exv10w72



 




Exhibit 10.72



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




SOLEXA, INC.




WARRANT TO PURCHASE COMMON STOCK




________ __, 2005




Void After ________ __, 2010




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



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



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




          (b) “Exercise Price” shall mean seven dollars and fifty cents ($7.50) per share, subject to
adjustment pursuant to Section 5 below.




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




     2. Exercise of Warrant. The rights represented by this Warrant may be
exercised in whole or in part at any time during the Exercise Period (subject to Section 7), by
delivery of the following to the Company at its address set forth above (or at such other address
as it may designate by notice in writing to the Holder):



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




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




          (c) This Warrant.




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



1.









 







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



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



     2.1 Net Exercise. During any period during which this Warrant would otherwise be exercisable
and the Registration Statement (as defined in Section 7.2 of the Securities Purchase Agreement
dated November 18, 2005, by and among the Company the Holder, and the other purchasers identified
on the signature pages thereto (the “Purchase
Agreement”)) is not effective, in lieu of exercising
this Warrant by payment of cash, the Holder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the principal office of the Company together with the properly endorsed Notice of
Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:



	 	 	 	 	 
	X =

	 	Y (A-B)
	 	 
	 

	 	A	 	 






	 	 	 
	Where X =

	 	the number of shares of Common Stock to be issued to the Holder
	 
	 	 
	Y=

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

	 	the fair market value of one share of the Company’s Common
Stock (at the date of such calculation)
	 
	 	 
	B=

	 	Exercise Price (as adjusted to the date of such calculation)






          For purposes of the above calculation, the “fair market value” of one share of Common Stock
shall mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq
SmallCap Market or other trading market where such security is listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of



2.









 







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



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



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



     3. Covenants of the Company.




     3.1 Covenants as to Exercise Shares. The Company covenants and agrees that all Exercise
Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issuance thereof. The Company further covenants and agrees
that the Company will at all times during the Exercise Period, have authorized and reserved, free
from preemptive rights, a sufficient number of shares of its Common Stock to provide for the
exercise of the rights represented by this Warrant. If at any time during the Exercise Period the
number of authorized but unissued shares of Common Stock shall not be sufficient to permit exercise
of this Warrant, the Company will take such corporate action as may, in the opinion of its counsel,
be necessary to increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.



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



3.









 





     4. Disposition of Warrant and Exercise Shares.




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




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



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



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



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




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



     5. Adjustment of Exercise Price and Shares. 



          (a) In the event of changes in the outstanding Common Stock of the Company by reason of stock
dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, consolidation, acquisition of the Company (whether
through merger or acquisition of substantially all the assets or stock of the Company), or the
like, the number and class of shares available under the Warrant in the aggregate and the Exercise
Price shall be correspondingly adjusted to give the Holder of the Warrant, on exercise for the same
aggregate Exercise Price, the total number, class, and kind of shares or other property as the
Holder would have owned had the Warrant been exercised prior to


4.









 







the event and had the Holder continued to hold such shares until the event requiring
adjustment. The form of this Warrant need not be changed because of any adjustment in the number
of Exercise Shares subject to this Warrant.




          (b) If at any time or from time to time the holders of Common Stock of the Company (or any
shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall
have received or become entitled to receive, without payment therefor,




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



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



               (iii) Common Stock or additional stock or other securities or property (including cash) by way
of spinoff, split-up, reclassification, combination of shares or similar corporate rearrangement
(other than shares of Common Stock pursuant to Section 5(a) above),


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




     6. Subsequent Equity Sales. 




               (i) If, at any time prior to the one and one half (1 1/2) year anniversary of the date
hereof, the Company issues additional shares of Common Stock or rights, warrants, options or other
securities or debt convertible, exercisable or exchangeable for shares of Common Stock or otherwise
entitling any individual or entity to acquire shares of Common Stock (collectively, “Common Stock
Equivalents”) at an effective net price to the Company per share of Common Stock (the “Effective
Price”) less than six dollars and fifty cents ($6.50) (as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like after the date hereof), then the Exercise
Price shall be reduced to equal the product of (A) the Exercise Price in effect immediately prior
to such issuance of Common Stock or Common Stock Equivalents times (B) a fraction, the numerator of
which is the sum of (1) the number of shares of Common Stock outstanding immediately prior to such
issuance, plus (2) the number of shares of Common Stock which the aggregate Effective Price of the
Common Stock issued (or deemed to be issued) would purchase at the Exercise Price, and the
denominator of which is the aggregate number of shares of Common Stock outstanding or deemed to be
outstanding immediately after such issuance. For purposes of this paragraph, in connection with
any issuance of any Common Stock Equivalents, (A) the maximum number of shares of Common Stock
potentially issuable at any time upon conversion, exercise or exchange of such Common Stock
Equivalents (the “Deemed Number”) shall be deemed to be outstanding upon issuance of such Common
Stock Equivalents,



5.









 







(B) the Effective Price applicable to such Common Stock shall equal the minimum dollar value of
consideration payable to the Company to purchase such Common Stock Equivalents and to convert,
exercise or exchange them into Common Stock (net of any discounts, fees, commissions and other
expenses), divided by the Deemed Number, and (C) no further adjustment shall be made to the
Exercise Price upon the actual issuance of Common Stock upon conversion, exercise or exchange of
such Common Stock Equivalents.



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



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



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


8. Fundamental Transactions. If, at any time while this Warrant is outstanding,
any capital reorganization, reclassification of the capital stock of the Company, consolidation or
merger of the Company with another corporation in which the Company is not the survivor, or sale,
transfer or other disposition of all or substantially all of the Company’s assets to another
corporation shall be effected, then the Company shall use its best efforts to ensure that lawful
and adequate provision shall be made whereby each Holder shall thereafter continue to have the
right to purchase and receive upon the basis and upon the terms and conditions herein specified and
in lieu of the Exercise Shares issuable upon exercise of the Warrant, shares of stock in the
surviving or acquiring corporation (“Acquirer”), as the case may be, such that the value of the
option to purchase such number of shares, as determined in accordance with the Black-Scholes Option
Pricing formula set forth in Appendix (A) hereto, is equivalent to the lesser of (i) the value of
this Warrant to purchase the Exercise Shares, as determined in accordance with the


6.









 






Black-Scholes Option Pricing formula in Appendix (B) hereto or (ii) 125% of the Built-in Gain, as
long as the Built-in-Gain is at least 50% of the strike price, as determined in accordance with
Appendix (C) hereto. Moreover, appropriate provision shall be made with respect to the rights and
interests of each Holder to the end that the provisions hereof (including, without limitation,
provisions for adjustment of the Exercise Price) shall thereafter be applicable, as nearly
equivalent as may be practicable in relation to any shares of stock thereafter deliverable upon the
exercise thereof. The Company shall not effect any such consolidation, merger, sale, transfer or
other disposition unless prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such consolidation or merger, or the
corporation purchasing or otherwise acquiring such assets or other appropriate corporation or
entity shall assume by written instrument, the obligation to deliver to the holder of the Warrant,
at the last address of such holder appearing on the books of the Company, such shares of stock, as,
in accordance with the foregoing provisions, such holder may be entitled to purchase, and the other
obligations under this Warrant. The provisions of this section shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales, transfers or other
dispositions. If the Company, in spite of using its best efforts, is unable to cause this Warrant
to continue in full force and effect until the expiration date of the Warrant in connection with
any capital reorganization, reclassification of the capital stock of the Company, consolidation or
merger of the Company with another corporation in which the Company is not the survivor, or sale,
transfer or other disposition of all or substantially all of the Company’s assets to another
corporation, then the Company shall pay the Holder in cash the lesser of (i) an amount calculated
in accordance with the Black-Scholes Option Pricing formula set forth in Appendix (B) hereto or
(ii) 125% of the Built-in Gain, as long as the Built-in-Gain is at least 50% of the strike price,
as determined in accordance with Appendix (C) hereto.




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



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



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



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



7.









 





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



[______________]


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




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



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



     16. Additional Restriction on Exercise. Notwithstanding anything to the contrary
contained herein, this Warrant shall not be exercisable by the Holder to the extent (but only to
the extent) that, if exercisable by Holder, Holder, any of its affiliates, or any other party which
may be deemed to be acting as a group in concert with Holder or any of its affiliates for the
purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)
would beneficially own in excess of 4.9% (the “Applicable
Percentage”) of the outstanding shares of
Common Stock. To the extent the above limitation applies, the determination of whether this Warrant
shall be exercisable (vis-a-vis other convertible, exercisable or exchangeable securities owned by
Holder) shall, subject to such Applicable Percentage limitation, be determined on the basis of
first submission to the Company for conversion or exercise or exchange (as the case may be). No
prior inability to exercise Warrants pursuant to this Section 15 shall have any effect on the
applicability of the provisions of this paragraph with respect to any subsequent determination of
exercisability. For the purposes of this Section 15, beneficial ownership and all determinations
and calculations, including without limitation, with respect to calculations of percentage
ownership, shall be determined in accordance with Section 13(d) of the Exchange Act, and Regulation
13D and G thereunder. The provisions of this Section 15 shall be implemented in a manner otherwise
than in strict conformity with the terms this Section 15 to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended Applicable Percentage beneficial
ownership limitation herein contained or to make changes or supplements necessary or desirable to
properly give effect to such Applicable Percentage limitation. The limitations contained in this
Section 15 shall apply to a successor holder of Warrants. The holders of Common Stock of the
Company



8.









 







shall be third party beneficiaries of this Section 15 and the Company may not waive this
Section 15 without the consent of holders of a majority of its Common Stock.



9.









 





     In Witness Whereof, the Company has caused this Warrant to be executed by its duly
authorized officer as of November [___], 2005.



	 	 	 	 	 
	 	 	SOLEXA, INC. 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	25861 Industrial Boulevard

Hayward, CA 94545






 









 






APPENDIX




(A)



Black Scholes Option Pricing formula to be used when calculating the amount per share
shall be: C =
StN(d1) - Ke-r(T-t)N(d2), where



C = warrant value



S = price of Acquirer’s stock as determined by reference to the closing price on the
securities exchange or Nasdaq National Market over the 20-day period ending three trading
days prior to the closing of the capital reorganization, reclassification of the capital
stock of the Company, consolidation or merger of the Company with another corporation in
which the Company is not the survivor, or sale, transfer or other disposition of all or
substantially all of the Company’s assets to another corporation described in Section 8 if
the Acquirer’s stock is then traded on such exchange or system, or the average of the
closing bid or sale prices (whichever is applicable) in the over-the-counter market over the
20-day period ending three trading days prior to the closing of the transaction if the
Acquirer’s stock is then actively traded in the over-the-counter market, or the then most
recently completed financing if the Acquirer’s stock is not then traded on a securities
exchange or system or in the over-the-counter market.



T = __/___/20__



t = date of issue of warrant



T-t = time until warrant expiration = ___days or ___months



N = volatility = average of the daily price changes of the Acquirer’s stock on the
securities exchange or Nasdaq National Market over the period beginning on the issue date of
this Warrant and ending three trading days prior to the public announcement of the capital
reorganization, reclassification of the capital stock of the Company, consolidation or
merger of the Company with another corporation in which the Company is not the survivor, or
sale, transfer or other disposition of all or substantially all of the Company’s assets to
another corporation described in Section 8 if the Acquirer’s stock is then traded on such
exchange or system, or the average of the daily change in the closing bid or sale prices
(whichever is applicable) in the over-the-counter market over the period beginning on the
issue date of this Warrant and ending three trading days prior to the public announcement of
the transaction if the Acquirer’s stock is then actively traded in the over-the-counter
market, or 0.6 if the Acquirer’s stock is not then traded on a securities exchange or system
or in the over-the-counter market.



d1
= (ln(S/K) + (r-l+
N^2/2)(T-t)) ÷ (N √(T-t))



ln = natural logarithm



l = dividend rate of the Acquirer for the most recent 12-month period at the time of closing
of the capital reorganization, reclassification of the capital stock of the Company,




 









 







consolidation or merger of the Company with another corporation in which the Company is not
the survivor, or sale, transfer or other disposition of all or substantially all of the
Company’s assets to another corporation.



K = $7.50



r = the 90-day Treasury Bill rate from the most recent auction reported on the
website: www.publicdebt.treas.gov



d2 = d1- N√(T-t)/365



(B)



Black Scholes Option Pricing formula to be used when calculating the amount per Warrant
Share shall be: C =
StN(d1) - Ke-r(T-t)N(d2),
where



C = warrant value



S = price of Company stock as determined by reference to the closing price on the securities
exchange or Nasdaq National Market over the 20-day period ending three trading days prior to
the closing of the capital reorganization, reclassification of the capital stock of the
Company, consolidation or merger of the Company with another corporation in which the
Company is not the survivor, or sale, transfer or other disposition of all or substantially
all of the Company’s assets to another corporation described in Section 8 if the Company’s
stock is then traded on such exchange or system, or the average of the closing bid or sale
prices (whichever is applicable) in the over-the-counter market over the 20-day period
ending three trading days prior to the closing of the transaction if the Company’s stock is
then actively traded in the over-the-counter market, or the then most recently completed
financing if the Company’s stock is not then traded on a securities exchange or system or in
the over-the-counter market.



T = __/___/20__



t = date of issue of warrant



T-t = time until warrant expiration = ___days or ___months



N = volatility = average of the daily price changes of the Company’s stock on the securities
exchange or Nasdaq National Market over the period beginning on the issue date of this
Warrant and ending three trading days prior to the public announcement of the capital
reorganization, reclassification of the capital stock of the Company, consolidation or
merger of the Company with another corporation in which the Company is not the survivor, or
sale, transfer or other disposition of all or substantially all of the Company’s assets to
another corporation described in Section 8 if the Company’s stock is then traded on such
exchange or system, or the average of the daily change in the closing bid or sale prices
(whichever is applicable) in the over-the-counter market over the period beginning on the
issue date of this Warrant and ending three trading days prior to the public announcement of
the transaction if the Company’s stock is then actively traded in


2.









 






 the over-the-counter market, or 0.6 if the Company’s stock is not then traded on a
securities exchange or system or in the over-the-counter market.



d1 = (ln(S/K) + (r-l+N√2/2)(T-t)) ÷ (Nv(T-t))



ln = natural logarithm



l = dividend rate of the Company for the most recent 12-month period at the time of closing
of the capital reorganization, reclassification of the capital stock of the Company,



consolidation or merger of the Company with another corporation in which the Company is not
the survivor, or sale, transfer or other disposition of all or substantially all of the
Company’s assets to another corporation.



K = $7.50



r = the 90-day Treasury Bill rate from the most recent auction reported on the
website: www.publicdebt.treas.gov



d2 = d1- N√(T-t)/365




3.









 








(C)



Built-In-Gain shall be determined as follows: B = S-K



B = Built-in-Gain



S = price of Company stock as determined by reference to the closing price on the securities
exchange or Nasdaq National Market over the 20-day period ending three trading days prior to
the closing of the capital reorganization, reclassification of the capital stock of the
Company, consolidation or merger of the Company with another corporation in which the
Company is not the survivor, or sale, transfer or other disposition of all or substantially
all of the Company’s assets to another corporation described in Section 8 if the Company’s
stock is then traded on such exchange or system, or the average of the closing bid or sale
prices (whichever is applicable) in the over-the-counter market over the 20-day period
ending three trading days prior to the closing of the transaction if the Company’s stock is
then actively traded in the over-the-counter market, or the then most recently completed
financing if the Company’s stock is not then traded on a securities exchange or system or in
the over-the-counter market.



K = $7.50




4.









 








NOTICE OF EXERCISE




TO: Solexa, Inc. 




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



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




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



	 	 	 
	 


	(Name)
	 


	 


	(Address)






     (3) The undersigned represents that (i) the aforesaid shares of Common Stock are being
acquired for the account of the undersigned for investment and not with a view to, or for resale in
connection with, the distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares, other than as contemplated by Article 7 of the Securities
Purchase Agreement dated as of November 18, 2005 by and among the Company, the undersigned and the
other purchasers named therein (the “Purchase
Agreement”); (ii) the undersigned is aware of the
Company’s business affairs and financial condition and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision regarding its investment in the
Company; (iii) the undersigned is experienced in making investments of this type and has such
knowledge and background in financial and business matters that the undersigned is capable of
evaluating the merits and risks of this investment and protecting the undersigned’s own interests;
(iv) the undersigned understands that the shares of Common Stock issuable upon exercise of this
Warrant have not been registered (except to the extent a registration statement pursuant to and as
contemplated by Article 7 of the Purchase Agreement is effective) under the Securities Act of 1933,
as amended (the “Securities Act”), by reason of a specific exemption from the registration
provisions of the Securities Act, which exemption depends upon, among other things, the bona fide
nature of the investment intent as expressed herein, and, because such securities have not been
registered under the Securities Act, they must be held indefinitely unless subsequently registered
under the Securities Act or an exemption from such registration is available; (v) the undersigned
is aware that the aforesaid shares of Common Stock may not be sold pursuant to Rule 144 adopted
under the Securities Act unless certain conditions are met and until the undersigned has held the
shares for the number of



 









 







years prescribed by Rule 144, that among the conditions for use of the Rule is the
availability of current information to the public about the Company; and (vi) the undersigned
agrees not to make any disposition of all or any part of the aforesaid shares of Common Stock
unless and until there is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with said registration
statement, or the undersigned has provided upon the Company’s reasonable request, an opinion of
counsel satisfactory to the Company, stating that such registration is not required.



 



	 	 	 
	 

	 	 
	(Date)

	 	(Signature)
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	(Print name)






 









 






ASSIGNMENT FORM



(To assign the foregoing Warrant, execute this form

and supply required information. Do not use this

form to purchase shares.)



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



	 	 	 	 	 
	Name:
	 	 	 	 
	 	 	 
	 	 	(Please Print)

	 
	 	 	 	 
	Address:
	 	 	 	 
	 	 	 
	 	 	(Please Print)

	 
	 	 	 	 
	Dated:

	 	______________________, 20____	 	 
	 
	 	 	 	 
	Holder’s
	 	 	 	 
	 
	 	 	 	 
	Signature:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Holder’s
	 	 	 	 
	 
	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 	 	 




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