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): May 6, 2005

SOLEXA, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

000-22570
(Commission File No.) 94-3161073
(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 2.2.2

EXHIBIT 10.62

EXHIBIT 99.1

Item 1.01 Entry into a Material Definitive Agreement.

On May 6, 2005, Solexa, Inc., a Delaware corporation (the “Company”), entered into Amendment No. 2 to that certain Acquisition Agreement, dated as of September 28, 2004, by and between the Company and Solexa Limited, a company registered in England and Wales (“Solexa Limited”), as amended by that certain Amendment and Waiver dated as of March 3, 2005 (the “Amendment”). The Amendment modifies certain registration rights of certain stockholders of the Company and the Company’s registration obligations to such stockholders as set forth therein. The Amendment is attached hereto as Exhibit 2.2.2 and is incorporated herein by reference.

In connection with the Amendment, the Company also entered into Amendments No. 1 to Amended and Restated Company Support Agreement, dated as of April 21, 2005, by and between the Company and certain stockholders (the “Stockholders”) of the Company (“Amendment No. 1”). Amendment No. 1 modifies certain registration rights of the Stockholders and the Company’s registration obligations to the Stockholders as set forth therein. Amendment No. 1 is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

See Item 3.02 regarding the warrant issued to Seven Hills Partners LLC (“Seven Hills”).

Item 3.02 Unregistered Sales of Equity Securities.

On May 6, 2005, the Company issued and sold 180,000 shares of the Company’s common stock at $4.00 per share and a warrant to purchase 90,000 shares of the Company’s common stock at an exercise price of $5.00 per share to Seven Hills as payment of a portion of the fee owed for services rendered by Seven Hills in connection with the business combination between the Company and Solexa Limited completed on March 4, 2005.

The warrant is exercisable 180 days after issuance and remains exercisable until the five year anniversary of issuance. The price of the warrant is subject to certain adjustments as set forth therein. The warrant is attached hereto as Exhibit 10.62 and is incorporated herein by reference.

The issuance and sale of the common stock and warrant to Seven Hills were exempt from registration in reliance upon Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and or Regulation D of the Securities Act, for transactions by an issuer not involving a public offering.

Item 9.01. Financial Statements and Exhibits.

(c)   Exhibits:

2.2.2	Amendment No. 2 to Acquisition Agreement, dated as of May 6, 2005, by and between the Company and Solexa Limited.
10.62	Warrant issued by the Company to Seven Hills Partners LLC on May 6, 2005.
99.1	Form of Amendment No. 1 to Amended and Restated Company Support Agreement between the Company and certain stockholders of the Company.

2

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: May 11, 2005	By:	/s/ Linda Rubinstein
	Name: Linda Rubinstein
	Title: Vice President and Chief Financial Officer

EXHIBITS

2.2.2	Amendment No. 2 to Acquisition Agreement, dated as of May 6, 2005, by and between the Company and Solexa Limited.
10.62	Warrant issued by the Company to Seven Hills Partners LLC on May 6, 2005.
99.1	Form of Amendment No. 1 to Amended and Restated Company Support Agreement between the Company and certain stockholders of the Company.

EX-2.2.2

Exhibit 2.2.2

AMENDMENT NO. 2 TO

ACQUISITION AGREEMENT

     This Amendment No. 2 to that certain Acquisition Agreement, dated as of September 28, 2004, by and between Solexa, Inc., a Delaware corporation (“Parent”), and Solexa Limited, a company registered in England and Wales (the “Company”), as amended by that certain Amendment and Waiver dated as of March 3, 2005 (the “Agreement”), is made effective as of May 6, 2005 (“Amendment No. 2”). Capitalized terms not otherwise defined in this Amendment No. 2 shall have the meaning ascribed to them in the Agreement.

RECITALS

     Whereas, pursuant to Section 1.1(h) of the Agreement, Parent has agreed to file a post-effective amendment to the Registration Statement on Form S-3 registering for resale certain shares Parent’s common stock, par value $0.01 per share (“Common Stock”) issued pursuant to the Agreement to those Company shareholders (the “Company Shareholders”) who, among other matters, may be deemed to be an “affiliate” of the Company, as such term in defined for the purposes of paragraphs (c) and (d) of Rule 145 under the Securities Act of 1933, as amended (the “Business Combination Shares”);

     Whereas, the Company Shareholders are purchasing shares of Common Stock (the “Private Placement Shares”) and warrants to purchase shares of Common Stock (the “Warrant Shares” together with the Private Placement Shares, the “Private Placement Securities”) pursuant to that certain Securities Purchase Agreement, dated as of April 21, 2005, by and among Parent and the individuals and entities named on the signature pages thereto (the “Purchase Agreement”);

     Whereas, pursuant to Section 7.2 of the Purchase Agreement, Parent has agreed to file a registration statement on Form S-3 registering the Private Placement Securities for resale;

     Whereas, Parent and the Company desire to amend the Agreement to amend the deadline within which Parent is obligated to register the Business Combination Shares for resale pursuant to the Agreement to correspond with the deadline within which Parent is obligated to register the Private Placement Securities for resale pursuant to the Purchase Agreement;

     Whereas, pursuant to Section 8.3 of the Agreement, the Agreement may be amended or waived in writing; and

     Whereas, subject to the terms and conditions provided herein, the parties desire to amend the Agreement in accordance with Section 8.3 thereof.

     Now, Therefore, in consideration of these premises and for other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1.   Amendment to Terms. Section 1.1(h) of the Agreement is hereby amended and restated to read in its entirety as follows:

     “(h) Parent agrees to use its commercially reasonable efforts to: (i) no later than July 14, 2005, file a registration statement on Form S-3 or a post-effective amendment to the Registration Statement on Form S-3, at Parent’s discretion, registering the resale by those Company shareholders who; (A) have executed Company Support Agreements, and (B) may be deemed to be an “affiliate” of the Company, as the term “affiliate” is defined for purposes of paragraphs (c) and (d) of Rule 145 of the Rules and Regulations, of the Parent Common Stock issuable to such shareholders in the Offer, and (ii) cause such post-effective amendment on Form S-3 to be declared effective under the Securities Act as promptly as practicable after its filing, and in any event within September 22, 2005. The various terms and procedures associated with resale under such registration statement are set forth in the Company Support Agreements between Parent and certain Company shareholders.”

2.   Miscellaneous.

          (a) Amendments and Waivers. Any term of this Amendment No. 2 may be amended or waived with the written consent of the parties or their respective successors and assigns. Any amendment or waiver effected in accordance with this Section 2(a) shall be binding upon the parties and their respective successors and assigns.

          (b) Governing Law. This Amendment No. 2 and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.

          (c) Full Force and Effect. Except as expressly modified by this Amendment No. 2, all of the terms and conditions of the Agreement shall remain in full force and effect.

          (d) Counterparts. This Amendment No. 2 may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

[signature page follows]

2

     In Witness Whereof, the parties hereto have executed this Amendment No. 2 as of the date first set forth above.

COMPANY:

By:	/s/ John West
Name:	John West
Title:	Chief Executive Officer

Address: Solexa Limited
c/o Abingworth Management Ltd.
3000 Sand Hill Road, Bldg. 4, Suite 135
Menlo Park, CA 94025

PARENT:

By:	/s/ John West
Name:	John West
Title:	Chief Executive Officer

Address: 25861 Industrial Boulevard
Hayward, CA 94545

Signature Page to Amendment No. 2 to
Acquisition Agreement

EX-10.62

Exhibit 10.62

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

SOLEXA, INC.

WARRANT TO PURCHASE COMMON STOCK

May 6, 2005

Void After May 6, 2010

     This Certifies That, for value received, Seven Hills Partners LLC, or assigns (the “Holder”), is entitled to subscribe for and purchase at the Exercise Price (defined below) from Solexa, Inc., a Delaware corporation, with its principal office at 25861 Industrial Boulevard, Hayward, CA 94545 (the “Company”) up to ninety thousand (90,000) shares of the common stock of the Company, par value $0.01 per share (the “Common Stock”).

     1. Definitions. As used herein, the following terms shall have the following respective meanings:

          (a) “Exercise Period” shall mean the period commencing with the date that is one hundred and eighty (180) days after the date hereof and ending five (5) years from the date hereof, unless sooner terminated as provided below.

          (b) “Exercise Price” shall mean five dollars ($5.00) per share, subject to adjustment pursuant to Section 5 below.

          (c) “Exercise Shares” shall mean the shares of the Common Stock issuable upon exercise of this Warrant.

     2. Exercise of Warrant. The rights represented by this Warrant may be exercised in whole or in part at any time during the Exercise Period, by delivery of the following to the Company at its address set forth above (or at such other address as it may designate by notice in writing to the Holder):

          (a) An executed Notice of Exercise in the form attached hereto;

          (b) Payment of the Exercise Price in cash or by check; and

          (c) This Warrant.

     Certificates for shares purchased hereunder shall be transmitted by the transfer agent of the Company to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”)

1.

system if the Company is a participant in such system (and so long as the legend may be removed in accordance with Section 4.10 of the Purchase Agreement), and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise within 5 Trading Days from the delivery to the Company of the Notice of Exercise Form, surrender of this Warrant and payment of the aggregate Exercise Price as set forth above (“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price.

     The person in whose name any certificate or certificates for Exercise Shares are to be issued upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on the date on which this Warrant was surrendered and payment of the Exercise Price was made, irrespective of the date of delivery of such certificate or certificates, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

     2.1 Net Exercise. Notwithstanding any provisions herein to the contrary, after the Filing Date (as defined in Section 7.2 of the Securities Purchase Agreement dated April 21, 2005, by and among the Company and the individuals and entities identified on the signature pages hereto (the “Purchase Agreement”)), if (i) the Registration Statement (as defined in the Purchase Agreement) has not been declared effective until such time as the Registration Statement is declared effective or at any time a Registration Statement is no longer effective and (ii) the fair market value of one share of the Company’s Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of 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 Notice of Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula:

	X = Y (A-B)
		A
Where X =	the number of shares of Common Stock to be issued to the Holder
Y=	the number of shares of Common 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 Common Stock (at the date of such calculation)
B=	Exercise Price (as adjusted to the date of such calculation)

2.

     For purposes of the above calculation, the “fair market value” of one share of Common Stock shall mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq SmallCap Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the holders if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the ten (10) consecutive trading days immediately preceding such date, or (ii) if the Nasdaq SmallCap Market is not the principal trading market for the shares of Common Stock, the average of the reported sales prices reported by Bloomberg on the principal trading market for the Common Stock during the same period, or, if there is no sales price for such period, the last sales price reported by Bloomberg for such period, or (iii) if neither of the foregoing applies, the last sales price of such security in the over-the-counter market on the pink sheets or bulletin board for such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

     Notwithstanding anything herein to the contrary, if there is no Registration Statement effective on the last day of the Exercise Period, this Warrant shall be automatically exercised via net exercise pursuant to this Section 2.1.

     2.2 Issuance of New Warrants. Upon any partial exercise of this Warrant, the Company, at its expense, will forthwith and, in any event within five (5) business days, issue and deliver to the Holder a new warrant or warrants of like tenor, registered in the name of the Holder, exercisable, in the aggregate, for the balance of the Warrant Shares.

     2.3 Payment of Taxes and Expenses. The Company shall pay any recording, filing, stamp or similar tax which may be payable in respect of any transfer involved in the issuance of, and the preparation and delivery of certificates (if applicable) representing, (i) any Warrant Shares purchased upon exercise of this Warrant and/or (ii) new or replacement warrants in the Holder’s name or the name of any transferee of all or any portion of this Warrant.

     2.4 Rescission Rights. If the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares pursuant to this Section 2 by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

     3. Covenants of the Company.

     3.1 Covenants as to Exercise Shares. The Company covenants and agrees that all Exercise Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the Exercise Period, have authorized and reserved, free from preemptive rights, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. If at any time during the Exercise Period the number of authorized but unissued shares of Common Stock

3.

shall not be sufficient to permit exercise of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes.

     3.3 Notices of Record Date. In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters) or other distribution, the Company shall mail to the Holder, at least ten (10) days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.

     4. Disposition of Warrant and Exercise Shares.

          (a) The Holder further agrees not to make any disposition of all or any part of the Warrant or Exercise Shares in any event unless and until:

               (i) The Company shall have received a letter secured by the Holder from the Securities and Exchange Commission stating that no action will be recommended to the Commission with respect to the proposed disposition; or

               (ii) There is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with said registration statement; or

               (iii) The Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Company, the Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, for the Holder to the effect that such disposition will not require registration of such Warrant or Exercise Shares under the Act or any applicable state securities laws; provided, however, that no such opinion of counsel shall be required for sales (i) under Rule 144, (ii) to one of its nominees, affiliates or a nominee thereof, (iii) to a pension or profit-sharing fund established and maintained for its employees or for the employees of any affiliate, (iv) from a nominee to any of the aforementioned persons as beneficial owner of this Warrant or such Warrant Shares, or (v) to a qualified institutional buyer, so long as such transfer is effected in compliance with Rule 144A under the Securities Act.

          (b) The Holder understands and agrees that subject to Section 4.10 of the Purchase Agreement, all certificates evidencing the shares to be issued to the Holder may bear the following legend:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”

4.

     5. Adjustment of Exercise Price and Shares.

          (a) In the event of changes in the outstanding Common Stock of the Company by reason of stock dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of shares, separations, reorganizations, liquidations, consolidation, acquisition of the Company (whether through merger or acquisition of substantially all the assets or stock of the Company), or the like, the number and class of shares available under the Warrant in the aggregate and the Exercise Price shall be correspondingly adjusted to give the Holder of the Warrant, on exercise for the same aggregate Exercise Price, the total number, class, and kind of shares or other property as the Holder would have owned had the Warrant been exercised prior to the event and had the Holder continued to hold such shares until the event requiring adjustment. The form of this Warrant need not be changed because of any adjustment in the number of Exercise Shares subject to this Warrant.

          (b) If at any time or from time to time the holders of Common Stock of the Company (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) Common Stock or any shares of stock or other securities which are at any time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution (other than a dividend or distribution covered in Section 5(a) above),

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

               (iii) Common 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 Common Stock pursuant to Section 5(a) above),

then and in each such case, the Holder hereof will, upon the exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common 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 he been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property.

     6. Subsequent Financings.

               (i) If, at any time prior to the second and one half (2 1/2) year anniversary of the date hereof, the Company issues additional shares of Common Stock or rights, warrants, options or other securities or debt convertible, exercisable or exchangeable for shares of Common Stock or otherwise entitling any individual or entity to acquire shares of Common Stock (collectively, “Common Stock Equivalents”) at an effective net price to the Company per share of Common Stock (the “Effective Price”) less than four dollars ($4.00) (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like after the date hereof), then the Exercise Price shall be reduced to equal the product of (A) the Exercise Price in effect

5.

immediately prior to such issuance of Common Stock or Common Stock Equivalents times (B) a fraction, the numerator of which is the sum of (1) the number of shares of Common Stock outstanding immediately prior to such issuance, plus (2) the number of shares of Common Stock which the aggregate Effective Price of the Common Stock issued (or deemed to be issued) would purchase at the Exercise Price, and the denominator of which is the aggregate number of shares of Common Stock outstanding or deemed to be outstanding immediately after such issuance. For purposes of this paragraph, in connection with any issuance of any Common Stock Equivalents, (A) the maximum number of shares of Common Stock potentially issuable at any time upon conversion, exercise or exchange of such Common Stock Equivalents (the “Deemed Number”) shall be deemed to be outstanding upon issuance of such Common Stock Equivalents, (B) the Effective Price applicable to such Common Stock shall equal the minimum dollar value of consideration payable to the Company to purchase such Common Stock Equivalents and to convert, exercise or exchange them into Common Stock (net of any discounts, fees, commissions and other expenses), divided by the Deemed Number, and (C) no further adjustment shall be made to the Exercise Price upon the actual issuance of Common Stock upon conversion, exercise or exchange of such Common Stock Equivalents.

               (ii) If, at any time while this Warrant is outstanding, the Company issues Common Stock Equivalents with an Effective Price or a number of underlying shares that floats or resets or otherwise varies or is subject to adjustment based (directly or indirectly) on market prices of the Common Stock (a “Floating Price Security”) in a transaction the primary purpose of which is to raise capital, then for purposes of applying the preceding paragraph in connection with any subsequent exercise, the Effective Price will be determined separately on each Exercise Date and will be deemed to equal the lowest Effective Price at which any holder of such Floating Price Security is entitled to acquire Common Stock on such Exercise Date (regardless of whether any such holder actually acquires any shares on such date).

               (iii) Notwithstanding the foregoing, no adjustment will be made under this Section 6 in respect to any issuance of Common Stock (A) upon exercise or conversion of any options or other securities described in the SEC Documents (as defined in the Purchase Agreement) or Disclosure Schedule to the Purchase Agreement or otherwise pursuant to any employee benefit plan of the Company or its subsidiaries or hereafter adopted by the Company, or (B) in connection with any grant of options to employees, officers, directors or consultants of the Company pursuant to a stock option plan duly adopted by the Company’s board of directors or in respect of the issuance of Common Stock upon exercise of any such options.

     7. Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then current fair market value of an Exercise Share by such fraction.

     8. Fundamental Transactions. If, at any time while this Warrant is outstanding, (i) the Company effects any merger of the Company with or into another entity, (ii)

6.

the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another individual or entity) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 5 above) (in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, (a) upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 8 and insuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

     9. No Stockholder Rights. This Warrant in and of itself shall not entitle the Holder to any voting rights or other rights as a shareholder of the Company.

     10. Registration Rights. The Holder of the Warrant Shares shall be entitled to the registration rights to such Warrant Shares provided by the Purchase Agreement.

     11. Transfer of Warrant. Subject to applicable laws and the restriction on transfer set forth on the first page of this Warrant, this Warrant and all rights hereunder are transferable, by the Holder in person or by duly authorized attorney, upon delivery of this Warrant and the form of assignment attached hereto to any transferee designated by Holder. The transferee shall sign an investment letter in form and substance reasonably satisfactory to the Company and its counsel.

7.

     12. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

     13. Notices, etc. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at the address listed on the signature page and to Holder at:

Seven Hills Partners LLC

c/o Seven Hills Group LLC

88 Kearny Street

San Francisco, CA 94108

Attn: Kempton Dunn III

Fax: (415) 869-6262

or at such other address as the Company or Holder may designate by ten (10) days advance written notice to the other parties hereto.

     14. Acceptance. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

     15. Governing Law. This Warrant and all rights, obligations and liabilities hereunder shall be governed by the laws of the State of California.

     16. Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. In any action or proceeding brought to enforce any provision of this Warrant or where any provision hereof is validly asserted as a defense, the successful party to such action or proceeding shall be entitled to recover reasonable attorneys’ fees in addition to any other available remedy.

8.

     In Witness Whereof, the Company has caused this Warrant to be executed by its duly authorized officer as of May 6, 2005.

SOLEXA, INC.
By:	/s/ John West

Name:	John West
Title:	Chief Executive Officer
Address:	25861 Industrial Boulevard
	Hayward, CA 94545

NOTICE OF EXERCISE

TO: Solexa, Inc.

     (1)o The undersigned hereby elects to purchase                                 shares of the Common Stock of Solexa, Inc. (the “Company”) pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

          o The undersigned hereby elects to purchase                                 shares of Common Stock of the Company pursuant to the terms of the net exercise provisions set forth in Section 2.1 of the attached Warrant, and shall tender payment of all applicable transfer taxes, if any.

     (2) Please issue a certificate or certificates representing said shares of Common Stock of the Company in the name of the undersigned or in such other name as is specified below:

(Name)

(Address)

     (3) The undersigned represents that (i) the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, other than as contemplated by Article 7 of the Securities Purchase Agreement dated as of April 21, 2005 by and among the Company and the purchasers named therein (the “Purchase Agreement”); (ii) the undersigned is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision regarding its investment in the Company; (iii) the undersigned is experienced in making investments of this type and has such knowledge and background in financial and business matters that the undersigned is capable of evaluating the merits and risks of this investment and protecting the undersigned’s own interests; (iv) the undersigned understands that the shares of Common Stock issuable upon exercise of this Warrant have not been registered (except to the extent a registration statement pursuant to and as contemplated by Article 7 of the Purchase Agreement is effective) under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration provisions of the Securities Act, which exemption depends upon, among other things, the bona fide nature of the investment intent as expressed herein, and, because such securities have not been registered under the Securities Act, they must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available; (v) the undersigned is aware that the aforesaid shares of Common Stock may not be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met and until the undersigned has held the shares for the number of years prescribed by Rule 144, that among the conditions for use of the Rule is the availability of current information to the public about the

Company; and (vi) the undersigned agrees not to make any disposition of all or any part of the aforesaid shares of Common Stock unless and until there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with said registration statement, or the undersigned has provided upon the Company’s reasonable request, an opinion of counsel satisfactory to the Company, stating that such registration is not required.

(Date)	(Signature)
	(Print name)

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

     For Value Received, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

Name:
	(Please Print)
Address:
	(Please Print)

Dated: __________, 20__

Holder’s

Signature:

Holder’s

Address:

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

EX-99.1

Exhibit 99.1

AMENDMENT NO. 1 TO

AMENDED AND RESTATED COMPANY SUPPORT AGREEMENT

     This Amendment No. 1 to that certain Amended and Restated Company Support Agreement (the “Agreement”) dated as of April 21, 2005, by and between Solexa, Inc., a Delaware corporation (the “Company”), and the undersigned stockholder (the “Holder”) of the Company is made effective as of May [___], 2005 (“Amendment No. 1”). Capitalized terms not otherwise defined in this Amendment No. 1 shall have the meaning ascribed to them in the Agreement.

RECITALS

     Whereas, the Holder is the registered owner of such number of the Company’s common stock, par value $0.01 per share (“Common Stock”) issued pursuant to that certain Acquisition Agreement, dated as of September 28, 2004, by and between the Company and Solexa Limited (the “Acquisition Agreement”) (the “Business Combination Shares”) and such number of options to purchase Common Stock as indicated beneath Holder’s signature on the last page of this Agreement;

     Whereas, the Holder is purchasing shares of Common Stock (the “Private Placement Shares”) and warrants to purchase shares of Common Stock (the “Warrant Shares” together with the Private Placement Shares, the “Private Placement Securities”) pursuant to that certain Securities Purchase Agreement, dated as of April 21, 2005, by and among the Company and the individuals and entities named on the signature pages thereto (the “Purchase Agreement”);

     Whereas, the Company and the Holder desire to amend the Agreement to amend the deadline within which the Company is obligated to register the Business Combination Shares for resale pursuant to the Agreement to correspond with the deadline within which the Company is obligated to register the Private Placement Securities for resale pursuant to the Purchase Agreement;

     Whereas, pursuant to Section 11(a) of the Agreement, any term of the Agreement may be amended or waived with the written consent of the Company and the Holder; and

     Whereas, the Company and the Holder have agreed to enter into this Amendment No. 1.

     Now, Therefore, in consideration of these premises and for other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1.   Amendment to Terms. Section 6(b) of the Agreement is hereby amended and restated to read in its entirety as follows:

          “(b) Required Registration. The Company shall use its commercially reasonable efforts to (i) file a registration statement on Form S-3 or a post-effective amendment to the Registration Statement on Form S-3, at the Company’s discretion, registering the resale of the Registrable Shares no later than July 14, 2005 (the “Amendment”), so long as the holders of such Registrable Shares shall provide the information necessary for inclusion therein in a timely manner to enable the Company to file the Amendment within such period, (ii) to cause such Amendment to be declared effective by the SEC as soon thereafter as possible and in any event no later than September 22, 2005, (iii) to file such amendments or supplements as may be necessary so that the prospectus contained in the Amendment will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and (iv) to effect all such registrations, qualifications and compliances (including, without limitation, obtaining appropriate qualifications under applicable state securities or “blue sky” laws and compliance with any other applicable governmental requirements or regulations) as Holder may reasonably request and that would permit or facilitate the sale of all Holder’s Registrable Shares (provided, however, that the Company shall not be required in connection therewith to qualify to do business or to file a general consent to service of process in any such state or jurisdiction), and in each case the Company will use its commercially reasonable efforts to cause such Amendment and all other such registrations, qualifications and compliances to be declared effective as promptly as practicable thereafter. As soon as reasonably practicable after the date hereof, the Company will provide to each holder of Registrable Securities a questionnaire setting forth the information that the Company will require from each such holder to include such holder’s Registrable Shares in the Registration Statement. If Holder shall fail to furnish such information to the Company within twenty (20) days following the date on which such questionnaire shall be delivered to the Holders, the Company may exclude Holder from the Registration Statement.”

2.   Miscellaneous.

          (a) Amendments and Waivers. Any term of this Amendment No. 1 may be amended or waived with the written consent of the parties or their respective successors and assigns. Any amendment or waiver effected in accordance with this Section 2(a) shall be binding upon the parties and their respective successors and assigns.

          (b) Governing Law. This Amendment No. 1 and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.

          (c) Full Force and Effect. Except as expressly modified by this Amendment No. 1, all of the terms and conditions of the Agreement shall remain in full force and effect.

          (d) Counterparts. This Amendment No. 1 may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

[signature page follows]

2

     The parties have caused this Amendment No. 1 to be duly executed on the date first above written.

COMPANY

By:

Name:

Title:

Address: Solexa, Inc.
25861 Industrial Boulevard
Hayward, California 94545
Attention: Chief Executive Officer
Facsimile No.: 650.670.9303

Signature Page to Amendment No. 1 to
Amended and Restated Company Support Agreement

HOLDER
By:
	[Name]

Holder’s Address for Notice:

Attention:
Facsimile No.:

Common Stock of the Company held of record:____________________

Options to Purchase Common Stock of the Company:_______________

Additional Securities of the Company Beneficially Owned:___________

Signature Page to Amendment No. 1 to
Amended and Restated Company Support Agreement