Document:

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                                                                   Exhibit 10.22

                    Product Development and Supply Agreement

                                   N-Mer, Inc.

                                       and

                                Affymetrix, Inc.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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                                    AGREEMENT

        This agreement ("Agreement"), dated as of October 24, 2001, between
Affymetrix, Inc. ("Affymetrix") a Delaware corporation having its principal
place of business at 3380 Central Expressway, Santa Clara, California 95051, and
N-Mer, Inc. ("N-Mer") a Delaware corporation having its principal place of
business at 670 Almanor Avenue, Sunnyvale, CA 94086.

RECITALS

        WHEREAS, Affymetrix has research, development, and manufacturing
capabilities and facilities, and has developed certain rights relevant to DNA
probe array based technology.

        WHEREAS, N-Mer has certain intellectual property rights, research and
development capabilities, and facilities to conduct research and development
activities for the N-Mer Field.

        WHEREAS, Affymetrix and N-Mer desire to enter into an agreement whereby
Affymetrix will supply N-Mer with DNA probe arrays for use in the N-Mer Field.

         NOW, THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement, Affymetrix and N-Mer agree as follows:

1       DEFINITIONS

        1.1 "Affiliate" shall mean any corporation, company, partnership, joint
venture and/or firm which is controlled by or controls a Party or is under
common control with a Party, but only for so long as such Affiliate remains an
Affiliate of a Party, and only if such Affiliate is bound by the terms of this
Agreement. For clarity, an Affiliate shall retain rights pursuant to this
Agreement only for so long as such Affiliate remains an Affiliate of the
designated entity and only if such Affiliate is bound by the terms of this
Agreement. For purposes of this Section, "control" shall mean, in the case of
corporations (or equivalents of corporations), direct or indirect ownership of
at least eighty percent (80%) of the stock having the right to vote for
directors of such corporation or, in the case of partnerships, at least eighty
percent (80%) of the ownership interest in such partnership. In any case,
"control" shall require the right to direct day-to-day management and direction
of the entity. Notwithstanding the foregoing, if local law requires a minimum
percentage of local ownership, control will be established by direct or indirect
beneficial ownership of one hundred percent (100%) of the maximum ownership
percentage that may, under such local law, be owned by foreign interests. Each
Party shall be liable to the other Party for breach of this Agreement by any of
such Party's Affiliates, and any such breach shall be deemed a breach by such
Party.

        1.2 "Affymetrix Field" means Probe Array-based products for use in all
applications excluding uses wherein [***] on the array [***] provided that
within such Probe Array or set of Probe Arrays used to assay [***] and intended
to be used together, the collection of probes shall satisfy all of the following
criteria:

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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                      (1) All Non-Control Probes are designed based on a
               specific reference sequence for the benefit of analyzing this
               reference sequence or a related variant wherein the Informative
               Probe Portion of each probe sequence is [***] of the Informative
               Probe Length. At Hyseq's reasonable request, Hyseq may audit the
               Affymetrix design process to ensure that only reference sequences
               are used;

                      (2) Control probes on any array represent less than [***]%
               of all probes on that array and all other probes are Non-Control
               Probes; and

                      (3) Collectively the sequence of the Informative Probe
               Portions of the probes of any [***] Informative Probe Lengths
               comprise no more than [***]% of the set of all possible probes of
               the [***] of the [***].

For example, without limiting the foregoing, the Parties agree that "Affymetrix
Field" includes products [***] and similar products and products derived
therefrom and the [***] products identified in Exhibit B attached hereto.

It is the intent of the Parties that the "Affymetrix Field" and "N-Mer Field"
are mutually exclusive.

        1.3 "Affymetrix Work Plan Technology" shall mean the patents, patent
applications, trade secrets and other Information owned or controlled by
Affymetrix that is reasonably necessary or useful to perform the Parties'
obligations under the Work Plan.

        1.4 "Affymetrix License Agreement" shall mean the License Agreement,
dated as of the date hereof, between Affymetrix and Callida Genomics, Inc.

        1.5 "Bacterial Clinical Diagnostics" shall mean the use of Probe Arrays
in the determination of the species or drug resistance profile of a bacterial or
fungal organism where the results of the assay are reported to a caregiver or
his/her patient for use in a therapeutic decision for that patient.

        1.6 "Confidential Information" means any and all non-public and
proprietary Information that is specifically designated as such and that is
disclosed by either Party to the other in any form in connection with this
Agreement and that, if orally disclosed, shall be reduced in writing and
delivered to the receiving Party within thirty (30) days of such disclosure.

        1.7 "Control Probe" means a probe within the Probe Array that does not
provide information about the [***] in the sample and is solely to determine if
the array is [***], the sample is [***] the array, or the sample is [***].

        1.8 "Custom Probe Arrays" shall refer to Probe Arrays the manufacture of
which requires the creation of one or more custom mask designs for particular
probe sequences identified by N-Mer pursuant to Sections 3.1 or 3.2,
specifically for and only for use in the N-Mer Field.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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        1.9 "Effective Date" shall mean the Closing Date (as such term is
defined in the Preferred Stock Purchase Agreement, dated as of the date hereof,
among Affymetrix, N-Mer, Callida Genomics, Inc. and Hyseq, Inc.).

        1.10 "Information" means any data, results, inventories, information,
know-how, processes, machines, trade secrets, techniques, methods, development,
material, or compositions of matter or other information of any type or kind.

        1.11 "Informative Probe Portion" of a probe means that portion of a
probe sequence that is [***] within the Probe Array; the Informative Probe
Portion being characterized by an Informative Probe Length that is the number of
[***] in the sequence of that Probe. A [***] with a [***] counts as [***], e.g.
a [***] is [***] and counts as [***], a [***] counts as [***]. A [***] that
pairs with [***] counts as a [***] equal to the number of [***].

        1.12 "N-Mer Field" means Probe Array-based products for use in all
applications, excluding the following: (a) uses wherein [***] probes in the
array is [***], and (b) Bacterial Clinical Diagnostics; provided that within
such Probe Array or set of Probe Arrays used to assay a target nucleic acid, the
collection of probes shall satisfy all of the following criteria:

                      (1) Each Non-Control Probe is designed without use of a
               reference sequence [***], so that the collection of Non-Control
               probes is designed to be able to analyze multiple unrelated
               sequences, i.e. the algorithm that is used to design the probes
               is independent of the sequence to be analyzed and does not
               directly rely on any sequence or collection of sequences of [***]
               to derive the probes. [***]; and

                      (2) Control probes represent less than [***]% of all
               probes on any single array and all other probes are Non-Control
               Probes.

It is the intent of the Parties that the "Affymetrix Field" and "N-Mer Field"
are mutually exclusive.

        1.13 "N-Mer's Area Of Interest" shall mean the use of Probe Arrays and
related reagents, protocols, instrumentation and software supplied hereunder,
solely for use in and licensed for use only in the N-MER Field: a) as a research
tool for internal research and development of applications of, or assays
associated with, Probe Arrays supplied by Affymetrix HEREUNDER, b) pursuant to
the Product Solicitation Agreement, for the distribution or sale of Probe Arrays
supplied pursuant to this Agreement to end users for internal research purposes
or to generate databases for commercial license in accordance with Section 3.6,
or c) in the event that the Product Solicitation Agreement terminates, for the
distribution or sale of Probe Arrays supplied pursuant to this Agreement to end
users for internal research purposes or to generate databases for commercial
license in accordance with Section 3.6.

        1.14 "Non-Control Probe" means a probe within the Probe Array that
provides information about the sequence of the target nucleic acid in the
sample.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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        1.15 "Lot" shall refer to a specified minimum purchase quantity of Probe
Arrays for the particular wafer format of Probe Array specified by N-Mer, and
which will be identified by Affymetrix within [***] of submission of a design of
a Custom Probe Array by N-Mer; provided, however, that a Lot shall not be more
than (i) [***] Probe Arrays in a [***] Probe Array/wafer format for research and
development and (ii) [***] Probe Arrays in a [***] Probe Array/wafer format or
an equivalent proportional number of Probe Arrays in a different Probe
Array/wafer format for commercial purposes. The Project Coordination Committee
shall have a right at the commencement of a design for a Custom Probe Array,
[***] (provided that the Lot size for a particular Custom Probe Array already
purchased by N-Mer and accepted by Affymetrix pursuant to Section 3.3 below may
only be changed on [***] written notice to N-Mer), to request Affymetrix to vary
the size of a Lot upwards or downwards. Affymetrix will use [***] efforts to
accommodate such request provided such variance does not [***] the quality of
the Probe Arrays produced from such Lot and such variance does not [***]
Affymetrix manufacturing processes or cost structure.

        1.16 "New Process Custom Probe Array" shall mean all Custom Probe Arrays
that are not Standard Custom Probe Arrays.

        1.17 "Party" shall mean Affymetrix or N-Mer. "Parties" shall mean
Affymetrix and N-Mer.

        1.18 "Probe Array" means a single Solid Support having affixed thereto
oligonucleotide, including nucleic acid, probes [***]; provided that [***] are
excluded.

        1.19 "Product Solicitation Agreement" shall mean the agreement of that
name between Affymetrix and N-Mer of even date herewith.

        1.20 "Project Coordination Committee" or "PCC" shall have the meaning
assigned to it in Section 6.1.

        1.21 "Solid Support" means a nonporous planar surface of a solid
material; specifically excluded from the definition of solid support is [***].

        1.22 "Standard Custom Probe Array" shall mean a Custom Probe Array where
the probe sequence at any given position is [***] and where such Custom Probe
Array is fabricated using the same equipment and process as Affymetrix then
standard probe arrays sold to [***] or more Third Parties.

        1.23 "System(s)" shall mean fluidics station(s), work station(s), probe
array reader(s), and associated software, such software licensed to N-Mer, and
such fluidics station(s) and probe array reader(s) sold to N-Mer, only for use
with Probe Arrays sold hereunder.

        1.24 "Term" shall mean the period beginning on the Effective Date and
ending upon dissolution of N-Mer. For purposes of this agreement, if Affymetrix
exercises the Option (as

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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such term is defined in the Option Agreement, dated as of the date hereof, among
Affymetrix, N-Mer and Callida Genomics, Inc.) such exercise shall be deemed to
be a dissolution of N-Mer.

        1.25 "Third Party" shall mean any person or entity other than
Affymetrix, N-Mer, or Affiliates of either.

        1.26 "Work Plan" shall mean the plan set forth in Exhibit A, and as may
be amended from time to time in writing by agreement of the Project Coordination
Committee.

2       PRODUCT DEVELOPMENT PLAN

        2.1 Performance of Work Plan. Affymetrix and N-Mer shall collaborate
together to develop technology and products as set forth in the Work Plan. N-Mer
shall bear all costs and expenses for the Parties' work required by the Work
Plan. The Parties shall use [***] efforts to perform their respective
obligations in compliance with the Work Plan, including, without limitation, the
schedules set forth therein. Affymetrix shall supply such services at [***]. The
Parties shall exchange Confidential Information as reasonably required to
perform the Work Plan, provided that a Party may disclose Confidential
Information of the other Party (i) solely to employees who need to know such
Confidential Information in order to perform their obligations under the Work
Plan and (ii) to consultants and/or advisors provided that such consultants and
advisors have signed confidentiality agreements at least as strict as the
confidentiality provisions in this Agreement and provided further that such
disclosure shall occur only with the prior written consent of the Party whose
Confidential Information is proposed to be disclosed, which consent shall not be
unreasonably denied, conditioned or delayed. Changes to the Work Plan shall be
subject to the mutual agreement of the Project Coordination Committee, [***].

        2.2 License to Perform Work Plan. Affymetrix hereby grants N-Mer a
royalty-free, fully paid-up, worldwide, non-exclusive license, without the right
to grant sublicenses, under the Affymetrix Work Plan Technology, solely to
perform N-Mer's obligations under the Work Plan. For purposes of clarity, no
right of distribution or sale is provided under this Section 2.2.

        2.3 License Under Affymetrix Work Plan Technology. Affymetrix hereby
grants to N-Mer a royalty-free, fully paid-up, worldwide, non-exclusive license,
without the right to grant sublicenses, under the Affymetrix Work Plan
Technology, solely as required in connection with the use (for development of
products to be sold under the Product Solicitation Agreement), manufacture, and
importation of [***] to be used solely in conjunction with Custom Probe Arrays
made by Affymetrix pursuant to this Agreement. Affymetrix hereby grants to N-Mer
a non-exclusive license (without the right to sublicense), under the Licensed
Patents (as such term is defined in the Affymetrix License Agreement), solely in
the N-Mer Field, and under the Patents-in-Interference (as such term is defined
in the Affymetrix License Agreement), in all fields, excluding Bacterial
Clinical Diagnostics, in each case on the same terms and subject to the same
conditions as the licenses to such Licensed Patents and Patents-in-Interference
granted by Affymetrix under the Affymetrix License Agreement, except that this
license shall be used solely in conjunction with Custom Probe Arrays made by
Affymetrix pursuant to this Agreement.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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        2.4 Supply of Material and Services. Affymetrix shall supply N-Mer with
Custom Probe Arrays, chip design services, Systems and other reagents and
services as provided in the Work Plan that are necessary for N-Mer to perform
its obligations under the Work Plan. Such supply shall be pursuant to the terms
set forth in Section 3 below.

3       PROBE ARRAY SUPPLY

        3.1 Standard Custom Probe Array Design. During the Term, N-Mer may
provide to Affymetrix probe sequences for Standard Custom Probe Arrays. Upon
Affymetrix' receipt of such probe sequences and such [***] related information,
Affymetrix shall use [***] efforts to design, lay out, and procure masks for
such Standard Custom Probe Arrays according to the schedule quoted to N-Mer at
the time N-Mer orders such Standard Custom Probe Arrays pursuant to Section 3.3;
provided, however, that such schedule will identify a time for completion that
is [***]. Affymetrix shall bill N-Mer for process development, design and layout
services for Standard Custom Probe Arrays at [***]. Affymetrix will make or
procure masks and bill N-Mer at a price equal to [***].

        3.2 New Process Custom Probe Array Design. Affymetrix shall use [***]
efforts to develop processes to manufacture New Process Custom Probe Arrays
pursuant to the Work Plan. After Affymetrix determines [***] the feasibility of
the manufacture of New Process Custom Probe Arrays pursuant to the Work Plan,
N-Mer may identify probe sequences for New Process Custom Probe Arrays. Upon
Affymetrix' receipt of such probe sequences and such [***] related information,
Affymetrix shall use [***] efforts to design, lay out, and procure masks for New
Process Custom Probe Arrays according to the schedule quoted to N-Mer at the
time N-Mer orders such New Process Custom Probe Arrays pursuant to Section 3.3;
provided, however, that such schedule shall provide for time periods [***].
Affymetrix shall bill N-Mer for design and layout services for New Process
Custom Probe Arrays at [***]. Affymetrix will make or procure masks and bill
N-Mer at a price equal to [***].

        3.3 Custom Probe Array Supply.

        3.3.1  General. N-Mer shall procure its requirements of Custom Probe
               Arrays exclusively from Affymetrix; provided, however, that if
               Affymetrix is unable to supply Custom Probe Arrays under the
               terms and conditions of this Agreement, N-Mer shall have the
               right to [***]; and, provided further, [***]. Affymetrix shall
               use [***] efforts to deliver such quantities of the Custom Probe
               Arrays specified in a forecast made pursuant to Section 3.4 and
               in compliance with specifications [***] pursuant to the Work
               Plan. N-Mer shall have the right to purchase Custom Probe Arrays
               in any format size commercially available that is sold by
               Affymetrix to [***] or more Third Parties at the time of such
               purchase by N-Mer.

        3.3.2  Standard Custom Probe Arrays. N-Mer shall have the right to order
               its requirements of Standard Custom Probe Arrays from Affymetrix,
               provided that in such orders N-Mer will identify probe sequences
               for each Standard Custom Probe

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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               Array [***]. If the information received by Affymetrix does not
               include such [***] information, Affymetrix will advise N-Mer of
               any and all additional needed information. Affymetrix shall
               deliver such Standard Custom Probe Arrays according to the
               schedule quoted to N-Mer at the time N-Mer orders such Standard
               Custom Probe Arrays; provided, however, that such schedule will
               identify a time for completion that is [***]. Affymetrix shall
               supply such Standard Custom Probe Arrays using standard quality
               control procedures [***].

        3.3.3  New Process Custom Probe Arrays. After Affymetrix determines
               [***] the feasibility of the manufacture of New Process Custom
               Probe Arrays pursuant to the Work Plan, N-Mer shall have the
               right to order its requirements of New Process Custom Probe
               Arrays from Affymetrix, provided that in such orders N-Mer will
               identify probe sequences for each New Process Custom Probe Array
               [***]. If the information received by Affymetrix does not include
               such [***] information, Affymetrix will advise N-Mer of any and
               all additional needed information. Affymetrix shall deliver such
               New Process Custom Probe Arrays according to the schedule quoted
               to N-Mer at the time N-Mer orders such Standard Custom Probe
               Arrays; provided, however, that such schedule shall provide for
               delivery periods [***]. Affymetrix shall evaluate and manufacture
               New Process Custom Probe Arrays using quality control procedures
               that are [***]. To the extent the Project Coordination Committee
               agrees on additional quality control procedures applicable to New
               Process Custom Probe Arrays, Affymetrix shall use [***] efforts
               to comply with all such procedures.

        3.3.4  Quantities; Manufacturing Capacity. In no event will Affymetrix
               be obligated to provide more than [***] ([***] Probe Array/wafer
               format equivalent) Standard Custom Probe Arrays in any [***]
               period for research and development purposes, nor more than [***]
               ([***] Probe Array/wafer format equivalent) Standard Custom Probe
               Arrays in any [***] period for distribution to Third Parties
               unless mutually agreed to in writing. In no event will Affymetrix
               be obligated to provide more than the number of New Process
               Custom Probe Arrays that can be produced from the use of [***]
               percent ([***]%) of the capacity of [***] dedicated manufacturing
               line selected by Affymetrix in any [***] period for research and
               development purposes and [***] percent ([***]%) of the capacity
               of [***] dedicated manufacturing lines in any [***] period for
               commercialization purposes. Notwithstanding the foregoing,
               Affymetrix shall use [***] efforts to supply additional Custom
               Probe Arrays to N-Mer provided that such incremental supply can
               be accommodated within Affymetrix's then existing manufacturing
               capacity and, provided further, that if Affymetrix can not
               reasonably satisfy such incremental demand for Custom Probe
               Arrays within its then existing manufacturing capacity taking
               into account [***], then Affymetrix shall use [***] efforts to
               expand capacity to supply such additional demand, provided that,
               to the extent capital equipment cumulatively costing more than
               [***] dollars ($[***]) is required by Affymetrix to provide for
               supply of New Process Custom Probe

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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               Arrays, then: (i) Affymetrix shall so notify N-Mer in writing of
               such requirements, including, without limitation, an itemized
               list of each piece of such equipment, its intended use,
               anticipated cost, and projected delivery date; (ii) upon N-Mer's
               written request, Affymetrix shall procure such capital equipment
               (the "N-Mer Equipment") under the terms and conditions identified
               under item (i); and (iii) Affymetrix shall [***] Term (as
               hereinafter defined) and N-Mer shall [***] for such N-Mer
               Equipment [***] procuring such N-Mer Equipment. Unless otherwise
               agreed by the Parties, the "[***] Term" for such N-Mer Equipment
               shall be the later of (i) [***] from the procurement by
               Affymetrix of such N-Mer Equipment or (ii) the last day of any
               [***] period after the [***] period referred to in the preceding
               clause during which such N-Mer Equipment is not utilized to
               manufacture Custom Probe Arrays under this Agreement. All right,
               title and interest in, to and under such N-Mer Equipment shall be
               owned by [***]. Notwithstanding anything in this Agreement to the
               contrary, N-Mer shall have no right to (i) [***] the N-Mer
               Equipment for the manufacture of Probe Arrays, (ii) [***] the
               N-Mer Equipment from [***] or (iii) enter the premises of
               Affymetrix. Affymetrix shall [***] such N-Mer Equipment in a
               [***]. During the [***] Term, Affymetrix shall use N-Mer
               Equipment [***] to supply N-Mer with Custom Probe Arrays pursuant
               to this Agreement; provided, however, that to the extent the
               N-Mer Equipment has excess capacity, [***] such N-Mer Equipment
               and consistent with generally accepted accounting principles.

        3.4 Forecasts. Beginning on the Effective Date and on the [***] during
the Term of this Agreement, N-Mer will provide a [***] forecast of Custom Probe
Arrays to be supplied by Affymetrix during the following [***] period. The
forecast will be provided according to a mechanism and on forms [***]. The [***]
of each such forecast shall constitute a firm order for the Custom Probe Arrays
set forth in [***]; provided, however, that Custom Probe Arrays shall only be
purchased by N-Mer in whole Lot increments and in quantities subject to Section
3.3.4. The [***] of such forecast will be for capacity planning purposes only,
and shall not constitute a firm order by N-Mer nor a commitment by Affymetrix.
Delivery times for all Custom Probe Arrays ordered hereunder will be quoted at
the time Affymetrix receives a firm order for such products and in compliance
with Section 3.3.

        3.5 Shipping; Title and Risk of Loss. Affymetrix shall pack Custom Probe
Arrays supplied under this Agreement in Affymetrix' standard shipping packages
and ship to the address specified by N-Mer. Unless otherwise mutually agreed to
in writing deliveries will be [***]. Affymetrix will ship via [***]. Title and
risk of loss or damage for deliveries will pass to N-Mer upon [***]. [***] will
pay all shipping costs, duties, and sales taxes. [***].

        3.6 Permitted Uses. All Custom Probe Arrays purchased pursuant to this
Agreement may only be used within N-Mer's Area of Interest. N-Mer may not, and
will not allow any Third Party to: 1) transfer the Custom Probe Arrays provided
by Affymetrix pursuant to this Agreement to Third Parties other than (i) in the
course of distribution to end users pursuant to [***] or (ii) in the event of
termination of the Product Solicitation Agreement; or 2) transfer to

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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any Third Party [***] with Custom Probe Arrays supplied to N-Mer for [***]
purposes under this Agreement; or 3) provide [***] to any Third Party using the
Custom Probe Arrays provided by Affymetrix pursuant to this Agreement; or 4)
allow any Third Party to [***] the Custom Probe Arrays supplied by Affymetrix to
N-Mer under this Agreement except pursuant to distribution in the event that (i)
[***] or (ii) in the event of termination of the Product Solicitation Agreement;
or 5) [***], or otherwise use outside of N-Mer's Area of Interest, the Probe
Arrays delivered hereunder; or 6) [***] the Custom Probe Arrays delivered
hereunder, except that [***] is permitted for work performed under the Work Plan
or for otherwise permitted internal research and development work performed by
N-Mer; or 7) use or, [***], of the Custom Probe Arrays delivered hereunder
outside of the N-Mer Field. N-Mer and its Affiliates will allow Affymetrix [***]
access during regular business hours and with advance written notice to ensure
compliance with these prohibitions. The Custom Probe Arrays transferred pursuant
to this Agreement are not licensed for use in violation of the above
restrictions. In the event that N-Mer wishes to provide for end users to be
permitted to [***] using the Probe Arrays supplied hereunder, Affymetrix will
permit N-Mer to do so provided N-Mer shall [***].

        3.7 System Supply. N-Mer has the right to issue, upon execution of this
Agreement and from time to time thereafter, as approved by the Project
Coordination Committee, purchase orders for the System(s) and reagents that are
[***] required for N-Mer to perform its research and development activities as
permitted under this Agreement and the Product Solicitation Agreement. Such
System(s) and reagents shall be supplied at [***]. N-Mer shall be permitted to
use such Systems, including software and reagents, purchased at [***] in the
N-Mer Area of Interest. The supply of all other Systems and reagents for
commercial purposes shall be at [***]. N-Mer shall also be permitted to use such
Systems purchased hereunder at [***] in a manner consistent with the permitted
uses of such Systems when sold by Affymetrix to Third Parties customers.

4       PROPRIETARY RIGHTS

        4.1 No [***] Supply. Until the end of the Term, N-Mer will not buy
arrays of diverse nucleic acids on solid supports from a Third Party when such
Third Party arrays [***] of Affymetrix or its Affiliates; provided, however,
that in order to enforce this provision Affymetrix must provide N-Mer a)
reasonable and prompt written notice of such [***] upon Affymetrix becoming
aware of such [***], and b) reasonable evidence of such [***]. This paragraph
shall not confer on N-Mer or any Third Party any rights under the patent rights
of Affymetrix.

        4.2 License Limitation. Except as otherwise stated herein, including,
without limitation, Sections 2.2, 2.3, 3.6 and 3.7, N-Mer acknowledges and
understands that no license is conveyed or implied for use of the Systems
herein.

        4.3 Covenant Not to Assert Inventions. N-Mer covenants not to assert the
patent rights in any [***] to the Probe Arrays supplied hereunder against
Affymetrix [***], for use outside of the N-Mer Field.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       9
<PAGE>

5       COMPENSATION

        5.1 For each Custom Probe Array delivered to N-Mer or its Affiliates for
researching and developing products in the N-MER Field, N-Mer will pay
Affymetrix its then current Cost plus [***] for such Probe Arrays. For each
Probe Array delivered to N-Mer or its Affiliates for distribution to end users,
N-Mer shall pay Affymetrix according to the following formula:

                                                  (AFFYMETRIX' COST)
                                          --------------------------------------
        PER UNIT PROBE ARRAY PRICE = (1 - (AFFYMETRIX' [***] RATE FROM SIMILARLY
                                          SITUATED COMMERCIAL VOLUME PURCHASERS
                                          IN THE [***]))

where Affymetrix' "Cost" is calculated under general accepted accounting
principles as applied by Affymetrix to its then current publicly reported
financial statements and including any [***]. For purposes of clarity, for
capital equipment paid for by N-Mer at the time such capital equipment is
purchased, pursuant to Section 3.3, the [***] of such capital equipment shall be
excluded from the calculation of Affymetrix Cost and the payment of [***] shall
be included in the calculation of [***]. For the purposes of calculating the
[***] rate described in the above formula, Affymetrix will look to sales in its
prior fiscal quarter to those customers that purchased an equivalent number of
arrays (normalizing for differences in the number of arrays per wafer purchased
by such other customers) as being purchased by N-Mer in the current fiscal
quarter provided further that in calculating [***] sales to Third Parties
Affymetrix shall exclude: 1) Probe Arrays provided under this Agreement, 2)
products provided to [***], and 3) products provided to Third Parties under
collaborative arrangements where Affymetrix has [***] of such collaborator or
otherwise receives [***] as part of such collaboration. Notwithstanding the
foregoing, in no event shall Affymetrix charge N-Mer more than the following
amounts for Standard Custom Probe Arrays: $[***] per Standard Custom Probe Array
in a [***] Probe Array/wafer format; $[***] per Standard Custom Probe Array in a
[***] Probe Array/wafer format; $[***] per Standard Custom Probe Array in a
[***] Probe Array/wafer format and $[***] per Standard Custom Probe Array in a
[***] Probe Array/wafer format.

        5.2 Notwithstanding the foregoing or any provision to the contrary in
this Agreement, N-Mer will be responsible for any and all [***] for Probe Arrays
supplied to N-Mer hereunder, and the Probe Array fees described in Section 5.1
of this Agreement shall be exclusive of any such [***].

        5.3 All amounts referred to in this Section 5 will be invoiced by
Affymetrix when due. All Custom Probe Arrays supplied under this Agreement will
be deemed accepted unless they are returned to Affymetrix within [***] of
delivery to N-Mer, with written explanation of the basis on which such Probe
Arrays have been returned on Affymetrix' standard "Return Materials
Authorization" according to the procedures provided for in such Return Materials
Authorization, including, without limitation, [***]. All payments will be made
to Affymetrix [***] from the date of invoicing by Affymetrix. Late payments
shall earn interest at the rate equal to the lesser of [***] percent ([***]%)
per month or the maximum rate allowable under

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       10
<PAGE>

law. All payments in this Agreement will be made in the form of a check or wire
transfer to Affymetrix in United States Dollars.

6       PROJECT COORDINATION

        6.1 The Parties will form a committee (the "Project Coordination
Committee" or "PCC") to aid in coordinating the performance of this Agreement,
including, without limitation, the Work Plan. The PCC will have general
responsibility for ensuring the performance of this Agreement pursuant to the
terms of this Agreement. The PCC shall be composed of two (2) representatives of
each of Affymetrix and N-Mer as each shall respectively appoint and be
reasonably acceptable to the other Party. Each Party by its representative(s)
shall cast one vote on the PCC. A quorum shall consist of at least one PCC
representative from each Party. The PCC shall act only with the [***]. A Party's
representatives shall serve at the discretion of such Party and may be
substituted for or replaced at any time by such Party. The PCC shall have its
first meeting within [***] after the Effective Date. Thereafter, the PCC shall
meet at least [***] during the Term, except at such times as the Parties
mutually believe there are no significant agenda items. The site of such
meetings shall alternate between the offices of Affymetrix and N-Mer, (or any
other site mutually agreed upon by the Parties) or be arranged by video
conference. The proceedings of all meetings of the PCC shall be prepared
alternately by the Parties, unless otherwise agreed, and sent to both Parties.
In the event that the PCC is unable to reach a decision by [***] with respect to
any matter and such inability continues for a period of [***] after the date on
which the matter is first submitted to the PCC, each Party shall refer the
matter to the Chief Executive Officers of Affymetrix and N-Mer for resolution.
Each Party shall set forth in writing a proposed solution to the impasse. If an
acceptable resolution is not achieved, either Party may choose to arbitrate the
issue(s) in accordance with Section 11.5.1. The Parties shall use reasonable
efforts to [***].

7       CONFIDENTIALITY

        7.1 For a period of [***] from following the expiration of this
Agreement, each Party shall maintain the Confidential Information of the other
Party in strict confidence (including the terms of this Agreement), and shall
not disclose, divulge, or otherwise communicate such Confidential Information of
the other, or use it for any purpose, except as permitted or contemplated by
this Agreement, and in order to carry out the terms and objectives of this
Agreement. Without limiting the foregoing, the Parties will use [***]
precautions to prevent and restrain the unauthorized disclosure of any
Confidential Information of the other Party. The provisions of this paragraph
shall not apply to Confidential Information which:

        7.1.1  was known or used by the receiving Party or its Affiliates
               without any restriction on disclosure, prior to its date of
               disclosure to the receiving Party, as evidenced by the prior
               written records of the receiving Party or its Affiliates; or

        7.1.2  either before or after the date of the disclosure to the
               receiving Party is lawfully disclosed without restriction on
               disclosure to the receiving Party or its Affiliates by an
               independent, unaffiliated Third Party rightfully in possession of
               the

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       11
<PAGE>

               Confidential Information, provided that if such Confidential
               Information is provided to the receiving Party by a Third Party
               rightfully in possession of the Confidential Information, but
               with restrictions on disclosure, the receiving Party may use such
               Confidential Information in accordance with such restrictions of
               the Third Party;

        7.1.3  either before or after the date of the disclosure to the
               receiving Party becomes published or generally known to the
               public through no fault or omission of the receiving Party or its
               Affiliates;

        7.1.4  is required to be disclosed by the receiving Party or its
               Affiliates to comply with applicable laws, to comply with a court
               order, or to comply with governmental regulations, provided that
               the receiving Party provides prior written notice of such
               disclosure to the other Party and takes reasonable and lawful
               actions to avoid and/or minimize the degree of such disclosure;

        7.1.5  is independently developed by the receiving Party or its
               Affiliates without reference to the Confidential Information.

        7.2 N-Mer may publish the results of use of the Probe Arrays after [***]
advance notice to the Project Coordination Committee as set forth in this
Section 7.2; provided, however, that in no event shall N-Mer publish Affymetrix'
Confidential Information without the prior written approval of Affymetrix.
Subject to the limitations of the foregoing and Section 3 above N-Mer may
publish the results of its research at its sole discretion. In the event that
N-Mer chooses to publish such results, if Affymetrix scientists have contributed
to such work, authorship will be according to scientific input and Affymetrix
will cooperate in such publications. If it is decided that publications will be
made pursuant to this Section, Affymetrix and N-Mer will provide the Project
Coordination Committee draft versions of all publications reporting results of
the use of the Probe Arrays, and will provide at least [***] for technical
review thereof, and will allow for removal of Confidential Information.

8       REPRESENTATIONS AND WARRANTIES

        8.1 Both Parties to this Agreement represent and warrant that they have
the full right and authority to enter into and perform this Agreement.

        8.2 Affymetrix represents and warrants that the Probe Arrays delivered
hereunder do not incorporate the trade secret or copyright rights of a Third
Party. EXCEPT FOR THE FOREGOING SENTENCE, AFFYMETRIX DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES RELATING TO INTELLECTUAL PROPERTY, MERCHANTABILITY,
AND FITNESS FOR A PARTICULAR PURPOSE. With respect to Third Party tort claims
that arise from the use, handling or storage of the products supplied to N-Mer
pursuant to this Agreement, Affymetrix shall [***] under any theory of strict
liability, negligence, whether active or passive, or products liability and
shall [***] for any indirect,

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       12
<PAGE>

consequential, incidental, or special damages, and Affymetrix' [***] for such
claims shall [***]. N-Mer understands that the risks of loss herein are
reflected in the price of the Probe Arrays and that the terms would have been
different if there had been a different allocation of risk.

9       INDEMNITY

        9.1 Indemnity by Affymetrix. Affymetrix shall indemnify, defend and hold
N-Mer and its Affiliates, successors-in-interest, assigns, agents, employees,
officers and directors (the "N-Mer Indemnitees") harmless from and against any
and all liability, damage, loss, cost or expense (including reasonable
attorneys' fees) arising out of Third Party claims or suits related to: (i)
Affymetrix' performance of, or failure to perform, its obligations under this
Agreement; (ii) breach by Affymetrix of its representations and warranties under
this Agreement; or (iii) any suit or proceeding brought against N-Mer or its
Affiliates to the extent based on a claim that the Probe Arrays delivered
hereunder directly infringe an issued patent in [***]; provided, however, that
Affymetrix' obligations pursuant to this Section 9.1 will not apply to the
extent such claims or suits result from the gross negligence or willful
misconduct of any of the N-Mer Indemnitees. Affymetrix will settle or defend any
suit or proceeding brought against N-Mer to the extent based on a claim that the
Probe Arrays delivered hereunder indirectly (i.e. through contributory
infringement or inducement) infringe an issued patent in [***] if a) [***] the
claims of such patent in a device claim, or [***] the claims of such patent in a
method claim, and b) [***]. Affymetrix shall have no liability under this
paragraph to the extent that the alleged infringement arises out of any addition
or modification to the Probe Arrays or their use by N-Mer not specified by
Affymetrix, or N-Mer' combination of the Probe Arrays with other devices not
specified by Affymetrix ("Non-Covered Claims"). Notwithstanding the foregoing,
Affymetrix will have no obligation to defend or indemnify the N-Mer Indemnitees
with respect to Third Party claims arising out of breach by N-Mer of its
representations and warranties set forth in this Agreement.

        9.2 Indemnity by N-Mer. N-Mer shall indemnify, defend and hold
Affymetrix and its Affiliates, successors-in-interest, assigns, agents,
employees, officers and directors (the "Affymetrix Indemnitees") harmless from
and against any and all liability, damage, loss, cost or expense (including
reasonable attorneys' fees) arising out of Third Party claims or suits related
to: (i) N-Mer's performance of, or failure to perform, its obligations under
this Agreement; (ii) breach by N-Mer of its representations and warranties under
this Agreement; (iii) any suit or proceeding based on an issued patent in [***]
brought against Affymetrix for Non-Covered Claims; provided, however, that
N-Mer's obligations pursuant to this Section 9.2 will not apply to the extent
such claims or suits result from the gross negligence or willful misconduct of
any of the Affymetrix Indemnitees. Notwithstanding the foregoing, N-Mer will
have no obligation to defend or indemnify the Affymetrix Indemnitees with
respect to Third Party claims arising out of breach by Affymetrix of its
representations and warranties set forth in this Agreement.

        9.3 Conditions to Indemnification. As a condition to a Party's right to
receive indemnification under this Section 9, it shall: (i) promptly notify
("Claim Notice") the other Party as soon as it becomes aware of a claim or suit
for which indemnification may be sought pursuant hereto (provided that the
failure to give a Claim Notice promptly shall not prejudice the rights of an
indemnified Party except to the extent that the failure to give such prompt
notice

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       13
<PAGE>

materially adversely affects the ability of the indemnifying Party to defend the
claim or suit); (ii) cooperate with the indemnifying Party in the defense of
such claim or suit, at the expense of the indemnifying Party; and (iii) if the
indemnifying Party confirms in writing to the indemnified Party its intention to
defend such claim or suit within ten (10) days of receipt of the Claim Notice,
permit the indemnifying Party to control the defense of such claim or suit,
including without limitation the right to select defense counsel; provided that
if the indemnifying Party fails to (x) provide such confirmation in writing
within the ten (10) day period; or (y) diligently and reasonably defend such
suit or claim at any time, its right to defend the claim or suit shall terminate
immediately in the case of (x) and otherwise upon twenty (20) days' written
notice to the indemnifying Party and the indemnified Party may assume the
defense of such claim or suit at the sole expense of the indemnifying Party and
may settle or compromise such claim or suit without the consent of the
indemnifying Party. In no event, however, may the indemnifying Party compromise
or settle any claim or suit in a manner which admits fault or negligence on the
part of any indemnified Party or that otherwise materially affects such
indemnified Party's rights under this Agreement or requires any payment by an
indemnified Party without the prior written consent of such indemnified Party.
Subject as expressly provided above, the indemnifying Party will have no
liability under this Section 10 with respect to claims or suits settled or
compromised without its prior written consent. Affymetrix' liability under
Section 9.1(iii) shall be limited to an amount equal to the [***]. N-Mer's
liability under Section 9.2(iii) shall be limited to an amount equal to the
[***]. In the event that the Probe Arrays are held to infringe and their use is
enjoined as a result of infringement for which it has indemnified N-Mer,
Affymetrix [***], and accept the return of unused Probe Arrays. This paragraph
states the entire liability for infringement of intellectual property rights and
is in lieu of all other warranties, express or implied except as stated in
Section 8.

10      TERM AND TERMINATION

        10.1 This Agreement shall extend until the end of the Term unless
terminated earlier by a Party for cause by written notice if the other Party (or
its Affiliate) materially breaches any material provision of this Agreement and
fails to substantially cure such breach within thirty (30) days of written
notice describing the breach and the intent of the notifying Party to terminate
the Agreement in the event such breach is not substantially cured.

        10.2 Upon termination of this Agreement, the following provisions will
survive: Sections 1, 7, 8, 9 and 11 (in their entirety) and Sections 3.6, 4.2,
4.3 and 10.2.

11      MISCELLANEOUS

        11.1 N-MER UNDERSTANDS THAT THE PROBE ARRAYS DELIVERED HEREUNDER ARE NOT
FDA APPROVED. N-MER AGREES NOT TO USE THE PROBE ARRAYS DELIVERED HEREUNDER IN
ANY CLINICAL OR OTHER SETTING REQUIRING FDA REVIEW OR APPROVAL. N-MER WILL
INDEMNIFY Affymetrix FOR ANY CLAIMS MADE BY [***] ARISING FROM THE USE OF THE
PROBE ARRAYS. THE PROBE ARRAYS AND SYSTEMS ARE NOT LICENSED EXCEPT AS

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       14
<PAGE>

SPECIFICALLY RECITED HEREIN UNDER ANY INTELLECTUAL PROPERTY RIGHTS OF
AFFYEMTRIX.

        11.2 Neither Party nor any of its Affiliates shall issue any press
release or otherwise publicly disseminate any information relating to this
Agreement without the prior written approval of the other Party, which approval
shall not be unreasonably withheld, or except as otherwise required by law.

        11.3 Neither this Agreement nor the rights, interests or obligations of
either Party may be assigned by such Party without the prior written consent of
the other Party, which shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, Affymetrix may assign any rights or
obligations of this Agreement to a Party who acquires all or substantially all
of the assets of the business of Affymetrix to which this Agreement relates by
merger or sale of assets or otherwise. For purposes of clarity, any [***] of
N-Mer (other than a change in voting control of Callida Genomics, Inc.) shall be
deemed to be a transfer of rights and obligations hereunder. Any attempted or
purported assignment in violation of the foregoing shall be void. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of each Party hereto.

        11.4 This Agreement shall be construed according to the laws of
California without regard to conflict of law provisions.

        11.5

        11.5.1 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"), the Parties shall seek to settle their differences
               amicably between themselves. Any unresolved Dispute 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) business 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. The procedure for the arbitration will be
               as follows: 1. A single arbitrator will be chosen in accordance
               with the arbitration selection rules of JAMS. The selection
               process will take a maximum of 14 calendar days. 2. The
               arbitration will take place under JAMS rules to the extent the
               rules are not superceded by the agreements of the party to
               arbitrate or any agreed limitation on damages. 3. The letter of
               allegation and a response shall be filed with the arbitrator
               within one week of the selection and agreement of the arbitrator
               to participate. 4. The Parties agree that [***] in connection
               with any arbitration that may take place pursuant to this Section
               11.5.1 and, therefore, the Parties and the arbitrator shall use
               their [***] efforts to conclude the arbitration, including the
               issuance of any award resulting therefrom, within a maximum of
               [***] from the time of the filing of the complaint or letter of
               allegation with the

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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       15
<PAGE>

               arbitrator. 5. The arbitration shall take place in the San
               Francisco Bay Area. 6. Costs and reasonable attorneys' fees shall
               be awarded by the arbitrator to the prevailing Party. 7. The
               Parties acknowledge that an appropriate remedy for a Major Supply
               Breach of Section 3.3 shall include, without limitation, [***] of
               Custom Probe Arrays plus actual damages. Judgment on the award of
               the arbitrator may be entered in the Superior Court of Santa
               Clara County in the State of California. All Parties admit to the
               jurisdiction of the Superior Court of Santa Clara County in the
               State of California for purposes of enforcement of the award of
               the arbitrator and compelling arbitration in accordance with this
               Section 11.5.1. 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. Nothing in this Section 11.5.1
               shall be construed to preclude a Party from seeking injunctive
               relief in a court of law for a breach of Section 7 where absent
               such relief such Party would suffer irreparable harm. A "Major
               Supply Breach" shall mean that Affymetrix has failed to supply
               N-Mer with at least [***] of the properly ordered Custom Probe
               Arrays in compliance with Section 3.3 and at least [***].

        11.6 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 omission 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.

        11.7 This Agreement and the documents referred to herein, together with
the Letter Agreement, dated as of the date hereof, among Affymetrix, N-Mer,
Callida Genomics, Inc. and Hyseq, Inc., are the full understanding of the
Parties with respect to the subject matter hereof and supersede all prior
understandings and writings relating to the subject matter herein. No waiver
alteration or modification of any of the provisions herein shall be binding
unless in writing and signed by the Parties.

        11.8 The headings in this Agreement are for convenience only and shall
not be considered in construing this Agreement.

        11.9 In the event that any provision of this Agreement is held by a
court of competent jurisdiction 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 the rights and obligations of
the Parties shall be construed and enforced as if the Agreement did not contain
the particular provision(s) held to be unenforceable.

        11.10 None of the provisions of this Agreement shall be for the benefit
of or enforceable by any Third Party.

        11.11 Any notice required under this Agreement shall be made by
overnight mail or courier to the addresses below.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       16
<PAGE>

        If to N-Mer:

               N-Mer, Inc.
               670 Almanor Avenue
               Sunnyvale, CA 94086
               Attn: Dr. Radoje Drmanac
               Facsimile Number: (408) 524-8141

        If to Affymetrix:

               Affymetrix, Inc.
               3380 Central Expressway
               Santa Clara, California 95051
               Attn: General Counsel
               Facsimile Number: (408) 731-5392

        11.12 "Force Majeure" shall mean an Act of God, flood, fire, explosion,
earthquake, strike, lockout, casualty or accident, war, civil commotion, act of
public enemies, blockage or embargo, or any injunction, law, order proclamation,
regulation, ordinance, demand or requirement of any government or any
subdivision, authority representative thereof, or the inability, after all
commercially reasonable efforts have been made, to procure materials, labor,
equipment, transportation or energy sufficient to meet manufacturing needs
without the necessity of allocation, or any other cause whatsoever, whether
similar or dissimilar to those enumerated above, which are beyond the reasonable
control of such Party, which the Party affected has used its reasonable best
efforts to avoid, and which prevent, restrict or interfere with the performance
by a Party of its obligations hereunder. The Party affected by Force Majeure
shall give notice to the other Party promptly in writing and whereupon shall be
excused from those obligations hereunder, to the extent of such prevention,
restriction or interference, provided that the affected Party shall use its
commercially reasonable efforts to overcome, avoid or remove such cause(s) of
non-performance and shall continue performance whenever such cause(s) is removed
with all possible speed. Nothing herein shall be deemed to require any Party to
settle on terms unsatisfactory to such Party with regard to any strike, lockout
or other labor difficulty, any investigation or proceeding by any public
authority or any litigation by any Third Party.

        11.13 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.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       17
<PAGE>

        IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their properly and duly authorized officers or representatives as
set forth below.

Affymetrix, Inc.

By: /s/ Barbara A. Caulfield
    -----------------------------------------------

Name: Barbara A. Caulfield
      ---------------------------------------------

Title: Executive Vice President and General Counsel
       --------------------------------------------

Date: October 24, 2001
      ---------------------------------------------

N-Mer, Inc.

By: /s/ George B. Rathmann
    -----------------------------------------------

Name: George Rathmann
      ---------------------------------------------

Title: Chairman and Interim Chief Executive Officer
       --------------------------------------------

Date: October 24, 2001
      ---------------------------------------------

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       18
<PAGE>

                                    EXHIBIT A
                             COLLABORATIVE WORK PLAN

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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       A-1
<PAGE>

INITIAL WORK PLAN FOR N-MER COMPANY

SUMMARY

This is an initial work plan for the development of [***] sequencing array
products. Our goal is to meet the technical milestone by using [***] technical
capabilities in array fabrication (for example, [***] to quickly develop and
market (by [***] or earlier) an advanced product based on universal arrays of
probes.

The primary focus will be [***]. The arrays will have [***] probe features, with
an intention that initial products will be based on [***]. Each feature will
have [***] probes, with [***] in length. Most of the probes will have [***].
Generic probe formula is [***]. Initially, total length of probes including
[***] will be between [***]. We plan to start with [***] comprising a [***] sets
of probes that can be tested and evaluated with the [***]. Optimal probe [***]
will be determined and then [***] of the selected design will then be produced
for further testing. In addition, a [***].

[***] primary sequencing applications will be:

    [***]

We will also investigate [***]. Furthermore, we will also analyze the [***]. The
general goal is to develop a [***]. One type of design can be [***]. We will
also investigate [***] applications.

In the product development phase, we will follow [***] product development
process that includes [***]. Each product will be in the form of a [***].
Necessary software for data evaluation and product/application [***] will be
[***].

This work plan below outlines our [***]. [***], we will focus on the product(s)
that [***].

PRODUCT DEVELOPMENT PLAN

[***]

1. PRODUCT CONCEPT

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HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       A-2

<PAGE>

Specifications:

     - [***]

Applications:

     - [***]

Other applications:

     - Various studies of [***]

     - Detection of [***]

     - [***]

2. SUMMARY OF TOTAL ARRAY NEEDS FOR PRODUCT DEVELOPMENT

       [***]

3. FEASIBILITY STUDY [***]

[***]

-    [***]: Start with [***] and then [***] based on the results from the
     feasibility study.

-    [***]: Affymetrix will produce the [***] according to the above designs.
     [***].

-    Purchasing and setting up Affimetrix [***].

-    Affymetrix will supply [***] within [***] of agreement on design, [***]
     within [***] of agreement on design and [***] within [***], assuming
     agreement on design in [***] (note that development of new process arrays
     involves some uncertainty and the indicated time is an estimate).

[***]

-    Sample [***] using Affy's protocol: [***].

-    Determining [***].

-    Optimizing [***].

-    Affymetrix and N-Mer to work together to [***].

Software development:

-    [***] software [***] to process data and [***].

Business:

-    [***].

4. DEVELOPMENT [***]

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       A-3

<PAGE>

-    Meeting technical milestone: "Technical Milestone" shall mean using a
     [***].

[***]

-    Testing [***].

-    Further optimizing [***].

-    Further optimizing [***].

-    Further optimizing [***].

-    Estimated [***].

Software:

-    Increasing [***].

-    Developing a database for [***].

Prototyping:

-    Developing [***].

-    Developing [***].

-    Testing [***].

Business:

-    Developing [***].

-    Develop [***].

Alpha Testing:

-    [***]

-    Testing the [***]. Tests will include [***].

-    Estimated [***].

5. BETA TESTING [***]

-    Identifying [***].

-    Providing [***]

-    Estimated [***].

6. PRODUCTION [***]

7. MARKETING AND SALES [***]

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       A-4
<PAGE>

                                    EXHIBIT B
                          EXISTING AFFYMETRIX PRODUCTS

-    [***]

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       B-1<PAGE>

                                                                   Exhibit 10.23

                         PRODUCT SOLICITATION AGREEMENT

                                     BETWEEN

                                   N-MER, INC.

                                       AND

                                AFFYMETRIX, INC.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>

                         PRODUCT SOLICITATION AGREEMENT

        This Product Solicitation Agreement (this "Agreement"), dated as of this
24th day of October 2001, by and between N-Mer, Inc., a Delaware corporation
having its principal place of business at 670 Almanor Avenue, Sunnyvale,
California 94085 (the "Company"), and Affymetrix, Inc., a Delaware corporation
having its principal place of business at 3380 Central Expressway, Santa Clara,
California 95051 ("Affymetrix"). The Company and Affymetrix will be referred to
individually as a "Party" or collectively as the "Parties."

        1. SCOPE OF ENGAGEMENT.

           1.1 On the terms and conditions of this Agreement, the Company hereby
engages Affymetrix for the term of this Agreement as the exclusive sales agent
to solicit and procure orders throughout the world for the Company's products
(the "Products"); provided, however, that the Company shall have the right
pursuant to Section 1.2 to convert this Agreement to a co-exclusive or
non-exclusive basis in which case Affymetrix shall be engaged by the Company as
the co-exclusive or non-exclusive, as applicable, sales agent to solicit and
procure orders throughout the world for the Products as set forth in Section
1.2.

           1.2 If the Company determines in good faith that Affymetrix is in
material breach of Section 4.1 of this Agreement, the Company shall provide
Affymetrix written notice of such determination and shall set forth in such
notice in reasonable detail the basis for such determination. Upon receipt of
such notice, representatives of the Company and Affymetrix shall meet as
appropriate for a period not to exceed [***] commencing on the date Affymetrix
receives such notice to discuss whether Affymetrix is in material breach of
Section 4.1 of this Agreement and to define in good faith the activities and
results to be performed and achieved by Affymetrix in the Maintenance Period (as
defined below) in order to cure such alleged material breach. Such activities
and results shall be [***] by Affymetrix and the Company and shall be limited to
activities and results (including number of sales calls and number of orders
taken) that are customary of exclusive sales agents of products similar to the
Products and consistent with the terms of this Agreement. In the event that
representatives of the Company and Affymetrix are unable to agree on such
activities and results during such [***] period, the Company may initiate
arbitration in respect of such dispute in accordance with Section 11.7 for the
purpose of having the arbitral tribunal determine, within [***], whether
Affymetrix is in material breach of Section 4.1 of this Agreement and, if so,
the appropriate activities and results to be performed and achieved by
Affymetrix during the Maintenance Period in order to cure such alleged material
breach. The "Maintenance Period" shall be a period of [***] commencing on the
date that the activities and results are agreed between the parties or
determined by the arbitral tribunal. Affymetrix shall perform the activities and
achieve the results agreed between the parties or determined by the arbitral
tribunal pursuant to this Section 1.2 during the Maintenance Period, and the
Company shall [***] with Affymetrix and [***] in order to enable Affymetrix to
perform such activities and achieve such results. In the event that the Company
determines in good faith that Affymetrix has not performed the activities and
achieved the results agreed between the parties or determined by the arbitral
tribunal pursuant to this Section 1.2 during the Maintenance Period and is in
material breach of Section 4.1 of this Agreement (and Affymetrix

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>

does not agree with such determination), the Company shall have the right to
initiate arbitration in respect of such dispute in accordance with Section 11.7;
provided, however, that the Company and Affymetrix shall have the right to have
such dispute heard by the same arbitrator that determined the activities and
results to be performed by Affymetrix during the Maintenance Period (if such
activities and results were determined by arbitration) and, provided further,
that the Parties agree that [***] in connection with any such arbitration and
the Parties shall use their [***] efforts to conclude such arbitration,
including the issuance of any award resulting therefrom, within [***] of the
initiation of such arbitration. Following the expiration of the Maintenance
Period and upon initiation of arbitration by the Company as set forth in the
preceding sentence, the exclusive sales agency set forth in this Agreement shall
convert to a co-exclusive sales agency [***] shall have the right to [***] only
until a final determination of the arbitrator is delivered. In the event that
the arbitral tribunal determines that Affymetrix has not performed the
activities and achieved the results agreed between the parties or determined by
the arbitral tribunal pursuant to this Section 1.2 during the Maintenance Period
and is in material breach of Section 4.1 of this Agreement, then the arbitral
tribunal shall provide in its award that the exclusive sales agency shall
convert into a non-exclusive sales agency [***]. For purposes of clarity, the
Company shall engage Affymetrix as the exclusive sales agent for the Products
until the parties agree otherwise, or until the Maintenance Period expires and
the Company initiates an arbitration (in which case the agency shall convert to
co-exclusive) or a final award is rendered by the arbitral tribunal providing
for the conversion of such exclusive sales agency to a non-exclusive sales
agency. The terms and conditions of Affymetrix' non-exclusive sales agent
relationship with the Company, [***], shall be [***].

           1.3 Subject to the Company's then current policies (including the
Company's then current credit policies), the Company shall accept [***] orders
submitted by Affymetrix for the Products upon the Company's [***] terms and
conditions unless the Company is unable to fill such orders using its [***]
efforts.

           1.4 All Product sales pursuant to an order submitted by Affymetrix
shall be at the [***] price prescribed by the Company pursuant to Section 5.3
for such Product, [***].

           1.5 No orders shall be binding on the Company unless and until
accepted by the Company in accordance with the Company's then current policies
and the terms of this Agreement. Affymetrix shall have no right, power or
authority to bind the Company to any order or other obligation.

           1.6 Affymetrix shall have the right to appoint sub-agents, [***].

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       2
<PAGE>

        2. TRADEMARK LICENSE. During the term of this Agreement, subject to the
terms and conditions of this Agreement, the Company grants to Affymetrix a
nonexclusive, worldwide, royalty free license solely to use the service marks,
trademarks, tradenames and any other designations used by the Company in
connection with the Products (collectively, the "Marks"), and the goodwill
associated with such Marks, in connection with Affymetrix' solicitation and
procurement of orders for the Products hereunder; provided, however, that
Affymetrix shall use its [***] efforts to comply with the Company's [***]
trademark policy in Affymetrix' use of the Marks. The Company shall have the
right to audit and inspect, upon advance written notice and during regular
business hours, Affymetrix' use of the Marks.

        3. SERVICE AND SUPPORT. The Company and Affymetrix will cooperate in
good faith to provide service and support to all customers who purchase Products
under orders submitted by Affymetrix, including, without limitation, the
following: (i) the Company shall train one (1) Affymetrix representative,
appointed by Affymetrix and reasonably acceptable to the Company, in the basic
operation of the Products such that such representative is sufficiently skilled
to train other Affymetrix representatives to adequately refer service and
support needs to the appropriate Party; (ii) Affymetrix shall be the principal
contact for customer service and its trained representatives shall refer the
service call to the appropriate Party as follows: the Company shall have the
principal obligation and shall use [***] efforts to provide the service and
customer support for components of the Products not purchased from Affymetrix
pursuant to the Product Development and Supply Agreement, dated as of the date
hereof (the "Supply Agreement"), between the Company and Affymetrix, and
Affymetrix shall have the primary obligation and shall use [***] efforts to
provide service and support for components of the Product purchased by the
Company from Affymetrix. The parties will provide service and support for their
respective components of the Products upon terms and conditions [***].

        4. DUTIES OF AFFYMETRIX.

           4.1 For so long as Affymetrix is the Company's exclusive or
co-exclusive sales agent pursuant to Section 1, Affymetrix shall use its [***]
efforts to solicit and procure orders for the Products, including, without
limitation, to (i) distribute the marketing material and other information
provided by the Company pursuant to Section 5.2; and (ii) to provide [***],
including, without limitation, [***], to its sales personnel and third party
agents that are comparable to [***] provided for other similar products sold by
or on behalf of Affymetrix.

           4.2 Whenever Affymetrix procures an order for the Products from a
customer, Affymetrix shall within [***] after Affymetrix' receipt of such order,
forward such order to the Company in such manner as is reasonably determined by
the Company. Each such order shall be in the form of a purchase order as
mutually agreed to by the Parties for Products, and shall contain all
information required to be completed on such form.

           4.3 Subject to Section 5.3, Affymetrix shall [***] quote the [***]
prices and terms for the Products [***] from the Company.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       3
<PAGE>

           4.4 Affymetrix shall make no representations or warranties relating
to the Products or the Company, except for those that the Company expressly
makes in writing to end-users regarding Products and those otherwise expressly
authorized in writing by the Company.

        5. DUTIES OF THE COMPANY.

           5.1 For so long as Affymetrix is the Company's exclusive sales agent
pursuant to Section 1, the Company shall not solicit or procure orders for the
Products (except through Affymetrix pursuant to this Agreement) nor shall it
appoint any other agents in relation to solicitation or procurement of orders
for the Products.

           5.2 The Company shall market and promote the Products and shall
provide Affymetrix with [***] quantities of any applicable printed and soft copy
(suitable for display on the web) marketing materials for the Products.
Affymetrix will cooperate [***] with the Company to [***] all marketing and
promotional materials regarding products supplied to the Company under the
Supply Agreement or otherwise incorporating Affymetrix trademarks. Affymetrix
shall have the right to use such materials in a reasonable manner solely in
connection with its solicitation and procurement of orders for the Products
pursuant to this Agreement. Affymetrix shall not alter or modify such marketing
materials except by prior written agreement of the Company.

           5.3 The Company shall inform Affymetrix within [***] of any [***]
changes in the price for the Products. At any time after Affymetrix ceases to be
the exclusive sales agent of the Company, the Company shall inform Affymetrix
within [***] of the acceptance of a purchase order from an end user for Products
[***]. Upon such notice, Affymetrix shall [***].

           5.4 The Company shall use commercially reasonable efforts to provide
Affymetrix with [***] prior written notice of any material changes to product
specifications, manufacturing methods, and marketing and sale documentation
(excluding such changes made by Affymetrix that relate to components purchased
from Affymetrix).

           5.5 The Company shall ship to the end user all Products sold pursuant
to complete orders submitted by Affymetrix and accepted by the Company pursuant
to the terms of this Agreement.

           5.6 The Company represents and warrants to Affymetrix that the
Products (excluding components purchased from Affymetrix) are manufactured in
accordance with all applicable laws and regulations and do not violate the
patent, trade secret or copyright rights of a third party; provided, however,
that the Company's liability under this sentence shall be limited to an amount
equal to the [***]. The Company [***] of the manufacture, use and sale of the
Products (excluding components purchased from Affymetrix). During the term of
this Agreement, the Company shall maintain product liability insurance with
limits of coverage in an amount [***] to Affymetrix. Proof of such insurance
shall be sent by the Company to Affymetrix in January of each year.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       4
<PAGE>

        6. COMMISSION.

           6.1 The Company shall pay Affymetrix a commission equal to [***]
percent ([***]%) of the Commissionable Invoice Price (as defined below) on the
sale of each Product pursuant to an order submitted by Affymetrix. For purposes
of determining when a sale of a Product occurs, the sale shall be deemed to
occur on the date of shipment of the Product to the purchaser of the Product.
All commission payments shall be made within [***] of the end of each [***] in
which the sale was made. For purposes of calculating the commission payable by
the Company to Affymetrix hereunder, the Commissionable Invoice Price shall mean
the invoice price of each Product ([***]) less the price paid by the Company to
Affymetrix for the components of each Product purchased from Affymetrix.

           6.2 Each commission payment shall be accompanied by a report setting
forth the Products sold in the previous month, the name of the purchaser, and
the quantity and date of Product purchased, the date of shipment and
calculations used to determine such commissions. The parties agree to develop
mutually satisfactory forms and systems as mutually deemed appropriate to
facilitate the tracking and calculation of Commissionable Invoice Price. Such
reports and all information contained therein shall be Confidential Information
of the Company and subject to the confidentiality obligations of this Agreement,
including, without limitation, Section 10 of this Agreement.

           6.3 The Company shall prepare and keep complete, and accurate records
of all Product purchases and the commissions due therefrom.

           6.4 The Company shall permit an independent certified public
accounting firm of nationally recognized standing appointed by Affymetrix, and
reasonably acceptable to the Company, to examine and audit the Company's records
during reasonable business hours upon at least [***] prior written notice and no
more frequently than [***] per year to the extent necessary to verify the
accuracy of the reports delivered under Section 6.2 above. If such an audit
correctly uncovers a deficiency in payment of commissions payable by the Company
hereunder, the Company shall [***] pay such deficient amount, and if the amount
of any such deficiency is greater than [***] percent ([***]%) of the total
amount due during the audited period, the Company shall bear the reasonable out
of pocket expenses of such accounting firm to conduct such audit, otherwise
Affymetrix shall bear the costs of such audit.

        7. TERM OF AGREEMENT.

           7.1 This Agreement shall become effective on the Closing Date (as
such term is defined in the Preferred Stock Purchase Agreement, dated as of the
date hereof, among Affymetrix, Callida Genomics, Inc. and Hyseq, Inc.) and shall
continue unless terminated in accordance with the terms and conditions hereof.

           7.2 This Agreement may be terminated by either Party for cause by
written notice if the other Party materially breaches any provision of this
Agreement and fails to

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       5
<PAGE>

substantially cure such breach within thirty (30) days of written notice
describing the breach and the intent of the notifying Party to terminate this
Agreement in the event such breach is not substantially cured; provided however,
that the conversion of the exclusive agency status to non-exclusive agency
status in accordance with Section 1.2 of this Agreement shall not give rise to
termination of this Agreement.

           7.3 At any time after the expiration of the Option (as such term is
defined in the Option Agreement, dated as of the date hereof, among the Company,
Callida Genomics, Inc. and Affymetrix) and after Affymetrix has become a
non-exclusive agent in accordance with Section 1.2, either Party shall have the
right to terminate this Agreement upon [***] written notice of their intention
to do so provided the cumulative amount of Net Sales of Products procured by
Affymetrix is less than $[***] and the Net Sales of Products procured by
Affymetrix in the preceding [***] period is less than $[***]. The term "Net
Sales" means the amounts received by the Company from all sales procured by
Affymetrix of any Product, including non-cash consideration, which shall be
reflected in the Company's books and records maintained in accordance with the
accounting principles used by the Company consistently applied across all of its
products, less the following deductions with respect to such sale, to the extent
included in the amounts invoiced or subsequently actually allowed and taken: (i)
all trade, cash and quantity credits, discounts, refunds or rebates or
retroactive price reductions; (ii) allowances or credits for returns or rejected
product; (iii) reasonable handling fees and restocking expenses for returned or
rejected products; (iv) freight, transportation, postage and insurance paid by
the Company; and (v) sales taxes, tariffs, duties and other governmental charges
(including value added tax) actually paid in connection with the sale (but
excluding what are commonly known as income taxes). A "sale" shall exclude
[***].

           7.4 The termination of this Agreement shall not release the Company
from the obligation to pay any sum that may be owing to Affymetrix (whether then
or thereafter due) or operate to discharge any liability that had been incurred
by the Company prior to any such termination. Any termination of this Agreement
shall not be an exclusive remedy, but shall be in addition to any legal or
equitable remedies available. Sections 6 (only to the extent the Company has
accepted orders from Affymetrix before such termination or expiration), 7.4, 8,
9, 10 and 11 shall survive any termination or expiration of this Agreement.

        8. DISCLAIMER; INDEMNITY.

           8.1 EXCEPT AS OTHERWISE PROVIDED HEREIN, NEITHER PARTY MAKES ANY
WARRANTIES TO THE OTHER PARTY WITH RESPECT TO THE PRODUCTS AND SERVICES AND EACH
DISCLAIMS ALL IMPLIED WARRANTIES INCLUDING WARRANTIES OF MERCHANTABILITY,
FITNESS FOR USE OR PARTICULAR PURPOSE AND NONINFRINGEMENT. EXCEPT AS OTHERWISE
PROVIDED HEREIN, NEITHER PARTY ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME
FOR IT ANY LIABILITY IN CONNECTION WITH THE SALE OR USE OF THE PRODUCTS.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       6
<PAGE>

           8.2 The Company shall indemnify and hold Affymetrix and its
directors, officers and employees (the "Affymetrix Indemnitees") harmless from
and against all losses, liabilities, damages and expenses (including reasonable
attorneys' fees and costs) resulting from all claims, demands, actions and other
proceedings ("Claims") by any unaffiliated third party to the extent arising
from (a) the breach of any representation, warranty or covenant of the Company
under this Agreement, or (b) tort liability caused by the manufacture, use or
sale of Products, [***], except in each case to the extent caused by the breach
of any representation, warranty or covenant of Affymetrix under this Agreement
or the gross negligence or willful misconduct of the Affymetrix Indemnitees or
in the event that such Claims are caused by the components of each Product
purchased from Affymetrix.

           8.3 Affymetrix shall indemnify and hold the Company and its
directors, officers and employees (the "Company Indemnitees") harmless from and
against all losses, liabilities, damages and expenses (including reasonable
attorneys' fees and costs) resulting from all claims, demands, actions and other
proceedings by any unaffiliated third party to the extent arising from the
breach of any representation, warranty or covenant of Affymetrix under this
Agreement, except in each case to the extent caused by the breach of any
representation, warranty or covenant of the Company under this Agreement or the
gross negligence or willful misconduct of the Company Indemnitees.

           8.4 A Party (the "Indemnitee") that intends to claim indemnification
under this Section 8 shall promptly notify the other Party (the "Indemnitor") of
any claim, demand, action or other proceeding for which the Indemnitee intends
to claim such indemnification. The Indemnitor shall have the right to
participate in, and to the extent the Indemnitor so desires jointly with any
other indemnitor similarly noticed, to assume the defense thereof with counsel
selected by the Indemnitor; provided, however, that the Indemnitee shall have
the right to retain its own counsel, with the fees and expenses to be paid by
the Indemnitor, if representation of the Indemnitee by the counsel retained by
the Indemnitor would be inappropriate due to actual or potential differing
interests between the Indemnitee and any other party represented by such counsel
in such proceedings. The indemnity obligations under this Section 8 shall not
apply to amounts paid in settlement of any claim, demand, action or other
proceeding if such settlement is effected without the prior express written
consent of the Indemnitor, [***]. The failure to deliver notice to the
Indemnitor within a reasonable time after notice of any such claim or demand, or
the commencement of any such action or other proceeding, if prejudicial to its
ability to defend such claim, demand, action or other proceeding, shall relieve
such Indemnitor of any liability to the Indemnitee under this Section 8 with
respect thereto, but the omission so to deliver notice to the Indemnitor shall
not relieve it of any liability that it may have to the Indemnitee otherwise
than under this Section 8. The Indemnitor may not settle or otherwise consent to
an adverse judgment in any such claim, demand, action or other proceeding, that
diminishes the rights or interests of the Indemnitee, or admits liability or
fault of the Indemnitee, without the prior [***] written consent of the
Indemnitee, [***]. The Indemnitee, its employees and agents, shall reasonably
cooperate with the Indemnitor and its legal representatives in the investigation
of any claim, demand, action or other proceeding covered by this Section 8.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       7
<PAGE>

        9. LIABILITY LIMITATION.

        EXCEPT AS SPECIFIED UNDER SECTION 8, NEITHER PARTY WILL BE LIABLE UNDER
ANY SECTION OR SUBJECT MATTER OF THIS AGREEMENT OR UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES.

       10. CONFIDENTIALITY.

           10.1 For a period of [***] from following the expiration of this
Agreement, each Party shall maintain the Confidential Information of the other
Party (including the terms of this Agreement) in strict confidence, and shall
not disclose, divulge, or otherwise communicate such Confidential Information of
the other, or use it for any purpose, except as permitted by this Agreement, and
in order to carry out the terms and objectives of this Agreement; provided,
however, that such disclosure shall be solely to: (i) employees who need to know
such Confidential Information in order to perform the receiving Party's
obligations under this Agreement; and (ii) solely upon prior written notice to,
and approval by, the disclosing Party, to third party consultants who are bound
by confidentiality obligations at least as strict as those set forth in this
Agreement. Without limiting the foregoing, the parties will use any and all
[***] precautions to prevent and restrain the unauthorized disclosure of any
Confidential Information of the other Party. The provisions of this paragraph
shall not apply to Confidential Information which:

           (a) was known or used by the receiving Party or its affiliates
without any restriction on disclosure, prior to its date of disclosure to the
receiving Party, as evidenced by the prior written records of the receiving
Party or its affiliates; or

           (b) either before or after the date of the disclosure to the
receiving Party is lawfully disclosed without restriction on disclosure to the
receiving Party or its affiliates by an independent, unaffiliated third party
rightfully in possession of the Confidential Information, provided that if such
Confidential Information is provided to the receiving Party by a third party
rightfully in possession of the Confidential Information, but with restrictions
on disclosure, the receiving Party may use such Confidential Information in
accordance with such restrictions of the third party;

           (c) either before or after the date of the disclosure to the
receiving Party becomes published or generally known to the public through no
fault or omission of the receiving Party or its affiliates;

           (d) is required to be disclosed by the receiving Party or its
affiliates to comply with applicable laws, to comply with a court order, or to
comply with governmental regulations, provided that the receiving Party provides
prior written notice of such disclosure to the other Party and takes [***]
actions to avoid and/or minimize the degree of such disclosure; or

           (e) is independently developed by the receiving Party or its
affiliates without reference to the Confidential Information.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       8
<PAGE>

        11. MISCELLANEOUS.

            11.1 Neither Party nor any of its affiliates shall issue any press
release or otherwise publicly disseminate any information relating to this
Agreement without the prior written approval of the other Party, [***], or
except as otherwise required by law.

            11.2 Each Party represents and acknowledges that it has read this
Agreement and fully understands and agrees to its terms, and that each Party has
been represented by counsel in connection with the negotiation and execution of
this Agreement.

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

            11.4 This Agreement shall be construed according to the laws of
California without regard to conflict of law provisions.

            11.5 Any notice, requests, delivery, approval or consent required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been sufficiently given if delivered to the Party to whom it is
directed at its address shown below or such other address as such Party shall
have last given by notice to the other Party (referred to herein as "notice").
All notices shall be effective upon receipt.

        If to the Company, addressed to:

                      N-Mer, Inc.
                      670 Almanor Avenue
                      Sunnyvale, CA 94086
                      Attn: Dr. Radoje Drmanac
                      Facsimile Number:   (408) 524-8141

        If to Affymetrix, addressed to:

                      Affymetrix, Inc.
                      3380 Central Expressway
                      Santa Clara, California 95051
                      Attn:  General Counsel
                      Fax:  (408) 481-4709

            11.6 Affymetrix may assign any rights or obligations of this
Agreement to a party who acquires all or substantially all of the assets of
Affymetrix or of that part of the business of Affymetrix to which this Agreement
relates by merger or sale of assets or otherwise. The Company may not assign or
transfer any rights or obligations of this Agreement by merger or sale of assets
or otherwise to a third party or its affiliates without the prior written
consent of Affymetrix which must be obtained and will not be unreasonably
withheld or delayed. For purposes of clarity, any [***] shall be deemed to be a
transfer of rights and obligations

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       9
<PAGE>

hereunder. Any attempted or purported assignment in violation of the foregoing
shall be void. This Agreement shall inure to the benefit of, and be binding
upon, the Parties and their successors and permitted assigns. Except as
otherwise expressly provided herein, the rights and obligations hereunder may
not be assigned or delegated by any Party hereto without the prior written
consent of each other Party hereto.

            11.7 ARBITRATION. 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"), the Parties shall seek to settle their differences amicably between
themselves. Any unresolved Dispute 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) business 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. The procedure for the arbitration will be
as follows: 1. A single arbitrator will be chosen in accordance with the
arbitration selection rules of JAMS. The selection process will take a maximum
of 14 calendar days. 2. The arbitration will take place under JAMS rules to the
extent the rules are not superceded by the agreements of the party to arbitrate
or any agreed limitation on damages. 3. The letter of allegation and a response
shall be filed with the arbitrator within one week of the selection and
agreement of the arbitrator to participate. 4. The Parties agree that [***] in
connection with any arbitration that may take place pursuant to this Section
11.7 and, therefore, the Parties and the arbitrator shall use their [***]
efforts to conclude the arbitration, including the issuance of any award
resulting therefrom, within a maximum of [***] from the time of the filing of
the complaint (or, if applicable, in the time periods otherwise specified in
Section 1.2) or letter of allegation with the arbitrator. 5. The arbitration
shall take place in the San Francisco Bay Area. 6. Costs and reasonable
attorneys' fees shall be awarded by the arbitrator to the prevailing Party.
Judgment on the award of the arbitrator may be entered in the Superior Court of
Santa Clara County in the State of California. All Parties admit to the
jurisdiction of the Superior Court of Santa Clara County in the State of
California for purposes of enforcement of the award of the arbitrator and
compelling arbitration in accordance with this Section 11.7. 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. Nothing in this Section 11.7 shall be construed to
preclude a Party from seeking injunctive relief in a court of law for a breach
of Section 10 where absent such relief such Party would suffer irreparable harm.

            11.8 This Agreement and the documents referred to herein, together
with the Letter Agreement, dated as of the date hereof, among Affymetrix, N-Mer,
Callida Genomics, Inc. and Hyseq, Inc., are the full understanding of the
Parties with respect to the subject matter hereof and supersede all prior
understandings and writings relating to the subject matter herein. No waiver
alteration or modification of any of the provisions herein shall be binding
unless in writing and signed by the Parties.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       10
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

N-MER, INC.

By: /s/ George B. Rathmann
   -------------------------------

Name: George Rathmann
     -----------------------------

Title: Chairman and Interim Chief Executive Officer
      -----------------------------------------------

AFFYMETRIX, INC.

By: /s/ Barbara A. Caulfield
   -------------------------------

Name: Barbara A. Caulfield
     -----------------------------

Title: Executive Vice President and General Counsel
      -----------------------------------------------

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       11

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