Exhibit 10.71
SOLEXA, INC.
SECURITIES PURCHASE AGREEMENT
November 18, 2005

 

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SOLEXA, INC.
SECURITIES PURCHASE AGREEMENT
     This Securities Purchase Agreement (this “Agreement”) is made as of
November 18, 2005, by and among Solexa, Inc. , a Delaware corporation (the
“Company”) with its principal office at 25861 Industrial Boulevard, Hayward,
California 94545, and the purchasers identified on the signature pages hereto
(the “Purchasers”).
RECITALS
     Whereas, the Company has authorized the sale and issuance of the Common
Shares and the Warrants (each as defined herein);
     Whereas, the Company and the Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D, as promulgated by the SEC (as defined herein)
under the Securities Act (as defined herein);
     Whereas, at the First Closing (as defined herein), the Company desires to
sell, and each Purchaser desires severally, and not jointly, to purchase, the
Shares and the Warrants, each as indicated below such Purchaser’s name on the
applicable signature page of this Agreement upon the terms and conditions stated
in this Agreement and at the Second Closing (as defined herein), if Stockholder
Approval (as defined herein) is obtained, each Purchaser hereto desires
severally, and not jointly, to purchase, the Shares and the Warrants, each as
indicated below such Purchaser’s name on the applicable signature page of this
Agreement upon the terms and conditions stated in this Agreement; and
     Now, Therefore, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
Authorization and Sale of Common Shares and Warrants
     1.1 Authorization. The Company has authorized (a) the sale and issuance to
the Purchasers pursuant to this Agreement of up to Two Hundred Thirty Thousand
Eight Hundred Forty (230,840) shares (the “Common Shares”) of Company’s common
stock, par value $0.01 per share (the “Common Stock”) at a price per shares of
six dollars and fifty cents ($6.50) and (b) the sale and issuance of warrants to
the Purchasers pursuant to this Agreement, in the form attached hereto as
Exhibit A, (the “Warrants”), to purchase up to Eighty Thousand Seven Hundred
Ninety Four (80,794) shares of the Common Stock, at a price per share of seven
dollars and fifty cents ($7.50) (the “Warrant Price”). The shares of Common
Stock issuable upon exercise of or otherwise pursuant to the Warrants purchased
by the Purchasers pursuant to this

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Agreement are referred to herein as the “Warrant Shares.” The Common Shares and
the Warrant Shares are collectively referred to herein as the “Shares.” The
Shares and the Warrants are collectively referred to herein as the “Securities.”
          (a) First Closing. Subject to the terms and conditions of this
Agreement, including without limitation, the conditions set forth in Article 5
and Article 6 of this Agreement (excluding Stockholder Approval in Section 7.8),
there shall be a closing at which the Company shall issue and sell, and each
Purchaser, shall severally, and not jointly, purchase, the number of shares of
Common Shares and the number of Warrants, in each case, in the respective
amounts indicated below such Purchaser’s name on the applicable signature page
of this Agreement, in exchange for the cash consideration set forth as the
“First Closing Purchase Price” indicated below such Purchaser’s name on the
signature page of this Agreement (the “First Closing”).
          (b) Second Closing. Subject to the terms and conditions of this
Agreement, including without limitation, the conditions set forth in Article 5
and Article 6 of this Agreement (including Stockholder Approval in Section 7.8),
at the Second Closing, there shall be a closing at which the Company shall issue
and sell, and each Purchaser, shall severally, and not jointly, purchase, the
number of shares of Common Shares and the number of Warrants, in each case, in
the respective amounts indicated below such Purchaser’s name on the signature
page of this Agreement, in exchange for the cash consideration set forth as the
“Second Closing Purchase Price” indicated below such Purchaser’s name on the
applicable signature page of this Agreement (the “Second Closing”).
ARTICLE 2
Closing Dates; Delivery
2.1 Closing Dates. Delivery.
          (a) Location. The First Closing and Second Closing of the purchase and
sale of the Common Shares and Warrants hereunder (together, the “Closings”)
shall be held at the offices of Cooley Godward llp (“Cooley Godward”), 3175
Hanover Street, Palo Alto, California 94304, or at such other location upon
which the Company and the Purchasers purchasing a majority of the Common Shares
at the applicable Closing shall agree, on the applicable Closing Date.
          (b) First Closing. Subject to the satisfaction (or waiver) of the
conditions thereto set forth in Article 5 and Article 6 of this Agreement, on
the date hereof or at such other time and place upon which the Company and the
Purchasers purchasing a majority of the Common Shares at the First Closing shall
agree, the Company will deliver or cause to be delivered to each Purchaser, a
duly executed Warrant and a certificate representing the number of Common Shares
purchased by such Purchaser, registered in such Purchaser’s name as indicated on
the Stock Certificate Questionnaire in the form attached hereto as Exhibit B-1.
Such delivery shall be against payment of the purchase price therefor by each
such Purchaser as set forth as the “First Closing Purchase Price” below their
respective names on the signature page attached hereto by wire transfer of
immediately available funds to the Company in accordance with the Company’s
written wiring instructions. The date of the First Closing is

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hereinafter referred to as the “First Closing Date.”
          (c) Second Closing. Subject to the satisfaction (or waiver) of the
conditions thereto set forth in Article 5 and Article 6 of this Agreement, on
the date one (1) business day following the Company’s receipt of the Stockholder
Approval (as defined herein), or at such other time and place upon which the
Company and the Purchasers purchasing a majority of the Common Shares at the
Second Closing shall agree, the Company will deliver or cause to be delivered to
each Purchaser, a duly executed Warrant and a certificate representing the
number of Common Shares purchased by such Purchaser, registered in such
Purchaser’s name as indicated on the Stock Certificate Questionnaire in the form
attached hereto as Exhibit B-1. Such delivery shall be against payment of the
purchase price therefor by each such Purchaser as set forth as the “Second
Closing Purchase Price” below their names on the signature page attached hereto
by wire transfer of immediately available funds to the Company in accordance
with the Company’s written wiring instructions. The date of the Second Closing
is hereinafter referred to as the “Second Closing Date.”
ARTICLE 3
Representations and Warranties of the Company
     Except as set forth on the Disclosure Schedule delivered by the Company to
the Purchasers herewith, the Company represents and warrants to the Purchasers
on and as of the date hereof and on the applicable Closing Date:
     3.1 Organization and Standing. The Company is a corporation duly organized
and validly existing under, and by virtue of, the laws of the State of Delaware
and is in good standing as a domestic corporation under the laws of said state.
The Company does not own or control any equity security or other interest of any
corporation, limited partnership or other business entity.
     3.2 Corporate Power; Authorization. The Company has all requisite legal and
corporate power and has taken all requisite corporate action to execute and
deliver this Agreement, to sell and issue the Common Shares and Warrants, to
issue the Warrant Shares upon exercise of the Warrants in accordance with the
terms of such Warrants, and to carry out and perform all of its obligations
under this Agreement. This Agreement constitutes, and upon execution and
delivery by the Company of the Warrants, the Warrants will constitute, legal,
valid and binding obligations of the Company, enforceable in accordance with
their respective terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors’ rights generally and (b) as limited by equitable
principles generally. The execution and delivery of this Agreement does not, and
the performance of this Agreement and the compliance with the provisions hereof,
the issuance, sale and delivery of the Common Shares and the Warrants by the
Company will not materially conflict with, or result in a material breach or
violation of the terms, conditions or provisions of, or constitute a material
default under, or result in the creation or imposition of any material lien
pursuant to the terms of, the Amended and Restated Certificate of Incorporation,
as amended (the “Restated Certificate”) or Bylaws of the Company or any statute,
law, rule or regulation or any state or federal order, judgment or decree or any
indenture, mortgage, lease or other material

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agreement or instrument to which the Company or any of its properties is
subject.
     3.3 Issuance and Delivery of the Shares. When issued in compliance with the
provisions of this Agreement and the Restated Certificate, the Common Shares
will be validly issued, fully paid and nonassessable. Upon exercise of the
Warrants in accordance with the terms thereof, the Warrant Shares will be
validly issued, fully paid and nonassessable. The issuance and delivery of the
Common Shares and the Warrants is not subject to preemptive or any other similar
rights of the stockholders of the Company or any liens or encumbrances.
     3.4 SEC Documents; Financial Statements. The Company has filed in a timely
manner all documents that the Company was required to file with the Securities
and Exchange Commission (the “SEC”) under Sections 13, 14(a) and 15(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), during the
twelve (12) months preceding the date of this Agreement. As of their respective
filing dates, all such documents filed by the Company with the SEC (the “SEC
Documents”) complied in all material respects with the requirements of the
Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”),
as applicable. None of the SEC Documents as of their respective dates contained
any untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Documents (the
“Financial Statements”) comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto. The Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the consolidated financial position of the Company and any
subsidiaries at the dates thereof and the consolidated results of their
operations and consolidated cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal, recurring adjustments or to the
extent that such unaudited statements do not include footnotes).
     3.5 Governmental Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement except for (a) compliance with the securities and blue sky laws
in the states in which the Common Shares and Warrants are offered and/or sold,
which compliance will be effected in accordance with such laws, (b) the filing
of the Registration Statement (as defined herein) and all amendments thereto
with the SEC as contemplated by Section 7.2 of this Agreement and (c) the filing
of a Form D pursuant to Securities and Exchange Commission Regulation D.
     3.6 No Material Adverse Change. Except as otherwise disclosed herein or in
the SEC Documents, since December 31, 2004, there have not been any changes in
the assets, liabilities, financial condition, business prospects or operations
of the Company from that reflected in the Financial Statements except changes in
the ordinary course of business which have not been, either individually or in
the aggregate, materially adverse.
     3.7 Authorized Capital Stock. The authorized capital stock of the Company
consists of (a) sixty million (60,000,0000) shares of Common Stock, $0.01 par
value, of which,

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as of November 18, 2005, twenty six million one hundred eight thousand two
hundred eighty six (26,108,286) shares were outstanding, and (b) two million
(2,000,000) shares of Preferred Stock, $0.01 par value, none of which shares is
currently outstanding. Except as described on Schedule 3.7 of the Disclosure
Schedule, there are no outstanding warrants, options, convertible securities or
other rights, agreements or arrangements of any character under which the
Company is or may be obligated to issue any equity securities of any kind and
except as contemplated by this Agreement.
     3.8 Litigation. Except as disclosed in the SEC Documents, there are no
actions, suits proceedings or investigations pending or, to the best of the
Company’s knowledge, threatened against the Company or any of its properties
before or by any court or arbitrator or any governmental body, agency or
official in which there is a reasonable likelihood (in the judgment of the
Company) of an adverse decision that (a) could have a material adverse effect on
the Company’s properties or assets or the business of the Company as currently
conducted or (b) could impair the ability of the Company to perform in any
material respect its obligations under this Agreement.
     3.9 Eligibility to Use Form S-3. The Company is eligible to use Form S-3
for the registration of its securities under the Securities Act which are
offered in transactions involving secondary offerings.
     3.10 Company not an “Investment Company.” The Company has been advised of
the rules and requirements under the Investment Company Act of 1940, as amended
(the “Investment Company Act”). The Company is not, and immediately after
receipt of payment for the Shares will not be, an “investment company” or an
entity “controlled” by an “investment company” within the meaning of the
Investment Company Act and shall conduct its business in a manner so that it
will not become subject to the Investment Company Act.
     3.11 NASDAQ Compliance. The Common Stock is registered pursuant to Section
12(g) of the Exchange Act and is listed on The Nasdaq Stock Market, Inc. Capital
Market (the “Nasdaq Capital Market”), and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or de-listing the Common Stock from the
Nasdaq Capital Market, nor has the Company received any notification that the
SEC or the National Association of Securities Dealers, Inc. (the “NASD”) is
contemplating terminating such registration or listing.
     3.12 Use of Proceeds. The proceeds of the sale of the Common Shares and the
Warrants hereunder shall be used by the Company for working capital and general
corporate purposes.
     3.13 Brokers and Finders. No person or entity will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or a Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company, other than SG Cowen & Co., LLC as lead
placement agent and Leerink, Swann & Company as co-placement agent.

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     3.14 No Directed Selling Efforts or General Solicitation. Neither the
Company nor any person or entity acting on its behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation D) in
connection with the offer or sale of any of the Securities.
     3.15 No Integrated Offering. Neither the Company nor any of its Affiliates,
nor any person or entity acting on its or their behalf has, directly or
indirectly, made any offers or sales of any Company security or solicited any
offers to buy any security, under circumstances that would adversely affect
reliance by the Company on Section 4(2) for the exemption from registration for
the transactions contemplated hereby or would require registration of the
Securities under the Securities Act.
     3.16 Private Placement. The offer and sale of the Securities to the
Purchasers as contemplated hereby is exempt from the registration requirements
of the Securities Act.
     3.17 Internal Accounting Controls. Except as described in the SEC
Documents, the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles,
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
     3.18 Sarbanes-Oxley; Disclosure Controls and Procedures. To its knowledge,
the Company is in compliance in all material respects with all of the provisions
of the Sarbanes-Oxley Act of 2002 that are applicable to it or any of its
subsidiaries. Except as disclosed in the SEC Documents, the Company has
established and maintains disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) that are effective in all material
respects to ensure that material information relating to the Company, including
any of its subsidiaries, is made known to its chief executive officer and chief
financial officer by others within those entities. The Company’s certifying
officers have evaluated the effectiveness of the Company’s controls and
procedures as of the end of the period covered by the most recently filed
quarterly or annual periodic report under the Exchange Act (such date, the
“Evaluation Date”). The Company presented in its most recently filed quarterly
or annual periodic report under the Exchange Act the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no significant changes in the Company’s
internal controls over financial reporting (as defined in Item 307(b) of
Regulation S-K under the Exchange Act) or, to the Company’s knowledge, in other
factors that could significantly affect the Company’s internal controls over
financial reporting.
     3.19 Intellectual Property.
          (a) “Intellectual Property” shall mean patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information and other
proprietary rights and processes.

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          (b) Except as disclosed in the SEC Documents and to the knowledge of
the Company, the Company owns or has the valid right to use all of the
Intellectual Property that is necessary for the conduct of the Company’s
business as currently conducted or as currently proposed to be conducted as
described in the SEC Documents, free and clear of all material liens and
encumbrances.
          (c) Except as disclosed in the SEC Documents, the conduct of the
Company’s business as currently conducted does not infringe or otherwise
conflict with (collectively, “Infringe”) any Intellectual Property rights of any
third party or any confidentiality obligation owed by the Company to a third
party, and, to the knowledge of the Company, the Intellectual Property and
confidential information of the Company are not being Infringed by any third
party.
          (d) Each employee, consultant and contractor of the Company who has
had access to confidential information of the Company that is necessary for the
conduct of Company’s business as currently conducted or as currently proposed to
be conducted has executed an agreement to maintain the confidentiality of such
confidential information and has executed appropriate agreements that are
substantially consistent with the Company’s standard forms thereof.
     3.20 Questionable Payments. Neither the Company nor, to the knowledge of
the Company, any of its current or former stockholders, directors, officers,
employees, agents or other persons acting on behalf of the Company, has on
behalf of the Company or in connection with its business: (a) used any corporate
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (b) made any direct or indirect
unlawful payments to any governmental officials or employees from corporate
funds; (c) established or maintained any unlawful or unrecorded fund of
corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company; or (e) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment of any nature.
     3.21 Transactions with Affiliates. Except as disclosed in the SEC Documents
and as contemplated pursuant to this Agreement, none of the officers or
directors of the Company and, to the knowledge of the Company, none of the
employees of the Company is presently a party to any transaction with the
Company or to a presently contemplated transaction (other than for services as
employees, officers and directors) that would be required to be disclosed
pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.
     3.22 Disclosure. Except as disclosed on Schedule 3.21 of the Disclosure
Schedule, the information contained in the Exchange Act Documents as of the date
hereof and as of the applicable Closing Date, did not and shall not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. For purposes herein,
“Exchange Act Documents” are the documents filed by the Company under the
Exchange Act, since the end of its most recently completed fiscal year through
the date hereof, including, without limitation, its most recent report on Form
10-K. The Company confirms that neither the Company nor, to the Company’s
knowledge, any other person acting on its behalf has provided any of the
Purchasers or their agents or counsel with any information that constitutes or
would reasonably be expected to constitute material, non-public information. The
Company

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acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than
those specifically set forth in Article IV hereof.
     3.23 Dilution; Sales By Purchasers. The Company acknowledges that the
issuance of the Securities may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligations under this Agreement and
the Warrants, including without limitation its obligation to issue the Warrants,
are unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and regardless of the
dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company. Anything in this Agreement or elsewhere herein to
the contrary notwithstanding (except for Section 4.5 hereof), it is understood
and agreed by the Company (i) that none of the Purchasers have been asked by the
Company to agree, nor has any Purchaser agreed, to desist from purchasing or
selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities
for any specified term; (ii) that future open market or other transactions by
any Purchaser, including short sales, and specifically including, without
limitation, short sales or “derivative” transactions, before or after the
closing of this or future private placement transactions, may negatively impact
the market price of the Company’s publicly-traded securities; (iii) that any
Purchaser, and counter parties in “derivative” transactions to which any such
Purchaser is a party, directly or indirectly, presently may have a “short”
position in the Common Stock, and (iv) that each Purchaser shall not be deemed
to have any affiliation with or control over any arm’s length counter-party in
any “derivative” transaction.
ARTICLE 4
Representations, Warranties and Covenants of the Purchasers
     Each Purchaser hereby severally, and not jointly, represents and warrants
to the Company on and as of the date hereof and on the applicable Closing Date:
     4.1 Authorization. Purchaser represents and warrants to the Company that:
(a) Purchaser has all requisite legal and corporate or other power and capacity
and has taken all requisite corporate or other action to execute and deliver
this Agreement, to purchase the Common Shares and the Warrants to be purchased
by it and to carry out and perform all of its obligations under this Agreement;
and (b) this Agreement constitutes the legal, valid and binding obligation of
such Purchaser, enforceable in accordance with its terms, except (i) as limited
by applicable bankruptcy, insolvency, reorganization or similar laws relating to
or affecting the enforcement of creditors’ rights generally and (ii) as limited
by equitable principles generally.
     4.2 Investment Experience. Purchaser is an “accredited investor” as defined
in Rule 501(a) under the Securities Act. Purchaser is aware of the Company’s
business affairs and financial condition and has had access to and has acquired
sufficient information about the

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Company to reach an informed and knowledgeable decision to acquire the Common
Shares and the Warrants. Purchaser has such business and financial experience as
is required to give it the capacity to protect its own interests in connection
with the purchase of the Common Shares and Warrants.
     4.3 Investment Intent. Purchaser is purchasing the Common Shares and the
Warrants for its own account as principal, for investment purposes only, and not
with a present view to, or for, resale, distribution or fractionalization
thereof, in whole or in part, within the meaning of the Securities Act, other
than as contemplated by Article 7. Purchaser understands that its acquisition of
the Common Shares and the Warrants has not been registered under the Securities
Act or registered or qualified under any state securities law in reliance on
specific exemptions therefrom, which exemptions may depend upon, among other
things, the bona fide nature of Purchaser’s investment intent as expressed
herein. Purchaser has completed or caused to be completed the Purchaser
Questionnaire attached hereto as Exhibit B (or has provided the information
requested thereon in the form otherwise acceptable to the Company) for use in
preparation of the Registration Statement, and the responses provided therein
shall be true and correct as of the applicable Closing Date and will be true and
correct as of the effective date of the Registration Statement. Purchaser, in
connection with its decision to purchase the Common Shares and the Warrants, has
relied solely upon the SEC Documents and the representations and warranties of
the Company contained herein. Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Securities except
in compliance with the Securities Act, and the rules and regulations promulgated
thereunder.
     4.4 Registration or Exemption Requirements. Purchaser further acknowledges
and understands that the Securities may not be resold or otherwise transferred
except in a transaction registered under the Securities Act or unless an
exemption from such registration is available.
4.5 Dispositions.
          (a) Purchaser will not, prior to the effectiveness of the Registration
Statement (as defined below), if then prohibited by law or regulation: (a) sell,
offer to sell, solicit offers to buy, dispose of, loan, pledge or grant any
right with respect to (collectively, a “Disposition”) the Securities; or
(b) engage in any hedging or other transaction which is designed or could
reasonably be expected to lead to or result in a Disposition of the Securities
by such Purchaser or an affiliate. In addition, Purchaser agrees that for so
long as it owns any Common Shares, it will not enter into any short sale of
Shares executed at a time when the Purchaser has no equivalent offsetting long
position in the Common Shares. For purposes of determining whether the Purchaser
has an equivalent offsetting long position in the Common Shares, shares that the
Purchaser is entitled to receive within sixty (60) days (whether pursuant to
contract or upon conversion or exercise of convertible securities) will be
included as if held long by the Purchaser.
          (b) Purchaser has not directly or indirectly, nor has any Person
acting on behalf of or pursuant to any understanding with such Purchaser,
engaged in any transactions in the Company’s securities (including, without
limitation, any Short Sales involving the Company’s securities) since the time
that such Purchaser was first contacted by the Company, SG Cowen & Co., LLC,
Leerink, Swann & Company, or any other Person regarding the

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transactions contemplated hereby. Such Purchaser covenants that neither it nor
any Person acting on its behalf or pursuant to any understanding with it will
engage in any transactions in the Company’s securities (including, without
limitation, any Short Sales involving the Company’s securities) prior to the
time that the transactions contemplated by this Agreement are publicly
disclosed.
     For purposes of this Section 4.5(b), (i) “Person” shall include, without
limitation, any individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company or joint
stock company and (ii) “Short Sales” shall include, without limitation, all
“short sales” as defined in Rule 200 promulgated under Regulation SHO under the
Exchange Act and all types of direct and indirect stock pledges, forward sale
contracts, options, puts, calls, short sales, swaps and similar arrangements
(including on a total return basis), and sales and other transactions through
non-U.S. broker-dealers or foreign regulated brokers.
     4.6 No Legal, Tax or Investment Advice. Purchaser understands that nothing
in this Agreement or any other materials presented to Purchaser in connection
with the purchase and sale of the Common Shares and the Warrants constitutes
legal, tax or investment advice. Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Common Shares and the
Warrants.
     4.7 Confidentiality. Purchaser will hold in confidence all information
concerning this Agreement and the placement of the Securities hereunder until
the earlier of such time as (a) the Company has made a public announcement
concerning the Agreement and the placement of the Securities hereunder, which
announcement shall be made in a press release pursuant to Section 7.9, or
(b) this Agreement is terminated.
     4.8 Residency. Purchaser’s principal executive offices are in the
jurisdiction set forth immediately below Purchaser’s name on the applicable
signature page attached hereto.
     4.9 Governmental Review. Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Shares or the
Warrants.
     4.10 Legend. Purchaser understands that, until such time as the
Registration Statement has been declared effective or the Securities may be sold
pursuant to Rule 144 under the Securities Act without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
the Securities may bear a restrictive legend in substantially the following form
(and a stop transfer order may be placed against transfer of the certificates
for the Shares):
     “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR IN ANY OTHER JURISDICTION. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE

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OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS OFFERED,
SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THOSE LAWS.”
          (a) The Company agrees that following the effectiveness of the
Registration Statement or at such time as such legend is no longer required
under this Section 4.10, it will, no later than three business days following
the delivery by a Purchaser to the Company or the Company’s transfer agent of a
certificate representing Common Shares or Warrant Shares, as applicable, issued
with a restrictive legend and a signed and completed notice of sale in
substantially the form of Exhibit E attached hereto (such third Trading Day, the
“Legend Removal Date”), deliver or cause to be delivered to such Purchaser a
certificate representing such shares that is free from any legend referring to
the Securities Act. The Company may not make any notation on its records or give
instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section. Certificates for Securities subject to
legend removal hereunder shall be transmitted by the transfer agent of the
Company to the Purchasers by crediting the account of the Purchaser’s prime
broker with the Depository Trust Company System. All costs and expenses related
to the removal of the legends and the reissuance of any Securities shall be
borne by the Company.
          (b) Each Purchaser, severally and not jointly with the other
Purchasers, agrees that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.10 is predicated upon the
Company’s reliance that such Purchaser will sell any Securities pursuant to
either (i) the registration requirements of the Securities Act, and such
Purchaser shall have delivered a current prospectus in connection with such sale
unless constructive delivery is permitted at the time pursuant to Rule 172 under
the Securities Act (“Rule 172”) as then in effect, in which event such Purchaser
shall have confirmed that a current prospectus is deemed to be delivered in
connection with such sale, or (ii) an exemption therefrom.
     4.11 Foreign Investors. If Purchaser is not a United States person (as
defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended), Purchaser hereby represents that it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Common Shares and the Warrants or any use of
this Agreement, including (a) the legal requirements within its jurisdiction for
the purchase of the Common Shares and the Warrants, (b) any foreign exchange
restrictions applicable to such purchase or acquisition, (c) any government or
other consents that may need to be obtained, and (d) the income tax and other
tax consequences, if any, that may be relevant to the purchase, holding,
redemption, sale or transfer of the Securities. Purchaser’s subscription and
payment for and continued beneficial ownership of the Securities will not
violate any applicable securities or other laws of Purchaser’s jurisdiction.

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ARTICLE 5
Conditions to Closing Obligations of Purchasers
     Each Purchaser’s obligation to purchase the Common Shares and the Warrants
at the relevant Closing is, at the option of such Purchaser, subject to the
fulfillment or waiver as of the relevant Closing Date of the following
conditions:
     5.1 Representations and Warranties. The representations and warranties made
by the Company in Article 3 hereof qualified as to materiality shall be true and
correct at all times prior to and on the applicable Closing Date, except to the
extent any such representation or warranty expressly speaks as of an earlier
date, in which case such representation or warranty shall be true and correct as
of such earlier date, and the representations and warranties made by the Company
in Article 3 hereof not qualified as to materiality shall be true and correct in
all material respects at all times prior to and on the applicable Closing Date,
except to the extent any such representation or warranty expressly speaks as of
an earlier date, in which case such representation or warranty shall be true and
correct in all material respects as of such earlier date.
     5.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the applicable Closing
Date shall have been performed or complied with in all material respects.
     5.3 Certificates. The Company shall deliver or cause to be delivered to the
Purchasers duly executed certificates for the Common Shares and the Warrants (in
such denominations as set forth below each Purchaser’s name on the applicable
signature page attached hereto.
     5.4 Legal Opinion. The Purchasers shall have received on the applicable
Closing Date an opinion of Cooley Godward, counsel for the Company, dated the
applicable Closing Date, in substantially the form of Exhibit C.
     5.5 Listing. The Company shall have complied with all requirements with
respect to the listing of the Shares on the Nasdaq Capital Market, except for
such requirements not required until after the issuance of the Shares, such
requirements to be complied with promptly after the applicable Closing.
     5.6 Officer’s Certificate. The Company shall have delivered a Certificate,
executed on behalf of the Company by its Chief Executive Officer or its Chief
Financial Officer, dated as of the applicable Closing Date, certifying to the
fulfillment of the conditions specified in Sections 5.1 and 5.2.
     5.7 Judgments. No judgment, writ, order, injunction, award or decree of or
by any court, or judge, justice or magistrate, including any bankruptcy court or
judge, or any order of or by any governmental authority, shall have been issued,
and no action or proceeding shall have been instituted by any governmental
authority, enjoining or preventing the consummation of the transactions
contemplated hereby.
     5.8 Secretary’s Certificate. The Company shall have delivered a
Certificate,

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executed on behalf of the Company by its Secretary or Chief Financial Officer,
dated as of the applicable Closing Date, certifying the resolutions adopted by
the Board of Directors of the Company approving the transactions contemplated by
this Agreement and the issuance of the Securities, certifying the current
versions of the Restated Certificate and Bylaws of the Company and certifying as
to the signatures and authority of persons signing this Agreement and related
documents on behalf of the Company.
     5.9 Stop Orders. No stop order or suspension of trading shall have been
imposed by the Nasdaq Capital Market, the SEC or any other governmental
regulatory body with respect to public trading in the Common Stock.
     5.10 Stockholder Approval. In the case of the Second Closing, the Company
shall have obtained Stockholder Consent prior to the 120th day following the
date hereof.
     5.11 First Contemporaneous Offering. Simultaneously with or prior to the
First Closing, the Company shall have sold securities to third party purchasers,
who are not acting in concert with any of the Purchasers, which securities shall
be on, and have, such terms and conditions as the Company shall determine in its
sole discretion.
     5.12 Second Contemporaneous Offering. Simultaneously with or prior to the
Second Closing, the Company shall have sold securities to third party
purchasers, who are not acting in concert with any of the Purchasers, which
securities shall be on, and have, such terms and conditions as the Company shall
determine in its sole discretion.
ARTICLE 6
Conditions to Closing Obligations of Company
     The Company’s obligation to sell and issue the Common Shares and the
Warrants at the relevant Closing is, at the option of the Company, subject to
the fulfillment or waiver of the following conditions:
     6.1 Receipt of Payment. The Purchasers shall have delivered payment of the
purchase price to the Company for the Common Shares and the Warrants being
issued at the applicable Closing.
     6.2 Representations and Warranties. The representations and warranties made
by the Purchasers in Article 4 hereof qualified as to materiality shall be true
and correct at all times prior to and on the applicable Closing Date, except to
the extent any such representation or warranty expressly speaks as of an earlier
date, in which case such representation or warranty shall be true and correct as
of such earlier date, and, the representations and warranties made by the
Purchasers in Article 4 hereof not qualified as to materiality shall be true and
correct in all material respects at all times prior to and on the applicable
Closing Date, except to the extent any such representation or warranty expressly
speaks as of an earlier date, in which case such representation or warranty
shall be true and correct in all material respects as of such earlier date.
     6.3 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchasers on or prior to the applicable
Closing Date shall

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have been performed or complied with in all material respects.
     6.4 Delivery of Purchaser Questionnaire. The Company shall have received
from each Purchaser a fully completed Purchaser Questionnaire in the form
attached hereto as Exhibit B (or shall have received the information requested
thereon in the form otherwise acceptable to the Company) prior to the Second
Closing for the Company’s use in preparing the Registration Statement pursuant
to Article 7 below; provided, however, in the event that the Second Closing does
not take place, such Purchaser Questionnaire (or the information requested
thereon in the form otherwise acceptable to the Company) shall have been
received from each Purchaser within ten (10) days following notification by the
Company of the filing of such Registration Statement.
     6.5 First Contemporaneous Offering. Simultaneously with or prior to the
First Closing, the Company shall have sold securities to third party purchasers,
who are not acting in concert with any of the Purchasers, which securities shall
be on, and have, such terms and conditions as the Company shall determine in its
sole discretion.
     6.6 Second Contemporaneous Offering. Simultaneously with or prior to the
Second Closing, the Company shall have sold securities to third party
purchasers, who are not acting in concert with any of the Purchasers, which
securities shall be on, and have, such terms and conditions as the Company shall
determine in its sole discretion.
ARTICLE 7
Covenants
     7.1 Definitions. For the purpose of this Article 7:
          (a) the term “Registration Statement” shall mean any registration
statement required to be filed by Section 7.2 below, and shall include any
preliminary prospectus, final prospectus, exhibit or amendment included in or
relating to such registration statements; and
          (b) the term “Registrable Shares” shall mean all of the Common Shares
issued pursuant to this Agreement and the Warrant Shares issuable upon exercise
of the Warrants issued pursuant to this Agreement.
The parties acknowledge that the Company may choose to include, at its option
and solely for its convenience, such Common Shares and such Warrant Shares on a
registration statement with other similar securities sold by the Company to
third party purchasers not acting in concert with any of the Purchasers.
     7.2 Registration Procedures and Expenses. The Company shall:
          (a) use its best efforts to file a Registration Statement with the SEC
within ten (10) days following the Second Closing Date, but in no event after
the date that is eighty (80) days after the First Closing Date (the “Filing
Date”), to register the Registrable Shares and shares of the Common Stock listed
on Schedule 7.2 attached hereto on Form S-3 under the Securities Act (providing
for shelf registration of such Registrable Shares and shares of the

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Common Stock listed on Schedule 7.2 under SEC Rule 415) or on such other form
which is appropriate to register such Registrable Shares for resale from time to
time by the Purchasers; provided, however, if a Registration Statement covering
the Registrable Shares is not filed with the SEC on or prior to the Filing Date,
the Company will make payments to each Purchaser, as liquidated damages and not
as a penalty, in an amount equal to one percent (1%) of the aggregate amount
invested by such Purchaser (the amount invested by a Purchaser shall include the
purchase price of the Common Shares acquired by such Purchaser and shall exclude
any amount attributable to the Warrants acquired by such Purchaser pursuant to
this Agreement) for each 30 day period (or a portion thereof) following the date
by which such Registration Statement should have been filed for which no
Registration Statement is filed with respect to the Registrable Securities;
          (b) use its best efforts, subject to receipt of necessary information
from the Purchasers, to cause any such Registration Statement filed pursuant to
Section 7.2(a) above to become effective as promptly after filing of such
Registration Statement as practicable but in any event by the date that is one
hundred (100) days following the First Closing Date; provided, however, that in
the event that a Registration Statement is reviewed by the SEC, then such date
shall be the date that is one hundred fifty (150) days following the First
Closing Date. If (i) the Company fails to file with the SEC a request for
acceleration in accordance with Rule 461 promulgated under the Securities Act,
within five business days of the date that the Company is notified (orally or in
writing, whichever is earlier) by the SEC that a Registration Statement will not
be “reviewed,” or is not subject to further review, or (ii) the Registration
Statement has not been declared effective by the appropriate date in the
preceding sentence, then the Company will make payments to each Purchaser, as
liquidated damages and not as a penalty, in an amount equal to one percent (1%)
of the purchase price attributed to the Common Shares purchased hereunder for
each thirty (30) day period (or a portion thereof) following the date by which
such Registration Statement should have been effective as described above had
the Company used its best efforts to have the Registration Statement declared
effective;
          (c) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the prospectus used in connection therewith as
may be necessary to keep such Registration Statement continuously effective
until termination of such obligation as provided in Section 7.5 below, subject
to the Company’s right to suspend pursuant to Section 7.4;
          (d) furnish to each Purchaser (and to each underwriter, if any, of
such Registrable Shares) such number of copies of prospectuses in conformity
with the requirements of the Securities Act and such other documents as the
Purchasers may reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Registrable Shares by the Purchasers,
including a copy of the prospectus to be furnished to each Purchaser pursuant to
Section 7.2(g);
          (e) file such documents as may be required of the Company for normal
securities law clearance for the resale of the Registrable Shares in such states
of the United States as may be reasonably requested by each Purchaser; provided,
however, that the Company shall not be required in connection with this
paragraph (e) to qualify as a foreign corporation or execute a general consent
to service of process in any jurisdiction;

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          (f) upon notification by the SEC that that the Registration Statement
will not be reviewed or is no longer subject to further review and comments by
the SEC, the Company shall within five business days request acceleration of
such Registration Statement such that it becomes effective at 5:00 p.m. New York
Time on the date that effectiveness is requested (the “Effective Date”);
          (g) deliver to each Purchaser, by 9:00 a.m. New York time on the day
following the Effective Date, without charge, an electronic copy of each
prospectus or prospectuses (including each form of prospectus) and each
amendment or supplement thereto. The Company hereby consents to the use of such
prospectus and each amendment or supplement thereto by each of the Purchasers in
connection with the offering and sale of the Registrable Securities covered by
such prospectus and any amendment or supplement thereto;
          (h) advise each Purchaser promptly:
               (i) of the effectiveness of the Registration Statement or any
post-effective amendments thereto;
               (ii) of any request by the SEC for amendments to the Registration
Statement or amendments to the prospectus or for additional information relating
thereto;
               (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement under the Securities Act or of the
suspension by any state securities commission of the qualification of the
Registrable Shares for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes; and
               (iv) of the existence of any fact and the happening of any event
that makes any statement of a material fact made in the Registration Statement,
the prospectus and amendment or supplement thereto, or any document incorporated
by reference therein, untrue, or that requires the making of any additions to or
changes in the Registration Statement or the prospectus in order to make the
statements therein not misleading;
          (i) use its best efforts to cause all Registrable Shares to be listed
on each securities exchange, if any, on which equity securities by the Company
are then listed;
          (j) bear all expenses in connection with the procedures in paragraphs
(a) through (g) of this Section 7.2 and the registration of the Registrable
Shares on such Registration Statement and the satisfaction of the blue sky laws
of such states; and
          (k) otherwise use commercially reasonable efforts to make available to
its security holders no later than the Availability Date (as defined below), an
earnings statement covering a period of at least twelve (12) months, beginning
after the effective date of each Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act,
including Rule 158 promulgated thereunder (for the purpose of this subsection
7.2(i), “Availability Date” means the 45th day following the end of the fourth
fiscal quarter after the fiscal quarter that includes the effective date of such
Registration Statement, except that, if such fourth fiscal quarter is the last
quarter of the Company’s fiscal year, “Availability Date” means the 90th day
after the end of such fourth fiscal quarter).

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     7.3 Indemnification.
          (a) The Company agrees to indemnify and hold harmless each Purchaser,
the partners, members, officers and directors of each Purchaser and each person,
if any, who controls such Purchaser within the meaning of the Securities Act or
the Exchange Act, from and against any losses, claims, damages or liabilities to
which they may become subject (under the Securities Act or otherwise) insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading or arise
out of any failure by the Company to fulfill any undertaking included in the
Registration Statement and the Company will, as incurred, reimburse such
Purchaser, partner, member, officer, director or controlling person for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
that the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability (collectively, “Loss”) arises out of, or is
based upon, an untrue statement or omission or alleged untrue statement or
omission made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Purchaser, partner, member, officer, director or controlling person specifically
for use in preparation of the Registration Statement or any breach of this
Agreement by such Purchaser; and provided further, however, that the Company
shall not be liable to any Purchaser of Registrable Shares (or any partner,
member, officer, director or controlling person of such Purchaser) to the extent
that any such Loss is caused by an untrue statement or omission or alleged
untrue statement or omission made in any preliminary prospectus if either (i)(A)
such Purchaser failed to send or deliver a copy of the final prospectus with or
prior to, or, if Rule 172 is then in effect, such Purchaser failed to confirm
that a final prospectus was deemed to be delivered prior to, the delivery of
written confirmation of the sale by such Purchaser to the person asserting the
claim from which such Loss resulted and (B) the final prospectus corrected such
untrue statement or omission, (ii) (X) such untrue statement or omission is
corrected in an amendment or supplement to the prospectus and (Y) having
previously been furnished by or on behalf of the Company with copies of the
prospectus as so amended or supplemented, or if Rule 172 is then in effect,
notified by the Company that such amended or supplemented prospectus has been
filed with the SEC, such Purchaser thereafter fails to deliver such prospectus
as so amended or supplemented, with or prior to, or, if Rule 172 is then in
effect, such Purchaser fails to confirm that the prospectus so amended or
supplemented was deemed to be delivered prior to, the delivery of written
confirmation of the sale of a Registrable Share to the person asserting the
claim from which such Loss resulted or (iii) such Purchaser sold Registrable
Shares in violation of such Purchaser’s covenant contained in Section 7.4 of
this Agreement.
          (b) Each Purchaser, severally and not jointly, agrees to indemnify and
hold harmless the Company (and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each officer of the Company who signs the Registration Statement
and each director of the Company), from and against any losses, claims, damages
or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof)

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arise out of, or are based upon, any breach of this Agreement by such Purchaser
or any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading in each case, on the effective date thereof, if, and only to the
extent, such untrue statement or omission or alleged untrue statement or
omission was made in reliance upon and in conformity with written information
furnished by or on behalf of such Purchaser specifically for use in preparation
of the Registration Statement, and such Purchaser will reimburse the Company
(and each of its officers, directors or controlling persons) for any legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim; provided, however, that in no event
shall any indemnity under this Section 7.3(b) be greater in amount than the
dollar amount of the proceeds (net of the amount of any damages such Purchaser
has otherwise been required to pay by reason of such untrue statement or
omission or alleged untrue statement or omission) received by such Purchaser
upon the sale of the Registrable Securities included in the Registration
Statement giving rise to such indemnification obligation.
          (c) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein, and,
to the extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate in the reasonable judgment of the indemnified person for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
further, that no indemnifying person shall be responsible for the fees and
expense of more than one separate counsel for all indemnified parties. The
indemnifying party shall not settle an action without the consent of the
indemnified party, which consent shall not be unreasonably withheld.
          (d) If after proper notice of a claim or the commencement of any
action against the indemnified party, the indemnifying party does not choose to
participate, then the indemnified party shall assume the defense thereof and
upon written notice by the indemnified party requesting advance payment of a
stated amount for its reasonable defense costs and expenses, the indemnifying
party shall advance payment for such reasonable defense costs and expenses (the
“Advance Indemnification Payment”) to the indemnified party. In the event that
the indemnified party’s actual defense costs and expenses exceed the amount of
the Advance Indemnification Payment, then upon written request by the
indemnified party, the indemnifying party shall reimburse the indemnified party
for such difference; in the event that the Advance Indemnification Payment
exceeds the indemnified party’s actual costs and expenses, the

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indemnified party shall promptly remit payment of such difference to the
indemnifying party.
          (e) If the indemnification provided for in this Section 7.3 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the
other, as well as any other relevant equitable considerations; provided, that in
no event shall any contribution by an indemnifying party hereunder be greater in
amount than the dollar amount of the proceeds (net of the amount of any damages
such indemnifying party has otherwise been required to pay by reason of such
untrue statement or omission or alleged untrue statement or omission) received
by such indemnifying party upon the sale of the Registrable Securities included
in the Registration Statement giving rise to such indemnification obligation.
     7.4 Prospectus Delivery. Each Purchaser hereby covenants with the Company
not to make any sale of the Registrable Shares without complying with
Section 8.3. Each Purchaser acknowledges that there may be times when the
Company must suspend the use of the prospectus forming a part of the
Registration Statement until such time as an amendment to the Registration
Statement has been filed by the Company and declared effective by the SEC, or
until such time as the Company has filed an appropriate report with the SEC
pursuant to the Exchange Act. Each Purchaser hereby covenants that it will not
sell any Registrable Shares pursuant to said prospectus during the period
commencing at the time at which the Company gives such Purchaser written notice
of the suspension of the use of said prospectus and ending at the time the
Company gives such Purchaser written notice that such Purchaser may thereafter
effect sales pursuant to said prospectus; provided that such suspension periods
shall in no event exceed thirty (30) days in any twelve (12) month period and
that, in the good faith judgment of the Company’s Board of Directors, the
Company would, in the absence of such delay or suspension hereunder, be required
under state or federal securities laws to disclose any corporate development, a
potentially significant transaction or event involving the Company, or any
negotiations, discussions, or proposals directly relating thereto, in either
case the disclosure of which would reasonably be expected to have a material
adverse effect upon the Company or its stockholders; provided further, that the
Company may suspend the use of the prospectus forming a part of the Registration
Statement to the extent necessary to file any post-effective amendment to the
Registration Statement in order to amend the table of selling stockholders
within the Registration Statement to reflect transfers of the Securities
pursuant to Sections 8.3(a) and 8.3(b). If, after the Registration Statement has
been declared effective by the SEC, sales cannot be made pursuant to such
Registration Statement, except as excused pursuant to this Section 7.4, then the
Company will make pro rata payments to each Purchaser, as liquidated damages and
not as a penalty, in an amount equal to one (1%) of the aggregate amount
invested by such Purchaser (the amount invested by such Purchaser shall include
the purchase price of the Shares acquired by such Purchaser and shall exclude
any amount attributable to the Warrants acquired by such Purchaser pursuant to
this Agreement) for each thirty (30) day period following the date sales cannot
be made pursuant to such Registration Statement after it has been declared
effective.
     7.5 Termination of Obligations. The obligations of the Company pursuant to

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Section 7.2 hereof shall cease and terminate upon the earlier to occur of
(a) such time as all of the Registrable Shares have been resold, (b) such time
as all of the Registrable Shares may be resold in a three-month period pursuant
to Rule 144(k), or (c) the fifth anniversary of the Second Closing Date or, if
the Second Closing does not occur, the First Closing Date.
     7.6 Reporting Requirements.
          (a) With a view to making available the benefits of certain rules and
regulations of the SEC that may at any time permit the sale of the Securities to
the public without registration or pursuant to a registration statement on Form
S-3, the Company agrees to use its best efforts to:
               (i) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
               (ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
               (iii) so long as any of the Purchasers own Registrable Shares, to
furnish to such Purchaser upon request (A) a written statement by the Company as
to whether it is in compliance with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, or whether it is qualified as a registrant
whose securities may be resold pursuant to SEC Form S-3, and (B) a copy of the
most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company.
     7.7 Blue Sky. The Company shall obtain and maintain all necessary blue sky
law permits and qualifications, or secured exemptions therefrom, required by any
state for the offer and sale of Securities.
     7.8 Stockholder Approval. Promptly following the First Closing Date, the
Company shall take all action necessary to call a special meeting of its
stockholders (the “Special Stockholders Meeting”) and seek the approval of the
Company’s stockholders for, among other matters, the authorization and issuance
of the Common Shares and Warrants at the Second Closing which were not sold to
the Purchasers at the First Closing and the issuance of the Warrant Shares upon
exercise of such Warrants in compliance with Rule 4350(i) of the Marketplace
Rules of the NASD (the “Stockholder Approval”), to the extent required by The
Nasdaq Stock Market, Inc. In connection therewith, the Company will promptly
prepare and file with the SEC proxy materials (including a proxy statement and
form of proxy) for use at the Special Stockholders Meeting and, promptly after
receiving clearance from the SEC, shall promptly mail such proxy materials to
the stockholders of the Company.
     7.9 Publicity. The Company shall, on or before 9:30 a.m. New York City time
on the first business day following the date hereof, issue a press release
disclosing the material terms of the transactions contemplated hereby. Except
with respect to the press release contemplated by this section, the Company
agrees that it will not use in advertising or publicity the names of any of the
Purchasers, any of their respective partners or employees, any of the funds or
accounts managed by any of them or any of their affiliates, or any trade name,
trademark, trade device, service mark, symbol or any abbreviation, contraction
or simulation thereof, in any case without

20.

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the prior written consent of the Purchasers.
ARTICLE 8
Restrictions on Transferability of Securities;
Compliance with Securities Act
     8.1 Restrictions on Transferability. The Securities shall not be
transferable in the absence of a registration under the Securities Act or an
exemption therefrom. The Company shall be entitled to give stop transfer
instructions to its transfer agent with respect to the Securities in order to
enforce the foregoing restrictions.
     8.2 Instruction Sheet. Each certificate representing Registrable Shares
shall bear the legend set forth on the Instruction Sheet attached hereto as
Exhibit D (in addition to any legends required under applicable securities
laws).
     8.3 Transfer of Securities.
          (a) Each Purchaser hereby covenants with the Company not to make any
sale of the Securities except:
               (i) in accordance with the Registration Statement, in which case
such Purchaser shall have delivered a current prospectus in connection with such
sale; provided, however, that if Rule 172 is then in effect, such Purchaser
shall have confirmed that a current prospectus is deemed to be delivered in
connection with such sale; or
               (ii) in accordance with Rule 144, in which case such Purchaser
covenants to comply with Rule 144; or
               (iii) (A) If the transferee has agreed in writing to be bound by
the terms of this Agreement, (B) such Purchaser shall have notified the Company
of the proposed disposition and shall have furnished the Company with a
reasonably detailed statement of the circumstances surrounding the proposed
disposition and (C) if reasonably requested by the Company, such Purchaser shall
have furnished the Company with an opinion of counsel, reasonably satisfactory
to the Company, that such disposition will not require registration of such
shares under the Securities Act.
          (b) Notwithstanding the provisions of subsection (a) above, no such
restriction shall apply to a transfer by a Purchaser that is (i) a partnership
transferring to its partners or former partners in accordance with partnership
interests, (ii) a corporation transferring to a wholly-owned subsidiary or a
parent corporation that owns all of the capital stock of such Purchaser, (iii) a
limited liability company transferring to its members or former members in
accordance with their interest in the limited liability company or (iv) an
individual transferring to such Purchaser’s family member or trust for the
benefit of an individual Purchaser; provided that in each case the transferee
will agree in writing to be subject to the terms of this Agreement to the same
extent as if he were an original Purchaser hereunder.
          (c) Each Purchaser further acknowledges and agrees that, if a
Purchaser is

21.

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selling the Securities using the prospectus forming a part of the Registration
Statement, such Securities are not transferable on the books of the Company
unless the certificate evidencing such Securities is submitted to the Company’s
transfer agent and a separate certificate executed by an officer of, or other
person duly authorized by, such Purchaser in the form attached hereto as
Exhibit E is submitted to Cooley Godward or the Company’s transfer agent.
     8.4 Purchaser Information. Each Purchaser covenants that it will promptly
notify the Company of any changes in the information set forth in the
Registration Statement regarding such Purchaser or such Purchaser’s “Plan of
Distribution”.
     8.5 Material Non-Public Information. The Company covenants and agrees that
neither it nor any other person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information. The Company understands and confirms that each Purchaser shall
be relying on the foregoing representations in effecting transactions in
securities of the Company.
ARTICLE 9
Miscellaneous
     9.1 Termination.
          (a) This Agreement may be terminated and the sale and purchase of the
Common Shares and the Warrants abandoned at any time prior to the First Closing,
by written notice of any individual Purchaser if the First Closing has not
occurred within five (5) business days of the date hereof (other than as a
result of the failure on the part of the party giving such notice of termination
to perform its covenants and obligations under this Agreement in all material
respects); provided, however, that the abandonment of the sale and purchase of
the Common Shares and the Warrants shall be applicable only to such Purchaser
providing such written notice.
          (b) If this Agreement is terminated pursuant to this Section 9.1, all
further obligations of the Company to such Purchaser and of such Purchaser to
the Company shall terminate and the Company shall notify the Purchasers in
writing of such notice and termination; provided, however, that (i) no party
shall be relieved of any liability arising from any breach by such party of any
provision of this Agreement and (ii) the parties shall, in all events, remain
bound by and continue to be subject to the provisions set forth in this
Article 9.
          (c) The sale and purchase of the remaining Common Shares and the
Warrants at the Second Closing may be abandoned, and the obligations of any
individual Purchaser with respect to the Second Closing may be terminated by
written notice of such Purchaser if the Second Closing has not occurred within
120 days of the date of this Agreement (other than as a result of the failure on
the part of the party giving such notice to perform its covenants and
obligations under this Agreement in all material respects). The Company shall
notify the

22.

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remaining Purchasers in writing of any such notice.
     9.2 Waivers and Amendments. With the exception of Article 7 hereof, the
terms of this Agreement may be waived or amended with the written consent of the
Company and the holders of a majority in interest of the Shares issued or
issuable hereunder. With respect to Article 7 hereof, with the written consent
of the Company and the record holders of a majority in interest of the
Registrable Shares issued or issuable hereunder, the terms of this Agreement may
be waived or amended and any such amendment or waiver shall be binding upon the
Company and all holders of Registrable Shares.
     9.3 Broker’s Fee. Each Purchaser acknowledges that the Company intends to
pay a fee in respect of the sale of the Securities to SG Cowen & Co., LLC as
lead agent, to Leerkink, Swann & Company and to the entities listed on
Schedule 3.13 of the Disclosure Schedule. Each of the parties to this Agreement
represents that, on the basis of any actions and agreements by it, there are no
other brokers or finders entitled to compensation in connection with the sale of
Securities to the Purchasers.
     9.4 Governing Law. This Agreement shall be governed in all respects by and
construed in accordance with the laws of the State of California without any
regard to conflicts of laws principles.
     9.5 Survival. The representations, warranties, covenants and agreements
made in this Agreement shall survive any investigation made by the Company or
the Purchasers and the Closing.
     9.6 Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties to this Agreement. Upon a permitted transfer of a
Purchaser’s Securities on the books of the Company in accordance with the terms
of Sections 8.3(a)(iii) or 8.3(b), the Purchaser may assign this Agreement to
the permitted transferee upon prior written notice to the Company. Except as set
forth in the previous sentence, no Purchaser shall assign this Agreement without
the prior written consent of the Company.
     9.7 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
thereof.
     9.8 Notices, etc. All notices and other communications required or
permitted under this Agreement shall be in writing and may be delivered in
person, by telecopy, overnight delivery service or registered or certified
United States mail, addressed to the Company or the Purchasers, as the case may
be, at their respective addresses set forth on the applicable signature pages
hereto, or at such other address as the Company or the Purchasers shall have
furnished to the other party in writing. All notices and other communications
shall be effective upon the earlier of actual receipt thereof by the person to
whom notice is directed or (a) in the case of notices and communications sent by
personal delivery or telecopy, one business day after such notice or
communication arrives at the applicable address or was successfully sent to the
applicable telecopy number, (b) in the case of notices and communications sent
by overnight delivery service, at noon (local time) on the second business day
following the day such notice or

23.

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communication was sent, and (c) in the case of notices and communications sent
by United States mail, seven days after such notice or communication shall have
been deposited in the United States mail.
     9.9 Severability of this Agreement. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
     9.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
     9.11 Further Assurances. Each party to this Agreement shall do and perform
or cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as the other party hereto may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby. For clarification purposes and without
implication that the contrary would otherwise be true, the transactions
contemplated hereby only include the transaction between the Company and the
Purchasers and do not include any other transaction between the Company and any
other third party purchaser of the Company’s securities.
     9.12 Currency. All references to “dollars” or “$” in this Agreement shall
be deemed to refer to United States dollars.
     9.13 Independent Nature of the Purchasers’ Obligations and Rights. The
obligations of the Purchasers under this Agreement are several and not joint
with the obligations of any other third party purchasers of the Company’s
securities, and the Purchasers shall not be responsible in any way for the
performance of the obligations of any other third party purchasers of the
Company’s securities. Each of the Purchasers and the Company agree and
acknowledge that (i) the decision of the Purchasers to purchase the Securities
pursuant to this Agreement has been made by the Purchasers independently of any
other third party purchasers of the Company’s securities and (ii) no other third
party purchasers of the Company’s securities have acted as agent for the
Purchasers in connection with the Purchasers making their investment hereunder
and that no such other third party purchasers will be acting as agent of the
Purchasers in connection with monitoring its investment hereunder or enforcing
their rights under this Agreement. Nothing contained herein or in any other
document contemplated hereby or any agreement of any such other third party
purchaser, and no action taken by any of the Purchasers pursuant hereto or any
other third party purchaser pursuant thereto, shall be deemed to constitute the
Purchasers or any such other third party purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers or any such other third party purchasers are in
any way acting in concert or as a group with respect to any matters. The
Purchasers shall be entitled to independently protect and enforce their rights,
including, without limitation, the rights arising out of this Agreement or out
of any of the other documents contemplated hereby, and it shall not be necessary
for any such other third party purchasers to be joined as an additional party in
any proceeding for such purpose. To the extent that any such other third party
purchasers purchase the same or similar securities as the Purchasers hereunder
or on the same or similar terms and conditions or pursuant to the same or
similar documents, all

24.

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such matters are solely in the control of the Company, not the action or
decision of any of the Purchasers, and would be solely for the convenience of
the Company and not because it was required or requested to do so by any of the
Purchasers or any such other third party purchaser.

25.

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     The foregoing agreement is hereby executed as of the date first above
written.

              Solexa, Inc., a Delaware corporation
 
       
 
  By:   /s/ John West
 
       
 
  Name:   John West
 
  Title:   CEO

Signature Page to Securities Purchase Agreement

 

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     IN WITNESS WHEREOF, the undersigned has executed this Purchase Agreement or
caused its duly authorized officers to execute this Purchase Agreement as of the
date first above written.

              IF AN INDIVIDUAL:   IF A CORPORATION, PARTNERSHIP,
  TRUST, ESTATE OR OTHER ENTITY:
 
           
 
 
            (Signature)   By: EGI-NP Investments, L.L.C
 
                By: CD Capital Management, LLC
 
                Its: Investment Manager           Print name of entity
 
           
 
 
            (Printed Name)   By:   /s/ John Ziegelman          
 
      Name:   President
 
           
 
      Title:   John Ziegelman
 
           
 
                Delaware           Print jurisdiction of organization of entity

     
Address:
  Address:
 
  2 North Riverside Plaza, Suite 720
 
   
 
  Chicago, IL 60606
 
   
 
 
   

Aggregate dollar amount of Common Shares and Warrants committed to be purchased
pursuant to the terms of the Agreement:

                      Common Shares     Warrant Shares  
First Closing Purchase Price            $6.50
    15,209       5,323  
Second Closing Purchase Price       $6.50
    19,417       6,796  

 

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

 

     IN WITNESS WHEREOF, the undersigned has executed this Purchase Agreement or
caused its duly authorized officers to execute this Purchase Agreement as of the
date first above written.

              IF AN INDIVIDUAL:   IF A CORPORATION, PARTNERSHIP,
TRUST, ESTATE OR OTHER ENTITY:
 
           
 
 
            (Signature)   By: The Jay Pritzker Foundation
 
                By: CD Capital Management, LLC
 
                Its: Investment Manager           Print name of entity
 
           
 
 
            (Printed Name)   By:   /s/ John Ziegelman          
 
      Name:   President
 
           
 
      Title:   John Ziegelman
 
           
 
                Illinois           Print jurisdiction of organization of entity

     
Address:
  Address:
 
  2 North Riverside Plaza, Suite 720
 
   
 
  Chicago, IL 60606
 
   
 
 
   

Aggregate dollar amount of Common Shares and Warrants committed to be purchased
pursuant to the terms of the Agreement:

                      Common Shares     Warrant Shares  
First Closing Purchase Price              $6.50
    5,069       1,774  
Second Closing Purchase Price         $6.50
    6,473       2,266  

 

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

 

IN WITNESS WHEREOF, the undersigned has executed this Purchase Agreement or
caused its duly authorized officers to execute this Purchase Agreement as of the
date first above written.

              IF AN INDIVIDUAL:   IF A CORPORATION, PARTNERSHIP,
  TRUST, ESTATE OR OTHER ENTITY:
 
           
 
 
            (Signature)   By: CD Investment Partners
 
                By: CD Capital Management, LLC
 
                Its: Investment Manager           Print name of entity
 
           
 
 
            (Printed Name)   By:   /s/ John Ziegelman          
 
      Name:   President
 
           
 
      Title:   John Ziegelman
 
           
 
                Cayman Islands           Print jurisdiction of organization of
entity

     
Address:
  Address:
 
  2 North Riverside Plaza, Suite 720
 
   
 
  Chicago, IL 60606
 
   
 
 
   

Aggregate dollar amount of Common Shares and Warrants committed to be purchased
pursuant to the terms of the Agreement:

                      Common Shares     Warrant Shares  
First Closing Purchase Price  $6.50
    81,117       28,391  
Second Closing Purchase Price  $6.50
    103,555       36,244  

Signature Page to Securities Purchase Agreement

 

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Exhibit A
FORM OF WARRANT
     The Form of Warrant is filed separately as Exhibit 10.72 of the Company’s
Current Report on Form 8-K, filed on November 23, 2005

 

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Exhibit B
INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Securities Purchase Agreement)

A.   Complete the following items in the Securities Purchase Agreement:

  1.   Provide the information regarding the Purchaser requested on the
signature page. The Agreement must be executed by an individual authorized to
bind the Purchaser.     2.   Exhibit B-1 — Stock Certificate Questionnaire:    
    Provide the information requested by the Stock Certificate Questionnaire.  
  3.   Exhibit B-2 — Registration Statement Questionnaire:         Provide the
information requested by the Registration Statement Questionnaire.     4.  
Exhibit B-3 — Purchaser Certificate:         Provide the information requested
by the Certificate for Individual Purchasers or the Certificate for Corporate,
Partnership, Trust, Foundation and Joint Purchasers, as applicable.     5.  
Return the signed Securities Purchase Agreement to:

John L. Brottem, Esq.
Cooley Godward llp
Five Palo Alto Square
3000 El Camino Real
Palo Alto, California 94306-2155
Fax: 650-745-3924

B.   Instructions regarding the transfer of funds for the purchase of Securities
will be telecopied to the Purchaser at a later date.   C.   Upon the resale of
the Registrable Shares by the Purchaser after the Registration Statement
covering the Registrable Shares is effective, as described in the Securities
Purchase Agreement, the Purchaser:

  (i)   must deliver a current prospectus to the buyer (prospectuses may be
obtained from the Company at the Purchaser’s request), provided, however, that
if Rule 172 is then in effect, such Purchaser must confirm that a current
prospectus is deemed to be delivered to such buyer; and     (ii)   must send a
letter in the form of Exhibit E to the Securities Purchase Agreement to the
Company so that the Registrable Shares may be properly transferred.

 

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Exhibit B-1
SOLEXA, INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 4.3 of the Agreement, please provide us with the following
information:

                1.    
The exact name that the Securities are to be registered in (this is the name
that will appear on the stock certificate(s)). You may use a nominee name if
appropriate:
 
 
       
 
      2.    
The relationship between the Purchaser of the Securities and the Registered
Holder listed in response to item 1 above:
 
 
       
 
      3.    
The mailing address of the Registered Holder listed in response to item 1 above:
 
 
       
 
 
 
       
 
 
 
       
 
 
 
       
 
 
 
       
 
      4.    
The Tax Identification Number of the Registered Holder listed in response to
item 1 above:
 
 

B-1

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Exhibit B-2
SOLEXA, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
     In connection with the preparation of the Registration Statement, please
provide us with the following information regarding the Purchaser.
A. General Information
     1. Please state your organization’s name exactly as it should appear in the
Registration Statement:
                                                            
     2. Have you or your organization had any position, office or other material
relationship within the past three years with the Company or its affiliates
other than as disclosed in the Prospectus included in the Registration
Statement?
¨ Yes ¨ No
     If yes, please indicate the nature of any such relationships below:
 
 
B. Securities Holdings
     Please fill in all blanks in the following questions related to your
beneficial ownership of the Company’s capital stock. Generally, the term
“beneficial ownership” refers to any direct or indirect interest in the
securities which entitles you to any of the rights or benefits of ownership,
even though you may not be the holder of record of the securities. For example,
securities held in “street name” over which you exercise voting or investment
power would be considered beneficially owned by you. Other examples of indirect
ownership include ownership by a partnership in which you are a partner or by an
estate or trust of which you or any member of your immediate family is a
beneficiary. Ownership of securities held in the names of your spouse, minor
children or other relatives who live in the same household may be attributed to
you.

     Please note: If you have any reason to believe that any interest in
securities of the Company which you may have, however remote, is a beneficial
interest, please describe such interest. For purposes of responding to this
questionnaire, it is preferable to err on the side of inclusion rather than
exclusion. Where the SEC’s interpretation of beneficial ownership would require
disclosure of your interest or possible interest in certain securities of the
Company, and you believe that you do not actually possess the attributes of
beneficial ownership, an appropriate response is to disclose the interest and at
the same time disclaim beneficial ownership of the securities.
B-2.1

 

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     1. As of [___], 2005, I owned outright (including shares registered in my
name individually or jointly with others, shares held in the name of a bank,
broker, nominee, depository or in “street name” for my account), the following
number of shares of the Company’s capital stock:
                                        .
     2. In addition to the number of shares I own outright as indicated by my
answer to question B(1), as of [___], 2005, I had or shared voting power or
investment power, directly or indirectly, through a contract, arrangement,
understanding, relationship or otherwise, over the following number of shares of
the Company’s capital stock:                                         .
     If the answer to this question B(2) was not “zero,” please complete the
following: with whom shared; and the nature of the relationship and any
underlying voting trust agreement, investment arrangement or the like:
Shared Voting Power:

          Number of Shares   With Whom Shared   Nature of Relationship          
                   

Shared Investment Power:

          Number of Shares   With Whom Shared   Nature of Relationship          
                   

     3. As of [___], 2005, I will have the right to acquire _________shares of
the Company’s capital stock pursuant to outstanding stock options issued under
the Company’s stock option plans and ________shares pursuant to the exercise of
outstanding warrants (none, indicated by “0” above).

      Options and Warrants Class   Number of Shares                  

B-2.2

 

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     (4) Please identify the natural person or persons who have voting and/or
investment control over the Company’s securities that you own, and state whether
such person(s) disclaims beneficial ownership of the securities. For example, if
you are a general partnership, please identify the general partners in the
partnership.
 
 
 
 
 
 
B-2.3

 

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C. NASD Questions
     1. Are you (i) a “member” 1 of the National Association of Securities
Dealers, Inc. (the “NASD”), (ii) an “affiliate”2 of a member of the NASD,
(iii) a “person associated with a member” or an “associated person of a member”3
of the NASD or (iv) an immediate family member4 of any of the foregoing persons?
If yes, please identify the member and describe such relationship (whether
direct or indirect), and please respond to Question Number 2 below; if no,
please proceed directly to Question Number 3.
Yes _____ No _____
     Description:
      
      
 

1   NASD defines a “member” as any broker or dealer admitted to membership in
the NASD, or any officer or partner or branch manager of such a member, or any
person occupying a similar status or performing a similar function for such a
member.   2   The term “affiliate” means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is in
common control with, the person specified. Persons who have acted or are acting
on behalf of or for the benefit of a person include, but are not necessarily
limited to, directors, officers, employees, agents, consultants and sales
representatives. The following should apply for purposes of the foregoing:

  (i)   a person should be presumed to control a Member if the person
beneficially owns 10 percent or more the outstanding voting securities of a
Member which is a corporation, or beneficially owns a partnership interest in
10 percent or more of the distributable profits or losses of a Member which is a
partnership;     (ii)   a Member should be presumed to control a person if the
Member and Persons Associated With a Member beneficially own 10 percent or more
of the outstanding voting securities of a person which is a corporation, or
beneficially own a partnership interest in 10 percent or more of the
distributable profits or losses of a person which is a partnership;     (iii)  
a person should be presumed to be under common control with a Member if:

  (1)   the same person controls both the Member and another person by
beneficially owning 10 percent or more of the outstanding voting securities of a
Member or person which is a corporation, or by beneficially owning a partnership
interest in 10 percent or more of the distributable profits or losses of a
Member or person which is a partnership; or     (2)   a person having the power
to direct or cause the direction of the management or policies of the Member or
such person also has the power to direct or cause the direction of the
management or policies of the other entity in question.

3   The NASD defines a “person associated with a member” or an “associated
person of a member” as being every sole proprietor, partner, equity owner,
officer, director or branch manager of any member, or any natural person
occupying a similar status or performing similar functions, or any natural
person engaged in the investment banking or securities business who directly or
indirectly controls or is controlled by such member (for example, any employee),
whether or not any such person is registered or exempt from registration with
the NASD.   4   Immediate family includes parents, mother-in-law, father-in-law,
husband or wife, brother or sister, brother-in-law or sister-in-law, son-in-law
or daughter-in-law, and children, or any other person who is supported, directly
or indirectly, to a material extent, by a person associated with a member of the
NASD or any other broker/dealer.

B-2.4

 

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     2. If you answered “yes” to Question Number 1, please furnish any
information as to whether any such member intends to participate in any capacity
in the private placement, including the details of such participation:
Description:
 
     3. Are you or have you been an “underwriter or related person”5 or a person
associated with an underwriter or related person, including, without limitation,
with respect to the proposed public offering? If yes, please identify the
underwriter or related person and describe such relationship (whether direct or
indirect).
Yes _____ No _____
Description:
 
     4. If known, please describe in detail any underwriting compensations,
arrangements or dealings entered into during the previous twelve months, or
proposed to be consummated in the next twelve months, between (i) any
underwriter or related person, member of the NASD, affiliate of a member of the
NASD, person associated with a member or associated person of a member of the
NASD or any immediate family member thereof, on the one hand, and (ii) the
Company, or any director, officer or stockholder thereof, on the other hand,
which provides for the receipt of any item of value and/or the transfer of any
warrants, options or other securities from the Company to any such person (other
than the information relating to the arrangements with any investment firm or
underwriting organization which may participate in the proposed public
offering).
Description:
 
     5. Have you purchased the securities in the ordinary course of business?
Yes _____ No _____
 

5   The term “underwriter or related person” includes underwriters,
underwriters’ counsel, financial consultants and advisors, finders, members of
the selling or distribution group, and any and all other persons associated with
or related to any of such persons, including members of the immediate family of
such persons.

B-2.5

 

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The answers to the foregoing questions are correctly stated to the best of my
information and belief. I shall advise John L. Brottem at (650) 843-5358, the
Company’s outside counsel, promptly of any changes in the foregoing information
prior to the effectiveness of the registration statement.

                    (Print name of Selling Security Holder)
 
       
 
                  (Signature)
 
       
 
       
 
  By:    
 
            (Name and title of signatory, if stockholder is an entity)
 
       
 
                  (Date)

B-2.6

 

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Exhibit B-3
SOLEXA, INC.
CERTIFICATE FOR INDIVIDUAL PURCHASERS
     If the investor is an individual Purchaser (or married couple) the
Purchaser must complete, date and sign this Certificate.
Certificate
     I certify that the representations and responses below are true and
accurate:
     In order for the Company to offer and sell the Securities in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category applicable
to you as an investor in the Company.
     ___(1) A natural person whose net worth1, either individually or jointly
with such person’s spouse exceeds $1,000,000;
     ___(2) A natural person who had an income2 in excess of $200,000, or joint
income with the person’s spouse in excess of $300,000, in 2003 and 2004, and
reasonably expects to have individual income reaching the same level in 2005;
     ___(3) An executive officer or director of the Company.

         
Date:
       
 
       
 
      Name(s) of Purchaser
 
       
 
       
 
      Signature
 
       
 
       
 
      Signature

 

1   For purposes of this Certificate, “net worth” means the excess of total
assets at fair market value over total liabilities, except that the principal
residence owned by a natural person shall be valued either (a) at cost,
including the cost of improvements, net of current encumbrances upon the
property, or (b) at the appraised value of the residence as determined upon a
written appraisal used by an institutional lender making a loan to the
individual secured by the property, including the cost of subsequent
improvements, net of current encumbrances upon the property. As used in the
preceding sentence, “institutional lender” means a bank, savings and loan
company, industrial loan company, credit union or personal property broker or a
company whose principal business is as a lender of loans secured by real
property and which has such loans receivable in the amount of $2,000,000 or
more.   2   For purposes of this Certificate, “income” means adjusted gross
income, as reported for federal income tax purposes, increased by the following
amounts: (a) the amount of any tax exempt interest income received, (b) the
amount of losses claimed as a limited partner in a limited partnership, (c) any
deduction claimed for depletion, (d) amounts contributed to an IRA or Keogh
retirement plan, (e) alimony paid, and (f) any amounts by which income from
long-term capital gains has been reduced in arriving at adjusted gross income
pursuant to the provisions of Section 1202 of the Internal Revenue Code.

B-3

 

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Exhibit B-4
SOLEXA, INC.
CERTIFICATE FOR CORPORATE, PARTNERSHIP,
TRUST, FOUNDATION, AND JOINT PURCHASERS
     If the investor is a corporation, partnership, trust, pension plan,
foundation, joint purchaser (other than a married couple) or other entity, an
authorized officer, partner, or trustee must complete, date and sign this
Certificate.
Certificate
     The undersigned certifies that the representations and responses below are
true and accurate:
     (a) The investor has been duly formed and is validly existing and has full
power and authority to invest in the Company. The person signing on behalf of
the undersigned has the authority to execute and deliver the Securities Purchase
Agreement on behalf of the Purchaser and to take other actions with respect
thereto.
     (b) Indicate the form of entity of the undersigned:

         
 
  ¨   Limited Partnership
 
       
 
  ¨   General Partnership
 
       
 
  ¨   Corporation
 
       
 
  ¨   Revocable Trust (identify each grantor and indicate under what
circumstances the trust is revocable by the grantor:
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
      (Continue on a separate piece of paper, if necessary.)
 
       
 
  ¨   Other Type of Trust (indicate type of trust and, for trusts other than
pension trusts, name the grantors and beneficiaries:
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
      (Continue on a separate piece of paper, if necessary.)
 
       
 
  ¨   Other form of organization (indicate form of organization (______).

B-4.2

 

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     (c) Indicate the approximate date the undersigned entity was
formed:                                        .
     (d) In order for the Company to offer and sell the Securities in
conformance with state and federal securities laws, the following information
must be obtained regarding your investor status. Please initial each category
applicable to you as an investor in the Company.
     ___(1) A bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its individual or
fiduciary capacity;
     ___(2) A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934;
     ___(3) An insurance company as defined in Section 2(13) of the Securities
Act;
     ___(4) An investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section 2(a)(48) of that
Act;
     ___(5) A Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958;
     ___(6) A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000;
     ___(7) An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such act, which is either a bank,
savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made solely by
persons that are accredited investors;
     ___(8) A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;
     ___(9) An organization described in Section 501(c)(3) of the Internal
Revenue Code, a corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the Securities,
with total assets in excess of $5,000,000;
     ___(10) A trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the Securities, whose purchase is directed by
a sophisticated person who has such knowledge and experience in financial and
business matters that such person is capable of evaluating the merits and risks
of investing in the Company;

B-4.2

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     ___(11) An entity in which all of the equity owners qualify under any of
the above subparagraphs. If the undersigned belongs to this investor category
only, list the equity owners of the undersigned, and the investor category which
each such equity owner satisfies:

         
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
      (Continue on a separate piece of paper, if necessary.)

         
Dated:
       
 
       
 
              Name of investor    
 
              Signature and title of authorized officer, partner or trustee    

B-4.2

 

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Exhibit C
OPINION OF COMPANY COUNSEL
November [__], 2005
To The Purchasers listed on Exhibit A hereto
Re: Solexa, Inc. Private Placement
Dear Ladies and Gentlemen:
     We have acted as counsel for Solexa, Inc., a Delaware corporation (the
“Company”), in connection with the issuance and sale of up to 101,395 shares of
the Company’s common stock, par value $0.01 per share (the “Common Stock”) (the
“Shares”) and warrants (the “Warrants”) to purchase an aggregate of up to 35,488
shares of Common Stock (the “Warrant Shares” and collectively with the Shares
and Warrants, the “Securities”), to the Purchasers at the First Closing under
that certain Securities Purchase Agreement dated as of November 18, 2005 (the
“Purchase Agreement”). We are rendering this opinion pursuant to Section 5.4 of
the Purchase Agreement. Except as otherwise defined herein, capitalized terms
used but not defined herein have the respective meanings given to them in the
Purchase Agreement.
     In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the Purchase Agreement by the various parties and originals or
copies certified to our satisfaction, of such records, documents, certificates,
opinions, memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below.
     As to certain factual matters, we have relied upon certificates of officers
of the Company and have not sought to independently verify such matters. Where
we render an opinion “to our knowledge” or concerning an item “known to us” or
our opinion otherwise refers to our knowledge, it is based solely upon (i) an
inquiry of attorneys within this firm who have represented the Company in this
transaction, (ii) receipt of a certificate executed by an officer of the Company
covering such matters, and (iii) such other investigation, if any, that we
specifically set forth herein.
     In rendering this opinion, we have assumed: the authenticity of all
documents submitted to us as originals; the conformity to originals of all
documents submitted to us as copies; the accuracy, completeness and authenticity
of certificates of public officials; the due authorization, execution and
delivery of all documents (except the due authorization, execution and delivery
by the Company of the Purchase Agreement and the Warrants (together, the
“Financing Agreements”)), where authorization, execution and delivery are
prerequisites to the effectiveness of such documents; and the genuineness and
authenticity of all signatures on original documents (except the signatures on
behalf of the Company on the Financing Agreements). We have also assumed: that
all individuals executing and delivering documents had the legal capacity to so
execute and deliver; that the Financing Agreements are obligations binding upon
the parties thereto other than the Company; that the parties to the Financing
Agreements other than the Company have filed any required California franchise
or income tax returns and have paid any required California franchise or income
taxes; and that there are no extrinsic agreements or
C-1

 

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

 

understandings among the parties to the Financing Agreements that would modify
or interpret the terms of the Financing Agreements or the respective rights or
obligations of the parties thereunder.
     Our opinion is expressed only with respect to the federal laws of the
United States of America and the laws of the State of California and the General
Corporation Law of the State of Delaware. We express no opinion as to whether
the laws of any particular jurisdiction apply, and no opinion to the extent that
the laws of any jurisdiction other than those identified above are applicable to
the subject matter hereof.
     We are not rendering any opinion as to any statute, rule, regulation,
ordinance, decree or decisional law relating to antitrust, banking, land use,
environmental, pension, employee benefit, tax, fraudulent conveyance, usury,
laws governing the legality of investments for regulated entities, regulations
T, U or X of the Board of Governors of the Federal Reserve System or local law.
Furthermore, we express no opinion with respect to compliance with antifraud
laws, rules or regulations relating to securities or the offer and sale thereof;
compliance with fiduciary duties by the Company’s Board of Directors or
stockholders; compliance with safe harbors for disinterested Board of Director
or stockholder approvals; compliance with state securities or blue sky laws
except as specifically set forth below; compliance with the Investment Company
Act of 1940; compliance with laws that place limitations on corporate
distributions; the enforceability of provisions in the Financing Agreements
concerning the voting of the Company’s capital stock (other than solely
administrative obligations of the Company).
With regard to our opinion in paragraphs 1 and 3 below with respect to the good
standing of the Company, we have relied solely upon certificates of the
Secretaries of State of the indicated jurisdictions as of a recent date.
With regard to our opinion in paragraph 6 below, we have examined and relied
upon a certificate executed by an officer of the Company, to the effect that the
consideration for all outstanding shares of capital stock of the Company was
received by the Company in accordance with the provisions of the applicable
Board of Directors resolutions and any plan or agreement relating to the
issuance of such shares, and we have undertaken no independent verification with
respect thereto.
     With regard to our opinion in paragraph 6 below with respect to securities
of the Company to be issued after the date hereof, we express no opinion to the
extent that, notwithstanding its current reservation of shares of Common Stock,
future issuance of securities of the Company or anti-dilution adjustments to
outstanding securities of the Company cause the Warrants to be convertible for
more shares of Common Stock than the number that then remain authorized but
unissued.
     With regard to our opinion in paragraph 8 below with respect to pending or
overtly threatened litigation, we have made an inquiry of the attorneys within
this firm who have represented the Company in this transaction, examined and
relied upon a certificate executed by an officer of the Company covering such
matters, and checked the records of this firm to ascertain that we are not
acting as counsel of record for the Company in any such matter. We have made no
further investigation.
C-1.4

 

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

 

     With regard to our opinion in paragraph 10 concerning exemption from
registration, our opinion is expressed only with respect to the offer and sale
of the Shares without regard to any offers or sales of other securities
occurring prior to or subsequent to the date hereof.
     On the basis of the foregoing, in reliance thereon and with the foregoing
qualifications, we are of the opinion that:

1.   The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware.   2.   The
Company has the requisite corporate power to own its property and assets and to
conduct its business as it is currently being conducted.   3.   The Company is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of California.   4.   The Company has the corporate power to
execute, deliver and perform its obligations under the Financing Agreements.  
5.   Each of the Financing Agreements has been duly and validly authorized,
executed and delivered by the Company and each such agreement constitutes a
valid and binding agreement of the Company enforceable against the Company in
accordance with its respective terms, except as rights to indemnity and
contribution under section 7.3 of the Purchase Agreement may be limited by
applicable laws and except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar
laws affecting creditors’ rights, and subject to general equity principles and
to limitations on availability of equitable relief, including specific
performance.   6.   The Company’s authorized capital stock consists of (a) sixty
million (60,000,000) shares of Common Stock, and (b) two million (2,000,000)
shares of Preferred Stock, par value $0.01 per share. The Shares and Warrant
Shares have been duly authorized and the Warrant Shares have been reserved for
issuance upon exercise of the Warrants. The Shares and Warrants, when issued,
sold and delivered against payment therefor in accordance with the terms of the
Purchase Agreement and the Warrant Shares, if issued on the date hereof upon
exercise of the Warrants and payment therefor in accordance with the terms of
the Warrants, will be validly issued, outstanding, fully paid and nonassessable.
To our knowledge, except as provided in the SEC Documents, the Financing
Agreements or the Disclosure Schedule, there are no options, warrants,
conversion privileges, preemptive rights or other rights presently outstanding
to purchase any of the authorized but unissued capital stock of the Company.  
7.   The execution and delivery of the Financing Agreements by the Company and
the issuance of the Shares and Warrants pursuant thereto do not violate any
provision of the Company’s Amended and Restated Certificate of Incorporation, as
amended, or Bylaws, as amended, and do not violate (a) any governmental statute,
rule or regulation which in our experience is typically applicable to
transactions of the nature contemplated by the Financing Agreements or (b) any
order, writ, judgment, injunction, decree, determination

C-1.4

 

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

 

    or award which has been entered against the Company and of which we are
aware, in each case to the extent the violation of which would materially and
adversely affect the Company and its subsidiaries, taken as a whole.   8.   To
our knowledge, there is no action, proceeding or investigation pending or
overtly threatened against the Company before any court or administrative agency
that questions the validity of the Purchase Agreement or that could reasonably
be expected to result, either individually or in the aggregate, in a material
adverse effect on the Company and its subsidiaries, taken as a whole that has
not been disclosed in writing to the Purchasers.   9.   All consents, approvals,
authorizations, or orders of, and filings, registrations, and qualifications
with any U.S. Federal or California regulatory authority or governmental body
required for the issuance of the Shares and Warrants, have been made or
obtained, except (a) for the filing of a Form D pursuant to Securities and
Exchange Commission Regulation D and (b) for the filing of the notice to be
filed under California Corporations Code Section 25102.1(d).   10.   The offer
and sale of the Shares and Warrants are exempt from the registration
requirements of the Securities Act of 1933, as amended, subject to the timely
filing of a Form D pursuant to Securities and Exchange Commission Regulation D.

     This opinion is intended solely for your benefit and is not to be made
available to or be relied upon by any other person, firm, or entity without our
prior written consent.

        Very truly yours,

Cooley Godward llp
    By:         James C. Kitch     

C-1.4

 

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Exhibit D
SOLEXA, INC.
IMPORTANT — DO NOT REMOVE THIS INSTRUCTION SHEET FROM THE ATTACHED SHARE
CERTIFICATE UNLESS AND UNTIL THE SHARES ARE SOLD AS FOLLOWS:
(1) THE SHARES ARE RESOLD PURSUANT TO THE REGISTRATION STATEMENT ON FORM S-3
(NO. [                                                            ]), AND, IN
CONNECTION WITH SUCH RESALE, THE HOLDER HAS PROVIDED TO THE COMPANY OR THE
TRANSFER AGENT FOR THE COMPANY’S STOCK A PURCHASER’S CERTIFICATE OF SUBSEQUENT
SALE AND THE HOLDER HAS DELIVERED A CURRENT PROSPECTUS OR, IF RULE 172 UNDER THE
SECURITIES ACT OF 1933 AS AMENDED IS THEN IN EFFECT, THE HOLDER HAS CONFIRMED
THAT A CURRENT PROSPECTUS IS DEEMED TO BE DELIVERED IN CONNECTION WITH SUCH
RESALE; OR
(2) THE SHARES ARE RESOLD IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, PROVIDED THAT, PRIOR TO
SUCH RESALE, THE HOLDER HAS NOTIFIED THE COMPANY OF SUCH DISPOSITION AND
PROVIDED THE COMPANY WITH WRITTEN ASSURANCES, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY OF COMPLIANCE WITH THE REQUIREMENTS OF SUCH
EXEMPTION.
DO NOT REMOVE THIS INSTRUCTION SHEET FROM
THE ATTACHED SHARE CERTIFICATE
EXCEPT IN ACCORDANCE WITH
THE INSTRUCTIONS SET FORTH ABOVE.
D-1

 

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Exhibit E
PURCHASER’S CERTIFICATE OF SUBSEQUENT SALE
To: Cooley Godward llp

Attention:   Trevor Dutcher, Esq.
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155

The undersigned, the selling securityholder or an officer of, or other duly
authorized person, hereby certifies that
                                                                                
represents that it has sold shares of the Common Stock of Solexa, Inc. and that
such
        [fill in name of selling securityholder]
shares were sold on                      either (i) in accordance with the
registration statement on Form S-3 with file number
[                            ],
                                       [date]
in which case the selling securityholder certifies that such selling
securityholder has delivered a current prospectus in connection with such sale,
provided, however, that if Rule 172 under the Securities Act of 1933, as
amended, is then in effect, such selling securityholder has confirmed that a
current prospectus is deemed to be delivered in connection with such sale, or
(ii) in accordance with Rule 144 under the Securities Act of 1933 (“Rule 144”),
in which case the selling securityholder certifies that it has complied with the
requirements of Rule 144.
Print or type:

         
 
  Number of shares sold (if sold on multiple dates, please provide a breakdown
by date):    
 
       
 
       
 
  Name of selling securityholder:    
 
       
 
       
 
  Name of individual representing selling securityholder (if an institution):  
 
 
       
 
       
 
  Title of individual representing selling securityholder (if an institution):  
 
 
       
 
        Signature by:    
 
       
 
  Selling securityholder or
individual representative:    
 
       

E-1

 

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Table Of Contents

                      Page  
ARTICLE 1
       AUTHORIZATION AND SALE OF COMMON SHARES AND WARRANTS     1  
1.1
  Authorization     1  
ARTICLE 2
       CLOSING DATES; DELIVERY     2  
2.1
  Closing Dates. Delivery     2  
ARTICLE 3
       REPRESENTATIONS AND WARRANTIES OF THE COMPANY     3  
3.1
  Organization and Standing     3  
3.2
  Corporate Power; Authorization     3  
3.3
  Issuance and Delivery of the Shares     4  
3.4
  SEC Documents; Financial Statements     4  
3.5
  Governmental Consents     4  
3.6
  No Material Adverse Change     4  
3.7
  Authorized Capital Stock     4  
3.8
  Litigation     5  
3.9
  Eligibility to Use Form S-3     5  
3.10
  Company not an “Investment Company.”     5  
3.11
  NASDAQ Compliance     5  
3.12
  Use of Proceeds     5  
3.13
  Brokers and Finders     5  
3.14
  No Directed Selling Efforts or General Solicitation     6  
3.15
  No Integrated Offering     6  
3.16
  Private Placement     6  
3.17
  Internal Accounting Controls     6  
3.18
  Sarbanes-Oxley; Disclosure Controls and Procedures     6  
3.19
  Intellectual Property     6  
3.20
  Questionable Payments     7  
3.21
  Transactions with Affiliates     7  
3.22
  Disclosure     7  
3.23
  Dilution; Sales By Purchasers     8  
ARTICLE 4
       REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS     8  

i.

 

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Table Of Contents
(continued)

                      Page  
4.1
  Authorization     8  
4.2
  Investment Experience     8  
4.3
  Investment Intent     9  
4.4
  Registration or Exemption Requirements     9  
4.5
  Dispositions     9  
4.6
  No Legal, Tax or Investment Advice     10  
4.7
  Confidentiality     10  
4.8
  Residency     10  
4.9
  Governmental Review     10  
4.10
  Legend     10  
4.11
  Foreign Investors     11  
ARTICLE 5
       CONDITIONS TO CLOSING OBLIGATIONS OF PURCHASERS     12  
5.1
  Representations and Warranties     12  
5.2
  Covenants     12  
5.3
  Certificates     12  
5.4
  Legal Opinion     12  
5.5
  Listing     12  
5.6
  Officer’s Certificate     12  
5.7
  Judgments     12  
5.8
  Secretary’s Certificate     12  
5.9
  Stop Orders     13  
5.10
  Stockholder Approval     13  
ARTICLE 6
       CONDITIONS TO CLOSING OBLIGATIONS OF COMPANY     13  
6.1
  Receipt of Payment     13  
6.2
  Representations and Warranties     13  
6.3
  Covenants     13  
6.4
  Delivery of Purchaser Questionnaire     13  
ARTICLE 7
       COVENANTS     14  
7.1
  Definitions     14  
7.2
  Registration Procedures and Expenses     14  
7.3
  Indemnification     16  

ii.

 

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Table Of Contents
(continued)

                      Page  
7.4
  Prospectus Delivery     18  
7.5
  Termination of Obligations     19  
7.6
  Reporting Requirements     19  
7.7
  Blue Sky     20  
7.8
  Stockholder Approval     20  
7.9
  Publicity     20  
ARTICLE 8
       RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; COMPLIANCE WITH SECURITIES
ACT     20  
8.1
  Restrictions on Transferability     20  
8.2
  Instruction Sheet     20  
8.3
  Transfer of Securities     20  
8.4
  Purchaser Information     21  
8.5
  Material Non-Public Information     21  
ARTICLE 9
       MISCELLANEOUS     22  
9.1
  Termination     22  
9.2
  Waivers and Amendments     22  
9.3
  Broker’s Fee     22  
9.4
  Governing Law     22  
9.5
  Survival     23  
9.6
  Successors and Assigns     23  
9.7
  Entire Agreement     23  
9.8
  Notices, etc     23  
9.9
  Severability of this Agreement     23  
9.10
  Counterparts     23  
9.11
  Further Assurances     23  
9.12
  Currency     24  
9.13
  Independent Nature of the Purchasers' Obligations and Rights     24  
A.
       GENERAL INFORMATION     1  
B.
       SECURITIES HOLDINGS     1  
C.
       NASD QUESTIONS     5  

Exhibit A — Form of Warrant
iii.

 

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Table Of Contents
(continued)

              Page  
Exhibit B — Instruction Sheet For Purchaser
    B  
Exhibit B-1 — Solexa, Inc. Stock Certificate Questionnaire
    B-1  
Exhibit B-2 — Solexa, Inc. Registration Statement Questionnaire
    B-2.1  
Exhibit B-3 — Solexa, Inc. Certificate for Individual Purchasers
    B-3  
Exhibit B-4 — Solexa, Inc. Certificate for Corporate, Partnership, Trust,
Foundation and Joint Purchasers
    B-4.1  
Exhibit C —Opinion of Company Counsel
    C-1  
Exhibit D — Instruction Sheet
    D-1  
Exhibit E — Form of Purchaser’s Certificate of Subsequent Sale
    E-1  

iv.

 

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