: Vice President
           ----------------------------

          ORCHID BIOCOMPUTER, INC.

     By: /s/ Dale R. Pfost, Ph.D.
         ------------------------------
             Dale R. Pfost, Ph.D.

     Title: Chief Executive Officer
            and President
            ----------------------------

                                       26
<PAGE>

                               LICENSE AGREEMENT

                                  SCHEDULE A

                             PRESENT PATENT RIGHTS

[*]

                                      27

[*] CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

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