STOCK OPTION AGREEMENT
1. You are hereby granted, in connection with and in partial consideration of your continued employment by
Hyseq, Inc. (the "Company") as its Chairman of the Board, an option (the "Option") to purchase, at the above
stated price, upon and subject to the provisions and conditions hereinafter set forth, 1,000,000 shares of
common stock, $.001 par value per share ("Common Stock"), of the Company, which Option shall become
exercisable for the number of shares as shown below on the later of (i) the accrual date set forth below and (ii)
such date whereon the stockholders of the Company approve the grant of this Option. This Option is a non-
statutory stock option, which is not granted under any stock option plan sponsored by the Company, and is
neither designated as, nor intended to be, an incentive stock option.
Unless earlier terminated pursuant to the terms of this Agreement, the Option shall expire on ten years minus one
day after the date of grant.
I hereby acknowledge receipt of this Option and understand that it is governed by the terms of this contract. I
acknowledge that I am aware of the provisions contained in this contract whereby the Board of Directors of the
Company (the "Board of Directors") may terminate or amend this contract. I further acknowledge that the grant
hereby made to me does not, under any circumstances, create any right for me to receive any grant in the future.
2. To exercise your Option to purchase any shares hereunder, it shall be necessary for you, on or after the date
on which such purchase privilege accrues and prior to the above-stated expiration date, to make payment in full
to the Company, in cash or in Common Stock of the Company or in a combination thereof, for the shares which
you so elect to purchase, at the price per share herein described, whereupon you will receive the shares for which
you thus make payment; provided, however, if all or part of the payment is in shares of Common Stock of the