Document:

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                                                                     EXHIBIT 4.2

                                                                   NO. PAW-____

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

                     WARRANT TO PURCHASE ___________ SHARES
                         OF SERIES A PREFERRED STOCK OF
                              DECODE GENETICS, INC.
                            (VOID AFTER ___________)

         This certifies that _________________________ or its assigns (the
"Holder"), for value received, is entitled to purchase from deCODE genetics,
Inc., a Delaware corporation (the "Company"), a maximum of __________ fully paid
and nonassessable shares of the Company's Series A Preferred Stock ("Preferred
Stock") for cash at a price of $_________ per share (the "Stock Purchase Price")
at any time or from time to time up to and including 5:00 p.m. (Pacific time) on
____________________ (the "Expiration Date"), upon surrender to the Company at
its principal office (or at such other location as the Company may advise the
Holder in writing) of this Warrant properly endorsed with the Form of
Subscription attached hereto duly filled in and signed and, if applicable, upon
payment in cash or by check of the aggregate Stock Purchase Price for the number
of shares for which this Warrant is being exercised determined in accordance
with the provisions hereof. The Company shall deliver notice of the Initial
Public Offering to the Holder at least 30 days prior to the closing thereof. The
Stock Purchase Price and the number of shares purchasable hereunder are subject
to adjustment as provided in Section 3 of this Warrant.

         This Warrant is subject to the following terms and conditions:

         1.       EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.

                  1.1 GENERAL. This Warrant is exercisable at the option of the
holder of record hereof, at any time or from time to time, up to the Expiration
Date for all or any part of the shares of Preferred Stock (but not for a
fraction of a share) which may be purchased hereunder. The Company agrees that
the shares of Preferred Stock purchased under this Warrant shall be and are
deemed to be issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered, properly endorsed, the completed, executed Form of Subscription
delivered and payment made for such shares. Certificates for the shares of
Preferred Stock so purchased, together with any other securities or property to
which the Holder hereof is entitled upon such exercise. shall be delivered to
the Holder hereof by the Company at the Company's expense within a reasonable
time after the rights represented by this Warrant have been so exercised. In
case of a purchase of less than all the shares which may be purchased under this
Warrant, the Company shall cancel this Warrant and execute and deliver a new
Warrant or Warrants of like tenor for the balance of the shares purchasable
under the Warrant surrendered upon such purchase to the Holder hereof within a
reasonable time. Each stock certificate so delivered shall be in such
denominations of Preferred Stock as may be requested by the Holder hereof and
shall be registered in the name of such Holder.

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                  1.2 NET ISSUE EXERCISE. Notwithstanding any provisions herein
to the contrary, if the fair market value of one share of the Company's
Preferred Stock is greater than the Stock Purchase Price (at the date of
calculation as set forth below), in lieu of exercising this Warrant for cash,
the Holder may elect to receive shares equal to the value (as determined below)
of this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the principal office of the Company together with the properly
endorsed Form of Subscription and notice of such election in which event the
Company shall issue to the Holder a number of shares of Preferred Stock computed
using the following formula:

                           X = Y (A-B)
                           -----------
                                A

         Where      X =      the number of shares of Preferred Stock to be
                             issued to the Holder

                    Y =      the number of shares of Preferred Stock
                             purchasable under the Warrant or, if only a
                             portion of the Warrant is being exercised,
                             the portion of the Warrant being canceled
                             (at the date of such calculation)

                    A =      the fair market value of one share of the Company's
                             Preferred Stock (at the date of such calculation)

                    B =      Stock Purchase Price (as adjusted to the date of
                             such calculation)

For purposes of the above calculation, fair market value of one share of
Preferred Stock shall be determined by the Company's Board of Directors in good
faith; provided, however, that in the event the Company makes an initial public
offering of its Common Stock the fair market value at such time per share shall
be the product of (i) the per share offering price to the public of the
Company's initial public offering, and (ii) the number of shares of Common Stock
into which each share of Preferred Stock is convertible at the time of such
exercise.

         2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company
covenants and agrees that all shares of Preferred Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that, during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Preferred Stock, or other securities and property, when and as required
to provide for the exercise of the rights represented by this Warrant. The
Company will take all such action as may be necessary to assure that such shares
of Preferred Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Preferred Stock may be listed; provided, however, that
the Company shall not be required to effect a registration under Federal or
State securities laws with respect to such exercise. The Company will not take
any action which would result in any adjustment of the Stock Purchase Price (as
set forth in Section 3 hereof) (i) if the total number of shares of Preferred
Stock issuable after such action upon exercise of all outstanding warrants,
together with all shares of Preferred Stock then outstanding and all shares of
Preferred Stock then issuable upon exercise of all options and upon the
conversion of all convertible securities then outstanding, would exceed the
total number of shares of Preferred Stock then authorized by the Company's
Restated Certificate of Incorporation, or (ii) if the total number of shares of
Common Stock issuable after such action upon the conversion of all such shares
of Preferred Stock, together

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with all shares of Common Stock then issuable upon exercise of all options and
upon the conversion of all such shares of Preferred Stock, together with all
shares of Common Stock then outstanding and all shares of Common Stock then
issuable upon exercise of all options and upon the conversion of all convertible
securities then outstanding would exceed the total number of shares of Common
Stock then authorized by the Company's Amended and Restated Articles of
Incorporation.

         3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.

                  3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company
shall at any time subdivide its outstanding shares of Preferred Stock into a
greater number of shares, the Stock Purchase Price in effect immediately prior
to such subdivision shall be proportionately reduced, and conversely, in case
the outstanding shares of Preferred Stock of the Company shall be combined into
a smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.

                  3.2 DIVIDENDS IN PREFERRED STOCK, OTHER STOCK, PROPERTY,
RECLASSIFICATION. If at any time or from time to time the Holders of Preferred
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,

                      (A)      Preferred Stock or any shares of stock or other
                               securities which are at any time directly or
                               indirectly convertible into or exchangeable for
                               Preferred Stock, or any rights or options to
                               subscribe for, purchase or otherwise acquire any
                               of the foregoing by way of dividend or other
                               distribution,

                      (B)      any cash paid or payable otherwise than as a cash
                               dividend, or

                      (C)      Preferred Stock or additional stock or other
                               securities or property (including cash) by way of
                               spinoff, split-up, reclassification, combination
                               of shares or similar corporate rearrangement,
                               (other than shares of Preferred Stock issued as a
                               stock split or adjustments in respect of which
                               shall be covered by the terms of Section 3.1
                               above), then and in each such case, the Holder
                               hereof shall, upon the exercise of this Warrant,
                               be entitled to receive, in addition to the number
                               of shares of Preferred Stock receivable
                               thereupon. and without payment of any additional
                               consideration therefor, the amount of stock and
                               other securities and property (including cash in
                               the cases referred to in clause (b) above and
                               this clause (c)) which such Holder would hold on
                               the date of such exercise had he been the holder
                               of record of such Preferred Stock as of the date
                               on which holders of Preferred Stock received or
                               became entitled to receive such shares or all
                               other additional stock and other securities and
                               property.

                  3.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. If any recapitalization, reclassification or reorganization of the capital
stock of the Company (including any automatic conversion of outstanding shares
of the Preferred Stock), or any consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets or
other transaction shall be effected in such a way that holders of Preferred
Stock shall be entitled to receive stock, securities, or other assets or
property (an "Organic Change"), then, as a condition of such Organic Change,
lawful and adequate

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provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of the
Preferred Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby) such shares of
stock, securities or other assets or property as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Preferred
Stock equal to the number of shares of such stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby;
provided, however, that in the event the value of the stock, securities or other
assets or property (determined in good faith by the Board of Directors of the
Company) issuable or payable with respect to one share of the Preferred Stock of
the Company immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby is in excess of the Stock Purchase Price hereof
effective at the time of a merger and securities received in such
reorganization, if any, are publicly traded, then this Warrant shall expire
unless exercised prior to such Organic Change. In the event of any Organic
Change, appropriate provision shall be made by the Company with respect to the
rights and interests of the Holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Stock Purchase Price and of the number of shares purchasable and receivable
upon the exercise of this Warrant) shall thereafter be applicable, in relation
to any shares of stock, securities or assets thereafter deliverable upon the
exercise hereof. The Company will not effect any such consolidation, merger or
sale unless, prior to the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or the corporation
purchasing such assets shall assume by written instrument reasonably
satisfactory in form and substance to the Holders of a majority of the warrants
to purchase Series A Preferred Stock then outstanding, executed and mailed or
delivered to the registered Holder hereof at the last address of such Holder
appearing on the books of the Company, the obligation to deliver to such Holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such Holder may be entitled to purchase.

                  3.4 CERTAIN EVENTS. If any change in the outstanding Preferred
Stock of the Company or any other event occurs as to which the other provisions
of this Section 3 are not strictly applicable or if strictly applicable would
not fairly protect the purchase rights of the Holder of the Warrant in
accordance with such provisions, then the Board of Directors of the Company
shall make an adjustment in the number and class of shares available under the
Warrant, the Stock Purchase Price or the application of such provisions, so as
to protect such purchase rights as aforesaid. The adjustment shall be such as
will give the Holder of the Warrant upon exercise for the same aggregate Stock
Purchase Price the total number, class and kind of shares as he would have owned
had the Warrant been exercised prior to the event and had he continued to hold
such shares until after the event requiring adjustment.

                  3.5      NOTICES OF CHANGE.

                           (A)      Immediately upon any adjustment in the
number or class or shares subject to this Warrant and of the Stock Purchase
Price, the Company shall give written notice thereof to the Holder, setting
forth in reasonable detail and certifying the calculation of such adjustment.

                           (B)      The Company shall give written notice to the
Holder at least 10 business days prior to the date on which the Company closes
its books or takes a record for determining rights to receive any dividends or
distributions.

                           (C)      The Company shall also give written notice
to the Holder at least 30 business days prior to the date on which an Organic
Change shall take place.

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         4. ISSUE TAX. The issuance of certificates for shares of Preferred
Stock upon the exercise of the Warrant shall be made without charge to the
Holder of the Warrant for any issue tax (other than any applicable income taxes)
in respect thereof, provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.

         5. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any warrant or of any shares of Preferred Stock
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.

         6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a shareholder of
the Company or any other matters or any rights whatsoever as a shareholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
holder to purchase shares of Preferred Stock, and no mere enumeration herein of
the rights or privileges of the holder hereof, shall give rise to any liability
of such Holder for the Stock Purchase Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by its creditors.

         7. WARRANTS TRANSFERABLE. Subject to compliance with applicable federal
and state securities laws, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the holder hereof (except
for transfer taxes), upon surrender of this Warrant properly endorsed. Each
taker and holder of this Warrant, by taking or holding the same, consents and
agrees that this Warrant, when endorsed in blank, shall be deemed negotiable,
and that the holder hereof, when this Warrant shall have been so endorsed, may
be treated by the Company, at the Company's option, and all other persons
dealing with this Warrant as the absolute owner hereof for any purpose and as
the person entitled to exercise the rights represented by this Warrant, or to
the transfer hereof on the books of the Company any notice to the contrary
notwithstanding; but until such transfer on such books, the Company may treat
the registered owner hereof as the owner for all purposes.

         8. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Preferred Stock issued upon exercise of this Warrant, referred to in
Section 7 shall survive the exercise of this Warrant.

         9. MODIFICATION AND WAIVER. This Warrant and any provision hereof may
be changed, discharged or terminated only by an instrument in writing signed by
the party against which enforcement of the same is sought.

         10. NOTICES. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the Company at
the address indicated therefore in the first paragraph of this Warrant or such
other address as either may from time to time provide to the other.

         11. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets. All of the obligations of
the Company relating to the Preferred Stock issuable upon the exercise of

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this Warrant shall survive the exercise and termination of this Warrant. All of
the covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof.

         12. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.

         13. LOST WARRANTS. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.

         14. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Stock Purchase Price.

                      [THIS SPACE INTENTIONALLY LEFT BLANK]

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         IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officer, thereunto duly authorized this ____ day of __________,

                                              DECODE GENETICS, INC.
                                              a Delaware corporation

                                              By:
                                                   Kari Stefansson
                                                   President and Secretary

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                                    EXHIBIT A

                                SUBSCRIPTION FORM

                                                              Date:

deCODE genetics, Inc.

Attn:  President

Ladies and Gentlemen:

:        The undersigned hereby elects to exercise the warrant issued to it by
         deCODE genetics, Inc. (the "Company") and dated ______________, Warrant
         No. PAW-9, (the "Warrant") and to purchase thereunder ___________
         shares of the Series A Preferred Stock of the Company (the "Shares") at
         a purchase price of ______________ per Share or an aggregate purchase
         price of $________________ (the "Purchase Price").

:        The undersigned hereby elects to convert percent ( %) of the value of
         the Warrant pursuant to the provisions of Section 1.2 of the Warrant.

         Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price herewith in full in cash or by certified check or wire transfer.
The undersigned also makes the representations set forth on the attached Exhibit
B of the Warrant.

                                                     Very truly yours,

                                                     By:

                                                     Title:

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                                    EXHIBIT B

                            INVESTMENT REPRESENTATION

THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO DECODE GENETICS, INC.
ALONG WITH THE SUBSCRIPTION FORM BEFORE THE PREFERRED STOCK ISSUABLE UPON
EXERCISE OF THE WARRANT DATED _______________, WILL BE ISSUED.

                                                    Date:

deCODE genetics, Inc.

Attn:  President

Ladies and Gentlemen:

         The undersigned, __________________________ ("Purchaser"), intends to
acquire up to shares of the Series A Preferred Stock (the "Preferred Stock") of
deCODE genetics, Inc. (the "Company") from the Company pursuant to the exercise
or conversion of certain Warrants to purchase Preferred Stock held by Purchaser.
The Preferred Stock will be issued to Purchaser in a transaction not involving a
public offering and pursuant to an exemption from registration under the
Securities Act of 1933, as amended (the "1933 Act") and applicable state
securities laws. In connection with such purchase and in order to comply with
the exemptions from registration relied upon by the Company, Purchaser
represents, warrants and agrees as follows:

         Purchaser is acquiring the Preferred Stock for its own account, to hold
for investment, and Purchaser shall not make any sale, transfer or other
disposition of the Preferred Stock in violation of the 1933 Act or the General
Rules and Regulations promulgated thereunder by the Securities and Exchange
Commission (the "SEC") or in violation of any applicable state securities law.

         Purchaser has been advised that the Preferred Stock has not been
registered under the 1933 Act or state securities laws on the ground that this
transaction is exempt from registration, and that reliance by the Company on
such exemptions is predicated in part on Purchaser's representations set forth
in this letter.

         Purchaser has been informed that under the 1933 Act, the Preferred
Stock must be held indefinitely unless it is subsequently registered under the
1933 Act or unless an exemption from such registration (such as Rule 144) is
available with respect to any proposed transfer or disposition by Purchaser of
the Preferred Stock. Purchaser further agrees that the Company may refuse to
permit Purchaser to sell, transfer or dispose of the Preferred Stock (except as
permitted under Rule 144) unless there is in effect a registration statement
under the 1933 Act and any applicable state securities laws covering such
transfer, or unless Purchaser furnishes an opinion of counsel reasonably
satisfactory to counsel for the Company, to the effect that such registration is
not required.

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         Purchaser also understands and agrees that there will be placed on the
certificate(s) for the Preferred Stock, or any substitutions therefor, a legend
stating in substance:

         "The shares represented by this certificate have not been registered
         under the Securities Act of 1933, as amended (the "Securities Act"), or
         any state securities laws. These shares have been acquired for
         investment and may not be sold or otherwise transferred in the absence
         of an effective registration statement for these shares under the
         Securities Act and applicable state securities laws, or an opinion of
         counsel satisfactory to the Company that registration is not required
         and that an applicable exemption is available."

         Purchaser has carefully read this letter and has discussed its
requirements and other applicable limitations upon Purchaser's resale of the
Preferred Stock with Purchaser's counsel.

                                                     Very truly yours,

                                                     By:

                                                     Title:<PAGE>   1
                                                                     EXHIBIT 4.3

                                                                   No. PCW-_____

THE SECURITIES REPRESENTED HEREBY, AND THE SECURITIES TO BE ISSUED UPON THE
EXERCISE OF THE SECURITIES REPRESENTED HEREBY, HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS
NOT REQUIRED.

THE SECURITIES REPRESENTED HEREBY, AND THE SECURITIES TO BE ISSUED UPON THE
EXERCISE OF THE SECURITIES REPRESENTED HEREBY, MAY NOT BE OFFERED, SOLD OR
TRANSFERRED IN THE UNITED STATES OR TO U.S. PERSONS UNTIL REGISTERED UNDER THE
ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

TRANSFER OF THE SECURITIES REPRESENTED HEREBY, OR OF THE SECURITIES TO BE ISSUED
UPON THE EXERCISE OF THE SECURITIES REPRESENTED HEREBY, IS PROHIBITED EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED PURSUANT TO THE ACT.

THE SECURITIES REPRESENTED HEREBY MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY
U.S. PERSON UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.

THE EXERCISE OF THIS WARRANT, AND THE DELIVERY OF SECURITIES THEREUPON, ARE
SUBJECT TO FURTHER CONDITIONS IMPOSED BY UNITED STATES SECURITIES LAWS. SEE
SECTION 14.

                     Warrant to Purchase __________ Shares
                         of Series C Preferred Stock of
                             deCODE genetics, Inc.
                            (Void after __________)

         This certifies that Roche Finance Ltd, a Swiss company having a place
of business at 124 Grenzacherstrasse CH-4070, Basel, Switzerland, or its
assigns, (the "Holder"), for value received, is entitled to purchase from deCODE
genetics Inc., a Delaware, USA corporation (the "Company"), having a place of
business at Lynghalsi 1, IS-110 Reykjavik, Iceland, a maximum of __________
fully paid and nonassessable shares of the Series C Preferred Stock of the
Company ("Series C Preferred Stock") for cash at a price of $_____ per share
(the "Preferred Stock Purchase Price") at any time or from time to time up to
and including 5:00 p.m. (New York time) on _________ [the date that is nine (9)
years from after the issue date of the Warrant] (the "Expiration Date"), upon
surrender to the Company at its principal office (or at such other location as
the Company may advise the Holder in writing) of this Warrant properly endorsed
with the Form of Subscription attached hereto duly filled

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in and signed and, if applicable, upon payment in cash or by check of the
aggregate Preferred Stock Purchase Price for the number of shares for which this
Warrant is being exercised, determined in accordance with the provisions hereof.
The Preferred Stock Purchase Price and the number and class of shares
purchasable hereunder are subject to adjustment as provided in Section 3 of this
Warrant.

         This Warrant is subject to the following terms and conditions:

1.       EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.

         1.1 General. This Warrant is exercisable at the option of the Holder of
record hereof, at any time or from time to time, up to the Expiration Date for
all or any part of the shares of Series C Preferred Stock (but not for a
fraction of a share) which may be purchased hereunder. The Company agrees that
the shares of Series C Preferred Stock purchased under this Warrant shall be
deemed to be issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered, properly endorsed, the completed, executed Form of Subscription
delivered and payment made for such shares. Certificates for the shares of
Series C Preferred Stock so purchased, together with any other securities or
property to which the Holder hereof is entitled upon such exercise, shall be
delivered to the Holder hereof by the Company at the Company's expense within a
reasonable time after the rights represented by this Warrant have been so
exercised. In case of a purchase of less than all the shares which may be
purchased under this Warrant, the Company shall cancel this Warrant and execute
and deliver a new Warrant or Warrants of like tenor for the balance of the
shares purchasable under this Warrant surrendered upon such purchase to the
Holder hereof within a reasonable time. Each stock certificate so delivered
shall be in such denominations of Series C Preferred Stock as may be requested
by the Holder hereof and shall be registered in the name of such Holder.

         1.2 Net Issue Exercise. Notwithstanding any provision herein to be
contrary, if the fair market value of one share of the Series C Preferred Stock
is greater than the Preferred Stock Purchase Price (at the date of calculation
as set forth below), then in lieu of exercising this Warrant for cash, the
Holder may elect to receive shares of Series C Preferred Stock equal to the
value (as determined below) of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
(or at such other location as the Company may advise the Holder in writing)
together with the properly endorsed Form of Subscription and notice of such
election, in which event the Company shall issue to the Holder a number of
shares of Series C Preferred Stock computed using the following formula:

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                                     Y (A - B)
                                 X = -----------
                                        A

     Where:

               X = the number of shares of Series C Preferred Stock to be issued
                   to the Holder

               Y = the number of shares of Series C Preferred Stock purchasable
                   under this Warrant or, if only a portion of this Warrant is
                   being exercised, the portion of this Warrant being canceled
                   (at the date of such calculation)

               A = the fair market value of one share of the Company's Series C
                   Preferred Stock (at the date of such calculation)

               B = Preferred Stock Purchase Price (as adjusted to the date of
                   such calculation)

For purposes of the above calculation, fair market value of one share of Series
C Preferred Stock shall be determined by the Company's Board of Directors in
good faith; provided, however, that in the event the Common Stock of the
Company, par value $0.001 per share (the "Common Stock") is publicly traded, the
fair market value per share on the date of exercise shall be the product of (i)
the average of the closing sales prices of the Common Stock (or the closing bid,
if no sales were reported) as quoted on the Nasdaq National Market, or if the
Common Stock is not then quoted on Nasdaq, on such other established exchange or
national system on which the Common Stock is listed, over the twenty (20)
business days preceding the date of exercise, and (ii) the number of shares of
Common Stock into which each share of Series C Preferred Stock is convertible at
the time of such exercise.

2.       SHARES TO BE FULLY PAID; RESERVATION OF SHARES.

                                      -3-
<PAGE>   4

         The Company covenants and agrees that all shares of Series C Preferred
Stock which may be issued upon the exercise of the rights represented by this
Warrant will, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable and free from all preemptive rights of any stockholder and free of
all taxes, liens and charges with respect to the issue thereof. The Company
further covenants and agrees that, during the period within which the rights
represented by this Warrant may be exercised, the Company will at all times have
authorized and reserved, for the purpose of issue or transfer upon exercise of
the subscription rights evidenced by this Warrant, a sufficient number of shares
of authorized but unissued Series C Preferred Stock, or other securities and
property, when and as required to provide for the exercise of the rights
represented by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Series C Preferred Stock may be issued
as provided herein without violation of any applicable United States federal or
state law or regulation, or of any requirements of any domestic stock exchange
upon which the Series C Preferred Stock may be listed; provided, however, that
the Company shall not be required to effect a registration under United States
federal or state securities laws with respect to such exercise. The Company will
not take any action which would result in any adjustment of the Preferred Stock
Purchase Price under Section 3 if: (i) the total number of shares of Series C
Preferred Stock issuable after such action upon exercise of all outstanding
warrants, together with all shares of Series C Preferred Stock then outstanding
and all shares of Series C Preferred Stock then issuable upon exercise of all
options and upon the conversion of all convertible securities then outstanding,
would exceed the total number of shares of Series C Preferred Stock then
authorized by the Company's Certificate of Incorporation as in effect from time
to time (the "Certificate of Incorporation"), or (ii) the total number of shares
of Common Stock issuable after such action upon the conversion of all such
shares of Series C Preferred Stock, together with all shares of Common Stock
then issuable upon exercise of all options and upon the conversion of all such
shares of Series C Preferred Stock, together with all shares of Common Stock
then outstanding and all shares of Common Stock then issuable upon exercise of
all options and upon the conversion of all convertible securities then
outstanding would exceed the total number of shares of Common Stock then
authorized by the Certificate of Incorporation.

                                      -4-
<PAGE>   5

3.       ADJUSTMENT OF WARRANT RIGHTS.

         3.1      Upon Conversion of Series C Preferred Stock.

                  (a) Warrant Exercisable for Common Stock. In the event that
all of the outstanding Series C Preferred Stock is, at any time prior to the
Expiration Date, converted in accordance with the Certificate of Incorporation
into shares of Common Stock, then this Warrant shall immediately become
exercisable for that number of shares of Common Stock equal to the number of
shares of Common Stock that would have been received if this Warrant had been
exercised in full and the shares of Series C Preferred Stock received thereupon
had been simultaneously converted into Common Stock immediately prior to such
event. In such event, the Common Stock purchase price (the "Common Stock
Purchase Price") per share shall equal the quotient obtained by dividing (i) the
aggregate Preferred Stock Purchase Price of the number of shares of Series C
Preferred for which this Warrant was exercisable immediately prior to such event
by (ii) the number of shares of Common Stock for which this Warrant is
exercisable immediately after such event.

                  (b) Adjustments to Common Stock. If, at any time following the
conversion of all of the Series C Preferred Stock and prior to the Expiration
Date, there is any change in the Common Stock by reason of stock dividends,
splits, subdivisions, combinations or the like the number of shares of Common
Stock subject to this Warrant pursuant to Section 3.1(a) shall be appropriately
adjusted in proportion to such increase or decrease in outstanding shares of
Common Stock, and the Common Stock Purchase Price per share shall be
appropriately adjusted so that the total Common Stock Purchase Price payable
upon exercise of this Warrant in full shall remain unchanged.

         3.2 Prior to Conversion of Series C Preferred. The Preferred Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant prior to the conversion of all of the outstanding Series C Preferred
shall be subject to adjustment from time to time upon the occurrence of certain
events described in this Section 3.2. Upon each adjustment of the Preferred
Stock Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Preferred Stock Purchase Price resulting from such adjustment,
the number of shares owned by multiplying the Preferred Stock Purchase Price in
effect immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Preferred Stock Purchase Price resulting from such adjustment.

                  (a) Subdivision or Combination of Stock. In case the Company
shall at any time subdivide its outstanding shares of Series C Preferred Stock
into a greater number of shares, the

                                      -5-
<PAGE>   6

Preferred Stock Purchase Price in effect prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding shares of
Series C Preferred Stock of the Company shall be combined into a smaller number
of shares, the Preferred Stock Purchase Price in effect immediately prior to
such combination shall be proportionately increased.

                  (b) Dividends in Preferred Stock, Property, Reclassification.
If at any time or from time to time the Holders of Series C Preferred Stock (or
any shares of stock or other securities at the time receivable upon the exercise
of this Warrant) shall have received or become entitled to receive, without
payment therefor:

                           (i)      Series C Preferred Stock or any shares of
stock or other securities which are at any time directly or indirectly
convertible into or exchangeable for Series C Preferred Stock, or any rights or
options to subscribe for, purchase or otherwise acquire any of the foregoing by
way of dividend or other distribution,

                           (ii)     Any cash paid or payable otherwise than as
a cash dividend, or

                           (iii)    Series C Preferred  Stock or additional
stock or other securities or property (including cash) by way of spinoff,
split-up, reclassification combination of shares or similar corporate
rearrangement (other than shares of Preferred Stock issued as a stock split or
adjustments in respect of which shall be covered by the terms of Section
3.2(a)),

then and in each such case, the Holder hereof shall upon the exercise of this
Warrant be entitled to receive, in addition to the number of shares of Series C
Preferred Stock receivable thereupon, and without payment of any additional
consideration therefor, the amount of stock and other securities and property
(including cash in the cases referred to in clauses (ii) and (iii) above) which
such Holder would hold on the date of such exercise had such Holder been the
holder of record of such Series C Preferred Stock as of the date on which
Holders of Series C Preferred Stock received or became entitled to receive such
shares or all other additional stock and other securities and property.

                  (c) Reorganization, Reclassification, Consolidation, Merger or
Sale. If any recapitalization, reclassification or reorganization of the capital
stock of the Company (including any automatic conversion of outstanding shares
of the Series C Preferred Stock), or all consolidation or merger of the Company
with another corporation, or the sale of all or substantially all of its assets
or other transaction shall be effected in such a way that Holders of Series C
Preferred Stock shall be entitled to receive stock, securities, or other assets
or property (an "Organic

                                      -6-
<PAGE>   7

Change"), then, as a condition of such Organic Change, lawful and adequate
provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of the
Series C Preferred Stock of the Company immediately purchasable and receivable
upon the exercise of the rights represented by this Warrants) such shares of
stock, securities or other assets or property as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Series C
Preferred Stock equal to the number of shares of such stock immediately
theretofore purchasable and receivable upon the exercise of rights represented
hereby; provided, however, that in the event the value of the stock, securities
or other assets or property (determined in good faith by the Board of Directors
of the Company) issuable or payable with respect to one share of the Series C
Preferred Stock of the Company immediately purchasable and receivable upon the
exercise of the rights represented by this Warrant is in excess of the Preferred
Stock Purchase Price effective at the time of a merger and securities received
in such reorganization, if any, are publicly traded, then this Warrant shall
expire unless exercised prior to such Organic Change. In the event of any
Organic Change, appropriate provision shall be made by the Company with respect
to the rights and interests of the Holder of this Warrant to the end that the
provisions hereof (including, without limitation, provisions for adjustments of
the Preferred Stock Purchase Price and of the number of shares purchasable and
receivable upon the exercise of this Warrant) shall thereafter be applicable, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof. The Company will not effect any such consolidation,
merger or sale unless, prior to the consummation thereof, the successor
corporation (if other than the Company) resulting from such consolidation or the
corporation purchasing such assets shall assume by written instrument reasonable
satisfactory in form and substance to the Holders of a majority of the warrants
to purchase Series C Preferred Stock then outstanding, executed and mailed or
delivered to the registered Holder hereof at the last address of such Holder
appearing on the books of the Company, the obligation to deliver to such Holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such Holder may be entitled to purchase.

                  (d) Certain Events. If any change in the outstanding Series C
Preferred Stock of the Company or any other event occurs as to which the other
provisions of this Section 3.2 are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights of the Holder of this
Warrant in accordance with such provisions, then the Board of Directors of the
Company shall make an adjustment in the number and class of shares available
under this Warrant, the Preferred Stock Purchase Price or the application of
such provisions, so as to protect such purchase rights. The adjustment shall be
such as will give the Holder of this Warrant upon exercise for the same
aggregate Preferred Stock

                                      -7-
<PAGE>   8

Purchase Price the total number, class and kind of shares as such Holder would
have owned had this Warrant been exercised prior to the event and had he
continued to hold such shares until after the event requiring adjustment.

                  (e)      Notices of Change.

                           (i)      Immediately  upon any adjustment under this
Section 3.2 in the number of shares subject to this Warrant and of the Preferred
Stock Purchase Price, the Company shall have written notice thereof to the
Holder, setting forth in reasonable detail and certifying the calculation of
such adjustment.

                           (ii)     The Company shall give written  notice to
the Holder at least ten (10) business days prior to the date on which the
Company closes its books or takes a record for determining rights to receive any
dividends or distributions.

                           (iii)    The Company shall also give written notice
to the Holder at least thirty (30) business days prior to the date an which on
which an Organic Change shall take place.

4.       ISSUE TAX.

         The issuance of certificates for shares of Series C Preferred Stock or
Common Stock, as the case may be, upon the exercise of this Warrant shall be
made without charge to the Holder of this Warrant for any issue tax (other than
any applicable income taxes) in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of this Warrant being exercised.

5.       CLOSING OF BOOKS.

         The Company will at no time close its transfer books against the
transfer of any warrant or any shares of Series C Preferred Stock or Common
Stock, as the case may be, issued or issuable upon the exercise of any warrant
in any manner which interferes with the timely exercise of this Warrant.

                                      -8-
<PAGE>   9

6.       NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY.

         Nothing contained in this Warrant shall be construed as conferring upon
the Holder hereof the right to vote or to consent or to receive notice as a
stockholder of the Company or any other matters or any rights whatsoever as a
stockholder of the Company. No dividends or interest shall be payable or accrued
in respect of this Warrant or the interest represented hereby or the shares
purchasable hereunder until, and only to the extent that, this Warrant shall
have been exercised. No provisions hereof, in the absence of affirmative action
by the Holder to purchase shares of Series C Preferred Stock or Common Stock, as
the case may be, and no mere enumeration herein of the rights or privileges of
the Holder hereof, shall give rise to any liability of such Holder for the
Preferred Stock Purchase Price or the Common Stock Purchase Price or as a
stockholder of the Company, whether such liability is asserted by the Company or
by its creditors.

7.       WARRANTS TRANSFERABLE.

         7.1 Transfer. Subject to compliance with applicable United States
federal and state securities laws, this Warrant and all rights hereunder shall
be transferable, in whole or in part, without charge to the Holder (except for
transfer taxes), upon surrender of this Warrant properly endorsed. Each taker
and holder of this Warrant, by taking or holding same, consents and agrees that
this Warrant, when endorsed in blank, shall be deemed negotiable, and that the
Holder, when this Warrant shall have been so endorsed, may be treated by the
Company, at the Company's option, and all other persons dealing with this
Warrant as the absolute owner hereof for any purpose and as the person entitled
to exercise the rights represented by this Warrant, or to the transfer hereof on
the books of the Company, any notice to the contrary notwithstanding; but until
such transfer on such books, the Company may treat the registered owner hereof
as the Holder for all purposes.

         7.2 Survival. The rights and obligations of the Company, of the Holder
and of the holder of the Series C Preferred Stock or Common Stock, as the case
may be, issuable upon the exercise of this Warrant referred to in Section 7.1
shall survive the exercise of this Warrant.

8.       MODIFICATION AND WAIVER.

         This Warrant and any provision hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of the same is sought.

                                      -9-
<PAGE>   10

9.       NOTICES.

         Any notice or request required or permitted to be given under or in
connection with this Warrant shall be deemed to have been sufficiently given if
in writing and personally delivered or sent by certified mail (return receipt
requested), facsimile transmission (receipt verified), or overnight express
courier service (signature required), prepaid, to the party for which such
notice is intended, at the address set forth for such party below:

                  (a)      In the case of the Purchaser, to:

                           Roche Finance Ltd
                           124 Grenzacherstrasse CH-4070
                           Basel
                           SWITZERLAND
                           Attention: CFDV Building 21 Room 292
                           Facsimile No.:  41-61-688-4169

                           With a copy to:

                           Hoffmann-La Roche Inc.
                           340 Kingsland Street
                           Nutley, NJ  07110
                           Attention: General Counsel
                           Facsimile No.: (973) 235-3500

                  (b)      In the case of the Company, to:

                           deCODE genetics, Inc.
                           Lynghalsi 1
                           SI-110 Reykjavik
                           ICELAND
                           Attention: President
                           Facsimile No.:  354-570-1901

or to such other address for such party as it shall have specified by like
notice to the other party, provided that notices of a change of address shall be
effective only upon receipt thereof. If delivered personally or by facsimile
transmission, the date of delivery shall be deemed to be the date on which such
notice or request was given. If sent by overnight express courier service, the
date of delivery shall be deemed to be the next business day after such notice
or request was deposited with such service. If sent by certified mail, the date
of delivery shall be deemed to be the third business day after such notice or
request was deposited with the U.S. Postal Service, or the foreign equivalent
thereto.

                                      -10-
<PAGE>   11

10.      BINDING EFFECT ON SUCCESSORS.

         This Warrant shall be binding upon any corporation succeeding the
Company by merger, consolidation or acquisition of all or substantially all of
the Company's assets. All of the obligations of the Company relating to the
Series C Preferred Stock or Common Stock, as the case may be, issuable upon the
exercise of this Warrant shall survive the exercise and termination of this
Warrant. All of the covenants and agreements of the Company shall inure to the
benefit of the successors and assigns of the Holder hereof.

11.      DESCRIPTIVE HEADINGS AND GOVERNING LAW.

         The description headings of the several sections and paragraphs of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant. This Warrant shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the State of
Delaware, USA.

12.      LOST WARRANTS.

         The Company covenants to the Holder hereof that upon receipt of
evidence reasonably satisfactory to the Company of the loss theft, destruction,
or mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant, the Company, at its expense, will make and deliver a new
Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant.

13.      FRACTIONAL SHARES.

         No fractional shares shall be issued upon exercise of this Warrant. The
Company shall, in lieu of issuing any fractional share, pay the holder entitled
to such fraction a sum in cash equal to such fraction multiplied by the then
effective Preferred Stock Purchase Price or Common Stock Purchase Price, as
applicable.

                                      -11-
<PAGE>   12

14.      ADDITIONAL RESTRICTIONS ON EXERCISE.

         In addition to the restrictions set forth in the legends at the head of
this Warrant, this Warrant shall not be exercised within the United States, and
the Warrant Shares to be issued upon the exercise of this Warrant shall not be
delivered within the United States, other than in offerings deemed to meet the
definition of "offshore transaction" (as such term is defined in Regulation S
promulgated under the United States Securities Act of 1933, as amended), unless
this Warrant or the Warrant Shares, as the case may be, are registered under
such Act or an exemption from such registration is available.

                                      * * *

                                      -12-
<PAGE>   13

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

                                                 deCODE genetics, Inc.

                                                  By:___________________________
                                                     Kari Stefansson
                                                     President

<PAGE>   14

                              FORM OF SUBSCRIPTION
                    (to be executed upon exercise of Warrant)

deCODE genetics, Inc.:

                  The undersigned hereby irrevocably elects to exercise the
right of purchase represented by the within warrant certificate (the "Warrant
Certificate") for, and to purchase thereunder:

                  [ ]       __________ shares of Series C Preferred Stock; or

                  [ ]       pursuant to Section 3.1 thereof, __________ shares
                            of Common Stock

, as provided for therein, and

                  [ ]      tenders  herewith  payment  of the  purchase  price
                           in full in the form of cash or a certified or
                           official bank check in the amount of US$__________;
                           or

                  [ ]      pursuant to Section 1.2 of the Warrant, elects to
                           purchase the number of shares of Series C Preferred
                           Stock indicated above by surrendering the Warrant to
                           the extent of __________ Warrant Shares, inasmuch as,
                           as of the date hereof, the fair market value of one
                           share of Series C Preferred Stock (as determined in
                           accordance with the terms of the Warrant) is US$_____
                           and the Preferred Stock Purchase Price is $_____.

                  The undersigned hereby certifies that the undersigned is not a
U.S. Person and the Warrant is not being exercised on behalf of a U.S. person,
as such term is defined in Regulation S promulgated under the United States
Securities Act of 1933, as amended.

                  Please issue a certificate or certificates for such Warrant
Shares or shares of Common Stock, as the case may be, in the name of, and pay
cash for any fractional share, to:

                           Name

                           Address

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

                           Social Security No.
                           or Federal ID No.

<PAGE>   15

                                                                 (continued ...)

                  If the number of Warrant Shares or shares of Common Stock, as
the case may be, to be issued in connection herewith shall not be all of the
Warrant Shares or shares of Common Stock purchasable under the Warrant, a new
Warrant Certificate shall be issued in the name of the undersigned for the
balance remaining of the shares purchasable thereunder, rounded up to the next
higher number of such shares.

                                                  ROCHE FINANCE LTD.

                                                  By:___________________________

                                                  Name:_________________________

                                                  Title:________________________

                                                  By:___________________________

                                                  Name:_________________________

                                                  Title:________________________

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