<PAGE>

                                                                     EXHIBIT 4.8


NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN

                                   HYSEQ, INC.

                                     WARRANT

Warrant No.                            Date of Original Issuance: April 5, 2002

      HYSEQ, Inc., a Nevada corporation (the "COMPANY"), hereby certifies that,
for value received,             or its registered assigns (the "HOLDER"), is
entitled to purchase from the Company up to a total of
shares of common stock, $0.001 par value per share (such common stock of the
Company, the "COMMON STOCK"), of the Company (each such share, a "WARRANT SHARE"
and all such shares, the "WARRANT SHARES") at an exercise price equal to $5.67
per share (as adjusted from time to time as provided in Section 9, the "EXERCISE
PRICE"), at any time and from time to time from and after the six month
anniversary following the date hereof and through and including April 5, 2007
(the "EXPIRATION DATE"), and subject to the following terms and conditions.

      1. Definitions. In addition to the terms defined elsewhere in this
Warrant, capitalized terms that are not otherwise defined herein that are
defined in the Purchase Agreement (as defined below) shall have the meanings
given to such terms in the Securities Purchase Agreement, dated as of April 5,
2002 among the Company and the Purchasers identified therein (the "PURCHASE
AGREEMENT").

      2. Registration of Warrant. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the "WARRANT
REGISTER"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.

      3. Registration of Transfers. The Company shall register the transfer of
any portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached hereto duly completed and signed,
to the Transfer Agent or to the Company at its address specified herein. Upon
any such registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a "NEW


<PAGE>

WARRANT"), evidencing the portion of this Warrant so transferred shall be issued
to the transferee and a New Warrant evidencing the remaining portion of this
Warrant not so transferred, if any, shall be issued to the transferring Holder.
The acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a Warrant. Notwithstanding the foregoing, this Warrant is subject to the
transfer restrictions set forth in Section 4.1 of the Purchase Agreement.

      4. Exercise and Duration of Warrants. This Warrant shall be exercisable by
the registered Holder at any time and from time to time on or after the date
hereof to and including the Expiration Date. At 6:30 p.m., New York City time on
the Expiration Date, the portion of this Warrant not exercised prior thereto
shall be and become void and of no value; provided that, if the closing sales
price of the Common Stock on the Expiration Date is greater than 102% of the
Exercise Price on the Expiration Date, then this Warrant shall be deemed to have
been exercised in full (to the extent not previously exercised) on a "cashless
exercise" basis at 6:30 P.M. New York City time on the Expiration Date.

      5. Delivery of Warrant Shares.

            (a) Upon delivery of the Form of Election to Purchase to the Company
(with the attached Warrant Shares Exercise Log) at its address for notice set
forth in Section 14 and upon payment of the Exercise Price multiplied by the
number of Warrant Shares that the Holder intends to purchase hereunder, the
Company shall promptly (but in no event later than three Trading Days after the
Date of Exercise (as defined herein) issue and deliver to the Holder, a
certificate for the Warrant Shares issuable upon such exercise free of
restrictive legends unless otherwise required by the Purchase Agreement. Any
Person so designated by the Holder in accordance with the terms hereof and of
the Purchase Agreement to receive Warrant Shares shall be deemed to have become
holder of record of such Warrant Shares as of the Date of Exercise of this
Warrant. The Company shall, upon request of the Holder, if available, use its
best efforts to deliver Warrant Shares hereunder electronically through the
Depository Trust Corporation or another established clearing corporation
performing similar functions, provided, that, the Company may, but will not be
required to change its transfer agent if its current transfer agent cannot
deliver Warrant Shares electronically through the Depository Trust Corporation.

                  A "Date of Exercise" means the date on which the Holder shall
have delivered to the Company (i) the Form of Election to Purchase attached
hereto (with the Warrant Exercise Log attached to it), appropriately completed
and duly signed and (ii) payment of the Exercise Price for the number of Warrant
Shares so indicated by the Holder to be purchased.

            (b) If the Company fails to deliver to the Holder a certificate or
certificates representing the Warrant Shares pursuant to Section 5(a) no later
than the third Trading Day after the Date of Exercise, then the Holder will have
the right to rescind such exercise.

            (c) In addition to any other rights available to the Holder, if the
Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to Section 5(a) no later than the third
Trading Day after the Date of Exercise, and if after such third Trading Day the
Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
which the


                                       2
<PAGE>

Holder anticipated receiving upon such exercise (a "BUY-IN"), then the Company
shall pay (1) in cash to the Holder the amount by which (x) the Holder's total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver pursuant to
Section 5(b) to the Holder in connection with the exercise at issue by (B) the
closing bid price of the Common Stock at the time of the obligation giving rise
to such purchase obligation and (2) deliver to the Holder the number of shares
of Common Stock that would have been issued had the Company timely complied with
its exercise and delivery obligations under Section 5(b). For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to cover
a Buy-In with respect to an attempted exercise of shares of Common Stock with a
market price on the date of exercise totaling $10,000, under clause (A) of the
immediately preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice indicating the
amounts payable to the Holder in respect of the Buy-In.

            (d) The Company's obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of
any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of Warrant Shares. If the
Company breaches its obligations under this Warrant, then, in addition to any
other liabilities the Company may have hereunder and under applicable law, the
Company shall pay or reimburse the Holder on demand for all costs of collection
and enforcement (including reasonable attorneys fees and expenses).

      6. Charges, Taxes and Expenses. The Company will pay all documentary stamp
taxes attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the registration
of any certificates for Warrant Shares or Warrants in a name other than that of
the Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.

      7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity, if requested. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe.

      8. Reservation of Warrant Shares. The Company covenants that it will at
all times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon


                                       3
<PAGE>

exercise of this Warrant as herein provided, the number of Warrant Shares which
are then issuable and deliverable upon the exercise of this entire Warrant, free
from preemptive rights or any other contingent purchase rights of persons other
than the Holder (taking into account the adjustments and restrictions of Section
9). The Company covenants that all Warrant Shares so issuable and deliverable
shall, upon issuance and the payment of the applicable Exercise Price in
accordance with the terms hereof, be duly and validly authorized, issued and
fully paid and nonassessable.

      9. Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.

            (a) Stock Dividends and Splits. If the Company, at any time while
this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, or (iii) combines outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
become effective immediately after the effective date of such subdivision or
combination.

            (b) Pro Rata Distributions. If the Company, at any time while this
Warrant is outstanding, distributes to all holders of Common Stock (other than
in a transaction covered by paragraph (a) or (c) of this Section 9) (i)
evidences of its indebtedness, (ii) any security (other than a distribution of
Common Stock covered by the preceding paragraph), (iii) rights or warrants to
subscribe for or purchase any security, or (iv) any other asset (in each case,
"DISTRIBUTED PROPERTY"), then in each such case the Exercise Price in effect
immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution shall be adjusted (effective on such
record date) to equal the product of such Exercise Price times a fraction of
which the denominator shall be such Exercise Price and of which the numerator
shall be such Exercise Price less the then fair market value of the Distributed
Property distributed in respect of one outstanding share of Common Stock, as
determined by the Company's independent certified public accountants that
regularly examine the financial statements of the Company (an "APPRAISER"). In
such event, the Holder, after receipt of the determination by the Appraiser,
shall have the right to select an additional appraiser (which shall be a
nationally recognized accounting firm), in which case such fair market value
shall be deemed to equal the average of the values determined by each of the
Appraiser and such appraiser. As an alternative to the foregoing adjustment to
the Exercise Price, at the request of the Holder delivered before the 90th day
after such record date, the Company will deliver to such Holder, within five
Trading Days after such request (or, if later, on the effective date of such
distribution), the Distributed Property that such Holder would have been
entitled to receive in respect of the Warrant Shares for which this Warrant
could have been exercised immediately prior to such record date.


                                       4
<PAGE>

            (c) Fundamental Transactions. If, at any time while this Warrant is
outstanding, (i) the Company effects any merger or consolidation of the Company
with or into another Person, (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Common Stock are permitted to
tender or exchange their shares for other securities, cash or property, or (iv)
the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (in any such case, a
"FUNDAMENTAL TRANSACTION"), then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the "ALTERNATE CONSIDERATION").
The aggregate Exercise Price for this Warrant will not be affected by any such
Fundamental Transaction, but the Company shall apportion such aggregate Exercise
Price among the Alternate Consideration in a reasonable manner reflecting the
relative value of any different components of the Alternate Consideration. If
holders of Common Stock are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. At the Holder's
request, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with the
foregoing provisions and evidencing the Holder's right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof. The terms
of any agreement pursuant to which a Fundamental Transaction is effected shall
include terms requiring any such successor or surviving entity to comply with
the provisions of this paragraph (c) and insuring that the Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction. If any Fundamental Transaction
constitutes or results in a Change of Control, then at the request of the Holder
delivered before the 90th day after such Fundamental Transaction, the Company
(or any such successor or surviving entity) will purchase the Warrant from the
Holder for a purchase price, payable in cash within five Trading Days after such
request (or, if later, on the effective date of the Fundamental Transaction),
equal to the Black Scholes value of the remaining unexercised portion of this
Warrant on the date of such request. As used in this Agreement, "CHANGE OF
CONTROL" means the occurrence of any of (i) an acquisition after the date hereof
by any Person or "group" (as described in Rule 13d-5(b)(1) promulgated under the
Exchange Act) of more than 50% of the voting rights or equity interests in the
Company, (ii) a replacement of more than one-half of the members of the
Company's board of directors over a two-year period from the directors who
constituted the Board of Directors at the beginning of such period, which
replacement shall not have been approved by the Board of Directors as so
constituted at the beginning of such period or (a) by directors whose nomination
for election by the stockholders of the Company was approved by such Board of
Directors or (b) by directors elected by such Board of Directors or (c) by
directors approved in the same manner as (a) or (b) above that were nominated or
elected by directors approved as set forth in (a) or (b) above, (iii) a merger
or consolidation of the Company or any Subsidiary or a sale of more than 50% of
the assets of the Company in one or a series of related transactions, unless
following such transactions or series of transactions, the holders of the
Company's securities prior to the first such transaction continue


                                       5
<PAGE>

to hold at least two-thirds of the voting rights and equity interests in of the
surviving entity or acquirer of such assets, or (iv) the execution by the
Company of an agreement to which the Company is a party or by which it is bound,
providing for any of the events set forth above in (i), (ii) or (iii).

            (d) Subsequent Equity Sales.

                  (i) If, at any time while this Warrant is outstanding, the
Company or any Subsidiary issues or sells, as the case may be, additional shares
of Common Stock or rights, warrants, options or other securities or debt
convertible, exercisable or exchangeable by its terms for shares of Common Stock
or otherwise by its terms entitling any Person to acquire shares of Common Stock
(collectively, "COMMON STOCK EQUIVALENTS"), and the price per share of any
Common Stock with respect to such issuance (the "EFFECTIVE PRICE") is less than
the closing sales price ("MARKET PRICE") of the Common Stock on the date of
closing of this transaction then the Exercise Price shall be reduced to equal
the product of (A) the Exercise Price in effect immediately prior to such
issuance of Common Stock or Common Stock Equivalents times (B) a fraction, the
numerator of which is the sum of (1) the number of shares of Common Stock
outstanding or issuable upon the exercise or conversion of outstanding Common
Stock Equivalents immediately prior to such issuance, plus (2) the number of
shares of Common Stock which the aggregate Effective Price of the Common Stock
issued (or deemed to be issued) would purchase at the Exercise Price, and the
denominator of which is the aggregate number of shares of Common Stock
outstanding or issuable upon the exercise or conversion of outstanding Common
Stock Equivalents immediately after such issuance. For purposes of the foregoing
adjustment, in connection with any issuance of any Common Stock Equivalents, (x)
the maximum number of shares of Common Stock potentially issuable at any time
upon conversion, exercise or exchange of such Common Stock Equivalents (the
"DEEMED NUMBER") shall be deemed to be outstanding upon issuance of such Common
Stock Equivalents, (y) the Effective Price applicable to such Common Stock shall
equal the minimum dollar value of consideration payable to the Company to
purchase such Common Stock Equivalents and to convert, exercise or exchange them
into Common Stock, divided by the Deemed Number, and (z) no further adjustment
shall be made to the Exercise Price upon the actual issuance of Common Stock
upon conversion, exercise or exchange of such Common Stock Equivalents. However,
upon termination or expiration of any Common Stock Equivalents the issuance of
which resulted in an adjustment to the Exercise Price pursuant to this
paragraph, the Exercise Price shall be recomputed to equal the price it would
have been had the adjustments in this paragraph been made, at the time of
issuance of such Common Stock Equivalents, only with respect to that number of
shares of the Common Stock actually issued upon conversion, exercise or exchange
of such Common Stock Equivalents and at the Effective Prices actually paid in
connection therewith.

                  (ii) If, at any time while this Warrant is outstanding, the
Company or any Subsidiary issues or sells, as the case may be, Common Stock
Equivalents with an Effective Price that floats or resets or otherwise varies or
is subject to adjustment based on market prices of the Common Stock (a "FLOATING
PRICE SECURITY"), then for purposes of applying the preceding paragraph in
connection with any subsequent exercise, the Effective Price will be determined
separately on each Exercise Date and will be deemed to equal the lowest
Effective Price at which any holder of such Floating Price Security is entitled
to acquire shares of


                                       6
<PAGE>

Common Stock on such Exercise Date (regardless of whether any such holder
actually acquires any shares on such date).

                  (iii) Notwithstanding the foregoing, no adjustment will be
made under this Section 9 in respect of any issuances of Common Stock and Common
Stock Equivalents: (i) to the Company's employees, officers or directors and the
issuance of shares of Common Stock to such employees, officers or directors upon
exercise of options granted, pursuant to an employee benefit plan or stock
option plan whether now existing or approved by the Company and its stockholders
in the future, (ii) to consultants as compensation for services rendered to the
Company not to exceed an aggregate value of $500,000, (iii) pursuant to one or
more Strategic Transactions, (iv) to Dr. George Rathmann for additional
financing provided to the Company by Dr George Rathmann, (v) under a bona fide
underwritten public offering (which shall not include equity lines of credit or
similar financing structures) which results in net proceeds in excess of US $40
million at a per share price (excluding underwriters' commissions and discounts)
that is not at a discount to the then-prevailing market price of the Common
Stock and (vi) pursuant to the Rights Agreement, dated as of June 5, 1998, by
and between the Company and U.S. Stock Transfer Corporation, as the Rights
Agent.

            (e) Number of Warrant Shares. Simultaneously with any adjustment to
the Exercise Price pursuant to paragraph (a)of this Section, the number of
Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, as applicable, so that after such
adjustment the aggregate Exercise Price payable hereunder for the increased or
decreased number of Warrant Shares shall be the same as the aggregate Exercise
Price in effect immediately prior to such adjustment.

            (f) Calculations. All calculations under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a share, as applicable. The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition
of any such shares shall be considered an issue or sale of Common Stock.

            (g) Notice of Adjustments. Upon the occurrence of each adjustment
pursuant to this Section 9, the Company at its expense will promptly compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the adjusted
Exercise Price and adjusted number or type of Warrant Shares or other securities
issuable upon exercise of this Warrant (as applicable), describing the
transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based. Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company's Transfer Agent.

            (h) Notice of Corporate Events. If the Company (i) declares a
dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including without limitation any granting of rights
or warrants to subscribe for or purchase any capital stock of the Company or any
Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating
or solicits stockholder approval for any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of the Company, then, except if such notice and the contents thereof shall be
deemed to constitute material non-


                                       7
<PAGE>

public information, the Company shall deliver to the Holder a notice describing
the material terms and conditions of such transaction, at least 20 calendar days
prior to the applicable record or effective date on which a Person would need to
hold Common Stock in order to participate in or vote with respect to such
transaction, and the Company will take all steps reasonably necessary in order
to insure that the Holder is given the practical opportunity to exercise this
Warrant prior to such time so as to participate in or vote with respect to such
transaction; provided, however, that the failure to deliver such notice or any
defect therein shall not affect the validity of the corporate action required to
be described in such notice. Until the exercise of this Warrant or any portion
of this Warrant, the Holder shall not have nor exercise any rights by virtue
hereof as a stockholder of the Company (including without limitation the right
to notification of stockholder meetings or the right to receive any notice or
other communication concerning the business and affairs of the Company other
than as provided in this Section 9(h)).

      10. Payment of Exercise Price. The Holder shall pay the Exercise Price in
one of the following manners:

            (a) Cash Exercise. From the date hereof, until the second
anniversary of the closing date, the Holder may deliver immediately available
funds; or

            (b) Cashless Exercise. The Holder may satisfy its obligation to pay
the Exercise Price through a "cashless exercise," in which event the Company
shall issue to the Holder the number of Warrant Shares determined as follows:

                         X = Y [(A-B)/A]
            where:
                         X = the number of Warrant Shares to be issued to the
                         Holder.

                         Y = the number of Warrant Shares with respect to which
                         this Warrant is being exercised.

                         A = the average of the Closing Prices for the five
                         Trading Days immediately prior to (but not including)
                         the Exercise Date.

                         B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued pursuant to the Purchase Agreement.

      11. Limitation on Exercise. (a) Notwithstanding anything to the contrary
contained herein, the number of shares of Common Stock that may be acquired by
the Holder upon any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following such exercise
(or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Holder's for
purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% of the
total number of issued and


                                       8
<PAGE>

outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). Each delivery of an Exercise Notice
hereunder will constitute a representation by the Holder that it has evaluated
the limitation set forth in this paragraph and determined that issuance of the
full number of Warrant Shares issuable in respect of such Exercise Notice does
not violate the restrictions contained in this paragraph. This provision shall
not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a merger, sale or
other business combination or reclassification involving the Company as
contemplated herein. The provisions of this Section may be waived by a Holder
(but only as to itself and not to any other Holder) upon not less than 61 days'
prior notice to the Company. Other Holders shall be unaffected by any such
waiver.

            (b) Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Holder upon any
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and its Affiliates and any other Persons whose beneficial ownership
of Common Stock would be aggregated with the Holder's for purposes of Section
13(d) of the Exchange Act, does not exceed 9.999% of the total number of issued
and outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). Each delivery of an Exercise Notice
hereunder will constitute a representation by the Holder that it has evaluated
the limitation set forth in this paragraph and determined that issuance of the
full number of Warrant Shares issuable in respect of such Exercise Notice does
not violate the restrictions contained in this paragraph. This provision shall
not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a merger, sale or
other business combination or reclassification involving the Company as
contemplated herein.

      12. No Fractional Shares. No fractional shares of Warrant Shares will be
issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would, otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the closing price of one
Warrant Share as reported on the Nasdaq National Market on the date of exercise.

      13. Exchange Act Filings. The Holder agrees and acknowledges that it shall
have sole responsibility for making any applicable filings with the U.S.
Securities and Exchange Commission pursuant to Sections 13 and 16 of the
Securities Exchange Act of 1934, as amended, as a result of its acquisition of
this Warrant and the Warrant Shares and any future retention or transfer
thereof.

      14. Notices. Any and all notices or other communications or deliveries
hereunder (including without limitation any Exercise Notice) shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this


                                       9
<PAGE>

Section on a day that is not a Trading Day or later than 6:30 p.m. (New York
City time) on any Trading Day, (iii) the Trading Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be: (i) if to the Company, to HYSEQ,
Inc., 670 Almanor Avenue, Sunnyvale, CA 94085, facsimile: (408) 524-8145,
attention: President, or (ii) if to the Holder, to the address or facsimile
number appearing on the Warrant Register or such other address or facsimile
number as the Holder may provide to the Company in accordance with this Section.

      15. Warrant Agent. The Company shall serve as warrant agent under this
Warrant. Upon 30 days' notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or any new warrant agent transfers substantially all of its
corporate trust or shareholders services business shall be a successor warrant
agent under this Warrant without any further act. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder's last
address as shown on the Warrant Register.

      16. Miscellaneous.

            (a) This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant. This Warrant may be amended only
in writing signed by the Company and the Holder and their successors and
assigns.

            (b) All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party agrees that all
legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the "NEW YORK COURTS"). Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of the New
York Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of this Agreement), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, or such New York Courts are improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner


                                       10
<PAGE>

permitted by law. Each party hereto (including its affiliates, agents, officers,
directors and employees) hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence an action or proceeding to
enforce any provisions of this Agreement, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its attorneys
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

            (c) The headings herein are for convenience only, do not constitute
a part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.

            (d) In case any one or more of the provisions of this Warrant shall
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]


                                       11
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.


                                        HYSEQ, INC.


                                        By:
                                           -------------------------------------
                                        Name: Peter S. Garcia
                                        Title: Senior Vice President and Chief
                                               Financial Officer


                                       12
<PAGE>

                          FORM OF ELECTION TO PURCHASE

To Hyseq, Inc.

      In accordance with the Warrant enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase _____________
shares of common stock ("COMMON STOCK"), $.001 par value per share, of Hyseq,
Inc. and if such Holder is not utilizing the cashless exercise provisions set
forth in this Warrant, encloses herewith $_________ in cash, certified or
official bank check or checks, which sum represents the aggregate Exercise Price
(as defined in the Warrant) for the number of shares of Common Stock to which
this Form of Election to Purchase relates, together with any applicable taxes
payable by the undersigned pursuant to the Warrant.

      By its delivery of this Form of Election To Purchase, the Holder
represents and warrants to the Company that in giving effect to the exercise
evidenced hereby the Holder will not beneficially own in excess of the number of
shares of Common Stock (determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934) permitted to be owned under Section 11 of this
Warrant to which this notice relates.

      The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of

                                             PLEASE INSERT SOCIAL SECURITY OR
                                             TAX IDENTIFICATION NUMBER


                         (Please print name and address)


                                       13
<PAGE>

                           WARRANT SHARES EXERCISE LOG

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
                                                                                   Number of
                  Number of Warrant                                                Warrant Shares
                  Shares Available to be          Number of Warrant Shares         Remaining to be
Date              Exercised                       Exercised                        Exercised
--------------------------------------------------------------------------------------------------
<S>               <C>                             <C>                              <C>














--------------------------------------------------------------------------------------------------
</TABLE>


                                       14
<PAGE>

                               FORM OF ASSIGNMENT

      [To be completed and signed only upon transfer of Warrant]

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the within
Warrant to purchase ____________ shares of Common Stock of HYSEQ, Inc. to which
the within Warrant relates and appoints ________________ attorney to transfer
said right on the books of HYSEQ, Inc. with full power of substitution in the
premises.

Dated:  _______________, ____


                                   ---------------------------------------------
                                   (Signature must conform in all respects to
                                   name of holder as specified on the face of
                                   the Warrant)


                                   ---------------------------------------------
                                   Address of Transferee

                                   ---------------------------------------------

                                   ---------------------------------------------



In the presence of:


--------------------------


                                       15