8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2006

SOLEXA, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

000-22570	94-3161073
(Commission File No.)	(IRS Employer Identification No.)

25861 Industrial Blvd.
Hayward, California 94545
(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (510) 670-9300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 10.54

EXHIBIT 10.55

EXHIBIT 99.1

Item 1.01 Entry into a Material Definitive Agreement.

Reference is made to Item 5.02 of this report.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

Craig C. Taylor and Genghis Lloyd-Harris resigned from the Board of Directors of Solexa, Inc. (“Solexa” or the “Company”) (the “Board”) effective following a regular meeting of the Board held on July 28, 2006. Joseph Whitters was appointed to the Board effective upon the departures of Mr. Taylor and Dr. Lloyd-Harris and will serve as chairman of the Compensation Committee of the Board. At the July 28, 2006 meeting the Board also appointed Stephen Allen and Douglas Fambrough to the Audit Committee of the Board (the “Audit Committee”) and appointed Mason Morfit as chairman of the Nominating and Corporate Governance Committee of the Board and as chairman of the Audit Committee.

On August 2, 2006, Solexa entered into an independent contractor services agreement with Joseph Whitters (the “Whitters Agreement”) pursuant to which Mr. Whitters will provide advisory and other consulting services to the Company outside of his membership on the Board in exchange for a grant of up to 7,500 shares of the Company’s common stock under Solexa’s 2005 Equity Incentive Plan, provided he is not entitled to receive consideration in excess of $60,000 in any twelve month period under the agreement. The shares to be issued pursuant to the Whitters Agreement are unvested, and will vest as they are earned through the provision of consulting services to be performed by Mr. Whitters subject to the restriction discussed herein.

A copy of the Whitters Agreement is attached as Exhibit 10.54 hereto and is incorporated herein by reference. A copy of the press release, entitled “Solexa Appoints Joseph Whitters to Board of Directors” is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

The Company also entered into an indemnity agreement with Mr. Whitters dated July 28, 2006 (the “Indemnity Agreement”). The Indemnity Agreement provides, among other things, that Solexa will indemnify Mr. Whitters, under the circumstances and to the extent provided for therein, for certain expenses which he may be required to pay in connection with certain claims to which he may be made a party by reason of his position as a director of Solexa, and otherwise to the fullest extent permitted under Delaware law and Solexa’s Bylaws.

The Indemnity Agreement is attached as Exhibit 10.55 hereto and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

Exhibit
Number	Description
10.54	Independent Contractor Services Agreement, dated as of July 28, 2006, between Solexa, Inc. and Joseph Whitters.
10.55	Indemnity Agreement, dated as of July 28, 2006, between Solexa, Inc. and Joseph Whitters.
99.1	Press release, dated as of August 3, 2006, entitled “Solexa Appoints Joseph Whitters to Board of Directors.”

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SOLEXA, INC.
Dated: August 3, 2006	By:	/s/ Linda Rubinstein
	Name: Linda Rubinstein
	Title: Vice President and Chief Financial Officer

EXHIBITS

Exhibit
Number	Description
10.54	Independent Contractor Services Agreement, dated as of July 28, 2006, between Solexa, Inc. and Joseph Whitters.
10.55	Indemnity Agreement, dated as of July 28, 2006, between Solexa, Inc. and Joseph Whitters.
99.1	Press release, dated as of August 3, 2006, entitled “Solexa Appoints Joseph Whitters to Board of Directors.”

EX-10.54

Exhibit 10.54

INDEPENDENT CONTRACTOR SERVICES AGREEMENT

This Agreement is made as of July 28, 2006, (“Effective Date”) by and between Solexa, Inc. and its successors or assignees (“Company”) and the undersigned Joseph E. Whitters(“Contractor”).

1.1. Engagement of Services. Company may from time to time submit a Statement of Work (“SOW”) to Contractor substantially in the form of Exhibit A to this Agreement. Subject to the terms of this Agreement, Contractor will provide the services set forth in each SOW accepted by Contractor (the “Project(s)”) by the completion dates set forth therein. The manner and means that Contractor chooses to complete the Projects are in Contractor’s sole discretion and control. Contractor shall perform the services necessary to complete the Projects in a timely and professional manner consistent with industry standards and at a location, place and time that Contractor deems appropriate. In completing the Projects, Contractor agrees to provide its own equipment, tools, and other materials at its own expense; however, Company will make its facilities and equipment available to Contractor when necessary.

2. Compensation.

     2.1 Fees. Company will pay Contractor the fee specified in each SOW as Contractor’s sole compensation for the Project, provided such Project meets the terms of the SOW and this Agreement and is of a quality consistent with industry standards. Contractor shall be responsible for all expenses incurred in performing services under this Agreement, except as set forth in the SOW. Upon termination of this Agreement for any reason prior to completion of an SOW, Company will pay Contractor fees and expenses on the basis stated in the SOW for work which is then in progress, within thirty (30) days of the later of Contractor’s invoice and the effective date of such termination.

     2.2 Invoicing. Unless otherwise provided in the applicable SOW, (a) payment to Contractor of undisputed fees will be due thirty (30) days following Company’s receipt of an invoice which contains accurate records of the work performed sufficient to document the invoiced fees; and (b) Contractor will submit invoices to Company upon completion of the milestones specified in the applicable SOW or, if no such milestones are specified, on a monthly basis for services performed in the previous month.

3. Independent Contractor Relationship. Contractor’s relationship with Company will be that of an independent contractor, and nothing in this Agreement should be construed to create a partnership, joint venture, or employer-employee relationship. Contractor (a) is not the agent of Company; (b) is not authorized to make any representation, contract, or commitment on behalf of Company; (c) will not be entitled to any of the benefits that Company makes available to its employees, such as group insurance, profit-sharing or retirement benefits (and waives the right to receive any such benefits); and (d) will be solely responsible for all tax returns and payments required to be filed with or made to any federal, state, or local tax authority with respect to Contractor’s performance of services and receipt of fees under this Agreement. If applicable, Company will report amounts paid to Contractor by filing Form 1099-MISC with the Internal Revenue Service, as required by law. Contractor agrees to accept exclusive liability for complying with all applicable state and federal laws, including laws governing self-employed individuals, if applicable, such as laws related to payment of taxes, social security, disability, and other contributions based on fees paid to Contractor under this Agreement. Company will not withhold or make payments for social security, unemployment insurance or disability insurance contributions, or obtain workers’ compensation insurance on Contractor’s behalf. Contractor hereby agrees to indemnify and defend Company against any and all such taxes or contributions, including penalties and interest. Contractor agrees to provide proof of payment of appropriate taxes on any fees paid to Contractor under this Agreement upon reasonable request of Company.

4. Intellectual Property Rights.

     4.1 Confidential Information. Contractor agrees that during the term of this Agreement and thereafter, except as expressly authorized in writing by the Chief Executive Officer (the “CEO”) of Company, it (a) will not use or permit the use of Confidential Information (defined below) in any manner or for any purpose not expressly set forth in this Agreement; (b) will not disclose, lecture upon, publish, or permit others to disclose, lecture upon, or publish any such Confidential Information to any third party without first obtaining the CEO’s express written consent on a case-by-case basis; (c) will limit access to Confidential Information to Contractor personnel who need to know such information in connection with their work for Company; and (d) will not remove any tangible embodiment of any Confidential Information from Company’s premises without Company’s prior written consent. “Confidential Information” includes, but is not limited to, all information related to Company’s business and its actual or anticipated research and development, including without limitation (i) trade secrets, inventions, ideas, processes, computer source and object code, formulae, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs, and techniques; (ii) information regarding products or plans for research and development, marketing and business plans, budgets, financial statements, contracts, prices, suppliers, and customers; (iii) information regarding the skills and compensation of Company’s employees, contractors, and any other service providers of Company; (iv) the existence of any business discussions, negotiations, or agreements between Company and any third party; and (v) all such information related to any third party that is disclosed to Company or to Contractor during the course of Company’s business (“Third

1

Party Information”). Notwithstanding the foregoing, it is understood that Contractor is free to use information which is generally known in the trade or industry, information which is not gained as a result of a breach of this Agreement, and Contractor’s own skill, knowledge, know-how, and experience.

     4.2 Competitive or Conflicting Engagements. Contractor agrees, during the term of this Agreement, not to enter into a contract or accept an obligation that is inconsistent or incompatible with Contractor’s obligations under this Agreement. Contractor warrants that there is no such contract or obligation in effect as of the Effective Date. Contractor further agrees not to disclose to Company, bring onto Company’s premises, or induce Company to use any confidential information that belongs to anyone other than Company or Contractor. In addition, Contractor agrees that, during the term of this Agreement, it will not perform, or agree to perform, any services for any third party that engages, or plans to engage, in any business or activity competitive with that of Company.

     4.3 Inventions and Intellectual Property Rights. As used in this Agreement, the term “Invention” means any ideas, concepts, information, materials, processes, data, programs, know-how, improvements, discoveries, developments, designs, artwork, formulae, other copyrightable works, and techniques and all Intellectual Property Rights therein. The term “Intellectual Property Rights” means all trade secrets, copyrights, trademarks, mask work rights, patents and other intellectual property rights recognized by the laws of any country.

     4.4 Background Technology. As used in this Agreement, the term “Background Technology” means all Inventions developed by Contractor other than in the course of providing services to Company hereunder and all Inventions acquired or licensed by Contractor that Contractor uses in performing services under this Agreement or incorporates into Work Product (defined below). Contractor will disclose any Background Technology in the SOW in which Contractor proposes to use or incorporate such Background Technology. If no Background Technology is disclosed in an SOW, Contractor warrants that it will not use Background Technology or incorporate it into Work Product provided pursuant thereto. Notwithstanding the foregoing, Contractor agrees that it will not incorporate into Work Product or otherwise deliver to Company any software code licensed under the GNU GPL or LGPL or any other license that by its terms requires, or conditions the use or distribution of such code on, the disclosure, licensing, or distribution of the Work Product or any source code owned or licensed by the Company.

     4.5 License to Background Technology. Contractor hereby grants to Company a non-exclusive, perpetual, fully-paid and royalty-free, irrevocable and world-wide right, with rights to sublicense through multiple levels of sublicensees, to reproduce, make derivative works of, distribute, publicly perform, and publicly display in any form or medium, whether now known or later developed, make, have made, use, sell, import, offer for sale, and exercise any and all present or future rights in the Background Technology incorporated or used in Work Product for the purpose of developing and marketing Company products.

     4.6 Disclosure of Work Product. As used in this Agreement, the term “Work Product” means any Invention that is solely or jointly conceived, made, reduced to practice, or learned by Contractor in the course of any services performed for Company or with the use of materials of Company during the term of this Agreement. Contractor agrees to disclose promptly in writing to Company, or any person designated by Company, all Work Product.

     4.7 Ownership of Work Product. Contractor agrees that any and all Work Product shall be the sole and exclusive property of Company.

     4.8 Assignment of Work Product. If Contractor has any rights to the Work Product that are not owned by Company upon creation or embodiment, Contractor irrevocably assigns to Company all right, title and interest worldwide in and to such Work Product. Except as set forth below, Contractor retains no rights to use the Work Product and agrees not to challenge the validity of Company’s ownership in the Work Product.

     4.9 Waiver or Assignment of Other Rights. If Contractor has any rights to the Work Product that cannot be assigned to Company, Contractor unconditionally and irrevocably waives the enforcement of such rights, and all claims and causes of action of any kind against Company with respect to such rights, and agrees, at Company’s request and expense, to consent to and join in any action to enforce such rights. If Contractor has any right to the Work Product that cannot be assigned to Company or waived by Contractor, Contractor unconditionally and irrevocably grants to Company during the term of such rights, an exclusive, irrevocable, perpetual, worldwide, fully paid and royalty-free license, with rights to sublicense through multiple levels of sublicensees, to reproduce, make derivative works of, distribute, publicly perform and publicly display in any form or medium, whether now known or later developed, make, use, sell, import, offer for sale and exercise any and all such rights.

     4.10 Assistance. Contractor agrees to assist Company in every way, both during and after the term of this Agreement, to obtain and enforce United States and foreign Intellectual Property Rights relating to Work Product in all countries. In the event Company is unable to secure Contractor’s signature on any document needed in connection with such purposes, Contractor hereby irrevocably designates and appoints Company and its duly authorized officers and agents as its agent and attorney in fact, which appointment is coupled with an interest, to act on its behalf to execute and file any such documents and to do all other lawfully permitted acts

2

to further such purposes with the same legal force and effect as if executed by Contractor.

5. Contractor Representations and Warranties. Contractor hereby represents and warrants that (a) the Work Product will be an original work of Contractor and any third parties will have executed assignment of rights reasonably acceptable to Company prior to being allowed to participate in the development of the Work Product; (b) the Work Product will fully conform to the requirements and terms set forth in the SOW; (c) neither the Work Product nor any element thereof will infringe or misappropriate the Intellectual Property Rights of any third party; (d) neither the Work Product nor any element thereof will be subject to any restrictions or to any mortgages, liens, pledges, security interests, or encumbrances; (e) Contractor will not grant, directly or indirectly, any rights or interest whatsoever in the Work Product to third parties; (f) Contractor has full right and power to enter into and perform this Agreement without the consent of any third party; (g) Contractor has an unqualified right to grant the license to all Background Technology as set forth in the section titled “License to Background Technology” to Company; (h) Contractor will comply with all laws and regulations applicable to Contractor’s obligations under this Agreement; and (i) should Company permit Contractor to use any of Company’s equipment, or facilities during the term of this Agreement, such permission shall be gratuitous and Contractor shall be responsible for any injury to any person (including death) or damage to property arising out of use of such equipment or facilities.

6. Indemnification. Contractor will indemnify and hold harmless Company, its officers, directors, employees, sublicensees, customers and agents from any and all claims, losses, liabilities, damages, expenses and costs (including attorneys’ fees and court costs) which result from a breach or alleged breach of any representation or warranty of Contractor (a “Claim”) in this Agreement or any intentional misconduct or negligence by Contractor or any of its subcontractors, employees, or agents in performing services under this Agreement. From the date of written notice from Company to Contractor of any such Claim, Company shall have the right to withhold from any payments due Contractor under this Agreement the amount of any defense costs, plus additional reasonable amounts as security for Contractor’s obligations under this section.

7. Termination.

     7.1 Termination without Cause. Company may terminate this Agreement without cause at its convenience upon fifteen (15) days’ prior written notice to Contractor. Contractor may terminate this Agreement at any time that there is no uncompleted SOW in effect upon fifteen (15) days’ prior written notice to Company. Company will pay Contractor only those fees and expenses related to services actually performed during such notice period, as specified in the SOW.

     7.2 Termination with Cause. Either party may terminate this Agreement immediately in the event that the other party has materially breached the Agreement and fails to cure such breach within fifteen (15) days of receipt of notice by the non-breaching party, setting forth in reasonable detail the nature of the breach. Company may also terminate this Agreement immediately in its sole discretion in the event of Contractor’s material breach of the section titled “Intellectual Property Rights.” Company will pay Contractor only those fees and expenses related to services actually performed during such notice period, as specified in the SOW.

     7.3 Return of Company Property. Upon termination of the Agreement or upon Company’s request at any other time, Contractor will deliver to Company all of Company’s property, equipment, and documents, together with all copies thereof, and any other material containing or disclosing any Work Product, Third Party Information or Confidential Information of Company and certify to Company in writing that Contractor has fully complied with this obligation Contractor further agrees that any property situated on Company’s premises and owned by Company is subject to inspection by Company personnel at any time with or without notice.

     7.4 Survival. The following provisions shall survive termination of this Agreement: Sections titled “Intellectual Property Rights,” “Contractor Representations and Warranties,” “Indemnification,” “Return of Company Property,” “Survival,” and “General Provisions.”

8. Multi-Employee Contractor. If Contractor will be hiring employees or agents to provide services pursuant to this Agreement, Contractor must obtain Company’s prior written consent to such hiring, and before any Contractor employee or agent performs services in connection with this Agreement or has access to Confidential Information, the employee or agent and Contractor must have entered into a binding written agreement expressly for the benefit of Company that contains provisions substantially equivalent to the sections of this Agreement titled “Engagement of Services” and “Intellectual Property Rights.” At Company’s request, Contractor will provide Company with copies of such agreements. Company reserves the right to refuse or limit Contractor’s use of any employee or agent or to require Contractor to remove any employee or agent already engaged in the performance of the services. Company’s exercise of such right will in no way limit Contractor’s obligations under this Agreement. Contractor agrees (a) that its employees and agents shall not be entitled to or eligible for any benefits that Company may make available to its employees; (b) to limit access to the Confidential Information to employees or agents of Contractor who have a reasonable need to have such access in order to perform the services pursuant to this Agreement; and (c) to be solely responsible for all expenses incurred by any of its employees or agents in performing the services or otherwise performing its obligations under this Agreement, except as set forth in the SOW.

3

9. General Provisions.

     8.1 Governing Law and Venue. This Agreement and any action related thereto will be governed, controlled, interpreted, and defined by and under the laws of the State of California, without giving effect to any conflicts of laws principles that require the application of the law of a different state. Contractor hereby expressly consents to the personal jurisdiction and venue in the state and federal courts for the county in which Company’s principal place of business is located for any lawsuit filed there against Contractor by Company arising from or related to this Agreement.

     9.2 Severability. If any provision of this Agreement is, for any reason, held to be invalid or unenforceable, the other provisions of this Agreement will be unimpaired and the invalid or unenforceable provision will be deemed modified so that it is valid and enforceable to the maximum extent permitted by law.

     9.3 No Assignment. This Agreement, and Contractor’s rights and obligations herein, may not be assigned, subcontracted, delegated, or otherwise transferred by Contractor without Company’s prior written consent, and any attempted assignment, subcontract, delegation, or transfer in violation of the foregoing will be null and void. The terms of this Agreement shall be binding upon assignees.

     9.4 Notices. Each party must deliver all notices or other communications required or permitted under this Agreement in writing to the other party at the address listed on the signature page, by courier, by certified or registered mail (postage prepaid and return receipt requested), or by a nationally-recognized express mail service. Notice will be effective upon receipt or refusal of delivery. If delivered by certified or registered mail, any such notice will be considered to have been given five (5) business days after it was mailed, as evidenced by the postmark. If delivered by courier or express mail service, any such notice shall be considered to have been given on the delivery date reflected by the courier or express mail service receipt. Each party may change its address for receipt of notice by giving notice of such change to the other party.

     9.5 Injunctive Relief. Contractor acknowledges that, because its services are personal and unique and because Contractor will have access to Confidential Information of Company, any breach of this Agreement by Contractor would cause irreparable injury to Company for which monetary damages would not be an adequate remedy and, therefore, will entitle Company to injunctive relief (including specific performance). The rights and remedies provided to each party in this Agreement are cumulative and in addition to any other rights and remedies available to such party at law or in equity.

     9.6 Waiver. Any waiver or failure to enforce any provision of this Agreement on one occasion will not be deemed a waiver of any other provision or of such provision on any other occasion.

     9.7 Export. Contractor agrees not to export, directly or indirectly, any U.S. technical data acquired from Company or any products utilizing such data, to countries outside the United States, because such export could be in violation of the United States export laws or regulations.

     9.8 Entire Agreement. This Agreement, together with the Nondisclosure Agreement dated as of May 16, 2006, is the final, complete and exclusive agreement of the parties with respect to the subject matters hereof and supersedes and merges all prior discussions between the parties with respect to such subject matters. No modification of or amendment to this Agreement, or any waiver of any rights under this Agreement, will be effective unless in writing and signed by Contractor and CEO of the Company. The terms of this Agreement will govern all SOWs and services undertaken by Contractor for Company. In the event of any conflict between this Agreement and a SOW, the terms of the SOW shall govern, but only with respect to the services set forth therein.

4

In Witness Whereof, the parties have caused this Independent Contractor Services Agreement to be executed by their duly authorized representatives.

Company:	Contractor:
/s/ John West	/s/ Joseph E. Whitters
(Signature)	(Signature)
By: John West	By:	/s/ Joseph E. Whitters
Title: CEO Address: 25861 Industrial Blvd. / Hayward, CA 94545	Title:
	Address:
	If Contractor is a natural person, Contractor must provide the following information for copyright registration purposes only:
	Date of Birth:
	Nationality or Domicile:

5

EXHIBIT A

Statement of Work

This Statement of Work (“SOW”) is incorporated into the Independent Contractor Services Agreement by and between Company and Contractor. This SOW describes services and Work Product to be performed and provided by Contractor pursuant to the Agreement. If any item in this SOW is inconsistent with the Agreement prior to such incorporation, the terms of this SOW will control, but only with respect to the services to be performed under this SOW.

1. Scope of Services:

     a. Participating in the activities of and advising Company’s Audit Committee of the Board of Directors, although not as a member of this committee.

     b. Other financial consulting projects as agreed with Company executive management.

     This Agreement does not cover matters related to Contractor’s activities as a member of Company’s Board of Directors of committees of the Board of Directors, for which Contractor will be compensated as a Company director.

2. Payment of Fees. Fee will be payable in Company common stock; management will recommend to the Compensation Committee of the Company’s Board of Directors that Contractor be issued a grant of 7,500 shares of unvested restricted stock to be vested based on fees earned as described below.

For participation in the activities of and advising Company’s Audit Committee of the Board of Directors:

• Monthly retainer fee of $625.00; plus

• Per meeting fees of:

o $1,000.00 for in-person meetings on the same day as a board meeting

o $2,000.00 for other in-person meetings

o $500.00 for telephonic meetings on the same day as a board meeting

o $1,000.00 for other telephonic meetings

For other financial consulting projects: Time and materials at a rate: $312.50 per hour, up to the greater of time spent on working on Company matters or a maximum of $2,500.00 per travel day if travel is in excess of eight hours. Fee invoiced by Contractor at the rates set forth below.

In no event will Company compensate Contractor under this consulting contract in an amount greater than $60,000.00 (sixty thousand dollars) in any twelve month period while Consultant is a member of Company’s board of directors. Compensation refers to the market value of restricted stock on the date of vesting plus any cash payments.

3. Expenses. Company will reimburse Contractor for the following expenses: traveling to Solexa arranged meetings, phone and other incidental expenses related to consulting activities

4. Duration: Cancellable at 30 days notice by either party, or immediately if Contractor joins the Audit Committee of the Company’s Board of Directors.

          Background Technology Disclosure. None

Signed:	/s/ John West	/s/ Joseph E. Whitters
	Chief Executive Officer, Solexa, Inc.	Contractor
Dated:	August 2, 2006	Dated:	8/2/06

EX-10.55

Exhibit 10.55

INDEMNITY AGREEMENT

     THIS AGREEMENT is made and entered into as of the 28th day of July, 2006 by and between SOLEXA, INC., a Delaware corporation (the “Corporation”), and JOSEPH WHITTERS (the “Agent”).

RECITALS

     WHEREAS, Agent will perform a valuable service to the Corporation in his capacity as a DIRECTOR of Board of Directors of the Corporation;

     WHEREAS, the stockholders of the Corporation have adopted bylaws (the “Bylaws”) providing for the indemnification of the directors, officers, employees and other agents of the Corporation, including persons serving at the request of the Corporation in such capacities with other corporations or enterprises, as authorized by the Delaware General Corporation Law, as amended (the “Code”); and

     WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit contracts between the Corporation and its agents, officers, employees and other agents with respect to indemnification of such persons;

     NOW, THEREFORE, in consideration of Agent’s service as a Director of the Corporation after the date hereof, the parties hereto agree as follows:

AGREEMENT

     1. Services to the Corporation. Agent will serve, at the will of the Corporation or under separate contract, if any such contract exists, as Director of the Corporation; provided, however, that Agent may at any time and for any reason resign from such position or any other position (subject to any contractual obligation that Agent may have assumed apart from this Agreement) and that the Corporation shall have no obligation under this Agreement to continue Agent in such position or any other position.

     2. Indemnity of Agent. The Corporation hereby agrees to hold harmless and indemnify Agent to the fullest extent authorized or permitted by the provisions of the Bylaws and the Code, as the same may be amended from time to time (but, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the Bylaws or the Code permitted prior to adoption of such amendment).

     3. Additional Indemnity. In addition to and not in limitation of the indemnification otherwise provided for herein, and subject only to the exclusions set forth in Section 4 hereof, the Corporation hereby further agrees to hold harmless and indemnify Agent:

          (a) from and against any and all Expenses (as defined below) paid or payable by Agent in connection with or in respect of a Claim (as defined below). “Claim” means any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any inquiry, hearing or investigation, whether instituted by the Corporation or any other party, that Agent in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution whether civil, criminal, administrative, investigative or otherwise, each of the foregoing by reason of the fact that Agent is, was or at any time becomes a director, officer, employee or other agent of Corporation, or is or was serving or at any time serves at the written request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. “Expense” means any and all expenses (including attorneys’ fees), witness fees,

Page 1 of 6

damages, judgments, fines and amounts paid in settlement and any other amounts paid or incurred by Agent in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in any Claim; any and all judgments, fines, losses, liabilities, penalties, and amounts paid in settlement of any such claim; and

          (b) otherwise to the fullest extent as may be provided to Agent by the Corporation under the non-exclusivity provisions of the Code and Section 42 of the Bylaws.

     4. Limitations on Additional Indemnity.

          (a) No indemnity pursuant to Section 3 hereof shall be paid by the Corporation:

               (i) on account of any claim against Agent for an accounting of profits made from the purchase or sale by Agent of securities of the Corporation pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto (the “Exchange Act”) or similar provisions of any federal, state or local statutory law;

               (ii) on account of Agent’s conduct that was knowingly fraudulent or deliberately dishonest or that constituted willful misconduct;

               (iii) on account of Agent’s conduct that constituted a breach of Agent’s duty of loyalty to the Corporation or resulted in any personal profit or advantage to which Agent was not legally entitled;

               (iv) for which payment actually has been made to Agent under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, bylaw or agreement, except in respect of any excess beyond payment under such insurance, clause, bylaw or agreement;

               (v) if indemnification is not lawful (and, in this respect, both the Corporation and Agent have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication); or

               (vi) in connection with any proceeding (or part thereof) initiated by Agent, or any proceeding by Agent against the Corporation or its directors, officers, employees or other agents, unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Corporation, (iii) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the Code, or (iv) the proceeding is initiated pursuant to Section 9 hereof.

          (b) Within thirty (30) days of receipt of a notice pursuant to Section 7, the Corporation (or the Independent Legal Counsel, if applicable) shall make an initial good faith determination of Agent’s entitlement to indemnification pursuant to this Agreement and shall notify Agent (and the Corporation, if Independent Legal Counsel is making such determination) promptly of such determination. If at any time thereafter the Corporation (or the Independent Legal Counsel, as applicable) in good faith determines that any indemnification requested pursuant to this Agreement is prohibited pursuant to Section 4(a), the Corporation shall promptly provide notice of such determination to Agent (and the Corporation, if applicable). Any determination by the Corporation pursuant to this Section 4(b) shall be made by the Corporation’s Board of Directors.

Page 2 of 6

     5. Continuation of Indemnity. All agreements and obligations of the Corporation contained herein shall continue during the period Agent is a director, officer, employee or other agent of the Corporation (or is or was serving at the written request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as Agent shall be subject to any possible Claim.

     6. Partial Indemnification. Agent shall be entitled under this Agreement to indemnification by the Corporation for a portion of the Expenses that Agent pays or incurs in connection with Claim even if Agent is not entitled hereunder to indemnification for the total amount thereof, and the Corporation shall indemnify Agent for the portion thereof to which Agent is entitled.

     7. Notification and Defense of Claim. Not later than thirty (30) days after receipt by Agent of notice of any Claim, Agent will, if a claim in respect thereof is to be made against the Corporation under this Agreement, notify the Corporation of the commencement of such Claim; provided, however, that no failure to provide such notice shall be deemed to reduce or limit the obligations of the Corporation under this Agreement unless (and only to the extent that) such failure materially prejudices the Corporation. The omission so to notify the Corporation will not relieve it from any liability which it may have to Agent otherwise than under this Agreement. With respect to any Claim as to which Agent notifies the Corporation of the commencement thereof:

          (a) The Corporation will be entitled to participate therein at its own expense;

          (b) Except as otherwise provided below, the Corporation may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such defense, assume the defense thereof, with counsel reasonably satisfactory to Agent. After notice from the Corporation to Agent of its election to assume the defense thereof, the Corporation will not be liable to Agent under this Agreement for any legal fees and expenses subsequently incurred by Agent in connection with the defense thereof except for reasonable costs of investigation or otherwise as provided below. Agent shall have the right to employ separate counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Agent unless (i) the employment of counsel by Agent has been authorized by the Corporation, (ii) Agent shall have reasonably concluded that there may be a conflict of interest between the Corporation and Agent in the conduct of the defense of such action (which conclusion may be made at any time during the pendency of the proceeding) or (iii) the Corporation shall not in fact have employed or continue to employ counsel to assume the defense of such action, in each of which cases the fees and expenses of Agent’s separate counsel shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any Claim brought by or on behalf of the Corporation (except for a shareholders’ derivative suit brought nominally in the name of the Corporation) or as to which Agent shall have made the conclusion provided for in clause (ii) above;

          (c) The Corporation shall not be liable to indemnify Agent under this Agreement for any amounts paid in settlement of any Claim effected without its written consent, which shall not be unreasonably withheld. The Corporation shall be permitted to settle any Claim except that it shall not settle any Claim without Agent’s prior written consent (which may be given or withheld in Agent’s sole discretion) in any manner which (a) would impose any penalty or limitation on Agent or (b) would admit any liability or, misconduct by Agent;

          (d) If there is a Change in Control (as defined below) of the Corporation, then with respect to all matters thereafter arising concerning the rights of Agent to indemnity expense payments and/or advances under this Agreement or any other agreement or Corporation Bylaw now or hereafter in effect, the Corporation shall seek legal advice only from Independent Legal Counsel (defined below)

Page 3 of 6

selected by Agent and approved by the Corporation (which approval shall not be unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Corporation and Agent as to whether and to what extent Agent would be permitted to be indemnified under applicable law. The Corporation shall pay the reasonable fees of such Independent Legal Counsel and fully indemnify such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto;

          (e) For purposes of this Section, a “Change in Control” shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or a corporation owned directly or indirectly by the stockholders of the Corporation in substantially the same proportions as their ownership of the stock of the Corporation, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 20% or more of the total voting power represented by the Corporation’s then outstanding voting securities, (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Corporation and any new director whose election by the Board of Directors or nomination for election by the Corporation’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, (iii) the stockholders of the Corporation approve a merger or consolidation of the Corporation with any other corporation, other than a merger or consolidation that would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 80% of the total voting power represented by the voting securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders or the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Company of (in one transaction or a series of transactions) all or substantially all of the Corporation’s assets; and

          (f) For purposes of this Section, “Independent Legal Counsel” shall be defined as an attorney or firm of attorneys, selected in accordance with this Section, who have not otherwise performed services for the Corporation or Agent within the last five years (other than as Independent Legal Counsel under this Agreement or of other agents of the Corporation under similar indemnity agreements).

     8. Expenses. The Corporation shall advance, promptly following request therefore, all expenses incurred by Agent in connection with a Claim (an “Expense Advancement”). Notwithstanding the foregoing, (i) the obligations of Corporation under this Section 8 shall be subject to the condition that the Corporation (or Independent Legal Counsel, if applicable) shall not have determined in good faith (in a written opinion, in the case of Independent Legal Counsel) pursuant to Section 4(b) that Agent would not be permitted to be indemnified under this Agreement, and (ii) the obligation of the Corporation to make an Expense Advancement shall be subject to the condition that if, when and to the extent that the Corporation (or Independent Legal Counsel, if applicable) determines that Agent would not be permitted to be indemnified under this Agreement, the Corporation shall be entitled to be reimbursed by Agent for all such amounts theretofore paid, and (iii) the corporation shall have received an undertaking by or on behalf of Agent to repay said amounts if it shall be determined ultimately that Agent is not entitled to be indemnified under the provisions of this Agreement, the Bylaws, the Code or otherwise; provided, however, that if Agent has commenced or thereafter commences a legal proceeding in a court of competent jurisdiction to secure a determination that Agent should be indemnified under this Agreement, any determination made by the Corporation (or Independent Legal Counsel, if applicable) that Agent should not be indemnified under this Agreement shall not be binding, the Corporation shall pay the Expenses or Expense Advancement for which Agent seeks payment in such legal proceeding (subject to

Page 4 of 6

potential reimbursement by Agent) and Agent shall not be required to reimburse the Corporation for any Expenses or Expense Advancement until a final judicial determination is made with respect thereto. Agent’s obligation to reimburse the Corporation for any Expense Advancement shall be unsecured and no interest shall be charged thereon.

     9. Enforcement. Any right to indemnification or advances granted by this Agreement to Agent shall be enforceable by or on behalf of Agent in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefore. It shall be a defense to any action for which a claim for indemnification is made under Section 3 hereof (other than an action brought to enforce a claim for expenses pursuant to Section 8 hereof, provided that the required undertaking has been tendered to the Corporation) that Agent is not entitled to indemnification because of the limitations set forth in Section 4 hereof. Neither the failure of the Corporation (including its Board of Directors or its stockholders) to have made a determination prior to the commencement of such enforcement action that indemnification of Agent is proper in the circumstances, nor an actual determination by the Corporation (including its Board of Directors or its stockholders) that such indemnification is improper shall be a defense to the action or create a presumption that Agent is not entitled to indemnification under this Agreement or otherwise. For purposes of this Agreement, the termination of any Claim, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Agent did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

     10. Subrogation. In the event of payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Agent, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Corporation effectively to bring suit to enforce such rights.

     11. Indemnification for Additional Expenses. In the event that any action is instituted (i) by Agent pursuant to Section 9; (ii) by the Corporation for recovery of any Expense Advancement by the Corporation to Agent, or (iii) by or in the name of the Corporation under this Agreement to enforce or interpret any of the terms of this Agreement, Agent shall be entitled to be paid all expenses (including, without limitation, attorneys’ and expert witness’ fees and all other costs, expenses and obligations paid or incurred in connection with such matter) incurred by Agent with respect to such action and Agent shall be entitled to the advancement of expenses with respect to such action. Agent hereby undertakes to repay such amounts advanced if, and to the extent that, it shall ultimately be determined that Agent is not entitled to be indemnified by the Company as authorized by this Agreement, consistent with the terms of Sections 6 and 8.

     12. Non-Exclusivity of Rights. The rights conferred on Agent by this Agreement shall not be exclusive of any other right which Agent may have or hereafter acquire under any statute, provision of the Corporation’s Certificate of Incorporation or Bylaws, agreement, vote of stockholders or directors, or otherwise, both as to action in her official capacity and as to action in another capacity while holding office. To the extent that a change in the applicable law (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under any applicable Bylaws or this Agreement, it is the intent of the parties hereto that Agent shall enjoy by this Agreement the greater benefits so afforded by such change.

13. Survival of Rights.

          (a) The rights conferred on Agent by this Agreement shall continue after Agent has ceased to be a director, officer, employee or other agent of the

Page 5 of 6

Corporation or to serve at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the benefit of Agent’s heirs, executors and administrators.

          (b) The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

     14. Separability. Each of the provisions of this Agreement is a separate and distinct agreement and independent of the others, so that if any provision hereof shall be held to be invalid for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions hereof. Furthermore, if this Agreement shall be invalidated in its entirety on any ground, then the Corporation shall nevertheless indemnify Agent to the fullest extent provided by the Bylaws, the Code or any other applicable law.

     15. Governing Law. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware.

     16. Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties hereto.

     17. Entire Agreement; Identical Counterparts. This Agreement constitutes the entire Agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute but one and the same Agreement. Only a counterpart signed by Agent need be produced to evidence the existence of this Agreement.

     18. Headings. The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.

     19. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) upon delivery if delivered by hand to the party to whom such communication was directed; (ii) upon the third business day after the date on which such communication was mailed if mailed by certified or registered mail with postage prepaid; (ii) the following business day if sent by overnight delivery using a nationally recognized courier service, such as Federal Express or UPS :

          (a) If to Agent, at the address indicated on the signature page hereof.

          (b) If to the Corporation, to:

Solexa Inc.
25861 Industrial Blvd.
Hayward, CA 94545

or to such other address as a party may have been given notice by the other party in accordance with this Section 19, but no such notice shall have been deemed given until actually received by the party sought to be charged with the contents.

Page 6 of 6

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.

SOLEXA INC.
By:		/s/ Linda Rubinstein
		Linda Rubinstein
Title:		Vice President and Chief Financial Officer
		(Title)
AGENT:
By:		/s/ Joseph Whitters
		Joseph Whitters
Address:
c/o Solexa,		Inc.
25861	Industrial Blvd.
Hayward,		CA 94545

Page 7 of 6

EX-99.1

Exhibit 99.1

APPROVED BY:
Linda Rubinstein
Vice President & Chief Financial Officer
Solexa, Inc.
510-670-9300

CONTACTS:
North American Media Contact:	Investor Contacts:
EVC Group, Inc	EVC Group
Steve DiMattia	Doug Sherk
646-277-8706	415-896-6818
sdimattia@evcgroup.com	dsherk@evcgroup.com
European Media Contact:	Jenifer Kirtland
Northbank Communications	415-896-2005
Sue Charles, CEO	jkirtland@evcgroup.com
+44 (0)20 7886 8152
s.charles@northbankcommunications.com

For Immediate Release

SOLEXA APPOINTS JOSEPH WHITTERS TO BOARD OF DIRECTORS

HAYWARD, Calif. and Cambridge, U.K. (August 3, 2006) — Solexa, Inc. (Nasdaq: SLXA) today announced the appointment of Joseph Whitters, 48, a veteran healthcare industry executive, to its Board of Directors. The Company also announced the resignations of Craig Taylor and Genghis Lloyd-Harris from its Board of Directors.

Mr. Whitters has nearly 20 years of experience in financial management positions in the healthcare industry. He was chief financial officer for most of his nearly two decade career at First Health Group Corporation and was executive vice president at the time of its sale to Coventry Health Plans in 2005. During his tenure at First Health, Mr. Whitters was deeply involved with a broad spectrum of the company’s financial activities, including mergers and acquisitions, new ventures and Sarbanes-Oxley compliance. Mr. Whitters led and participated in more than $1 billion in acquisitions and numerous public offerings, and helped grow First Health from $5 million in revenue when he joined the company, to $900 million 18 years later in 2005.

“We are delighted that Joe has joined the Solexa Board of Directors,” said John West, chief executive officer of Solexa. “His financial expertise and track record of organic growth and growth by acquisition will be invaluable as we build Solexa into a world-class commercial enterprise.”

“I am very pleased to join the Solexa Board at this exciting time, as the company embarks on commercial shipments of its next-generation genetic analysis system,” said Mr. Whitters. “I look forward to working with the Board and the management team as Solexa deploys its technology to build a robust business.”

Prior to joining First Health in 1986, Mr. Whitters served as a controller for United HealthCare Corporation and as a manager of accounting and taxation at Overland Express. He was a former

advisory committee participant for Nasdaq. Mr. Whitters currently serves as a board member for Mentor Corp, Luminent Mortgage Capital and Omnicell. Mr. Whitters received his bachelor’s degree in accounting from Luther College.

Mr. West also commented, “I would also like to extend my sincere gratitude and appreciation to Craig Taylor and Genghis Lloyd-Harris for the many contributions they have made to our company. Through his association with Asset Management Company, Craig was one of the original supporters of Lynx Therapeutics, dating from the spin-off of Lynx in 1992. He has served as chairman of our board since 2000 and was our acting chief financial officer from 1994 to 1997. I thank him for his leadership and guidance over the years.”

“Genghis has taken a leadership role with the company since he joined our Board of Directors in 2004 on behalf of Abingworth, Solexa’s original venture investor dating from Solexa Limited’s 1998 seed financing. We are grateful to Genghis for his tireless activities on Solexa’s behalf over the last two years. We wish both Craig and Genghis well in their future endeavors.”

About Solexa
Solexa, Inc. is developing and commercializing the Solexa Genome Analysis System, which will be used to perform a range of analyses including whole genome resequencing, gene expression analysis and small RNA analysis. Solexa expects its first-generation instrument, the 1G Genome Analyzer, to generate over a billion bases of DNA sequence per run and to enable human genome resequencing below $100,000 per sample, making it the first platform to reach this important milestone. Solexa’s longer-term goal is to reduce the cost of human re-sequencing to a few thousand dollars for use in a wide range of applications from basic research through clinical diagnostics. For further information, please visit www.solexa.com.

This press release contains “forward-looking” statements, including statements related to the current views of Solexa management as to future products, product development including the commercial introduction of the Company’s novel genetic analysis technology and the expansion and success of Solexa’s commercial application of its genomics technologies. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “predicts,” “expects,” “envisions,” “hopes,” “estimates,” “intends,” “will,” “continue,” “may,” “potential,” “should,” “confident,” “could” and similar expressions are intended to identify forward-looking statements. There can be no assurance that such expectations of any of the forward-looking statements will prove to be correct, and actual results could differ materially from those projected or assumed in the forward-looking statements. There are a number of important factors that could cause the results of Solexa to differ materially from those indicated by these forward-looking statements including, among others, risks detailed from time to time in the Company’s SEC reports, including its Annual Report on Form 10-K for the year ended December 31, 2005 and its Form 10-Q for the quarter ended March 31, 2006. Solexa does not undertake any obligation to update forward-looking statements.

###