This Option Agreement (the "Agreement") is entered into as of October 24, 2001, among Callida Genomics,
Inc., a Delaware corporation ("CGI"), N-Mer, Inc., a Delaware corporation ("N-Mer"), and Affymetrix, Inc., a
Delaware corporation ("Affymetrix").
WHEREAS, CGI, Hyseq, Inc., a Nevada corporation ("Hyseq"), and Affymetrix have entered into the Preferred
Stock Purchase Agreement, dated as of the date hereof (the "Stock Purchase Agreement");
WHEREAS, N-Mer and Affymetrix have entered into the Product Development and Supply Agreement, dated
as of the date hereof (the "Supply Agreement"), and the Product Solicitation Agreement, dated as of the date
hereof (the "Product Solicitation Agreement");
WHEREAS, this Agreement is being entered into in order to induce Affymetrix to enter into the Stock Purchase
Agreement, Supply Agreement and Product Solicitation Agreement and to consummate the transactions
WHEREAS, N-Mer is a wholly-owned subsidiary of CGI; and
WHEREAS, CGI wishes to grant Affymetrix an option to acquire 81% of the capital stock of N-Mer.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth
herein, the parties hereto hereby agree as follows:
SECTION 1.1 DEFINITIONS. As used in this Agreement, the following terms shall have the meanings set forth
"Affiliate" shall mean with respect to any Person (i) any other Person that directly or indirectly through one or
more intermediaries controls or is controlled by or is under common control with such Person, (ii) or any other
Person owning or controlling 25% or more of the outstanding voting securities of or other ownership interest in
such Person or (iii) any officer, director, general partner, managing partner or member of such Person.
"Business Day" shall mean a day other than a Saturday or Sunday on which commercial banks in New York,
New York are not required or permitted under applicable