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                                                                     EXHIBIT 4.8

THIS PROMISSORY NOTE AND ANY COMMON STOCK ISSUABLE UPON REPAYMENT HEREOF HAVE
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.

                                   HYSEQ, INC.
                                 PROMISSORY NOTE

Note No.  1

$4,000,000                                                     November 13, 2001
                                                           Sunnyvale, California

        FOR VALUE RECEIVED, Hyseq, Inc., a Nevada corporation, promises to pay
to Affymetrix, Inc., a Delaware corporation ("Affymetrix"), or its permitted
assigns (each of Affymetrix and any such assign, a "Holder"), the principal sum
of $4,000,000, or such lesser amount as shall then equal the outstanding
principal amount hereof, together with interest from the date of this Promissory
Note on the unpaid principal balance at a rate equal to 7.50% per annum,
computed on the basis of the actual number of days elapsed and a year of 360
days consisting of twelve 30-day months. All unpaid principal, together with any
then unpaid and accrued interest, shall be due and payable on the earlier of (i)
November 13, 2006 (the "Maturity Date") or (ii) the acceleration of the maturity
thereof in accordance with Section 6 of this Promissory Note.

        The obligations of the Company represented by this Promissory Note are
secured by a security interest as set forth in the Pledge and Security
Agreement, dated November 13, 2001 (the "Security Agreement"), between the
Company and Affymetrix.

        The Company has entered into a Registration Rights Agreement, dated as
of November 13, 2001 (the "Registration Rights Agreement"), with the Holder
providing for resales of all Common Stock held by the Holder issuable pursuant
to this Promissory Note.

        The following is a statement of the rights of the Holder and the
conditions to which this Promissory Note is subject, and to which the Holder
hereof, by the acceptance of this Promissory Note, agrees:

        1.     Definitions. As used in this Promissory Note, the following terms
shall have the meanings set forth below:

               (a) "Affiliate" shall mean with respect to any Person (i) any
other Person that directly or indirectly through one or more intermediaries
controls or is controlled by or is under common control with such Person, (ii)
any other Person owning or controlling 25% or more of the outstanding voting
securities of or other ownership interest in such Person or (iii) any officer,
director, general partner, managing partner or member of such Person.

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               (b) "Aggregate Amount Outstanding" shall mean an amount equal to
the sum of (i) the outstanding principal amount hereunder, together with any
unpaid and accrued interest thereon, and (ii) the Other Amounts Outstanding.

               (c) "Ancillary Agreements" shall have the meaning ascribed to
such term in the Stock Purchase Agreement.

               (d) "Beneficial Owner" (and, with correlative meanings,
"Beneficially Own" and "Beneficial Ownership") of any interest shall mean a
Person who, together with his or its Affiliates, is or may be deemed a
beneficial owner of such interest for purposes of Rule 13d-3 or 13d-5 under the
Securities Exchange Act of 1934.

               (e) "Capital Lease Obligations" shall mean, with respect to any
Person, the obligation of such Person to pay rent or other amounts under any
lease with respect to any property (whether real, personal or mixed) acquired or
leased by such Person that is required to be accounted for under GAAP as a
liability on a consolidated balance sheet of such Person.

               (f) "CGI" shall mean Callida Genomics, Inc., a Delaware
corporation.

               (g) "Change-in-Control" shall mean (i) (x) any consolidation or
merger of the Company with or into any other corporation or other entity or
Person, or any other corporate reorganization, in which the stockholders of the
Company immediately prior to such consolidation, merger or reorganization own
less than 50% of the Company's voting power or the voting power of the surviving
entity or the ultimate parent of the surviving entity immediately after such
consolidation, merger or reorganization, or (y) any transaction or series of
related transactions not included in clause (x) to which the Company is a party
in which in excess of 50% of the Company's voting power is transferred to
another corporation, Person, entity or group for purposes of Section 13(d) under
the Securities Exchange Act of 1934, as amended, or (ii) a sale, lease or other
disposition of all or substantially all of the assets of the Company to any
other corporation, entity or Person; provided, however, that the consummation by
the Company of (A) a consolidation, merger, reorganization or other transaction
in which in excess of 50% the voting power of the surviving entity or the
ultimate parent of the surviving entity is owned, directly or indirectly, by
George B. Rathmann, Ph.D. (or any trust of which he is a trustee) immediately
after such consolidation, merger, reorganization or other transaction or (B) the
sale, lease or other disposition of all or substantially all of the Company's
assets to an entity in which in excess of 50% the voting power of such entity or
the ultimate parent of such entity is owned, directly or indirectly, by George
B. Rathmann, Ph.D. (or any trust of which he is a trustee) immediately after
such sale, lease or other disposition shall not be deemed a Change of Control
even if such consolidation, merger, reorganization or other transaction or sale,
lease or other disposition of assets would otherwise be deemed a Change of
Control pursuant to clause (i) or (ii) of this definition.

                (h) "Closing Price Per Share" shall mean, with respect to the
Common Stock, for any day, (i) the last reported sale price regular way on the
Nasdaq National Market or (ii) if the Common Stock is not quoted on the Nasdaq
National Market, the last reported sale price regular way per share or, in case
no such reported sale takes place on such day, the average of

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the reported closing bid and asked prices regular way, in either case, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading.

                (i) "Collateral" shall have the meaning ascribed to such term in
the Security Agreement.

                (j) "Common Stock" shall mean the Common Stock, par value $0.001
per share, of the Company authorized at the date hereof.

                (k) "Company" includes the corporation initially executing this
Promissory Note and any Person that shall succeed to or assume the obligations
of the Company under this Promissory Note.

                (l) "Determination Date" shall mean each day commencing on the
eleventh Trading Day after the date hereof and ending on the Maturity Date,
other than a Saturday or Sunday on which commercial banks in New York, New York
are not required or permitted under applicable laws or regulations to close.

                (m) "ECM Amount Due" shall mean an amount equal to the product
of (i) the Aggregate Amount Outstanding on any Determination Date minus (ii) the
product of the Equity Market Capitalization on any Determination Date multiplied
by 10%.

                (n) "Equity Market Capitalization", as of any Determination
Date, shall mean the product of (i) the average of the Closing Prices Per Share
of the Common Stock for the twenty (20) consecutive Trading Days immediately
preceding but excluding such Determination Date, multiplied by (ii) the number
of shares of Common Stock issued and outstanding as of such Determination Date.

                (o) "GAAP" or "Generally Accepted Accounting Principles" shall
mean generally accepted accounting principles as in effect from time to time in
the United States.

                (p) "Governmental Body" shall mean any foreign or domestic
government; court; federal, state, county, municipal or other department,
commission, board, bureau, agency, administrator, public authority or
instrumentality; arbitrator; mediator; or other governmental regulator or
authority.

                (q) "Indebtedness" shall mean, with respect to any Person, (i)
all obligations of such Person for borrowed money or for the deferred purchase
price of property or services (including all obligations, contingent or
otherwise, of such Person in connection with letters of credit, bankers'
acceptances, Interest Rate Protection Agreement or other similar instruments,
including currency swaps) other than indebtedness to trade creditors and service
providers incurred in the ordinary course of business and payable on usual and
customary terms, (ii) all obligations of such Person evidenced by bonds, notes,
debentures or other similar instruments, (iii) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the remedies available
to the seller or lender under such agreement are limited to repossession or sale
of such property), (iv) all Capital Lease Obligations of such Person, (v) all
obligations of the types described in clauses (i), (ii), (iii) or (iv) above
secured by (or for which the obligee has an existing right,

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contingent or otherwise, to be secured by) any Lien upon or in any property
(including accounts, contract rights and other intangibles) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness, (vi) all preferred stock issued by such Person which is
redeemable, prior to full satisfaction of the Company's obligations under this
Promissory Note, other than at the option of such Person, (vii) all Indebtedness
of others subject to a Third Party Guaranty by such Person and (viii) all
Indebtedness of any partnership of which such Person is a general partner.

                (r) "Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement or similar hedging arrangement
used by a Person to fix or cap a floating rate of interest on Indebtedness to a
negotiated maximum rate or amount.

                (s) "Lien" or "Liens" shall mean, with respect to any Person,
any security interest, pledge, mortgage, charge, option, assignment,
hypothecation, encumbrance, attachment, garnishment, sequestration, forfeiture,
execution or other voluntary or involuntary lien upon or affecting the revenues
of such Person or any real or personal property in which such Person has or
hereafter acquires any interest.

                (t) "Material Adverse Effect" shall mean an adverse effect upon
the business, financial condition, results of operations or prospects of the
Company, or upon the ability of the Company to perform its obligations hereunder
or under the Security Agreement, which adverse effect would be viewed as
material by a reasonably prudent lender.

                (u) "national securities exchange" shall mean a national
securities exchange registered under Section 6 of the Securities Exchange Act of
1934, as amended.

                (v) "Note Percentage" shall mean the quotient obtained by
dividing (i) the outstanding principal amount hereunder, together with any
unpaid and accrued interest thereon, by (ii) the Aggregate Amount Outstanding.

                (w) "Option" shall have the meaning ascribed to such term in the
Option Agreement, dated as of October 24, 2001, among CGI, N-Mer, Inc. and
Affymetrix.

                (x) "Other Amounts Outstanding" shall mean the aggregate
principal amount outstanding under all promissory notes (other than this
Promissory Note) of the Company in favor of the Holder, together with any unpaid
and accrued interest thereon.

                (y) "Person" shall mean an individual, corporation (including
any non-profit corporation), association, general or limited partnership,
organization, business, firm, limited liability company, joint venture, trust,
estate, or other entity, association or organization, whether constituting a
separate legal entity or not.

                (z) "Product Solicitation Agreement" shall have the meaning
ascribed to such term in the Stock Purchase Agreement.

                (aa) "Related Person" shall mean any Person with whom the
Company or one of its Affiliates has a contractual, licensing, collaborative,
partnership, joint venture or other similar relationship and any of such
Person's Affiliates.

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                (bb) "Related Agreements" shall have the meaning ascribed to
such term in the Stock Purchase Agreement.

                (cc) "Stock Purchase Agreement" shall mean the Preferred Stock
Purchase Agreement, dated as of October 24, 2001, among CGI, Affymetrix and the
Company.

                (dd) "Supply Agreement" shall have the meaning ascribed to such
term in the Stock Purchase Agreement.

                (ee) "Third Party Guaranty" means, with respect to any Person,
any obligation, contingent or otherwise, of such Person guaranteeing or having
the economic effect of guaranteeing any Indebtedness of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of such Person, (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness, (ii) to purchase
property, securities or services for the purpose of assuring the holder of such
Indebtedness of the payment of such Indebtedness of (iii) to maintain working
capital, equity capital or the financial condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness.

                (ff) "Trading Day" means (i) if the Common Stock is quoted on
the Nasdaq National Market, days on which trades may be effected through such
system or (ii) if the Common Stock is listed or admitted for trading on any
national securities exchange, days on which such national securities exchange is
open for business.

        2.      INTEREST. Accrued interest on this Promissory Note shall be
payable at such time as the outstanding principal amount hereof shall be paid in
full; provided, however, that in the event the principal amount hereof is not
repaid in full on the Maturity Date, accrued but unpaid interest on this
Promissory Note shall thereafter be paid in cash on the Maturity Date, the last
business day of each calendar month thereafter and on such date as the
outstanding principal amount hereof shall be paid in full.

        3.      PREPAYMENT. This Promissory Note may be prepaid by the Company
at any time in whole or in part without prepayment fee, premium or penalty by
payment of the unpaid principal amount, or part thereof, together with accrued
but unpaid interest. Any such prepayment shall be applied first to interest and
then to principal, or in such other order as the Holder may, in its sole
discretion, determine.

        4.     REPRESENTATIONS AND WARRANTIES.  The Company represents and
warrants to the Holder, as of the date of making this Promissory Note, as
follows:

               (a) GOOD STANDING AND POWER. The Company and each of its
subsidiaries is a corporation, duly incorporated and validly existing in good
standing under the laws of the jurisdiction of its incorporation; each has the
corporate power to own its property and to carry on its business as now being
conducted; and each is duly qualified to do business and is in good standing in
each jurisdiction in which the character of the properties owned or leased by it
therein or in which the transaction of its business makes such qualification
necessary, except where the failure to be so qualified, or to be in good
standing, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

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               (b) CORPORATE AUTHORITY. The Company has full corporate power and
authority to execute and deliver, and to incur and perform its obligations
under, this Promissory Note and the Security Agreement, which have been duly
authorized by all proper and necessary corporate action. No consent or approval
of stockholders is required as a condition to the validity or performance of, or
the exercise by the Holder of any of its rights or remedies under, this
Promissory Note or the Security Agreement.

               (c) AUTHORIZATIONS. All authorizations, consents, approvals,
registrations, notices, filings, exemptions and licenses (collectively
"Authorizations") with or from any Governmental Body or other Person necessary
for the execution, delivery and performance by the Company of, and the
incurrence and performance of its obligations under, each of this Promissory
Note and the Security Agreement, and the exercise by the Holder of its remedies
under each of this Promissory Note and the Security Agreement have been effected
or obtained and are in full force and effect, other than (i) such Authorizations
as may be required under applicable federal or state securities laws, which
Authorizations shall be obtained prior to the time required under such
securities laws, and (ii) such Authorizations as shall be required for the
perfection of the security interests under the Security Agreement, which shall
be obtained in accordance with the terms of the Security Agreement.

               (d) BINDING OBLIGATION. This Promissory Note and the Security
Agreement constitute the valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.

               (e) NO CONFLICTS. There is no statute, regulation, rule, order or
judgment, and no provision of any agreement or instrument binding upon the
Company or any of its subsidiaries, or affecting their properties, and no
provision of the certificate of incorporation or by-laws (or similar
constitutive instruments) of the Company or any of its subsidiaries, that would
prohibit, conflict with or in any way impair the execution or delivery of, or
the incurrence or performance of any obligations of the Company under, this
Promissory Note or the Security Agreement, or result in or require the creation
or imposition of any Lien on property of the Company or any of its subsidiaries
as a consequence of the execution, delivery and performance of this Promissory
Note or the Security Agreement, other than in respect of the Authorizations
referenced in Section 4(c) hereof.

               (f) USE OF PROCEEDS. The proceeds of this Promissory Note will be
used by the Company exclusively for the purchase of shares of Series A Preferred
Stock, par value $0.001 per share, of CGI pursuant to the Stock Purchase
Agreement. The Company hereby authorizes and instructs Affymetrix to remit the
proceeds of this Promissory Note to CGI or its designee on behalf of the
Company. The Company acknowledges and agrees that CGI has authorized and
instructed Affymetrix to remit the proceeds of this Promissory Note to N-Mer,
Inc. pursuant to the Stock Purchase Agreement.

               (g) MARGIN REGULATIONS. This Promissory Note and the use of the
proceeds hereof as contemplated herein will not violate or be inconsistent with
any of the provisions of Regulation U, T or X (or any successor regulations) of
the Federal Reserve Board.

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               (h)    COMPLIANCE WITH LAWS AND CHARTER DOCUMENTS.

                      (i)    Neither the Company nor any of its subsidiaries is,
or as a result of performing any of its obligations under this Promissory Note
or the Security Agreement will be, in violation of (a) any law, statute, rule,
regulation or order of any Governmental Body applicable to it or its properties
or assets or (b) its certificate of incorporation, by-laws or any similar
document.

                      (ii)   The Company and each of its subsidiaries each has
all authorizations, consents, approvals, registrations, franchises, licenses and
permits, with or from Governmental Bodies and other Persons as are necessary for
it to own its properties and conduct its business as now conducted and the
absence of which could reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect.

        All representations and warranties made by the Company in this
Promissory Note shall (i) be considered to have been relied upon by the Holder,
(ii) survive this Promissory Note regardless of any investigation made by, or on
behalf of, the Holder, and (iii) continue in full force and effect as long as
any amount payable under this Promissory Note remains unpaid.

        5.     EVENTS OF DEFAULT.  Each of the following constitutes an event of
default under this Promissory Note (an "Event of Default"):

               (a) The Company shall fail duly to pay any principal hereof when
due, whether at maturity, by notice of intention to prepay or otherwise; or

               (b) The Company shall fail duly to pay any interest, fee or any
other amount payable under this Promissory Note within two (2) days after the
same shall be due; or

               (c) The Company shall fail duly to observe or perform any term,
covenant or agreement contained in, and required to be observed or performed by
it under, this Promissory Note or the Security Agreement, and such failure shall
have continued unremedied for a period of thirty (30) days after written notice
thereof; or

               (d) Any representation or warranty made by the Company in this
Promissory Note or the Security Agreement shall prove to have been false or
misleading in any material respect when so made or deemed made; or

               (e) A default or defaults under any bond(s), debentures(s),
note(s) or other evidence(s) of Indebtedness by the Company or any subsidiary of
the Company or under any mortgage(s), indenture(s) or instrument(s) under which
there may be issued or by which there may be secured or evidenced any
Indebtedness of such type by the Company or any such subsidiary with a principal
amount then outstanding, individually or in the aggregate, in excess of
$1,000,000, whether such Indebtedness now exists or shall hereafter be created,
which default with the passing of time or the giving of notice, or both, shall
give the holders of such bond(s), debenture(s), note(s), or other evidence(s) or
such Indebtedness the right to declare such obligation due and payable prior to
the date on which it would otherwise have become due and payable; or

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               (f) There shall be an event of default, default or breach under
any other promissory note of the Company in favor of the Holder; or

               (g) An involuntary case or other proceeding shall be commenced
against the Company or any of its subsidiaries seeking liquidation,
reorganization or other relief with respect to it or its debts under any
applicable bankruptcy, insolvency, reorganization or similar law or seeking the
appointment of a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of it or any substantial part of its property,
and such involuntary case or other proceeding shall remain undismissed and
unstayed or unbonded for a period of more than sixty (60) days; or an order or
decree approving or ordering any of the foregoing shall be entered and continued
unstayed and in effect; or

               (h) The Company or any of its subsidiaries shall commence a
voluntary case or proceeding under any applicable bankruptcy, insolvency,
reorganization or similar law or any other case or proceeding to be adjudicated
a bankrupt or insolvent, or any of them shall consent to the entry of a decree
or order for relief in respect of the Company or any of its subsidiaries in an
involuntary case or proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against any of them, or any of them shall file a
petition or answer or consent seeking reorganization or relief under any such
applicable law, or any of them shall consent to the filing of such petition or
to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company or any of its
subsidiaries or any substantial part of their respective property, or any of
them shall make a general assignment for the benefit of creditors, or any of
them shall admit in writing its inability to pay its debts generally as they
become due, or the Company or any of its subsidiaries shall take corporate
action in furtherance of any such action; or

               (i) One or more judgments against the Company or any of its
subsidiaries or attachments against its property, which at any time exceed in
the aggregate $1,000,000, or the operation or result of which is reasonably
likely to interfere materially and adversely with the conduct of the business of
the Company or any of its subsidiaries, remain unpaid, unstayed on appeal,
undischarged, unbonded, or undismissed for a period of more than sixty (60)
days; or

               (j) Any court or governmental or regulatory authority shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which prohibits, enjoins or otherwise
restricts the Company or any of its subsidiaries, in a manner that, individually
or in the aggregate, could reasonably be expected to have (i) a Material Adverse
Effect or (ii) an adverse effect upon the validity or enforceability of this
Promissory Note or the Security Agreement or upon the rights of the Holder
hereunder or under the Security Agreement, which adverse effect would be viewed
as material by a reasonably prudent lender.

        With respect to any Event of Default, (i) in any such event described in
Section 5(g) or (h), the principal amount hereof, together with any then unpaid
and accrued interest thereon, shall automatically be due and payable without
notice or demand or any action whatsoever by the Holder; and (ii) in all other
Events of Default the Holder may, upon written notice to the Company, declare
the principal amount hereof, together with any then unpaid and accrued

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interest thereon (or any part thereof), to be forthwith due and payable without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Company.

        In addition, upon any Event of Default, the Holder may without prior
notice or demand, exercise any and all rights available to it under this
Promissory Note or the Security Agreement in equity or by applicable law. No
action taken by the Holder shall be deemed to be an election of remedies by the
Holder, it being the intent of the parties that the Holder shall be entitled
repeatedly to exercise all remedies separately or concurrently and in any manner
allowed by law.

        6.     ACCELERATION OF MATURITY.

               (a) EXERCISE OF OPTION. Upon the exercise by Affymetrix of the
Option, the outstanding principal amount hereof, together with any then unpaid
and accrued interest thereon, shall automatically be due and payable without
notice or demand or any action whatsoever by the Holder.

               (b) CHANGE-IN-CONTROL. Upon a Change-in-Control, the outstanding
principal amount hereof, together with any then unpaid and accrued interest
thereon, shall automatically be due and payable without notice or demand or any
action whatsoever by the Holder.

               (c) DELISTING OF COMMON STOCK. If at any time the Common Stock is
not approved for quotation on the Nasdaq National Market or listed on a national
securities exchange, the outstanding principal amount hereof, together with any
then unpaid and accrued interest thereon, shall automatically be due and payable
without notice or demand or any action whatsoever by the Holder.

               (d) IMPAIRMENT. If the Equity Market Capitalization on any
Determination Date is less than $50 million and the loan evidenced hereby (after
considering the realizable value of the Collateral) is impaired such that
Affymetrix reasonably determines that carrying the outstanding principal amount
hereof, together with any then unpaid and accrued interest thereon, on
Affymetrix' balance sheet at a value equal to the aggregate amount of principal
and interest outstanding under this Promissory Note is not in conformity with
GAAP, the Holder may, upon written notice to the Company, declare the
outstanding principal amount hereof, together with any then unpaid and accrued
interest thereon, to be forthwith due and payable.

               (e) BANKRUPTCY OF CGI. The outstanding principal amount hereof,
together with any then unpaid and accrued interest thereon, shall automatically
be due and payable without notice or demand or any action whatsoever by the
Holder if: (i) an involuntary case or other proceeding shall be commenced
against CGI or any of its subsidiaries seeking liquidation, reorganization or
other relief with respect to it or its debts under any applicable bankruptcy,
insolvency, reorganization or similar law or seeking the appointment of a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed or unbonded for a
period of more than sixty (60) days; or an order or decree approving or ordering
any of the foregoing shall be entered and continued unstayed and in effect; or
(ii) CGI

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or any of its subsidiaries shall commence a voluntary case or proceeding under
any applicable bankruptcy, insolvency, reorganization or similar law or any
other case or proceeding to be adjudicated a bankrupt or insolvent, or any of
them shall consent to the entry of a decree or order for relief in respect of
CGI or any of its subsidiaries in an involuntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against any of
them, or any of them shall file a petition or answer or consent seeking
reorganization or relief under any such applicable law, or any of them shall
consent to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of CGI or any of its subsidiaries or any substantial part of
their respective property, or any of them shall make a general assignment for
the benefit of creditors, or any of them shall admit in writing its inability to
pay its debts generally as they become due, or CGI or any of its subsidiaries
shall take corporate action in furtherance of any such action; or (iii) CGI or
any of its subsidiaries shall be dissolved, liquidated or wound up or CGI or any
of its subsidiaries shall take corporate action in furtherance of any such
action.

               (f) LITIGATION AGAINST AFFYMETRIX. If the Company or any of its
Affiliates or any Related Person commences any suit, action, litigation or
administrative or judicial action or proceeding or arbitration proceeding (each
a "Proceeding") against Affymetrix or any of its Affiliates in connection with
Affymetrix' investment or proposed investment in, or relationship or licensing
arrangement with, the Company, CGI or N-Mer, Inc., excluding any Proceeding
arising solely out of any breach or alleged breach by Affymetrix under any of
the Related Agreements, the Ancillary Agreements or the Confidentiality
Agreement, dated August 22, 2001, between the Company and Affymetrix, the Holder
may, upon written notice to the Company, declare the outstanding principal
amount hereof, together with any then unpaid and accrued interest thereon, to be
forthwith due and payable.

               (g) SALE OF INTEREST IN CGI. Upon the sale, assignment, transfer
or other disposition by the Company of any securities of CGI held by the
Company, an amount of outstanding principal hereof, together with any then
unpaid and accrued interest thereon, equal to the product of (i) the Note
Percentage and (ii) the aggregate amount of gross proceeds (net of discounts,
commissions or fees paid to brokers by the Company) received by the Company upon
such sale, assignment, transfer or other disposition shall automatically be due
and payable without notice or demand or any action whatsoever by the Holder.

               (h) EQUITY MARKET CAPITALIZATION. If the Aggregate Amount
Outstanding on any Determination Date is more than 10% of the Equity Market
Capitalization on such Determination Date, an amount of outstanding principal
hereof, together with any then unpaid and accrued interest thereon, equal to the
product of (i) the Note Percentage and (ii) the ECM Amount Due shall
automatically be due and payable without notice or demand or any action
whatsoever by the Holder.

        7.     SUCCESSORS AND ASSIGNS. Subject to the restrictions on transfer
described in Section 9 below, the rights and obligations of the Company and the
Holder shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.

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        8.     WAIVER AND AMENDMENT. Any provision of this Promissory Note may
be amended, waived or modified upon the written consent of the Company and
Affymetrix.

        9.     ASSIGNMENT. Neither this Promissory Note nor the Security
Agreement, and none of the rights, interests or obligations hereunder or
thereunder, may be assigned, by operation of law or otherwise, in whole or in
part, by the Company without the prior written consent of the Holder. This
Promissory Note and the Security Agreement, and all of the rights, interests or
obligations hereunder or thereunder, may be assigned, sold or transferred by
operation of law or otherwise, in whole or in part, by the Holder; provided that
prior thereto, if reasonably requested by the Company, the Holder shall furnish
the Company with an opinion of counsel or other information or documentation,
reasonably satisfactory to the Company, that such assignment, sale or transfer
will not require registration of this Promissory Note under the Securities Act.
It is agreed that the Company will not require opinions of counsel for
transactions made pursuant to Rule 144 except in unusual circumstances. Any
assignment contrary to the provisions of this Section 9 shall be null and void.

        10.    ADDRESSES FOR NOTICES, ETC. Any notices and other communications
required or permitted under this Agreement shall be effective if in writing and
delivered personally or sent by telecopier, Federal Express or registered or
certified mail, postage prepaid, addressed as follows:

If to the Holder, to:         Affymetrix, Inc.
                              3380 Central Expressway
                              Santa Clara, California  95051
                              Telephone:  (408) 731-5000
                              Telecopier:  (408) 731-5394
                              Attention:  General Counsel

with a copy to:               Sullivan & Cromwell
                              1870 Embarcadero Road
                              Palo Alto, California  94303
                              Telephone:  (650) 461-5600
                              Telecopier:  (650) 461-5700
                              Attention:  John L. Savva, Esq.

If to the Company, to:        Hyseq, Inc.
                              670 Almanor Avenue
                              Sunnyvale, California  94085
                              Telephone:  (408) 524-8100
                              Telecopier:  (408) 524-8141
                              Attention:  General Counsel

                                       11
<PAGE>

with a copy to:               Latham & Watkins
                              135 Commonwealth Drive
                              Menlo Park, California 94025
                              Telephone:  (650) 328-4600
                              Telecopier:  (650) 463-1600
                              Attention:  Alan C. Mendelson, Esq.

        Unless otherwise specified herein, such notices or other communications
shall be deemed effective (a) on the date delivered, if delivered personally,
(b) two business days after being sent, if sent by Federal Express or other
commercial overnight delivery service, (c) one business day after being sent, if
sent by telecopier with confirmation of good transmission and receipt, and (d)
three business days after being sent, if sent by registered or certified mail.
Each of the parties hereto shall be entitled to specify another address by
giving notice as aforesaid to each of the other parties hereto.

        11.    PAYMENT. Payments of principal and interest pursuant to this
Promissory Note shall be made by the Company in lawful tender of the United
States in immediately available funds.

        12.    EXCHANGE.

               (a) RIGHT TO EXCHANGE. The Company shall have the right, at its
option, at any time prior to payment in full of the principal balance of, and
all interest accrued on, this Note, to exchange this Note, in accordance with
the provisions of this Section 12, in whole or in part, into fully paid and
nonassessable shares of Common Stock. The number of shares of Common Stock (the
"Exchange Shares") deliverable upon exchange of such amount of principal and
interest (the "Exchange Amount") shall be such number of shares as has a fair
market value as of the date of exchange (the "Exchange Date") equal to the
Exchange Amount. For purposes of this Section 12, the fair market value of
shares of Common Stock shall be deemed equal to 90% of the average of the
Closing Prices Per Share of the Common Stock for the ten (10) consecutive
Trading Days immediately preceding and including the second Trading Day prior to
the Exchange Date.

               (b) EXCHANGE CONDITIONS. The right of the Company to undertake an
exchange pursuant to this Section 12 shall be subject to satisfaction or waiver
by the Holder of the following conditions:

                   (i) Issuance of Exchange Shares to the Holder in the exchange
shall not cause the Holder to Beneficially Own a number of shares of Common
Stock that exceeds the product of (i) 19% multiplied by (ii) the number of
shares of Common Stock outstanding on the Exchange Date;

                   (ii) (A) The Company shall have filed a registration
statement pursuant to Rule 415 under the Securities Act (the "Shelf Registration
Statement") with the Securities and Exchange Commission (the "Commission"),
which Shelf Registration Statement provides for resales of all Registrable
Securities (as such term is defined in the Registration Rights Agreement) held
by the Holder issued or issuable pursuant to this Promissory Note,

                                       12
<PAGE>

(B) such Shelf Registration Statement has been declared effective by the
Commission and is effective at the time of delivery of such Registrable
Securities pursuant to this Section 12, (C) such Shelf Registration Statement
and the related prospectus is usable for resales of Registrable Securities by
the Holder at the time of delivery of Registrable Securities pursuant to this
Section 12 (it being understood that a Shelf Registration Statement shall not be
deemed unusable because of the failure by the Holder to furnish information,
following a written request by the Company, required for inclusion therein) and
(D) such Shelf Registration Statement conforms with the requirements of the
Registration Rights Agreement and the Securities Act and the rules and
regulations of the Commission promulgated thereunder as announced from time to
time;

                   (iii) Any registration with or approval of any governmental
authority under any state law or any federal law required in connection with the
valid issuance and delivery of the Exchange Shares shall have been completed and
become effective;

                   (iv) (A) The Exchange Shares shall, subject to notice of
issuance, have been approved for quotation on the Nasdaq National Market or
listed on a national securities exchange and (B) any required approvals for
quotation of the Exchange Shares on the Nasdaq National Market (or, if the
Common Stock is then listed on a national securities exchange, any required
approvals for listing of the Exchange Shares on such exchange), shall have been
obtained;

                   (v) The Exchange Shares shall be issued out of the Company's
authorized but unissued Common Stock and shall, upon issue, be duly and validly
issued and fully paid and non-assessable and free of any preemptive or similar
rights; and

                   (vi) The Company and its Board of Directors shall have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company's
Certificate of Incorporation (or similar charter documents) or the laws of its
state of incorporation or any other jurisdiction (collectively, "Anti-Takeover
Provisions") that is or could reasonably be expected to become applicable to the
Holder as a result of the Company and the Holder fulfilling their obligations or
exercising their rights under this Promissory Note and the Registration Rights
Agreement, including, without limitation, the Company's issuance of Exchange
Shares pursuant to this Section 12 and the Holders' ownership of such Exchange
Shares. The Company agrees that no claim shall be made or enforced by the
Company that the Holder is an "Acquiring Person" (or similar triggering person)
under any shareholders rights plan or other Anti-Takeover Provision in effect or
hereafter adopted by the Company, or that the Holder could be deemed to trigger
the provisions of any such plan or arrangement, by virtue of receiving Exchange
Shares pursuant to this Section 12.

               (c) EXCHANGE PROCEDURE. Written notice (an "Exchange Notice") of
the Company's election to exchange shall be delivered to the Holder pursuant to
Section 10 hereof notifying the Holder of the exchange, specifying the principal
amount of, and accrued interest on, the Note to be exchanged, the date on which
such exchange is expected to occur and calling upon the Holder to surrender to
the Company, in the manner and at the place designated, this

                                       13
<PAGE>

Promissory Note. As soon as practicable following surrender by the Holder of
this Promissory Note, the Company shall issue and deliver to the Holder a
certificate or certificates for the number of Exchange Shares to which the
Holder shall be entitled upon such exchange (bearing such legends as are
required under applicable state and federal securities laws), together with a
new Promissory Note representing any amounts of principal and interest then
outstanding under this Promissory Note and not then exchanged and a check
payable to the Holder for any cash amounts payable as described in Section
12(d).

               (d) FRACTIONAL SHARES; EFFECT OF EXCHANGE. No fractional shares
shall be issued upon exchange of this Promissory Note. In lieu thereof, the
Company shall pay to the Holder an amount equal to the product obtained by
multiplying (i) the average of the Closing Prices Per Share of the Common Stock
for the ten (10) consecutive Trading Days immediately preceding and including
the second Trading Day prior to the Exchange Date by (ii) the fraction of a
share not issued pursuant to the previous sentence. Upon exchange of this
Promissory Note in full and the payment of the amounts specified in this Section
12(d), the Company shall be forever released from all its obligations and
liabilities under this Promissory Note (except for liabilities arising out of or
relating to the breach of any representation, warranty, covenant or agreement by
the Company contained in this Promissory Note).

               (e) SHELF REGISTRATION STATEMENT. Notwithstanding any provision
to the contrary contained in the Registration Rights Agreement, the Company
shall keep the Shelf Registration Statement continuously effective for a period
of sixty (60) days from the time of delivery of Registrable Securities pursuant
to this Section 12 and shall ensure that such Shelf Registration Statement and
the related prospectus are continuously usable during such period for resales by
the Holders of Registrable Securities.

        13.    MAXIMUM AMOUNT OF INTEREST. Notwithstanding any contrary
provision, the total liability of the Company for payment of interest hereunder
shall not exceed the maximum amount of interest permitted by law, and if any
payment made by the Company includes interest in excess of such a maximum
amount, the Holder shall at any time before or after default apply such excess
to the reduction of principal hereunder.

        14.    SET-OFF. The Company hereby authorizes the Holder upon the
occurrence of an Event of Default and at any time and from time to time during
the continuance thereof, to the fullest extent permitted by law, to set-off and
apply any and all Indebtedness at any time owing by such Holder to or for the
credit or the account of the Company against any of the obligations of the
Company, now or hereafter existing under this Promissory Note, irrespective of
whether the Holder shall have made any demand under this Promissory Note and
although such obligations may be unmatured. The rights of the Holder under this
Section 14 are in addition to other rights and remedies (including other rights
of set-off) which the Holder may have. The Holder shall give notice thereof to
the Company concurrently with or prior to the exercise of such rights; provided,
however, that failure to give such notice shall not affect the validity of such
exercise.

        15.    SEVERABILITY. The holding of any provision of this Promissory
Note to be invalid or unenforceable by a court of competent jurisdiction shall
not affect any other provisions and the other provisions of this Promissory Note
shall remain in full force and effect.

                                       14
<PAGE>

        16. GOVERNING LAW; VENUE. This Promissory Note shall be governed by and
construed and enforced in accordance with the internal laws of the State of
California. This Promissory Note shall be deemed to have been made in California
and the validity of this Promissory Note, its construction, interpretation and
enforcement, shall be determined under, governed by and construed in accordance
with the laws of California. In any court proceeding, the Company agrees to
submit to the jurisdiction of the state or federal court selected by the Holder,
and venue of any action concerning this Promissory Note or the Security
Agreement shall be in the county of Santa Clara in the State of California. The
Company hereby irrevocably waives to the fullest extent permitted by law any
objection which it may now or hereafter have to the laying of such venue and any
claim that any such forum is an inconvenient forum. Nothing in this Section 16
shall impair the right of the Holder to bring any action or proceeding against
the Company or its property in the courts of any other county or jurisdiction.

        17. EXPENSES. The Company agrees to pay all out-of-pocket expenses of
the Holder (including the reasonable fees and expenses of Sullivan & Cromwell,
as counsel for Affymetrix) in connection with the enforcement of any provision
of this Promissory Note and the Security Agreement and any amendment or
supplement hereto or thereto and the collection of this Promissory Note.

                                       15
<PAGE>

        IN WITNESS WHEREOF, the Company has caused this Promissory Note to be
issued as of the date first written above.

                                   HYSEQ, INC.,
                                   a Nevada corporation

                                   By:  /s/ GEORGE B. RATHMANN
                                      -----------------------------
                                      Name:  George B. Rathmann
                                      Title: Chairman of the Board
                                             of Directors<PAGE>
                                                                     EXHIBIT 4.9

                         REGISTRATION RIGHTS AGREEMENT

        This Registration Rights Agreement (this "Agreement") is made and
entered into as of November 13, 2001, among Hyseq, Inc., a Nevada corporation
(the "Company"), and Affymetrix, Inc. a Delaware corporation (the "Investor").

        WHEREAS, pursuant to the Preferred Stock Purchase Agreement, dated as of
the date hereof (the "Stock Purchase Agreement"), by and among Callida Genomics,
Inc., a Delaware corporation, the Investor and the Company, the Investor has
agreed to extend credit to the Company and to purchase one or more Promissory
Notes of the Company (collectively, the "Promissory Notes"); and

        WHEREAS, the extension of credit to the Company pursuant to the
Promissory Notes and the purchase of the Promissory Notes is conditioned upon
the execution and delivery by the Company of this Agreement.

        NOW THEREFORE, the Company and the Investor hereby agree as follows:

        1. DEFINITIONS.

        Terms used and not otherwise defined herein that are defined in the
Promissory Notes, shall have the meanings given such terms in the Promissory
Notes. As used in this Agreement, the following terms shall have the following
meanings:

        "Closing Date" shall have the meaning ascribed to such term in the Stock
Purchase Agreement.

        "Commission" means the United States Securities and Exchange Commission,
or any other federal agency at the time administering the Exchange Act or the
Securities Act, whichever is the relevant statute for the particular purpose.

        "Common Stock" means the Company's common stock, par value $0.001 per
share.

        "Effectiveness Date" means the 180th day following the Closing Date.

        "Effectiveness Period" shall have the meaning set forth in Section 2(a).

        "Event" shall have the meaning set forth in Section 2(b).

        "Event Date" shall have the meaning set forth in Section 2(b).

        "Event Notice Date" shall have the meaning set forth in Section 2(b).

        "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.

<PAGE>

        "Exercise Notice" shall have the meaning set forth in Section 2(b).

        "Filing Date" means the 60th day following the Closing Date.

        "Holder" means the beneficial owner of Registrable Securities. For all
purposes of this Agreement, the Company shall be permitted to treat the record
owner of Registrable Securities as the beneficial owner thereof unless the
Company has been given written notice of the existence and identity of a
different beneficial owner.

        "Indemnified Party" shall have the meaning set forth in Section 5(c).

        "Indemnifying Party" shall have the meaning set forth in Section 5(c).

        "Losses" shall have the meaning set forth in Section 5(a).

        "Materially Detrimental" means, in the good faith judgment of the Board
of Directors of the Company as set forth in a certificate signed by the
President, Chief Financial Officer or General Counsel of the Company, the filing
in question would be materially detrimental to the Company by reason of (i) any
Proceeding before, or material event involving, the Food and Drug
Administration, or (ii) any proposal or plan of the Company or any of its
subsidiaries to engage in any sale, acquisition, merger, consolidation,
reorganization, tender offer or similar transaction.

        "Note Holder" means the beneficial owner of a Promissory Note. For all
purposes of this Agreement, the Company shall be permitted to treat the record
owner of Promissory Notes as the beneficial owner thereof unless the Company has
been given written notice of the existence and identity of a different
beneficial owner.

        "Option Price" as of a specified date means the quotient obtained by
dividing (i) the aggregate principal and interest under Promissory Notes that
has theretofore been exchanged for the Option Shares and (ii) the total number
of Option Shares (as adjusted for stock splits, stock dividends,
recapitalizations and the like) theretofore issued.

        "Option Shares" shall have the meaning set forth in Section 2(b).

        "Person" shall mean an individual, corporation (including any non-profit
corporation), association, general or limited partnership, organization,
business, firm, limited liability company, joint venture, trust, estate, or
other entity, association or organization, whether constituting a separate legal
entity or not.

        "Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

        "Promissory Notes" shall have the meaning set forth in the recitals
hereto.

                                       2
<PAGE>

        "Prospectus" means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

        "Put Period" means a period of sixty (60) days commencing at the time
each Registrable Security is delivered to a Holder pursuant to the Promissory
Notes.

        "Puttable Securities" shall have the meaning set forth in Section 2(b).

        "Registrable Securities" means any Security except any Security which
(i) has been effectively registered under the Securities Act and sold in a
manner contemplated by a Registration Statement or (ii) has been transferred in
compliance with Rule 144 or is transferable pursuant to paragraph (k) of Rule
144.

        "Registration Statement" means the registration statement required to be
filed hereunder including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

        "Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.

        "Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.

        "Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.

        "Security" and "Securities" means all or any portion of the shares of
Common Stock issued or issuable from time to time in exchange for any amounts
due under the Promissory Notes; and any securities issued successively in
exchange for or in respect of any of the foregoing, whether pursuant to a merger
or consolidation, as a result of any successive stock split or reclassification
of, or stock dividend on, any of the foregoing or otherwise.

                                       3
<PAGE>

        "Securities Act" means the United States Securities Act of 1933, as
amended.

        "Special Counsel" means Sullivan & Cromwell, special counsel to the
Investor, for so long as the Investor shall be a Holder or a Note Holder.

        "Stock Purchase Agreement" shall have the meaning set forth in the
recitals hereto.

        "Trading Market" means the Nasdaq National Market or any national
securities exchange, market or trading or quotation facility on which the Common
Stock is then listed or quoted.

        2.     REGISTRATION.

               (a) On or prior to the Filing Date, the Company shall prepare and
file with the Commission a Registration Statement covering the offer and sale of
all Registrable Securities for an offering to be made on a continuous or delayed
basis by the Holders pursuant to Rule 415 (if the Company files such
Registration Statement without affording the Holders the opportunity to review
and comment on the same as required by Section 3(a) hereof, the Company shall
not be deemed to have satisfied this requirement). The Registration Statement
shall be on Form S-3 (except if such form is not then available to the Company,
in which case such registration shall be on another appropriate form in
accordance herewith) and shall contain (except if otherwise directed by the
Holders) the "Plan Of Distribution" attached hereto as Annex A. The Company
shall use commercially reasonable efforts to cause the Registration Statement to
be declared effective under the Securities Act prior to the Effectiveness Date,
and shall use commercially reasonable efforts to keep the Registration Statement
continuously effective under the Securities Act for so long as there shall
remain outstanding any Registrable Securities or any principal or interest is
outstanding under the Promissory Notes (the "Effectiveness Period"); provided,
that the Company shall not be deemed to have used its commercially reasonable
efforts to keep the Registration Statement effective during the Effectiveness
Period if it voluntarily takes any action that would result in the Holders not
being able to sell the Registrable Securities covered by such Registration
Statement during the Effectiveness Period, unless such action is required under
applicable law or the Company has filed a post-effective amendment to the
Registration Statement and the Commission has not declared it effective.

               (b) If, at any time during a Put Period, (i) a Registration
Statement ceases to be effective as to all Registrable Securities to which it is
required to relate at any time prior to the expiration of the Effectiveness
Period without being succeeded within ten Trading Days, or if it would be
Materially Detrimental, twenty Trading Days, by an amendment to such
Registration Statement or by a subsequent Registration Statement filed with and
declared effective by the Commission, (ii) an amendment to a Registration
Statement is not filed by the Company with the Commission within ten Trading
Days or if it would be Materially Detrimental, twenty Trading Days, of the
Commission's notifying the Company that such amendment is required in order for
such

                                       4
<PAGE>

Registration Statement to be declared effective, (iii) the Common Stock is not
listed or quoted, or is suspended from trading, on the Trading Market for a
period of three Trading Days in such Put Period (which need not be consecutive
Trading Days) or (iv) the Company at any time fails to comply with Section 3(l)
hereof (any such failure or breach being referred to as an "Event" and for
purposes of clauses (i) and (ii) the date on which the applicable Trading
Day-period is exceeded, or for purposes of clause (iii) the date on which such
three Trading Day period is exceeded, or for purposes of clause (iv) the date on
which the Company fails to comply with Section 3(l) hereof, being referred to as
an "Event Date"), then each Holder, in addition to such other remedies as may be
available at law, in equity or hereunder, shall have the right, at such Holder's
option, to sell to the Company all or a portion of the Registrable Securities
delivered to such Holder at the commencement of, or at any time during, the Put
Period (such Registrable Securities being referred to herein as the "Puttable
Securities") on the following terms and conditions:

               (A) The Company shall deliver each Holder written notice of each
Event within three (3) days of such Event (the date of delivery of such notice
is referred to herein as the "Event Notice Date").

               (B) Each Holder may exercise its option to sell Puttable
Securities to the Company under this Section 2(b) at any time during the period
commencing on the Event Date and ending on the date that is thirty (30) days
after the Event Notice Date, by providing written notice of such exercise to the
Company (the "Exercise Notice"), which notice shall include the number of
Puttable Securities such Holder elects to sell to the Company pursuant to this
Section 2(b) (the "Option Shares"). The delivery of an Exercise Notice by a
Holder shall constitute an irrevocable commitment by such Holder to sell, and a
binding obligation of the Company to purchase, such Holder's Option Shares on
the terms and subject to the conditions set forth in this Section 2(b).

               (C) The purchase price per Option Share to be sold to the Company
under this Section 2(b) shall be the Option Price as of the date of the Exercise
Notice.

               (D) The Company shall reimburse each Holder for any and all fees
and expenses, including reasonable legal fees and expenses, incurred pursuant to
the exercise or the attempted exercise of such Holder's rights under this
Section 2(b).

               (E) The Company shall, within three (3) days of receipt of an
Exercise Notice and receipt of the certificate or certificates for the Option
Shares to be sold by a Holder under this Section 2(b), pay to the Holder the
aggregate purchase price therefor and the amount of fees and expenses
reimbursable under this Agreement in lawful tender of the United States in
immediately available funds.

                                       5
<PAGE>

        3.     REGISTRATION PROCEDURES.

        In connection with the Company's registration obligations hereunder, the
Company shall:

               (a) Not less than (i) five Trading Days prior to the filing of
the Registration Statement or any related Prospectus, (ii) three Trading Days
prior to the filing of any pre-effective or post effective amendment to the
Registration Statement or (iii) one Trading Day prior to the filing of any
supplement to the Registration Statement (other than a prospectus supplement the
principal purpose of which is to update the list of selling stock holders), the
Company shall, (A) furnish to the Holders (or, if there is no Holder, the Note
Holders) and the Special Counsel copies of all such documents proposed to be
filed (including documents incorporated by reference and not available on the
EDGAR system) which documents will be subject to the review of such Holders (or,
if there is no Holder, the Note Holders) and the Special Counsel, and (B) cause
its officers and directors, counsel and independent certified public accountants
to respond to such inquiries as shall be necessary to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities (or, if there is no Holder, the Note Holders) and the Special Counsel
shall reasonably object in good faith.

               (b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission
such additional Registration Statements in order to register for resale under
the Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably possible, and in any event within ten Trading
Days, to any comments received from the Commission with respect to the
Registration Statement or any amendment thereto and, as promptly as reasonably
possible provide the Holders (or, if there is no Holder, the Note Holders) true
and complete copies of all correspondence from and to the Commission relating to
the Registration Statement; and (iv) promptly take such action as may be
necessary so that each of the Registration Statement and any amendment thereto
and the Prospectus and any amendment or supplement thereto comply in all
material respects with the provisions of the Securities Act and the Exchange Act
and the respective rules and regulations thereunder.

               (c) Notify the Holders of Registrable Securities to be sold (or,
if there is no Holder, the Note Holders) and the Special Counsel as promptly as
reasonably possible (and, in the case of a post-effective amendment provided for
in (i)(A) below, not less than three Trading Days prior to such filing) and (if
requested by any such Person) confirm such notice in writing no later than one
Trading Day following the day (i)(A)

                                       6
<PAGE>

when a Prospectus or any Prospectus supplement (other than a prospectus
supplement the principal purpose of which is to update the list of selling stock
holders) or post-effective amendment to the Registration Statement is proposed
to be filed; (B) when the Commission notifies the Company whether there will be
a "review" of such Registration Statement and whenever the Commission comments
in writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any
event or passage of time that makes the financial statements included in the
Registration Statement ineligible for inclusion therein or any statement made in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference and not superseded untrue in any
material respect or that requires any post-effective amendment to the
Registration Statement or Prospectus so that, in the case of the Registration
Statement or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

               (d) Use its commercially reasonable efforts to avoid the issuance
of, or, if issued, obtain the withdrawal of (i) any Commission order suspending
the effectiveness of the Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

               (e) Furnish to each Note Holder and each Holder and the Special
Counsel, without charge (i) at least one conformed copy of each Registration
Statement and each amendment thereto, including financial statements and
schedules and (ii) all documents incorporated or deemed to be incorporated
therein by reference, and all exhibits to the extent requested by such Person
(including those previously furnished or incorporated by reference) promptly
after the filing of such documents with the Commission; provided, that the
Company shall have no obligation to provide any document that is available on
the EDGAR system.

               (f) Subject to the provisions of Sections 3(c) and 6(d), the
Company (i) shall promptly deliver to each Note Holder and each Holder and the
Special Counsel, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably

                                       7
<PAGE>

request, and (ii) hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders in connection
with the offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto.

               (g) Prior to any public offering of Registrable Securities, use
its commercially reasonable efforts to register or qualify or cooperate with the
selling Holders and the Special Counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder reasonably requests
in writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a Registration Statement;
provided, that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or subject the
Company to any material tax in any such jurisdiction where it is not then so
subject.

               (h) Cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as any such Holders may request.

               (i) Upon the occurrence of any event contemplated by Section
3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither the Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

               (j) Comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after (i) the
effective date (as defined in Rule 158(c) under the Securities Act) of the
Registration Statement, (ii) the effective date of each post-effective amendment
to the Registration Statement, and (iii) the date of each filing by the Company
with the Commission of an Annual Report on Form 10-K that is incorporated by
reference in the Registration Statement, an earning statement of the Company and
its subsidiaries complying with Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158).

                                       8
<PAGE>

               (k) The Company may require each selling Holder to furnish to the
Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if requested by the Commission, the
controlling person thereof.

               (l) Notwithstanding any provision to the contrary contained in
this Agreement, keep the Registration Statement continuously effective for a
period of not less than sixty (60) days from each time of delivery of
Registrable Securities pursuant to the Promissory Note and ensure that such
Registration Statement and the related Prospectus are continuously usable during
such period for resales by the Holders of Common Stock.

               (m) Use its commercially reasonable efforts to take all other
steps necessary to effect the registration and offering of the Registrable
Securities covered by the Registration Statement contemplated hereby.

        4.     REGISTRATION EXPENSES.

        All fees and expenses incident to the performance of or compliance with
this Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
Trading Market on which the Common Stock is then listed for trading, and (B) in
compliance with applicable state securities or Blue Sky laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company, (v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.

        5.     INDEMNIFICATION.

        (a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a

                                       9
<PAGE>

margin call of Common Stock), investment advisors and employees of each of them,
each Person who controls any such Holder (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable costs of
preparation and reasonable attorneys' fees) and expenses (collectively,
"Losses"), as incurred, arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Prospectus or in any amendment or supplement thereto or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or supplement thereto, in light of the circumstances under which they
were made) not misleading, except to the extent, but only to the extent, that
(i) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or in any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (ii) the use by such Holder of an
outdated or defective Prospectus after the Company has notified such Holder in
writing that the Prospectus is outdated or defective and prior to the receipt by
such Holder of the Advice contemplated in Section 6(d). The Company shall notify
the Holders promptly of the institution, threat or assertion of any Proceeding
of which the Company is aware in connection with the transactions contemplated
by this Agreement.

               (b) Indemnification by Holders. Each Holder shall, severally and
not jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon: (i) such Holder's failure
to comply with the prospectus delivery requirements of the Securities Act
(provided that the Company has delivered a Prospectus to such Holder or a
Prospectus is otherwise available via the EDGAR system) or (ii) any untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or in any amendment or supplement thereto, or arising solely out of
or based solely upon any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information so furnished in writing by such Holder to the
Company specifically for inclusion in such Registration Statement or such
Prospectus or to the extent that (A) such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and

                                       10
<PAGE>

was reviewed and expressly approved in writing by such Holder expressly for use
in the Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or in any amendment or
supplement thereto or (B) the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
the Advice contemplated in Section 6(d). In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.

               (c) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity hereunder
(an "Indemnified Party"), such Indemnified Party shall promptly notify the
Person from whom indemnity is sought (the "Indemnifying Party") in writing, and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, that the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party. An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (ii) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (iii) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
in writing by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Party and the Indemnifying Party (in
which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the defense
thereof and such counsel shall be at the expense of the Indemnifying Party);
provided, that the Indemnifying Party shall not be liable for the fees and
expenses of more than one separate firm of attorneys at any time for all
indemnified parties. The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding. All fees
and expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within

                                       11
<PAGE>

ten Trading Days of written notice and reasonable documentation thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; provided, that
the Indemnified Party shall reimburse all such fees and expenses to the extent
it is finally judicially determined that such Indemnified Party is not entitled
to indemnification hereunder).

               (d) Contribution. If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy
or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms. The parties hereto agree that it would
not be just and equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in this Section
5(d). No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Notwithstanding
the provisions of this Section 5(d), no Holder shall be required to contribute,
in the aggregate, any amount in excess of the amount by which the proceeds
actually received by such Holder from the sale of the Registrable Securities
subject to the Proceeding exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.

               (e) The indemnity and contribution agreements contained in this
Section 5 are in addition to any liability that the Indemnifying Parties may
have to the Indemnified Parties. The remedies provided in this Section 5 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.

                                       12
<PAGE>

        6.     MISCELLANEOUS.

               (a) Remedies. In the event of a breach by the Company or by the
Investor or by a Holder of any of their obligations under this Agreement, the
Investor, each Holder or the Company, as the case may be, in addition to being
entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company, the Investor and each Holder agree
that monetary damages would not provide adequate compensation for any losses
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.

               (b) No Piggyback on Registrations. Neither the Company nor any of
its security holders (other than the Holders in such capacity pursuant hereto)
may include securities of the Company in the Registration Statement other than
the Registrable Securities, and the Company shall not after the date hereof
enter into any agreement providing any such right to any of its security
holders.

               (c) Compliance. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement, provided that the Company has delivered a Prospectus
to such Holder or a Prospectus is otherwise available via the EDGAR system.

               (d) Discontinued Disposition. Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a notice from
the Company of the occurrence of any event of the kind described in Section 3(c)
but subject to Section 3(l), such Holder will forthwith discontinue disposition
of such Registrable Securities under the Registration Statement until such
Holder's receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.

               (e) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities and the Company shall determine to prepare and
file with the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents relating to equity securities to
be issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee

                                       13
<PAGE>

benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen days after receipt of such notice, any such
Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
holder requests to be registered, subject to customary underwriter cutbacks
applicable to all holders of registration rights.

               (f) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of the then outstanding Registrable Securities (or, if there is
no Holder, the Note Holders). Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of certain Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.

               (g) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder 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 telephone number specified in this Section prior to 6:30 p.m. (New
York City time) on a Trading Day, (ii) the Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Agreement later than 6:30 p.m. (New
York City time) on any date and earlier than 11:59 p.m. (New York City time) on
such date, (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 address for such
notices and communications shall be as follows:

         If to the Company:     HYSEQ, Inc.
                                670 Almanor Avenue,
                                Sunnyvale, California 94085
                                Facsimile No.:  (408) 524-8141
                                Attn: General Counsel

         With a copy to:        Latham & Watkins
                                135 Commonwealth Drive
                                Menlo Park, California 94025
                                Attn: Alan C. Mendelson
                                Facsimile No.:  (650) 463-2600

                                       14
<PAGE>

         If to the Investor:    Affymetrix, Inc.
                                3380 Central Expressway
                                Santa Clara, California 95051
                                Attn: General Counsel
                                Facsimile No.:

         With a copy to:        Sullivan & Cromwell
                                1870 Embarcadero Road
                                Palo Alto, California 94303
                                Attention:  John L. Savva, Esq.
                                Facsimile No.:  (650) 461-5700

        If to any other Person who is then a registered Holder:

        To the address of such Holder as it appears in the stock transfer books
of the Company or such other address as may be designated in writing hereafter,
in the same manner, by such Person.

               (h) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder of the then outstanding Registrable Securities (or, if there is no
Holder, the Note Holders). Each Note Holder and each Holder may assign their
respective rights hereunder in the manner and to the Persons as permitted under
the Promissory Notes.

               (i) Execution and Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.

               (j) Governing Law. 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

                                       15
<PAGE>

(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 an 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
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.

               (k) Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.

               (l) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

               (m) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

               (n) Survival. The respective indemnities, agreements,
representations, warranties and other provisions set forth in this Agreement or
made pursuant hereto shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Holder, any director, officer or partner of such Holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or
any controlling person of any of the foregoing, and shall survive the transfer
and registration of the Registrable Securities of such Holder.

                                       16
<PAGE>

               (o) Independent Nature of Holders' Obligations and Rights. The
obligations of each Holder hereunder is several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible in
any way for the performance of the obligations of any other Holder hereunder.
Nothing contained herein or in any other agreement or document delivered at any
closing, and no action taken by any Holder pursuant hereto or thereto, shall be
deemed to constitute the Holders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holders
are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Holder shall be entitled to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary for any other Holder to be
joined as an additional party in any proceeding for such purpose.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                           SIGNATURE PAGES TO FOLLOW]

                                       17
<PAGE>

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

                                       HYSEQ, INC.

                                       By /s/ PETER S. GARCIA
                                          -------------------------------------
                                          Name:  Peter S. Garcia
                                          Title: Sr. VP & CFO

                                       AFFYMETRIX, INC.

                                       By: /s/ BARBARA A. CAULFIELD
                                           -------------------------------------
                                           Name:  Barbara A. Caulfield
                                           Title: Exec. V.P. and General Counsel

<PAGE>

                                                                         Annex A

                              PLAN OF DISTRIBUTION

        The common stock is being registered to permit public secondary trading
of these securities by the holders thereof from time to time after the date of
this prospectus. The Company will not receive any of the proceeds from the
offering of the common stock by selling securityholders.

        The selling securityholders, including their pledgees or donees, may
sell the common stock directly to purchasers or through underwriters,
broker-dealers or agents. If the common stock is sold through underwriters or
broker-dealers, the selling securityholder will be responsible for underwriting
discounts or commissions or agent's commissions. These discounts, concessions or
commissions as to any particular underwriter, broker-dealer or agent may be in
excess of those customary in the types of transactions involved.

        The common stock may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale, or at negotiated prices. Such sales may be
effected in transactions, which may involve block transactions:

        -      on any national securities exchange or quotation service on which
               the common stock may be listed or quoted at the time of sale;

        -      in the over-the-counter market;

        -      in transactions otherwise than on such exchanges or services or
               in the over-the-counter market; or

        -      through the writing of options.

        In connection with sales of the common stock or otherwise, the selling
securityholders may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the common stock in the course of hedging
the positions they assume. The selling securityholders may also sell short the
common stock and deliver the common stock to close out short positions, or loan
or pledge the common stock to broker-dealers that in turn may sell such
securities.

        The aggregate proceeds to the selling securityholders from the sale of
the common stock offered by them hereby will be the purchase price of the common
stock less discounts and commissions, if any. Each of the selling
securityholders reserves the right to accept and, together with their agents
from time to time, to reject, in whole or in part, any proposed purchase of
common stock to be made directly or through agents. The Company will not receive
any of the proceeds from this offering.

                                      A-1
<PAGE>

        In order to comply with the securities laws of some states, if
applicable, the common stock may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states the
common stock may not be sold unless it has been registered or qualified for sale
or an exemption from registration or qualification requirements is available and
is complied with.

        The selling securityholders and any underwriters, broker-dealers or
agents that participate in the sale of the common stock may be "underwriters"
within the meaning of Section 2(11) of the Securities Act. Any discounts,
commissions, concessions or profit they earn on any resale of the shares may be
underwriting discounts and commissions under the Securities Act. Selling
securityholders who are "underwriters" within the meaning of Section 2(11) of
the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act. The selling securityholders have acknowledged that they
understand their obligations to comply with the provisions of the Exchange Act
and the rules thereunder relating to stock manipulation, particularly Regulation
M.

        In addition, any securities covered by this prospectus that qualify for
sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144
rather than pursuant to this prospectus. A selling securityholder may not sell
any common stock described in this prospectus and may not transfer, devise or
gift these securities by other means not described in this prospectus.

        To the extent required, the specific common stock to be sold, the names
of the selling securityholders, the respective purchase prices and public
offering prices, the names of any agent, dealer or underwriter and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement of which this prospectus
is a part.

        The Company entered into a registration rights agreement for the benefit
of the selling securityholders to register their common stock under applicable
federal and state securities laws under specific circumstances and at specific
times. The registration rights agreement provides for cross-indemnification of
the selling securityholders and the Company and their and the Company's
respective directors, officers and controlling persons against specific
liabilities in connection with the offer and sale of the common stock, including
liabilities under the Securities Act. The Company has agreed, among other
things, to bear all expenses (other than underwriting discounts and selling
commissions) in connection with the registration and sale of the common stock
covered by this prospectus.

                                      A-2

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