THIS GUARANTY (“Guaranty”) is made as of October 1, 2002 by George Rathmann, an individual (“Guarantor”), in favor of
AMB PROPERTY, L.P., a Delaware limited partnership (“Seller”).
A. Seller, as landlord, and Hyseq, Inc., a Nevada corporation (“Buyer”), as tenant, are parties to that certain lease dated as
of June 23, 2000 (the “Original Lease”), which Original Lease has been previously amended by that certain First Amendment to
Lease Agreement dated December 14, 2000 (collectively, the “Lease”) relating to certain real property and improvements located
at 225, 249 and 257 Humboldt Court, Sunnyvale, California (the “Property”), all as more particularly described in the Lease.
B. Pursuant to that certain Termination Agreement dated as of October 1, 2002 by and among Buyer, Seller and Guarantor
(the “Termination Agreement”), Seller has agreed to terminate the Lease.
C. Pursuant to the terms of that certain Real Property Option and Sale Agreement and Joint Escrow Instructions dated as
of October 1, 2002 by and between Buyer and Seller (“Option Agreement”), Seller has agreed to afford Buyer an option
(“Option”) to purchase the Property upon the terms and conditions set forth in the Option Agreement. Initially capitalized terms
not otherwise defined herein shall have the meaning given to them in the Option Agreement.
D. Pursuant to the Option Agreement, Buyer has executed or will execute in favor of Seller a promissory note (“Note”) in
the principal amount of Two Million Six Hundred Thousand Dollars ($2,600,000). The Note, the Option Agreement, and the
Termination Agreement are collectively referred to herein as the “Transaction Documents”.
THEREFORE, to induce Seller to afford the Option to Buyer and to enter into the Transaction Documents, and in
consideration thereof, Guarantor unconditionally guarantees and agrees as follows:
1.1. Guarantor hereby guarantees and promises to pay to Seller or order