<PAGE>

                                                                   EXHIBIT 10.47

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

                       DATED                         2004
                      ------------------------------------

                                 SOLEXA LIMITED

                                      AND

                             LYNX THERAPEUTICS INC

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

                           COLONY TECHNOLOGY SHARING
                                   AGREEMENT

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

                              CMS CAMERON MCKENNA
                                  MITRE HOUSE
                             160 ALDERSGATE STREET
                                LONDON EC1A 4DD

                              T +44(0)20 7367 3000
                              F +44(0)20 7367 2000

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                    <C>
1.         Definitions and Interpretation.......................................        3
2.         Term.................................................................        6
3.         Project Management...................................................        6
4.         Standstill Period....................................................        7
5.         Ownership of IP Rights...............................................        7
6.         Registered IP........................................................        7
7.         Ownership of Background Assets.......................................        8
8.         Commercial Exploitation..............................................        9
9.         Payments and Royalties...............................................       10
10.        Infringement of the Intellectual Property Rights.....................       11
11.        Third Party Claims...................................................       11
12.        Audit Rights.........................................................       12
13.        Liability............................................................       12
14.        Confidentiality......................................................       13
15.        Termination..........................................................       13
16.        Survival.............................................................       14
17.        Announcements........................................................       15
18.        Non-solicitation.....................................................       15
19.        No Assignment........................................................       15
20.        Costs and Payments...................................................       15
21.        Entire Agreement.....................................................       15
22.        Notices..............................................................       16
23.        Third Party Rights...................................................       17
24.        Disputes.............................................................       17
25.        Governing Law and Jurisdiction.......................................       18

Schedule 1......................................................................       19

         Background IP..........................................................       19

Schedule 2......................................................................       20

           Background Assets....................................................       20
</TABLE>

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

<PAGE>

THIS AGREEMENT is made the 22nd day of March, 2004

BETWEEN:

(1)   SOLEXA LIMITED a company registered in England and Wales with company
      number 03625145 and registered office at Chesterford Research Park, Little
      Chesterford, Saffron Walden, Essex CB10 1XL ("SOLEXA") and

(2)   LYNX THERAPEUTICS INC a Delaware corporation having its principal place of
      business at 25861 Industrial Blvd, Hayward, CA 94545 ("LYNX").

RECITALS:

(A)   On [ * ], Serono International S.A. issued an Information Memorandum in
      respect of the proposed sale by auction by [ * ] (the "SELLER") of all the
      assets and rights identified in Schedules 1 and 2.

(B)   Solexa and Lynx submitted a joint non-binding offer to acquire the assets
      and rights identified in Schedules 1 and 2 1 (the "ACQUISITION") on 30
      January 2004 and a revised offer on 17 February 2004.

(C)   Subject to completion of the Acquisition, Solexa and Lynx agree to jointly
      own the Colony Technology (as hereinafter defined) and Background Assets
      (as hereinafter defined). Both Parties shall have the right to exploit
      such rights and assets on the terms set out herein.

IT IS AGREED as follows:

1.    DEFINITIONS AND INTERPRETATION

1.1   In this Agreement, the following words and expressions shall have the
      following meanings:-

      "ACQUISITION": has the meaning prescribed in Recital (B);

      "AFFILIATE": means any company, partnership or other entity which directly
      or indirectly Controls, is Controlled by or is under common Control with,
      either Party;

      "AGREEMENT": means the terms and conditions set out herein, together with
      any Schedules;

      "BACKGROUND IP": means any IP Rights obtained from the Seller as a result
      of the Acquisition including in relation to the Background Assets, as
      identified in Schedule 1;

      "BACKGROUND ASSETS": means the assets obtained from the Seller as a result
      of the Acquisition and as identified in Schedule 2;

      "COLONY TECHNOLOGY": means the Background IP and any Foreground IP;

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

<PAGE>

      "COMPETENT AUTHORITY": means any local or national agency, authority,
      department, court, tribunal, arbitrator, inspectorate, minister, ministry
      official or public or statutory person (whether autonomous or not) of, any
      government of, any country having jurisdiction over this Agreement or any
      of the Parties or in respect of the regulation of a Product;

      "CONTROL": means the ownership of more than 50% of the issued share
      capital or the legal power to direct or cause the direction of the general
      management and policies of the Party in question;

      "EFFECTIVE DATE": means the date of completion of the Acquisition;

      "FOREGROUND IP": means any IP Rights created jointly by Solexa and Lynx on
      or after the Effective Date which results from a Joint Development
      Project;

      "FORCE MAJEURE": means any cause preventing either Party from performing
      all or any of its obligations under this Agreement which arise or is
      attributable to acts, events, omissions or accidents beyond the reasonable
      control of the Party so prevented;

      "KNOW-HOW": means trade secrets, confidential business information and
      unpatented technical and other information, including information
      comprising or relating to concepts, formulae, specifications, discoveries,
      data, material, ideas, inventions, procedures for experiments, tests and
      results of experimentation and testing, results of research or development
      processes, manufacturing processes and techniques whether such information
      is recorded or stored in any paper notebooks, books, files, ledgers,
      records, tapes, discs, diskettes, CDROM or any other media;

      "IP RIGHTS": means all rights in or to any and all patents, trade marks,
      service marks, trade and business names, copyright (including without
      limitation copyright in computer programs), rights in designs, database
      rights, rights in Know-How, and all other intellectual property rights or
      forms of protection of a similar or equivalent nature or effect which may
      subsist anywhere in the world (whether or not registered or capable of
      registration), together with all applications for registration of and
      rights to apply for, and any licence to use, any of the forgoing;

      "JOINT DEVELOPMENT PROJECT": means a project to be jointly undertaken by
      the Parties to develop IP Rights using Background IP;

      "NET SALES": means subject to Clause 9, any invoiced amount in respect of
      the Sale of Products less the following, to the extent they are paid or
      allowed and included in the invoice price:

      (a)   quantity and/or trade discounts actually granted;

      (b)   freight, shipment and insurance costs incurred in transporting
            Products to customers; and

      (c)   sales taxes and customs duties incurred in connection with the sale,
            exportation or importation of Product.

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

<PAGE>

      "PARTIES": means Solexa and Lynx collectively and reference to a "PARTY"
      shall mean either Solexa or Lynx as the context so requires;

      "PATENT AGENTS": has the meaning ascribed thereto in Clause 6;

      "PRODUCT(S)": means any and all goods, products, services or materials
      utilising or incorporating or exploiting any part of the Colony Technology
      the Sale of which would infringe the Colony Technology if such Sale was
      not by the owner of the Colony Technology or with the consent of such
      owner or if such utilisation, incorporation or exploitation would require
      the consent or license of or to be undertaken by such owner;

      "PURCHASE AGREEMENT": means the Asset Purchase Agreement between the
      Seller, Solexa and Lynx relating to the Colony Technology existing at the
      date of such agreement;

      "REGISTERED IP": means Background IP or Foreground IP which is registered
      or capable of registration on any official register of IP Rights anywhere
      in the world;

      "SALE": means sale, lend, license, lease, hire, supply or dispose and
      "Sells" and "Sold" shall be construed accordingly;

      "SELLER": has the meaning prescribed in Recital (A);

      "STEERING COMMITTEE": has the meaning prescribed by Clause 3.1; and

      "TRANSFER AND VALIDATION PROJECT": means the project to be agreed and
      undertaken by the Parties to ensure that the Background IP is correctly
      vested jointly in the Parties and that it is validated by appropriate
      experiments which will have defined project goals and objectives agreed
      between the Parties.

1.2   In this Agreement:

      1.2.1 all references to Clauses and Schedules are references to clauses
            and schedules to this Agreement unless the context otherwise
            requires;

      1.2.2 references to statutory provisions shall, except where the context
            requires otherwise, be construed as references to those provisions
            as respectively amended or re-enacted or as their application is
            modified by other provisions (whether before or after the date of
            this Agreement from time to time);

      1.2.3 unless the context otherwise requires, references to the singular
            include the plural and vice versa, references to any gender include
            all other genders, and references to "persons" shall include
            individuals, bodies corporate, unincorporated associations,
            businesses and partnerships;

      1.2.4 the headings shall be ignored in construing the Agreement; and

      1.2.5 references to the words "includes" or "including" shall be construed
            without limitation to the generality of the preceding words.

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

<PAGE>

1.3   The Schedule(s) form part of this Agreement and shall have the same force
      and effect as if expressly set out in the body of this Agreement.

2.    TERM

2.1   This Agreement shall commence on the Effective Date and shall continue
      thereafter unless or until it expires or is terminated in accordance with
      Clause 15.

3.    PROJECT MANAGEMENT

3.1   The Parties shall each appoint a representative to form a committee for
      the term of this Agreement to agree on the Transfer and Validation Project
      and to deal with any issues that arise between them including with regard
      to the maintenance, prosecution and exploitation of the Colony Technology
      (the "STEERING COMMITTEE").

3.2   The Steering Committee shall consist of one member from each Party. Each
      Party may replace or provide substitutes for its members as it sees fit.
      On and from the Effective Date, the following persons shall be appointed
      to the Steering Committee:

      3.2.1      From Solexa:    Tony Smith

      3.2.2      From Lynx:      Mary Schramke

3.3   Within 30 days of the Effective Date, the members of the Steering
      Committee shall meet and agree on the scope and nature of the Transfer and
      Validation Project setting out such agreement in reasonable detail.

3.4   The Steering Committee will then meet every month in person or by
      telephone conference at such places and on such dates as shall be mutually
      convenient to the Parties. Additional representatives of the Parties may
      attend provided the Party inviting the additional representatives gives
      prior written notification to the other Party. The Quorum for meetings of
      the Steering Committee shall be one representative from each Party.

3.5   All decisions to be taken by the Steering Committee will require unanimous
      agreement from both Parties representatives. In the event that there is
      not unanimous agreement, the matter in question requiring the decision of
      the Steering Committee shall not proceed and the status quo shall be
      preserved.

3.6   The Steering Committee shall keep accurate minutes of its deliberations
      which record all proposed decisions and actions recommended or taken.
      Draft minutes to be approved by the Committee Chairman within 10 days.

3.7   During the term of the Agreement each of the Parties shall furnish the
      Steering Committee with monthly written reports describing the progress of
      agreed projects and comprehensive written reports within 30 days of the
      completion of each such project.

3.8   Chairmanship of each meeting of the Steering Committee shall alternate
      between the Parties. The Chairman shall not have a casting vote.

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

<PAGE>

3.9   The costs of each Party's representative on the Steering Committee shall
      be for the account of such Party. Expenses of the Steering Committee shall
      be borne as agreed between the Parties of it not agreed, equally by the
      Parties.

4.    STANDSTILL PERIOD

4.1   Save as may be otherwise agreed in writing by the Steering Committee in
      relation to the Transfer and Validation Project or a Joint Development
      Project, neither Party shall undertake any review, investigation,
      experimentation, development, exploitation or other activity in connection
      with any part of the Background IP without the express written consent of
      the other Party until the expiry of a six (6) month period from the
      Effective Date.

5.    OWNERSHIP OF IP RIGHTS

5.1   All Background IP obtained through or as a result of the Acquisition shall
      be assigned to both Parties jointly to hold in equal undivided shares as
      tenants in common.

5.2   Any Foreground IP developed jointly by the Parties or in the performance
      or carrying out of a Joint Development Project or the Transfer and
      Validation Project shall be owned and held jointly by the Parties as
      tenants in common in equal and undivided shares.

5.3   Any IP Rights developed, acquired or created by either Party independently
      of the other Party and not in the performance or carrying out of a Joint
      Development Project or the Transfer and Validation Project shall be owned
      by such Party and nothing in this Agreement shall give the other Party any
      right, title, interest or licence therein or in respect thereof.

5.4   If in any territory it is not possible for the Parties to hold Colony
      Technology jointly as tenants in common in equal undivided shares the
      Parties shall agree through the Steering Committee that one Party shall
      hold the relevant legal rights on trust for both Parties and shall grant a
      licence to the other Party to put such Party, so far as possible, in the
      same position as regards its legal and economic rights as it would have
      been had the Parties been joint owners of the relevant Colony Technology
      in the relevant territory as tenant in common in equal individual shares.

5.5   Each Party shall execute all such documents and do all such things as
      shall be reasonably necessary to vest or perfect the vesting of the Colony
      Technology (including Registered IP) in the Parties as provided in this
      Clause 5 and otherwise to give effect to the provisions of this Clause 5.
      The expenses of the Parties in doing so shall be shared equally between
      the Parties.

6.    REGISTERED IP

6.1   The Parties shall jointly appoint such firm of patent agents as the CEO's
      of each of the Parties shall determine by mutual agreement within 30 days
      of the Effective date (the "PATENT AGENTS") who shall act for the Parties
      in respect of all matters relating to the application for registration in
      any jurisdiction of any IP Rights which are capable of registration, and
      shall generally advise the Parties as to the conduct and administration of
      the IP Rights as provided for in this Agreement.

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

<PAGE>

6.2   The Steering Committee shall meet (at such times as may be reasonably
      requested by either Party) in order to decide (after consultation with the
      Patent Agents) upon:

      6.2.1 the jurisdictions in which any Colony Technology capable of
            registration shall be applied for and registered; and

      6.2.2 whether or not to renew, surrender, or allow to lapse, any such
            Colony Technology

6.3   In the event that the Parties fail to agree upon any matter falling to be
      decided pursuant to Clause 6.2 above they shall use their best endeavours
      to resolve the deadlock by consultation. Failing such resolution the
      matter in dispute shall not go ahead and the status quo shall be
      preserved, except that in relation to the registration or renewal of a
      registration of any Colony Technology in any Territory the Party wishing
      to do so may instruct the Patent Agents to do so independently of the
      other Party (and in its sole name) in order to preserve the Colony
      Technology in the relevant territory and may carry out such other action
      as may be necessary to obtain, maintain and protect the Colony Technology
      in such territory provided that all costs of obtaining, maintaining and
      protecting the Colony Technology in the territory concerned (including the
      Patent Agents fees) shall be for the sole account of the Party taking such
      action. The Party which does not take such action and share in the costs
      of registration or renewal (as the case may be) of the Registered IP
      concerned shall not be entitled to manufacture, market, distribute, sell
      or otherwise commercially exploit Products or the Colony Technology in the
      territory in which the said Registered IP is registered to the extent that
      the Party taking such action (as registered owner of the Registered IP)
      would be entitled to prevent the other Party from doing so but for this
      Agreement and the other Party's joint ownership of the Colony Technology
      pursuant to this Agreement.

6.4   Except as specified in Clause 6.3, the fees of the said firm of Patent
      Agents and the costs of the implementation of the Steering Committee's
      decisions, including without limitation all fees, costs, charges and
      expenses incurred in order to obtain, maintain and protect any part of the
      IP Rights capable of registration shall be borne equally by the Parties.

7.    OWNERSHIP OF BACKGROUND ASSETS

7.1   All Background Assets obtained through the Acquisition shall be assigned
      to and shall be owned jointly by both Parties in equal undivided shares as
      tenants in common.

7.2   The Steering Committee shall decide which portion of the Background Assets
      capable of physical possession will be held by each of the Parties

7.3   With respect to the Background Assets held by either Party, such Party
      shall:

      7.3.1 hold the same in trust for both Parties;

      7.3.2 adequately insure the same from loss, damage and destruction at the
            expense of both Parties in equal shares;

      7.3.3 protect the same and keep the same in suitable environmental
            conditions secure from unauthorised access, loss, damage or
            destruction;

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

<PAGE>

      7.3.4 upon reasonable notice from the other Party provide the other Party
            with free unrestricted access to and use of such Background Assets
            (or such part thereof as the other Party shall request) at such
            premises as the same shall be kept from time to time or such other
            premises as the other Party may reasonably require;

      7.3.5 where reasonably practicable at all times mark such Background
            Assets as the joint property of the Parties and held in trust for
            the Parties.

8.    COMMERCIAL EXPLOITATION

8.1   Subject to Clause 4, the other provisions of this Clause 8 and any
      decision of the Steering Committee both Parties shall have the right to
      manufacture, market, distribute, sell and otherwise commercially exploit
      the Products and Colony Technology independently of the other Party as it
      may determine appropriate in its absolute discretion (including without
      limitation to grant one or more non-exclusive licences provided the same
      do not include any right to sub-license and do not prejudice the
      integrity, reputation, or value of the Colony Technology or the ability of
      the other Party to manufacture, market, distribute, sell or otherwise
      exploit Products or the Colony Technology). Neither Party shall grant any
      licence of any part of the Colony Technology to any third party during the
      period of [ * ] from the Effective Date without the prior written consent
      of the other.

8.2   At least 30 days prior to the grant of any licence or right by any Party
      under or in relation to the Colony Technology to any third party such
      Party shall provide to the other Party details of the licence or right to
      be granted and a copy of the agreement or document recording the same. The
      Party intending to grant the licence or right shall take into account
      (including by way of amendment to the intended licence or right) the
      comments of the other Party to the extent the other Party reasonably
      requires in order to preserve the integrity, reputation or value of the
      Colony Technology or its ability to manufacture, market, distribute, sell
      or otherwise exploit Products or the Colony Technology.

8.3   Neither Party shall charge, mortgage, encumber or, except as specified in
      Clause 8.1, create any licence, right or interest over or in respect of
      the Colony Technology without the prior written consent of the other Party
      (except in relation to any licence of the Colony Technology during the
      period of [ * ] from the Effective Date, such consent not to be
      unreasonably withheld or delayed).

8.4   Neither Party shall assign, transfer, sell or dispose of its interest (or
      any part thereof) in the Colony Technology or Background Assets without
      the prior written consent of the other Party (such consent not to be
      unreasonably withheld or delayed) except that either Party may assign,
      transfer, sell or dispose of the whole of such interest to an Affiliate or
      to a third party acquiring all or substantially all of the business and
      assets of the assigning Party and then only if such Affiliates or third
      Party first undertakes in writing to be bound by the terms of this
      Agreement.

8.5   [ * ]

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

<PAGE>

9.    PAYMENTS AND ROYALTIES

9.1   In the event that a Party or any licensee of a Party sells any Product
      that Party shall pay to the other Party a royalty equal to [ * ] of any
      and all Net Sales in respect of that Product whether such Net Sales are by
      such Party or its licensee (but subject always to Clause 9.4).

9.2   The Sale of any Product to a third party other than in a bona fide arms
      length transaction exclusively for money and any use of a Product by a
      third party for commercial purposes which does not result in a Sale shall
      be deemed to constitute a Sale and the Net Sales in respect of such Sale
      shall be the higher of the actual invoiced amount or the usual selling
      price of Product of the Party or its licensee (as the case may be) or, if
      none, the fair market value of such Product. Net Sales by either Party to
      its Affiliate shall not be subject to the payment of a royalty under
      Clause 9.1 but any Sale of Product by an Affiliate to a third party shall
      be subject to the payment of a royalty under Clause 9.1 in all respects as
      if such Sale were by the relevant Party and not by its Affiliate.

9.3   If any Product is incorporated in any other product sold or supplied by
      either Party or any licensee and is not priced separately from such other
      product, the Net Sales of such Products shall be taken to be that
      proportion of the invoiced Sales of such other product fairly attributable
      to the Product when comparing the cost to make the Product with the cost
      to make the other product.

9.4   The Parties may vary the percentage of royalties payable on Net Sales of
      Product by licensees of a Party by prior written agreement. Neither Party
      shall unreasonably withhold or delay their consideration or consent to a
      request by either Party to a reduction in the royalties payable in respect
      of Net Sales by a licensee if such a reduction is reasonably needed to
      achieve a licence of the Colony Technology and the percentage of royalties
      payable on Net Sales of Product by the licensee (and the share of such
      royalties payable to the Party whose consent is required) is commercially
      reasonable under the circumstances. For the avoidance of doubt it shall
      not in any circumstance be unreasonable for a Party to withhold its
      consent to such a reduction if the proposed royalty payable on Net Sales
      of Product by the licensee is less than [ * ] or the proposed share of
      such royalty receivable by the Party whose consent is required is less
      than [ * ] of Net Sales of Product by the licensee.

9.5   Payment of the sums due under this Clause 9 shall be made in arrears
      within thirty (30) days of the end of each calendar quarter in respect of
      Net Sales of the Product made during such a calendar quarter. Both Parties
      shall procure that all payments are accompanied by a written statement
      giving full details of the quantity and description of the Product Sold,
      the invoiced value of Sales and the deductions made from such invoiced
      value in order to give Net Sales and the amount due in respect of that
      period. Such statements shall be accompanied by payment in full of the
      total amount shown to be due by the statement.

9.6   All sums payable under this Clause 9:

      9.6.1 shall be paid in US dollars. If any Net Sales are not calculated in
            US dollars it shall be converted into US dollars on the last day of
            the relevant period specified

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

<PAGE>

            in Clause 9.5 at the open middle market rate of exchange published
            on that day by the Wall Street Journal;

      9.6.2 shall be paid in full without any withholding or deduction whether
            on account of any taxes, charges or duties or otherwise unless the
            Party is required by law to make such withholding or deduction. The
            parties to this Agreement shall take all steps necessary to ensure
            that royalties may be paid under this Agreement without any or at
            reduced rates of withholding or deduction and the paying Party shall
            provide the other with proper documentary evidence as to the
            deduction or withholding to enable the other Party to obtain
            appropriate relief under such double taxation agreements as may be
            relevant; and

      9.6.3 shall be paid by the due date failing which the other Party shall be
            entitled to charge interest on any outstanding amount at the
            statutory rate of interest for late payment prescribed by section 1
            of the Late Payment of Commercial Debts (Interest) Act 1998. Such
            interest shall be paid by the defaulting Party on demand in writing.

9.7   All payments to be made under this Clause 9 are exclusive of any
      applicable VAT or sales tax to which the payment is subject. The paying
      Party shall be additionally liable for all taxes, charges or duties in
      respect of all payments to be made hereunder and shall pay the same for
      the other Party in the manner and at the rate prescribed by law or
      regulation.

9.8   All payments under this Agreement shall be made without legal or equitable
      deduction, abatement or set-off.

10.   INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS

10.1  In the event that either Party becomes aware of a third party infringing
      any part of the Colony Technology, it shall notify the other Party as soon
      as reasonably practicable. The Parties shall then meet through the
      Steering Committee to decide what action should be taken against that
      third party. Any costs in relation to an action against a third party in
      respect of the relevant IP Rights shall be shared equally unless one Party
      decides that it does not wish to enforce the relevant IP Rights against
      the infringer in which case the other Party can elect to prosecute on its
      own (indemnifying the non-participating Party against all costs and
      expenses that it may incur in respect of the claim against the third
      party).

10.2  Any awards or payments received from the third party infringer shall be
      shared equally by the Parties, unless one of the Parties elects not to
      participate in the action against the infringer in which case the sole
      participating Party shall retain such sums.

11.   THIRD PARTY CLAIMS

11.1  In the event that either Party receives notice of a claim by a third party
      that any of the relevant Colony Technology infringes that third party's
      rights, the Party will inform the other Party as soon as reasonably
      practicable and the Parties shall meet to discuss and agree the action to
      be taken by them in respect of such claim. If an action is brought by a
      third Party against one of the Parties alleging that the Colony Technology
      infringes that third Parties' IP Rights the other Party shall on request
      and at the requesting Parties' expense

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

<PAGE>

      assist in the defence to such claim or action to the extent that in all
      the circumstances it is reasonable to do so.

12.   AUDIT RIGHTS

12.1  Both Parties shall keep, and procure that any licensee shall keep, at its
      normal place of business, complete and accurate records showing the
      quantity, description and Net Sales of the Products Sold or used as may be
      necessary or proper to enable the other Party to check the statements
      required under Clause 9.2, through an independent certified or chartered
      accountant, and shall at all times if and when required by the other Party
      produce such records to an independent certified or chartered accountant
      nominated by the other Party and permit such independent certified or
      chartered accountant to inspect and take copies and extracts of such
      records.

12.2  Subject to Clause 12.3 below, each Party shall be entitled on not less
      than ten (10) business days notice to require the other Party to permit it
      and its employees, agents, auditors to inspect the Sales and other records
      of that Party in relation to the Products.

12.3  Each Party shall not be entitled to exercise such audit right more
      frequently than twice in any period of twelve (12) months unless it finds
      a discrepancy amounting to a shortfall payment of more than [ * ] during a
      previous audit in which case it shall be entitled to undertake quarterly
      audits.

12.4  Each Party shall pay its own costs in conducting any audits of the other
      Party's records.

13.   LIABILITY

13.1  Neither Party shall be considered to be in breach of this Agreement or be
      liable for any damages suffered by the other, by reason of any failure to
      perform any obligation hereunder if and to the extent that such failure is
      the result of an event of Force Majeure. The respective obligations of the
      relevant Party's shall be suspended for such time as such an event shall
      prevent it from performing its obligations.

13.2  For the purpose of the establishment of any liability on the part of any
      of the Parties and for the purpose of the application of this Clause, a
      series of interrelated events shall be considered to constitute one single
      event.

13.3  Nothing in this Agreement shall be taken to exclude or limit either
      Party's liability:

      13.3.1 for death or personal injury caused by negligence;

      13.3.2 for fraud or fraudulent misrepresentation or the tort of deceit;

      13.3.3 any liability which cannot be excluded or limited by applicable
             law.

13.4  Neither Party shall be liable to the other for any indirect, special,
      punitive or consequential loss or damage whatsoever or howsoever occurring
      (including if arising in consequence of its negligence).

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      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

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14.   CONFIDENTIALITY

14.1  Each Party hereby undertakes and agrees to maintain and protect the
      confidentiality of the Colony Technology in the same manner and to the
      same extent as it would maintain and protect comparable information that
      it exclusively owns including in relation to the disclosure of the Colony
      Technology as necessary to commercially exploit the same.

14.2  Each Party hereby undertakes and agrees to:

      14.2.1 use the confidential information (including that relating to the
             business affairs or finances) of the other Party disclosed or made
             available to or acquired by it under, pursuant to or in consequence
             of this Agreement (excluding the Colony Technology) ("CONFIDENTIAL
             INFORMATION") only as specified in and for the purposes envisaged
             under this Agreement and not to use the same for any other purpose
             whatsoever;

      14.2.2 ensure that only those of its officers and employees who are
             directly concerned with the carrying out of this Agreement have
             access to the Confidential Information on a strictly applied "need
             to know" basis and are informed of the secret and confidential
             nature of it;

      14.2.3 keep the Confidential Information secret and confidential and shall
             not directly or indirectly publish, disclose or permit to be
             published or disclosed the same to any third party for any reason
             without the prior written consent of the other Party.

14.3  The obligations of confidence referred to in Clause 14.2 shall not extend
      to any Confidential Information which:

      14.3.1 is or becomes generally available to the public otherwise than by
             reason of breach by the Party receiving the Confidential
             Information ("RECIPIENT PARTY") of the provisions of this Clause
             14;

      14.3.2 is known to the Recipient Party and is at its free disposal (having
             been generated independently by the Recipient Party or a third
             party in circumstances where it has not been derived directly or
             indirectly from the other Party's Confidential Information) prior
             to its receipt from the other Party provided that evidence of such
             knowledge is furnished by the Recipient Party to the other Party
             within 28 days of receipt of that Confidential Information; or

      14.3.3 is subsequently disclosed to the Recipient Party without
             obligations of confidence by a third party owing no such
             obligations to the other Party in respect of that Confidential
             Information.

14.4  The obligations of the Parties under this Clause 14 shall survive the
      expiration or termination of this Agreement for whatever reason.

15.   TERMINATION

15.1  This Agreement shall continue and remain in full force and effect for so
      long as any application for a patent or a registered patent in relation to
      the Colony Technology which is

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      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

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      jointly owned by the Parties shall remain subsisting. This Agreement may
      only be terminated by the Parties upon mutual written agreement or in
      accordance with Clause 16.5.

16.   SURVIVAL

16.1  Clauses 5 (Ownership of IP Rights), 7 (Ownership of Background
      Technology), 13 (Liability), 14 (Confidentiality) and 25 (Governing Law
      and Jurisdiction) shall survive expiry and termination of this Agreement.

16.2  Subject to Clause 16.5 and without prejudice to Clause 16.1, upon expiry
      or termination of the Agreement for any reason each Party may continue to
      exploit the Colony Technology as it may determine in its absolute
      discretion and Clause 8.1 shall survive the expiration or termination of
      this Agreement.

16.3  Without prejudice to Clause 16.1, the royalties payable in respect of Net
      Sales in accordance with Clause 9 in respect of Net Sales during the term
      of this Agreement and the rights of the Parties to conduct audits thereof
      under Clause 12 shall survive the termination of this Agreement.

16.4  Obligations that by their nature are intended to continue to be in force
      after termination of this Agreement, shall survive the termination of this
      Agreement.

16.5  If in relation to either Party ("Affected Party"):

      16.5.1 a notice is issued to convene a meeting for the purpose of passing
             a resolution to wind it up, or such a resolution is passed (other
             than a resolution for its solvent reconstruction or
             reorganisation);

      16.5.2 a resolution is passed by its directors to seek a winding up or to
             enter administration; or a petition for a winding up order is
             presented against it or a petition is presented or an application
             is made for the appointment of an administrator, or such an order
             or appointment is made;

      16.5.3 a receiver, administrative receiver and manager, interim receiver,
             custodian, sequestrator, administrator or similar officer is
             appointed in respect of that Party or over a substantial part of
             its assets;

      16.5.4 any step or event is taken or arises outside the United Kingdom
             which is similar or analogous to any of the steps or events listed
             at 16.5.1 to 16.5.3 above;

      16.5.5 it makes any general assignment, composition or arrangement with or
             for the benefit of all or some of its creditors.

      the other Party shall have the right and option to purchase and the
      Affected Party shall sell (on the exercise of such option) the entire
      legal and beneficial title and interest of the Affected Party to all
      Colony Technology and Background Assets for a sum equal to the fair market
      value of such assets. Such option to be exercisable by the other Party
      upon written notice to the Affected Party at any time from the occurrence
      of such event to 30 days after receiving notice of such event from the
      Affected Party. Upon completion of such

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      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

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      purchase this Agreement shall terminate. Upon such termination Clause 16.2
      shall not apply.

17.   ANNOUNCEMENTS

17.1  No Party shall make any formal press release or other public announcement
      in connection with any of the transactions contemplated by this Agreement
      except:

      17.1.1 an announcement in the agreed form or in any other form agreed by
             both Parties; or

      17.1.2 any announcement required by any applicable Competent Authority.

18.   NON-SOLICITATION

      The parties agree that during the term of the Agreement and for a period
      of [ * ] months thereafter, they will not, whether directly or indirectly,
      procure the services of any of the other Party's employees or consultants
      directly engaged in the performance of this Agreement. In the event that
      either Party breaches this Clause, the defaulting Party shall pay to the
      affected Party all unavoidable and reasonable costs incurred by the
      affected Party including but not limited to a sum equal to the gross
      salary of the employee or the consultant due under any relevant notice
      period. This Clause shall not restrict either Party from appointing any
      person, whether employee or consultant of the other or not, who has
      applied in response to an advertisement properly and publicly placed in
      the normal course of business.

19.   NO ASSIGNMENT

      Neither Party may assign any right under this Agreement without the prior
      written consent of the other Party (such consent not to be unreasonably
      withheld or delayed) except to an Affiliate or third party which at the
      same time acquires the whole of such Party's interest in the Colony
      Technology and Background Assets pursuant to Clause 8.4.

20.   COSTS AND PAYMENTS

      Except as otherwise stated in this Agreement, each Party shall bear its
      own costs and expenses in relation to the negotiation, preparation,
      execution and carrying into effect of this Agreement and all other
      agreements forming part of the transactions contemplated by this
      Agreement.

21.   ENTIRE AGREEMENT

21.1  This Agreement constitutes the whole and only agreement and understanding
      between the parties in relation to its subject matter. Except as provided
      in Clause 21.3, all previous agreements, understandings, undertakings,
      representations, warranties and arrangements of any nature whatsoever
      between the Parties with any bearing on the subject matter of this
      Agreement are superseded and extinguished (and all rights and liabilities
      arising by reason of them, whether accrued or not at the date of this
      Agreement, are cancelled) to the extent that they have such a bearing.

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      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

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21.2  The rights, powers and remedies provided in this Agreement are independent
      and cumulative and do not exclude any rights, powers or remedies (express
      or implied) which are available as a matter of common law, statute, custom
      or otherwise.

21.3  Nothing in this Agreement shall be read or construed as excluding or
      restricting any liability or remedy in respect of fraud or the tort of
      deceit.

22.   NOTICES

22.1  Any communication to be given in connection with the matters contemplated
      by this Agreement shall except where expressly provided otherwise be in
      writing and shall either be delivered by hand or sent by first class
      pre-paid or registered post. Delivery by courier shall be regarded as
      delivery by hand.

22.2  Such communication shall be sent to the address of the relevant Party
      referred to in this Agreement or to such other address as may previously
      have been communicated to the sending Party in accordance with this
      Clause. Each communication shall be marked for the attention of the
      relevant person.

22.3  The addresses of the parties for the purpose of Clause 22.2 are as
      follows:

      Solexa:              Chesterford Research Park,
                           Little Chesterford,
                           Saffron Walden,
                           Essex CB10 1XL

      For the attention of:    Nick McCooke

      Lynx:                25861 Industrial Blvd,
                           Hayward,
                           CA 94545

      For the attention of:    Kevin Corcoran

22.4  A communication shall be deemed to have been served:

      22.4.1 if delivered by hand at the address referred to in Clause 22.3 at
             the time of delivery; or

      22.4.2 if sent by first class pre-paid post to the address referred to in
             that sub-clause, at the expiration of two clear days after the time
             of posting; and

22.5  If a communication would otherwise be deemed to have been delivered
      outside normal business hours (being 9:30 a.m. to 5:30 p.m. on a business
      day) under the preceding provisions of this Clause, it shall be deemed to
      have been delivered at the next opening of such normal business hours.

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

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22.6  In proving service of the communication, it shall be sufficient to show
      that delivery by hand was made or that the envelope containing the
      communication was properly addressed and posted as a first class pre-paid
      letter or that the facsimile was despatched and a confirmatory
      transmission report received.

22.7  Either Party may notify the other of a change to its name, relevant person
      or address for the purposes of Clause 22.3 (Address) provided that such
      notification shall only be effective on:

      22.7.1 the date specified in the notification as the date on which the
             change is to take place; or

      22.7.2 if no date is specified or the date specified is less than five
             clear business days after the date on which notice is deemed to
             have been served, the date falling five clear business days after
             notice of any such change is deemed to have been given.

22.8  For the avoidance of doubt, the Parties agree that the provisions of this
      Clause shall not apply in relation to the service of any statement of
      claim, summons, order, judgment or other document relating to or in
      connection with any legal proceedings.

23.   THIRD PARTY RIGHTS

      Nothing in this Agreement is intended to confer on any person any right to
      enforce any term of this Agreement which that person would not have had
      but for the Contracts (Rights of Third Parties) Act 1999.

24.   DISPUTES

24.1  Any dispute in relation to this Agreement shall be referred by either
      Party to the Steering Committee for resolution unless the Steering
      Committee have already considered the matter in which case it shall be
      referred as indicated in Clause 24.2 below.

24.2  If within the 14 business days of the reference made under Clause 24.1 the
      Steering Committee has not resolved the dispute the Parties shall refer
      the dispute to the Chief Executive Officers of Solexa and Lynx for
      resolution. If the dispute cannot be resolved by those individuals within
      14 days after the dispute has been referred the dispute shall be resolved
      in accordance with the remaining provisions of this Clause.

24.3  Following a failure to resolve a dispute under Clause 24.2, either Party
      may request that the dispute be referred to mediation. Any reference to
      mediation shall be made in accordance with the mediation procedures of the
      Centre for Effective Dispute Resolution ("CEDR"). The mediation will be
      conducted by a single mediator appointed by the parties or, if the parties
      are unable to agree on the identity of the mediator within 14 days after
      the date of the request that the dispute be resolved by mediation, or if
      the person appointed is unable or unwilling to act, the mediator shall be
      appointed by the Executive of the CEDR on the application of either Party.
      The mediation shall be conducted in London and in English. Mediation is
      without prejudice to the rights of the parties in any future proceedings.

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      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

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24.4  This Clause 24 is without prejudice to either Party's right to seek
      interim relief against the other Party (such as an injunction) through
      relevant courts and legal process in order to protect its rights and
      interests, or to enforce the obligations of the other Party.

25.   GOVERNING LAW AND JURISDICTION

25.1  This Agreement shall be governed by and construed in accordance with
      English law.

25.2  Subject to Clause 24, the parties hereby irrevocably agree to submit to
      the exclusive jurisdiction of the Courts of England in respect of any
      dispute which may arise in connection with the validity, effect,
      interpretation or performance of, or the legal relationships established
      by, this Agreement or otherwise arising in connection with this Agreement.

IN WITNESS WHEREOF the Parties duly executed this Agreement the day and year
first above written.

SIGNED by                  )         /s/ N. J. McCooke
                            ----------------------------------------

SOLEXA LIMITED             )         N. J. McCooke, CEO

in the presence of:        )         /s/ B. J. Haigh
                            ----------------------------------------

Witness:                   )         B. J. Haigh

SIGNED by                  )         /s/ Kevin P. Corcoran
                            ----------------------------------------

LYNX THERAPEUTICS INC      )         Kevin P. Corcoran, President & CEO

in the presence of:        )         /s/ Patricia Rabelo
                            ----------------------------------------

Witness:                   )         Patricia Rabelo

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

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                                   SCHEDULE 1

                                 BACKGROUND IP

1.    [ * ]

2.    [ * ]

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      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.

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                                   SCHEDULE 2

                               BACKGROUND ASSETS

1.    [ * ]

2.    [ * ]

3.    [ * ]

[*]=  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
      BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
      EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT
      OF 1934, AS AMENDED.