<SUBMISSION>
<ACCESSION-NUMBER>0001012870-00-003639
<TYPE>S-1/A
<PUBLIC-DOCUMENT-COUNT>14
<FILING-DATE>20000703
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ILLUMINA INC
<CIK>0001110803
<ASSIGNED-SIC>3826
<IRS-NUMBER>330804655
<STATE-OF-INCORPORATION>CA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-1/A
<ACT>33
<FILE-NUMBER>333-33922
<FILM-NUMBER>667312
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>9390 TOWNE CENTRE DRIVE
<STREET2>SUITE 200
<CITY>SAN DIEGO
<STATE>CA
<ZIP>92121
<PHONE>8585874290
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>9390 TOWN CENTRE DRIVE
<STREET2>SUITE 200
<CITY>SAN DIEGO
<STATE>CA
<ZIP>92121
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>S-1/A
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>AMENDMENT NO. 1 TO THE FORM S-1
<TEXT>

<PAGE>


   As filed with the Securities and Exchange Commission on July 3, 2000

                                                Registration No. 333-33922
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

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

                             AMENDMENT NO. 1
                                   FORM S-1
                            REGISTRATION STATEMENT
                       Under The Securities Act of 1933

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

                                ILLUMINA, INC.
            (Exact name of Registrant as specified in its charter)

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

<TABLE>
<S>                                <C>                                <C>
           California                             3826                            33-0804655
     (before reincorporation)         (Primary Standard Industrial             (I.R.S. Employer
                                      Classification Code Number)           Identification Number)
            Delaware
     (after reincorporation)
 (State or other jurisdiction of
 incorporation or organization)
</TABLE>

                      9390 Towne Centre Drive, Suite 200
                              San Diego, CA 92121
                                (858) 587-4290
  (Address, including zip code, and telephone number, including area code, of
                   Registrant's principal executive offices)

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

                                Jay T. Flatley
                     President and Chief Executive Officer
                      9390 Towne Centre Drive, Suite 200
                              San Diego, CA 92121
                                (858) 587-4290
(Name, address, including zip code, and telephone number, including area code,
                             of agent for service)

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

                 Please send copies of all communications to:

<TABLE>
<S>                                                <C>
            Michael J. O'Donnell, Esq.                         Edwin D. Williamson, Esq.
            Martin J. Waters III, Esq.                            Sullivan & Cromwell
         Wilson Sonsini Goodrich & Rosati                    1701 Pennsylvania Avenue, N.W.
             Professional Corporation                            Washington, D.C. 20006
                650 Page Mill Road                                   (202) 956-7500
               Palo Alto, CA 94304
                  (650) 493-9300
</TABLE>

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

       Approximate date of commencement of proposed sale to the public:
     As soon as practicable after the effective date of this Registration
                                  Statement.

   If the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), please check the following box. [_]

   If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

   If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

   If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

   If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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

                     CALCULATION OF REGISTRATION FEE
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
 Title of Each Class of
    Securities to be      Proposed Maximum Aggregate
       Registered              Offering Price(1)        Amount of Registration Fee
----------------------------------------------------------------------------------
<S>                      <C>                           <C>
Common Stock, $0.01 par
 value.................          $100,000,000                     $26,400
</TABLE>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

(1) Estimated solely for the purpose of computing the amount of the
    registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

(2) This amount has been previously paid.

   The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may be     +
+changed. These securities may not be sold until the registration statement    +
+filed with the Securities and Exchange Commission is effective. This          +
+preliminary prospectus is not an offer to sell nor does it seek an offer to   +
+buy these securities in any jurisdiction where the offer or sale is not       +
+permitted.                                                                    +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

                Subject to Completion. Dated July 3, 2000.

                             5,000,000 Shares

                                 Illumina, Inc.

    [LOGO]                        Common Stock

                                  -----------

  This is an initial public offering of shares of common stock of Illumina,
Inc. All of the 5,000,000 shares of common stock are being sold by Illumina.

  Prior to this offering, there has been no market for the common stock. It is
currently estimated that the initial public offering price per share will be
between $9.00 and $11.00 . Application has been made for quotation of the
common stock on the Nasdaq National Market under the symbol "ILMN".

  See "Risk Factors" beginning on page 8 to read about certain factors you
should consider before buying shares of the common stock.

                                  -----------

  Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.

                                  -----------

<TABLE>
<CAPTION>
                                                                 Per Share Total
                                                                 --------- -----
<S>                                                              <C>       <C>
Initial public offering price...................................   $       $
Underwriting discount...........................................   $       $
Proceeds, before expenses, to Illumina..........................   $       $
</TABLE>

  To the extent that the underwriters sell more than 5,000,000 shares of common
stock, the underwriters have the option to purchase up to an additional 750,000
shares from Illumina at the initial public offering price less the underwriting
discount.

                                  -----------

  The underwriters expect to deliver the shares against payment in New York,
New York on           , 2000.

Goldman, Sachs & Co.

                                   Chase H&Q

                                                                        SG Cowen

                                  -----------

                       Prospectus dated     , 2000.
<PAGE>


                                   [ARTWORK]
<PAGE>

                               PROSPECTUS SUMMARY

   You should read the following summary together with the more detailed
information regarding our company and our financial statements and notes to
those statements appearing elsewhere in this prospectus.

                                  Our Business

Overview

   We are a leading developer of next-generation tools for the large-scale
analysis of genetic variation and function. Understanding genetic variation and
function is critical to the development of personalized medicine, a key goal of
genomics. Our tools will provide information that could be used to improve
drugs and therapies, customize diagnoses and treatment, and cure disease.

   Completion of the sequencing of the human genome will drive demand for tools
that can assist researchers in processing the billions of tests necessary to
convert raw genetic data into medically valuable information. This requires
functional analysis of highly complex biological systems, involving a scale of
experimentation not practical using currently available tools and technologies.
Using our technologies, we are developing a comprehensive line of products that
can address the scale of experimentation and the breadth of functional analysis
required to achieve the goals of molecular medicine.

   Our patented BeadArray technology uses fiber optics to achieve a level of
array miniaturization that allows for a new scale of experimentation. An array
is a collection of miniaturized test sites arranged on a surface that permits
many tests, or assays, to be performed in parallel. By arranging our arrays in
a pattern that matches the wells of industry standard containers called
microtiter plates, we can simultaneously process up to 3 million assays, a
throughput significantly beyond the capability of any technology known to us.
We assemble our arrays using relatively inexpensive raw materials. Our
proprietary manufacturing process allows us to easily adapt the arrays to a
broad range of applications. These advances allow us to create next-generation
arrays with a unique combination of high throughput, cost effectiveness and
flexibility. In addition, our complementary Oligator technology permits
parallel synthesis of the millions of different pieces of DNA necessary to
perform large-scale genetic analysis on arrays.

   We intend to provide both products and services that utilize our proprietary
technologies. Our first products, developed in partnership with PE Biosystems,
will include disposable BeadArray cassettes, reagent kits for analyzing
variation in genetic sequences, and instruments that automatically read data
from the BeadArray cassettes. An array cassette is a collection of individual
arrays arranged in a pattern, and a reagent kit is a set of chemicals used for
performing specific analyses. We also plan to commercialize services for the
analysis of genetic variation.

                                       3
<PAGE>


Our Market Opportunity

   We believe that advances in genomics will underpin the future of medicine.
To date, billions of dollars have been spent on the sequencing of the human
genome. We anticipate that during the next decade, a substantially greater
amount will be spent on efforts to understand the function of the genome and to
apply this information to medicine and related industries. A significant
portion of these funds will likely be used to purchase tools for the analysis
of genetic variation and function. We are initially focusing on the key
techniques for performing these analyses:

  . SNP genotyping - a method for analyzing genetic variation by determining
    which of the most common form of variation, called Single Nucleotide
    Polymorphisms, or SNPs, are present in genetic sequences;

  . gene expression profiling - the analysis of which genes are active in a
    particular cell or group of cells; and

  . proteomics - the process of determining which proteins are present in
    cells and how they interact.

   The complexity of biology, with combinations of over one hundred thousand
genes and potentially millions of genetic variations, will require an
unprecedented level of experimentation using these techniques. Unlocking the
full potential of the markets for these techniques requires a new generation of
high-throughput, cost-effective technologies.

   We believe our technologies will have broad applicability in a variety of
other high-growth markets, such as high-throughput screening of pharmaceutical
candidates and chemical detection. One of our initial collaborations outside of
healthcare is with The Dow Chemical Company to design a system to qualify
chemical solvents for use in manufacturing.

Our Technologies

   Our proprietary BeadArray technology combines fiber optic bundles and
specially prepared beads that self-assemble into an array. Each fiber optic
bundle contains thousands to millions of individual fibers depending on the
diameter of the bundle. In a separate process, we create sensors by affixing a
specific type of molecule to each of the billions of microscopic beads in a
given batch. The particular molecules on a bead define that bead's function as
a sensor. We combine batches of beads coated with specific molecules to form a
pool specific to the type of array we intend to create.

   To form an array, we typically dip each fiber optic bundle into a pool of
coated beads. The coated beads are drawn into the wells, one bead per well, on
the end of each fiber in the bundle. The tens of thousands of beads at the end
of the fiber optic bundle comprise our BeadArray. One may perform an experiment
by then dipping the BeadArray into a prepared sample. The molecules in the
sample bind to their matching molecules on the coated bead. Since each bead
performs its own assay, we are able to make tens of thousands of quantitative
measurements simultaneously on each sample.

   Using our BeadArray technology, we have addressed the limitations of the
tools for genetic analysis. We achieve high throughput with a high density of
test sites per array and our ability to format arrays in a pattern arranged to
match the wells of standard microtiter plates. We maximize

                                       4
<PAGE>

cost effectiveness by reducing consumption of expensive reagents and valuable
samples, and through the low manufacturing cost associated with our BeadArray
technology. Our ability to vary the size, shape and format of the fiber optic
bundles and to create specific beads for various applications gives us the
flexibility to address multiple markets and market segments.

   Our proprietary Oligator technology complements our BeadArray technology.
The Oligator synthesizes in parallel many different short segments of DNA to
meet the requirements of large-scale genomics applications. We believe that our
Oligator technology is substantially more cost effective and provides higher
throughput than available commercial alternatives.

Our Strategy

   Our goal is to make our BeadArray platform the industry standard for
products and services utilizing array technologies. We plan to achieve this by:

  . focusing on emerging high-growth markets;

  . rapidly commercializing our BeadArray technology for SNP genotyping;

  . partnering with multiple companies to expand our market opportunity;

  . expanding our technologies into multiple product lines; and

  . strengthening our technological leadership.

Company Information

   We had no revenue during the period from our inception on April 28, 1998
through December 31, 1998. We recorded $0.5 million in revenue during the year
ended December 31, 1999 and $83,205 during the three-month period ended March
31, 2000. Our net losses were approximately $1.1 million, $5.5 million and $3.9
million, respectively, during the same periods. As of March 31, 2000, our total
accumulated deficit was $10.6 million. Substantially all our revenue has been
from government grants. We do not expect to ship any products before 2001.

   We were incorporated in California in April 1998. We intend to reincorporate
in Delaware prior to the completion of this offering. Our principal executive
offices are located at 9390 Towne Centre Drive, Suite 200, San Diego,
California 92121. Our telephone number is (858) 587-4290.

   Illumina, BeadArray, Array of Arrays and Oligator are trademarks of our
company. This prospectus also contains brand names, trademarks or service marks
of companies other than Illumina, and these brand names, trademarks and service
marks are the property of their respective holders.

                                       5
<PAGE>

                                  The Offering

<TABLE>
<S>                              <C>
Shares offered by Illumina.....   5,000,000 shares
Shares to be outstanding after
 the offering..................  30,541,095 shares
Proposed Nasdaq National Market
 symbol........................  ILMN
Use of proceeds................  For general corporate purposes, including
                                 commercialization of our BeadArray and Oligator
                                 technologies, research and development, working
                                 capital, funding our operating losses, capital
                                 expenditures and potential acquisitions.
</TABLE>

   The above information is based on 25,541,095 shares outstanding as of March
31, 2000 and excludes:

  . 932,485 shares issuable upon exercise of options then outstanding at a
    weighted average exercise price of $0.34 per share;

  . 43,183 shares issuable upon exercise of warrants then outstanding at a
    weighted average exercise price of $0.926 per share; and

  . a total of 1,022,384 shares available for future issuance under our
    various stock plans.

   Unless otherwise noted, this prospectus assumes:

  . our reincorporation in Delaware prior to this offering;

  . the automatic conversion of our outstanding convertible preferred stock
    into common stock upon the closing of this offering;

  . the filing of our amended and restated certificate of incorporation
    authorizing a class of 10,000,000 shares of undesignated preferred stock
    prior to the closing of this offering; and

  . no exercise by the underwriters of their option to purchase additional
    shares of our common stock in the offering.

                                       6
<PAGE>

                         Summary Financial Information
                     (in thousands, except per share data)

   The following tables summarize our financial data for the periods presented.
The pro forma share data in the statement of operations data assumes the
conversion of all of our outstanding preferred stock into 18,836,297 shares of
common stock upon the closing of this offering. The as adjusted balance sheet
data reflects the sale of 5,000,000 shares of our common stock in the offering
at an estimated price of $10.00 per share, less estimated expenses payable by
us and the underwriting discount. You should read the following financial
information together with the "Selected Financial Information" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this prospectus.

<TABLE>
<CAPTION>
                                     Period from
                                    April 28, 1998               Three months
                                      (inception)                ended March
                                       through      Year ended       31,
                                     December 31,  December 31, ---------------
                                         1998          1999      1999    2000
                                    -------------- ------------ ------  -------
                                                                 (Unaudited)
<S>                                 <C>            <C>          <C>     <C>
Statement of Operations Data:
Total revenue.....................     $   --        $   474    $   42  $    83
Total operating expenses..........       1,194         6,355       975    4,472
                                       -------       -------    ------  -------
Operating loss....................      (1,194)       (5,881)     (933)  (4,389)
                                       -------       -------    ------  -------
Net loss..........................      (1,146)       (5,518)     (843)  (3,901)
                                       =======       =======    ======  =======
Historical net loss per share,
 basic and diluted................     $ (1.71)      $ (3.91)   $(1.21) $ (2.31)
                                       =======       =======    ======  =======
Historical weighted average shares
 outstanding......................         669         1,410       696    1,686
Pro forma net loss per share......                   $ (0.40)           $ (0.25)
                                                     =======            =======
Pro forma weighted average shares
 outstanding......................                    13,697             15,701
</TABLE>

<TABLE>
<CAPTION>
                                As of
                           March 31, 2000
                         -------------------
                         Actual  As Adjusted
                         ------- -----------
                             (Unaudited)
<S>                      <C>     <C>         <C> <C>
Balance Sheet Data:
Cash, cash equivalents
 and short-term
 investments............ $32,717   $77,917
Working capital.........  32,392    77,592
Total assets............  34,430    79,630
Deferred revenue........   2,500     2,500
Stockholders' equity....  30,834    76,034
</TABLE>

                                       7
<PAGE>

                                  RISK FACTORS

   Any investment in our common stock involves a high degree of risk. You
should carefully consider the risks described below and all of the information
contained in this prospectus before deciding whether to purchase our common
stock. If any of the following risks actually occur, our business, financial
condition and results of operations would suffer. In such case, the trading
price of our common stock could decline, and you may lose all or part of your
investment in our common stock.

We Have Generated No Revenue from Product Sales to Date. We Expect to Continue
to Incur Net Losses and We May Not Achieve or Maintain Profitability.

   Since inception, we have recognized no revenue from product sales. We have
incurred net losses since our inception. At March 31, 2000, our accumulated
deficit was approximately $10.6 million. We expect to continue to have
increasing net losses and negative cash flow. The magnitude of our net losses
will depend, in part, on the rate of growth, if any, of our revenues and on the
level of our expenses. To date, we have derived all of our revenues from grants
and partnerships. We expect to incur significant expenses for research and
development, for developing our manufacturing capabilities and for efforts to
commercialize our products. As a result, we expect that our operating expenses
will increase significantly in the near term and, consequently, we will need to
generate significant additional revenues to achieve profitability. Even if we
achieve profitability, we may not be able to sustain or increase profitability
on a quarterly or annual basis.

Our Success Depends Upon The Increasing Availability of Genetic Information and
The Continued Emergence and Growth of Markets For Analysis of Genetic Variation
and Function.

   We design our products primarily for applications in the life sciences and
pharmaceutical industries. The usefulness of our technology depends in part
upon the availability of genetic data. We are initially focusing on markets for
analysis of genetic variation and function, namely SNP genotyping, gene
expression profiling and proteomics. These markets are new and emerging, and
they may not develop as we anticipate, or reach their full potential. Other
methods of analysis of genetic variation and function may emerge and displace
the methods we are developing. Also, researchers may not seek or be able to
convert raw genetic data into medically valuable information through the
analysis of genetic variation and function. If genetic data is not available or
if our target markets do not emerge in a timely manner, or at all, demand for
our products will not develop as we expect, and we may never become profitable.

Our Success Depends on Market Acceptance of Our New and Unproven Technology.

   Historically, life sciences and pharmaceutical companies have analyzed
genetic variation and function using a variety of technologies. Compared to the
existing technologies, our technologies are new and unproven. In order to be
successful, our products must meet the commercial requirements of the life
sciences and pharmaceutical industries as tools for the large-scale analysis of
genetic variation and function. Market acceptance will depend on many factors,
including:

  . our ability and the ability of our collaborative partners to demonstrate
    to potential customers the benefits and cost effectiveness of our
    products and services relative to others available in the market;

  . the extent of our partners' efforts to market, sell and distribute our
    products;


                                       8
<PAGE>

  . our or our partners' ability to manufacture products in sufficient
    quantities with acceptable quality and reliability and at an acceptable
    cost; and

  . the willingness and ability of customers to adopt new technologies
    requiring capital investments.

   Our products may not gain market acceptance. If our BeadArray technology
does not become widely used in the life sciences and pharmaceutical industries,
demand for our products will not develop as expected and it is unlikely that we
ever will become profitable.

We Are an Early Stage Company Deploying Unproven Technologies. If We Do Not
Develop Commercially Successful Products, We May Be Forced to Cease Operations.

   We currently have no commercially available products. Our technologies are
in the early stages of development. You should evaluate us in light of the
uncertainties and complexities affecting an early stage company developing
tools for the life sciences and pharmaceutical industries.

   We may not be successful in the commercial development of products. Prior to
their commercialization, products will require significant research and
development and investment, including testing, to demonstrate their technical
benefits and cost effectiveness. We have not proven our ability to develop and
commercialize products. We must conduct a substantial amount of additional
research and development before any of our products will be ready for sale.
Problems frequently encountered in connection with the development of
commercial products using new and unproven technologies might limit our ability
to develop and commercialize our products.

Commercialization of Our Technologies Depends On Partnerships and
Collaborations with Other Companies. If Our Current Partnership and
Collaborations Are Not Successful, or If We Are Not Able to Enter Into
Additional Partnerships and Collaborations in the Future, We May Not Be Able to
Develop Our Technologies or Products.

   Since we currently do not possess all of the resources necessary to develop
and commercialize products that may result from our technologies, we will need
either to develop a sales, marketing and support group with relevant experience
or make appropriate arrangements with strategic partners to market and sell our
products. We have chosen to enter into arrangements to develop and
commercialize our initial products. We have entered into an agreement with PE
Biosystems to gain access to their proprietary chemistry format for use with
the initial products of the partnership. PE Biosystems also will fund, in part,
the development of these products. Our partnership agreement provides that
PE Biosystems will develop the detection instrument and reagent kits required
for use with these products, and will provide sales and marketing support for
the products. If our partnership with PE Biosystems is not successful, or if PE
Biosystems elects to terminate our partnership, we may not be able to develop
or successfully commercialize our initial products on a timely basis, or at
all. We intend to rely on other corporate partners and collaborators to develop
other chemistry formats and to gain access to genetic data for use with our
technologies. If we do not enter into additional partnership agreements, or if
these agreements are not successful, our ability to develop and commercialize
products will be impacted negatively and our revenues will decline.

   We have limited or no control over the resources that any partner or
collaborator may devote to our products. Any of our present or future partners
or collaborators may not perform their obligations as expected. These partners
or collaborators may breach or terminate their agreements with us or otherwise
fail to meet their obligations or perform their collaborative activities
successfully and in a timely manner. Further, any of our partners or
collaborators may elect not to develop products arising

                                       9
<PAGE>

out of our partnerships or collaborations or devote sufficient resources to the
development, manufacture or commercialization of these products. If any of
these events occur, we may not be able to develop our technologies or
commercialize our products and our ability to generate revenues will decrease.

We Have Limited Manufacturing Experience. If We Are Unable to Find Third-Party
Manufacturers to Manufacture Our Products or Unless We Develop Our Product
Capability, We May Not Be Able to Launch Our Products in a Timely Manner, or at
All.

   We have no experience manufacturing our products in the volumes that will be
necessary for us to achieve significant commercial sales. To date, we have
limited our manufacturing activities to the manufacturing of prototype systems
for testing purposes and for internal use by our collaborative partners.

   The nature of our products requires customized components that currently are
available from a limited number of sources. For example, we currently obtain
the fiber optic bundles included in our products from a single source. If we
are unable to secure a sufficient supply of fiber optic bundles or other
product components, we will be unable to meet future demand for our products.
We will need to enter into contractual relationships with manufacturers for
commercial scale production of our products, or develop these capabilities
internally, and we cannot assure you that we will be able to do so on a timely
basis, for sufficient quantities or on commercially reasonable terms.
Accordingly, we may not be able to establish or maintain reliable, high-volume
manufacturing at commercially reasonable costs.

We May Encounter Difficulties in Managing Our Growth That Could Increase Our
Losses.

   We have experienced a period of rapid and substantial growth that has
strained our human and capital resources. If our growth continues and we are
unable to manage it effectively, our business will suffer and our stock price
could decline. The number of our employees increased from nine at December 31,
1998 to 60 at March 31, 2000. The need to effectively manage our operations and
growth requires us to continue to expend funds to improve our operational,
financial and management controls, reporting systems and procedures, and to
attract and retain sufficient numbers of talented employees. If we are unable
to successfully implement improvements to our management information and
control systems in an efficient or timely manner, or if we encounter
deficiencies in existing systems and controls, management may receive
inadequate information to manage our day-to-day operations.

We Expect Intense Competition in Our Target Markets, Which Could Render Our
Products Obsolete or Substantially Limit the Volume of Products That We Sell.
This Would Limit Our Ability to Compete and Achieve Profitability.

   We compete with life sciences companies that design, manufacture and market
instruments for analysis of genetic variation and function and other
applications using technologies such as two-dimensional electrophoresis,
capillary electrophoresis, mass spectrometry, flow cytometry, microfluidics,
and mechanically deposited, inkjet and photolithographic arrays. For an
explanation of these technologies, see "Business--Current Technologies and
Their Limitations." We anticipate that we will face increased competition in
the future as new companies enter the market with new technologies. The markets
for our products are characterized by rapidly changing technology, evolving
industry standards, changes in customer needs, emerging competition and new
product introductions. One or more of our competitors may render our technology
obsolete or uneconomical. Many of our competitors have greater financial and
personnel resources and more experience in research and development than we
have. Furthermore, the life sciences and pharmaceutical companies, which are
our potential customers and strategic partners, could develop competing
products.

                                       10
<PAGE>

Our Technologies Can Be Applied to Many Different Industries, and We May Fail
to Focus on the Most Profitable Areas.

   Our technologies may be applicable to numerous, diverse industries. However,
we have limited financial and managerial resources. Therefore, we will be
required to focus on product candidates in selected industries and to forego
efforts with regard to other products and industries. Our decisions may not
produce viable commercial products and may divert our resources from more
profitable market opportunities.

Any Inability to Adequately Protect Our Proprietary Technologies Could Harm Our
Competitive Position.

   Our success will depend in part on our ability to obtain patents and
maintain adequate protection of our intellectual property in the United States
and other countries. If we do not protect our intellectual property adequately,
competitors may be able to use our technologies and thereby erode our
competitive advantage. The laws of some foreign countries do not protect
proprietary rights to the same extent as the laws of the United States, and
many companies have encountered significant problems in protecting their
proprietary rights abroad. These problems can be caused by the absence of rules
and methods for defending intellectual property rights.

   The patent positions of companies developing tools for the life sciences and
pharmaceutical industries, including our patent position, generally are
uncertain and involve complex legal and factual questions. We will be able to
protect our proprietary rights from unauthorized use by third parties only to
the extent that our proprietary technologies are covered by valid and
enforceable patents or are effectively maintained as trade secrets. We will
apply for patents covering our technologies and products, as we deem
appropriate. However, our applications may be challenged and may not result in
issued patents. Our existing patents and any future patents we obtain may not
be sufficiently broad to prevent others from practicing our technologies or
from developing competing products. There also is risk that others may
independently develop similar or alternative technologies or design around our
patented technologies. In addition, others may challenge or invalidate our
patents, or our patents may fail to provide us with any competitive advantage.

   We also rely upon trade secret protection for our confidential and
proprietary information. We have taken security measures to protect our
proprietary information. These measures, however, may not provide adequate
protection for our trade secrets or other proprietary information. We seek to
protect our proprietary information by entering into confidentiality agreements
with employees, collaborators and consultants. Nevertheless, employees,
collaborators or consultants may still disclose our proprietary information,
and we may not be able to meaningfully protect our trade secrets. In addition,
others may independently develop substantially equivalent proprietary
information or techniques or otherwise gain access to our trade secrets.

Litigation or Other Proceedings or Third Party Claims of Intellectual Property
Infringement Could Require Us to Spend Time and Money and Could Shut Down Some
of Our Operations.

   Our commercial success depends in part on our non-infringement of the
patents or proprietary rights of third parties. Third parties may assert that
we are employing their proprietary technology without authorization. In
addition, third parties may obtain patents in the future and claim that use of
our technologies infringes these patents. We could incur substantial costs and
divert the attention of our management and technical personnel in defending
ourselves against any of these claims. We may incur the same liabilities in
enforcing our patents against others. Furthermore, parties making claims
against us may be able to obtain injunctive or other equitable relief, which
effectively could block our ability to further develop, commercialize and sell
products, and could result in the award of substantial damages against us. In
the event of a successful claim of infringement against us, we

                                       11
<PAGE>


may be required to pay damages and obtain one or more licenses from third
parties. We may not be able to obtain these licenses at a reasonable cost, or
at all. In that event, we could encounter delays in product introductions while
we attempt to develop alternative methods or products. Defense of any lawsuit
or failure to obtain any of these licenses could prevent us from
commercializing available products.

If We Lose Our Key Personnel or Are Unable to Attract and Retain Additional
Personnel, We May Be Unable to Achieve Our Goals.

   We are highly dependent on our management and scientific personnel. The loss
of their services could adversely impact our ability to achieve our business
objectives. We will need to hire additional qualified personnel with expertise
in molecular biology, chemistry and biological information processing. We
compete for qualified management and scientific personnel with other
biotechnology companies, universities and research institutions, particularly
those focusing on genomics. Competition for these individuals, particularly in
the San Diego area, is intense, and the turnover rate can be high. Failure to
attract and retain management and scientific personnel would prevent us from
pursuing collaborations or developing our products or technologies.

   Our planned activities will require additional expertise in specific
industries and areas applicable to the products developed through our
technologies, including the life sciences and healthcare industries and
molecular biology, chemistry and biological information processing. Thus, we
will need to add new personnel, including management, and develop the expertise
of existing management. The failure to do so could impair the growth of our
business.

Our Collaborations With Outside Scientists May Be Subject to Change, Which
Could Limit Our Access to Their Expertise.

   We work extensively with scientific advisors and collaborators at academic
and other institutions to develop applications of our technologies. These
scientists are not our employees and may have other commitments that could
limit their availability. Although our scientific advisors generally agree not
to do competing work, if a conflict of interest between their work for us and
their work for another entity arises, we may lose their services. Although our
scientific advisors and collaborators sign agreements not to disclose our
confidential information, it is possible that some of our valuable proprietary
information could become publicly known through them.

We May Need Additional Capital in the Future. If Additional Capital is Not
Available On Acceptable Terms, We May Have to Curtail or Cease Operations.

   Our future capital requirements will be substantial and will depend on many
factors including payments received under collaborative agreements and
government grants, the progress and scope of our collaborative and independent
research and development projects, and the filing, prosecution and enforcement
of patent claims. Changes also may occur that would require our available
capital resources to be consumed significantly sooner than we expect.

   We expect that the proceeds from this offering, combined with our current
cash and cash equivalents, investments and funding from existing strategic
alliances and grants, will be sufficient to fund our anticipated operating
needs for at least the next 24 months. If our capital resources are
insufficient to meet future capital requirements, we may have to raise
additional funds to continue the development of our technologies and complete
the commercialization of products, if any, resulting from our technologies. We
may be unable to raise sufficient additional capital. If we fail to do so, we
may have to curtail or cease operations.

                                       12
<PAGE>

Management May Invest or Spend the Proceeds of This Offering in Ways With Which
You May Not Agree and in Ways That May Not Yield a Return.

   Management will have broad discretion over the use of proceeds from this
offering. Stockholders may not agree with management's decisions, and our use
of the proceeds may not yield a significant return, or any return at all. We
intend to use a majority of the proceeds from this offering for research and
development, working capital and other general corporate purposes and to
finance potential acquisitions. Because of the number and variability of
factors that determine our use of the net proceeds from this offering, we
cannot assure you that our actual use will not vary substantially from our
currently planned uses. Initially, we intend to invest the net proceeds from
this offering in income producing, investment grade securities.

We Expect that Our Quarterly Results of Operations Will Fluctuate. This
Fluctuation Could Cause Our Stock Price to Decline.

   Our quarterly operating results have fluctuated in the past and are likely
to do so in the future. These fluctuations could cause our stock price to
fluctuate significantly or decline. A large portion of our expenses are
relatively fixed, including expenses for facilities, equipment and personnel.
In addition, we expect operating expenses to increase significantly in 2000.
Accordingly, if revenues do not grow as anticipated, we may not be able to
correspondingly reduce our operating expenses. Failure to achieve anticipated
levels of revenues, therefore, could significantly harm our operating results
for a particular fiscal period.

   Due to the possibility of fluctuations in our revenues and expenses, we
believe that quarter-to-quarter comparisons of our operating results are not a
good indication of our future performance. Our operating results in some
quarters may not meet the expectations of stock market analysts and investors.
In that case, our stock price probably would decline.

If We Engage in Any Acquisition, We Will Incur a Variety of Costs, and May
Never Realize the Anticipated Benefits of the Acquisition.

   If appropriate opportunities become available, we may attempt to acquire
businesses, technologies, services or products that we believe are a strategic
fit with our business. We currently have no commitments or agreements with
respect to any material acquisitions. If we do undertake any acquisition, the
process of integrating an acquired business, technology, service or product may
result in unforeseen operating difficulties and expenditures and may absorb
significant management attention that would otherwise be available for ongoing
development of our business. Moreover, we may fail to realize the anticipated
benefits of any acquisition. Future acquisitions could reduce your ownership in
Illumina and could cause us to incur debt, expose us to future liabilities and
result in amortization expenses related to goodwill and other intangible
assets.

   In addition, recent proposed changes in the Financial Accounting Standards
Board rules for merger accounting may affect the cost of making acquisitions or
of being acquired. For example, if these proposed changes become effective, we
likely would have to record goodwill or other intangible assets that we would
amortize to earnings if we merge with another company. This amortization would
adversely impact our future operating results. In addition, a prospective
acquiror of Illumina might be less inclined to acquire us if they are required
to amortize goodwill or other intangible assets. Further, accounting rules
changes that reduce the availability of immediate write-offs of the value of
in-process research and development in connection with an acquisition could
result in the capitalization and amortization of these amounts, which would
negatively impact our results of operations in future periods.

                                       13
<PAGE>

Our Stock Price Could Be Extremely Volatile. You May Not Be Able to Resell Your
Shares at or Above the Initial Public Offering Price.

   Prior to this offering, there has been no public market for shares of our
common stock. An active trading market may not develop or be sustained
following completion of this offering. The initial public offering price for
the shares will be determined by negotiations between us and representatives of
the underwriters. This price may bear no relationship to the price at which our
common stock will trade upon completion of this offering. The stock market has
experienced significant price and volume fluctuations, and the market prices of
technology companies, particularly life sciences companies, have been highly
volatile. You may not be able to resell your shares at or above the initial
public offering price.

   In the past, companies that have experienced volatility in the market price
of their stock have been the objects of securities class action litigation. If
we were the object of securities class action litigation, it could result in
substantial costs and a diversion of management's attention and resources.

Future Sales of Our Common Stock May Depress Our Stock Price.

   The market price of our common stock could decline as a result of sales of
substantial amounts of our common stock in the public market after the closing
of this offering, or the perception that these sales could occur. In addition,
these factors could make it more difficult for us to raise funds through future
offerings of common stock. There will be approximately 30,541,095 shares of
common stock outstanding immediately after this offering, or approximately
31,291,095 shares if the representatives of the underwriters exercise their
over-allotment option in full. These shares, other than the shares sold in the
offering, will become available for sale in the public market as follows:

  .  264,768 shares that become eligible for sale at various times between
     the date of this offering and the date 90 days after the effective date
     of this offering;

  .  an additional 15,862,985 shares that become eligible for sale beginning
     180 days after the effective date of this offering;

  .  an additional 82,372 shares that become eligible for sale upon exercise
     of vested options 90 days after the date of this prospectus and an
     additional 41,755 shares that become eligible for sale upon the exercise
     of vested options 180 days after the date of this prospectus; and

  .  an additional 9,413,342 shares that become eligible for sale at various
     times thereafter upon the expiration of applicable holding periods.

Some of Our Existing Stockholders Can Exert Control Over Us, and May Not Make
Decisions That Are in the Best Interests of All Stockholders.

   After this offering, our officers, directors and principal stockholders
(greater than 5% stockholders) together will control approximately 47.4% of our
outstanding common stock. As a result, these stockholders, acting together,
would be able to exert significant influence over all matters requiring
stockholder approval, including the election of directors and approval of
significant corporate transactions. In addition, this concentration of
ownership may delay or prevent a change of control of our company, even when a
change may be in the best interests of our stockholders. The interests of these
stockholders may not always coincide with our interests as a company or the
interests of other stockholders. Accordingly, these stockholders could cause us
to enter into transactions or agreements that we would not otherwise consider.

                                       14
<PAGE>

Our Operations Must Comply With Environmental Statutes and Regulations, and Any
Failure to Comply Could Result in Extensive Costs Which Would Harm Our
Business.

   The manufacture of our products involves the use, transportation, storage
and disposal of hazardous substances and is subject to related environmental
and health and safety statutes and regulations. Although we currently use
fairly small quantities of hazardous substances, as we expand our operations,
the increased use of hazardous substances will lead to additional and more
stringent requirements. This may cause us to incur substantial costs to
maintain compliance with applicable statutes and regulations. In addition, our
failure to comply with laws and regulations and any costs associated with
unexpected and unintended releases of hazardous substances by us into the
environment, or at disposal sites used by us, could expose us to substantial
liability in the form of fines, penalties, remediation costs or other damages,
or could lead to a shut down of our operations. We are not aware of any current
claims associated with our use of hazardous substances. It is our intent to
remain at all times in full compliance with all applicable environmental and
health and safety laws and regulations.

                                       15
<PAGE>

                           FORWARD-LOOKING STATEMENTS

   You should not rely on forward-looking statements in this prospectus. This
prospectus, including the sections entitled "Prospectus Summary", "Risk
Factors", "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business", contains forward-looking statements
within the meaning of the federal securities laws. These statements relate to
future events or our future financial performance and involve known and unknown
risks, uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance
or achievements expressed or implied by the forward-looking statements. These
risks and other factors include those listed under "Risk Factors" and elsewhere
in this prospectus. In some cases, you can identify forward-looking statements
by terminology such as "may", "will", "should", "expect", "intend", "plan",
"anticipate", "believe", "estimate", "predict", "potential", "continue" or the
negative of these terms or other comparable terminology. Examples of these
forward-looking statements include, but are not limited to, statements
regarding the following:

  . the introduction and development of new products, product improvements
    and new services;

  . the applicability and usefulness of our technologies in various markets
    and industries;

  . the success of our technologies;

  . emerging markets in functional genetic analysis, namely SNP genotyping,
    gene expression profiling and proteomics, and the future growth of these
    markets;

  . demand for increased throughput in genetic analysis;

  . continued advances in genomics;

  . the potential to derive medically valuable information from raw genetic
    data and the further potential to use this information to improve drugs
    and therapies, to customize diagnosis and treatment, and cure disease;

  . potential future partnerships, collaborations and acquisitions;

  . growth in our research and development, general and administrative
    expenses;

  . the proceeds of this offering, combined with our cash, cash equivalents,
    investments, and funding through grants and collaborations being
    sufficient to fund our anticipated operating needs for the next 24
    months; and

  . the lack of a material impact of the adoption of SFAS No. 133.

These statements are only predictions. In evaluating these statements, you
should consider various factors, including the risks outlined under "Risk
Factors." These factors may cause actual events or our results to differ
materially from those expressed or implied by any forward-looking statement.

   Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of these
forward-looking statements. We are under no duty and do not intend to update
any of the forward-looking statements after the date of this prospectus or to
conform our prior statements to actual results.

                                       16
<PAGE>

                                USE OF PROCEEDS

   We estimate that the net proceeds from the sale of the 5,000,000 shares of
common stock that we are selling in this offering will be approximately $45.2
million ($52.2 million if the underwriters exercise their over-allotment option
in full) based on an assumed public offering price of $10.00 per share and
after deducting the estimated underwriting discount and estimated offering
expenses payable by us.

   We intend to use the net proceeds of this offering for general corporate
purposes including:

  . commercialization of our BeadArray and Oligator technologies;

  . research and development;

  . working capital;

  . funding our operating losses;

  . capital expenditures; and

  . possible acquisitions.

   The amounts that we actually expend for working capital purposes will vary
significantly depending on a number of factors, including future revenue
growth, if any, and the amount of cash we generate from operations. As a
result, we will retain broad discretion in the allocation of the net proceeds
of this offering. In addition, we may use a portion of the net proceeds for
further development of our products through acquisitions of complementary
businesses, products and technologies. However, we have no present commitments
or agreements with respect to any acquisitions. Initially, we intend to invest
the net proceeds in income producing, investment-grade securities.

                                DIVIDEND POLICY

   We have never declared or paid any dividends on our capital stock. We
currently expect to retain any future earnings for use in the operation and
expansion of our business and do not anticipate paying any cash dividends.

                                       17
<PAGE>

                                 CAPITALIZATION

   The following table sets forth our actual capitalization as of March 31,
2000 and as adjusted to reflect the automatic conversion of our outstanding
preferred stock into 18,836,297 shares of common stock upon the closing of this
offering and the sale of 5,000,000 shares of our common stock at an estimated
price of $10.00 per share, less estimated expenses payable by us and the
underwriting discount. You should read this table in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and the notes to those statements
included elsewhere in this prospectus.

<TABLE>
<CAPTION>
                                                           Actual   As Adjusted
                                                           -------  -----------
                                                             (in thousands,
                                                           except share data)
<S>                                                        <C>      <C>
Stockholders' equity:
  Convertible preferred stock: authorized--50,000,000
   shares actual (no par value) and 10,000,000 shares as
   adjusted ($0.01 par value); issued and outstanding--
   18,836,297 shares actual and none as adjusted.......... $37,398    $   --
  Common stock, $0.01 par value: authorized--60,000,000
   shares actual and 120,000,000 shares as adjusted;
   issued and outstanding--6,704,798 shares actual and
   30,541,095 shares as adjusted..........................      67        305
  Additional paid-in capital..............................  22,741    105,101
  Deferred compensation................................... (18,768)   (18,768)
  Unrealized loss on investments..........................     (40)       (40)
  Accumulated deficit..................................... (10,564)   (10,564)
                                                           -------    -------
Total stockholders' equity................................ $30,834    $76,034
                                                           =======    =======
</TABLE>

   The outstanding share information excludes the shares issuable upon exercise
of the options and warrants referred to in the paragraph following the table
under "Prospectus Summary--The Offering."

                                       18
<PAGE>

                                    DILUTION

   Our pro forma net tangible book value as of March 31, 2000 was $30.8
million, or $1.20 per share. Pro forma net tangible book value per share
represents the amount of our total tangible assets reduced by the amount of our
total liabilities and divided by the total number of shares of common stock
outstanding after giving effect to the automatic conversion of our convertible
preferred stock. Dilution in pro forma net tangible book value per share
represents the difference between the amount per share paid by purchasers of
shares of common stock in this offering and the pro forma net tangible book
value per share of common stock immediately after the completion of this
offering. After giving effect to the sale of the shares of common stock offered
by us at an assumed initial public offering price of $10.00 per share, and
after deducting the estimated underwriting discounts and commissions and
estimated offering expenses payable by us, our pro forma net tangible book
value as of March 31, 2000 would have been approximately $76.0 million or
$2.49 per share of common stock. This represents an immediate increase in
pro forma net tangible book value of $1.29 per share to existing stockholders
and an immediate dilution of $7.51 per share to new investors of common stock.
The following table illustrates this dilution on a per share basis:

<TABLE>
   <S>                                                             <C>   <C>
   Assumed initial public offering price per share................       $10.00
     Pro forma net tangible book value per share as of March 31,
      2000........................................................ $1.20
     Increase per share attributable to new investors.............  1.29
                                                                   -----
   Pro forma net tangible book value per share after this
    offering......................................................         2.49
                                                                         ------
   Dilution per share to new investors............................       $ 7.51
                                                                         ======
</TABLE>

   The following table summarizes, on a pro forma basis after giving effect to
the offering (based on an assumed initial public offering price of $10.00 per
share), as of March 31, 2000, the differences between the existing stockholders
and new investors with respect to the number of shares of common stock
purchased from us, the total consideration paid to us and the average price per
share paid:

<TABLE>
<CAPTION>
                            Shares Purchased  Total Consideration
                           ------------------ ------------------- Average Price
                             Number   Percent   Amount    Percent   Per Share
                           ---------- ------- ----------- ------- -------------
   <S>                     <C>        <C>     <C>         <C>     <C>
   Existing stockholders.. 25,541,095    84%  $39,940,480    44%     $ 1.56
   New investors..........  5,000,000    16%   50,000,000    56%     $10.00
                           ----------   ---   -----------   ---
     Total................ 30,541,095   100%   89,940,480   100%
                           ==========   ===   ===========   ===
</TABLE>

   The foregoing discussion and tables are based upon the number of shares
actually issued and outstanding on March 31, 2000 and assume no exercise of the
options and warrants then outstanding, which are referred to in the first
paragraph following the table under "Prospectus Summary--The Offering".
Assuming the exercise of all of these options and warrants, the number of
shares purchased by existing shareholders would be 26,516,763, or 84%, the
total consideration paid by existing shareholders would be $40,297,512, or 45%,
for an average price per share of $1.52 and the dilution per share to new
investors would be $7.58.

                                       19
<PAGE>

                         SELECTED FINANCIAL INFORMATION
                     (in thousands, expect per share data)

   The statement of operations data set forth below for the period from April
28, 1998 (inception) to December 31, 1998 and for the year ended December 31,
1999 and the balance sheet data at December 31, 1998 and 1999 are derived from
our financial statements that have been audited by Ernst & Young LLP, which are
included elsewhere in this prospectus, and are qualified by reference to those
financial statements. The data for the three months ended March 31, 1999 and
2000 and at March 31, 2000 are derived from unaudited financial statements
included elsewhere in this prospectus. We have prepared this unaudited
information on the same basis as the audited financial statements and have
included all adjustments, consisting only of normal recurring adjustments, that
we consider necessary for a fair presentation of our financial position at such
date and our operating results for these periods. You should read the selected
financial information set forth below in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
our financial statements and related notes appearing elsewhere in this
prospectus.

<TABLE>
<CAPTION>
                                      Period from
                                       April 28,
                                          1998                   Three months
                                      (inception)                   ended
                                        through     Year ended    March 31,
                                      December 31, December 31, ---------------
                                          1998         1999      1999    2000
                                      ------------ ------------ ------  -------
                                                                 (Unaudited)
<S>                                   <C>          <C>          <C>     <C>
Statement of Operations Data:
Grant and collaborative revenue.....    $   --       $   474    $   42  $    83
                                        -------      -------    ------  -------
  Total revenue.....................        --           474        42       83
Operating expenses:
 Selling, general and
  administrative....................        345        1,349       164      615
 Research and development...........        771        4,048       711    2,671
 Amortization of deferred
  compensation, and other non-cash
  compensation charges..............         78          958       100    1,186
                                        -------      -------    ------  -------
  Total operating expenses..........      1,194        6,355       975    4,472
                                        -------      -------    ------  -------
Operating loss......................     (1,194)      (5,881)     (933)  (4,389)
Other income, net...................         48          363        90      488
                                        -------      -------    ------  -------
Net loss............................    $(1,146)     $(5,518)   $ (843) $(3,901)
                                        =======      =======    ======  =======
Historical net loss per share, basic
 and diluted........................    $ (1.71)     $ (3.91)   $(1.21) $ (2.31)
                                        =======      =======    ======  =======
Historical weighted average shares
 outstanding........................        669        1,410       696    1,686
Pro forma net loss per share........                 $ (0.40)           $ (0.25)
                                                     =======            =======
Pro forma weighted average shares
 outstanding........................                  13,697             15,701
</TABLE>

<TABLE>
<CAPTION>
                                                      As of
                                                   December 31,  March 31,
                                                   1998   1999     2000
                                                  ------ ------- ---------
                                                                  (Unaudited)
<S>                                               <C>    <C>     <C>       <C>
Balance Sheet Data:
Cash, cash equivalents and short-term
 investments..................................... $8,234 $33,088  $32,717
Working capital..................................  8,231  32,881   32,392
Total assets.....................................  8,557  33,895   34,430
Deferred revenue.................................    --    1,250    2,500
Convertible preferred stock......................  9,398  37,398   37,398
Stockholders' equity.............................  8,380  32,032   30,834
</TABLE>

   See our financial statements for a description of the computation of
historical and pro forma net loss per share and the number of shares used in
the historical and pro forma per share calculations in "Statement of Operations
Data" above.

                                       20
<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   The following discussion and analysis of our financial condition and results
of operations should be read in conjunction with "Selected Financial Data" and
our financial statements and related notes included elsewhere in this
prospectus. In addition to historical information, the discussion and analysis
contains forward-looking statements that involve risks and uncertainties. Our
actual results could differ materially from those anticipated by these forward-
looking statements due to factors including, but not limited to, those factors
set forth under "Risk Factors" and elsewhere in this prospectus.

Overview

   We were founded and began operations in April 1998. We are developing next-
generation tools that will permit the large-scale analysis of genetic variation
and function. To date, we have generated revenues primarily from government
grants from the National Institutes of Health. We have entered into a strategic
partnership with PE Biosystems and research collaborations with Dow Chemical,
Third Wave Technologies and PyroSequencing. We expect to commercialize our
first products in 2001 in partnership with PE Biosystems. We have not entered
into any commercial agreements with our research collaborators, but we may do
so in the future.

   We have dedicated substantial resources to the development of our
proprietary technologies. We have designed our technologies to provide the
throughput, cost effectiveness and flexibility necessary to investigate and
understand genetic variation and function on the large scale necessary to
extract medically valuable information from raw genetic data.

   Our revenues are primarily attributable to research funding. We recognize
revenues related to research funding as we incur related research and
development expenses. Our strategic partners often pay us before we recognize
the related revenues, and we defer these payments until we earn them. As of
March 31, 2000, we had deferred revenue of $2.5 million.

   We have incurred substantial operating losses since our inception. As of
March 31, 2000, our accumulated deficit was $10.6 million, and total
stockholders' equity was $30.8 million. We expect to incur additional operating
losses over the next several years as we continue to fund internal research and
development, develop our technologies and commercialize products based on those
technologies.

Results of Operations

Comparison of Three Months Ended March 31, 1999 and 2000

 Revenue


   Revenue for the three months ended March 31, 1999 and 2000 were $42,233 and
$83,205, respectively. Government grants accounted for 100% and 89% of our
total revenue for the three months ended March 31, 1999 and 2000, respectively.

 Research and Development Expenses

   Our research and development expenses consist primarily of salaries and
other personnel-related expenses, facility costs and supplies. Research and
development expenses increased $2.0 million to $2.7 million for the three
months ended March 31, 2000, from $0.7 million for the

                                       21
<PAGE>


three months ended March 31, 1999. The increase was primarily due to increased
staffing and other personnel-related costs to support our BeadArray technology.
We expect that our research and development expenses will increase
substantially to support our collaborative research programs, internal product
research and development and technology development.

 General and Administrative Expenses

   Our general and administrative expenses consist primarily of personnel costs
for finance, human resources, business development and general management, as
well as professional fees, such as expenses for legal and accounting services.
General and administrative expenses increased $0.4 million to $0.6 million for
the three months ended March 31, 2000 from $0.2 million for the three months
ended March 31, 1999. This increase was primarily attributable to an increase
in staffing necessary to manage and support our growth. We expect that our
general and administrative expenses will increase as we expand our legal and
accounting staff, add infrastructure and incur additional costs to support our
growth and requirements as a public company.

 Amortization of Deferred Compensation and Other Non-Cash Compensation Charges

   In connection with the grant of stock options and sale of restricted common
stock to employees, founders and directors, we recorded deferred compensation
of approximately $0.3 million and $12.6 million for the three months ended
March 31, 1999 and 2000, respectively. We recorded this amount as a component
of stockholders' equity and will amortize the amount as a charge to operations
over the vesting period of the stock and options. We recorded amortization of
this deferred compensation of approximately $48,000 and $0.8 million for the
three months ended March 31, 1999 and 2000, respectively. We recorded an
additional $52,000 and $0.3 million of expense related to restricted common
stock sold to consultants for the three months ended March 31, 1999 and 2000,
respectively, which was expensed as our rights to repurchase the common stock
lapsed.

   For employees, founders and directors, deferred compensation represents the
difference between the exercise price of the option or purchase price of the
stock and the deemed fair value of our common stock on the date of grant in
accordance with Accounting Principles Board Opinion No. 25 and its related
interpretations. For consultants, deferred compensation is recorded at the fair
value for the options granted or stock sold in accordance with Statement of
Financial Accounting Standards No. 123 and Emerging Issues Task Force No. 96-
18.

   We recognize compensation expense over the vesting period for employees,
founders and directors, using an accelerated amortization methodology in
accordance with Financial Accounting Standards Board interpretation No. 28. In
February 2000, we modified all our consultant agreements to include assurances
that the contracts would be fulfilled. In accordance with these modifications,
we recorded additional deferred compensation of $3.0 million as a component of
stockholders' equity and will amortize this amount as a charge to operations
over the vesting period of the stock and options. We recorded amortization of
this deferred compensation of approximately $80,000 for the three months ended
March 31, 2000.

 Other Income

   Other income, net of expenses, primarily consists of interest income, net of
interest and amortization expense. Interest income, which represents income
earned on our cash and cash equivalents and investments, was $0.5 million for
the three months ended March 31, 2000 as compared to $0.1 million for the three
months ended March 31, 1999. Changes in interest income were due primarily to
changes in our average cash and investment balances during these periods. There
was no interest expense in either period and amortization expense was
approximately $9,500 in each period.

                                       22
<PAGE>


Comparison of Years Ended December 31, 1998 and 1999

 Revenue

   Revenue for the year ended December 31, 1999 was $0.5 million, 92% of which
was from government grants. We had no revenue for the period from our inception
on April 28, 1998 through December 31, 1998.

 Research and Development

   Research and development expenses increased $3.2 million to $4.0 million for
the year ended December 31, 1999, from $0.8 million for the period from our
inception on April 28, 1998 through December 31, 1998. The increase was
primarily due to increased staffing and other personnel costs to support the
development of our technologies.

 General and Administrative Expenses

   General and administrative expenses increased $1.0 million to $1.3 million
for the year ended December 31, 1999 from $0.3 million for the period from our
inception on April 28, 1998 through December 31, 1998. This increase was
primarily attributable to an increase in staffing necessary to manage and
support our growth.

 Amortization of Deferred Compensation and Other Non-Cash Compensation Charges

   In connection with the grant of stock options and sale of restricted common
stock to employees, founders and directors, we recorded deferred compensation
of approximately $0.3 million and $4.3 million for the period from our
inception on April 28, 1998 through December 31, 1998 and the year ended
December 31, 1999, respectively. We recorded this amount as a component of
stockholders' equity and will amortize the amount as a charge to operations
over the vesting period of the stock and options. We recorded amortization of
this deferred compensation of approximately $33,000 and $0.6 million for the
period from our inception on April 28, 1998 through December 31, 1998 and the
year ended December 31, 1999, respectively. We recorded an additional $45,000
and $0.4 million of expense related to restricted common stock sold to
consultants for the period from our inception on April 28, 1998 through
December 31, 1998 and the year ended December 31, 1999, respectively, which is
expensed as our rights to repurchase the common stock lapse.


 Other Income

   Interest income was $0.4 million for the year ended December 31, 1999 as
compared to $48,000 for the period from our inception on April 28, 1998 through
December 31, 1998. Interest expense was $48,000 for the year ended December 31,
1999. There was no interest expense for the period from our inception on
April 28, 1998 through December 31, 1998.

 Provision for Income Taxes

   We incurred net operating losses for the period from our inception on April
28, 1998 through December 31, 1998 and the year ended December 31, 1999, and
accordingly, we did not pay any federal or state income taxes. As of December
31, 1999, we had net operating loss carryforwards for federal tax purposes of
approximately $5.1 million, which begin to expire in 2018.

   As of December 31, 1999, we had net operating loss carryforwards for state
tax purposes of approximately $5.3 million, which begin to expire in 2006. We
also had federal and state research and development tax credit carryforwards of
approximately $0.3 million and $0.2 million, respectively, which begin to
expire in 2018, unless previously utilized.

                                       23
<PAGE>


   Our utilization of the net operating losses and credits may be subject to
substantial annual limitations pursuant to Section 382 and 383 of the Internal
Revenue Code, and similar state provisions, as a result of changes in our
ownership structure. These annual limitations may result in the expiration of
net operating losses and credits prior to utilization.

Liquidity and Capital Resources

   Since inception, we have financed our business primarily through private
placements of preferred stock with net proceeds of $37.4 million, and funding
from strategic partners and government grants. As of March 31, 2000, we had
cash, cash equivalents and investments of approximately $32.7 million. We
currently invest our funds in U.S. investment-grade corporate debt securities
with maturities not exceeding 18 months.

   Our operating activities used cash of $1.1 million and $2.9 million in the
period from our inception on April 28, 1998 through December 31, 1998 and the
year ended December 31, 1999 respectively, and $0.8 million and $0.7 million in
the three months ended March 31, 1999 and 2000, respectively. Our use of cash
for these periods primarily resulted from our losses from operations offset by
receipt of funding from collaborators.

   Our investing activities used cash of $12.3 million in the year ended
December 31, 1999, and $5.3 million and $6.3 million in the three months ended
March 31, 1999 and 2000, respectively, substantially all of which consisted of
purchases of investment securities. We had minimal investing activities in the
period from our inception on April 28, 1998 through December 31, 1998.

   Our financing activities provided $9.3 million, $28.1 million and $0.9
million in the period from our inception on April 28, 1998 through December 31,
1998, the year ended December 31, 1999 and the three months ended March 31,
2000, respectively. We had minimal financing activities in the three months
ended March 31, 1999. Our financing activities have consisted primarily of the
sale of stock to both private investors and strategic partners.

   We lease our primary office facility under an operating lease with options
to renew under varying terms. In addition, we entered into a $1 million lease
financing arrangement with a lease financing corporation in October 1998. As of
December 31, 1999, we had utilized all funds available under this lease
agreement. At March 31, 2000, the total of annual future minimum lease payments
under these lease arrangements was $1.1 million. In April 2000, we entered into
a $3 million loan arrangement to be used at our discretion to finance purchases
of capital equipment, $1.7 million of which remains available.

   Our existing facility lease will expire in August 2001. We are currently in
negotiations to lease an additional 20,000 square feet in the same facility,
through August 2002. We are also in negotiations to lease a total of 97,000
square feet in two buildings that will be constructed over the next year. The
lease will contain an option to purchase the buildings together with additional
land on the same site. If these negotiations are successfully completed we
would be obligated to provide funding of approximately $6 million at the time
the lease is executed, in the form of an interest bearing, secured loan with a
term of approximately one year. In addition, we would be obligated to provide a
secured letter of credit.

   We expect that the proceeds from this offering, combined with our current
cash and cash equivalents, investments and funding from existing strategic
alliances and grants will be sufficient to fund our anticipated operating needs
for at least the next 24 months. However, our future capital requirements and
the adequacy of our available funds will depend on many factors, including
scientific progress in our research and development programs, the magnitude of
those programs,

                                       24
<PAGE>


competing technological and market developments and our ability to successfully
commercialize our first products in partnership with PE Biosystems and to
establish additional strategic relationships. Therefore, we may require
additional funding within this time frame and the additional funding, if
needed, may not be available on terms that are acceptable to us, or at all.
Further, any additional equity financing may be dilutive to our then existing
stockholders and may adversely affect their rights.

Recently Issued Accounting Standards

   SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities,
will be effective January 1, 2001. This statement establishes accounting and
reporting standards requiring that every derivative instrument, including
derivative instruments imbedded in other contracts, be recorded in the balance
sheet as either an asset or liability measured at its fair value. The statement
also requires that changes in the derivative's fair value be recognized in
earnings unless specific hedge accounting criteria are met. We believe the
adoption of SFAS No. 133 will not have an effect on our financial statements
because we do not engage in derivative or hedging activities.

Quantitative and Qualitative Disclosure about Market Risk

   Our exposure to market risk for changes in interest rates relates primarily
to the increase or decrease in the amount of interest income we can earn on our
investment portfolio and on the increase or decrease in the amount of interest
expense we must pay with respect to our various outstanding debt instruments.
Our risk associated with fluctuating interest expense is limited, however, to
our capital lease obligations, the interest rates under which are closely tied
to market rates, and our investments in interest rate sensitive financial
instruments. Under our current policies, we do not use interest rate derivative
instruments to manage exposure to interest rate changes. We ensure the safety
and preservation of our invested principal funds by limiting default risk,
market risk and reinvestment risk. We mitigate default risk by investing in
investment grade securities. A hypothetical 100 basis point adverse move in
interest rates along the entire interest rate yield curve would not materially
affect the fair value of our interest sensitive financial instruments. Declines
in interest rates over time will, however, reduce our interest income while
increases in interest rates over time will increase our interest expense.

                                       25
<PAGE>

                                    BUSINESS

Overview

   We are developing next-generation tools that will permit the large-scale
analysis of genetic variation and function. The information provided by these
analyses will enable the development of personalized medicine, a key goal of
genomics. Our proprietary BeadArray technology will provide the throughput,
cost effectiveness and flexibility necessary to enable researchers in the life
sciences and pharmaceutical industries to perform the billions of tests
necessary to extract medically valuable information from advances in genomics.
This information will correlate genetic variation and gene function with
particular disease states, enhancing drug discovery, allowing diseases to be
detected earlier and more specifically, and permitting better choices of drugs
for individual patients. Our technology will have applicability across a wide
variety of industries beyond life sciences and pharmaceuticals, including
agriculture, food, chemicals and petrochemicals.

The Importance of SNPs, Gene Expression and Proteomics in Modern Medical
Research

 Background on Genes and Proteins

   The human body is composed of billions of cells each containing
deoxyribonucleic acid, or DNA, which encodes the basic instructions for
cellular function. The complete set of an individual's DNA is called the
genome, and is organized into 23 pairs of chromosomes, which are further
divided into over 100,000 smaller regions called genes. Each cell uses or
expresses only those genes required for its specific functions. Each gene is
comprised of a string of four types of nucleotide bases, known as A, C, G and
T. Human DNA has approximately 3 billion nucleotides and their precise order is
known as the DNA sequence. When a gene is expressed, a copy of its DNA
sequence, called messenger RNA, or mRNA, is used as a template to direct the
synthesis of a protein. Proteins direct cell function and ultimately the
development of individual traits. Any variation in any part of a gene, called a
polymorphism, may result in a change in cell function leading to disease.

 Genetic Variation and Function

   Every person inherits two copies of each gene, one from each parent. The two
copies of each gene may be identical, or they may be different. These
differences are referred to as genetic variation. Examples of the physical
consequences of genetic variation include differences in eye and hair color.

   Genetic variation can also have important medical consequences, including
predisposition to disease and differential response to drugs. Genetic variation
affects diseases, including cancer, diabetes, cardiovascular disease and
Alzheimer's disease. In addition, genetic variation may cause people to respond
differently to the same drug. Some people may respond well, others may not
respond at all, and still others may experience adverse side effects.

   The most common form of genetic variation is a Single Nucleotide
Polymorphism, or SNP. A SNP is a variation in a single position in a DNA
sequence. It is estimated that the human genome contains between three and six
million SNPs. The importance of SNPs is illustrated by the recent formation of
the SNP Consortium, which includes nine major pharmaceutical companies,
chartered to discover an initial set of approximately 300,000 SNPs.

   While in some cases a single SNP will be responsible for medically important
effects, it is now believed that the genetic component of most major diseases
is the result of the interaction of many SNPs. Therefore, it will be important
to investigate many SNPs together in order to discover medically valuable
information.

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<PAGE>

   In addition to the knowledge gained from the analysis of SNPs, the study of
gene function will significantly contribute to clinical diagnosis and
treatment. This study focuses on the physiological functions that are affected
by medically relevant SNPs.

   Current efforts to understand genetic variation and function have centered
around three principal techniques: SNP genotyping, gene expression profiling
and proteomics.

 SNP Genotyping

   SNP genotyping is the process of determining which SNPs are present in each
of the two copies of a gene, or other portion of DNA sequence, within an
individual or other organism. The use of SNP genotyping to obtain meaningful
statistics on the effect of an individual SNP or a collection of SNPs, and to
apply that information to clinical trials and diagnostic testing, will require
the analysis of millions of SNP genotypes and the testing of large populations
for each disease. For example, a single large clinical trial could involve
genotyping 300,000 SNPs per patient in 1,000 patients, thus requiring
300 million assays. Using available technologies, this scale of SNP genotyping
is both impractical and prohibitively expensive.

   Large-scale SNP genotyping, when commercially feasible, will be used for a
variety of applications, including genomics-based drug development, clinical
trial analysis, disease predisposition testing, and disease diagnosis. SNP
genotyping can also be used outside of healthcare, for example in the
development of plants and animals with desirable commercial characteristics.
These markets will require billions of SNP genotyping assays annually.

 Gene Expression Profiling

   Gene expression profiling is the process of determining which genes are
active in a specific cell or group of cells and is accomplished by measuring
mRNA, the intermediary between genes and proteins. Variation in gene expression
can cause disease, or act as an important indicator of disease or
predisposition to disease. By comparing gene expression patterns between cells
from different environments, such as normal tissue compared to diseased tissue
or in the presence or absence of a drug, specific genes or groups of genes that
play a role in these processes can be identified. Studies of this type, used in
drug discovery, require monitoring thousands, and preferably tens of thousands,
of mRNAs in large numbers of samples. The high cost of large-scale gene
expression profiling has limited the development of the gene expression
profiling market.

   Once gene expression patterns have been correlated to specific diseases,
gene expression profiling is expected to become an important diagnostic tool.
Diagnostic use of expression profiling tools is anticipated to grow rapidly
with the combination of the sequencing of various genomes and the availability
of more cost-effective technologies.

 Proteomics

   Proteomics is the process of determining which proteins are present in cells
and how they interact with one another. Proteomics is another method of
correlating the molecular state of a cell with disease or reaction to a
stimulus such as a drug. This market remains undeveloped, as low cost, accurate
technologies for analysis have not been available. We expect that proteomics
will become valuable in drug discovery research as the technologies improve and
that array technology will be critical in facilitating the growth of this
market.

                                       27
<PAGE>

Current Technologies and Their Limitations

   There are currently a variety of technologies available for analyzing
genetic variation and function. These technologies lack the combination of high
throughput, cost effectiveness and flexibility necessary to adequately address
the rapidly evolving markets of SNP genotyping, gene expression profiling and
proteomics. These technologies can be classified into three distinct groups:

   Traditional Technologies. Traditional technologies perform assays
individually, or serially. Serial processing is an inherent limitation to assay
throughput. These technologies often require relatively large sample volumes,
adding significantly to the costs of the assays. Most of them have limited
flexibility to perform different applications. Examples of traditional
technologies include 2D electrophoresis, capillary electrophoresis, mass
spectrometry and flow cytometry.

  .  2D Electrophoresis. Two-dimensional electrophoresis, or 2D
     electrophoresis, separates proteins on the basis of molecular
     characteristics and is the traditional method for detecting the presence
     of proteins. This process separates large numbers of proteins within a
     sample, but has poor reproducibility and requires an additional process
     to identify particular proteins.

  .  Capillary Electrophoresis. Capillary electrophoresis is a process for
     separating DNA in glass tubes and can be applied to SNP genotyping.
     While recent advances that include multiple capillaries have improved
     throughput, this technology is still fundamentally serial in nature, and
     thus has low throughput for genotyping applications. It also uses large
     sample sizes, contributing to assay cost.

  .  Mass Spectrometry. Mass spectrometry, a process that uses a
     sophisticated instrument to measure molecular weight, has recently been
     applied to SNP genotyping and proteomics. Provided sample preparation
     and purification are successful, the sample read out is accurate.
     However, as another serial detection process, mass spectrometry has
     limited throughput compared to array technologies and requires expensive
     instrumentation.

  .  Flow Cytometry. Flow cytometry, a technique for counting cells, has been
     modified for use in SNP genotyping and proteomics. For these
     applications, beads flow past a detector one bead at a time. While flow
     cytometry is a somewhat flexible and inexpensive technology, it has low
     throughput compared to array technologies because it analyzes SNPs and
     proteins serially. Moreover, flow cytometry can only perform a limited
     number of tests per bead pool.

   Microfluidics. Microfluidics, a process for miniaturizing the scale of
experimentation, offers some improvement over traditional techniques, although
it remains a largely serial process with only moderate throughput compared to
array technologies. Although multiple applications are possible using
microfluidic systems, the practical implementation of applications using these
systems is challenging.

   Arrays. Arrays, which perform assays in parallel, were developed to achieve
the high throughput required for large-scale genetic analysis. The spacing
between test sites in an array defines the array's density. Higher density
increases parallel processing. In addition to increasing the throughput, higher
density reduces the required sample volume, and thereby lowers costs. Arrays
offer parallel processing by performing multiple assays per sample
simultaneously. However, they currently lack the ability to test multiple
samples simultaneously, one more level of parallel processing necessary for
large-scale genetic analysis. These array technologies also have limited
applications outside of SNP genotyping and gene expression profiling.
Manufacturing limitations have further prevented arrays from reaching their
full potential. There are a number of current methodologies for manufacturing
arrays, including mechanical deposition, inkjet printing and photolithography,
each with its own set of limitations.

                                       28
<PAGE>

  .  Mechanical Deposition. This method of manufacturing arrays has centered
     around creating test sites by mechanically depositing material on a flat
     surface. These arrays can be easily modified and are relatively
     inexpensive. However, it is difficult to put the test sites close
     together, resulting in relatively low-density arrays that have limited
     throughput. In addition, the arrays cannot be mass produced and because
     they are made individually, they may vary in quality.

  .  Inkjet Printing. Inkjet printing is a new method for manufacturing
     arrays that deposits DNA on a surface in a manner similar to the way an
     inkjet printer deposits ink on paper. Although these arrays are
     flexible, they are unlikely to be used for large-scale genetic analysis
     because they are difficult to mass produce.

  .  Photolithography. Photolithography uses a process similar to
     semiconductor manufacturing to synthesize DNA on a surface. Test sites
     can be placed closer together using this process, creating high-density
     arrays, thereby increasing assay throughput. However, the
     photolithographic process requires very expensive capital equipment and
     has expensive tooling that greatly limits the ability to modify arrays.

   Traditional technologies, microfluidics and arrays all use various
chemistries to perform assays in SNP genotyping, gene expression profiling and
proteomics. The specific chemistries and techniques used to perform an assay,
known as an assay format, can be deployed using one or more of the above
technologies. Often, assay formats are designed to perfom only one test per
well of a microtiter plate, resulting in low throughput and adding
significantly to expense.

   Thus, while numerous technologies and assay formats are being applied to SNP
genotyping, gene expression and proteomics, growth of these markets is
currently limited by the absence of a cost-effective technology that enables
billions of assays to be carried out annually.

Illumina's Solution

   Illumina has developed a proprietary array technology that enables the
large-scale analysis of genetic variation and function. Our BeadArray
technology combines fiber optic bundles and microscopic beads in a simple
proprietary manufacturing process to produce array cassettes that can perform
up to 3 million assays simultaneously. Our BeadArray technology provides a
unique combination of high throughput, cost effectiveness, and flexibility. We
achieve high throughput with a high density of test sites per array and our
ability to format arrays in a pattern arranged to match the wells of standard
microtiter plates. We maximize cost effectiveness by reducing consumption of
expensive reagents and valuable samples, and from the low manufacturing costs
associated with our complementary technologies. Our ability to vary the size,
shape and format of the fiber optic bundles and to create specific beads for
different applications provides the flexibility to address multiple markets and
market segments. We believe that these features will enable our BeadArray
technology to become a leading platform for the emerging high-growth markets of
SNP genotyping, gene expression profiling and proteomics.

Illumina's Strategy

   Our goal is to make our BeadArray platform the industry standard for
products and services using array technologies. We plan to achieve this by:

 Focusing on Emerging High-Growth Markets

   We are initially focusing on the SNP genotyping, gene expression profiling
and proteomics markets. We believe these markets have the potential for high
growth due to increasing demand for therapeutics and diagnostics based on newly
available genomic information. To date, the lack of high-throughput, cost-
effective technologies has limited the growth of these markets.

                                       29
<PAGE>

 Rapidly Commercializing Our BeadArray Technology for SNP Genotyping

   We intend to rapidly commercialize our BeadArray technology for SNP
genotyping through partnerships. Our first partner, PE Biosystems, contributes
extensive expertise in instrument and reagent development, as well as a large
and experienced worldwide sales and marketing team. We believe that the
combination of our BeadArray technology with PE Biosystems' leadership position
in the genetic analysis market will enable us to capture a significant portion
of the SNP genotyping market.

 Partnering With Multiple Companies To Expand Our Market Opportunity

   We plan to pursue multiple partnerships to facilitate the expansion of our
BeadArray and Oligator technologies and to exploit large and diverse markets.
We expect to enter into partnerships and collaborations to gain access to
complementary technologies, distribution channels and information content. We
intend to structure partnerships that maximize our long-term commercial benefit
by maintaining control of our technologies.

 Expanding Our Technologies into Multiple Product Lines

   We intend to utilize the flexibility of our BeadArray and Oligator
technologies to develop multiple product lines. In addition to providing new
sources of revenue, we believe these product lines will further our goal of
establishing our BeadArray technology as the industry standard for array-based
analysis. We expect these product lines to include a lower-throughput array
system, handheld instruments, and a high capacity BeadArray system that will
allow more simultaneous assays per sample. We intend to expand our Oligator
technology by continuing to increase the capacity and cost effectiveness of our
instrumentation.

 Strengthening Our Technological Leadership

   We plan to continue advancing our proprietary technologies through our
internal research efforts, collaborations with industry leaders and strategic
licensing. We may also pursue opportunistic acquisitions of complementary
technologies and leverage our technologies into other value-added businesses.

Illumina's Technology


 BeadArray Technology

   Our proprietary BeadArray technology combines fiber optic bundles and
specially prepared beads that self-assemble into an array.

   Fiber Optic Bundles. We have the fiber optic bundles manufactured to our
specifications, which we cut into lengths of less than one inch. Each bundle
contains thousands to millions of individual fibers depending on the size of
the bundle. For example, a fiber optic bundle with a diameter of approximately
one millimeter could contain up to 50,000 individual fibers. Dipping the fiber
optic bundles into a chemical solution etches a microscopic well at the end of
each individual fiber within a bundle. In the preceding example, this process
would create 50,000 microscopic wells per bundle.

   Microscopic Beads. In a separate process, we create sensors by affixing a
specific type of molecule to each of the billions of microscopic beads in a
batch. We make different batches of beads, with the beads in a given batch
coated with one particular type of molecule. The particular molecules on a bead
define that bead's function as a sensor. For example, we create a batch of SNP
sensors by attaching a particular DNA sequence to each bead in the batch. We
combine

                                       30
<PAGE>

batches of coated beads to form a pool specific to the type of array we intend
to create. A bead pool one milliliter in volume contains sufficient beads to
produce thousands of arrays.

   Array Self-Assembly and Decoding. To form an array we typically dip each
fiber optic bundle into a pool of coated beads. The coated beads are drawn into
the wells, one bead per well, on the end of each fiber in the bundle. We call
this process self-assembly. The tens of thousands of beads at the end of the
fiber optic bundle comprise our BeadArray. Because the beads assemble randomly
into the wells, we perform a final procedure called decoding in order to
determine which bead type occupies which well in the array. We employ several
proprietary methods for decoding, a process that requires only a few steps to
identify all the beads in the array. One beneficial by-product of the decoding
process is a validation of each bead in the array. This quality control test
characterizes the performance of each bead and can identify and eliminate use
of any empty wells. We ensure that each bead type on the array is sufficiently
represented by having multiple copies of each bead type. This improves the
reliability and accuracy of the resulting data by allowing statistical
processing of the results of identical beads.

   Array Use in Experiments. One performs an experiment on the BeadArray by
preparing a sample, such as DNA from a patient, and introducing it to the
array. The design features of our BeadArray allow it to be simply dipped into a
solution containing the sample. The molecules in the sample bind to their
matching molecules on the coated bead. An analytical instrument detects the
matched molecules by shining a laser through the fiber optic bundle. Since the
molecules in the sample have a structure that causes them to emit light in
response to a laser, detection of a binding event is possible. This allows the
measurement of the number of molecules bound to each coated bead, resulting in
a quantitative analysis of the sample.

 Oligator Technology

   Genomic applications require many different short pieces of DNA that can be
made synthetically, called oligonucleotides. For example, SNP genotyping
typically requires three to four different oligonucleotides per assay. A SNP
genotyping experiment analyzing 10,000 SNPs may therefore require 30,000 to
40,000 different oligonucleotides, contributing significantly to the expense of
the experiment.

   We have designed our proprietary Oligator technology for the parallel
synthesis of many different oligonucleotides to meet the requirements of large-
scale genomics applications. We believe that our Oligator technology is
substantially more cost effective and provides higher throughput than available
commercial alternatives. Our technology utilizes centrifugation for the
automated parallel synthesis of 768 different oligonucleotides per machine per
day. Using a similar approach, we expect to develop instruments in the future
with substantially greater capacity.

 Key Advantages of Our BeadArray and Oligator Technologies

   We believe that our BeadArray and Oligator technologies provide distinct
advantages, in a variety of applications, over competing technologies, by
creating cost-effective, highly miniaturized arrays with the following
advantages:

   High Throughput. The miniaturization of our BeadArray provides a
significantly greater information content per unit area than any other array
known to us. To further increase throughput, we have formatted our arrays in a
pattern arranged to match the wells of standard microtiter plates, allowing
throughput levels of up to 3 million unique assays per microtiter plate. The
Oligator's parallel synthesis capability allows us to manufacture the diversity
of oligonucleotides necessary to support large-scale genomic applications.

   Cost Effectiveness. Our BeadArray substantially reduces the cost of
experiments as a result of our proprietary manufacturing process and our
ability to capitalize on cost reductions generated by

                                       31
<PAGE>

advances in fiber optics, digital imaging and bead chemistry. In addition, our
miniaturized BeadArray requires smaller volumes than other array technologies,
and therefore reduces reagent costs. Our Oligator technology further reduces
reagent costs, as well as the cost of coating beads.

   Flexibility. A wide variety of conventional chemistries are available for
attaching different molecules, such as DNA, RNA, proteins, and other chemicals
to beads. By using beads, we are able to take advantage of these chemistries to
create a wide variety of sensors, which we assemble into arrays using the same
proprietary manufacturing process. In addition, we can have fiber optic bundles
manufactured in multiple shapes and sizes and organized in various arrangements
to optimize them for different markets and market segments. In combination, the
use of beads and fiber optic bundles provides the flexibility and scalability
for our BeadArray technology to be tailored to perform many applications in
many different market segments, from drug discovery to diagnostics. Our
Oligator technology allows us to manufacture a wide diversity of lengths and
quantities of oligonucleotides.

   Accuracy. The high density of beads in each array enables us to have
multiple copies of each individual bead type. We measure the copies
simultaneously and combine them into one data point. This allows us to make a
comparison of each bead against its own population of identical beads, which
permits the statistical calculation of a more reliable and accurate value for
each data point. Finally, the manufacture of the array includes a proprietary
decoding step that also functions as a quality control test of every bead on
every array, improving the overall accuracy of the data.

Potential Fields of Application

   We believe that the demand for increased throughput will continue in genetic
analysis and will develop in new areas, including proteomics, high-throughput
screening and chemical detection. The parallel processing capabilities of our
BeadArray technology are applicable to the complex problems of many different
industries, including the following:

   Pharmaceutical Discovery and Development

   . Cost-effective, rapid methods for gene discovery and function
     characterization

   . Specific targeting of drug discovery efforts

   . Customized drugs for patients

   . Toxicological evaluation of potential drugs

   . High-throughput screening for pharmaceutical candidates

   Medicine

   . Diagnostic methods for identifying, classifying and staging diseases

   . Predictors of successful drug therapy for a particular patient

   . Early recognition of potential adverse response to drug therapy

   . Identification of predisposition to disease in order to prescribe
     preventative therapies

   Agriculture and Food Production

   . Development of plants and animals with desirable commercial
     characteristics

   . Evaluation of foods to ensure safety

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<PAGE>

   Chemical and Petrochemical

   . Process monitoring

   .  Leak detection and environmental monitoring

   Food, Beverage and Fragrance

   . Quality control monitoring

   . Identification of new products with appealing compositions

Products and Services

   The first implementation of our BeadArray technology, the Array of Arrays,
will be a disposable cassette with 96 fiber optic bundles arranged in a pattern
that matches the standard 96-well microtiter plate. Each fiber optic bundle
will perform approximately 2,000 unique assays. Therefore, one Array of Arrays
can perform approximately 192,000 individual assays simultaneously, more than
any other array system known to us.

   By simply increasing the number of fiber optic bundles in the cassette, we
will expand the Array of Arrays to match standard 384-well and 1,536-well
microtiter plates. In these configurations, the Array of Arrays will be able to
simultaneously perform approximately 768,000 and 3,072,000 unique assays,
respectively.

   We intend to provide both products and services using our proprietary
BeadArray platform. In partnership with PE Biosystems, we are developing our
first products based on our Array of Arrays. These products will include
disposable Array of Arrays, reagent kits for SNP genotyping and instruments
that automatically read data from our Array of Arrays. Our services may involve
partnerships for early access to our technology prior to its general commercial
release. In addition to early access, we may commercialize assay development
and genotyping services.

 SNP Genotyping

   We are designing our first product based on the Array of Arrays for SNP
genotyping. The first SNP genotyping assay format that we intend to
commercialize will be PE Biosystems' proprietary OLA ZipCode assay format. This
assay format enables the creation of a universal Array of Arrays that can be
used to analyze any set of SNPs. We expect to commercialize our first product
using this assay format in 2001. We plan to extend our BeadArray technology to
create products using other assay formats. We expect one or more of these
additional assay formats to be available on the Array of Arrays in 2002.

 Gene Expression Profiling

   We will design our first product for gene expression profiling to test
selected sets of approximately 100 to 2,000 genes on large numbers of samples.
We believe that there is currently a need for a cost-effective and high-
throughput gene expression profiling technology to analyze the activity of
selected sets of genes from many samples simultaneously. We expect our initial
products in gene expression profiling, based on the Array of Arrays combined
with specific assay formats, to be commercially available in 2001.

 High-Throughput Synthesis

   We plan to use our Oligator technology to build internal capacity to produce
millions of oligonucleotides per year. In addition to their use to coat beads,
these oligonucleotides may be components of the reagent kits for our BeadArray
products and used for assay development.

                                       33
<PAGE>

Areas of Exploration

   The increasing need for high-throughput experimentation will drive the use
of array technology into other potentially large emerging markets, including:

   Proteomics. We are currently investigating the use of our BeadArray
technology for the analysis of proteins. This application has the potential to
provide information that is complementary to gene expression profiling, because
many important cellular processes are regulated at the level of proteins rather
than at the level of genes. We have demonstrated the feasibility of carrying
out assays for the detection and analysis of proteins on the BeadArray.

   High-Throughput Screening. The synthesis of large libraries of chemicals and
their high-throughput screening for potential as drugs are core technologies in
drug development. These libraries contain more compounds than can be
effectively screened using available technologies. We have developed a strategy
for high-throughput screening using our BeadArray technology. We believe that
we may be able to miniaturize high-throughput screening significantly, increase
the throughput of screens, and increase the amount of information obtained for
each compound.

   Chemical Detection. We have demonstrated the use of our BeadArray technology
for the detection of chemicals. For this application, the BeadArray generates a
unique pattern for each chemical that it detects. Currently, we are working
with Dow Chemical to design a system to qualify chemical solvents for use in
manufacturing. We are exploring with Chevron the possibility of using this
system for the detection of leaks at gasoline refineries. There are many other
potential applications for this type of detector such as quality control
monitoring in the food, beverage and fragrance industries.

Partnerships and Collaborations

   We have entered into the following strategic agreements with commercial
entities to expand the functionality of our BeadArray technology and to provide
distribution channels for the commercialization of our products and services:

   PE Biosystems, a Division of PE Corporation. In November 1999, we entered
into a partnership with PE Biosystems, a leading supplier of instruments and
reagents to the life sciences and pharmaceutical industries. Illumina and PE
Biosystems will jointly implement PE Biosystems' proprietary OLA ZipCode assay
format on Illumina's proprietary Array of Arrays initially for SNP genotyping.
We will develop and manufacture the Array of Arrays and PE Biosystems will
develop and manufacture the detection instrument and the reagent kits. PE
Biosystems and Illumina will co-brand products and PE Biosystems will
distribute them through their worldwide sales channels. Under the agreement,
Illumina has rights to use and sell the instruments developed in the
partnership for other applications.

   In connection with this partnership, PE Corporation invested $5 million to
purchase shares of our preferred stock and agreed to provide Illumina with
substantial research and development support over two years. Illumina and PE
Biosystems will divide the profits from all partnership products, including
instruments, array cassettes and reagent kits, after both parties have received
repayment for cost-of-goods, sales and marketing expenses, and ongoing research
and development expenses.

   The Dow Chemical Company. In June 1999, we entered into a research
collaboration with Dow Chemical to develop a BeadArray designed for the
identification of chemical solvents prior to entry into Dow Chemical's
manufacturing facilities. If successful, Dow Chemical could use our technology
as a rapid and reliable method for performing a quality control check on their
incoming raw materials. We retain all rights to commercialize any resulting
products.


                                       34
<PAGE>

   Third Wave Technologies, Inc. In December 1999, we entered into a research
collaboration with Third Wave Technologies to adapt their proprietary assay
format, called Invader, to our BeadArray platform. If the research
collaboration is successful, Illumina and Third Wave Technologies may negotiate
a commercialization agreement. In January 2000, PE Biosystems announced plans
to acquire Third Wave Technologies.

   PyroSequencing, Inc. In November 1999, we entered into a research
collaboration with PyroSequencing to adapt their proprietary assay format,
called PyroSequencing, to our BeadArray platform. Pyrosequencing provides
instrumentation and chemistry to perform DNA sequencing and SNP genotyping. If
the research collaboration is successful, Illumina and PyroSequencing may
negotiate a commercialization agreement.

   We also have entered into collaborations with Tufts University, The
Australian National University, Stanford University and The University of
California, San Diego to develop new applications for our BeadArray technology.

Intellectual Property

   We have an extensive patent portfolio, including ownership of, or exclusive
licenses to, 12 issued U.S. patents and 44 pending U.S. patent applications,
including two allowed applications, some of which derive from a common parent
application. Our issued patents, which cover fiber optic arrays, bead array
technology and chemical detection, expire between 2010 and 2017. We are seeking
to extend this patent protection on our BeadArray, Oligator and related
technologies. We have received or filed counterparts for many of these patents
and applications in one or more foreign countries.

   We also rely upon copyright protection, trade secrets, know-how, continuing
technological innovation and licensing opportunities to develop and maintain
our competitive position. Our success will depend in part on our ability to
obtain patent protection for our products and processes, to preserve our
copyrights and trade secrets, to operate without infringing the proprietary
rights of third parties and to acquire licenses related to enabling technology
or products used with our BeadArray and Oligator technologies.

   We are party to various exclusive and non-exclusive license agreements with
third parties which grant us rights to use key aspects of our BeadArray and
Oligator technologies. For example, we have an exclusive license from Tufts
University to patents filed by Dr. David Walt, a Director, the Chairman of our
Scientific Advisory Board and one of our founders. Our exclusive licenses
expire with the termination of the underlying patents, which will occur between
2010 and 2017. These exclusive licenses are critical to our business.

U.S. Government Grants

   Government grants allow us to fund internal scientific programs and
exploratory research. We retain ownership of all intellectual property and
commercial rights generated during these projects, subject to a non-exclusive,
non-transferable, paid-up license to practice, for or on behalf of the
United States, inventions made with federal funds. This license is retained by
the U.S. government as provided by applicable statutes and regulations. We have
grants from the National Institutes of Health as outlined below.

                                       35
<PAGE>

<TABLE>
<CAPTION>
                            Grant Title                             Grant Date
  ------------------------------------------------------------------------------
   <S>                                                            <C>
   Decoding randomly ordered arrays.............................. February 1999
   Gene expression analysis on randomly ordered DNA arrays....... March 1999
   Parallel array processor...................................... August 1999
   Randomly ordered arrays for SNP genotyping.................... September 1999
   Compact device for solvent identification..................... September 1999
   Pyrosequencing arrays......................................... March 2000
   Optical binary encoding of assembled arrays................... June 2000
   Automated DNA synthesizer using tilted plate technology....... July 2000
</TABLE>


Manufacturing

   We manufacture our BeadArrays and Array of Arrays in-house and intend to
rely upon PE Biosystems to manufacture the imaging system and reagent kits for
our first product. We currently depend upon outside suppliers for materials
used in the manufacture of our BeadArrays and Array of Arrays. We intend to
continue, and may extend, the outsourcing of portions of our manufacturing
process to subcontractors where we determine it is in our best commercial
interests.

   We have designed our manufacturing facility to optimize material flow and
personnel movement. We adhere to access and safety standards required by
federal, state and local health ordinances, such as standards for the use,
handling and disposal of hazardous substances. This year, we will implement a
company-wide enterprise resource planning system to manage and control our
manufacturing resources.

Competition

   We are aware of other life sciences companies or companies with life
sciences divisions, such as Affymetrix, Agilent, Aclara Biosciences, Caliper
Technologies, Ciphergen, Genometrix, Luminex, Orchid Biosciences and Sequenom,
that have, or are developing, assay technologies for the SNP genotyping, gene
expression profiling and proteomics markets. Each of these markets is very
competitive. Many of our potential competitors in these markets have greater
commercial experience and substantially greater financial, technical and
personnel resources than we do. We expect new competitors to emerge and the
intensity of competition to increase in the future.

Employees

   As of March 31, 2000, we had a total of 60 employees, 20 of whom hold Ph.D.
or M.D. degrees and 44 of whom are engaged in full-time research and
development activities. We plan to expand our research and development programs
as well as corporate collaborations and will hire additional staff as these
initiatives are implemented. None of our employees is represented by a labor
union. We consider our employee relations to be good.

Facilities

   We lease an aggregate of approximately 15,000 square feet of office and
laboratory facilities at 9390 Towne Centre Drive in San Diego, California. Our
lease expires in August 2001. We are currently in negotiations to lease an
additional 20,000 square feet in the same facility, through August 2002. We are
also in negotiations to lease a total of 97,000 square feet in two buildings
that will be constructed over the next year. The lease will contain an option
to purchase the buildings together with additional land on the same site. If
these negotiations are successfully completed we would be obligated to provide
funding of approximately $6 million at the time the lease is executed, in the
form of an interest bearing, secured loan with a term of approximately one
year. In addition, we would be obligated to provide a secured letter of credit.

Legal Proceedings

   We are not currently a party to any material legal proceedings.

                                       36
<PAGE>

                                   MANAGEMENT

Directors and Executive Officers

   Our directors and executive officers as of March 31, 2000 are as follows:

<TABLE>
<CAPTION>
                Name                 Age                Position
                ----                 ---                --------
 <C>                                 <C> <S>
 Jay T. Flatley.....................  47 President, Chief Executive Officer and
                                         Director

 Timothy M. Kish....................  48 Vice President, Chief Financial
                                         Officer

 David L. Barker, Ph.D..............  59 Vice President, Chief Scientific
                                         Officer

 John R. Stuelpnagel, DVM...........  42 Founder, Vice President of Business
                                          Development and Director

 Mark S. Chee, Ph.D. ...............  38 Founder, Vice President of Genomics

 Robert C. Kain.....................  39 Vice President of Engineering

 Noemi C. Espinosa..................  41 Vice President of Intellectual
                                         Property

 Anthony W. Czarnik, Ph.D. .........  42 Founder, Research Fellow, Former Chief
                                         Scientific Officer

 Lawrence A. Bock...................  40 Founder

 Charles M. Hartman(1)..............  58 Director

 Robert T. Nelsen(2)................  36 Director

 George Poste, DVM, Ph.D. ..........  55 Director

 William H. Rastetter, Ph.D.(1)(2)..  51 Director

 David R. Walt, Ph.D. ..............  47 Founder, Director, Chairman of the
                                          Scientific Advisory Board
</TABLE>
--------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.

   Jay T. Flatley has served as our President, Chief Executive Officer and a
Director since October 1999. Prior to joining Illumina, Mr. Flatley was co-
founder, President, Chief Executive Officer and a Director of Molecular
Dynamics, a life sciences company, from May 1994 to September 1999. He served
in various other positions with that company from 1987 to 1994. From 1985 to
1987, Mr. Flatley was Vice President of Engineering and Vice President of
Strategic Planning at Plexus Computers, a UNIX computer company. Mr. Flatley
holds a B.A. in Economics from Claremont McKenna College and a B.S. and M.S. in
Industrial Engineering from Stanford University.

   Timothy M. Kish has served as our Vice President and Chief Financial Officer
since May 2000. Prior to joining us, Mr. Kish was Vice President, Finance and
Chief Financial Officer at Biogen, Inc., a biopharmaceutical company, from
September 1993 to April 2000. He served as Corporate Controller of that company
from 1986 to 1993. From 1983 to 1986, Mr. Kish was Director of Finance at
Allied Health & Scientific Products Company, a subsidiary of Allied-Signal
Corporation. Mr. Kish holds a B.B.A. from Michigan State University and an
M.B.A. from the University of Minnesota.

   David L. Barker, Ph.D. has served as our Vice President and Chief Scientific
Officer since March 2000. Prior to joining us, Dr. Barker was Vice President
and Chief Science Advisor at Amersham Pharmacia Biotech, a life sciences
company, from September 1998 to March 2000. From May 1997 to September 1998,
Dr. Barker was Vice President of Research and Business Development of Molecular
Dynamics. From 1992 to 1997, he was Vice President of Scientific Development.
From 1988 to 1995, he held various other positions with that company. Dr.
Barker holds a B.S. in Chemistry from California Institute of Technology and
received his Ph.D. in Biochemistry from Brandeis University.

   John R. Stuelpnagel, D.V.M., one of our founders, is our Vice President of
Business Development, acting Chief Financial Officer and a Director since April
1998. From April 1998 to

                                       37
<PAGE>

October 1999, he served as Illumina's acting President and Chief Executive
Officer. While founding Illumina, Dr. Stuelpnagel was an associate with CW
Group, a venture capital firm, from June 1997 to September 1998 and with
Catalyst Partners, a venture capital firm, from August 1996 to June 1997. Dr.
Stuelpnagel received his B.S. in Biochemistry and his Doctorate in Veterinary
Medicine from the University of California, Davis and his M.B.A. from the
University of California, Los Angeles.

   Mark S. Chee, Ph.D., one of our founders, has served as our Vice President
of Genomics since June 1998. Prior to founding Illumina, Dr. Chee served as
Director of Genetics Research at Affymetrix, a life sciences company, from
April 1997 to July 1997 and in other positions from 1993 to April 1997. Dr.
Chee received his B.Sc. in Biochemistry from the University of New South Wales
and his Ph.D. from the University of Cambridge.

   Robert C. Kain has served as our Vice President of Engineering since
December 1999. Prior to joining us, Mr. Kain was Senior Director of Engineering
at Molecular Devices from July 1999 to December 1999. Previously, Mr. Kain
served as Director of Microarray Engineering at Molecular Dynamics from August
1998 to July 1999 and in other positions from August 1996 to August 1998. From
1983 to 1988, Mr. Kain was employed at DatagraphiX, an information technology
equipment company. Mr. Kain received his B.S. in Physics from San Diego State
University and his M.B.A. from St. Mary's College.

   Noemi C. Espinosa has served as our Vice President of Intellectual Property
since May 2000. Prior to joining us, Ms. Espinosa was a partner with the firm
of Brobeck, Phleger & Harrison LLP from January 1992 to April 2000, having
joined the firm in 1990. From 1983 to 1990, Ms. Espinosa was associated with
the intellectual property firm of Townsend & Townsend. Ms. Espinosa holds a
B.S. in Chemical Engineering and a J.D. from the University of California,
Hastings College of Law. She is registered to practice before the United States
Patent and Trademark Office.

   Anthony W. Czarnik, Ph.D., one of our founders, has been a Research Fellow
at Illumina since March 2000. From June 1998 to March 2000, he served as
Illumina's Chief Scientific Officer. Prior to joining Illumina, Dr. Czarnik was
Vice President of Chemistry at IRORI Quantum Microchemistry from 1996 to 1998
and Director of Bioorganic Chemistry at Parke-Davis from 1993 to 1996.
Previously, he was a professor at The Ohio State University. Dr. Czarnik
received his B.S. in Biochemistry from the University of Wisconsin-Madison and
his Ph.D. from the University of Illinois at Urbana/Champaign.

   Lawrence A. Bock, one of our founders, served as a Director from June 1998
to March 2000. He has been a General Partner of CW Group, a medical venture
capital fund, since June 1998. From 1988 to 1998, Mr. Bock was General Partner
of Avalon Ventures, a venture capital firm. He is also founder and Director of
FastTrack Systems, Inc. Mr. Bock holds a B.S. in Biochemistry from Bowdoin
College and an M.B.A. from the University of California, Los Angeles.

   Charles M. Hartman has been a Director since March 2000. He has been a
General Partner of CW Group since April 1983. Mr. Hartman is a Director of
Caliper Technologies Corp. (Nasdaq: CALP). From 1966 to 1983, Mr. Hartman
served in various positions at Johnson & Johnson, a healthcare company, where
he was responsible for identification, evaluation and negotiation of situations
ranging from single product opportunities to company acquisitions, both
domestically and internationally. Mr. Hartman is a Director of The Hastings
Center, a non-profit organization devoted to the study of bioethical issues in
medicine and the life sciences. Mr. Hartman holds a B.S. in Chemistry from the
University of Notre Dame and an M.B.A. from the University of Chicago.

   Robert T. Nelsen has been a Director since June 1998. Since July 1994, Mr.
Nelsen has served as a senior principal of venture capital funds associated
with ARCH Venture Partners, a venture capital firm, including ARCH Venture Fund
III, L.P., a stockholder of the Company. From April 1987 to July 1994, Mr.
Nelsen was Senior Manager at ARCH Development Corporation, a company affiliated
with the University of Chicago, where he was responsible for new company
formation.

                                       38
<PAGE>

Mr. Nelsen is a Director of Caliper Technologies Corp. (Nasdaq: CALP).
Mr. Nelsen holds a B.S. in Biology and Economics from the University of Puget
Sound and an M.B.A. from the University of Chicago.

   George Poste, D.V.M., Ph.D. has been a Director since February 2000. Dr.
Poste was Chief Science and Technology Officer at SmithKline Beecham, a
biopharmaceutical company, from October 1981 to December 1999. Dr. Poste is a
Director of SmithKline Beecham (Nasdaq: SBH) and Maxygen (Nasdaq: MAXY). Prior
to being appointed Chief Science and Technology Officer, Dr. Poste was
President of Research and Development at SmithKline Beecham. Dr. Poste is also
a Research Professor at the University of Pennsylvania and holds the William
Pitt Fellowship at Pembroke College, Cambridge University. He was awarded a
D.Sc. for meritorious research contributions by the University of Bristol in
1987. Dr. Poste received his Doctorate in Veterinary Medicine and his Ph.D. in
Virology from the University of Bristol.

   William H. Rastetter, Ph.D. has been a Director since November 1998. Since
December 1986, Dr. Rastetter has served as President and Chief Executive
Officer of IDEC Pharmaceuticals, a biopharmaceutical company. Dr. Rastetter is
a Director of Spiros Development (Nasdaq: SDCO). Additionally, he has served as
Chairman of the Board of Directors of IDEC Pharmaceuticals since May 1996. From
1982 to 1986, Dr. Rastetter served in various positions at Genentech and
previously he was a professor at the Massachusetts Institute of Technology.
Dr. Rastetter holds a S.B. in Chemistry from the Massachusetts Institute of
Technology and received his M.A. and Ph.D. in Chemistry from Harvard
University.

   David R. Walt, Ph.D. has been a Director and Chairman of the Scientific
Advisory Board since June 1998. Dr. Walt has been the Robinson Professor of
Chemistry at Tufts University since September 1995. Dr. Walt has published over
100 papers and holds over 20 patents. Dr. Walt holds a B.S. in Chemistry from
the University of Michigan and received his Ph.D. in Organic Chemistry and
Pharmacology from the State University of New York at Stony Brook.

Scientific Advisory Board

   The following individuals are members of our Scientific Advisory Board:

   Christopher C. Goodnow, Ph.D. is Professor at the John Curtin School of
Medical Research at The Australian National University where he is the Founder
and Director of the Medical Genome Centre. Previously, he was an Assistant
Investigator of the Howard Hughes Medical Institute and Assistant Professor of
Microbiology and Immunology at Stanford University Medical School. Dr. Goodnow
has been a recipient of numerous awards and honors, including the Searle
Scholar and the University Medal from the University of Sydney. Dr. Goodnow
received his B.V.Sc. and B.Sc. (Vet) in Veterinary Science from the University
of Sydney and his Ph.D. in Immunology from Stanford University.

   Leroy Hood, M.D., Ph.D. is the William Gates III Professor of Biomedical
Sciences, Director of a National Science Foundation Science and Technology
Center and Chairman of the Department of Molecular Biotechnology at the
University of Washington School of Medicine. Dr. Hood is a member of the
National Academy of Sciences and the American Association of Arts and Sciences.
Among his numerous honors and awards are the Louis Pasteur Award for Medical
Innovation, the Albert Lasker Basic Medical Research Award, the Cetus Award for
Biotechnology, the American College of Physician Award, Ciba-Geigy/Drew Award,
Lynen Medal and the University Distinguished Alumnus Award from the Johns
Hopkins University School of Medicine. Dr. Hood has a M.D. from the Johns
Hopkins Medical School and a Ph.D. in Biochemistry from the California
Institute of Technology.

   Terrence J. Sejnowski, Ph.D. is an Investigator with the Howard Hughes
Medical Institute and a Professor at The Salk Institute for Biological Studies
where he directs the Computational

                                       39
<PAGE>

Neurobiology Laboratory. He is also Professor of Biology and Adjunct Professor
in the Departments of Physics, Neurosciences, Psychology, Cognitive Science,
and Computer Science and Engineering at the University of California, San
Diego. Dr. Sejnowski has been the recipient of numerous honors and awards
including the Presidential Young Investigator Award, the Wright Prize from the
Harvey Mudd College and the Sherman Fairchild Distinguished Scholar Award at
the California Institute of Technology. Dr. Sejnowski received a B.S. in
Physics from the Case-Western Reserve University, a M.A. in Physics from
Princeton University, and a Ph.D. in Physics from Princeton University.

   Paul R. Schimmel, Ph.D. is Professor and Member at The Skaggs Institute for
Chemical Biology at The Scripps Research Institute. He formerly was the John D.
and Catherine T. MacArthur Professor of Biochemistry and Biophysics in the
Department of Biology at The Massachusetts Institute of Technology. He received
the Pfizer Award in enzyme chemistry from the American Chemical Society and was
named co-recipient of the Biophysical Society Emily M. Gray Award. Dr. Schimmel
is a member of the National Academy of Sciences and the American Academy of
Arts and Sciences. Dr. Schimmel received his A.B. degree in pre-medicine from
Ohio Weslyan University and his Ph.D. in Biophysical Chemistry from The
Massachusetts Institute of Technology.

   W. Clark Still, Ph.D. is Mitchell Professor of Chemistry at Columbia
University. He is a recipient of numerous awards and honors including Science
Digest's 100 Brightest Scientists Under 40, the National Science Foundation's
Alan T. Waterman Award, the American Chemical Society's Cope Scholar and
Computers in Chemistry Awards, California Institute of Technology's Buchman
Award, Frankfurt University's Rolf Sammet Award, and Nagoya University's Nagoya
Medal of Organic Chemistry. He is a Fellow of the American Academy of Arts and
Sciences, the Japan Society for the Promotion of Science and the Alfred P.
Sloan Society. He received his B.S. in Chemistry and his Ph.D. in Organic
Chemistry from Emory University.

Board Composition and Committees

   Our board of directors currently consists of seven members. Prior to the
closing of this offering, our board of directors will be divided into three
classes, with each director serving a three-year term and one class being
elected at each year's annual meeting of stockholders. Directors Hartman and
Walt will be in the class of directors whose initial term expires at the 2001
annual meeting of stockholders. Directors Stuelpnagel and Nelsen will be in the
class of directors whose initial term expires at the 2002 annual meeting of the
stockholders. Directors Flatley, Poste and Rastetter will be in the class of
directors whose initial term expires at the 2003 annual meeting of
stockholders.

   Our board of directors currently has an audit committee and a compensation
committee. Directors Hartman and Rastetter are currently members of the audit
committee and we will be appointing a third member. The audit committee reviews
our internal accounting procedures and consults with and reviews the services
provided by our independent accountants. Directors Nelsen and Rastetter
currently are members of the compensation committee. The compensation committee
reviews and recommends to the board of directors the compensation and benefits
for all of our officers and establishes and reviews general policies relating
to compensation and benefits for our other employees.

Director Compensation

   We reimburse our non-employee directors for their expenses incurred in
connection with attending board and committee meetings but do not compensate
them for their services as board or committee members. We have in the past
granted non-employee directors options to purchase our common stock pursuant to
the terms of our stock plan, and our board continues to have the discretion to
grant options to new and continuing non-employee directors. In addition,
several directors have purchased shares of our common stock pursuant to
restricted stock purchase agreements, subject to a repurchase right in our
favor. For a discussion of each director's restricted stock purchase agreement,
see "Related Party Transactions."

                                       40
<PAGE>


   In July 2000, our stockholders approved guidelines for the grant of stock
options under our 2000 Stock Option Plan, as amended, to directors who are not
our officers or employees. These guidelines provide that such directors will
receive:

  . one-time option grants of 20,000 shares vesting annually over four years
    upon joining the board which are to be granted on the date of the first
    board meeting attended at the fair market value of one share of our
    common stock on the date of grant; and

  . annual option grants of 10,000 shares vesting annually over four years
    which are to be granted on the date of each annual stockholder meeting
    following the closing of this offering at the fair market value of one
    share of our common stock on the date of grant.

Executive Compensation

   The following table sets forth the compensation earned for services rendered
to us in all capacities by our chief executive officer and our four most highly
compensated executive officers whose total cash compensation exceeded
$100,000--collectively, the "Named Executive Officers"--for the year ended
December 31, 1999.

                        Summary 1999 Compensation Table

<TABLE>
<CAPTION>
                               Annual Compensation      Long-Term
                                       ($)             Compensation
                              ---------------------    ------------
                                                        Securities
                                                        Underlying   All Other
Name and Principal Positions  Salary  Bonus  Other     Options (#)  Compensation
----------------------------  ------- ------ ------    ------------ ------------
<S>                           <C>     <C>    <C>       <C>          <C>
Jay T. Flatley, President
 and Chief Executive
 Officer(1).................   55,859    --  11,179(2)      --           --

John R. Stuelpnagel, Vice
 President of Business
 Development................  141,500 12,000    --          --           --

Mark S. Chee, Vice President
 of Genomics................  145,000  7,000    --          --           --

Anthony W. Czarnik, former
 Chief Scientific
 Officer(3).................  185,000    --     --          --           --

Richard J. Pytelewski,
 former Vice President of
 Operations.................  158,000    --  55,025(4)      --           --
</TABLE>
--------
(1) Mr. Flatley joined Illumina in October 1999.
(2) This amount represents an allowance for housing.

(3) Dr. Czarnik is currently a Research Fellow.

(4) This amount represents reimbursement for relocation costs.

Purchases of Restricted Common Stock

   We have not granted any options to the named executive officers. However,
each named executive officer has purchased shares of our common stock subject
to a repurchase right in our favor. The repurchase right entitles us to
repurchase unvested shares at their original exercise price on termination of
the executive officer's services with us. Our repurchase rights lapse over time
on employment anniversary dates and upon achievement of business milestones.
For a discussion of each executive officer's restricted stock purchase
agreement, see "Related Party Transactions."

Stock Plans

 1998 Incentive Stock Plan

   Our 1998 Incentive Stock Plan was adopted by our board of directors in April
1998 and approved by our stockholders in April 1999. The stock plan was amended
in October 1999 and

                                       41
<PAGE>


February 2000. A total of 5,750,000 shares of common stock have been reserved
for issuance under our stock plan.


   The 1998 Incentive Stock Plan provides for grants of incentive stock options
to our employees including officers and employee directors and nonstatutory
stock options to our consultants including nonemployee directors. The purpose
of our stock plan is to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to our
employees and consultants and to promote the success of our business. At the
request of the board of directors, the compensation committee administers our
stock plan and determines the optionees and the terms of options granted,
including the exercise price, number of shares subject to the option and the
exercisability thereof.

   The term of options granted under the 1998 Incentive Stock Plan is stated in
the option agreement. However, the term of an incentive stock option may not
exceed ten years and, in the case of an option granted to an optionee who owns
more than 10 percent of our outstanding stock at the time of grant, the term of
an option may not exceed five years. Options granted under the 1998 Incentive
Stock Plan vest and become exercisable as set forth in each option agreement.

   With respect to any optionee who owns more than 10% of our outstanding
stock, the exercise price of any stock option granted must be at least 110% of
the fair market value on the grant date.

   No incentive stock options may be granted to an optionee, which, when
combined with all other incentive stock options becoming exercisable in any
calendar year that are held by that person, would have an aggregate fair market
value in excess of $100,000.

   The 1998 Incentive Stock Plan will terminate in April 2008, unless our board
of directors terminates it sooner.

   As of March 31, 2000, we had issued 392,381 shares of common stock upon the
exercise of options granted under our stock option plan, we had outstanding
options to purchase 932,485 shares of common stock at a weighted average
exercise price of $0.34 per share and 522,384 shares remain available for
future option grants under our stock option plan. On the effective date of the
Company's registration statement, the 1998 Plan shall terminate and all
reserved but unissued shares shall be reserved for issuance under our 2000
Stock Plan.

 2000 Stock Plan

   Our board of directors adopted the 2000 Stock Plan in June 2000, and our
stockholders subsequently approved it. This plan provides for the grant of
incentive stock options to our employees and nonstatutory stock options and
stock purchase rights to our employees, directors and consultants. As of June
2000, a total of 4,000,000 shares of our common stock were reserved for
issuance pursuant to our 2000 Stock Plan.

   No options have yet been issued pursuant to the 2000 Stock Plan. The number
of shares reserved for issuance under our 2000 Stock Plan will increase
annually on the first day of the Company's fiscal year beginning in 2001 by an
amount equal to the lesser of 5% of the outstanding shares of our common stock
on the last day of the immediately preceding fiscal year, 1,500,000 shares or
such lesser amount as our board of directors may determine.

   Our board of directors or a committee of our board administers the 2000
Stock Plan. The committee may consist of two or more "outside directors" to
satisfy certain tax and securities requirements. The administrator has the
power to determine the terms of the options or stock purchase rights granted,
including the exercise price, the number of shares subject to each option or

                                       42
<PAGE>


stock purchase right, the exercisability of the options and the form of
consideration payable upon exercise. The administrator determines the exercise
price of options granted under our stock option plan, but with respect to
incentive stock options, the exercise price must at least be equal to the fair
market value of our common stock on the date of grant. Additionally, the term
of an incentive stock option may not exceed ten years. The administrator
determines the term of all other options. No optionee may be granted an option
to purchase more than 500,000 shares in any fiscal year. In connection with his
or her initial service, an optionee may be granted an additional option to
purchase not more than 1,000,000 shares of our common stock. After termination
of one of our employees, directors or consultants, he or she may exercise his
or her option for the period of time stated in the option agreement. If
termination is due to death or disability, the option will generally remain
exercisable for 12 months following such termination. In all other cases, the
option will generally remain exercisable for 3 months. However, an option may
never be exercised later than the expiration of its term.

   The administrator determines the exercise price of stock purchase rights
granted under our 2000 Stock Plan. Unless the administrator determines
otherwise, the restricted stock purchase agreement will grant us a repurchase
option that we may exercise upon the voluntary or involuntary termination of
the purchaser's service with us for any reason (including death or disability).
The purchase price for shares we repurchase will generally be at the original
price paid by the purchaser. The administrator determines the rate at which our
repurchase option will lapse. Our stock option plan generally does not allow
for the transfer of options or stock purchase rights and only the optionee may
exercise an option and stock purchase right during his or her lifetime.

   Our stock option plan provides that in the event of our merger with or into
another corporation or a sale of substantially all of our assets, the successor
corporation will assume or substitute for each option or stock purchase right.
If the outstanding options or stock purchase rights are not assumed or
substituted for, all outstanding options and stock purchase rights become fully
vest and exercisable. Our stock option plan will automatically terminate in
2010, unless we terminate it sooner. In addition, our board of directors has
the authority to amend, suspend or terminate the stock option plan provided it
does not adversely affect any option previously granted under our stock option
plan.

 2000 Employee Stock Purchase Plan

   Our 2000 employee stock purchase plan was adopted by our board of directors
and approved by our stockholders in February 2000 and August 2000,
respectively, and will become effective upon the closing of this offering. We
have reserved a total of 300,000 shares of common stock for issuance under the
2000 employee stock purchase plan, together with an annual increase in the
number of shares reserved thereunder beginning on the first day of our fiscal
year commencing January 1, 2001 in an amount equal to the lesser of:

  . 1.5 million shares;

  . 3% of our outstanding common stock on the last day of the prior fiscal
    year; or

  . an amount determined by our board of directors.

   Our employee stock purchase plan is administered by the board of directors
and is intended to qualify under Section 423 of the Internal Revenue Code. Our
employees, including our officers and employee directors but excluding our five
percent or greater stockholders, are eligible to participate if they are
customarily employed for at least 20 hours per week and for more than five
months in any calendar year. Our employee stock purchase plan permits eligible
employees to purchase common stock through payroll deductions, which may not
exceed the lesser of 15% of an employee's compensation, where compensation is
defined on Form W-2, or $25,000.


                                       43
<PAGE>


   Our employee stock purchase plan will be implemented in a series of
overlapping 24 month offering periods, and each offering period consists of
four six month purchase periods. The initial offering period under our employee
stock purchase plan will begin on the effective date of this offering, and the
subsequent offering periods will begin on the first trading day on or after
February 1 and August 1 of each year. Each participant will be granted an
option on the first day of the offering period and the option will be
automatically exercised on the date six months later, the end of a purchase
period, throughout the offering period. If the fair market value of our common
stock on any purchase date is lower than the fair market value on the start
date of that offering period, then all participants in that offering period
will be automatically withdrawn from that offering period and re-enrolled in
the immediately following offering period. The purchase price of our common
stock under our employee stock purchase plan will be 85 percent of the lesser
of the fair market value per share on the start date of the offering period or
at the end of the purchase period. Employees may end their participation in an
offering period at any time, and their participation ends automatically on
termination of employment with our company.

   Our employee stock purchase plan will terminate in 2010, unless our board of
directors terminates it sooner.

 401(k) Plan

   In 1998, we adopted a Retirement Savings and Investment Plan, the 401(k)
Plan, covering our full-time employees located in the United States. The 401(k)
Plan is intended to qualify under Section 401(k) of the Internal Revenues Code,
so that contributions to the 401(k) Plan by employees or by us and the
investment earnings thereon are not taxable to the employees until withdrawn.
If our 401(k) Plan qualifies under Section 401(k) of the Internal Revenues
Code, our contributions will be deductible by us when made. Our employees may
elect to reduce their current compensation by up to the statutorily prescribed
annual limit of $10,500 in 2000 and to have those funds contributed to the
401(k) Plan. The 401(k) Plan permits us, but does not require us, to make
additional matching contributions on behalf of all participants. To date, we
have not made any contributions to the 401(k) Plan.

Employment Agreements and Change in Control Arrangements

   We have not entered into employment or severance agreements with any of our
officers or employees other than Dr. Czarnik. We have agreed to provide Dr.
Czarnik with severance compensation for up to twelve months in an amount equal
to his then annual base salary in the event of his termination without cause.
We entered into an agreement with Richard Pytelewski, our former Vice President
of Operations, to serve as a consultant to Illumina. Pursuant to that
agreement, we paid Mr. Pytelewski his salary through the end of his consultancy
in June 2000, and issued him 30,000 shares of common stock at that time.

                                       44
<PAGE>

                           RELATED PARTY TRANSACTIONS

Stock Issuances to our Directors, Officers and Principal Stockholders

   In June 1998, we sold 2,499,998 shares of our Series A preferred stock at a
price per share of $0.30. In November 1998, we sold 9,336,299 shares of our
Series B preferred stock at $0.926 per share. In November and December 1999, we
sold 7,000,000 shares of our Series C preferred stock at $4.00 per share. All
of our preferred stock is convertible into shares of our common stock on a one-
for-one basis.

   Since our inception, we have from time to time sold shares of our common
stock, at per share prices ranging from $0.01 per share to $1.00, to our
directors, officers, founders and consultants, subject to repurchase rights in
our favor that lapse over specified periods, usually five years, subject to
earlier lapse in some cases upon the achievement of specified milestones by
Illumina. The repurchase right entitles us to repurchase shares at their
original purchase price on termination of a purchaser's services with us. Upon
the closing of an acquisition of Illumina for cash or publicly traded
securities, the lapsing of our repurchase right accelerates as to 50% of each
officer's shares of common stock then subject to our repurchase right and, with
respect to the remaining 50%, on the first anniversary of the closing date of
the acquisition. If the acquirer terminates the officer without cause within
one year of the closing date, our repurchase right lapses with respect to all
shares.

   Listed below are those persons who participated in the transactions
described above who are our executive officers or directors or who beneficially
own five percent or more of our securities.

<TABLE>
<CAPTION>
                               Common Stock               Convertible Preferred Stock
                          ----------------------- -------------------------------------------
                                      Aggregate                                   Aggregate
                           Shares   Consideration Series A  Series B  Series C  Consideration
                             (#)         ($)         (#)       (#)       (#)         ($)
                          --------- ------------- --------- --------- --------- -------------
<S>                       <C>       <C>           <C>       <C>       <C>       <C>
Executive Officers &
 Directors
Jay T. Flatley(1).......  1,000,000     90,000          --        --     12,500      50,000
Timothy M. Kish(2)......    375,000    375,000          --        --        --          --
David L. Barker,
 Ph.D.(3)...............    250,000    100,000          --        --        --          --
John R. Stuelpnagel,
 DVM(4).................    550,000     49,750       72,399   107,959     6,250     146,720
Mark S. Chee, Ph.D.(5)..    550,000     44,750        5,733   367,060     7,500     371,719
Anthony W. Czarnik,
 Ph.D.(6)...............    425,000      6,250        6,551       --        --        1,965
Robert C. Kain(7).......    150,000     37,500          --        --        --          --
Noemi C. Espinosa(8)....    215,000    215,000          --        --        --          --
Richard J.
 Pytelewski(9)..........    109,167      3,275          --        --      5,000      20,000
Lawrence A. Bock(10)....     68,750        688          --        --        --          --
Charles M. Hartman(10)..     68,750        688          --        --        --          --
George Poste, DVM,
 Ph.D(11)...............    100,000     40,000          --        --        --          --
William H. Rastetter,
 Ph.D(12)...............     75,000     14,500          --        --        --          --
David R. Walt,
 Ph.D.(13)..............  1,000,000     10,000      266,378   107,960       --      179,914

5% Stockholders
Entities affiliated with
 CW Group(14)...........        --         --     1,770,302 2,375,099   575,000   5,031,090
ARCH Venture Fund III,
 L.P. (15)..............        --         --       345,302 2,644,997   625,000   5,053,590
Entities affiliated with
 Venrock Associates.....        --         --           --  2,644,997   625,000   4,950,000
TGI Fund II, L.C. ......        --         --           --    998,621   750,000   3,925,000
PE Corporation..........        --         --           --        --  1,250,000   5,000,000
</TABLE>
--------

 (1) Mr. Flatley purchased his shares of common stock in October 1999, at a per
     share price of $0.09. Our right to repurchase 750,000 of these shares
     lapses over a five-year period, and our right to repurchase 250,000 of
     these shares lapses over an eight-year period, subject to earlier lapse
     upon the achievement of specified milestones by Illumina. The right to
     repurchase had lapsed as to 20,000 shares as of March 31, 2000.

 (2) Mr. Kish purchased his shares of common stock in March 2000, at a per
     share price of $1.00. Our right to repurchase these shares lapses over a
     five year period, subject to earlier lapse upon the achievement of
     specified milestones by Illumina.

                                       45
<PAGE>


 (3) Dr. Barker purchased his shares of common stock in March 2000, at a per
     share price of $0.40. Our right to repurchase these shares lapses over a
     five-year period, subject to earlier lapse upon the achievement of
     specified milestones by Illumina.

 (4) Dr. Stuelpnagel purchased his shares of common stock in June and August
     1998, October 1999 and March 2000, at a per share price of $0.01 to $0.40.
     We have no repurchase right with respect to 100,000 shares, our right to
     repurchase 375,000 shares lapses over four- and five-year periods, and our
     right to repurchase 75,000 of these shares lapses over an eight-year
     period, subject to earlier lapse upon the achievement of specified
     milestones by Illumina. The right to repurchase had lapsed as to 92,706
     shares as of March 31, 2000.

 (5) Dr. Chee purchased his shares of common stock in June 1998, October 1999
     and March 2000 at a per share price of $0.01 to $0.40. Our right to
     repurchase 450,000 of these shares lapses over four- and five-year
     periods, and our right to repurchase 100,000 of these shares lapses over
     an eight-year period, subject to earlier lapse upon the achievement of
     specified milestones by Illumina. The right to repurchase had lapsed as to
     132,916 shares as of March 31, 2000.

 (6) Dr. Czarnik purchased his shares of common stock in June 1998 and October
     1999, at a per share price of $0.01 to $0.09. Our right to repurchase
     400,000 of these shares lapses over a five-year period, and our right to
     repurchase 25,000 of these shares lapses over an eight-year period,
     subject to earlier lapse upon the achievement of specified milestones by
     Illumina. The right to repurchase had lapsed as to 140,000 shares as of
     March 31, 2000.

 (7) Mr. Kain purchased his shares of common stock in January 2000, at a per
     share price of $0.25. Our right to repurchase these shares lapses over a
     five-year period, subject to earlier lapses.

 (8) Ms. Espinosa purchased her shares of common stock in March 2000, at a per
     share purchase price of $1.00. Our right to repurchase these shares lapses
     over a five-year period, subject to earlier lapse upon the achievement of
     specified milestones by Illumina.

 (9) Mr. Pytelewski purchased his shares of common stock in November 1998 and
     October 1999, at a per share price of $0.03 to $0.09. Our right to
     repurchase 250,000 of these shares lapses over a five-year period, and our
     right to repurchase 25,000 of these shares lapses over an eight-year
     period, subject to earlier lapse upon the achievement of specified
     milestones by Illumina. The right to repurchase had lapsed as to 66,666
     shares as of March 31, 2000. In June 2000, we issued Mr. Pytelewski 30,000
     shares of common stock in connection with the completion of his
     consultancy.

(10) Mr. Bock, a founder, and Mr. Hartman, a director, purchased their shares
     of common stock in May 1999 at a per price share of $0.01 upon the
     exercise of options. Mr. Bock and Mr. Hartman are general partners of CW
     Group.

(11) Dr. Poste purchased his shares of common stock in February 2000, at a per
     share price of $0.40. Our right to repurchase these shares lapses over a
     four-year period, subject to earlier lapse upon the achievement of
     specified milestones by Illumina. The right to repurchase had lapsed as to
     2,083 shares as of March 31, 2000.

(12) Dr. Rastetter purchased his shares of common stock in February 1999 and
     March 2000, at a per share price of $0.09 to $0.40. Our right to
     repurchase these shares lapses over four- and five-year periods, subject
     to earlier lapse upon the achievement of specified milestones by Illumina.
     The right to repurchase had lapsed as to 12,500 shares as of March 31,
     2000.

(13) Dr. Walt purchased his shares of common stock in April 1998, at a per
     share price of $0.01. Our right to repurchase these shares lapses over a
     five-year period. The right to repurchase had lapsed as to 533,333 shares
     as of March 31, 2000.

(14) Lawrence A. Bock and Charles M. Hartman are general partners of CW Group.
     Mr. Hartman is a Director of Illumina and Mr. Bock is a founder of
     Illumina.

(15) Robert T. Nelsen, a Director of Illumina, is a managing director of the
     general partner of ARCH Venture Fund III, L.P.

   Upon closing of this offering, all shares of outstanding preferred stock
will be automatically converted into shares of common stock. We have entered
into an agreement pursuant to which these and other preferred stockholders will
have registration rights with respect to their shares of common stock following
this offering. For a description of these registration rights, see "Description
of Capital Stock."

Other Transactions

   We pay license fees to Tufts University in connection with our license of
patents filed by Dr. David Walt, one of our directors. Dr. Walt is the Robinson
Professor of Chemistry at Tufts. It is our understanding that Tufts University
pays a portion of the license fees received from us to Dr. Walt. We have also
provided Tufts University with $100,000 in funding for research relating to the
development of our BeadArray technology. In addition, we and Tufts University
are co-investigators under a research grant for DNA sequencing sponsored by the
Department of Energy.

                                       46
<PAGE>

                             PRINCIPAL STOCKHOLDERS

   The following table sets forth information known to us with respect to the
beneficial ownership of our common stock as of March 31, 2000 and as adjusted
to reflect the sale of common stock offered hereby by:

  . each stockholder known by us to own beneficially more than five percent
    of our common stock;

  . each of the named executive officers listed in the Summary Compensation
    Table on page 40;

  . each of our directors; and

   .all of our directors and the named executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of common stock subject to stock
options and warrants currently exercisable or exercisable within 60 days are
deemed to be outstanding for computing the percentage ownership of the person
holding these options and the percentage ownership of any group of which the
holder is a member, but are not deemed outstanding for computing the percentage
of any other person. Except as indicated by footnote, and subject to community
property laws where applicable, the persons named in the table have sole voting
and investment power with respect to all shares of common stock shown as
beneficially owned by them. Some of the shares of common stock held by our
directors, officers and consultants are subject to repurchase rights in our
favor. For a discussion of these repurchase rights, see "Related Party
Transactions."
<TABLE>
<CAPTION>
                                 Number of
                                   Shares             Percent of Shares
                                Beneficially         Beneficially Owned
                               Owned Prior to ---------------------------------
Name and Address                the Offering  Before Offering(1) After Offering
----------------               -------------- ------------------ --------------
<S>                            <C>            <C>                <C>
CW Group(2)...................   4,991,464           19.5%            16.3%
 1041 Third Avenue
 New York, NY 10021
ARCH Venture Fund III,
 L.P.(3)......................   3,615,299           14.2             11.8
 8725 West Higgins Road, Suite
  290
 Chicago, IL 60631
Venrock Associates(4).........   3,269,997           12.8             10.7
 30 Rockefeller Plaza, Room
  5508
 New York, NY 10112
TGI Fund II, L.C. ............   1,748,621            6.8              5.7
 6501 Columbia Center
 701 Fifth Avenue
 Seattle, WA 98104
David R. Walt(5)..............   1,374,338            5.4              4.5
 62 Talbot Avenue
 Medford, MA 02155
PE Corporation................   1,250,000            4.9              4.1
 50 Danbury Road
 Wilton, CT 06897
Jay T. Flatley(6).............     992,000            3.9              3.2
Mark S. Chee..................     921,793            3.6              3.0
John R. Stuelpnagel...........     716,608            2.8              2.3
Anthony W. Czarnik............     421,551            1.7              1.4
Timothy M. Kish...............     375,000            1.5              1.2
Richard J. Pytelewski.........     280,000            1.1               *
David L. Barker...............     250,000            1.0               *
Noemi C. Espinosa.............     215,000             *                *
</TABLE>

                                       47
<PAGE>

<TABLE>
<CAPTION>
                                  Number of
                                    Shares             Percent of Shares
                                 Beneficially         Beneficially Owned
                                Owned Prior to ---------------------------------
Name and Address                 the Offering  Before Offering(1) After Offering
----------------                -------------- ------------------ --------------
<S>                             <C>            <C>                <C>
Robert C. Kain................       150,000            *                *
George Poste..................       100,000            *                *
 709 Swedeland
 King of Prussia, PA 19406
William H. Rastetter..........        75,000            *                *
 1101 Torreyana Road
 San Diego, CA 92121
Charles M. Hartman(2).........     4,991,464          19.5             16.3
 1041 Third Avenue
 New York, NY 10021
Lawrence A. Bock (2)..........     4,991,464          19.5             16.3
 2187 New Castle Avenue, Suite
  101
 Cardiff By the Sea, CA 92007
Robert T. Nelsen(3)...........     3,615,299          14.2             11.8
 8725 West Higgins Road, Suite
  290
 Chicago, IL 60631
All directors and named
 executive officers as a group
 (14 persons).................    14,478,053          56.7             47.4
</TABLE>
--------
 *  Represents beneficial ownership of less than one percent (1%) of the
    outstanding shares of our common stock.

(1) Percentage ownership before the offering is based on the 25,541,095 shares
    of common stock outstanding on March 31, 2000, after giving effect to the
    conversion of all of our preferred stock into shares of our common stock.

(2) Shares shown as owned by CW Group, Charles M. Hartman, a Director of
    Illumina and a general partner of CW Group and Lawrence A. Bock, a founder
    of Illumina and a general partner of CW Group; are owned by entities
    managed by CW Group, partners of CW Group and members of their families.
    Mr. Hartman and Mr. Bock disclaim beneficial ownership of the shares shown
    except shares owned directly or attributable to his partnership interest.

(3) Shares shown as owned by ARCH Venture Fund III, L.P. Robert T. Nelsen is a
    Director of Illumina and a managing director of the general partner of ARCH
    Venture Fund III, L.P. Mr. Nelsen disclaims beneficial ownership of the
    shares shown except to the extent of his pecuniary interest therein.

(4) Held by Venrock Associates or entities managed by it.

(5) Includes 303,980 shares owned by Dr. Walt's wife.

(6) Includes 12,000 shares owned by Mr. Flatley's children.

   Except as otherwise noted above, the address of each person listed on the
table is 9390 Towne Centre Drive, San Diego, California 92121.

                                       48
<PAGE>

                          DESCRIPTION OF CAPITAL STOCK

General

   We are authorized to issue 120,000,000 shares of common stock, $0.01 par
value, and 10,000,000 shares of undesignated preferred stock, $0.01 par value.

Common Stock

   Assuming the conversion of all of our preferred stock into 18,836,297 shares
of common stock, as of March 31, 2000 we had 25,541,095 shares of common stock
outstanding that were held of record by approximately 101 stockholders.

   The holders of common stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Subject to preferences that may
be applicable to any outstanding preferred stock, the holders of common stock
are entitled to receive ratably any dividends that may be declared from time to
time by the board of directors out of funds legally available for that purpose.
In the event of our liquidation, dissolution or winding up, the holders of
common stock are entitled to share ratably in all assets remaining after
payment of liabilities, subject to prior distribution rights of preferred stock
then outstanding. The common stock has no preemptive or conversion rights or
other subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are
fully paid and nonassessable, and the shares of common stock to be issued upon
the closing of this offering will be fully paid and nonassessable.

Preferred Stock

   Upon the closing of this offering, our board of directors will have the
authority, without action by our stockholders, to designate and issue up to
10,000,000 shares of preferred stock in one or more series. The board of
directors may also designate the rights, preferences and privileges of each
series of preferred stock; any or all of which may be greater than the rights
of the common stock. It is not possible to state the actual effect of the
issuance of any shares of preferred stock upon the rights of holders of the
common stock until the board of directors determines the specific rights of the
holders of the preferred stock. However, these effects might include:

  . restricting dividends on the common stock;

  . diluting the voting power of the common stock;

  . impairing the liquidation rights of the common stock; and

  . delaying or preventing a change in control of our company without further
    action by the stockholders.

   We have no present plans to issue any shares of preferred stock.

Warrants

   As of March 31, 2000 we had outstanding warrants to purchase 43,183 shares
of Series B preferred stock at an exercise price of $0.926 per share. The
warrants will expire in November 2005.

 Holders of Registration Rights Can Require Us to Register Shares of Our Stock
                                   for Resale

   The holders of 18,836,297 shares of common stock and 43,183 shares of common
stock issuable upon the exercise of warrants or their permitted transferees are
entitled to rights with respect to registration of these shares under the
Securities Act of 1933, as amended. These rights are provided under the terms
of our agreement with the holders of registrable securities. Under these

                                       49
<PAGE>

registration rights, holders of at least a majority of the then outstanding
registrable securities may require on two occasions that we register their
shares for public resale. We are obligated to register, on two separate
occasions, these shares if the holders of a majority of the eligible shares
request registration and only if the shares to be registered have an
anticipated public offering price of at least $5,000,000. In addition, holders
of registrable securities may require that we register their shares for public
resale on Form S-3 or similar short-form registration, if we are eligible to
use Form S-3 or similar short-form registration, and the value of the
securities to be registered is at least $1,000,000. If we elect to register any
of our shares of common stock for any public offering, the holders of
registrable securities are entitled to include shares of common stock in the
registration. However we may reduce the number of shares proposed to be
registered in view of market conditions. We will pay all expenses in connection
with any registration, other than underwriting discounts and commissions.

Anti-Takeover Effects of Some Provisions of Delaware Law

   Provisions of Delaware law and our amended and restated certificate of
incorporation and amended bylaws to be in effect upon the closing of this
offering could make the acquisition of our company through a tender offer, a
proxy contest or other means more difficult and could make the removal of
incumbent officers and directors more difficult. We expect these provisions to
discourage coercive takeover practices and inadequate takeover bids and to
encourage persons seeking to acquire control of our company to first negotiate
with our board of directors. We believe that the benefits provided by our
ability to negotiate with the proponent of an unfriendly or unsolicited
proposal outweigh the disadvantages of discouraging these proposals. We believe
the negotiation of an unfriendly or unsolicited proposal could result in an
improvement of its terms.

   We are subject to Section 203 of the Delaware General Corporation Law, an
anti-takeover law. In general, Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years following the date the person became
an interested stockholder, unless:

  . prior to the date of the transaction, the board of directors of the
    corporation approved either the business combination or the transaction
    which resulted in the stockholder becoming an interested stockholder;

  . the stockholder owned at least 85% of the voting stock of the corporation
    outstanding at the time the transaction commenced, excluding for purposes
    of determining the number of shares outstanding (a) shares owned by
    persons who are directors and also officers, and (b) shares owned by
    employee stock plans in which employee participants do not have the right
    to determine confidentially whether shares held subject to the plan will
    be tendered in a tender or exchange offer; or

  . on or subsequent to the date of the transaction, the business combination
    is approved by the board and authorized at an annual or special meeting
    of stockholders, and not by written consent, by the affirmative vote of
    at least 66% of the outstanding voting stock which is not owned by the
    interested stockholder.

   Generally, a "business combination" includes a merger, asset or stock sale,
or other transaction resulting in a financial benefit to the interested
stockholder. An "interested stockholder" is a person who, together with
affiliates and associates, owns or, within three years prior to the
determination of interested stockholder status, did own 15% or more of a
corporation's outstanding voting securities. We expect the existence of this
provision to have an anti-takeover effect with respect to transactions our
board of directors does not approve in advance. We also anticipate that Section
203 may also discourage attempts that might result in a premium over the market
price for the shares of common stock held by stockholders.

                                       50
<PAGE>


Anti-Takeover Effects of Provisions of Our Charter Documents

   Our amended and restated certificate of incorporation to be in effect upon
the closing of this offering provides for our board of directors to be divided
into three classes serving staggered terms. Approximately one-third of the
board of directors will be elected each year. The provision for a classified
board could prevent a party who acquires control of a majority of the
outstanding voting stock from obtaining control of the board of directors until
the second annual stockholders meeting following the date the acquirer obtains
the controlling stock interest. The classified board provision could discourage
a potential acquirer from making a tender offer or otherwise attempting to
obtain control of our company and could increase the likelihood that incumbent
directors will retain their positions. Our amended and restated certificate of
incorporation to be in effect upon the closing of this offering provides that
directors may be removed:

  . with cause by the affirmative vote of the holders of at least a majority
    of the outstanding shares of voting stock; or

  . without cause by the affirmative vote of the holders of at least 66 2/3%
    of the then-outstanding shares of the voting stock.

   Our amended bylaws to be in effect upon the closing of this offering
establish an advance notice procedure for stockholder proposals to be brought
before an annual meeting of our stockholders, including proposed nominations of
persons for election to the board of directors. At an annual meeting,
stockholders may only consider proposals or nominations specified in the notice
of meeting or brought before the meeting by or at the direction of the board of
directors. Stockholders may also consider a proposal or nomination by a person
who was a stockholder of record on the record date for the meeting, who is
entitled to vote at the meeting and who has given to our Secretary timely
written notice, in proper form, of his or her intention to bring that business
before the meeting. The amended bylaws do not give the board of directors the
power to approve or disapprove stockholder nominations of candidates or
proposals regarding other business to be conducted at a special or annual
meeting of the stockholders. However, our bylaws may have the effect of
precluding the conduct of business at a meeting if the proper procedures are
not followed. These provisions may also discourage or deter a potential
acquirer from conducting a solicitation of proxies to elect the acquirer's own
slate of directors or otherwise attempting to obtain control of our company.

   Under Delaware law, a special meeting of stockholders may be called by the
board of directors or by any other person authorized to do so in the amended
and restated certificate of incorporation or the amended bylaws. Our amended
bylaws authorize a majority of our board of directors, the chairman of the
board or the chief executive officer to call a special meeting of stockholders.
Because our stockholders do not have the right to call a special meeting, a
stockholder could not force stockholder consideration of a proposal over the
opposition of the board of directors by calling a special meeting of
stockholders prior to such time as a majority of the board of directors
believed or the chief executive officer believed the matter should be
considered or until the next annual meeting provided that the requestor met the
notice requirements. The restriction on the ability of stockholders to call a
special meeting means that a proposal to replace the board also could be
delayed until the next annual meeting.

   Delaware law provides that stockholders may execute an action by written
consent in lieu of a stockholder meeting. However, Delaware law also allows us
to eliminate stockholder actions by written consent. Elimination of written
consents of stockholders may lengthen the amount of time required to take
stockholder actions since actions by written consent are not subject to the
minimum notice requirement of a stockholder's meeting. However, we believe that
the elimination of stockholders' written consents may deter hostile takeover
attempts. Without the availability of stockholder's actions by written consent,
a holder controlling a majority of our capital stock would not be able to amend
our bylaws or remove directors without holding a stockholders meeting. The
holder

                                       51
<PAGE>

would have to obtain the consent of a majority of the board of directors, the
chairman of the board or the chief executive officer to call a stockholders'
meeting and satisfy the notice periods determined by the board of directors.
Our amended and restated certificate of incorporation to be in effect upon the
closing of this offering provides for the elimination of actions by written
consent of stockholders upon the closing of this offering.

Transfer Agent and Registrar

   The transfer agent and registrar for our common stock is EquiServe.

Nasdaq Stock Market Listing

   We have applied to have our common stock listed on the Nasdaq National
Market for quotation under the symbol "ILMN".

                                       52
<PAGE>

                        SHARES ELIGIBLE FOR FUTURE SALE

   Prior to this offering, there has been no public market for our stock.
Future sales of substantial amounts of our common stock in the public market
following this offering or the possibility of these sales occurring could
adversely affect prevailing market prices for our common stock or could impair
our ability to raise capital through an offering of equity securities.

   After this offering, we will have outstanding 30,541,095 shares of common
stock, based upon shares outstanding as of March 31, 2000. All of the shares
sold in this offering will be freely tradable without restriction under the
Securities Act except for any shares purchased by our "affiliates" as that term
is defined in Rule 144 under the Securities Act. The remaining 25,541,095
shares of common stock held by existing stockholders are "restricted" shares as
that term is defined in Rule 144 under the Securities Act. We issued and sold
the restricted shares in private transactions in reliance upon exemptions from
registration under the Securities Act. Restricted shares may be sold in the
public market only if they are registered under the Securities Act or if they
qualify for an exemption from registration, such as Rule 144 or 701 under the
Securities Act, which are summarized below.

   Our officers, directors and some of our stockholders, including business
partners, who collectively hold an aggregate of 25,088,827 shares, and the
underwriters have entered into lock-up agreements in connection with this
offering. These lock-up agreements provide that, with limited exceptions, our
officers, directors and other stockholders have agreed not to offer, sell,
contract to sell, grant any option to purchase or otherwise dispose of any of
our shares for a period of 180 days after the effective date of this offering.
Goldman, Sachs & Co. may, in its sole discretion and at any time without prior
notice, release all or any portion of the shares subject to these lock-up
agreements. We have also entered into an agreement with Goldman, Sachs & Co.
that we will not offer, sell or otherwise dispose of our common stock until 180
days after the effective date of this offering.

   Taking into account the lock-up agreements, the number of shares, other than
shares sold in the offering, that will be available for sale in the public
market under the provisions of Rules 144 and 701, will be as follows:

  .  264,768 shares that become eligible for sale at various times between
     the date of this offering and the date 90 days after the effective date
     of this offering;

  .  an additional 15,862,985 shares that become eligible for sale beginning
     180 days after the effective date of this offering;

  .  an additional 82,372 shares that become eligible for sale upon exercise
     of vested options 90 days after the date of this prospectus and an
     additional 41,755 shares that become eligible for sale upon the exercise
     of vested options 180 days after the date of this prospectus; and

  .  an additional 9,413,342 shares that become eligible for sale at various
     times thereafter upon the expiration of applicable holding periods.

   Following the expiration of the lock-up period, shares issued upon exercise
of options granted by us prior to the completion of this offering will also be
available for sale in the public market pursuant to Rule 701 under the
Securities Act unless those shares are held by one of our affiliates, directors
or officers.

   Rule 701 permits resale of shares in reliance upon Rule 144 but without
compliance with restrictions of Rule 144, including the holding period
requirement. In general, under Rule 144 as currently in effect, a person, or
persons whose shares are aggregated, who has beneficially owned restricted
shares for at least one year, including the holding period of any prior owner
except an

                                       53
<PAGE>

affiliate, would be entitled to sell within any three-month period a number of
shares that does not exceed the greater of:

  . one percent of the number of shares of common stock then outstanding,
    which will equal approximately 305,411 shares immediately after the
    offering, or

  . the average weekly trading volume of the common stock during the four
    calendar weeks preceding the filing of a Form 144 with respect to such
    sale.

   Sales under Rule 144 are also subject to manner of sale provisions and
notice requirements and to the availability of current public information about
us. Under Rule 144(k), a person who is not deemed to have been an affiliate of
our company at any time during the three months preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years
including the holding period of any prior owner except an affiliate, is
entitled to sell the shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.

   Rule 701, as currently in effect, permits our employees, officers, directors
or consultants who purchased shares under a written compensatory plan or
contract to resell these shares in reliance upon Rule 144 but without
compliance with specific restrictions. Rule 701 provides that affiliates may
sell their Rule 701 shares under Rule 144 without complying with the holding
period requirement and that non-affiliates may sell these shares in reliance on
Rule 144 without complying with the holding period, public information, volume
limitation or notice provisions of Rule 144.

   We intend to file, shortly after the effectiveness of this offering, a
registration statement on Form S-8 under the Securities Act covering all shares
of common stock reserved for issuance under the stock plans and subject to
outstanding options under our 1998 Incentive Stock Plan. See "Management--Stock
Plans". Shares of common stock issued upon exercise of options under the Form
S-8 will be available for sale in the public market, subject to Rule 144 volume
limitations applicable to affiliates and subject to the contractual
restrictions described above. As of March 31, 2000, options to purchase 932,485
shares of common stock were outstanding. Beginning 90 and 180 days after the
effective date of this offering, approximately 82,372 shares and 41,755 shares,
respectively, issuable upon the exercise of vested stock options will become
eligible for sale in the public market, if the options are exercised.

   Following this offering, the holders of an aggregate of 18,836,297 shares of
outstanding common stock and 43,183 shares of common stock issuable upon the
exercise of warrants have the right to require us to register their shares for
sale upon meeting specific requirements. See "Description of Capital Stock--
Registration Rights" for additional information regarding registration rights.

                                       54
<PAGE>

                                  UNDERWRITING

   Illumina and the underwriters for the offering named below have entered into
an underwriting agreement with respect to the shares being offered. Subject to
specified conditions, each underwriter has severally agreed to purchase the
number of shares indicated in the following table. Goldman, Sachs & Co., Chase
Securities Inc. and SG Cowen Securities Corporation are the representatives of
the underwriters.

<TABLE>
<CAPTION>
                                                                       Number of
                              Underwriters                              Shares
                              ------------                             ---------
   <S>                                                                 <C>
   Goldman, Sachs & Co. ..............................................
   Chase Securities Inc. .............................................
   SG Cowen Securities Corporation ...................................
                                                                       ---------
     Total............................................................ 5,000,000
                                                                       =========
</TABLE>

   Under the terms and conditions of the underwriting agreement, the
underwriters are committed to take and pay for all of the shares offered
hereby, if any are taken. If the underwriters sell more shares than the total
number set forth in the table above, the underwrites have an option to buy up
to an additional 750,000 shares from Illumina to cover such sales. They may
exercise that option for 30 days. If any shares are purchased pursuant to this
option, the underwriters will severally purchase shares in approximately the
same proportion as set forth in the table above.

   The following table shows the per share and total underwriting discounts and
commissions to be paid to the underwriters by Illumina. These amounts are shown
assuming both no exercise and full exercise of the underwriters' option to
purchase additional shares.

<TABLE>
<CAPTION>
                                                           Paid by Illumina
                                                           ----------------
                                                       No Exercise Full Exercise
                                                       ----------- -------------
   <S>                                                 <C>         <C>
   Per Share..........................................     $            $
   Total..............................................     $            $
</TABLE>

   Shares sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus.
Any shares sold by the underwriters to securities dealers may be sold at a
discount of up to $   per share from the initial public offering price. The
securities dealers may resell any shares purchased from the underwriters to
other brokers or dealers at a discount of up to $   per share from the initial
public offering price. If all the shares are not sold at the initial public
offering price, the representatives may change the offering price and the other
selling terms.

   Illumina and its directors, officers, and principal shareholders have agreed
with the underwriters not to dispose of or hedge any of their common stock or
securities convertible into or exchangeable for shares of common stock during
the period from the date of this prospectus continuing through the date 180
days after the date of this prospectus, except with the prior written consent
of the representatives. This restriction does not apply to any issuances under
existing employee benefit plans. See "Shares Eligible For Future Sale" for a
discussion of transfer restrictions.

   Prior to the offering, there has been no public market for the shares. The
initial public offering price will be negotiated among Illumina and the
representatives. Among the factors considered in determining the initial public
offering price of the shares, in addition to prevailing market conditions, are
Illumina's historical performance, estimates of Illumina's business potential
and earnings prospects, an assessment of Illumina's management and the
consideration of the above factors in relation to market valuation of companies
in related businesses.

   Application has been made for quotation of the common stock on the Nasdaq
National Market under the symbol "ILMN".


                                       55
<PAGE>


   In connection with the offering, the underwriters may purchase and sell
shares of common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in the offering. "Covered"
short sales are sales made in an amount not greater than the underwriters'
option to purchase additional shares from the issuer in the offering. The
underwriters may close out any covered short position either by exercising
their option to purchase additional shares or by purchasing shares in the open
market. "Naked" short sales are any sales in excess of such option. The
underwriters must close out any naked short position by purchasing shares in
the open market. A naked short position is more likely to be created if the
underwriters are concerned that there may be downward pressure on the price of
the common stock in the open market after pricing that could adversely affect
investors who purchase in the offering. Stabilizing transactions consist of
various bids for or purchases of common stock made by the underwriters in the
open market prior to the completion of the offering

   The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased shares
sold by or for the account of such underwriter in stabilizing or short covering
transactions.

   Purchases to cover a short position and stabilizing transactions may have
the effect of preventing or retarding a decline in the market price of the
issuer's stock, and together with the imposition of the penalty bid, may
stabilize, maintain or otherwise affect the market price of the common stock.
As a result, the price of the common stock may be higher than the price that
otherwise might exist in the open market. If these activities are commenced,
they may be discontinued at any time. These transactions may be effected on the
Nasdaq National Market, in the over-the-counter market or otherwise.

   The underwriters do not expect sales to discretionary accounts to exceed
five percent of the total number of shares offered.

   At Illumina's request, the underwriters have reserved up to 250,000 shares
of the common stock offered hereby for sale, at the initial public offering
price, to customers and other friends of Illumina through a directed share
program. The number of shares available for sale to the general public will be
reduced to the extent these persons purchase the reserved shares. There can be
no assurance that any of the reserved shares will be so purchased. Any reserved
shares not so purchased will be offered by the underwriters to the general
public on the same basis as other shares offered hereby.

   A prospectus in electronic format may be made available on the web sites
maintained by one or more of the underwriters. The underwriters may agree to
allocate a number of shares to underwriters for sale to their online brokerage
account holders. Internet distributions will be allocated by the
representatives to underwriters that may make Internet distributions on the
same basis as other allocations.

   Illumina estimates that its share of the total expenses of the offering,
excluding the underwriting discount, will be approximately $1,300,000.

   Illumina has agreed to indemnify the underwriters against liabilities,
including liabilities under the Securities Act of 1933.

                                       56
<PAGE>

                           VALIDITY OF THE SECURITIES

   The validity of the common stock offered hereby will be passed upon for us
by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto,
California, and for the underwriters by Sullivan & Cromwell, Washington, D.C.

                                    EXPERTS

   Ernst & Young LLP, independent auditors, have audited our financial
statements at December 31, 1998 and 1999, and for the period from April 28,
1998 (inception) through December 31, 1998 and the year ended December 31,
1999, as set forth in their report, which is included in this Prospectus and in
the registration statement. Our financial statements are included in reliance
on Ernst & Young LLP's report, given on their authority as experts in
accounting and auditing.

                   WHERE YOU CAN FIND ADDITIONAL INFORMATION

   We have filed with the Securities and Exchange Commission, Washington, D.C.,
a registration statement on Form S-1 under the Securities Act with respect to
the shares of common stock offered hereby. This prospectus does not contain all
the information set forth in the registration statement and the exhibits and
schedules thereto. For further information with respect to us and our common
stock, you should refer to the registration statement and to the exhibits and
schedules filed therewith. A copy of the registration statement may be
inspected by anyone without charge at the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549. Copies of all or any portion of the registration statement may be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, upon payment of prescribed fees. The public may
obtain information on the operation of the public reference room by calling the
SEC at 1-800-SEC-0330. The Commission maintains a Web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.

                                       57
<PAGE>

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S>                                                                         <C>
Report of Ernst & Young LLP, Independent Auditors.......................... F-2

Balance Sheets as of December 31, 1998 and 1999 and March 31, 2000
 (unaudited)............................................................... F-3

Statements of Operations for the period from April 28, 1998 (inception) to
 December 31, 1998, the year ended December 31, 1999 and the three months
 ended March 31, 1999 and 2000 (unaudited)................................. F-4

Statements of Stockholders' Equity for the period from April 28, 1998
 (inception) to March 31, 2000............................................. F-5

Statements of Cash Flows for the period from April 28, 1998 (inception) to
 December 31, 1998, the year ended December 31, 1999 and the three months
 ended March 31, 1999 and 2000 (unaudited)................................. F-7

Notes to Financial Statements.............................................. F-8
</TABLE>

                                      F-1
<PAGE>

               REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors
Illumina, Inc.

   We have audited the accompanying balance sheets of Illumina, Inc. as of
December 31, 1998 and 1999, and the related statements of operations,
stockholders' equity, and cash flows for the period from April 28, 1998
(inception) to December 31, 1998 and the year ended December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

   We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

   In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Illumina, Inc. at December
31, 1998 and 1999, and the results of its operations and its cash flows for the
period from April 28, 1998 (inception) to December 31, 1998 and the year ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.

                                          /s/ Ernst & Young LLP

San Diego, California

February 29, 2000,


                                      F-2
<PAGE>

                                 ILLUMINA, INC.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                    Pro forma
                                                                  stockholders'
                                December 31,                      equity as of
                           ------------------------   March 31,     March 31,
                              1998         1999         2000          2000
                           -----------  -----------  -----------  -------------
                                                     (Unaudited)   (Unaudited)
<S>                        <C>          <C>          <C>          <C>
ASSETS
Current assets:
  Cash and cash
   equivalents............ $ 8,233,729  $21,164,114  $15,067,452
  Investments, available
   for sale...............         --    11,924,163   17,649,664
  Accounts receivable.....         --        49,818       22,701
  Other receivable........     102,988      259,117      349,285
  Prepaid expenses and
   other current assets...      71,532       95,833      398,433
                           -----------  -----------  -----------
    Total current assets..   8,408,249   33,493,045   33,487,535
Property and equipment,
 net......................       1,000      291,314      802,031
Intangible assets, net....     113,600       75,733       66,266
Other assets..............      34,566       34,566       74,376
                           -----------  -----------  -----------
    Total assets.......... $ 8,557,415  $33,894,658  $34,430,208
                           ===========  ===========  ===========
LIABILITIES AND
 STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable........ $   129,985  $   318,219  $   349,877
  Accrued liabilities.....      45,685      292,689      745,974
  Note payable............       1,500        1,500          --
                           -----------  -----------  -----------
    Total current
     liabilities..........     177,170      612,408    1,095,851
Deferred revenue..........         --     1,250,000    2,500,000
Commitments
Stockholders' equity:
  Convertible preferred
   stock, no par value,
   50,000,000 shares
   authorized, 11,836,297
   and 18,836,297 shares
   issued and outstanding
   at December 31, 1998
   and 1999, respectively;
   18,836,297 shares
   issued and outstanding
   at March 31, 2000
   (unaudited); 10,000,000
   shares, $.01 par value,
   authorized; no shares
   issued and outstanding
   pro forma (unaudited)..   9,397,998   37,397,998   37,397,998   $       --
  Common stock, $.01 par
   value, 60,000,000
   shares authorized,
   3,456,000 and 5,139,083
   shares issued and
   outstanding at December
   31, 1998 and 1999,
   respectively; 6,704,798
   shares issued and
   outstanding at March
   31, 2000 (unaudited);
   120,000,000 shares
   authorized, 25,541,095
   shares issued and
   outstanding pro forma
   (unaudited)............      34,560       51,391       67,048       255,411
  Additional paid-in
   capital................     380,202    5,288,231   22,741,071    59,950,706
  Deferred compensation...    (286,895)  (4,026,916) (18,767,522)  (18,767,522)
  Unrealized loss on
   investments............         --       (10,689)     (40,120)      (40,120)
  Note receivable.........         --        (4,500)         --            --
  Accumulated deficit.....  (1,145,620)  (6,663,265) (10,564,118)  (10,564,118)
                           -----------  -----------  -----------   -----------
    Total stockholders'
     equity...............   8,380,245   32,032,250   30,834,357   $30,834,357
                           -----------  -----------  -----------   ===========
    Total liabilities and
     stockholders' equity. $ 8,557,415  $33,894,658  $34,430,208
                           ===========  ===========  ===========
</TABLE>

                            See accompanying notes.

                                      F-3
<PAGE>

                                 ILLUMINA, INC.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                          Period from
                           April 28,
                             1998                    Three months ended
                          (inception)  Year ended         March 31,
                          to December   December    ----------------------
                           31, 1998     31, 1999      1999        2000
                          -----------  -----------  ---------  -----------
                                                         (Unaudited)
<S>                       <C>          <C>          <C>        <C>          <C>
Revenue.................. $       --   $   474,026  $  42,233  $    83,205
Costs and expenses:
  General and
   administrative........     345,080    1,348,870    164,529      615,341
  Research and
   development...........     770,901    4,047,876    710,594    2,670,574
  Amortization of
   deferred compensation
   and other non-cash
   compensation charges..      78,187      957,822    100,303    1,185,825
                          -----------  -----------  ---------  -----------
    Total costs and
     expenses............   1,194,168    6,354,568    975,426    4,471,740
                          -----------  -----------  ---------  -----------
Loss from operations.....  (1,194,168)  (5,880,542)  (933,193)  (4,388,535)
Interest income, net ....      48,548      400,764     99,221      497,149
Amortization expense.....         --       (37,867)    (9,467)      (9,467)
                          -----------  -----------  ---------  -----------
Net loss................. $(1,145,620) $(5,517,645) $(843,439) $(3,900,853)
                          ===========  ===========  =========  ===========
Historical net loss per
 share, basic and
 diluted................. $     (1.71) $     (3.91) $   (1.21) $     (2.31)
                          ===========  ===========  =========  ===========
Shares used in
 calculating historical
 net loss per share,
 basic and diluted.......     668,748    1,410,225    696,352    1,685,796
Pro forma net loss per
 share, basic and
 diluted.................              $     (0.40)            $     (0.25)
                                       ===========             ===========
Shares used in
 calculating pro forma
 net loss per share,
 basic and diluted.......               13,696,522              15,701,190
</TABLE>


                            See accompanying notes.

                                      F-4
<PAGE>

                                ILLUMINA, INC.

                      STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                   Convertible preferred stock   Common stock     Additional                Unrealized
                   --------------------------- -----------------   paid-in      Deferred      loss on      Note    Accumulated
                      Shares        Amount      Shares    Amount   capital    compensation  investments receivable   deficit
                   ------------- ------------- ---------  ------  ----------  ------------  ----------- ---------- -----------
<S>                <C>           <C>           <C>        <C>     <C>         <C>           <C>         <C>        <C>
Balance at April
28, 1998.........            --  $         --        --   $  --   $     --    $       --      $   --      $  --    $      --
 Issuance of
 common stock at
 $.01 per share
 for cash........            --            --    600,000   6,000        --            --          --         --           --
 Issuance of
 restricted
 common stock at
 $.01 to $.03 per
 share for cash..            --            --  2,856,000  28,560     15,120           --          --         --           --
 Issuance of
 Series A
 preferred stock
 at $.30 per
 share for cash..      2,499,998       749,999       --      --         --            --          --         --           --
 Issuance of
 Series B
 preferred stock
 at $.926 per
 share for cash..      9,212,147     8,533,000       --      --         --            --          --         --           --
 Issuance of
 Series B
 preferred stock
 at $.926 per
 share for
 nGenetics
 acquisition.....        124,152       114,999       --      --         --            --          --         --           --
 Deferred
 compensation
 related to stock
 options and
 restricted
 stock...........            --            --        --      --     319,818      (319,818)        --         --           --
 Amortization of
 deferred
 compensation....            --            --        --      --         --         32,923         --         --           --
 Deferred
 compensation
 related to
 restricted stock
 purchased by
 consultants.....            --            --        --      --      45,264           --          --         --           --
 Net loss and
 comprehensive
 loss............            --            --        --      --         --            --          --         --    (1,145,620)
                   ------------- ------------- ---------  ------  ---------   -----------     -------     ------   ----------
Balance at
December 31,
1998.............     11,836,297     9,397,998 3,456,000  34,560    380,202      (286,895)        --         --    (1,145,620)
 Issuance of
 common stock
 including
 exercise of
 stock options
 for cash and
 note receivable.            --            --    297,416   2,974        167           --          --         --           --
 Issuance of
 restricted
 common stock for
 cash............            --            --  1,367,000  13,670    109,360           --          --      (4,500)         --
 Issuance of
 common stock for
 technology......            --            --     35,000     350    100,986           --          --         --           --
 Repurchase of
 restricted
 common stock....            --            --    (16,333)   (163)      (327)          --          --         --           --
 Issuance of
 Series C
 preferred stock
 at $4.00 per
 share for cash..      7,000,000    28,000,000       --      --         --            --          --         --           --
 Deferred
 compensation
 related to stock
 options and
 restricted
 stock...........            --            --        --      --   4,334,469    (4,334,469)        --         --           --
<CAPTION>
                       Total
                   stockholders'
                      equity
                   -------------
<S>                <C>
Balance at April
28, 1998.........   $      --
 Issuance of
 common stock at
 $.01 per share
 for cash........        6,000
 Issuance of
 restricted
 common stock at
 $.01 to $.03 per
 share for cash..       43,680
 Issuance of
 Series A
 preferred stock
 at $.30 per
 share for cash..      749,999
 Issuance of
 Series B
 preferred stock
 at $.926 per
 share for cash..    8,533,000
 Issuance of
 Series B
 preferred stock
 at $.926 per
 share for
 nGenetics
 acquisition.....      114,999
 Deferred
 compensation
 related to stock
 options and
 restricted
 stock...........          --
 Amortization of
 deferred
 compensation....       32,923
 Deferred
 compensation
 related to
 restricted stock
 purchased by
 consultants.....       45,264
 Net loss and
 comprehensive
 loss............   (1,145,620)
                   -------------
Balance at
December 31,
1998.............   8,380, 245
 Issuance of
 common stock
 including
 exercise of
 stock options
 for cash and
 note receivable.        3,141
 Issuance of
 restricted
 common stock for
 cash............      118,530
 Issuance of
 common stock for
 technology......      101,336
 Repurchase of
 restricted
 common stock....         (490)
 Issuance of
 Series C
 preferred stock
 at $4.00 per
 share for cash..   28,000,000
 Deferred
 compensation
 related to stock
 options and
 restricted
 stock...........          --
</TABLE>

                                             (continued on following page)


                                      F-5
<PAGE>


                              ILLUMINA, INC.

              STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)

<TABLE>
<CAPTION>
                        Convertible
                      preferred stock       Common stock      Additional                 Unrealized
                   ---------------------- ------------------    paid-in      Deferred      loss on      Note    Accumulated
                     Shares     Amount     Shares    Amount     capital    compensation  investments receivable   deficit
                   ---------- ----------- ---------  -------  -----------  ------------  ----------- ---------- ------------
<S>                <C>        <C>         <C>        <C>      <C>          <C>           <C>         <C>        <C>
 Amortization of
  deferred
  compensation...         --          --        --       --           --        594,448        --         --             --
 Deferred
  compensation
  related to
  restricted
  stock purchased
  by consultants.         --          --        --       --       363,374           --         --         --             --
 Comprehensive
  loss:
 Unrealized loss
  on investments.         --          --        --       --           --            --     (10,689)       --             --
 Net loss........         --          --        --       --           --            --         --         --      (5,517,645)
 Comprehensive
  loss...........         --          --        --       --           --            --         --         --             --
                   ---------- ----------- ---------  -------  -----------  ------------   --------     ------   ------------
Balance at
 December 31,
 1999............  18,836,297  37,397,998 5,139,083   51,391    5,288,231    (4,026,916)   (10,689)    (4,500)    (6,663,265)
 Issuance of
  common stock
  including
  exercise of
  stock options
  for cash
  (unaudited)....         --          --     94,965      950        4,839           --         --         --             --
 Issuance of
  restricted
  common stock
  for cash
  (unaudited)....         --          --  1,290,000   12,900      832,350           --         --         --             --
 Issuance of
  common stock
  for technology
  and services
  (unaudited)....         --          --    186,000    1,860      689,640           --         --         --             --
 Repurchase of
  restricted
  common stock
  (unaudited)....         --          --     (5,250)     (53)        (420)          --         --         --             --
 Repayment of
  note receivable
  (unaudited)....         --          --        --       --           --            --         --       4,500            --
 Deferred
  compensation
  related to
  stock options
  and restricted
  stock
  (unaudited)....         --          --        --       --    15,611,350   (15,611,350)       --         --             --
 Amortization of
  deferred
  compensation
  (unaudited)....         --          --        --       --           --        870,744        --         --             --
 Deferred
  compensation
  related to
  restricted
  stock purchased
  by consultants
  (unaudited)....         --          --        --       --       315,081           --         --         --             --
 Comprehensive
  loss:
 Unrealized loss
  on investments
  (unaudited)....         --          --        --       --           --            --     (29,431)       --             --
 Net loss
  (unaudited)....         --          --        --       --           --            --         --         --      (3,900,853)
 Comprehensive
  loss
  (unaudited)....         --          --        --       --           --            --         --         --             --
                   ---------- ----------- ---------  -------  -----------  ------------   --------     ------   ------------
Balance at March
 31, 2000
 (unaudited).....  18,836,297 $37,397,998 6,704,798  $67,048  $22,741,071  $(18,767,522)  $(40,120)    $  --    $(10,564,118)
                   ========== =========== =========  =======  ===========  ============   ========     ======   ============
<CAPTION>
                       Total
                   stockholders'
                      equity
                   -------------
<S>                <C>
 Amortization of
  deferred
  compensation...       594,448
 Deferred
  compensation
  related to
  restricted
  stock purchased
  by consultants.       363,374
 Comprehensive
  loss:
 Unrealized loss
  on investments.       (10,689)
 Net loss........    (5,517,645)
                   -------------
 Comprehensive
  loss...........    (5,528,334)
                   -------------
Balance at
 December 31,
 1999............    32,032,250
 Issuance of
  common stock
  including
  exercise of
  stock options
  for cash
  (unaudited)....         5,789
 Issuance of
  restricted
  common stock
  for cash
  (unaudited)....       845,250
 Issuance of
  common stock
  for technology
  and services
  (unaudited)....       691,500
 Repurchase of
  restricted
  common stock
  (unaudited)....          (473)
 Repayment of
  note receivable
  (unaudited)....         4,500
 Deferred
  compensation
  related to
  stock options
  and restricted
  stock
  (unaudited)....           --
 Amortization of
  deferred
  compensation
  (unaudited)....       870,744
 Deferred
  compensation
  related to
  restricted
  stock purchased
  by consultants
  (unaudited)....       315,081
 Comprehensive
  loss:
 Unrealized loss
  on investments
  (unaudited)....       (29,431)
 Net loss
  (unaudited)....    (3,900,853)
                   -------------
 Comprehensive
  loss
  (unaudited)....    (3,930,284)
                   -------------
Balance at March
 31, 2000
 (unaudited).....   $30,834,357
                   =============
</TABLE>

                          See accompanying notes.

                                      F-6
<PAGE>

                                 ILLUMINA, INC.

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                            Period from
                           April 28, 1998                Three Months Ended
                           (inception) to Year ended         March 31,
                            December 31,   December    -----------------------
                                1998       31, 1999       1999        2000
                           -------------- -----------  ----------  -----------
                                                            (Unaudited)
<S>                        <C>            <C>          <C>         <C>
Operating activities
Net loss.................   $(1,145,620)  $(5,517,645) $ (843,439) $(3,900,853)
 Adjustments to
  reconcile net loss to
  net cash used in
  operating activities:
 Write-off of assets
  purchased in exchange
  for Series B preferred
  stock..................           399           --          --           --
 Write-off of note
  payable................           --            --          --        (1,500)
 Issuance of stock for
  technology and
  services...............           --        101,336      11,336      691,500
 Depreciation and
  amortization...........           --         42,841       9,467       39,243
 Amortization of premium
  on investments.........           --         53,526      23,436      (44,166)
 Amortization of
  deferred compensation
  and other non-cash
  compensation charges...        78,187       957,822     100,303    1,185,825
 Changes in operating
  assets and
  liabilities:
   Prepaid expenses and
    other current assets.       (71,532)      (24,301)     23,668     (302,600)
   Accounts receivable...           --        (49,818)    (42,233)      27,117
   Other receivable......      (102,988)     (156,129)    (67,975)     (90,168)
   Deferred revenue......           --      1,250,000         --     1,250,000
   Other assets..........       (34,566)          --          --       (39,810)
   Accounts payable......       129,985       188,234      (8,465)      31,658
   Accrued liabilities...        45,685       247,004     (25,685)     453,285
                            -----------   -----------  ----------  -----------
     Net cash used in
      operating
      activities.........    (1,100,450)   (2,907,130)   (819,587)    (700,469)
Investing activities
Purchase of investment
 securities..............           --    (16,244,380) (5,324,791)  (8,710,766)
Maturity of investment
 securities..............           --      4,256,000         --     3,000,000
Purchase of property and
 equipment...............           --       (295,286)        --      (540,493)
                            -----------   -----------  ----------  -----------
Net cash used in
 investing activities....           --    (12,283,666) (5,324,791)  (6,251,259)

Financing activities
Proceeds from note
 payable.................         1,500           --          --           --
Proceeds from stock
 subscription receivable.           --            --          --         4,500
Proceeds from issuance of
 common stock, net of
 repurchased shares......        49,680       121,181         --       850,566
Net proceeds from
 issuance of Series A
 preferred stock.........       749,999           --          --           --
Net proceeds from
 issuance of Series B
 preferred stock.........     8,533,000           --          --           --
Net proceeds from
 issuance of Series C
 preferred stock.........           --     28,000,000         --           --
                            -----------   -----------  ----------  -----------
Net cash provided by
 financing activities....     9,334,179    28,121,181         --       855,066
                            -----------   -----------  ----------  -----------
Net increase (decrease)
 in cash and cash
 equivalents.............     8,233,729    12,930,385  (6,144,378)  (6,096,662)
Cash and cash equivalents
 at beginning of the
 period..................           --      8,233,729   8,233,729   21,164,114
                            -----------   -----------  ----------  -----------
Cash and cash equivalents
 at end of the period....   $ 8,233,729   $21,164,114  $2,089,351  $15,067,452
                            ===========   ===========  ==========  ===========
Non-cash investing and
 financing transactions:
Purchase of property and
 equipment and intangible
 assets in exchange for
 Series B preferred
 stock...................   $   114,999   $       --   $      --   $       --
                            ===========   ===========  ==========  ===========
Issuance of stock for
 stock subscription
 receivable..............   $       --    $     4,500  $      --   $       --
                            ===========   ===========  ==========  ===========
Issuance of stock for
 technology and services.   $       --    $   101,336  $   11,336  $   691,500
                            ===========   ===========  ==========  ===========
</TABLE>



                            See accompanying notes.

                                      F-7
<PAGE>

                                 ILLUMINA, INC.

                         NOTES TO FINANCIAL STATEMENTS

(Information as of March 31, 2000 and for the three months ended March 31, 1999
                          and 2000 is unaudited)

1. Summary of Significant Accounting Policies

 Organization and Business

   Illumina, Inc. (the "Company") was incorporated on April 28, 1998. The
Company is developing next-generation tools that will permit the large-scale
analysis of genetic variation and function. The Company's proprietary BeadArray
technology will provide the throughput, cost effectiveness and flexibility
necessary to enable researchers in the life sciences and pharmaceutical
industries to perform the billions of tests necessary to extract medically
valuable information from advances in genomics. This information will correlate
genetic variation and gene function with particular disease states, enhancing
drug discovery, allowing diseases to be detected earlier and more specifically
and permitting better choices of drugs for individual patients. In addition to
the life sciences and pharmaceutical industries, the Company's technology will
have applicability across a wide variety of industries, including agriculture,
petrochemicals and food, flavor and beverages.

 Use of Estimates

   The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.

 Interim Financial Information

   The financial information as of March 31, 2000 and for the three months
ended March 31, 1999 and 2000 is unaudited and includes all adjustments,
consisting only of normal recurring adjustments, that the Company's management
considers necessary for a fair presentation of the Company's operating results
and cash flows for such periods. Results for the three month period ended March
31, 2000 are not necessary indicative of results to be expected for the full
fiscal year 2000 or any future period.

 Cash and Cash Equivalents

   Cash and cash equivalents are comprised of highly liquid investments with an
original maturity of less than three months when purchased.

 Investments

   The Company applies Statement of Financial Accounting Standards ("SFAS") No.
115, Accounting for Certain Investments in Debt and Equity Securities, to its
investments. Under SFAS No. 115, the Company classifies its investments as
"Available-for-Sale" and records such assets at estimated fair value in the
balance sheet, with unrealized gains and losses, if any, reported in
stockholders' equity.

   At December 31, 1999, investments consist of the following:

<TABLE>
<CAPTION>
                                                                     Unrealized
                                              Amortized    Market       gain
                                                Cost        Value      (loss)
                                             ----------- ----------- ----------
   <S>                                       <C>         <C>         <C>
   Corporate debt securities................ $11,935,562 $11,924,163  $(11,399)
                                             ----------- -----------  --------
                                             $11,935,562 $11,924,163  $(11,399)
                                             =========== ===========  ========
</TABLE>

                                      F-8
<PAGE>


                              ILLUMINA, INC.

                NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 2000 and for the three months ended March 31, 1999
                          and 2000 is unaudited)

   The Company has an unrealized gain of $710 related to cash equivalents,
resulting in total unrealized losses of $10,689 at December 31, 1999.

   At March 31, 2000, investments consist of the following:

<TABLE>
<CAPTION>
                                                                     Unrealized
                                              Amortized    Market       gain
                                                cost        value      (loss)
                                             ----------- ----------- ----------
   <S>                                       <C>         <C>         <C>
   Corporate debt securities................ $17,691,229 $17,649,664  $(41,565)
                                             ----------- -----------  --------
                                             $17,691,229 $17,649,664  $(41,565)
                                             =========== ===========  ========
</TABLE>

   The Company has an unrealized gain of $1,445 related to cash equivalents,
resulting in total unrealized losses of $40,120 at March 31, 2000.

   There were no material realized gains or losses for the year ended December
31, 1999 or for the three months ended March 31, 2000.

   The amortized cost and estimated fair value of corporate debt securities at
March 31, 2000, by contractual maturity, are shown below. Expected maturities
may differ from contractual maturities because the issuers of the securities
may have the right to prepay obligations without prepayment penalties.

<TABLE>
<CAPTION>
                                                                     Estimated
                                                           Cost     Fair Value
                                                        ----------- -----------
   <S>                                                  <C>         <C>
   Due in one year or less............................. $ 7,107,984 $ 7,101,327
   Due after one year through three years..............  10,583,245  10,548,337
                                                        ----------- -----------
                                                        $17,691,229 $17,649,664
                                                        =========== ===========
</TABLE>

 Concentration of Credit Risk

   Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of cash, cash equivalents and
short-term investments. The Company limits its exposure to credit loss by
placing its cash and investments with high credit quality financial
institutions.

 Fair Value of Financial Instruments

   Financial instruments, including cash and cash equivalents, accounts
receivable, accounts payable and accrued liabilities, are carried at cost,
which management believes approximates fair value.

 Property and Equipment

   Property and equipment are stated at cost and depreciated over the estimated
useful lives of the assets (generally three to five years) using the straight-
line method. Amortization of leasehold improvements is computed over the
shorter of the lease term or the estimated useful life of the related assets.

                                      F-9
<PAGE>


                              ILLUMINA, INC.

                NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 2000 and for the three months ended March 31, 1999
                          and 2000 is unaudited)


 Acquired Technology Rights

   The intangible assets consist of acquired technology rights related to the
acquisition of nGenetics in 1998. The purchase price was $114,999, consisting
of 124,152 shares of Series B preferred stock, valued at $0.926 per shares, the
selling price paid in cash by outside investors in a contemporaneous selling of
stock.

   In accordance with APB 17, Accounting for Intangible Assets, the acquired
technology rights are recorded at cost. The rights related to the acquired
technology are being amortized over its estimated useful life (four years) and
the Company has amortized approximately $47,000 through March 31, 2000.

 Long-Lived Assets

   In accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of, if indicators of impairment
exist, the Company assesses the recoverability of the affected long-lived
assets by determining whether the carrying value of such assets can be
recovered through undiscounted future operating cash flows. If impairment is
indicated, the Company measures the future cash flows associated with the use
of the asset. While the Company's current and historical operating and cash
flow losses are indicators of impairment, the Company believes the future cash
flows to be received from the long-lived assets will exceed the assets'
carrying value, and accordingly the Company has not recognized any impairment
losses through March 31, 2000.

 Revenue Recognition

   Revenue from grants is recognized on a percentage of completion basis as
related costs are incurred, provided that amounts earned are not subject to
refund if the research is unsuccessful. Payments received in advance of the
performance or product sale requirements are deferred until the related
performance or product sale requirements have been completed.

 Research and Development

   Expenditures relating to research and development are expensed in the period
incurred.

 Income Taxes

   Current income tax expense is the amount of income taxes expected to be
payable for the current year. A deferred income tax asset or liability is
computed for the expected future impact of differences between the financial
reporting and tax bases of assets and liabilities, as well as the expected
future tax benefit to be derived from tax loss and credit carryforwards.
Deferred income tax expense is generally the net change during the year in the
deferred income tax asset or liability. Valuation allowances are established
when realizability of deferred tax assets is uncertain. The effect of tax rate
changes is reflected in tax expense during the period in which such changes are
enacted.

                                      F-10
<PAGE>


                              ILLUMINA, INC.

                NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 2000 and for the three months ended March 31, 1999
                          and 2000 is unaudited)


 Stock-Based Compensation

   As permitted by SFAS No. 123, Accounting for Stock-Based Compensation, the
Company accounts for common stock options granted, and restricted stock sold,
to employees, founders and directors using the intrinsic value method and,
thus, recognizes no compensation expense for options granted, or restricted
stock sold, with exercise prices equal to or greater than the fair value of the
Company's common stock on the date of the grant. The Company has recorded
deferred stock compensation related to certain stock options, and restricted
stock, which were granted with exercise prices below estimated fair value (see
Note 3), which is being amortized on an accelerated amortization methodology in
accordance with FIN 28.

   Deferred compensation for options granted, and restricted stock sold, to
consultants has been determined in accordance with SFAS No. 123 and EITF 96-18
as the fair value of the consideration received or the fair value of the equity
instruments issued, whichever is more reliably measured. Deferred charges for
options granted, and restricted stock sold, to consultants are periodically
remeasured as the underlying options vest.

 Comprehensive Loss

   In accordance with SFAS No. 130, Reporting Comprehensive Income, the Company
has disclosed comprehensive loss as a component of stockholders' equity.

 Net Loss Per Share

   Basic and diluted net loss per common share are presented in conformity with
SFAS No. 128, Earnings per Share, and SAB 98, for all periods presented. Under
the provisions of SAB 98, common stock and convertible preferred stock that has
been issued or granted for nominal consideration prior to the anticipated
effective date of the initial public offering must be included in the
calculation of basic and diluted net loss per common share as if these shares
had been outstanding for all periods presented. To date, the Company has not
issued or granted shares for nominal consideration.

   In accordance with SFAS No. 128, basic and diluted net loss per share has
been computed using the weighted-average number of shares of common stock
outstanding during the period, less shares subject to repurchase. Pro forma
basic and diluted net loss per common share, as presented in the statements of
operations, has been computed for the year ended December 31, 1999 as described
above, and also gives effect to the assumed conversion of preferred stock which
will automatically convert to common stock immediately prior to the completion
of the Company's initial public offering (using the "as if converted" method)
from the original date of issuance.

                                      F-11
<PAGE>


                              ILLUMINA, INC.

                NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION AS OF MARCH 31, 2000 AND FOR THE THREE MONTHS ENDED MARCH 31, 1999
                          AND 2000 IS UNAUDITED)


   The following table presents the calculation net loss per share:

<TABLE>
<CAPTION>
                              PERIOD FROM
                               APRIL 28,
                                 1998                    THREE MONTHS ENDED
                              (INCEPTION)  YEAR ENDED         MARCH 31,
                              TO DECEMBER   DECEMBER    ----------------------
                               31, 1998     31, 1999      1999        2000
                              -----------  -----------  ---------  -----------
<S>                           <C>          <C>          <C>        <C>
Net loss....................  $(1,145,620) $(5,517,645) $(843,439) $(3,900,853)
                              ===========  ===========  =========  ===========
Basic and diluted net loss
 per share..................  $     (1.71) $     (3.91) $   (1.21) $     (2.31)
                              ===========  ===========  =========  ===========
Weighted-average shares used
 in computing historical net
 loss per share, basic and
 diluted....................      668,748    1,410,225    696,352    1,685,796
Pro forma net loss per
 share, basic and diluted...  $     (0.26) $     (0.40) $   (0.14) $     (0.25)
                              ===========  ===========  =========  ===========
Shares used above...........      668,748    1,410,225    696,352    1,685,796
  Pro forma adjustment to
   reflect weighted-average
   effect of assumed
   conversion of convertible
   preferred stock..........    3,784,570   12,286,297  5,482,121   14,015,394
                              -----------  -----------  ---------  -----------
  Shares used in computing
   pro forma net loss per
   share, basic and diluted.    4,453,318   13,696,522  6,178,473   15,701,190
</TABLE>

   The Company has excluded all convertible preferred stock, outstanding stock
options and warrants, and shares subject to repurchase from the calculation of
diluted loss per common share because all such securities are antidilutive for
all periods presented. The total number of shares excluded from the calculation
of diluted net loss per share, prior to application of the treasury stock
method for options and warrants, was 14,919,900, 22,649,271, 15,073,736 and
24,056,726 for the period from April 28, 1998 (inception) through December 31,
1998, the year ended December 31, 1999 and for the three months ended March 31,
1999 and 2000, respectively. Such securities, had they been dilutive, would
have been included in the computation of diluted net loss per share.

 PRO FORMA STOCKHOLDERS' EQUITY

   Unaudited pro forma stockholders' equity at March 31, 2000 includes the
conversion of all outstanding shares of preferred stock into common stock.

 SEGMENT REPORTING

   The Company has determined that it operates in only one segment.

 EFFECT OF NEW ACCOUNTING STANDARDS

   SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities,
will be effective January 1, 2001. This statement establishes accounting and
reporting standards requiring that every derivative instrument, including
certain derivative instruments imbedded in other contracts, be recorded in the
balance sheet as either an asset or liability measured at its fair value. The
statement

                                      F-12
<PAGE>


                              ILLUMINA, INC.

                NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 2000 and for the three months ended March 31, 1999
                          and 2000 is unaudited)

also requires that changes in the derivative's fair value be recognized in
earnings unless specific hedge accounting criteria are met. The Company
believes the adoption of SFAS No. 133 will not have an effect on the financial
statements because the Company does not engage in derivative or hedging
activities.

2. Balance Sheet Account Details

   Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                      December 31,
                                                     ---------------  March 31,
                                                      1998    1999      2000
                                                     ------ --------  ---------
   <S>                                               <C>    <C>       <C>
   Laboratory equipment............................. $  --  $271,250  $658,518
   Computer equipment...............................  1,000   24,487   161,264
   Furniture and fixtures...........................    --       549    16,998
                                                     ------ --------  --------
                                                      1,000  296,286   836,780
   Accumulated depreciation and amortization........    --    (4,972)  (34,749)
                                                     ------ --------  --------
     Total.......................................... $1,000 $291,314  $802,031
                                                     ====== ========  ========
</TABLE>

   Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
                                                        December 31,
                                                      ---------------- March 31,
                                                       1998     1999     2000
                                                      ------- -------- ---------
   <S>                                                <C>     <C>      <C>
   Compensation...................................... $19,196 $ 94,236 $297,488
   Professional fees.................................  26,489  103,771  340,187
   Sponsored research................................     --    74,667   90,917
   Other.............................................     --    20,015   17,382
                                                      ------- -------- --------
     Total........................................... $45,685 $292,689 $745,974
                                                      ======= ======== ========
</TABLE>

3. Stockholders' Equity

 Common stock

   As of March 31, 2000, the Company has sold, net of repurchased shares,
2,989,083 shares of common stock at $0.01 per share, 797,749 shares at $0.03
per share, 1,441,234 shares at $0.09 per share, 175,000 shares at $0.25 per
share, 711,732 shares at $0.40 per share and 590,000 shares at $1.00 per share,
of which 5,491,417 shares were sold to employees and consultants subject to
restricted stock agreements. The common shares vest in accordance with the
provisions of the agreements, generally over five years. All unvested shares
are subject to repurchase by the Company at the original purchase price. As of
March 31, 2000, 4,244,761 shares of common stock were subject to repurchase.

                                      F-13
<PAGE>


                              ILLUMINA, INC.

                NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 2000 and for the three months ended March 31, 1999
                          and 2000 is unaudited)


 Convertible Preferred Stock

   A summary of convertible preferred stock issued and outstanding as of March
31, 2000 is as follows:

<TABLE>
<CAPTION>
                                                                     Liquidation
                                                            Shares   Preference
                                                          ---------- -----------
   <S>                                                    <C>        <C>
   Series A..............................................  2,499,998 $   749,999
   Series B..............................................  9,336,299   8,647,999
   Series C..............................................  7,000,000  28,000,000
                                                          ---------- -----------
                                                          18,836,297 $37,397,998
                                                          ========== ===========
</TABLE>

   At March 31, 2000, the Company had 2,500,000 shares of Convertible Series A
preferred stock and 2,500,000 shares of Convertible Series A-1 preferred stock
authorized, of which 2,499,998 shares of the Series A preferred stock were
issued and outstanding. The Series A preferred stock was issued at $0.30 per
share for cash.

   In addition, the Company had 12,000,000 shares of Convertible Series B
preferred stock and 12,000,000 shares of Convertible Series B-1 preferred stock
authorized, of which 9,336,299 shares of Series B preferred stock were issued
and outstanding. The Company issued 9,212,147 shares of Series B preferred
stock at $0.926 per share for cash and 124,152 shares of Series B preferred
stock at $0.926 per share in conjunction with the purchase of the net assets of
nGenetics in 1998.

   The Company also has 7,000,000 shares of Convertible Series C preferred
stock and 7,000,000 shares of Convertible Series C-1 preferred stock
authorized. During November and December 1999, the Company sold 7,000,000
shares of Series C convertible preferred stock at $4.00 per share for cash. As
more fully discussed in Note 4, the Company sold 1,250,000 of these shares as
part of a collaborative agreement with PE Corporation. The remaining 5,750,000
Series C shares were sold to institutional investors after the completion of
the PE collaboration.

   The Series A, A-1, B, B-1, C, and C-1 preferred stock are convertible, at
the option of the holder, at any time after the date of issuance, into shares
of common stock. The preferred stock will automatically be converted into
shares of common stock at the then effective conversion price (currently a one-
for-one conversion ratio) (i) upon the closing of a firm commitment
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933 with a sale price per share of common stock of
at least $4.50 and with aggregate proceeds of at least $15,000,000, or (ii)
upon the approval of the holders of more than 66 2/3% of the outstanding shares
of each series of preferred stock. Each holder of Series A, B and C convertible
preferred stock is entitled to one vote for each share of common stock into
which such convertible preferred share would convert.

   In the event of any liquidation, dissolution or winding up of the Company,
the holders of preferred stock are entitled to receive their liquidation value
prior and in preference to any distribution of the assets or surplus funds of
the Company to the holders of common stock. If, upon the occurrence of such
event, the assets and funds distributed among the holders of preferred stock
are insufficient to permit full payment, the entire assets and funds of the
Company would be distributed

                                      F-14
<PAGE>


                              ILLUMINA, INC.

                NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 2000 and for the three months ended March 31, 1999
                          and 2000 is unaudited)

among the preferred stockholders in proportion to the product of the
liquidation preference of each such share and the number of such shares owned
by each such holder. The holders of Series A, B and C convertible preferred
stock are entitled to receive liquidation preferences over the common
stockholders at the rate of $0.30, $0.926, and $4.00 per share, respectively.

 Warrants

   In connection with a lease financing facility (Note 5), in 1998 the Company
issued to Comdisco warrants to purchase 43,183 shares of common stock at $.926
per share. Comdisco may exercise the warrants, in whole or in part, until
November 17, 2005, or 3 years after the closing date of the Company's initial
public offering, whichever is later.

 Stock Options

   In 1998, the Company adopted the 1998 Incentive Stock Plan (the "Plan") and
has reserved 4,500,000 shares of common stock for grants under the Plan. The
Plan provides for the grant of incentive and nonstatutory stock options, stock
bonuses and rights to purchase stock to employees, directors or consultants of
the Company. The Plan provides that incentive stock options will be granted
only to employees at no less than the fair value of the Company's common stock
(no less than 110% of the fair value for nonstatutory stock options), as
determined by the board of directors at the date of the grant. Options
generally vest 20% one year from the date of grant and ratably each month
thereafter for a period of 48 months and expire up to ten years from date of
grant.

   A summary of the Company's stock option activity from April 28, 1998
(inception) through March 31, 2000 follows:

<TABLE>
<CAPTION>
                                                                    Weighted-
                                                                     Average
                                                        Options   Exercise Price
                                                        --------  --------------
   <S>                                                  <C>       <C>
   Outstanding at April 28, 1998 (inception)...........      --       $ --
   Granted.............................................  525,000      $0.02
                                                        --------
   Outstanding at December 31, 1998....................  525,000      $0.02
   Granted.............................................  495,200      $0.10
   Exercised........................................... (297,416)     $0.01
   Cancelled...........................................  (77,584)     $0.03
                                                        --------
   Outstanding at December 31, 1999....................  645,200      $0.08
   Granted (unaudited).................................  382,500      $0.70
   Exercised (unaudited)...............................  (94,965)     $0.06
   Cancelled (unaudited)...............................     (250)     $0.09
                                                        --------
   Outstanding at March 31, 2000 (unaudited)...........  932,485      $0.34
                                                        ========
</TABLE>

                                      F-15
<PAGE>


                              ILLUMINA, INC.

                NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 2000 and for the three months ended March 31, 1999
                          and 2000 is unaudited)

   At March 31, 2000, options to purchase approximately 7,525 shares were
exercisable and 522,384 shares remain available for future grant.

   Following is a further breakdown of the options outstanding as of March 31,
2000:

<TABLE>
<CAPTION>
                                                                              Weighted
                                    Weighted                                  average
                                    average        Weighted                exercise price
      Range of         Options   remaining life    average       Options     of options
   exercise prices   outstanding    in years    exercise price exercisable  exercisable
   ---------------   ----------- -------------- -------------- ----------- --------------
   <S>               <C>         <C>            <C>            <C>         <C>
        $0.03          115,251        3.5           $0.03         7,460        $0.03
        $0.09          397,466        4.1           $0.09            65        $0.09
        $0.25           38,000        4.7           $0.25           --         $0.25
        $0.40          192,268        4.9           $0.40           --         $0.40
        $1.00          189,500        5.0           $1.00           --         $1.00
                       -------                                    -----
                       932,485                                    7,525
                       =======                                    =====
</TABLE>

   Pro forma information regarding net loss is required by SFAS No. 123 and has
been determined as if the Company had accounted for its employee stock options
under the fair value method of that statement. The fair value for these options
was estimated at the dates of grant using the fair value option pricing model
(Black Scholes) with the following weighted-average assumptions for 1999 and
1998: (a) weighted average risk-free interest rate of 6.5%, (b) expected
dividend yield of 0%, (c) anticipated volatility of 70% and (d) five year
estimated life of the options.

   For purposes of adjusted pro forma disclosures, the estimated fair value of
the options is amortized to expense over the vesting period. The Company's
adjusted pro forma information is as follows:

<TABLE>
<CAPTION>
                                        Period from                   Three
                                       April 28, 1998                Months
                                       (inception) to Year ended      Ended
                                        December 31,   December     March 31,
                                            1998       31, 1999       2000
                                       -------------- -----------  -----------
   <S>                                 <C>            <C>          <C>
   Adjusted pro forma net loss........  $(1,091,846)  $(4,868,928) $(3,080,092)
   Adjusted pro forma basic net loss
    per share.........................  $     (1.63)  $     (3.45) $     (1.83)
</TABLE>

   The pro forma effect on net loss presented is not likely to be
representative of the pro forma effects on reported net income or loss in
future years because these amounts reflect less than five years of vesting.

 2000 Employee Stock Purchase Plan

   In February 2000, the board of directors adopted the 2000 Employee Stock
Purchase Plan (the "Purchase Plan"). A total of 500,000 shares of the Company's
common stock have been reserved for issuance under the Purchase Plan. The
Purchase Plan permits eligible employees to purchase common stock at a
discount, but only through payroll deductions, during defined offering periods.
The price at which stock is purchased under the Purchase Plan is equal to 85%
of the fair market value of the common stock on the first or last day of the
offering period, whichever is lower. The initial offering period will commence
on the effective date of the offering. In addition, the Purchase Plan provides
for annual increases of shares available for issuance under the Purchase Plan
beginning with fiscal 2001.

                                      F-16
<PAGE>


                              ILLUMINA, INC.

                NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 2000 and for the three months ended March 31, 1999
                          and 2000 is unaudited)

 Deferred Stock Compensation

   Since the inception of the Company, in connection with the grant of certain
stock options and sales of restricted stock to employees, founders and
directors through March 31, 2000, the Company has recorded deferred stock
compensation totaling approximately $17.3 million, representing the difference
between the exercise or purchase price and the fair value of the Company's
common stock as estimated by the Company's management for financial reporting
purposes on the date such stock options were granted or restricted common stock
was sold. Deferred compensation is included as a reduction of stockholders'
equity and is being amortized to expense over the vesting period of the options
and restricted stock. During the three months ended March 31, 2000, the Company
recorded amortization of deferred stock compensation expense of approximately
$0.8 million.

   In February 2000, the Company modified the consulting agreements with all of
its outside consultants. Under the modified consulting agreements, the
consultants agreed to pay a substantial financial penalty if they did not
fulfill their performance obligations under the agreements. The amount of the
penalty was determined for each consultant based on the intrinsic value of the
unvested restricted common stock based on the original purchase price and the
fair value of the common stock as estimated by the Company's management for
financial reporting purposes on the date of modification. Each consultant had
already vested in a portion of the original restricted common stock in
accordance with the services already provided, and the amounts related to the
vested common stock was expensed. The deferred consultant compensation related
to the unvested stock of $3.0 million was recorded in February 2000 and will be
amortized ratably over the contracted service periods. The Company amortized
approximately $80,000 of this deferred compensation in the three months ended
March 31, 2000.

   The following is a breakdown of the amortization of deferred compensation
and other non-cash charges:

<TABLE>
<CAPTION>
                                  Period from
                                 April 28, 1998              Three Months Ended
                                 (inception) to  Year Ended       March 31,
                                  December 31,  December 31, -------------------
                                      1998          1999       1999      2000
                                 -------------- ------------ -------- ----------
                                                                 (Unaudited)
<S>                              <C>            <C>          <C>      <C>
General and administrative......    $16,095       $345,970   $ 15,596 $  380,496
Research and development........     62,092        611,852     84,707    805,329
                                    -------       --------   -------- ----------
                                    $78,187       $957,822   $100,303 $1,185,825
                                    =======       ========   ======== ==========
</TABLE>

 Shares Reserved for Future Issuance

   At March 31, 2000, the Company has reserved shares of common stock for
future issuance as follows:
<TABLE>
   <S>                                                                <C>
   Conversion of convertible preferred stock......................... 18,836,297
   1998 Incentive Stock Plan.........................................  1,454,869
   Warrants..........................................................     43,183
                                                                      ----------
                                                                      20,334,349
                                                                      ==========
</TABLE>


                                      F-17
<PAGE>


                              ILLUMINA, INC.

                NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 2000 and for the three months ended March 31, 1999
                          and 2000 is unaudited)

4. Collaborative Agreements

 PE Corporation

   In November 1999, the Company signed a collaborative agreement with PE
Corporation ("PE") under which both companies will perform certain research
activities with an objective of developing and commercializing products
utilizing the Company's technology. In conjunction with the agreement,
PE purchased 1,250,000 shares of Series C convertible preferred stock, at $4.00
per share. Under the agreement, PE will provide the Company with non-refundable
research and development support, a portion of which is dependent on the
achievement of certain scientific milestones. Upon commercialization of the
products developed under the collaboration, the Company will share in the
operating profits resulting from the sale of such products, which will be
partially offset by the research funding amounts provided by PE to the Company.
The Company has deferred recognition of income from the research funding
provided by PE, and will recognize such amounts as revenue in conjunction with
the sale of any commercial products resulting from the development efforts.

 Other Agreements

   The Company has various research agreements with governmental and academic
organizations for which the Company performs research activities. These
organizations fund the research efforts, the revenue for which is recognized as
the procedures are performed.

5. Asset and Technology Purchase

   In December 1999, the Company reached a preliminary agreement to acquire
certain tangible assets and rights to certain in-process technologies in
exchange for $100,000 and 175,000 shares of common stock valued at $630,000
($3.60 per share, or 90% of the price at which the Series C Preferred Stock was
sold in December 1999). In March 2000, a final asset purchase agreement was
signed and the transaction closed, at which time the Company recorded the
tangible assets at their fair value of approximately $50,000. As of the date
these technologies were acquired, they had not achieved technological or
commercial feasibility and there is no significant alternative future use
should the Company's development efforts prove unsuccessful. Accordingly, the
Company recorded an acquired in-process technology charge of $680,000 in March
2000 related to the purchase of these technologies.

6. Commitments

 Leases

   The Company leases its primary office facility under an operating lease with
options to renew under varying terms. In addition, the Company entered into a
$1,000,000 lease financing arrangement with a lease financing corporation. As
of December 31, 1999, the Company had utilized all funds available under the
lease arrangement.

   At March 31, 2000, annual future minimum rental payments under the Company's
operating leases for the years ending December 31 are as follows:

<TABLE>
   <S>                                                               <C>
   2000 (nine months)............................................... $  549,669
   2001.............................................................    379,718
   2002.............................................................    177,655
                                                                     ----------
     Total minimum lease payments................................... $1,107,042
                                                                     ==========
</TABLE>


                                      F-18
<PAGE>


                              ILLUMINA, INC.

                NOTES TO FINANCIAL STATEMENTS--(Continued)

(Information as of March 31, 2000 and for the three months ended March 31, 1999
                          and 2000 is unaudited)

   Rent expense for the period from April 28, 1998 to December 31, 1998, the
year ended December 31, 1999 and the three months ended March 31, 2000 was
$138,264, $620,387, and $207,832, respectively.

7. Income Taxes

   At December 31, 1999, the Company has federal and state tax net operating
loss carryforwards of approximately $5,119,000 and $5,262,000, respectively.
The federal and state tax loss carryforwards will begin expiring in 2018 and
2006, respectively, unless previously utilized. The Company also has federal
and state research and development tax credit carryforwards of approximately
$318,000 and $175,000, respectively, which will begin to expire in 2018, unless
previously utilized.

   Pursuant to Sections 382 and 383 of the Internal Revenue Code, annual use of
the Company's net operating loss and credit carryforwards may be limited in the
event of a cumulative change in ownership of more than 50% within a three year
period.

   Significant components of the Company's deferred tax assets as of December
31, 1999 are shown below. A valuation allowance has been recognized as of
December 31, 1999 to offset the deferred tax assets as realization of such
assets is uncertain.

<TABLE>
   <S>                                                               <C>
   Deferred tax assets:
     Net operating loss carryforwards............................... $2,094,000
     Research and development credit carryforwards..................    431,000
     Other..........................................................    224,000
                                                                     ----------
       Total deferred tax assets....................................  2,749,000
   Valuation allowance for deferred tax assets...................... (2,749,000)
                                                                     ----------
   Net deferred taxes............................................... $      --
                                                                     ==========
</TABLE>

8. Retirement Plan

   The Company has a 401(k) savings plan covering substantially all of its
employees. Company contributions to the plan are discretionary and no such
contributions were made in 1999.

9. Subsequent Events (unaudited)

 Loan and Security Agreement

   In April 2000, the Company entered into a $3,000,000 loan arrangement to be
used at its discretion to finance purchases of capital equipment. The loan is
secured by the capital equipment financed.

                                      F-19
<PAGE>

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

   No dealer, salesperson or other person is authorized to give any informa-
tion or to represent anything not contained in this prospectus. You must not
rely on any unauthorized information or representations. This prospectus is an
offer to sell only the shares offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.

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

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Prospectus Summary........................................................    3
Risk Factors..............................................................    8
Forward-Looking Statements................................................   16
Use of Proceeds...........................................................   17
Dividend Policy...........................................................   17
Capitalization............................................................   18
Dilution..................................................................   19
Selected Financial Information............................................   20
Management's Discussion and Analysis of Financial Condition and Results of
 Operations...............................................................   21
Business..................................................................   26
Management................................................................   37
Related Party Transactions................................................   45
Principal Stockholders....................................................   47
Description of Capital Stock..............................................   49
Shares Eligible for Future Sale...........................................   53
Underwriting..............................................................   55
Validity of the Securities................................................   57
Experts...................................................................   57
Where You Can Find Additional Information.................................   57
Index to Financial Statements.............................................  F-1
</TABLE>

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

   Through and including       , 2000 (the 25th day after the date of this
prospectus), all dealers effecting transactions in these securities, whether
or not participating in this offering, may be required to deliver a prospec-
tus. This is in addition to a dealer's obligation to deliver a prospectus when
acting as underwriter and with respect to an unsold allotment or subscription.

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

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

                             5,000,000 Shares

                                Illumina, Inc.

                                 Common Stock

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

                                    [LOGO]

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

                             Goldman, Sachs & Co.
                                   Chase H&Q
                                   SG Cowen

                      Representatives of the Underwriters

-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>

                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

   The following table sets forth the costs and expenses, other than the
underwriting discounts, payable by the Registrant in connection with the sale
of the securities being registered. All amounts are estimates except the SEC
registration fee, the NASD filing fee and the Nasdaq/NMS listing fee.

<TABLE>
   <S>                                                               <C>
   SEC Registration Fee............................................. $   26,400
   NASD Filing Fee..................................................     10,500
   Nasdaq National Market Listing Fee...............................     95,000
   Printing Costs...................................................    225,000
   Legal Fees and Expenses..........................................    425,000
   Accounting Fees and Expenses.....................................    325,000
   Blue Sky Fees and Expenses.......................................      1,500
   Transfer Agent and Registrar Fees................................     10,500
   Miscellaneous....................................................    181,100
                                                                     ----------
     Total.......................................................... $1,300,000
                                                                     ==========
</TABLE>
--------
*  To be filed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

   As permitted by Section 204(a) of the California General Corporation Law,
the Registrant's Amended and Restated Articles of Incorporation eliminate a
director's personal liability for monetary damages to the Registrant and its
shareholders arising from a breach or alleged breach of the director's
fiduciary duty, except for liability arising under Sections 310 and 316 of the
California General Corporation Law or liability for (i) acts or omissions that
involve intentional misconduct or knowing and culpable violation of law, (ii)
acts or omissions that a director believes to be contrary to the best interests
of the Registrant or its shareholders or that involve the absence of good faith
on the part of the director, (iii) any transaction from which a director
derived an improper personal benefit, (iv) acts or omissions that show a
reckless disregard for the director's duty to the Registrant or its
shareholders in circumstances in which the director was aware, or should have
been aware, in the ordinary course of performing a director's duties, of a risk
of serious injury to the Registrant or its shareholders, (v) acts or omissions
that constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the Registrant or its shareholders, (vi)
interested transactions between the corporation and a director in which a
director has a material financial interest, and (vii) liability for improper
distributions, loans or guarantees. This provision does not eliminate the
directors' duty of care, and in appropriate circumstances equitable remedies
such as an injunction or other forms of non-monetary relief would remain
available under California law.

   Sections 204(a) and 317 of the California General Corporation Law authorize
a corporation to indemnify its directors, officers, employees and other agents
in terms sufficiently broad to permit indemnification (including reimbursement
for expenses) under certain circumstances for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"). The Registrant's
Amended and Restated Articles of Incorporation and Bylaws contain provisions
covering indemnification to the maximum extent permitted by the California
General Corporation Law of corporate directors, officers and other agents
against certain liabilities and expenses incurred as a result of proceedings
involving such persons in their capacities as directors, officers employees or
agents, including proceedings under the Securities Act or the Securities
Exchange Act of 1934, as amended. Prior to the effective date of this Offering,
the Registrant will enter into indemnification agreements with its directors
and executive officers.

                                      II-1
<PAGE>

   In connection with its reincorporation in Delaware, the Registrant will be
subject to Section 145 of the Delaware General Corporation Law ("Section 145").
Section 145 permits indemnification of officers and directors of the Company
under certain conditions and subject to certain limitations. Section 145 also
provides that a corporation has the power to maintain insurance on behalf of
its officers and directors against any liability asserted against such person
and incurred by him or her in such capacity, or arising out of his or her
status as such, whether or not the corporation would have the power to
indemnify him or her against such liability under the provisions of Section
145. Upon shareholder approval of such reincorporation, Article VI, Section
6.1, of the Registrant's Bylaws will provide for mandatory indemnification of
its directors and officers and permissible indemnification of employees and
other agents to the maximum extent not prohibited by the Delaware General
Corporation Law. The rights to indemnity thereunder continue as to a person who
has ceased to be a director, officer, employee or agent and inure to the
benefit of the heirs, executors and administrators of the person. In addition,
expenses incurred by a director or executive officer in defending any civil,
criminal, administrative or investigative action, suit or proceeding by reason
of the fact that he or she is or was a director or officer of the Registrant
(or was serving at the Registrant's request as a director or officer of another
corporation) shall be paid by the Registrant in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified by
the Registrant as authorized by the relevant section of the Delaware General
Corporation Law.

   As permitted by Section 102(b)(7) of the Delaware General Corporation Law,
the Registrant's Certificate of Incorporation provides that, pursuant to
Delaware law, its directors shall not be personally liable for monetary damages
for breach of the directors' fiduciary duty as directors to the Registrant and
its stockholders. This provision in the Certificate of Incorporation does not
eliminate the directors' fiduciary duty, and in appropriate circumstances
equitable remedies such as injunctive or other forms of non-monetary relief
will remain available under Delaware law. In addition, each director will
continue to be subject to liability for breach of the director's duty of
loyalty to the Registrant for acts or omission not in good faith or involving
international misconduct, for knowing violations of law, for actions leading to
improper personal benefit to the director, and for payment of dividends or
approval of Stock repurchases or redemptions that are unlawful under Section
174 of the Delaware General Corporation Law. The provision also does not affect
a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. The Registrant has
entered into indemnification agreements with each of its directors and
executive officers. Generally, the indemnification agreements attempt to
provide the maximum protection permitted by Delaware law as it may be amended
from time to time. Moreover, the indemnification agreements provide for certain
additional indemnification. Under such additional indemnification provisions,
however, an individual will not receive indemnification for judgments,
settlements or expenses if he or she is found liable to the Registrant (except
to the extent the court determines he or she is fairly and reasonably entitled
to indemnity for expenses), for settlements not approved by the Registrant or
for settlements and expenses if the settlement is not approved by the court.
The indemnification agreements provide for the Registrant to advance to the
individual any and all reasonable expenses (including legal fees and expenses)
incurred in investigating or defending any such action, suit or proceeding. In
order to receive an advance of expenses, the individual must submit to the
Registrant copies of invoices presented to him or her for such expenses. Also,
the individual must repay such advances upon a final judicial decision that he
or she is not entitled to indemnification.

   The Registrant intends to enter into additional indemnification agreements
with each of its directors and executive officers to effectuate these indemnity
provisions and to purchase directors' and officers' liability insurance.

                                      II-2
<PAGE>

   In addition to the foregoing, the Underwriting Agreement contains certain
provisions by which the Underwriters have agreed to indemnify the Registrant,
each person, if any, who controls the Registrant within the meaning of Section
15 of the Securities Act, each director of the Registrant, each officer of the
Registrant who signs the Registration Statement, with respect to information
furnished in writing by or on behalf of the Underwriters for use in the
Registration Statement.

   At present, there is no pending litigation or proceeding involving a
director, officer, employee or other agent of the Registrant in which
indemnification is being sought, nor is the Registrant aware of any threatened
litigation that may result in a claim for indemnification by any director,
officer, employee or other agent of the Registrant.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

   Since our incorporation in April 1998, we have sold and issued the following
securities:

Common Stock

   (1) In May 1998, we sold 1,075,000 shares of our Common Stock at a price
       of $0.01 per share to a founder and a consultant for $10,750.

   (2) In June 1998, we sold 1,125,000 shares of our Common Stock at a price
       of $0.01 per share to officers and consultants for $11,250.

   (3) In July 1998, we sold 500,000 shares of our Common Stock at a price of
       $0.01 per share to an investor for $5,000 and 220,000 shares of our
       Common Stock at a price of $0.03 per share to consultants for $6,600.

   (4) In August 1998, we sold 20,000 shares of our Common Stock at a price
       of $0.03 per share to a consultant for $600.

   (5) In September 1998, we sold 250,000 shares of Common Stock at a price
       of $0.03 per share to an officer for $7,500.

   (6) In November 1998, we sold 266,000 shares of our Common Stock at a
       price of $0.03 per share to an officer and consultants for $7,980.

   (7) In February 1999, we sold 50,000 shares of our Common Stock at a price
       of $0.09 per share to a director for $4,500.

   (8) In May 1999, we sold 137,500 shares of our Common Stock at a price of
       $0.01 per share to a director and a consultant for $1,357 and 8,333
       shares of our Common Stock at $0.03 per share to a consultant for
       $250. In connection with a technology purchase we issued 10,000 shares
       of our Common Stock valued at a price of $0.09 per share for a total
       value of $900.

   (9) In June 1999, we sold 8,000 shares of our Common Stock at a price of
       $0.09 per share to an employee for $720.

  (10) In July 1999, we sold 14,083 shares of our Common Stock at a price of
       $0.01 per share to an employee for $141.

  (11) In August 1999, we sold 68,750 shares of our Common Stock at a price
       of $0.01 per share to an investor and 9,000 shares of our Common Stock
       at a price of $0.09 per share to a consultant for $810.

  (12) In September 1999, we sold 68,750 shares of our Common Stock at a
       price of $0.01 per share to an investor for $688.

                                      II-3
<PAGE>


  (13) In October 1999, we sold 1,300,000 shares of our Common Stock at a
       price of $0.09 per share to officers for $117,000.

  (14) In November 1999, we sold 25,000 shares of our Common Stock at a price
       of $0.09 per share to an investor for $2,250.

  (15) In January 2000, we sold 175,000 shares of our Common Stock at a price
       of $0.25 per share to an investor, consultants and an employee for
       $43,750.

  (16) In February 2000, we sold 45,082 shares of our Common Stock at a price
       of $0.03 per share to employees for $1,352, 10,275 shares of our
       Common Stock at a price of $0.09 per share to employees for $925, and
       110,299 shares of our Common Stock at a price of $0.40 per share to a
       director, a consultant and employees for $44,120.

  (17) In March 2000, we sold 4,667 shares of our common stock at a price of
       $0.03 per share to employees for $140, 34,209 shares of our Common
       Stock at a price of $0.09 per share to employees for $3,079, 426,433
       shares of our Common Stock at a price of $0.40 per share to a founder,
       consultants and employees for $170,573 and 590,000 shares of our
       common stock at a price of $1.00 per share to employees for $590,000.
       In connection with an asset purchase transaction, we issued 175,000
       shares valued at $0.40 per share for $70,000.

   The sales of the above securities were deemed to be exempt from registration
in reliance on Section 4(2) of the Securities Act as transactions by an issuer
not involving any public offering. All recipients were either accredited or
sophisticated investors, as those terms are defined under the Securities Act.
The recipients of securities in each such transaction represented their
intention to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof and appropriate legends
were affixed to the share certificates and other instruments issued in such
transactions. All recipients either received adequate information about us or
had access, through employment or other relationships, to such information.

Preferred Stock

  (1) In June 1998, we sold an aggregate of 2,499,998 shares of our Series A
      Convertible Preferred Stock to investors at a price of $0.30 per share
      for an aggregate purchase price of $749,999.

  (2) In November 1998, we sold an aggregate of 9,336,299 shares of our
      Series B Convertible Preferred Stock to investors at a price of $0.926
      per share for an aggregate purchase price of $8,648,214.

  (3) In November 1999, we sold 1,250,000 shares of our Series C Convertible
      Preferred Stock to an investor at a price of $4.00 per share for a
      purchase price of $5,000,000.

  (4) In December 1999, we sold an aggregate of 5,750,000 shares of our
      Series C Convertible Preferred Stock to investors at a price of $4.00
      per share for an aggregate purchase price of $23,000,000.

   The sales of the above securities were deemed to be exempt from registration
in reliance on Regulation D under the Securities Act in the case of (1) and
Section 4(2) of the Securities Act in the case of (2), (3) and (4) promulgated
thereunder as transactions by an issuer not involving any public offering. All
recipients were either accredited or sophisticated investors, as those terms
are defined in the Securities Act. The recipients of securities in each such
transaction represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends were affixed to the share
certificates and other instruments issued in such transactions. All recipients
either received adequate information about us or had access, through employment
or other relationships, to such information.

                                      II-4
<PAGE>

Stock Options and Stock Purchase Rights

  (1) From inception through March 2000, we granted stock options and stock
      purchase rights to acquire an aggregate of 4,060,700 shares of our
      Common Stock at prices ranging from $0.01 to $1.00 per share to
      employees, consultants and directors pursuant to our 1998 Incentive
      Stock Plan.

  (2) From inception through March 2000, we issued an aggregate of 3,050,381
      shares of our Common Stock to employees, consultants and directors
      pursuant to the exercise of stock options and stock purchase rights
      under our 1998 Incentive Stock Plan, for aggregate consideration of
      $977,610.

   The sales of the above securities were deemed to be exempt from registration
in reliance on Rule 701 promulgated under Section 3(b) under the Securities Act
as transactions pursuant to a compensatory benefit plan or a written contract
relating to compensation.

Warrants

  (1) In October 1998 we issued a warrant to acquire 43,183 shares of our
      Series B Convertible Preferred Stock at an exercise price of $0.926 per
      share to an investor.

   The sales of the above securities were deemed to be exempt from registration
in reliance on Section 4(2) of the Securities Act as transactions by an issuer
not involving any public offering. The recipient was an accredited and
sophisticated investor, as those terms are defined in the Securities Act. The
recipient represented its intention to acquire the securities for investment
only and not with a view to or for sale in connection with any distribution
thereof and appropriate legends were affixed to the instruments issued in the
transaction. The recipient received adequate information about us and had
access, through their relationship with us, to such information.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

   (a) Exhibits

<TABLE>
 <C>     <S>                                                                <C>
   1.1** Form of Underwriting Agreement
   2.1   Form of Merger Agreement between Illumina, Inc., a California
         corporation, and Illumina, Inc., a Delaware corporation.
   3.1   Form of Certificate of Incorporation of the Registrant to be
         filed after the closing of the offering made under this
         Registration Statement.
   3.2   Form of Bylaws of the Registrant to be in effect after the
         closing of the offering made under this Registration Statement.
   4.1   Specimen Common Stock Certificate.
   4.2   Amended and Restated Investors Rights Agreement, dated November
         5, 1999, by and among the Registrant and certain stockholders of
         the Registrant.
   5.1   Opinion of Wilson Sonsini Goodrich & Rosati, Professional
         Corporation.
  10.1   Form of Indemnification Agreement between the Registrant and
         each of its directors and officers.
  10.2   1998 Incentive Stock Plan.
  10.3   2000 Employee Stock Purchase Plan.
  10.4*  Sublease Agreement dated August 1998 between Registrant and
         Gensia Sicor Inc. for Illumina's principal offices.
 +10.5*  Joint Development Agreement dated November 1999 between
         Registrant and PE Corporation.
 +10.6*  Asset Purchase Agreement dated November 1998 between Registrant
         and nGenetics, Inc.
</TABLE>

                                      II-5
<PAGE>

<TABLE>
 <C>    <S>                                                                <C>
 +10.7* Asset Purchase Agreement dated March 2000 between Registrant and
        Spyder Instruments, Inc.
 +10.8* License Agreement dated May 1998 between Tufts and Registrant.
  10.9  Master Loan and Security Agreement, dated March 6, 2000, by and
        between Registrant and FINOVA Capital Corporation.
  10.10 2000 Stock Plan
  23.1  Consent of Ernst & Young, LLP, Independent Auditors.
  23.2  Consent of Counsel (included in Exhibit 5.1).
  24.1* Power of Attorney (see Page II-7 of the original filing).
  27.1  Financial Data Schedule.
</TABLE>
--------

* Previously filed.

**  To be filed by amendment
+ Confidential treatment requested.

   (b) Financial Statement Schedules

   Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.

ITEM 17. UNDERTAKINGS.

   The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

   Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

   The undersigned registrant hereby undertakes that:

   (1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

   (2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

                                      II-6
<PAGE>

                                   SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Palo Alto, State of
California on July 3, 2000.

                                          Illumina, Inc.

                                                   /s/ Jay T. Flatley
                                          By: _________________________________
                                                      Jay T. Flatley
                                               President and Chief Executive
                                                          Officer

                               POWER OF ATTORNEY

   PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:

<TABLE>
<CAPTION>
              Signature                          Title                Date
              ---------                          -----                ----

<S>                                    <C>                        <C>
        /s/ Jay T. Flatley             President, Chief Executive July 3, 2000
______________________________________  Officer and Director
            Jay T. Flatley              (Principal Executive
                                        Officer)

        /s/ Timothy M. Kish            Vice President of Business July 3, 2000
______________________________________  Development (Principal
           Timothy M. Kish              Accounting Officer)

         John R. Stuelpnagel*          Director                   July 3, 2000
______________________________________
         John R. Stuelpnagel

         Charles M. Hartman*           Director                   July 3, 2000
______________________________________
          Charles M. Hartman

          Robert T. Nelsen*            Director                   July 3, 2000
______________________________________
           Robert T. Nelsen

            George Poste*              Director                   July 3, 2000
______________________________________
       George Poste, DVM, Ph.D.

          William Rastetter*           Director                   July 3, 2000
______________________________________
       William Rastetter, Ph.D.

            David R. Walt*             Director                   July 3, 2000
______________________________________
         David R. Walt, Ph.D.
</TABLE>

    /s/ Jay T. Flatley

*By: _____________________

      Jay T. Flatley

     Attorney-in-Fact

                                      II-7
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
 <C>     <S>
   1.1** Form of Underwriting Agreement.
   2.1   Form of Merger Agreement between Illumina, Inc., a California
         corporation, and Illumina, Inc., a Delaware corporation.
   3.1   Form of Certificate of Incorporation of the Registrant to be filed
         after the closing of the offering made under this Registration
         Statement.
   3.2   Form of Bylaws of the Registrant to be in effect after the closing of
         the offering made under this Registration Statement.
   4.1   Specimen Common Stock Certificate.
   4.2   Amended and Restated Investors Rights Agreement, dated November 5,
         1999, by and among the Registrant and certain stockholders of the
         Registrant.
   5.1   Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
  10.1   Form of Indemnification Agreement between the Registrant and each of
         its directors and officers.
  10.2   1998 Incentive Stock Plan.
  10.3   2000 Employee Stock Purchase Plan.
  10.4*  Sublease Agreement dated August 1998 between Registrant and Gensia
         Sicor Inc. for Illumina's principal offices.
 +10.5*  Joint Development Agreement dated November 1999 between Registrant and
         PE Corporation.
 +10.6*  Asset Purchase Agreement dated November 1998 between Registrant and
         nGenetics, Inc.
 +10.7*  Asset Purchase Agreement dated March 2000 between Registrant and
         Spyder Instruments, Inc.
 +10.8*  License Agreement dated May 1998 between Tufts and Registrant.
  10.9   Master Loan and Security Agreement, dated March 6, 2000, by and
         between Registration and FINOVA Capital Corporation.
  10.10  2000 Stock Plan
  23.1   Consent of Ernst & Young, LLP, Independent Auditors.
  23.2   Consent of Counsel (included in Exhibit 5.1).
  24.1*  Power of Attorney (see Page II-7 of the original filing).
  27.1   Financial Data Schedule.
</TABLE>
--------

* Previously filed.

**  To be filed by amendment.
+ Confidential treatment requested.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>FORM OF MERGER AGREEMENT
<TEXT>

<PAGE>

                                                                     Exhibit 2.1

                         AGREEMENT AND PLAN OF MERGER
                               OF ILLUMINA, INC.
                            A DELAWARE CORPORATION
                                      AND
                           A CALIFORNIA CORPORATION



          THIS AGREEMENT AND PLAN OF MERGER dated as of May __, 2000 (the
"Agreement") is between Illumina, Inc., a Delaware corporation ("Illumina
Delaware") and Illumina, Inc., a California corporation ("Illumina California").
Illumina Delaware and Illumina California are sometimes referred to herein as
the "Constituent Corporations."

                                R E C I T A L S
                                ---------------

          A.  Illumina Delaware is a corporation duly organized and existing
under the laws of the State of Delaware and has an authorized capital of
110,000,000 shares, 60,000,000 of which are designated "Common Stock," $0.01 par
value, and 50,000,000 of which are designated "Preferred Stock," $0.01 par
value.  Of such authorized shares of Preferred Stock, 2,500,000 shares are
designated "Series A Preferred Stock," 2,500,000 shares are designated Series A-
1 Preferred Stock ("Series A-1 Preferred"), 12,000,000 shares are designated
Series B Preferred Stock ("Series B Preferred'), 12,000,000 are designed Series
B-1 Preferred Stock ("Series B-1 Preferred"), 7,000,000 shares are designated
Series C Preferred Stock ("Series C Preferred'), and 7,000,000 shares are
designated Series C-1 Preferred Stock ("Series C-1 Preferred"). As of the date
of this Agreement of Merger, 100 shares of Common Stock were issued and
outstanding, all of which were held by Illumina California.  No shares of
Preferred Stock were outstanding.

          B.  llumina California is a corporation duly organized and existing
under the laws of the State of California and has an authorized capital of
110,000,000 shares, 60,000,000 of which are designated "Common Stock," $0.01 par
value, and 50,000,000 of which are designated "Preferred Stock," $0.01 par
value.  Of such authorized shares of Preferred Stock, 2,500,000 shares are
designated "Series A Preferred Stock," 2,500,000 shares are designated Series A-
1 Preferred Stock ("Series A-1 Preferred"), 12,000,000 shares are designated
Series B Preferred Stock ("Series B Preferred'), 12,000,000 are designed Series
B-1 Preferred Stock ("Series B-1 Preferred"), 7,000,000 shares are designated
Series C Preferred Stock ("Series C Preferred'), and 7,000,000 shares are
designated Series C-1 Preferred Stock ("Series C-1 Preferred"). As of the date
of this Agreement and Plan of Merger, 5,139,083 shares of Common Stock,
2,499,998 shares of Series A Preferred Stock, 9,336,299 shares of Series B
Preferred Stock, and 7,000,000 shares of Series C Preferred Stock were issued
and outstanding. No shares of Series A-1 Preferred Stock, Series B-1 Preferred
Stock, or Series C-1 Preferred stock were issued and outstanding.

          C.  The Board of Directors of Illumina California has determined that,
for the purpose of effecting the reincorporation of Illumina California in the
State of Delaware, it is advisable and in
<PAGE>

the best interests of Illumina California that Illumina California merge with
and into Illumina Delaware upon the terms and conditions herein provided.

          D.  The respective Boards of Directors of Illumina Delaware and
Illumina California have approved this Agreement and have directed that this
Agreement be submitted to a vote of their respective shareholders and executed
by the undersigned officers.

          NOW, THEREFORE, in consideration of the mutual agreements and
covenants set forth herein, Illumina Delaware and Illumina California hereby
agree, subject to the terms and conditions hereinafter set forth, as follows:

                                   I. MERGER

          1.1  Merger.  In accordance with the provisions of this Agreement, the
               ------
Delaware General Corporation Law and the California Corporations Code, Illumina
California shall be merged with and into Illumina Delaware (the "Merger"), the
separate existence of Illumina California shall cease and Illumina Delaware
shall be, and is herein sometimes referred to as, the "Surviving Corporation,"
and the name of the Surviving Corporation shall be Illumina, Inc.

          1.2  Filing and Effectiveness.  The Merger shall become effective when
               ------------------------
the following actions shall have been completed:

               (a) This Agreement and Merger shall have been adopted and
approved by the shareholders of each Constituent Corporation in accordance with
the requirements of the Delaware General Corporation Law and the California
Corporations Code;

               (b) All of the conditions precedent to the consummation of the
Merger specified in this Agreement shall have been satisfied or duly waived by
the party entitled to satisfaction thereof; and

               (c) An executed Agreement and Plan of Merger meeting the
requirements of the Delaware General Corporation Law shall have been filed with
the Secretary of State of the State of Delaware.

          The date and time when the Merger shall become effective, as
aforesaid, is herein called the "Effective Date of the Merger."

          1.3  Effect of the Merger.  Upon the Effective Date of the Merger, the
               --------------------
separate existence of Illumina California shall cease and Illumina Delaware, as
the Surviving Corporation, (i) shall continue to possess all of its assets,
rights, powers and property as constituted immediately prior to the Effective
Date of the Merger, (ii) shall be subject to all actions previously taken by its
and Illumina California's Board of Directors, (iii) shall succeed, without other
transfer, to all of the assets, rights, powers and property of Illumina
California in the manner more fully set forth in Section 259 of the Delaware
General Corporation Law, (iv) shall continue to be subject to all of the

                                      -2-
<PAGE>

debts, liabilities and obligations of Illumina Delaware as constituted
immediately prior to the Effective Date of the Merger, and (v) shall succeed,
without other transfer, to all of the debts, liabilities and obligations of
Illumina California in the same manner as if Illumina Delaware had itself
incurred them, all as more fully provided under the applicable provisions of the
Delaware General Corporation Law and the California Corporations Code.

                II.   CHARTER DOCUMENTS, DIRECTORS AND OFFICERS

          2.1  Certificate of Incorporation.  The Certificate of Incorporation
               ----------------------------
of Illumina Delaware as in effect immediately prior to the Effective Date of the
Merger shall continue in full force and effect as the Certificate of
Incorporation of the Surviving Corporation until duly amended in accordance with
the provisions thereof and applicable law.

          2.2  Bylaws.  The Bylaws of Illumina Delaware as in effect immediately
               ------
prior to the Effective Date of the Merger shall continue in full force and
effect as the Bylaws of the Surviving Corporation until duly amended in
accordance with the provisions thereof and applicable law.

          2.3  Directors and Officers.  The directors and officers of Illumina
               ----------------------
California immediately prior to the Effective Date of the Merger shall be the
directors and officers of the Surviving Corporation until their successors shall
have been duly elected and qualified or as otherwise provided by law, the
Certificate of Incorporation of the Surviving Corporation or the Bylaws of the
Surviving Corporation.

                     III.   MANNER OF CONVERSION OF STOCK

          3.1  Illumina California Common Shares.  Upon the Effective Date of
               ---------------------------------
the Merger, each share of Illumina California Common Stock, $0.01 par value,
issued and outstanding immediately prior thereto shall, by virtue of the Merger,
and without any action by the Constituent Corporations, by the holder of such
shares or by any other person, be converted into and exchanged for one fully
paid and nonassessable share of Common Stock, $0.01 par value, of the Surviving
Corporation.  No fractional share interests of Surviving Corporation Common
Stock shall be issued.  In lieu thereof, any fractional share interests to which
a holder would otherwise be entitled shall be aggregated.

          3.2  Illumina California Preferred Shares.
               ------------------------------------

               (a) Upon the Effective Date of the Merger, each share of Series A
Preferred Stock, Series A-1 Preferred Stock, Series B Preferred Stock, Series B-
1 Preferred Stock, Series C Preferred Stock, and Series C-1 Preferred Stock of
Illumina California, $0.01 par value, issued and outstanding immediately prior
to the Merger, which shares are convertible into such number of shares of
Illumina California Common Stock as set forth in the Illumina California
Articles of Incorporation, as amended, shall, by virtue of the Merger, and
without any action by the Constituent Corporations, by the holder of such shares
or by any other person, be converted into or exchanged for one fully paid and
nonassessable share of Series A Preferred Stock, Series A-1 Preferred Stock,
Series B Preferred Stock, Series B-1 Preferred Stock, Series C Preferred Stock,
or Series C-1 Preferred Stock, $0.01 par value, of the Surviving Corporation,
respectively, having such rights,

                                      -3-
<PAGE>

preferences and privileges as set forth in the Certificate of Incorporation of
the Surviving Corporation, which share of Preferred Stock shall be convertible
into the same number of shares of the Surviving Corporation's Common Stock,
$0.01 par value, as such share of Illumina California Preferred Stock was so
convertible into immediately prior to the Effective Date of the Merger, subject
to adjustment pursuant to the terms of the Certificate of Incorporation of the
Surviving Corporation.

          3.3  Illumina California Options, Stock Purchase Rights and
               ------------------------------------------------------
Convertible Securities.
----------------------

               (a) Upon the Effective Date of the Merger, the Surviving
Corporation shall assume the obligations of Illumina California under, and
continue, the option plans (including without limitation Illumina California's
1998 Incentive Stock Plan) and all other employee benefit plans of Illumina
California. Each outstanding and unexercised option, other right to purchase, or
security convertible into Illumina California Common Stock or Illumina
California Preferred Stock (a "Right") shall become, subject to the provisions
in paragraph (c) hereof, an option, right to purchase or a security convertible
into the Surviving Corporation's Common Stock or Preferred Stock, respectively,
on the basis of one share of the Surviving Corporation's Common Stock or
Preferred Stock, as the case may be, for each one share of Illumina California
Common Stock or Preferred Stock, as the case may be, issuable pursuant to any
such Right, on the same terms and conditions and at an exercise price equal to
the exercise price applicable to any such Illumina California Right at the
Effective Date of the Merger. This paragraph 3.3(a) shall not apply to Illumina
California Common Stock or Preferred Stock. Such Common Stock and Preferred
Stock are subject to paragraph 3.1 and 3.2, respectively, hereof.

               (b) A number of shares of the Surviving Corporation's Common
Stock and Preferred Stock shall be reserved for issuance upon the exercise of
options, stock purchase rights and convertible securities equal to the number of
shares of Illumina California Common Stock and Illumina California Preferred
Stock so reserved immediately prior to the Effective Date of the Merger.

               (c) The assumed Rights shall not entitle any holder thereof to a
fractional share upon exercise or conversion (unless the holder was entitled to
a fractional interest immediately prior to the Merger).  In lieu thereof, any
fractional share interests to which a holder of an assumed Right (other than an
option issued pursuant to Illumina California's 1998 Incentive Stock Plan) would
otherwise be entitled upon exercise or conversion shall be aggregated (but only
with other similar Rights which have the same per share terms).  To the extent
that after such aggregation, the holder would still be entitled to a fractional
share with respect thereto upon exercise or conversion, the holder shall be
entitled upon the exercise or conversion of all such assumed Rights pursuant to
their terms (as modified herein), to one full share of Common Stock or Preferred
Stock in lieu of such fractional share.  With respect to each class of such
similar Rights, no holder will be entitled to more than one full share in lieu
of a fractional share upon exercise or conversion.

          Notwithstanding the foregoing, with respect to options issued under
the Illumina California 1998 Incentive Stock Plan that are assumed in the
Merger, the number of shares of Common Stock

                                      -4-
<PAGE>

to which the holder would be otherwise entitled upon exercise of each such
assumed option following the Merger shall be rounded down to the nearest whole
number and the exercise price shall be rounded up to the nearest whole cent. In
addition, no "additional benefits" (within the meaning of Section 424(a)(2) of
the Internal Revenue Code of 1986, as amended) shall be accorded to the
optionees pursuant to the assumption of their options.

          3.4  Illumina Delaware Common Stock.  Upon the Effective Date of the
               ------------------------------
Merger, each share of Common Stock, $0.01 par value, of Illumina Delaware issued
and outstanding immediately prior thereto shall, by virtue of the Merger, and
without any action by Illumina Delaware, the holder of such shares or any other
person, be canceled and returned to the status of authorized but unissued
shares.

          3.5  Exchange of Certificates.  After the Effective Date of the
               ------------------------
Merger, each holder of an outstanding certificate representing shares of
Illumina California Common Stock or Preferred Stock may be asked to surrender
the same for cancellation to an exchange agent, whose name will be delivered to
holders prior to any requested exchange (the "Exchange Agent"), and each such
holder shall be entitled to receive in exchange therefor a certificate or
certificates representing the number of shares of the Surviving Corporation's
Common Stock or Preferred Stock, as the case may be, into which the surrendered
shares were converted as herein provided.  Until so surrendered, each
outstanding certificate theretofore representing shares of Illumina California
Common Stock or Preferred Stock shall be deemed for all purposes to represent
the number of shares of the Surviving Corporation's Common Stock or Preferred
Stock, respectively, into which such shares of Illumina California Common Stock
or Preferred Stock, as the case may be, were converted in the Merger.

          The registered owner on the books and records of the Surviving
Corporation or the Exchange Agent of any such outstanding certificate shall,
until such certificate shall have been surrendered for transfer or conversion or
otherwise accounted for to the Surviving Corporation or the Exchange Agent, have
and be entitled to exercise any voting and other rights with respect to and to
receive dividends and other distributions upon the shares of Common Stock or
Preferred Stock of the Surviving Corporation represented by such outstanding
certificate as provided above.

          Each certificate representing Common Stock or Preferred Stock of the
Surviving Corporation so issued in the Merger shall bear the same legends, if
any, with respect to the restrictions on transferability as the certificates of
Illumina California so converted and given in exchange therefore, unless
otherwise determined by the Board of Directors of the Surviving Corporation in
compliance with applicable laws.

          If any certificate for shares of the Surviving Corporation's stock is
to be issued in a name other than that in which the certificate surrendered in
exchange therefor is registered, it shall be a condition of issuance thereof
that the certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer, that such transfer otherwise be proper and comply with
applicable securities laws and that the person requesting such transfer pay to
the Exchange Agent any transfer or other taxes payable by reason of issuance of
such new certificate in a name other than

                                      -5-
<PAGE>

that of the registered holder of the certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
payable.

                                IV.    GENERAL

          4.1  Covenants of Illumina Delaware. Illumina Delaware covenants and
               ------------------------------
agrees that it will, on or before the Effective Date of the Merger:

               (a) Qualify to do business as a foreign corporation in the State
of California and, in connection therewith, irrevocably appoint an agent for
service of process as required under the provisions of Section 2105 of the
California Corporations Code.

               (b) File any and all documents with the California Franchise Tax
Board necessary for the assumption by Illumina Delaware of all of the franchise
tax liabilities of Illumina California.

               (c) Take such other actions as may be required by the California
Corporations Code.

          4.2  Further Assurances.  From time to time, as and when required by
               ------------------
Illumina Delaware or by its successors or assigns, there shall be executed and
delivered on behalf of Illumina California such deeds and other instruments, and
there shall be taken or caused to be taken by it such further and other actions
as shall be appropriate or necessary in order to vest or perfect in or conform
of record or otherwise by Illumina Delaware the title to and possession of all
the property, interests, assets, rights, privileges, immunities, powers,
franchises and authority of Illumina California and otherwise to carry out the
purposes of this Agreement, and the officers and directors of Illumina Delaware
are fully authorized in the name and on behalf of Illumina California or
otherwise to take any and all such action and to execute and deliver any and all
such deeds and other instruments.

          4.3  Abandonment.  At any time before the Effective Date of the
               -----------
Merger, this Agreement may be terminated and the Merger may be abandoned for any
reason whatsoever by the Board of Directors of either Illumina California or of
Illumina Delaware, or of both, notwithstanding the approval of this Agreement by
the shareholders of Illumina California or by the sole stockholder of Illumina
Delaware, or by both.

          4.4  Amendment.  The Boards of Directors of the Constituent
               ---------
Corporations may amend this Agreement at any time prior to the filing of this
Agreement (or certificate in lieu thereof) with the Secretary of State of the
State of Delaware, provided that an amendment made subsequent to the adoption of
this Agreement by the stockholders of either Constituent Corporation shall not:
(a) alter or change the amount or kind of shares, securities, cash, property
and/or rights to be received in exchange for or on conversion of all or any of
the shares of any class or series thereof of such Constituent Corporation, (b)
alter or change any term of the Certificate of Incorporation of the Surviving
Corporation to be effected by the Merger, or (c) alter or change any of the
terms and conditions of this Agreement if such alteration or change would
adversely affect the holders of any class or series of capital stock of either
Constituent Corporation.

                                      -6-
<PAGE>

          4.5  Registered Office.  The registered office of the Surviving
               -----------------
Corporation in the State of Delaware is 1209 Orange Street, Wilmington, County
of New Castle, Delaware 19801 and The Corporation Trust Company is the
registered agent of the Surviving Corporation at such address.

          4.6  Agreement.  Executed copies of this Agreement will be on file at
               ---------
the principal place of business of the Surviving Corporation at 9390 Towne
Centre Drive, Suite 200, San Diego, CA 92121, and copies thereof will be
furnished to any shareholder of either Constituent Corporation, upon request and
without cost.

          4.7  Governing Law.  This Agreement shall in all respects be
               -------------
construed, interpreted and enforced in accordance with and governed by the laws
of the State of Delaware and, so far as applicable, the merger provisions of the
California Corporations Code.

          4.8  FIRPTA Notification.  (a) On the Effective Date of the Merger,
               -------------------
Illumina California shall deliver to Illumina Delaware, as agent for the
shareholders of Illumina California, a properly executed statement (the
"Statement") substantially in the form attached hereto as Exhibit A.  Illumina
Delaware shall retain the Statement for a period of not less than seven years
and shall, upon request, provide a copy thereof to any person that was a
shareholder of Illumina California immediately prior to the Merger.  In
consequence of the approval of the Merger by the shareholders of Illumina
California, (i) such shareholders shall be considered to have requested that the
Statement be delivered to Illumina Delaware as their agent and (ii) Illumina
Delaware shall be considered to have received a copy of the Statement at the
request of the Illumina California shareholders for purposes of satisfying
Illumina Delaware's obligations under Treasury Regulation Section 1.1445-
2(c)(3).

               (b) Illumina California shall deliver to the Internal Revenue
Service a notice regarding the Statement in accordance with the requirements of
Treasury Regulation Section 1.897-2(h)(2).

                                      -7-
<PAGE>

          IN WITNESS WHEREOF, this Agreement having first been approved by the
Boards of Directors of Illumina Delaware and Illumina California is hereby
executed on behalf of each of such two corporations and attested by their
respective officers thereunto duly authorized.

                                       ILLUMINA, INC.
                                       a Delaware corporation


                                       By: ___________________________________
                                           Jay T. Flatley, President and Chief
                                           Executive Officer

ATTEST:


__________________________
Michael J. O'Donnell
Secretary

                                       ILLUMINA, INC.
                                       a California corporation


                                       By:___________________________________
                                          Jay T. Flatley, President and Chief
                                          Executive Officer

ATTEST:


__________________________
Michael J. O'Donnell
Secretary




ILLUMINA, INC.
AGREEMENT & PLAN OF MERGER
<PAGE>

                                   Exhibit A
                                   ---------

                                                                   May ___, 2000
TO THE SHAREHOLDERS OF ILLUMINA, INC.:

     In connection with the reincorporation (the "Reincorporation") in Delaware
of Illumina, Inc., a California corporation (the "Company"), pursuant to the
Agreement and Plan of Merger (the "Agreement") dated as of May __, 2000 between
the Company and Illumina, Inc., a Delaware corporation and wholly-owned
subsidiary of the Company ("Illumina Delaware"), your shares of Company stock
will be replaced by shares of stock in Illumina Delaware.

     In order to establish that (i) you will not be subject to tax under Section
897 of the Internal Revenue Code of 1986, as amended (the "Code"), in
consequence of the Reincorporation and (ii) Illumina Delaware will not be
required under Section 1445 of the Code to withhold taxes from the Illumina
Delaware stock that you will receive in connection therewith, the Company hereby
represents to you that, as of the date of this letter, shares of Company stock
do not constitute a "United States real property interest" within the meaning of
Section 897(c) of the Code and the regulations issued thereunder.

     A copy of this letter will be delivered to Illumina Delaware pursuant to
Section 4.8 of the Agreement.

     Under penalties of perjury, the undersigned officer of the Company hereby
declares that, to the best knowledge and belief of the undersigned, the facts
set forth herein are true and correct.

                                             Sincerely,


                                             ________________________________
                                             Jay T. Flatley, Chief Executive
                                             Officer and President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>FORM OF CERTIFICATE OF INCORPORATION
<TEXT>

<PAGE>

                                                                     EXHIBIT 3.1

               AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                                 ILLUMINA, INC.

     Illumina, Inc., a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:

     A.  The name of the corporation is Illumina, Inc.  The corporation was
originally incorporated under the same name, and the original Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware on
_________, 2000.

     B.  Pursuant to Sections 242 and 245 of the General Corporation Law of the
State of Delaware, this Restated Certificate of Incorporation restates and
amends the provisions of the Certificate of Incorporation of the corporation.

     C.  The text of the Certificate of Incorporation is hereby amended and
restated in its entirety to read as follows:

                                   ARTICLE I

     The name of this corporation is Illumina, Inc.

                                   ARTICLE II

     The address of the corporation's registered office in the State of Delaware
is 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801.
The name of its registered agent at such address is The Corporation Trust
Company.

                                  ARTICLE III

     The purpose of the corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
Delaware.

                                   ARTICLE IV

     The corporation is authorized to issue two classes of shares of stock to be
designated, respectively, Common Stock, $0.001 par value, and Preferred Stock,
$0.001 par value. The total number of shares that the corporation is authorized
to issue is 130,000,000 shares. The number of shares of Common Stock authorized
is 120,000,000. The number of shares of Preferred authorized is 10,000,000.
<PAGE>

     The Preferred Stock may be issued from time to time in one or more series
pursuant to a resolution or resolutions providing for such issue duly adopted by
the board of directors (authority to do so being hereby expressly vested in the
board). The board of directors is further authorized to determine or alter the
rights, preferences, privileges and restrictions granted to or imposed upon any
wholly unissued series of Preferred Stock and to fix the number of shares of any
series of Preferred Stock and the designation of any such series of Preferred
Stock. The board of directors, within the limits and restrictions stated in any
resolution or resolutions of the board of directors originally fixing the number
of shares constituting any series, may increase or decrease (but not below the
number of shares of any such series then outstanding) the number of shares of
any series subsequent to the issue of shares of that series.

     The authority of the board of directors with respect to each such class or
series shall include, without limitation of the foregoing, the right to
determine and fix:

          (a) the distinctive designation of such class or series and the number
of shares to constitute such class or series;

          (b) the rate at which dividends on the shares of such class or series
shall be declared and paid, or set aside for payment, whether dividends at the
rate so determined shall be cumulative or accruing, and whether the shares of
such class or series shall be entitled to any participating or other dividends
in addition to dividends at the rate so determined, and if so, on what terms;

          (c) the right or obligation, if any, of the corporation to redeem
shares of the particular class or series of Preferred Stock and, if redeemable,
the price, terms and manner of such redemption;

          (d) the special and relative rights and preferences, if any, and the
amount or amounts per share that the shares of such class or series of Preferred
Stock shall be entitled to receive upon any voluntary or involuntary
liquidation, dissolution or winding up of the corporation;

          (e) the terms and conditions, if any, upon which shares of such class
or series shall be convertible into, or exchangeable for, shares of capital
stock of any other class or series, including the price or prices or the rate or
rates of conversion or exchange and the terms of adjustment, if any;

          (f) the obligation, if any, of the corporation to retire, redeem or
purchase shares of such class or series pursuant to a sinking fund or fund of a
similar nature or otherwise, and the terms and conditions of such obligation;

          (g) voting rights, if any, on the issuance of additional shares of
such class or series or any shares of any other class or series of Preferred
Stock;

          (h) limitations, if any, on the issuance of additional shares of such
class or series or any shares of any other class or series of Preferred Stock;
and

                                      -2-
<PAGE>

          (i) such other preferences, powers, qualifications, special or
relative rights and privileges thereof as the board of directors of the
corporation, acting in accordance with this Restated Certificate of
Incorporation, may deem advisable and are not inconsistent with law and the
provisions of this Restated Certificate of Incorporation.

                                   ARTICLE V

     The corporation reserves the right to amend, alter, change, or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon the stockholders
herein are granted subject to this right.

                                   ARTICLE VI

     The corporation is to have perpetual existence.

                                  ARTICLE VII

     1.  Limitation of Liability.  To the fullest extent permitted by the
         -----------------------
General Corporation Law of the State of Delaware as the same exists or as may
hereafter be amended, a director of the corporation shall not be personally
liable to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director.

     2.  Indemnification.  The corporation shall indemnify to the fullest
         ---------------
extent permitted by law any person made or threatened to be made a party to an
action or proceeding, whether criminal, civil, administrative or investigative,
by reason of the fact that such person or his or her testator or intestate is or
was a director or officer of the corporation, or any predecessor of the
corporation, or serves or served at any other enterprise as a director, officer
or employee at the request of the corporation or any predecessor to the
corporation and may indemnify to the fullest extent permitted by law any person
made or threatened to be made a party to an action or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact that
such person or his or her testator or intestate is or was an employee of the
corporation, or any predecessor of the corporation, or serves or served at any
other enterprise as a director, officer or employee at the request of the
corporation or any predecessor to the corporation.

     3.  Amendments. Neither any amendment nor repeal of this Article VII, nor
         ----------
the adoption of any provision of the corporation's Certificate of Incorporation
inconsistent with this Article VII, shall eliminate or reduce the effect of this
Article VII, in respect of any matter occurring, or any action or proceeding
accruing or arising or that, but for this Article VII, would accrue or arise,
prior to such amendment, repeal, or adoption of an inconsistent provision.

                                      -3-
<PAGE>

                                  ARTICLE VIII

     In the event any shares of Preferred Stock shall be redeemed or converted
pursuant to the terms hereof, the shares so converted or redeemed shall not
revert to the status of authorized but unissued shares, but instead shall be
canceled and shall not be re-issuable by the corporation.

                                   ARTICLE IX

     Holders of stock of any class or series of the corporation shall not be
entitled to cumulate their votes for the election of directors or any other
matter submitted to a vote of the stockholders, unless such cumulative voting is
required pursuant to Sections 214 of the Delaware General Corporation Law, in
which event each such holder shall be entitled to as many votes as shall equal
the number of votes which (except for this provision as to cumulative voting)
such holder would be entitled to cast for the election of directors with respect
to his shares of stock multiplied by the number of directors to be elected by
him, and the holder may cast all of such votes for a single director or may
distribute them among the number of directors to be voted for, or for any two or
more of them as such holder may see fit, so long as the name of the candidate
for director shall have been placed in nomination prior to the voting and the
stockholder, or any other holder of the same class or series of stock, has given
notice at the meeting prior to the voting of the intention to cumulate votes.

     1.  Number of Directors. The number of directors which constitutes the
         -------------------
whole Board of Directors of the corporation shall be designated in the Amended
and Restated Bylaws of the corporation. The directors shall be divided into
three classes with the term of office of the first class (Class I) to expire at
the annual meeting of stockholders held in 2001; the term of office of the
second class (Class II) to expire at the annual meeting of stockholders held in
2002; the term of office of the third class (Class III) to expire at the annual
meeting of stockholders held in 2003; and thereafter for each such term to
expire at each third succeeding annual meeting of stockholders after such
election.

     2.  Election of Directors. Elections of directors need not be by written
         ---------------------
ballot unless the Amended and Restated Bylaws of the corporation shall so
provide.

                                   ARTICLE X

     In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter, amend or repeal
the Amended and Restated Bylaws of the corporation.

                                   ARTICLE XI

     No action shall be taken by the stockholders of the corporation except at
an annual or special meeting of the stockholders called in accordance with the
Amended and Restated Bylaws, no special meetings of the stockholders shall be
called by stockholders without approval of the Board of

                                      -4-
<PAGE>

Directors, and no action, including the removal of directors without cause shall
be taken by the stockholders by written consent. The affirmative vote of sixty-
six and two-thirds percent (66 2/3%) of the then outstanding voting securities
of the corporation, voting together as a single class, shall be required for the
amendment, repeal or modification of the provisions of Article IX, Article X or
Article XII of this Amended and Restated Certificate of Incorporation or
Sections 2.3 (Special Meeting), 2.4 (Notice of Stockholders' Meeting), 2.4
(Advanced Notice of Stockholder Nominees and Stockholder Business), 2.8
(Voting), or 2.10 (Stockholder Action by Written Consent Without a Meeting), or
3.2 (Number of Directors) of the corporation's Amended and Restated Bylaws.

                                  ARTICLE XII

     Meetings of stockholders may be held within or without the State of
Delaware, as the Amended and Restated Bylaws may provide. The books of the
corporation may be kept (subject to any provision contained in the statutes)
outside of the State of Delaware at such place or places as may be designated
from time to time by the Board of Directors or in the Amended and Restated
Bylaws of the corporation.

                                      -5-
<PAGE>

          IN WITNESS WHEREOF, Illumina, Inc. has caused this certificate to be
signed by Jay T. Flatley, its President and Chief Executive Officer, this ____
day of ____________, 2000.

                                    ___________________________________________
                                    Jay T. Flatley,
                                    President and Chief Executive Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>FORM OF BYLAWS OF THE REGISTRANT
<TEXT>

<PAGE>

                                                                     Exhibit 3.2

                                    BYLAWS

                                      OF

                                ILLUMINA, INC.


<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                          Page
                                                                                                          ----
<S>                                                                                                       <C>
ARTICLE I................................................................................................   1

      1.1   REGISTERED OFFICE............................................................................   1
            -----------------
      1.2   OTHER OFFICES................................................................................   1
            -------------

ARTICLE II...............................................................................................   1

      2.1   PLACE OF MEETINGS............................................................................   1
            -----------------
      2.2   ANNUAL MEETING...............................................................................   1
            --------------
      2.3   SPECIAL MEETING..............................................................................   2
            ---------------
      2.4   NOTICE OF STOCKHOLDERS' MEETINGS.............................................................   2
            --------------------------------
      2.5   MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.................................................   2
            --------------------------------------------
      2.6   QUORUM.......................................................................................   2
            ------
      2.7   ADJOURNED MEETING; NOTICE....................................................................   2
            -------------------------
      2.8   VOTING.......................................................................................   3
            ------
      2.9   WAIVER OF NOTICE.............................................................................   3
            ----------------
      2.10  RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS..................................   3
            -----------------------------------------------------------
      2.11  PROXIES......................................................................................   4
            -------
      2.12  LIST OF STOCKHOLDERS ENTITLED TO VOTE........................................................   4
            -------------------------------------

ARTICLE III..............................................................................................   4

      3.1   POWERS.......................................................................................   4
            ------
      3.2   NUMBER OF DIRECTORS..........................................................................   5
            -------------------
      3.3   ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS......................................   5
            -------------------------------------------------------
      3.4   RESIGNATION AND VACANCIES....................................................................   5
            -------------------------
      3.5   PLACE OF MEETINGS; MEETINGS BY TELEPHONE.....................................................   6
            ----------------------------------------
      3.6   FIRST MEETINGS...............................................................................   6
            --------------
      3.7   REGULAR MEETINGS.............................................................................   7
            ----------------
      3.8   SPECIAL MEETINGS; NOTICE.....................................................................   7
            ------------------------
      3.9   QUORUM.......................................................................................   7
            ------
      3.10  WAIVER OF NOTICE.............................................................................   7
            ----------------
      3.11  ADJOURNED MEETING; NOTICE....................................................................   7
            -------------------------
      3.12  BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING............................................   8
            -------------------------------------------------
      3.13  FEES AND COMPENSATION OF DIRECTORS...........................................................   8
            ----------------------------------
      3.14  APPROVAL OF LOANS TO OFFICERS................................................................   8
            -----------------------------
      3.15  REMOVAL OF DIRECTORS.........................................................................   8
            --------------------

ARTICLE IV...............................................................................................   8

      4.1  COMMITTEES OF DIRECTORS......................................................................    8
           -----------------------
</TABLE>

                                      -i-

<PAGE>

                               TABLE OF CONTENTS
                                 (continued)

<TABLE>
<CAPTION>
                                                                                                          Page
                                                                                                          ----
<S>                                                                                                       <C>
      4.2  COMMITTEE MINUTES............................................................................    9
           -----------------
      4.3  MEETINGS AND ACTION OF COMMITTEES............................................................    9
           ---------------------------------

ARTICLE V................................................................................................  10

      5.1   OFFICERS.....................................................................................  10
            --------
      5.2   ELECTION OF OFFICERS.........................................................................  10
            --------------------
      5.3   SUBORDINATE OFFICERS.........................................................................  10
            --------------------
      5.4   REMOVAL AND RESIGNATION OF OFFICERS..........................................................  10
            -----------------------------------
      5.5   VACANCIES IN OFFICES.........................................................................  10
            --------------------
      5.6   CHAIRMAN OF THE BOARD........................................................................  11
            ---------------------
      5.7   PRESIDENT....................................................................................  11
            ---------
      5.8   VICE PRESIDENT...............................................................................  11
            --------------
      5.9   SECRETARY....................................................................................  11
            ---------
      5.10  TREASURER....................................................................................  12
            ---------
      5.11  ASSISTANT SECRETARY..........................................................................  12
            -------------------
      5.12  ASSISTANT TREASURER..........................................................................  12
            -------------------
      5.13  AUTHORITY AND DUTIES OF OFFICERS.............................................................  12
            --------------------------------

ARTICLE VI...............................................................................................  13

      6.1  INDEMNIFICATION OF DIRECTORS AND OFFICERS....................................................   13
           -----------------------------------------
      6.2  INDEMNIFICATION OF OTHERS....................................................................   13
           -------------------------
      6.3  INSURANCE....................................................................................   13
           ---------

ARTICLE VII..............................................................................................  14

      7.1  MAINTENANCE AND INSPECTION OF RECORDS........................................................   14
           -------------------------------------
      7.2  INSPECTION BY DIRECTORS......................................................................   14
           -----------------------
      7.3  ANNUAL STATEMENT TO STOCKHOLDERS.............................................................   15
           --------------------------------
      7.4  REPRESENTATION OF SHARES OF OTHER CORPORATIONS...............................................   15
           ----------------------------------------------

ARTICLE VIII.............................................................................................  15

      8.1   CHECKS.......................................................................................  15
            ------
      8.2   EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS.............................................  15
            ------------------------------------------------
      8.3   STOCK CERTIFICATES; PARTLY PAID SHARES.......................................................  15
            --------------------------------------
      8.4   SPECIAL DESIGNATION ON CERTIFICATES..........................................................  16
            -----------------------------------
      8.5   LOST CERTIFICATES............................................................................  16
            -----------------
      8.6   CONSTRUCTION; DEFINITIONS....................................................................  17
            -------------------------
      8.7   DIVIDENDS....................................................................................  17
            ---------
      8.8   FISCAL YEAR..................................................................................  17
            -----------
      8.9   SEAL.........................................................................................  17
            ----
</TABLE>

                                     -ii-

<PAGE>

                               TABLE OF CONTENTS
                                 (continued)

<TABLE>
<CAPTION>
                                                                                                          Page
                                                                                                          ----
<S>                                                                                                       <C>
      8.10  TRANSFER OF STOCK............................................................................  17
            -----------------
      8.11  STOCK TRANSFER AGREEMENTS....................................................................  17
            -------------------------
      8.12  REGISTERED STOCKHOLDERS......................................................................  18
            -----------------------

ARTICLE IX...............................................................................................  18

ARTICLE X................................................................................................  18

ARTICLE XI...............................................................................................  19

      11.1  APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES..................................................  19
            -------------------------------------------
      11.2  DUTIES OF CUSTODIAN..........................................................................  19
            -------------------------------------------
</TABLE>

                                     -iii-

<PAGE>


                                    BYLAWS
                                    ------

                                      OF
                                      --

                                ILLUMINA, INC.
                                --------------


                                   ARTICLE I

                               CORPORATE OFFICES
                               -----------------

     1.1  REGISTERED OFFICE
          -----------------

     The registered office of the corporation shall be 1209 Orange Street, in
the City of Wilmington, County of New Castle, State of Delaware.  The name of
the registered agent of the corporation at such location is Corporation Trust
Company.

     1.2  OTHER OFFICES
          -------------

     The board of directors may at any time establish other offices at any place
or places where the corporation is qualified to do business.

                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS
                            ------------------------

     2.1  PLACE OF MEETINGS
          -----------------

     Meetings of stockholders shall be held at any place, within or outside the
State of Delaware, designated by the board of directors.  In the absence of any
such designation, stockholders' meetings shall be held at the registered office
of the corporation.

     2.2  ANNUAL MEETING
          --------------

     The annual meeting of stockholders shall be held each year on a date and at
a time designated by the board of directors.  In the absence of such
designation, the annual meeting of stockholders shall be held on the Second
Tuesday of May in each year at 10:00 a.m.  However, if such day falls on a legal
holiday, then the meeting shall be held at the same time and place on the next
succeeding full business day.  At the meeting, directors shall be elected and
any other proper business may be transacted.
<PAGE>

     2.3  SPECIAL MEETING
          ---------------

     A special meeting of the stockholders may be called, at any time for any
purpose or purposes, by the board of directors.

     2.4  NOTICE OF STOCKHOLDERS' MEETINGS
          --------------------------------

     All notices of meetings with stockholders shall be in writing and shall be
sent or otherwise given in accordance with Section 2.5 of these bylaws not less
than ten (10) nor more than sixty (60) days before the date of the meeting to
each stockholder entitled to vote at such meeting.  The notice shall specify the
place, date, and hour of the meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called.

     2.5  MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
          --------------------------------------------

     Written notice of any meeting of stockholders, if mailed, is given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the corporation.  An
affidavit of the secretary or an assistant secretary or of the transfer agent of
the corporation that the notice has been given shall, in the absence of fraud,
be prima facie evidence of the facts stated therein.

     2.6  QUORUM
          ------

     The holders of a majority of the stock issued and outstanding and entitled
to vote thereat, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders for the transaction of business
except as otherwise provided by statute or by the certificate of incorporation.
If, however, such quorum is not present or represented at any meeting of the
stockholders, then the stockholders entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum is
present or represented.  At such adjourned meeting at which a quorum is present
or represented, any business may be transacted that might have been transacted
at the meeting as originally noticed.

     2.7  ADJOURNED MEETING; NOTICE
          -------------------------

     When a meeting is adjourned to another time or place, unless these bylaws
otherwise require, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken.  At the adjourned meeting the corporation may transact any business that
might have been transacted at the original meeting.  If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.

                                      -2-
<PAGE>

     2.8  VOTING
          ------

     The stockholders entitled to vote at any meeting of stockholders shall be
determined in accordance with the provisions of Section 2.11 of these bylaws,
subject to the provisions of Sections 217 and 218 of the General Corporation Law
of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners
of stock and to voting trusts and other voting agreements).

     Except as may be otherwise provided in the certificate of incorporation,
each stockholder shall be entitled to one vote for each share of capital stock
held by such stockholder.

     2.9  WAIVER OF NOTICE
          ----------------

     Whenever notice is required to be given under any provision of the General
Corporation Law of Delaware or of the certificate of incorporation or these
bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice.  Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.  Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders need be specified in any written waiver of notice unless so
required by the certificate of incorporation or these bylaws.

     2.10 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS
          -----------------------------------------------------------

     In order that the corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action.

     If the board of directors does not so fix a record date:

          (a) The record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held.

          (b) The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting, when no prior action
by the board of directors is necessary, shall be the day on which the first
written consent is expressed.

                                      -3-
<PAGE>

          (c) The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the board of directors
adopts the resolution relating thereto.

     A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.

     2.11 PROXIES
          -------

     Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action may authorize another person or
persons to act for him by a written proxy, signed by the stockholder and filed
with the secretary of the corporation, but no such proxy shall be voted or acted
upon after three (3) years from its date, unless the proxy provides for a longer
period.  A proxy shall be deemed signed if the stockholder's name is placed on
the proxy (whether by manual signature, typewriting, telegraphic transmission or
otherwise) by the stockholder or the stockholder's attorney-in-fact.  The
revocability of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Section 212(c) of the General Corporation Law of
Delaware.

     2.12 LIST OF STOCKHOLDERS ENTITLED TO VOTE
          -------------------------------------

     The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder.  Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held.  The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.

                                  ARTICLE III

                                   DIRECTORS
                                   ---------

     3.1  POWERS
          ------

     Subject to the provisions of the General Corporation Law of Delaware and
any limitations in the certificate of incorporation or these bylaws relating to
action required to be approved by the stockholders or by the outstanding shares,
the business and affairs of the corporation shall be managed and all corporate
powers shall be exercised by or under the direction of the board of directors.

                                      -4-
<PAGE>

     3.2  NUMBER OF DIRECTORS
          -------------------

     The board of directors shall consist of seven (7) members.  The number of
directors may be changed by an amendment to this bylaw, duly adopted by the
board of directors or by the stockholders, or by a duly adopted amendment to the
certificate of incorporation.  Upon the closing of the first sale of the
corporation's common stock pursuant to a firmly underwritten registered public
offering (the "IPO"), the directors shall be divided into three classes, with
the term of office of the first class, which class shall initially consist of
two (2) directors, to expire at the first annual meeting of stockholders held
after the IPO; the term of office of the second class, which shall initially
consist of two (2) directors, to expire at the second annual meeting of
stockholders held after the IPO; the term of office of the third class, which
class shall initially consist of three (3) directors, to expire at the third
annual meeting of stockholders held after the IPO; and thereafter for each such
term to expire at each third succeeding annual meeting of stockholders held
after such election.

     No reduction of the authorized number of directors shall have the effect of
removing any director before that director's term of office expires.

     3.3  ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
          -------------------------------------------------------

     Except as provided in Section 3.4 of these bylaws, directors shall be
elected at each annual meeting of stockholders to hold office until the next
annual meeting.  Directors need not be stockholders unless so required by the
certificate of incorporation or these bylaws, wherein other qualifications for
directors may be prescribed.  Each director, including a director elected to
fill a vacancy, shall hold office until his successor is elected and qualified
or until his earlier resignation or removal.

     Elections of directors need not be by written ballot.

     3.4  RESIGNATION AND VACANCIES
          -------------------------

     Any director may resign at any time upon written notice to the corporation.
When one or more directors so resigns and the resignation is effective at a
future date, a majority of the directors then in office, including those who
have so resigned, shall have power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective, and each director so chosen shall hold office as provided in this
section in the filling of other vacancies.

     Unless otherwise provided in the certificate of incorporation or these
bylaws:

          (a) Vacancies and newly created directorships resulting from any
increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.

                                      -5-
<PAGE>

          (b) Whenever the holders of any class or classes of stock or series
thereof are entitled to elect one or more directors by the provisions of the
certificate of incorporation, vacancies and newly created directorships of such
class or classes or series may be filled by a majority of the directors elected
by such class or classes or series thereof then in office, or by a sole
remaining director so elected.

     If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the certificate of incorporation or these bylaws, or may apply
to the Court of Chancery for a decree summarily ordering an election as provided
in Section 211 of the General Corporation Law of Delaware.

     If, at the time of filling any vacancy or any newly created directorship,
the directors then in office constitute less than a majority of the whole board
(as constituted immediately prior to any such increase), then the Court of
Chancery may, upon application of any stockholder or stockholders holding at
least ten (10) percent of the total number of the shares at the time outstanding
having the right to vote for such directors, summarily order an election to be
held to fill any such vacancies or newly created directorships, or to replace
the directors chosen by the directors then in office as aforesaid, which
election shall be governed by the provisions of Section 211 of the General
Corporation Law of Delaware as far as applicable.

     3.5  PLACE OF MEETINGS; MEETINGS BY TELEPHONE
          ----------------------------------------

     The board of directors of the corporation may hold meetings, both regular
and special, either within or outside the State of Delaware.

     Unless otherwise restricted by the certificate of incorporation or these
bylaws, members of the board of directors, or any committee designated by the
board of directors, may participate in a meeting of the board of directors, or
any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting.

     3.6  FIRST MEETINGS
          --------------

     The first meeting of each newly elected board of directors shall be held at
such time and place as shall be fixed by the vote of the stockholders at the
annual meeting and no notice of such meeting shall be necessary to the newly
elected directors in order legally to constitute the meeting, provided a quorum
shall be present. In the event of the failure of the stockholders to fix the
time or place of such first meeting of the newly elected board of directors, or
in the event such meeting is not held at the time and

                                      -6-
<PAGE>

place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.

     3.7  REGULAR MEETINGS
          ----------------

     Regular meetings of the board of directors may be held without notice at
such time and at such place as shall from time to time be determined by the
board.

     3.8  SPECIAL MEETINGS; NOTICE
          ------------------------

     Special meetings of the board may be called by the president on three (3)
days' notice to each director, either personally or by mail, telegram, telex, or
telephone; special meetings shall be called by the president or secretary in
like manner and on like notice on the written request of two (2) directors
unless the board consists of only one (1) director, in which case special
meetings shall be called by the president or secretary in like manner and on
like notice on the written request of the sole director.

     3.9  QUORUM
          ------

     At all meetings of the board of directors, a majority of the authorized
number of directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or by the certificate of
incorporation.  If a quorum is not present at any meeting of the board of
directors, then the directors present thereat may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
is present.

     3.10 WAIVER OF NOTICE
          ----------------

     Whenever notice is required to be given under any provision of the General
Corporation Law of Delaware or of the certificate of incorporation or these
bylaws, a written waiver thereof, signed by the person entitled to notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice.  Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.  Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the directors, or members of a committee of directors, need be specified in
any written waiver of notice unless so required by the certificate of
incorporation or these bylaws.

     3.11 ADJOURNED MEETING; NOTICE
          -------------------------

     If a quorum is not present at any meeting of the board of directors, then
the directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present.

                                      -7-
<PAGE>

     3.12 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
          -------------------------------------------------

     Unless otherwise restricted by the certificate of incorporation or these
bylaws, any action required or permitted to be taken at any meeting of the board
of directors, or of any committee thereof, may be taken without a meeting if all
members of the board or committee, as the case may be, consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
the board or committee.

     3.13 FEES AND COMPENSATION OF DIRECTORS
          ----------------------------------

     Unless otherwise restricted by the certificate of incorporation or these
bylaws, the board of directors shall have the authority to fix the compensation
of directors.

     3.14 APPROVAL OF LOANS TO OFFICERS
          -----------------------------

     The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or of its
subsidiary, including any officer or employee who is a director of the
corporation or its subsidiary, whenever, in the judgment of the directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
corporation.  The loan, guaranty or other assistance may be with or without
interest and may be unsecured, or secured in such manner as the board of
directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation.  Nothing contained in this section shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.

     3.15 REMOVAL OF DIRECTORS
          --------------------

     Unless otherwise restricted by statute, by the certificate of incorporation
or by these bylaws, any director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors.

     No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of such director's term of office.

                                   ARTICLE IV

                                   COMMITTEES
                                   ----------

     4.1  COMMITTEES OF DIRECTORS
          -----------------------

     The board of directors may, by resolution passed by a majority of the whole
board, designate one or more committees, with each committee to consist of one
or more of the directors of the corporation.  The board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee.  In the absence or
disqualification of a member of a committee, the member or members thereof
present at any

                                      -8-
<PAGE>

meeting and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the board of directors to act
at the meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the board of directors or
in the bylaws of the corporation, shall have and may exercise all the powers and
authority of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers that may require it; but no such committee shall have the
power or authority to (i) amend the certificate of incorporation (except that a
committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the board of directors
as provided in Section 151(a) of the General Corporation Law of Delaware, fix
any of the preferences or rights of such shares relating to dividends,
redemption, dissolution, any distribution of assets of the corporation or the
conversion into, or the exchange of such shares for, shares of any other class
or classes or any other series of the same or any other class or classes of
stock of the corporation), (ii) adopt an agreement of merger or consolidation
under Sections 251 or 252 of the General Corporation Law of Delaware, (iii)
recommend to the stockholders the sale, lease or exchange of all or
substantially all of the corporation's property and assets, (iv) recommend to
the stockholders a dissolution of the corporation or a revocation of a
dissolution, or (v) amend the bylaws of the corporation; and, unless the board
resolution establishing the committee, the bylaws or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of Delaware.

     4.2  COMMITTEE MINUTES
          -----------------

     Each committee shall keep regular minutes of its meetings and report the
same to the board of directors when required.

     4.3  MEETINGS AND ACTION OF COMMITTEES
          ---------------------------------

     Meetings and actions of committees shall be governed by, and held and taken
in accordance with, the provisions of Article III of these bylaws, Section 3.5
(place of meetings and meetings by telephone), Section 3.7 (regular meetings),
Section 3.8 (special meetings and notice), Section 3.9 (quorum), Section 3.10
(waiver of notice), Section 3.11 (adjournment and notice of adjournment), and
Section 3.12 (action without a meeting), with such changes in the context of
those bylaws as are necessary to substitute the committee and its members for
the board of directors and its members; provided, however, that the time of
regular meetings of committees may also be called by resolution of the board of
directors and that notice of special meetings of committees shall also be given
to all alternate members, who shall have the right to attend all meetings of the
committee. The board of directors may adopt rules for the government of any
committee not inconsistent with the provisions of these bylaws.

                                      -9-
<PAGE>

                                   ARTICLE V

                                   OFFICERS
                                   --------

     5.1  OFFICERS
          --------

     The officers of the corporation shall be a president, one or more vice
presidents, a secretary, and a treasurer.  The corporation may also have, at the
discretion of the board of directors, a chairman of the board, one or more
assistant vice presidents, assistant secretaries, assistant treasurers, and any
such other officers as may be appointed in accordance with the provisions of
Section 5.3 of these bylaws.  Any number of offices may be held by the same
person.

     5.2  ELECTION OF OFFICERS
          --------------------

     The officers of the corporation, except such officers as may be appointed
in accordance with the provisions of Sections 5.3 or 5.5 of these bylaws, shall
be chosen by the board of directors, subject to the rights, if any, of an
officer under any contract of employment.

     5.3  SUBORDINATE OFFICERS
          --------------------

     The board of directors may appoint, or empower the president to appoint,
such other officers and agents as the business of the corporation may require,
each of whom shall hold office for such period, have such authority, and perform
such duties as are provided in these bylaws or as the board of directors may
from time to time determine.

     5.4  REMOVAL AND RESIGNATION OF OFFICERS
          -----------------------------------

     Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by an
affirmative vote of the majority of the board of directors at any regular or
special meeting of the board or, except in the case of an officer chosen by the
board of directors, by any officer upon whom such power of removal may be
conferred by the board of directors.

     Any officer may resign at any time by giving written notice to the
corporation.  Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.

     5.5  VACANCIES IN OFFICES
          --------------------

     Any vacancy occurring in any office of the corporation shall be filled by
the board of directors.

                                      -10-
<PAGE>

     5.6  CHAIRMAN OF THE BOARD
          ---------------------

     The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise and perform
such other powers and duties as may from time to time be assigned to him by the
board of directors or as may be prescribed by these bylaws.  If there is no
president, then the chairman of the board shall also be the chief executive
officer of the corporation and shall have the powers and duties prescribed in
Section 5.7 of these bylaws.

     5.7  PRESIDENT
          ---------

     Subject to such supervisory powers, if any, as may be given by the board of
directors to the chairman of the board, if there be such an officer, the
president shall be the chief executive officer of the corporation and shall,
subject to the control of the board of directors, have general supervision,
direction, and control of the business and the officers of the corporation.  He
shall preside at all meetings of the stockholders and, in the absence or
nonexistence of a chairman of the board, at all meetings of the board of
directors.  He shall have the general powers and duties of management usually
vested in the office of president of a corporation and shall have such other
powers and duties as may be prescribed by the board of directors or these
bylaws.

     5.8  VICE PRESIDENT
          --------------

     In the absence or disability of the president, the vice presidents, if any,
in order of their rank as fixed by the board of directors or, if not ranked, a
vice president designated by the board of directors, shall perform all the
duties of the president and when so acting shall have all the powers of, and be
subject to all the restrictions upon, the president.  The vice presidents shall
have such other powers and perform such other duties as from time to time may be
prescribed for them respectively by the board of directors, these bylaws, the
president or the chairman of the board.

     5.9  SECRETARY
          ---------

     The secretary shall keep or cause to be kept, at the principal executive
office of the corporation or such other place as the board of directors may
direct, a book of minutes of all meetings and actions of directors, committees
of directors, and stockholders.  The minutes shall show the time and place of
each meeting, whether regular or special (and, if special, how authorized and
the notice given), the names of those present at directors' meetings or
committee meetings, the number of shares present or represented at stockholders'
meetings, and the proceedings thereof.

     The secretary shall keep, or cause to be kept, at the principal executive
office of the corporation or at the office of the corporation's transfer agent
or registrar, as determined by resolution of the board of directors, a share
register, or a duplicate share register, showing the names of all stockholders
and their addresses, the number and classes of shares held by each, the number
and date of certificates evidencing such shares, and the number and date of
cancellation of every certificate surrendered for cancellation.

                                      -11-
<PAGE>

     The secretary shall give, or cause to be given, notice of all meetings of
the stockholders and of the board of directors required to be given by law or by
these bylaws.  He shall keep the seal of the corporation, if one be adopted, in
safe custody and shall have such other powers and perform such other duties as
may be prescribed by the board of directors or by these bylaws.

     5.10 TREASURER
          ---------

     The treasurer shall keep and maintain, or cause to be kept and maintained,
adequate and correct books and records of accounts of the properties and
business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained earnings,
and shares.  The books of account shall at all reasonable times be open to
inspection by any director.

     The treasurer shall deposit all money and other valuables in the name and
to the credit of the corporation with such depositaries as may be designated by
the board of directors.  He shall disburse the funds of the corporation as may
be ordered by the board of directors, shall render to the president and
directors, whenever they request it, an account of all of his transactions as
treasurer and of the financial condition of the corporation, and shall have such
other powers and perform such other duties as may be prescribed by the board of
directors or these bylaws.

     5.11 ASSISTANT SECRETARY
          -------------------

     The assistant secretary, or, if there is more than one, the assistant
secretaries in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as the board of
directors or the stockholders may from time to time prescribe.

     5.12 ASSISTANT TREASURER
          -------------------

     The assistant treasurer, or, if there is more than one, the assistant
treasurers, in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election),
shall, in the absence of the treasurer or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the treasurer
and shall perform such other duties and have such other powers as the board of
directors or the stockholders may from time to time prescribe.

     5.13 AUTHORITY AND DUTIES OF OFFICERS
          --------------------------------

     In addition to the foregoing authority and duties, all officers of the
corporation shall respectively have such authority and perform such duties in
the management of the business of the corporation as may be designated from time
to time by the board of directors or the stockholders.

                                      -12-
<PAGE>

                                  ARTICLE VI

                                   INDEMNITY
                                   ---------

     6.1  INDEMNIFICATION OF DIRECTORS AND OFFICERS
          -----------------------------------------

     The corporation shall, to the maximum extent and in the manner permitted by
the General Corporation Law of Delaware, indemnify each of its directors and
officers against expenses (including attorneys' fees), judgments, fines,
settlements, and other amounts actually and reasonably incurred in connection
with any proceeding, arising by reason of the fact that such person is or was an
agent of the corporation.  For purposes of this Section 6.1, a "director" or
"officer" of the corporation includes any person (i) who is or was a director or
officer of the corporation, (ii) who is or was serving at the request of the
corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, or (iii) who was a director or officer of a
corporation which was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation.

     6.2  INDEMNIFICATION OF OTHERS
          -------------------------

     The corporation shall have the power, to the extent and in the manner
permitted by the General Corporation Law of Delaware, to indemnify each of its
employees and agents (other than directors and officers) against expenses
(including attorneys' fees), judgments, fines, settlements, and other amounts
actually and reasonably incurred in connection with any proceeding, arising by
reason of the fact that such person is or was an agent of the corporation.  For
purposes of this Section 6.2, an "employee" or "agent" of the corporation (other
than a director or officer) includes any person (i) who is or was an employee or
agent of the corporation, (ii) who is or was serving at the request of the
corporation as an employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or (iii) who was an employee or agent of a
corporation which was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor corporation.

     6.3  INSURANCE
          ---------

     The corporation may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability under
the provisions of the General Corporation Law of Delaware.

                                      -13-
<PAGE>

                                  ARTICLE VII

                              RECORDS AND REPORTS
                              -------------------

     7.1  MAINTENANCE AND INSPECTION OF RECORDS
          -------------------------------------

     The corporation shall, either at its principal executive office or at such
place or places as designated by the board of directors, keep a record of its
stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these bylaws as amended to date,
accounting books, and other records.

     Any stockholder of record, in person or by attorney or other agent, shall,
upon written demand under oath stating the purpose thereof, have the right
during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom.  A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder.  In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in Delaware or at its principal place of
business.

     The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder.  Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held.  The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.

     7.2  INSPECTION BY DIRECTORS
          -----------------------

     Any director shall have the right to examine the corporation's stock
ledger, a list of its stockholders, and its other books and records for a
purpose reasonably related to his position as a director. The Court of Chancery
is hereby vested with the exclusive jurisdiction to determine whether a director
is entitled to the inspection sought. The Court may summarily order the
corporation to permit the director to inspect any and all books and records, the
stock ledger, and the stock list and to make copies or extracts therefrom.  The
Court may, in its discretion, prescribe any limitations or conditions with
reference to the inspection, or award such other and further relief as the Court
may deem just and proper.

                                      -14-
<PAGE>

     7.3  ANNUAL STATEMENT TO STOCKHOLDERS
          --------------------------------

     The board of directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the corporation.

     7.4  REPRESENTATION OF SHARES OF OTHER CORPORATIONS
          ----------------------------------------------

     The chairman of the board, the president, any vice president, the
treasurer, the secretary or assistant secretary of this corporation, or any
other person authorized by the board of directors or the president or a vice
president, is authorized to vote, represent, and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation.  The authority granted
herein may be exercised either by such person directly or by any other person
authorized to do so by proxy or power of attorney duly executed by such person
having the authority.

                                 ARTICLE VIII

                                GENERAL MATTERS
                                ---------------

     8.1  CHECKS
          ------

     From time to time, the board of directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.

     8.2  EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
          ------------------------------------------------

     The board of directors, except as otherwise provided in these bylaws, may
authorize any officer or officers, or agent or agents, to enter into any
contract or execute any instrument in the name of and on behalf of the
corporation; such authority may be general or confined to specific instances.
Unless so authorized or ratified by the board of directors or within the agency
power of an officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or to pledge its
credit or to render it liable for any purpose or for any amount.

     8.3  STOCK CERTIFICATES; PARTLY PAID SHARES
          --------------------------------------

     The shares of a corporation shall be represented by certificates, provided
that the board of directors of the corporation may provide by resolution or
resolutions that some or all of any or all classes or series of its stock shall
be uncertificated shares.  Any such resolution shall not apply to shares
represented by a certificate until such certificate is surrendered to the
corporation.  Notwithstanding the adoption of such a resolution by the board of
directors, every holder of stock

                                      -15-
<PAGE>

represented by certificates and upon request every holder of uncertificated
shares shall be entitled to have a certificate signed by, or in the name of the
corporation by the chairman or vice-chairman of the board of directors, or the
president or vice-president, and by the treasurer or an assistant treasurer, or
the secretary or an assistant secretary of such corporation representing the
number of shares registered in certificate form. Any or all of the signatures on
the certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the corporation with the same
effect as if he were such officer, transfer agent or registrar at the date of
issue.

     The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor.  Upon the face or back of each stock certificate issued to represent
any such partly paid shares, upon the books and records of the corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid shares, the corporation shall
declare a dividend upon partly paid shares of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon.

     8.4  SPECIAL DESIGNATION ON CERTIFICATES
          -----------------------------------

     If the corporation is authorized to issue more than one class of stock or
more than one series of any class, then the powers, the designations, the
preferences, and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the designations,
the preferences, and the relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.

     8.5  LOST CERTIFICATES
          -----------------

     Except as provided in this Section 8.5, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and cancelled at the same time.  The corporation
may issue a new certificate of stock or uncertificated shares in the place of
any certificate theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate or uncertificated shares.

                                      -16-
<PAGE>

     8.6  CONSTRUCTION; DEFINITIONS
          -------------------------

     Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Delaware General Corporation Law shall
govern the construction of these bylaws.  Without limiting the generality of
this provision, the singular number includes the plural, the plural number
includes the singular, and the term "person" includes both a corporation and a
natural person.

     8.7  DIVIDENDS
          ---------

     The directors of the corporation, subject to any restrictions contained in
the certificate of incorporation, may declare and pay dividends upon the shares
of its capital stock pursuant to the General Corporation Law of Delaware.
Dividends may be paid in cash, in property, or in shares of the corporation's
capital stock.

     The directors of the corporation may set apart out of any of the funds of
the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve. Such purposes shall include but not be
limited to equalizing dividends, repairing or maintaining any property of the
corporation, and meeting contingencies.

     8.8  FISCAL YEAR
          -----------

     The fiscal year of the corporation shall be fixed by resolution of the
board of directors and may be changed by the board of directors.

     8.9  SEAL
          ----

     The seal of the corporation shall be such as from time to time may be
approved by the board of directors.

     8.10 TRANSFER OF STOCK
          -----------------

     Upon surrender to the corporation or the transfer agent of the corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignation or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate, and record the transaction in its books.

     8.11 STOCK TRANSFER AGREEMENTS
          -------------------------

     The corporation shall have power to enter into and perform any agreement
with any number of stockholders of any one or more classes of stock of the
corporation to restrict the transfer of shares of stock of the corporation of
any one or more classes owned by such stockholders in any manner not prohibited
by the General Corporation Law of Delaware.

                                      -17-
<PAGE>

     8.12 REGISTERED STOCKHOLDERS
          -----------------------

     The corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends and
to vote as such owner, shall be entitled to hold liable for calls and
assessments the person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of another person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.

                                  ARTICLE IX

                                  AMENDMENTS
                                  ----------

     The original or other bylaws of the corporation may be adopted, amended or
repealed by the stockholders entitled to vote; provided, however, that the
corporation may, in its certificate of incorporation, confer the power to adopt,
amend or repeal bylaws upon the directors.  The fact that such power has been so
conferred upon the directors shall not divest the stockholders of the power, nor
limit their power to adopt, amend or repeal bylaws.

                                   ARTICLE X

                                  DISSOLUTION
                                  -----------

     If it should be deemed advisable in the judgment of the board of directors
of the corporation that the corporation should be dissolved, the board, after
the adoption of a resolution to that effect by a majority of the whole board at
any meeting called for that purpose, shall cause notice to be mailed to each
stockholder entitled to vote thereon of the adoption of the resolution and of a
meeting of stockholders to take action upon the resolution.

     At the meeting a vote shall be taken for and against the proposed
dissolution.  If a majority of the outstanding stock of the corporation entitled
to vote thereon votes for the proposed dissolution, then a certificate stating
that the dissolution has been authorized in accordance with the provisions of
Section 275 of the General Corporation Law of Delaware and setting forth the
names and residences of the directors and officers shall be executed,
acknowledged, and filed and shall become effective in accordance with Section
103 of the General Corporation Law of Delaware.  Upon such certificate's
becoming effective in accordance with Section 103 of the General Corporation Law
of Delaware, the corporation shall be dissolved.

     Whenever all the stockholders entitled to vote on a dissolution consent in
writing, either in person or by duly authorized attorney, to a dissolution, no
meeting of directors or stockholders shall be necessary.  The consent shall be
filed and shall become effective in accordance with Section 103 of the General
Corporation Law of Delaware.  Upon such consent's becoming effective in
accordance with Section 103 of the General Corporation Law of Delaware, the
corporation shall be

                                      -18-
<PAGE>

dissolved. If the consent is signed by an attorney, then the original power of
attorney or a photocopy thereof shall be attached to and filed with the consent.
The consent filed with the Secretary of State shall have attached to it the
affidavit of the secretary or some other officer of the corporation stating that
the consent has been signed by or on behalf of all the stockholders entitled to
vote on a dissolution; in addition, there shall be attached to the consent a
certification by the secretary or some other officer of the corporation setting
forth the names and residences of the directors and officers of the corporation.

                                  ARTICLE XI

                                   CUSTODIAN
                                   ---------

      11.1  APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES
            -------------------------------------------

      The Court of Chancery, upon application of any stockholder, may appoint
one or more persons to be custodians and, if the corporation is insolvent, to be
receivers, of and for the corporation when:

            (a)  at any meeting held for the election of directors the
stockholders are so divided that they have failed to elect successors to
directors whose terms have expired or would have expired upon qualification of
their successors; or

            (b)  the business of the corporation is suffering or is threatened
with irreparable injury because the directors are so divided respecting the
management of the affairs of the corporation that the required vote for action
by the board of directors cannot be obtained and the stockholders are unable to
terminate this division; or

            (c)  the corporation has abandoned its business and has failed
within a reasonable time to take steps to dissolve, liquidate or distribute its
assets.

      11.2  DUTIES OF CUSTODIAN
            -------------------

      The custodian shall have all the powers and title of a receiver appointed
under Section 291 of the General Corporation Law of Delaware, but the authority
of the custodian shall be to continue the business of the corporation and not to
liquidate its affairs and distribute its assets, except when the Court of
Chancery otherwise orders and except in cases arising under Sections 226(a)(3)
or 352(a)(2) of the General Corporation Law of Delaware.

                                      -19-
<PAGE>

                       CERTIFICATE OF ADOPTION OF BYLAWS

                                      OF

                                ILLUMINA, INC.


                           Adoption by Incorporator
                           ------------------------


     The undersigned person appointed in the Certificate of Incorporation to act
as the Incorporator of Illumina, Inc. hereby adopts the foregoing bylaws,
comprising 20 pages, as the Bylaws of the corporation.

     Executed as of _______________, 2000.


                                        _____________________________________
                                        Martin J. Waters, Incorporator


             Certificate by Secretary of Adoption by Incorporator
             ----------------------------------------------------

     The undersigned hereby certifies that he is the duly elected, qualified,
and acting Secretary of Illumina, Inc. and that the foregoing Bylaws, comprising
20 pages, were adopted as the Bylaws of the corporation on _______________,
2000, by the person appointed in the Certificate of Incorporation to act as the
Incorporator of the corporation.

     IN WITNESS WHEREOF, the undersigned has hereunto set his hand and affixed
the corporate seal this _____ day of __________, 2000.

                                        _____________________________________
                                        Michael J. O'Donnell, Secretary

                                      -20-
<PAGE>

     (ALTERNATIVE)

                       CERTIFICATE OF ADOPTION OF BYLAWS

                                      OF

                                ILLUMINA, INC.

          Certificate by Secretary of Adoption by Stockholders' Vote
          ----------------------------------------------------------

     The undersigned hereby certifies that he is the duly elected, qualified,
and acting Secretary of Illimina, Inc. and that the foregoing Bylaws, comprising
20 pages, were submitted to the stockholders at their first meeting held on
_______________, 2000, and recorded in the minutes thereof and were ratified by
the vote of stockholders entitled to exercise the majority of the voting power
of the corporation.

     IN WITNESS WHEREOF, the undersigned has hereunto set his hand and affixed
the corporate seal this ____ day of ____________ 2000.


                                        _____________________________________
                                        Michael J. O'Donnell, Secretary

                                      -21-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>SPECIMEN COMMON STOCK CERTIFICATE
<TEXT>

<PAGE>

                                                                     EXHIBIT 4.1

COMMON STOCK

THIS CERTIFICATE IS TRANSFERABLE
IN BOSTON, MA AND NEW YORK, NY

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

SEE REVERSE FOR CERTAIN DEFINITIONS

CUSIP 452327 10 9

This Certifies that

is the record holder of

FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, $.01 PAR VALUE, OF
Illumina, Inc.

transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney, upon surrender of this certificate properly
endorsed. This certificate is not valid until countersigned and registered by
the Transfer Agent and Registrar.

      IN WITNESS WHEREOF the Corporation has caused this certificate to be
signed in facsimile by its duly authorized officers and a facsimile of its
corporate seal.

Dated:

/s/ Michael J. O'Donnell

SECRETARY

/s/ Jay Flatley

PRESIDENT AND CHIEF EXECUTIVE OFFICER

COUNTERSIGNED AND REGISTERED:
EQUISERVE TRUST COMPANY, N.A.
TRANSFER AGENT
AND REGISTRAR

BY
AUTHORIZED SIGNATURE
<PAGE>

Illumina, Inc.

THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS,
A FULL STATEMENT OF THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES AND
LIMITATIONS OF EACH CLASS OF STOCK OR SERIES THEREOF AUTHORIZED TO BE ISSUED AND
THE AUTHORITY OF THE BOARD OF DIRECTORS OF THE CORPORATION TO DESIGNATE AND FIX
THE RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS OF CLASSES OF PREFERRED STOCK
IN SERIES.

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM * - as tenants in common
TEN ENT * - as tenants by the entities
JT WROS * - as joint tenants with rights of survivorship and not as tenants in
            common


UNIF GIFT MIN ACT* Custodian
                                                         (Cust)
(Minor)
                                 under Uniform Gifts to Minors
                                 Act
                                                             (State)


Additional abbreviations may also be used though not in the above list.

For value received,
hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

(Please print or typewrite name and address including postal zip code of
assignee)

Shares of the Common Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

Attorney

to transfer the said Shares on the Books of the within-named Corporation with
full power of substitution in the premises.

Dated:

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the certificate in every particular, without alteration
or enlargement, or any change whatever.

SIGNATURE(S) GUARANTEED:

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.
COMMON STOCK

<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>AMENDED AND RESTATED INVESTORS RIGHTS AGREEMENT
<TEXT>

<PAGE>

                                                                     Exhibit 4.2

                                                                  EXECUTION COPY

                                ILLUMINA, INC.

                        _______________________________


                          SECOND AMENDED AND RESTATED

                         STOCKHOLDER RIGHTS AGREEMENT

                         Dated as of November 5, 1999

                        _______________________________

<PAGE>

                                ILLUMINA, INC.

                          SECOND AMENDED AND RESTATED
                         STOCKHOLDER RIGHTS AGREEMENT

          This Second Amended and Restated Stockholder Rights Agreement (the
"Agreement") is dated as of November 5, 1999, by and among Illumina, Inc., a
California corporation (the "Company"), and the persons listed on the Schedule
of Stockholders attached hereto as Exhibit A (collectively the "Stockholders"
                                   ---------
and individually a "Stockholder").  This Agreement is intended to supersede and
replace the prior Amended and Restated Stockholder Rights Agreement between the
Company and certain of the Stockholders dated November 12, 1998 (the "Prior
Agreement"), which Prior Agreement is hereby terminated and of no further force
and effect.

                                   RECITALS
                                   --------

          Whereas, the Company and the purchasers of the Company's Series C
Preferred Stock (the "Purchasers") have entered into an agreement for sale by
the Company and purchase by the Purchasers of the Company's Series C Preferred
Stock of even date herewith; and

          Whereas, in connection with the purchase and sale of the Company's
securities, the Company and the Purchasers desire to provide for (i) the rights
of the Purchasers with respect to registration of Common Stock issued upon
conversion of the shares of the Company's stock held by the Purchasers according
to the terms of this Agreement; and (ii) certain other provisions as set forth
below.

          For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:

                                   SECTION 1

                                  Definitions
                                  -----------

          As used in this Agreement, the following terms shall have the
following respective meanings:

          1.1  "Commission" shall mean the Securities and Exchange Commission of
                ----------
the United States or any other U.S. federal agency at the time administering the
Securities Act of 1933.

          1.2  "Common Stock" shall mean shares of the Company's Common Stock.
                ------------

          1.3  "Exchange Act" shall mean the Securities Exchange Act of 1934, as
                ------------
amended, or any similar Federal statute, and the rules and regulations of the
Commission thereunder, as the same shall be in effect at the time.
<PAGE>

          1.4  "Holder" shall mean each of the Stockholders (and their
                ------
transferees as permitted by Section 4.10) holding Registrable Securities or
securities convertible into Registrable Securities.

          1.5  "Initiating Holders" shall mean Holders who in the aggregate hold
                ------------------
greater than forty percent (40%) of the Registrable Securities.

          1.6  "Other Holders" shall mean holders of Company securities, other
                -------------
than the Holders, proposing to distribute their securities pursuant to a
registration under Section 4 of this Agreement.

          1.7  "Preferred" shall mean shares of the Company's Series A Preferred
                ---------
Stock, Series A-1 Preferred Stock, Series B Preferred Stock, Series B-1
Preferred Stock, Series C Preferred Stock, and Series C-1 Preferred Stock.

          1.8  "Registrable Securities" means Common Stock originally purchased
                ----------------------
or Common Stock issued or issuable on conversion of the Preferred and any shares
of Common Stock issued or issuable in respect of such Common Stock upon any
stock split, stock dividend, recapitalization, or similar event.  Shares of
Common Stock or other securities shall only be treated as Registrable Securities
if they have not been sold to or through a broker or dealer or underwriter in a
public distribution or a public securities transaction.

          1.9  The terms "register," "registered" and "registration" refer to a
                          --------    ----------       ------------
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.

          1.10 "Registration Expenses" shall mean all expenses, except as
                ---------------------
otherwise stated below, incurred by the Company in complying with Sections 4.1,
4.2, and 4.3 hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel and independent public accountants for the Company (and
fees and disbursements of one special counsel for Holders, if any), blue sky
fees, transfer taxes, fees of transfer agents and registrars and expenses and
the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company).

          1.11 "Securities" shall mean Common Stock or Preferred.
                ----------

          1.12 "Securities Act" shall mean the Securities Act of 1933, as
                --------------
amended, or any similar United States federal statute and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.

          1.13 "Selling Expenses" shall mean all underwriting discounts and
                ----------------
selling commissions applicable to the securities registered by the Holders.

                                      -2-
<PAGE>

                                   SECTION 2

                              Information Rights
                              ------------------

          2.1  Financial Information.  As soon as practicable after the end of
               ---------------------
each fiscal year, and in any event within one hundred twenty (120) days
thereafter, the Company will provide each Stockholder with consolidated balance
sheets of the Company and its subsidiaries, if any, as of the end of such fiscal
year, and consolidated statements of income, stockholders' equity and cash flows
of the Company and its subsidiaries, if any, for such year, prepared in
accordance with generally accepted accounting principles and setting forth in
each case in comparative form the figures for the previous fiscal year, all in
reasonable detail and audited (without qualification as to scope) by independent
auditors of national standing selected by the Company.  In addition, the Company
will provide each Stockholder with the following reports for so long as the
Stockholder is a holder of a minimum of two hundred fifty thousand (250,000)
shares of Preferred or Common Stock, including for purposes of this Section 2
any such Shares which have been transferred to an affiliate of a Stockholder:

               (a) As soon as practicable after the end of each month and fiscal
quarter, and in any event within thirty (30) days and forty-five (45) days,
respectively, thereafter, a consolidated balance sheet of the Company and its
subsidiaries, if any, as of the end of each such period, consolidated statements
of income, consolidated statements of changes in financial condition, a
consolidated statement of cash flow of the Company and its subsidiaries and a
statement of stockholders' equity for such period and for the current fiscal
year to date, and setting forth in each case in comparative form the figures for
corresponding periods in the previous fiscal year, and setting forth in
comparative form the budgeted figures, prepared in accordance with generally
accepted accounting principles (other than for accompanying notes), subject to
changes resulting from year-end audit adjustments, all in reasonable detail and
signed by the principal financial or accounting officer of the Company.

               (b) As soon as practicable after its adoption by the Board of
Directors, a copy of the annual operating plan of the Company for the next
fiscal year and an annual budget for the next fiscal year of the Company
containing profit and loss projections, cash flow projections, and capital
expenditures, all on a monthly basis.

          2.2  Assignment of Rights.  The rights granted pursuant to Section 2.1
               --------------------
may be assigned or otherwise conveyed by a Stockholder to a transferee who
acquires (i) at least two hundred fifty thousand (250,000) shares of Preferred
or (ii) all shares of Preferred or Common Stock held by such transferor, or to a
constituent partner, member or affiliate of a Stockholder.  Notwithstanding the
foregoing, the rights granted pursuant to Section 2.1 may not be assigned or
otherwise conveyed to a competitor of the Company, as reasonably determined by
the Board of Directors of the Company excluding any director with an interest in
such transferee.  The Stockholder shall provide the Company with written notice
of any assignment or conveyance of the rights granted pursuant to Section 2.1.

                                      -3-
<PAGE>

          2.3  Termination.  The provisions of Sections 2, 3 and 5, including
               -----------
information rights, rights of first refusal and miscellaneous covenants, shall
terminate upon the closing of a firmly underwritten public offering of the
Common Stock of the Company with a sales price per share (as adjusted for
combinations, stock dividends, subdivisions or split-ups) of at least $4.50 and
with aggregate gross proceeds to the corporation, at the public offering price,
of at least $15,000,000, and the provisions of Section 3 shall not be applicable
to such transaction.

                                   SECTION 3

                   Rights of First Refusal On New Issuances
                   ----------------------------------------

          3.1  Rights of First Refusal.  The Company hereby grants to each
               -----------------------
Stockholder the right of first refusal to purchase such Stockholder's pro rata
portion of New Securities (as defined in Section 3.1(a)) that the Company may,
from time to time, propose to sell and issue.  Such Stockholder's pro rata
portion, for purposes of this right of first refusal, is the ratio of the number
of shares of Common Stock held by such Stockholder (including Common Stock
issuable upon conversion of securities convertible into Common Stock of the
Company held by such Stockholder, including the Preferred) divided by the total
number of shares of Common Stock outstanding at the time of issuance of such New
Securities (including Common Stock issuable upon conversion of all outstanding
securities convertible into Common Stock, including the Preferred).  This right
of first refusal shall be subject to the following provisions:

               (a) "New Securities" shall mean any Common Stock of the Company,
whether now authorized or not, and any rights, options, or warrants to purchase
said Common Stock, and securities of any type whatsoever that are, or may
become, convertible into Common Stock; provided, however, that "New Securities"
does not include (i) shares of Common Stock issued upon conversion of the
Preferred; (ii) securities issued pursuant to the acquisition of another
corporation by the Company by merger, purchase of substantially all of the
assets, or other reorganization as approved by the Company's Board of Directors;
(iii) shares of the Company's Common Stock (or related options) issued to
employees, officers, directors, consultants or other persons performing services
for the Company (including, but not by way of limitation, distributors and sales
representatives) pursuant to any stock offering, plan, or arrangement as
approved by the Company's Board of Directors; (iv) securities issued to
financial institutions regularly engaged in the business of lending money or
providing equipment lease financing in the connection with the extension of
credit to the Company for the purpose of financing equipment, inventory, or
accounts receivable or in connection with the lease of equipment and in both
cases for other than equity financing purposes, as approved by the Company's
Board of Directors; (v) securities issued to customers or potential customers of
the Company in connection with participation in a product development consortium
or issued in connection with a strategic alliance or other corporate partner
transaction with the Company for purposes which are not primarily equity
financing, as approved by the Company's Board of Directors; or (vi) shares of
the Company's Common Stock issued in connection with any stock split, stock
dividend, or recapitalization by the Company.

                                      -4-
<PAGE>

               (b) In the event that the Company proposes to issue New
Securities, it shall give each Stockholder at least thirty (30) days prior
written notice of its intention, describing the type of New Securities, the
price, and the general terms upon which the Company proposes to issue the same.
Each Stockholder shall have twenty (20) days from the date of mailing of any
such notice to agree to purchase its pro rata share of such New Securities for
the price and upon the general terms specified in the notice by giving written
notice to the Company and stating therein the quantity of New Securities to be
purchased.

               (c) In the event that a Stockholder fails to exercise in full the
right of first refusal within said twenty (20) day period, the Company shall
have seventy-five (75) days thereafter to sell (or enter into an agreement
pursuant to which the sale of New Securities covered thereby shall be closed, if
at all, within thirty (30) days from the date of said agreement) the New
Securities respecting which the Stockholder's rights were not exercised, at a
price and upon general terms no more favorable to the purchasers thereof than
specified in the Company's notice.  In the event the Company has not sold the
New Securities within said seventy-five (75) day period (or sold and issued New
Securities in accordance with the foregoing within thirty (30) days from the
date of said agreement), the Company shall not thereafter issue or sell any New
Securities, without first offering such securities to the Stockholders in the
manner provided above.

               (d) The Stockholder's failure to exercise this right of first
refusal on any issuance of New Securities shall not adversely affect the
Stockholder's right of first refusal to purchase subsequent issuances of New
Securities.

               (e) The right of first refusal set forth in this Section 3.1 is
nonassignable except to another Stockholder or another entity under common
control with a Stockholder.

          3.2  Termination.  The provisions of this Section 3 shall terminate in
               -----------
accordance with the provisions of Section 2.3.

                                   SECTION 4

                              Registration Rights
                              -------------------

          4.1  Requested Registration.
               ----------------------

               (a) Request for Registration.  If the Company shall receive from
                   ------------------------
Initiating Holders a written request that the Company effect any registration,
qualification or compliance with respect to not less than forty percent (40%) of
the Registrable Securities (or such lesser percentage of the Registrable
Securities if the reasonably anticipated aggregate price to the public thereof
would exceed $5,000,000) the Company will:

                   (i) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders and afford each
Holder the opportunity of including in the registration such Registrable
Securities owned by such Holder; and

                                      -5-
<PAGE>

                   (ii) as soon as practicable, use its best efforts to effect
such registration, qualification or compliance (including, without limitation,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations) as may be
so requested and as would permit or facilitate the sale and distribution of all
or such portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request received
by the Company within twenty (20) days after receipt of such written notice from
the Company;

                   Provided, however, that the Company shall not be obligated to
take any action to effect any such registration, qualification or compliance
pursuant to this Section 4.1:

                       (A) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;

                       (B) Prior to the earlier to occur of (i) six (6) months
after the effective date of the Company's first registered public offering of
its stock or (ii) December 31, 2003;

                       (C) During the period starting with the sixty (60) days
prior to the Company's estimated date of filing of, and ending on the date six
(6) months immediately following the effective date of, a registration statement
in connection with the initial public offering of securities of the Company,
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective;

                       (D) During the period starting with the date thirty (30)
days prior to the Company's estimated date of filing of, and ending on the date
three (3) months immediately following the effective date of, any registration
statement pertaining to securities of the Company sold by the Company (other
than a registration of securities in a Rule 145 transaction or with respect to
an employee benefit plan), provided that the Company is actively employing in
good faith all reasonable efforts to cause such registration statement to become
effective;

                       (E) After the Company has effected two registrations
pursuant to this paragraph 4.1, and such registrations have been declared or
ordered effective, provided that all Registrable Securities requested to be
included in each such registration were in fact included in the registration;
and provided further that any registration that is withdrawn because of negative
information about the Company, which information is likely to have a material
adverse effect on the price or amount at which the Initiating Holders can sell
their Shares, shall not count toward such two registrations hereunder;

                       (F) If the Company shall furnish to such Holders a
certificate signed by the President of the Company, and concurred to in writing
by an underwriter or other

                                      -6-
<PAGE>

financial advisor of the Company, stating that in the good faith judgment of the
Board of Directors it would be seriously detrimental to the Company or its
stockholders for a registration statement to be filed in the near future, then
the Company's obligation to use its best efforts to register, qualify or comply
under this Section 4 shall be deferred for a period not to exceed ninety (90)
days from the date of receipt of written request from the Initiating Holders,
provided, however, that the Company shall not utilize this right more than once
in any twelve (12) month period.

              Subject to the foregoing clauses (A) through (F), the Company
shall file a registration statement covering the Registrable Securities so
requested to be registered as soon as practicable, after receipt of the request
or requests of the Initiating Holders.

          (b) Underwriting.  In the event that a registration pursuant to
              ------------
Section 4.1 is for a registered public offering involving an underwriting, the
Initiating Holders will so advise the Company as part of the written request
given by such Initiating Holders pursuant to Section 4.1(a), and the Company
shall in turn advise the Holders as part of the notice given pursuant to Section
4.1(a)(i).  In such event, the right of any Holder to registration pursuant to
Section 4.1 shall be conditioned upon such Holder's participation in the
underwriting arrangements required by this Section 4.1, and the inclusion of
such Holder's Registrable Securities in the underwriting to the extent requested
shall be limited to the extent provided herein.

          The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by the Company, but subject to the reasonable approval of a majority in interest
of the Initiating Holders.  Notwithstanding any other provision of this Section
4.1, if the managing underwriter advises the Initiating Holders in writing that
the number of shares to be underwritten exceeds the number that can be sold in
such offering so as to be likely to have a material adverse effect on the price
or amount at which the Initiating Holders can sell their Shares, then the
Company shall so advise all Holders and Other Holders, and the number of shares
that may be included in the registration and underwriting shall be allocated
first among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders at the time of
filing the registration statement and second among the Other Holders in
proportion to the number of shares proposed to be included in such registration
by such Other Holders.  No Registrable Securities or other securities excluded
from the underwriting by reason of the underwriter's marketing limitation shall
be included in such registration.  To facilitate the allocation of shares in
accordance with the above provisions, the Company or the underwriters may round
the number of shares allocated to any holder to the nearest one hundred (100)
shares.

          If any Holder of Registrable Securities or Other Holder disapproves of
the terms of the underwriting, such person may elect to withdraw therefrom by
written notice to the Company, the managing underwriter and the Initiating
Holders.  The Registrable Securities and/or other securities so withdrawn shall
also be withdrawn from registration.

                                      -7-
<PAGE>

          4.2  Company Registration.
               --------------------

               (a) Notice of Registration. If at any time or from time to time
                   ----------------------
the Company shall determine to register any of its securities, either for its
own account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans, or (ii) a registration
relating solely to a Rule 145 transaction, the Company will:

                   (i)  promptly give to each Holder written notice thereof; and

                   (ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made by any Holder within twenty (20) days after receipt of such
written notice from the Company.

               (b) Underwriting.  If the registration of which the Company gives
                   ------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 4.2(a)(i).  In such event the right of any Holder to
registration pursuant to Section 4.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein.  All Holders proposing to
distribute their securities through such underwriting shall, together with the
Company and the Other Holders, enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the
Company.  Notwithstanding any other provision of this Section 4.2, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may limit the
number of shares of Registrable Securities to be included in such registration
without requiring any limitation in the number of shares to be registered on
behalf of the Company, provided that if such underwriting is other than an
initial public offering the number of shares of Registrable Securities held by
Holders and Other Holders to be included in such registration shall not be
limited to less than twenty percent (20%) of the total number of shares to be
included in such registration.  The Company shall so advise all Holders and
Other Holders and the number of shares that may be included in the registration
and underwriting by all Holders and Other Holders shall be allocated among them,
as nearly as practicable, first, to the Company (or, if applicable, to the
                          -----
holders for whose account the Company is registering the securities), second,
                                                                      ------
among the Holders of Registrable Securities in proportion to the respective
amounts of Registrable Securities held by such Holders at the time of filing of
the registration statement, and, third, among the Other Holders in proportion to
                                 -----
the number of shares proposed to be included in such registration by such Other
Holders; provided, however, that at all times, such allocation shall be subject
         --------  -------
to the twenty percent (20%) threshold set forth in the preceding sentence if
such registration and underwriting is other than an initial public offering.  To
facilitate the allocation of shares in accordance with the above provisions, the
Company may round the number of shares allocated to any Holder or Other Holder
to the nearest one hundred (100) shares.  If any Holder or Other Holder
disapproves of the terms of any such underwriting, such holder may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter.  Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration.

                                      -8-
<PAGE>

               (c) Right to Terminate Registration.  The Company shall have the
                   -------------------------------
right to terminate or withdraw any registration initiated by it under this
Section 4.2 prior to the effectiveness of such registration whether or not any
Holder has elected to include Registrable Securities in such registration.

          4.3  Registration on Form S-3.
               ------------------------

               (a) Request for Registration.  If any Holder or Holders request
                   ------------------------
that the Company file a registration statement on Form S-3 (or any successor
form to Form S-3) for a public offering of shares of the Registrable Securities
held by such party the reasonably anticipated aggregate price to the public of
which would exceed $1,000,000, and the Company is a registrant entitled to use
Form S-3 to register the Registrable Securities for such an offering, the
Company shall use its best efforts to cause such Registrable Securities to be
registered for the offering on such form and to cause such Registrable
Securities to be qualified in such jurisdictions as the Holder or Holders may
reasonably request. The substantive provisions of Section 4.1(b) shall be
applicable to each registration initiated under this Section 4.3.

               (b) Limitations.  Notwithstanding the foregoing, the Company
                   -----------
shall not be obligated to take any action pursuant to this Section 4.3: (i) in
any particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act; (ii) with
respect to Section 4.3 only, for a period of one hundred twenty (120) days after
receipt of the request of the initiating Holders, if the Company, within ten
(10) days after such receipt gives notice of its bona fide intention to effect
the filing of a registration statement with the Commission within ninety (90)
days of receipt of such request (other than with respect to a registration
statement relating to a Rule 145 transaction, an offering solely to employees or
any other registration which is not appropriate for the registration of
Registrable Securities) and the Company shall promptly notify the initiating
Holders in the event it abandons its intention to effect such registration
statement; (iii) during the period starting with the date sixty (60) days prior
to the Company's estimated date of filing of, and ending on the date three (3)
months immediately following, the effective date of any registration statement
pertaining to securities of the Company (other than a registration of securities
in a Rule 145 transaction or with respect to an employee benefit plan), provided
that the Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective and, provided further that
the Company shall have the right to defer filing a registration statement under
the Securities Act not more than one in any twelve month period; or (iv) if the
Company shall furnish to such Holder a certificate signed by the President of
the Company stating that in the good faith judgment of the Board of Directors it
would be seriously detrimental to the Company or the stockholders as a whole for
registration statements to be filed in the near future, then the Company's
obligation to use its best efforts to file a registration statement shall be
deferred for a period not to exceed ninety (90) days from the receipt of the
request to file such registration by such Holder, provided, however, that the
Company shall not utilize this right more than once in any twelve (12) month
period.

                                      -9-
<PAGE>

          4.4  Limitations on Subsequent Registration Rights.  From and after
               ---------------------------------------------
the date hereof, the Company will not, without the prior written consent of
holders of a majority of the voting power of the then outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which allows such holder or prospective holder of
any securities of the Company to include such securities in any registration
filed under Sections 4.1, 4.2 or 4.3 hereof, unless, under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that the inclusion of his securities will
not diminish the amount of Registrable Securities which are included.  However,
the Company may by agreement grant such holder or prospective holder a
registration right analogous to that set forth in Section 4.1 provided that (i)
such holder or prospective holder may not demand a registration analogous to
that set forth in Section 4.1 at any time earlier than the Holders first have
such right, and (ii) that the Registrable Securities may be included in any such
registration demanded by such holders to the extent such inclusion will not
diminish the amount of securities of such holders which are included.

          4.5  Expenses of Registration.
               ------------------------

               (a) Registration Expenses.  The Company shall bear all
                   ---------------------
Registration Expenses incurred in connection with all registrations pursuant to
Section 4.1, Section 4.2, and Section 4.3, except that for registrations
pursuant to Section 4.3 the Company shall bear expenses for no more than 4
(four) such registrations.

               (b) Selling Expenses.  Unless otherwise stated in Section 4.5(a),
                   ----------------
all Selling Expenses and Registration Expenses relating to securities registered
on behalf of the Holders shall be borne by the Holders pro rata on the basis of
the number of shares so registered by such Holder.

          4.6  Registration Procedures.  In the case of each registration,
               -----------------------
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will:

               (a) keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof;

               (b) as soon as practicable, prepare and file with the Commission
a registration statement with respect to such securities and use its best
efforts to cause such registration statement to become and remain effective
until the earlier of (i) one hundred twenty (120) days or (ii) the distribution
described in the Registration Statement has been completed; provided, however,
that (i) such 120-day period shall be extended for a period of time equal to the
period the Holder refrains from selling any securities included in such
registration at the request of an underwriter of Common Stock (or other
securities) of the Company; and (ii) in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 120-day period shall be extended, if
necessary, to keep the registration statement effective until all such
Registrable Securities are sold, provided that Rule 145, or any successor Rule
under the Securities Act, permits an offering on a continuous or delayed basis,
and, provided further, that applicable rules under the Securities Act governing
the obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment which (I) includes any prospectus required by Section
10(a)(3)

                                      -10-
<PAGE>

of the Securities Act or (II) reflects facts or events representing a material
or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be included
in (I) and (II) above to be contained in periodic reports filed pursuant to
Section 13 or 15(d) of the Exchange Act in the registration statement;

          (c) furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities;

          (d) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;

          (e) in the event of an underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering.  Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement;

          (f) notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements made therein not misleading in the light of the circumstances then
existing;

          (g) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration;

          (h) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any Holder reasonably requests and do any and all other acts and things which
may be necessary or advisable to enable such holder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller; provided, that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service or process in any such
jurisdiction, but the Company will be required to consent to service or process
in actions arising out of or in connection with the sale of the Registrable
Securities or any violation of state securities laws;

          (i) use its best efforts to cause the Registrable Securities covered
by such registration statement to be registered with or approved by any other
governmental agencies or

                                      -11-
<PAGE>

authorities as may be necessary by virtue of the business and operations of the
Company to enable the seller or sellers thereof to consummate the disposition of
such Registrable Securities;

          (j) use its best efforts to obtain a comfort letter from the Company's
independent public accountants in customary form and covering such matters of
the type customarily covered by comfort letters with respect to offerings of
such type as the Holders may reasonably request;

          (k) otherwise comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering a period of twelve months, beginning
within three months after the effective date of the registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder; and

          (l) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed, provided that the applicable listing requirements are satisfied.

          The Company may require each holder of Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding the distribution of such Registrable Securities as the
Company may from time to time reasonably request in writing.

     4.7  Preparation; Reasonable Investigation.
          -------------------------------------

     In connection with the preparation and filing of each registration
statement under the Securities Act pursuant to this Agreement, the Company will
give each Holder of Registrable Securities, their underwriters, if any, and
their respective counsel and accountants, the opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the Commission, and each amendment, thereof or supplement thereto,
and will give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such Holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.

     4.8  Indemnification.
          ---------------

          (a) By Company.  The Company will indemnify and hold harmless each
              ----------
Holder, each of its officers and directors and partners, and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of the
Securities Act and each Stockholder and its officers, directors and partners and
each person controlling such Stockholder within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages or liabilities,
joint or several, (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement,

                                      -12-
<PAGE>

prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, or any
violation by the Company of the Securities Act, the Exchange Act or any state or
federal securities law, or any Rule or regulation promulgated under such Acts or
law applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse each such Holder,
each of its officers, directors and partners, and each person controlling such
Holder, each such underwriter and each person who controls any such underwriter,
each Stockholder, each of its officers, directors and partners and each person
controlling such Stockholder, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable in any such case to any such Holder to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder, controlling person, underwriter or
Stockholder and stated to be specifically for use therein. If the Holders and
Stockholders are represented by counsel other than counsel for the Company, the
Company will not be obligated under this Section 4.7(a) to reimburse legal fees
and expenses of more than one separate counsel for all Holders and Stockholders.

          (b) By Holders.  Each Holder will, if Registrable Securities held by
              ----------
such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify and hold harmless the
Company, each of its directors, each of its officers, each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, and each other such Holder, each of its
officers and directors and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such Holders, such directors,
officers, persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein.
Notwithstanding the foregoing, the liability of each Holder under this
subsection (b) shall be limited in an amount equal to the public offering price
of the Registrable Securities sold by such Holder, unless such liability arises
out of or is based on willful misconduct by such Holder.

                                      -13-
<PAGE>

          (c) Procedures.  Each party entitled to indemnification under this
              ----------
Section 4.8 (the "Indemnified Party") shall give written notice to the party
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
separate and different defenses.  No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.

          (d) Contribution.  If the indemnification provided for in this Section
              ------------
4.8 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party or is insufficient with respect to any loss, liability, claim,
damage, or expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations.  The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.  The amount paid or payable by a party as a result of any
loss, liability, claim, damage or expense referred to above shall be deemed to
include, subject to the limitations set forth in Section 4.8(c), any legal or
other fees, or expenses reasonably incurred by such party in connection with any
investigation or proceeding.  If indemnification is available under this Section
4.8, the indemnifying parties shall indemnify each indemnified party to the full
extent provided in Section 4.8(a) and (b) without regard to the relative fault
of said indemnifying party or indemnified party or other equitable consideration
provided for in this Section 4.8(d).  Notwithstanding the foregoing, the
liability of each Holder under this subsection (d) shall be limited in an amount
equal to the public offering price of the Registrable Securities sold by such
Holder, unless such liability arises out of or is based on willful misconduct by
such Holder.

          (e) Controlling Agreement.  Notwithstanding the foregoing, to the
              ---------------------
extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into

                                      -14-
<PAGE>

in connection with the underwritten public offering are in conflict with the
foregoing provisions of this Section 4.8, the provisions in the underwriting
agreement shall control.

          4.9   Information by Holder.  The Holder or Holders of Registrable
                ---------------------
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by them as the Company may request in writing
and only as shall be necessary to enable the Company to comply with the
provisions hereof in connection with any registration, qualification or
compliance referred to in this Agreement.

          4.10  Rule 144 Reporting.  With a view to making available the
                ------------------
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Securities to the public without
registration, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to use its best efforts to:

                (a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Exchange Act.

                (b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements);

                (c) Furnish to any Holder forthwith upon request a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144 (at any time after 90 days after the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as such Holder may reasonably request in
availing itself of any Rule or regulation of the Commission allowing such Holder
to sell any such securities without registration.

          4.11  Transfer of Registration Rights.  The rights to cause the
                -------------------------------
Company to register securities granted Holders under Sections 4.1, 4.2 and 4.3
may be assigned in connection with any transfer or assignment by a Holder of
Registrable Securities provided that:  (i) such transfer may otherwise be
effected in accordance with applicable securities laws, (ii) such transfer is
effected in compliance with the restrictions on transfer contained in this
Agreement and in any other agreement between the Company and the Holder, and
(iii) such assignee or transferee is a constituent partner, member or affiliate
of a Stockholder or purchases (a) at least 500,000 shares of Preferred or Common
Stock into which such Preferred has been converted or (b) all shares of
Preferred, and Common Stock into which such Preferred has been converted, held
by a Stockholder.

          4.12  Termination.  The registration rights granted pursuant to this
                -----------
Section 4 shall terminate as to any Holder at the later of (i) five years after
the Company's initial public offering or (ii) after

                                      -15-
<PAGE>

the effective date of the Company's first registered public offering of its
stock, at such time as such Holder may sell under Rule 144, or a successor rule,
in a three month period all Registrable Securities then held by such Holder.

          4.13  Lockup Agreement.  Each Holder agrees that, if, in connection
                ----------------
with the Company's initial public offering of the Company's securities, the
Company or the underwriters managing the offering so request, the Holder shall
not sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any Registrable Securities (other than those included in
the registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days) from the effective date of such registration as may
be requested by the Company or the underwriters; provided that each officer and
director of the Company who owns stock of the Company also agrees to such
restrictions.  This Section 4.13 shall be binding on all transferees or
assignees of Registrable Securities, whether or not such persons are entitled to
registration rights pursuant to Section 4.11.

          4.14  Representations and Warranties of the Company.  The Company
                ---------------------------------------------
represents and warrants to each of the Stockholders as follows:

                    (i)  The execution, delivery and performance of this
Agreement by the Company have been duly authorized by all requisite corporate
action and will not violate any provision of law, any order of any court or
other agency of government, the Restated Certificate or By-laws of the Company
or any provision of any indenture, agreement or other instrument to which it or
any or its properties or assets is bound, conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
such indenture, agreement or other instrument or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of the Company.

                    (ii) This Agreement has been duly executed and delivered by
the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms.

                                   SECTION 5

                            Miscellaneous Covenants
                            -----------------------

          5.1  Proprietary Information Agreement.  Unless otherwise determined
               ---------------------------------
by Board of Directors, the Company shall require all future officers, directors
and employees of, and consultants to, the Company and its subsidiaries, if any,
to execute a proprietary information agreement providing for the protection of
the Company's proprietary or confidential information and the assignment of
intellectual property rights to the Company.

          5.2  Stock Vesting.  The Company shall cause all future recipients of
               -------------
the Company's Common Stock or options to purchase the Company's Common Stock
receiving such securities in connection with the performance of services for the
Company to execute and deliver agreements

                                      -16-
<PAGE>

providing that such Common Stock shall be subject to a right of the Company to
repurchase such Common Stock at the original purchase price in the event that
the relationship of such person with the Company is terminated, which right
shall lapse over a five-year period, or providing that such options shall become
exercisable over a five-year period based upon continuing employment, or
providing such other vesting arrangements as determined appropriate by the
Company's Board of Directors.

          5.3  Changes in Common Stock or Preferred Stock.  If, and as often as,
               ------------------------------------------
there is any change in the Common Stock or the Preferred by way of a stock
split, stock dividend, combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means,
appropriate adjustment shall be made in the provisions hereof so that the rights
and privileges granted hereby shall continue with respect to the Common Stock or
the Preferred as so changed.

          5.4  Termination.  The provisions of this Section 5 shall terminate in
               -----------
accordance with the provisions of Section 2.3.

                                   SECTION 6

                                    Legends
                                    -------

          6.1  Legends.  Each Stockholder understands that the share
               -------
certificates evidencing any Registrable Securities shall be endorsed with the
following legends (in addition to any legends required under applicable state
securities laws):

               (a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."

               (b) "THE SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF AN AGREEMENT BETWEEN
THE COMPANY AND THE REGISTERED HOLDER OR HIS PREDECESSOR IN INTEREST. COPIES OF
SUCH AGREEMENT MAY BE OBTAINED BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD
OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.

               (c) Any legend required to be placed thereon by the California
Commissioner of Corporations or any other applicable state securities laws.

                                      -17-
<PAGE>

                                   SECTION 7

                                 Miscellaneous
                                 -------------

          7.1  Governing Law.  This Agreement shall be governed in all respects
               -------------
by the laws of the State of California as applied to contracts made and to be
fully performed entirely within that state between residents of that state.  All
disputes arising out of this Agreement shall be subject to the exclusive
jurisdiction and venue of the California state courts of San Diego County,
California, (or, if there is exclusive federal jurisdiction, the United States
District Court for the Southern District of California) and the parties consent
to the personal and exclusive jurisdiction and venue of these courts.

          7.2  Entire Agreement; Amendment.  This Agreement constitutes the full
               ---------------------------
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.  This Agreement or any term hereof may be amended,
waived, discharged or terminated by a written instrument signed by the Company
and the Holders, or transferees of such Holders, holding more than sixty-six and
two-thirds percent (66 2/3%) of the Registrable Securities; provided, however,
that no such amendment may treat any Holder in a manner different from the other
Holders.

          7.3  Aggregation.  For the purposes of determining the number of
               -----------
shares of Registrable Securities held by a transferee or assignee, the holdings
of transferees and assignees of a partnership who are partners or retired
partners of such partnership (including spouses and ancestors, lineal
descendants and siblings of such partners or spouses who acquire Registrable
Securities by gift, will or intestate succession) shall be aggregated together
and with the partnership; provided, that all assignees and transferees who would
not qualify individually for assignment of registration rights shall have a
single attorney-in-fact for the purpose of exercising any rights, receiving
notices or taking any action under Sections 2 and 4.

          7.4  Notices, etc.  All notices and other communications required or
               -------------
permitted hereunder shall be deemed given if in writing and mailed by registered
or certified mail, postage prepaid, or otherwise delivered by hand or by
messenger, addressed (a) if to a Holder, at such Holder's address as set forth
on Exhibit A to this Agreement, or at such other address as such Holder shall
   ---------
have furnished to the Company in writing, or (b) if to any other holder of any
Registrable Securities, at such address as such holder shall have furnished the
Company in writing, or, until any such holder so furnishes an address to the
Company, then to and at the address of the last holder of such Registrable
Securities who has so furnished an address to the Company, or (c) if to the
Company, at the address of its principal offices and addressed to the attention
of the Corporate Secretary and with a copy to Wilson Sonsini Goodrich & Rosati,
650 Page Mill Road, Palo Alto, California 94304-1050, Attention:  Michael J.
O'Donnell, or at such other address as the Company shall have furnished to the
Purchasers.

          7.5  Severability.  In the event that any provision of this Agreement
               ------------
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement

                                      -18-
<PAGE>

shall continue in full force and effect without said provision; provided that no
such severability shall be effective if it materially changes the economic
benefit of this Agreement to any party.

          7.6  Counterparts.  This Agreement may be executed in any number of
               ------------
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.

                           [Signature pages follow]

                                      -19-
<PAGE>

          IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.


"COMPANY"                             ILLUMINA, INC.

                                      a California corporation

                                      By: _________________________________
                                          Jay Flatley
                                          President and Chief Executive Officer
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.


"STOCKHOLDER"                                PE CORPORATION

                                             By:______________________________

                                             Title:___________________________
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"                           ARCH VENTURE FUND III, L.P.

                                        By:  ARCH Venture Partners, LLC
                                             General Partner

                                        By:__________________________________

                                        Title:_______________________________
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"                           CW VENTURES III, L.P.

                                        By:____________________________________
                                             CW Partners IV, LLC
                                             General Partner

                                        CW VENTURES III - A CO-INVESTMENT
                                        FUND, L.P.

                                        By:____________________________________
                                             CW Partners IV, LLC
                                             General Partner

                                        CHASE/CW VENTURES III (ILLUMINA), L.P.

                                        By:____________________________________
                                             CW Partners IV, LLC
                                             General Partner
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"                           VENROCK ASSOCIATES

                                        By:____________________________________

                                        Name:__________________________________

                                        Title: General Partner

                                        VENROCK ASSOCIATES II, L.P.

                                        By:____________________________________

                                        Name:__________________________________

                                        Title: General Partner

                                        VENROCK ENTREPRENEURS FUND, L.P.

                                        By: Venrock Management, L.L.C.
                                        Its: General Partner

                                        By:____________________________________

                                        Name:__________________________________

                                        Title: Member
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"                           TGI FUND II, LC

                                        By: Tredegar Investments, Inc.

                                        By:____________________________________
                                             Steve Johnson, President
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"                           LOMBARD ODIER & CIE

                                        By:____________________________________

                                        Title:_________________________________

                                        By:____________________________________

                                        Title:_________________________________
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"                           FOUR PARTNERS

                                        By:____________________________________

                                        Title:_________________________________



                                        FBB ASSOCIATES



                                        By:____________________________________

                                        Title:_________________________________
<PAGE>

IN WITNESS WHEREOF, the parties have executed this Second Amended and Restated
Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"                           THE DOW CHEMICAL COMPANY

                                        By:____________________________________

                                        Title:_________________________________
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"                           CHEVRON TECHNOLOGY VENTURES LLC

                                        By:____________________________________

                                        Title:_________________________________
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"                           STATE FARM MUTUAL AUTOMOBILE
                                        INSURANCE COMPANY

                                        By:___________________________________

                                        Title:________________________________

                                        By:___________________________________

                                        Title:________________________________
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"                           COMDISCO, INC.

                                        By:___________________________________

                                        Title:________________________________
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"
                                             __________________________________
                                             Jay Flatley


                                             __________________________________
                                             Sarah Flatley
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"
                                             ___________________________________
                                             Katherine Sbicca Flatley
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"
                                             ________________________________
                                             C. Woodrow Rea
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"
                                             ________________________________
                                             Mark S. Chee
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"
                                             ________________________________
                                             John R. Stuelpnagel
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"
                                             ________________________________
                                             Harold B. Staff
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Second Amended and
Restated Stockholder Rights Agreement as of the day and date set forth above.

"STOCKHOLDER"
                                             ________________________________
                                             Richard J. Pytelewski
<PAGE>

                                   EXHIBIT A
                                   ---------

                           SCHEDULE OF STOCKHOLDERS

Series A Preferred Stock Financing (June 12, 1998)

<TABLE>
<CAPTION>

          Stockholder                                Security                 Number of Shares
---------------------------------------------------------------------------------------------------
<S>                                              <C>                          <C>
CW Ventures III, L.P.                            Series A Preferred                1,770,302
ARCH Venture Fund III, L.P.                      Series A Preferred                  345,302
MLPF&S Cust FPO Bain Capital                     Series A Preferred                  250,000
    SEP FBO Michele D. May
John R. Stuelpnagel                              Series A Preferred                   72,399
Kevin J. Kinsella Trust dated                    Series A Preferred                   33,333
    November 2, 1994
David R. Walt                                    Series A Preferred                   16,378
Anthony W. Czarnik                               Series A Preferred                    6,551
Mark S. Chee                                     Series A Preferred                    5,733
</TABLE>

Series B Preferred Stock Financing (November 12, 1998)


<TABLE>
<CAPTION>
          Stockholder                                Security                 Number of Shares
-----------------------------------------------------------------------------------------------------------
<S>                                              <C>                           <C>
ARCH Venture Fund III, L.P.                      Series B Preferred                2,644,997
CW Ventures III, L.P.                            Series B Preferred                2,375,099
Venrock Associates II, L.P.                      Series B Preferred                1,507,648
Venrock Associates                               Series B Preferred                1,137,349
TGI Fund II, LC                                  Series B Preferred                  998,621
Mark S. Chee                                     Series B Preferred                  367,060
John R. Stuelpnagel                              Series B Preferred                  107,959
MLPF&S Cust FPO Bain Capital                     Series B Preferred                   53,980
   SEP FBO Michele D. May
David R. Walt                                    Series B Preferred                   53,980
Comdisco, Inc.                                   Series B Preferred                   53,980
Kevin J. Kinsella Trust dated                    Series B Preferred                   35,626
   November 2, 1994
</TABLE>
<PAGE>

     Series C Preferred Stock Financing - First Closing (November 5, 1999)

<TABLE>
<CAPTION>
             Stockholder                              Security                 Number of Shares
----------------------------------     -------------------------------   ----------------------------
<S>                                    <C>                               <C>
PE Corporation                                   Series C Preferred                 1,250,000
</TABLE>

    Series C Preferred Stock Financing - Second Closing (December 16, 1999)


<TABLE>
<CAPTION>

             Stockholder                              Security                 Number of Shares
----------------------------------     -------------------------------   ----------------------------
<S>                                    <C>                               <C>
ARCH Venture Fund III, L.P.                      Series C Preferred                   625,000
CW Ventures III, L.P.                            Series C Preferred                   375,000
CW Ventures III - a Co-Investment                Series C Preferred                   150,000
 Investment Fund, L.P.
Chase/CW Ventures III, L.P.                      Series C Preferred                    50,000
Venrock Associates II, L.P.                      Series C Preferred                   350,313
Venrock Associates, L.P.                         Series C Preferred                   243,437
Venrock Entrepreneur's Fund                      Series C Preferred                    31,250
TGI Fund II, L.C.                                Series C Preferred                   750,000
Lombard Odier & Cie                              Series C Preferred                   750,000
FBB Associates                                   Series C Preferred                   712,500
Four Partners                                    Series C Preferred                    37,500
The Dow Chemical Company                         Series C Preferred                   687,500
Chevron Technology Ventures LLC                  Series C Preferred                   500,000
State Farm Mutual Automobile Insurance           Series C Preferred                   375,000
 Company
Comdisco, Inc.                                   Series C Preferred                    50,000
Jay and Sarah Flatley                            Series C Preferred                    12,500
Katherine Sbicca Flatley                         Series C Preferred                     6,250
C. Woodrow Rea                                   Series C Preferred                    12,500
Mark S. Chee                                     Series C Preferred                     7,500
John R. Stuelpnagel                              Series C Preferred                     6,250
Harold B. Staff                                  Series C Preferred                    12,500
Richard J. Pytelewski                            Series C Preferred                     5,000
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>7
<FILENAME>0007.txt
<DESCRIPTION>OPINION OF WILSON SINSONI GOODRICH & ROSATI
<TEXT>

<PAGE>

                                                                     Exhibit 5.1
                                                                     -----------

                                 June 30, 2000
Illumina, Inc.
9390 Towne Centre Drive, Suite 200
San Diego, CA 92121

     Re: Registration on Form S-1

Ladies and Gentlemen:

     We have examined the Registration Statement on Form S-1 filed by you with
the Securities and Exchange Commission on April 3, 2000 (Registration No. 333-
33922), as amended (the "Registration Statement"), in connection with the
registration under the Securities Act of 1933, as amended, of up to 5,000,000
shares of your Common Stock, $0.01 par value per share (the "Shares").  The
Shares include an over-allotment option granted to the underwriters of the
offering to purchase up to 750,000 shares.  We understand that the Shares are to
be sold to the underwriters of the offering for resale to the public as
described in the Registration Statement.  As your legal counsel, we have
examined the proceedings taken, and are familiar with the proceedings proposed
to be taken, by you in connection with the sale and issuance of the Shares to be
sold by you.  It is our opinion that upon completion of the proceedings being
taken or contemplated by us, as your counsel, to be taken prior to the issuance
of the Shares, including the proceedings being taken in order to permit such
transaction to be carried out in accordance with applicable state securities
laws, the Shares, when issued and sold in the manner described in the
Registration Statement, will be legally issued, fully paid and non-assessable.
We are members of the Bar of the State of California only and express no opinion
as to any matter relating to the laws of any jurisdiction other than the laws of
the State of California and the federal laws of the United States.  Without
limiting the foregoing, we express no opinion as to the securities laws of the
State of Delaware.  We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our name wherever
appearing in the Registration Statement, including the Prospectus constituting a
part thereof, and any amendments thereto.


                                  Very truly yours,

                                  /s/ Wilson Sonsini Goodrich & Rosati

                                  Wilson Sonsini Goodrich & Rosati
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>8
<FILENAME>0008.txt
<DESCRIPTION>FORM OF INDEMNIFICATION AGREEMENT
<TEXT>

<PAGE>

                                                                    Exhibit 10.1

                                ILLUMINA, INC.
                                    FORM OF
                           INDEMNIFICATION AGREEMENT

          This Indemnification Agreement ("Agreement") is effective as of May
__, 2000 by and between Illumina, Inc., a Delaware corporation (the "Company"),
and [name] ("Indemnitee").

          WHEREAS, effective as of the date hereof, Illumina, Inc., a California
corporation, is reincorporating into Delaware;

          WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve the Company and its
related entities;

          WHEREAS, in order to induce Indemnitee to continue to provide services
to the Company, the Company wishes to provide for the indemnification of, and
the advancement of expenses to, Indemnitee to the maximum extent permitted by
law;

          WHEREAS, the Company and Indemnitee recognize the continued difficulty
in obtaining liability insurance for the Company's directors, officers,
employees, agents and fiduciaries, the significant increases in the cost of such
insurance and the general reductions in the coverage of such insurance;

          WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same time
as the availability and coverage of liability insurance has been severely
limited; and

          WHEREAS, in connection with the Company's reincorporation, the Company
and Indemnitee desire to continue to have in place the additional protection
provided by an indemnification agreement, with such changes as are required to
conform the existing agreement to Delaware law and to provide indemnification
and advancement of expenses to the Indemnitee to the maximum extent permitted by
Delaware law;

          WHEREAS, in view of the considerations set forth above, the Company
desires that Indemnitee shall be indemnified and advanced expenses by the
Company as set forth herein;

          NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth
below.

          1.  Certain Definitions.
              -------------------

              a.  "Change in Control" shall mean, and shall be deemed to have
occurred if, on or after the date of this Agreement, (i) any "person" (as such
term is used in Sections 13(d) and 14(d)
<PAGE>

of the Securities Exchange Act of 1934, as amended), other than a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
acting in such capacity or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the Company
representing more than 50% of the total voting power represented by the
Company's then outstanding Voting Securities, (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company and any new director whose election by the
Board of Directors or nomination for election by the Company's stockholders was
approved by a vote of at least two thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, (iii) the stockholders of the Company
approve a merger or consolidation of the Company with any other corporation
other than a merger or consolidation which would result in the Voting Securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting Securities of
the surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of
related transactions) all or substantially all of the Company's assets.

          b.  "Claim" shall mean with respect to a Covered Event: any
threatened, pending or completed action, suit, proceeding or alternative dispute
resolution mechanism, or any hearing, inquiry or investigation that Indemnitee
in good faith believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other.

          c.  References to the "Company" shall include, in addition to
Illumina, Inc., any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger to which Illumina, Inc. (or
any of its wholly owned subsidiaries) is a party which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees, agents or fiduciaries, so that if Indemnitee is
or was a director, officer, employee, agent or fiduciary of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise,
Indemnitee shall stand in the same position under the provisions of this
Agreement with respect to the resulting or surviving corporation as Indemnitee
would have with respect to such constituent corporation if its separate
existence had continued.

          d.  "Covered Event" shall mean any event or occurrence related to the
fact that Indemnitee is or was a director, officer, employee, agent or fiduciary
of the Company, or any subsidiary of the Company, or is or was serving at the
request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other

                                      -2-
<PAGE>

enterprise, or by reason of any action or inaction on the part of Indemnitee
while serving in such capacity.

          e.  "Expenses" shall mean any and all expenses (including attorneys'
fees and all other costs, expenses and obligations incurred in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to defend, to be a witness in or to participate in, any
action, suit, proceeding, alternative dispute resolution mechanism, hearing,
inquiry or investigation), judgments, fines, penalties and amounts paid in
settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) of any Claim and any federal,
state, local or foreign taxes imposed on the Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement.

          f.  "Expense Advance" shall mean a payment to Indemnitee pursuant to
Section 3 of Expenses in advance of the settlement of or final judgement in any
action, suit, proceeding or alternative dispute resolution mechanism, hearing,
inquiry or investigation which constitutes a Claim.

          g.  "Independent Legal Counsel" shall mean an attorney or firm of
attorneys, selected in accordance with the provisions of Section 2(d) hereof,
who shall not have otherwise performed services for the Company or Indemnitee
within the last three years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other Indemnitees under similar
indemnity agreements).

          h.  References to "other enterprises" shall include employee benefit
plans; references to "fines" shall include any excise taxes assessed on
Indemnitee with respect to an employee benefit plan; and references to "serving
at the request of the Company" shall include any service as a director, officer,
employee, agent or fiduciary of the Company which imposes duties on, or involves
services by, such director, officer, employee, agent or fiduciary with respect
to an employee benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interests of the Company" as referred to in this Agreement.

          i.  "Reviewing Party" shall mean, subject to the provisions of Section
2(d), any person or body appointed by the Board of Directors in accordance with
applicable law to review the Company's obligations hereunder and under
applicable law, which may include a member or members of the Company's Board of
Directors, Independent Legal Counsel or any other person or body not a party to
the particular Claim for which Indemnitee is seeking indemnification.

          j.  "Section" refers to a section of this Agreement unless otherwise
indicated.

          k.  "Voting Securities" shall mean any securities of the Company that
vote generally in the election of directors.

                                      -3-
<PAGE>

     2.   Indemnification.
          ---------------

          a.  Indemnification of Expenses.  Subject to the provisions of Section
              ---------------------------
2(b) below, the Company shall indemnify Indemnitee for Expenses to the fullest
extent permitted by law if Indemnitee was or is or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, any Claim (whether by reason of or arising in part out of
a Covered Event), including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses.

          b.  Review of Indemnification Obligations.  Notwithstanding the
              -------------------------------------
foregoing, in the event any Reviewing Party shall have determined (in a written
opinion, in any case in which Independent Legal Counsel is the Reviewing Party)
that Indemnitee is not entitled to be indemnified hereunder under applicable
law, (i) the Company shall have no further obligation under Section 2(a) to make
any payments to Indemnitee not made prior to such determination by such
Reviewing Party, and (ii) the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all Expenses
theretofore paid to Indemnitee to which Indemnitee is not entitled hereunder
under applicable law; provided, however, that if Indemnitee has commenced or
                      --------  -------
thereafter commences legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee is entitled to be indemnified hereunder
under applicable law, any determination made by any Reviewing Party that
Indemnitee is not entitled to be indemnified hereunder under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expenses theretofore paid in indemnifying Indemnitee until a
final judicial determination is made with respect thereto (as to which all
rights of appeal therefrom have been exhausted or lapsed).  Indemnitee's
obligation to reimburse the Company for any Expenses shall be unsecured and no
interest shall be charged thereon.

          c.  Indemnitee Rights on Unfavorable Determination; Binding Effect.
              --------------------------------------------------------------
If any Reviewing Party determines that Indemnitee substantively is not entitled
to be indemnified hereunder in whole or in part under applicable law, Indemnitee
shall have the right to commence litigation seeking an initial determination by
the court or challenging any such determination by such Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and, subject to
the provisions of Section 15, the Company hereby consents to service of process
and to appear in any such proceeding.  Absent such litigation, any determination
by any Reviewing Party shall be conclusive and binding on the Company and
Indemnitee.

          d.  Selection of Reviewing Party; Change in Control.  If there has not
              -----------------------------------------------
been a Change in Control, any Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other than a Change
in Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately prior to such Change in Control), any
Reviewing Party with respect to all matters thereafter arising concerning the
rights of Indemnitee to indemnification of Expenses under this Agreement or any
other agreement or under the Company's Certificate of Incorporation or Bylaws as
now or hereafter in effect, or under any other applicable law, if desired by
Indemnitee, shall be Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld).

                                      -4-
<PAGE>

Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent Indemnitee would be
entitled to be indemnified hereunder under applicable law and the Company agrees
to abide by such opinion. The Company agrees to pay the reasonable fees of the
Independent Legal Counsel referred to above and to indemnify fully such counsel
against any and all expenses (including attorneys' fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto. Notwithstanding any other provision of this Agreement, the
Company shall not be required to pay Expenses of more than one Independent Legal
Counsel in connection with all matters concerning a single Indemnitee, and such
Independent Legal Counsel shall be the Independent Legal Counsel for any or all
other Indemnitees unless (i) the employment of separate counsel by one or more
Indemnitees has been previously authorized by the Company in writing, or (ii) an
Indemnitee shall have provided to the Company a written statement that such
Indemnitee has reasonably concluded that there may be a conflict of interest
between such Indemnitee and the other Indemnitees with respect to the matters
arising under this Agreement.

          e.  Mandatory Payment of Expenses.  Notwithstanding any other
              -----------------------------
provision of this Agreement other than Section 10 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
Claim, Indemnitee shall be indemnified against all Expenses incurred by
Indemnitee in connection therewith.

     3.   Expense Advances.
          ----------------

          a.  Obligation to Make Expense Advances.  Upon receipt of a written
              -----------------------------------
undertaking by or on behalf of the Indemnitee to repay such amounts if it shall
ultimately be determined that the Indemnitee is not entitled to be indemnified
therefore by the Company hereunder under applicable law, the Company shall make
Expense Advances to Indemnitee.

          b.  Form of Undertaking.  Any obligation to repay any Expense Advances
              -------------------
hereunder pursuant to a written undertaking by the Indemnitee shall be unsecured
and no interest shall be charged thereon.

          c.  Determination of Reasonable Expense Advances.  The parties agree
              --------------------------------------------
that for the purposes of any Expense Advance for which Indemnitee has made
written demand to the Company in accordance with this Agreement, all Expenses
included in such Expense Advance that are certified by affidavit of Indemnitee's
counsel as being reasonable shall be presumed conclusively to be reasonable.

     4.   Procedures for Indemnification and Expense Advances.
          ---------------------------------------------------

          a.  Timing of Payments.  All payments of Expenses (including without
              ------------------
limitation Expense Advances) by the Company to the Indemnitee pursuant to this
Agreement shall be made to the fullest extent permitted by law as soon as
practicable after written demand by Indemnitee therefor is presented to the
Company, but in no event later than thirty (30) business days after such

                                      -5-
<PAGE>

written demand by Indemnitee is presented to the Company, except in the case of
Expense Advances, which shall be made no later than ten (10) business days after
such written demand by Indemnitee is presented to the Company.

          b.  Notice/Cooperation by Indemnitee.  Indemnitee shall, as a
              --------------------------------
condition precedent to Indemnitee's right to be indemnified or Indemnitee's
right to receive Expense Advances under this Agreement, give the Company notice
in writing as soon as practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement.  Notice to the
Company shall be directed to the Chief Executive Officer of the Company at the
address shown on the signature page of this Agreement (or such other address as
the Company shall designate in writing to Indemnitee).  In addition, Indemnitee
shall give the Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee's power.

          c.  No Presumptions; Burden of Proof.  For purposes of this Agreement,
              --------------------------------
the termination of any Claim by judgment, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere, or its
                                                         ---------------
equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by this Agreement or applicable
law.  In addition, neither the failure of any Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by any
Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
this Agreement under applicable law, shall be a defense to Indemnitee's claim or
create a presumption that Indemnitee has not met any particular standard of
conduct or did not have any particular belief.  In connection with any
determination by any Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder under applicable law, the burden of
proof shall be on the Company to establish that Indemnitee is not so entitled.

          d.  Notice to Insurers.  If, at the time of the receipt by the Company
              ------------------
of a notice of a Claim pursuant to Section 4(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies.  The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such Claim in
accordance with the terms of such policies.

          e.  Selection of Counsel.  In the event the Company shall be obligated
              --------------------
hereunder to provide indemnification for or make any Expense Advances with
respect to the Expenses of any Claim, the Company, if appropriate, shall be
entitled to assume the defense of such Claim with counsel approved by Indemnitee
(which approval shall not be unreasonably withheld) upon the delivery to
Indemnitee of written notice of the Company's election to do so.  After delivery
of such notice, approval of such counsel by Indemnitee and the retention of such
counsel by the Company, the Company will not be liable to Indemnitee under this
Agreement for any fees or expenses of

                                      -6-
<PAGE>

separate counsel subsequently retained by or on behalf of Indemnitee with
respect to the same Claim; provided that, (i) Indemnitee shall have the right to
employ Indemnitee's separate counsel in any such Claim at Indemnitee's expense
and (ii) if (A) the employment of separate counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense, or (C) the Company shall not
continue to retain such counsel to defend such Claim, then the fees and expenses
of Indemnitee's separate counsel shall be Expenses for which Indemnitee may
receive indemnification or Expense Advances hereunder.

     5.   Additional Indemnification Rights; Nonexclusivity.
          -------------------------------------------------

          a.  Scope.  The Company hereby agrees to indemnify the Indemnitee to
              -----
the fullest extent permitted by law, notwithstanding that such indemnification
is not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute.  In
the event of any change after the date of this Agreement in any applicable law,
statute or rule which expands the right of a Delaware corporation to indemnify a
member of its board of directors or an officer, employee, agent or fiduciary, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change.  In the event of any
change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its board of directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this Agreement, shall
have no effect on this Agreement or the parties' rights and obligations
hereunder except as set forth in Section 10(a) hereof.

          b.  Nonexclusivity.  The indemnification and the payment of Expense
              --------------
Advances provided by this Agreement shall be in addition to any rights to which
Indemnitee may be entitled under the Company's Certificate of Incorporation, its
Bylaws, any other agreement, any vote of stockholders or disinterested
directors, the General Corporation Law of the State of Delaware, or otherwise.
The indemnification and the payment of Expense Advances provided under this
Agreement shall continue as to Indemnitee for any action taken or not taken
while serving in an indemnified capacity even though subsequent thereto
Indemnitee may have ceased to serve in such capacity.

     6.   No Duplication of Payments.  The Company shall not be liable under
          --------------------------
this Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, provision of the Company's Certificate of
Incorporation, Bylaws or otherwise) of the amounts otherwise payable hereunder.

     7.   Partial Indemnification.  If Indemnitee is entitled under any
          -----------------------
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Claim, but not, however, for
all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

                                      -7-
<PAGE>

     8.   Mutual Acknowledgment.  Both the Company and Indemnitee
          ---------------------
acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Company from indemnifying its directors, officers, employees,
agents or fiduciaries under this Agreement or otherwise.  Indemnitee understands
and acknowledges that the Company has undertaken or may be required in the
future to undertake with the Securities and Exchange Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.

     9.   Liability Insurance.  To the extent the Company maintains
          -------------------
liability insurance applicable to directors, officers, employees, agents or
fiduciaries, Indemnitee shall be covered by such policies in such a manner as to
provide Indemnitee the same rights and benefits as are provided to the most
favorably insured of the Company's directors, if Indemnitee is a director; or of
the Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.

     10.  Exceptions.  Notwithstanding any other provision of this Agreement,
          ----------
the Company shall not be obligated pursuant to the terms of this Agreement:

          a.  Excluded Actions or Omissions.  To indemnify or make Expense
              -----------------------------
Advances to Indemnitee with respect to Claims arising out of acts, omissions or
transactions for which Indemnitee is prohibited from receiving indemnification
under applicable law.

          b.  Claims Initiated by Indemnitee.  To indemnify or make Expense
              ------------------------------
Advances to Indemnitee with respect to Claims initiated or brought voluntarily
by Indemnitee and not by way of defense, counterclaim or crossclaim, except (i)
with respect to actions or proceedings brought to establish or enforce a right
to indemnification under this Agreement or any other agreement or insurance
policy or under the Company's Certificate of Incorporation or Bylaws now or
hereafter in effect relating to Claims for Covered Events, (ii) in specific
cases if the Board of Directors has approved the initiation or bringing of such
Claim, or (iii) as otherwise required under Section 145 of the Delaware General
Corporation Law, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, Expense Advances, or insurance recovery, as
the case may be.

          c.  Lack of Good Faith.  To indemnify Indemnitee for any Expenses
              ------------------
incurred by the Indemnitee with respect to any action instituted (i) by
Indemnitee to enforce or interpret this Agreement, if a court having
jurisdiction over such action determines as provided in Section 13 that each of
the material assertions made by the Indemnitee as a basis for such action was
not made in good faith or was frivolous, or (ii) by or in the name of the
Company to enforce or interpret this Agreement, if a court having jurisdiction
over such action determines as provided in Section 13 that each of the material
defenses asserted by Indemnitee in such action was made in bad faith or was
frivolous.

                                      -8-
<PAGE>

          d.   Claims Under Section 16(b).  To indemnify Indemnitee for Expenses
               --------------------------
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

     11.  Counterparts.  This Agreement may be executed in one or more
          ------------
counterparts, each of which shall constitute an original.

     12.  Binding Effect; Successors and Assigns.  This Agreement shall be
          --------------------------------------
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), spouses, heirs and
personal and legal representatives.  The Company shall require and cause any
successor (whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part, of
the business or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place.  This Agreement
shall continue in effect regardless of whether Indemnitee continues to serve as
a director, officer, employee, agent or fiduciary (as applicable) of the Company
or of any other enterprise at the Company's request.

     13.  Expenses Incurred in Action Relating to Enforcement or Interpretation.
          ---------------------------------------------------------------------
In the event that any action is instituted by Indemnitee under this Agreement or
under any liability insurance policies maintained by the Company to enforce or
interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be
indemnified for all Expenses incurred by Indemnitee with respect to such action
(including without limitation attorneys' fees), regardless of whether Indemnitee
is ultimately successful in such action, unless as a part of such action a court
having jurisdiction over such action makes a final judicial determination (as to
which all rights of appeal therefrom have been exhausted or lapsed) that each of
the material assertions made by Indemnitee as a basis for such action was not
made in good faith or was frivolous; provided, however, that until such final
judicial determination is made, Indemnitee shall be entitled under Section 3 to
receive payment of Expense Advances hereunder with respect to such action. In
the event of an action instituted by or in the name of the Company under this
Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee
shall be entitled to be indemnified for all Expenses incurred by Indemnitee in
defense of such action (including without limitation costs and expenses incurred
with respect to Indemnitee's counterclaims and cross-claims made in such
action), unless as a part of such action a court having jurisdiction over such
action makes a final judicial determination (as to which all rights of appeal
therefrom have been exhausted or lapsed) that each of the material defenses
asserted by Indemnitee in such action was made in bad faith or was frivolous;
provided, however, that until such final judicial determination is made,
Indemnitee shall be entitled under Section 3 to receive payment of Expense
Advances hereunder with respect to such action.

     14.  Period of Limitations.  No legal action shall be brought and no cause
          ---------------------
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of

                                      -9-
<PAGE>

accrual of such cause of action, and any claim or cause of action of the Company
shall be extinguished and deemed released unless asserted by the timely filing
of a legal action within such two year period; provided, however, that if any
                                               --------  -------
shorter period of limitations is otherwise applicable to any such cause of
action, such shorter period shall govern.

          15.  Notice.  All notices, requests, demands and other communications
               ------
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and signed for by the party addressed, on the date of such
delivery, or (ii) if mailed by domestic certified or registered mail with
postage prepaid, on the third business day after the date postmarked.  Addresses
for notice to either party are as shown on the signature page of this Agreement,
or as subsequently modified by written notice.

          16.  Consent to Jurisdiction.  The Company and Indemnitee each hereby
               -----------------------
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the Court of
Chancery of the State of Delaware in and for New Castle County, which shall be
the exclusive and only proper forum for adjudicating such a claim.

          17.  Severability.  The provisions of this Agreement shall be
               ------------
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable, and the
remaining provisions shall remain enforceable to the fullest extent permitted by
law.  Furthermore, to the fullest extent possible, the provisions of this
Agreement (including without limitation each portion of this Agreement
containing any provision held to be invalid, void or otherwise unenforceable,
that is not itself invalid, void or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid, illegal or
unenforceable.

          18.  Choice of Law.  This Agreement, and all rights, remedies,
               -------------
liabilities, powers and duties of the parties to this Agreement, shall be
governed by and construed in accordance with the laws of the State of Delaware
as applied to contracts between Delaware residents entered into and to be
performed entirely in the State of Delaware without regard to principles of
conflicts of laws.

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

          20.  Amendment and Termination.  No amendment, modification,
               -------------------------
termination or cancellation of this Agreement shall be effective unless it is in
writing signed by both the parties hereto.  No waiver of any of the provisions
of this Agreement shall be deemed to be or shall constitute a waiver of any
other provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver.

                                      -10-
<PAGE>

          21.  Integration and Entire Agreement.  This Agreement sets forth the
               --------------------------------
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.

          22.  No Construction as Employment Agreement.  Nothing contained in
               ---------------------------------------
this Agreement shall be construed as giving Indemnitee any right to be retained
in the employ of the Company or any of its subsidiaries or affiliated entities.

                                      -11-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement as of the date first above written.

                                    ILLUMINA, INC.

                                    By: ____________________________________

                                    Name:  _________________________________

                                    Title: _________________________________

                                    Address:  9390 Towne Centre Drive, Suite 200
                                              San Diego, CA 92121



                                    INDEMNITEE:

                                    By:_____________________________________

                                    Name:___________________________________

                                    Address:________________________________

                                            ________________________________




ILLUMINA, INC.
INDEMNIFICATION AGREEMENT
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>9
<FILENAME>0009.txt
<DESCRIPTION>1998 INCENTIVE STOCK PLAN
<TEXT>

<PAGE>

                                                                    EXHIBIT 10.2


                                ILLUMINA, INC.
                           1998 INCENTIVE STOCK PLAN


          1.  Purposes of the Plan.  The purposes of this Stock Plan are to
              --------------------
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company's business.  Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant.  Stock
Purchase Rights may also be granted under the Plan.

          2.  Definitions.  As used herein, the following definitions shall
              -----------
apply:

              (a) "Administrator" means the Board or any of its Committees as
                   -------------
shall be administering the Plan in accordance with Section 4 hereof.

              (b) "Applicable Laws" means the requirements relating to the
                   ---------------
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any other country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.

              (c) "Board" means the Board of Directors of the Company.
                   -----

              (d) "Code" means the Internal Revenue Code of 1986, as amended.
                   ----

              (e) "Committee"  means a committee of Directors appointed by the
                   ---------
Board in accordance with Section 4 hereof.

              (f) "Common Stock" means the Common Stock of the Company.
                   ------------

              (g) "Company" means Illumina, Inc., a California corporation.
                   -------

              (h) "Consultant" means any person who is engaged by the Company or
                   ----------
any Parent or Subsidiary to render consulting or advisory services to such
entity.

              (i) "Director" means a member of the Board of Directors of the
                   --------
Company.

              (j) "Disability" means total and permanent disability as defined
                   ----------
in Section 22(e)(3) of the Code.

              (k) "Employee" means any person, including Officers and Directors,
                   --------
employed by the Company or any Parent or Subsidiary of the Company.  A Service
Provider shall not cease to be
<PAGE>

an Employee in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company, its
Parent, any Subsidiary, or any successor. For purposes of Incentive Stock
Options, no such leave may exceed ninety (90) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock Option held by
the Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

          (l) "Exchange Act" means the Securities Exchange Act of 1934, as
               ------------
amended.

          (m) "Fair Market Value" means, as of any date, the value of Common
               -----------------
Stock determined as follows:

              (i)   If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation The Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

              (ii)  If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the last market trading day prior to the day of determination; or

              (iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator.

          (n) "Incentive Stock Option" means an Option intended to qualify as an
               ----------------------
incentive stock option within the meaning of Section 422 of the Code.

          (o) "Nonstatutory Stock Option" means an Option not intended to
               -------------------------
qualify as an Incentive Stock Option.

          (p) "Officer" means a person who is an officer of the Company within
               -------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

          (q) "Option" means a stock option granted pursuant to the Plan.
               ------

          (r) "Option Agreement" means a written or electronic agreement between
               ----------------
the Company and an Optionee evidencing the terms and conditions of an individual
Option grant.  The Option Agreement is subject to the terms and conditions of
the Plan.

                                      -2-
<PAGE>

          (s)  "Option Exchange Program" means a program whereby outstanding
                -----------------------
Options are exchanged for Options with a lower exercise price.

          (t)  "Optioned Stock" means the Common Stock subject to an Option or a
                --------------
Stock Purchase Right.

          (u)  "Optionee" means the holder of an outstanding Option or Stock
                --------
Purchase Right granted under the Plan.

          (v)  "Parent" means a "parent corporation," whether now or hereafter
                ------
existing, as defined in Section 424(e) of the Code.

          (w)  "Plan" means this 1998 Incentive Stock Plan.
                ----

          (x)  "Restricted Stock" means shares of Common Stock acquired pursuant
                ----------------
to a grant of a Stock Purchase Right under Section 11 below.

          (y)  "Section 16(b)" means Section 16(b) of the Securities Exchange
                -------------
Act of 1934, as amended.

          (z)  "Service Provider"  means an Employee, Director or Consultant.
                ----------------

          (aa) "Share" means a share of the Common Stock, as adjusted in
                -----
accordance with Section 12 below.

          (bb) "Stock Purchase Right" means a right to purchase Common Stock
                --------------------
pursuant to Section 11 below.

          (cc) "Subsidiary" means a "subsidiary corporation," whether now or
                ----------
hereafter existing, as defined in Section 424(f) of the Code.

     3.   Stock Subject to the Plan.  Subject to the provisions of Section
          -------------------------
12 of the Plan, the maximum aggregate number of Shares which may be subject to
option and sold under the Plan is 4,500,000 Shares.  The Shares may be
authorized but unissued, or reacquired Common Stock.

     If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated).  However, Shares that have actually been issued under the Plan,
upon exercise of either an Option or Stock Purchase Right, shall not be returned
to the Plan and shall not become available for future distribution under the
Plan, except that if Shares of Restricted Stock are repurchased by the Company
at their original purchase price, such Shares shall become available for future
grant under the Plan.

     4.   Administration of the Plan.
          --------------------------

                                      -3-
<PAGE>

          (a)  Administrator.  The Plan shall be administered by the Board or a
               -------------
Committee appointed by the Board, which Committee shall be constituted to comply
with Applicable Laws.

          (b)  Powers of the Administrator.  Subject to the provisions of the
               ---------------------------
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority in its discretion:

               (i)    to determine the Fair Market Value;

               (ii)   to select the Service Providers to whom Options and Stock
Purchase Rights may from time to time be granted hereunder;

               (iii)  to determine the number of Shares to be covered by each
such award granted hereunder;

               (iv)   to approve forms of agreement for use under the Plan;

               (v)    to determine the terms and conditions, of any Option or
Stock Purchase Right granted hereunder. Such terms and conditions include, but
are not limited to, the exercise price, the time or times when Options or Stock
Purchase Rights may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Option or Stock Purchase Right or the
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;

               (vi)   to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(e) instead of Common Stock;

               (vii)  to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;

               (viii) to initiate an Option Exchange Program;

               (ix)   to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

               (x)    to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The Fair Market
Value of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined. All elections by Optionees to
have Shares withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable; and

                                      -4-
<PAGE>

               (xi) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.

          (c)  Effect of Administrator's Decision. All decisions, determinations
               ----------------------------------
and interpretations of the Administrator shall be final and binding on all
Optionees.

     5.   Eligibility.
          -----------

          (a)  Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers.  Incentive Stock Options may be granted only to
Employees.

          (b)  Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option.  However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options.  For purposes of this
Section 5(b), Incentive Stock Options shall be taken into account in the order
in which they were granted.  The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

          (c)  Neither the Plan nor any Option or Stock Purchase Right shall
confer upon any Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall it interfere in
any way with his or her right or the Company's right to terminate such
relationship at any time, with or without cause.

     6.   Term of Plan.  The Plan shall become effective upon its adoption
          ------------
by the Board.  It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 14 of the Plan.

     7.   Term of Option.  The term of each Option shall be stated in the
          --------------
Option Agreement; provided, however, that the term shall be no more than ten
(10) years from the date of grant thereof.  In the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant or such shorter term as may be provided
in the Option Agreement.

     8.   Option Exercise Price and Consideration.
          ---------------------------------------

          (a)  The per share exercise price for the Shares to be issued upon
exercise of an Option shall be such price as is determined by the Administrator,
but shall be subject to the following:

               (i)  In the case of an Incentive Stock Option

                                      -5-
<PAGE>

                     (1)  granted to an Employee who, at the time of grant of
such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant.

                     (2)  granted to any other Employee, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.

               (ii)  In the case of a Nonstatutory Stock Option

                     (1)  granted to a Service Provider who, at the time of
grant of such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the exercise price shall be no less than 110% of the Fair Market Value per Share
on the date of grant.

                     (2)  granted to any other Service Provider, the per Share
exercise price shall be no less than 85% of the Fair Market Value per Share on
the date of grant.

               (iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price other than as required above pursuant to a merger or
other corporate transaction.

          (b)  The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant).  Such consideration  may consist of (1) cash,
(2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option, have been owned by the Optionee for more
than six months on the date of surrender, and (y) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which such Option shall be exercised, (5) consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan, or (6) any combination of the foregoing methods of payment.  In making
its determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.

     9.   Exercise of Option.
          ------------------

          (a)  Procedure for Exercise; Rights as a Shareholder. Any Option
               -----------------------------------------------
granted hereunder shall be exercisable according to the terms hereof at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement.  Except in the case of Options granted to Officers,
Directors and Consultants, Options shall become exercisable at a rate of no less
than 20% per year over five (5) years from the date the Options are granted.
Unless the Administrator provides otherwise, vesting of Options granted
hereunder shall be tolled during any unpaid leave of absence.  An Option may not
be exercised for a fraction of a Share.

     An Option shall be deemed exercised when the Company receives: (i) written
or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the

                                      -6-
<PAGE>

Option, and (ii) full payment for the Shares with respect to which the Option is
exercised. Full payment may consist of any consideration and method of payment
authorized by the Administrator and permitted by the Option Agreement and the
Plan. Shares issued upon exercise of an Option shall be issued in the name of
the Optionee or, if requested by the Optionee, in the name of the Optionee and
his or her spouse. Until the Shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Shares, notwithstanding the exercise
of the Option. The Company shall issue (or cause to be issued) such Shares
promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 12 of the Plan.

     Exercise of an Option in any manner shall result in a decrease in the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

          (b) Termination of Relationship as a Service Provider.  If an Optionee
              -------------------------------------------------
ceases to be a Service Provider, such Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement (of at least
thirty (30) days) to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of the Option
as set forth in the Option Agreement).  In the absence of a specified time in
the Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination.  If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan.  If, after termination,
the Optionee does not exercise his or her Option within the time specified by
the Administrator, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

          (c) Disability of Optionee.  If an Optionee ceases to be a Service
              ----------------------
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
(of at least six (6) months) to the extent the Option is vested on the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement).  In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee's termination.  If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

          (d) Death of Optionee.  If an Optionee dies while a Service Provider,
              -----------------
the Option may be exercised within such period of time as is specified in the
Option Agreement (of at least six (6) months) to the extent that the Option is
vested on the date of death (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement) by the Optionee's
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance.  In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve

                                      -7-
<PAGE>

(12) months following the Optionee's termination. If, at the time of death, the
Optionee is not vested as to the entire Option, the Shares covered by the
unvested portion of the Option shall immediately revert to the Plan. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

          (e) Buyout Provisions.  The Administrator may at any time offer to buy
              -----------------
out for a payment in cash or Shares, an Option previously granted, based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

     10.  Non-Transferability of Options and Stock Purchase Rights.  The Options
          --------------------------------------------------------
and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee.

     11.  Stock Purchase Rights.
          ---------------------

          (a) Rights to Purchase.  Stock Purchase Rights may be issued either
              ------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan.  After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically of the terms, conditions and restrictions
related to the offer, including the number of Shares that such person shall be
entitled to purchase, the price to be paid, and the time within which such
person must accept such offer.  The terms of the offer shall comply in all
respects with Section 260.140.42 of Title 10 of the California Code of
Regulations.  The offer shall be accepted by execution of a Restricted Stock
Purchase Agreement in the form determined by the Administrator.

          (b) Repurchase Option.  Unless the Administrator determines otherwise,
              -----------------
the Restricted Stock purchase agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
disability).  The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company.  The repurchase option shall lapse at such rate as the
Administrator may determine.  Except with respect to Shares purchased by
Officers, Directors and Consultants, the repurchase option shall in no case
lapse at a rate of less than 20% per year over five (5) years from the date of
purchase.

          (c) Other Provisions.  The Restricted Stock purchase agreement shall
              ----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.

          (d) Rights as a Shareholder.  Once the Stock Purchase Right is
              -----------------------
exercised, the purchaser shall have rights equivalent to those of a shareholder
and shall be a shareholder when his or her purchase is entered upon the records
of the duly authorized transfer agent of the Company.  No adjustment shall be
made for a dividend or other right for which the record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 12 of
the Plan.

                                      -8-
<PAGE>

     12.  Adjustments Upon Changes in Capitalization, Merger or Asset Sale.
          ----------------------------------------------------------------

          (a) Changes in Capitalization.  Subject to any required action by the
              -------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company.  The conversion of any convertible securities
of the Company shall not be deemed to have been "effected without receipt of
consideration."  Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive.  Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.

          (b) Dissolution or Liquidation.  In the event of the proposed
              --------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction.  The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option or Stock Purchase Right until
fifteen (15) days prior to such transaction as to all of the Optioned Stock
covered thereby, including Shares as to which the Option or Stock Purchase Right
would not otherwise be exercisable.  In addition, the Administrator may provide
that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option or Stock Purchase Right shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated.  To the extent it has not been previously exercised, an
Option or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action.

          (c) Merger or Asset Sale.  In the event of a merger of the Company
              --------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation.  In the
event that the successor corporation refuses to assume or substitute for the
Option or Stock Purchase Right, the Optionee shall fully vest in and have the
right to exercise the Option or Stock Purchase Right as to all of the Optioned
Stock, including Shares as to which it would not otherwise be vested or
exercisable.  If an Option or Stock Purchase Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option or Stock Purchase Right shall terminate upon the expiration of such
period.  For the purposes of this

                                      -9-
<PAGE>

paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right to
purchase or receive, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

     13.  Time of Granting Options and Stock Purchase Rights.  The date of
          --------------------------------------------------
grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Service Provider to whom an
Option or Stock Purchase Right is so granted within a reasonable time after the
date of such grant.

     14.  Amendment and Termination of the Plan.
          -------------------------------------

          (a) Amendment and Termination.  The Board may at any time amend,
              -------------------------
alter, suspend or terminate the Plan.

          (b) Shareholder Approval.  The Board shall obtain shareholder approval
              --------------------
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.

          (c) Effect of Amendment or Termination.  No amendment, alteration,
              ----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

     15.  Conditions Upon Issuance of Shares.
          ----------------------------------

          (a) Legal Compliance.  Shares shall not be issued pursuant to the
              ----------------
exercise of an Option  unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

          (b) Investment Representations.  As a condition to the exercise of an
              --------------------------
Option, the Administrator may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present

                                      -10-
<PAGE>

intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.

     16.  Inability to Obtain Authority.  The inability of the Company to
          -----------------------------
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

     17.  Reservation of Shares.  The Company, during the term of this
          ---------------------
Plan, shall at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

     18.  Shareholder Approval.  The Plan shall be subject to approval by
          --------------------
the shareholders of the Company within twelve (12) months after the date the
Plan is adopted.  Such shareholder approval shall be obtained in the degree and
manner required under Applicable Laws.

     19.  Information to Optionees and Purchasers.  The Company shall provide to
          ---------------------------------------
each Optionee and to each individual who acquires Shares pursuant to the Plan,
not less frequently than annually during the period such Optionee or purchaser
has one or more Options or Stock Purchase Rights outstanding, and, in the case
of an individual who acquires Shares pursuant to the Plan, during the period
such individual owns such Shares, copies of annual financial statements. The
Company shall not be required to provide such statements to key employees whose
duties in connection with the Company assure their access to equivalent
information.

                                      -11-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>10
<FILENAME>0010.txt
<DESCRIPTION>2000 EMPLOYEE STOCK PURCHASE PLAN
<TEXT>

<PAGE>

                                                                    EXHIBIT 10.3

                               ILLUMINA, INC.


                      2000 EMPLOYEE STOCK PURCHASE PLAN

     The following constitute the provisions of the 2000 Employee Stock Purchase
Plan of Illumina, Inc.

     1.  Purpose.  The purpose of the Plan is to provide employees of the
         -------
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the
intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as
amended. The provisions of the Plan, accordingly, shall be construed so as to
extend and limit participation in a manner consistent with the requirements of
that section of the Code.

     2.  Definitions.
         -----------

            (a)  "Board" shall mean the Board of Directors of the Company or
                  -----
any committee thereof designated by the Board of Directors of the Company in
accordance with Section 14 of the Plan.

            (b)  "Code" shall mean the Internal Revenue Code of 1986, as
                  ----
amended.

            (c)  "Common Stock" shall mean the common stock of the Company.
                  ------------

            (d)  "Company" shall mean Illumina, Inc., a Delaware Corporation
                  -------
and any Designated Subsidiary of the Company.

            (e)  "Compensation" shall mean all base straight time gross
                  ------------
earnings exclusive of commissions, payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation.

            (f)  "Designated Subsidiary" shall mean any Subsidiary that has
                  ---------------------
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

            (g)  "Employee" shall mean any individual who is an Employee of
                  --------
the Company for tax purposes whose customary employment with the Company is at
least twenty (20) hours per week and more than five (5) months in any calendar
year. For purposes of the Plan, the employment relationship shall be treated
as continuing intact while the individual is on sick leave or other leave of
absence approved by the Company. Where the period of leave exceeds 90 days and
the individual's right to reemployment is not guaranteed either by statute or
by contract, the employment relationship shall be deemed to have terminated on
the 91st day of such leave.

            (h)  "Enrollment Date" shall mean the first Trading Day of each
                  ---------------
Offering Period.
<PAGE>

            (i)  "Exercise Date" shall mean the first Trading Day on or after
                  -------------
March 1st and September 1st of each year.

            (j)  "Fair Market Value" shall mean, as of any date, the value of
                  -----------------
Common Stock determined as follows:

                 (i)    If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system
on the date of determination, as reported in The Wall Street Journal or such
other source as the Board deems reliable;

                 (ii)   If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock on the date of determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable;

                 (iii)  In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by the
Board; or

                 (iv)   For purposes of the Enrollment Date of the first
Offering Period under the Plan, the Fair Market Value shall be the initial
price to the public as set forth in the final prospectus included within the
registration statement in Form S-1 filed with the Securities and Exchange
Commission for the initial public offering of the Company's Common Stock (the
"Registration Statement").

            (k)  "Offering Periods" shall mean the periods of approximately
                  ----------------
twenty-four (24) months during which an option granted pursuant to the Plan
may be exercised, commencing on the first Trading Day on or after March 1st
and September 1st of each year and terminating on the first Trading Day on or
after the February 28 and August 31 Offering Period commencement date
approximately twenty-four months later; provided, however, that the first
Offering Period under the Plan shall commence with the first Trading Day on or
after the date on which the Securities and Exchange Commission declares the
Company's Registration Statement effective and ending on the first Trading Day
on or after August 31, 2002. The duration and timing of Offering Periods may
be changed pursuant to Section 4 of this Plan.

            (l)  "Plan" shall mean this 2000 Employee Stock Purchase Plan.
                  ----

            (m)  "Purchase Period" shall mean the approximately six month
                  ---------------
period commencing on one Exercise Date and ending with the next Exercise Date,
except that the first Purchase Period of any Offering Period shall commence on
the Enrollment Date and end with the next Exercise Date.

            (n)  "Purchase Price" shall mean 85% of the Fair Market Value of a
                  --------------
share of Common Stock on the Enrollment Date or on the Exercise Date,
whichever is lower; provided however, that the Purchase Price may be adjusted
by the Board pursuant to Section 20.

                                      -2-
<PAGE>

            (o)  "Reserves" shall mean the number of shares of Common Stock
                  --------
covered by each option under the Plan which have not yet been exercised and
the number of shares of Common Stock which have been authorized for issuance
under the Plan but not yet placed under option.

            (p)  "Subsidiary" shall mean a corporation, domestic or foreign,
                  ----------
of which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.

            (q)  "Trading Day" shall mean a day on which national stock
                  -----------
exchanges and the Nasdaq System are open for trading.

     3.  Eligibility.
         -----------

            (a)  Any Employee who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.

            (b)  Any provisions of the Plan to the contrary notwithstanding,
no Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth
of stock (determined at the fair market value of the shares at the time such
option is granted) for each calendar year in which such option is outstanding
at any time.

     4.  Offering Periods. The Plan shall be implemented by consecutive,
         ----------------
overlapping Offering Periods with a new Offering Period commencing on the
first Trading Day on or after March 1st and September 1st each year, or on
such other date as the Board shall determine, and continuing thereafter until
terminated in accordance with Section 20 hereof; provided, however, that the
first Offering Period under the Plan shall commence with the first Trading Day
on or after the date on which the Securities and Exchange Commission declares
the Company's Registration Statement effective and ending on the first Trading
Day on or after August 31, 2002. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without stockholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected thereafter.

     5.  Participation.
         -------------

            (a)  An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll office
prior to the applicable Enrollment Date.

            (b)  Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll
in the Offering Period to which such authorization is applicable, unless
sooner terminated by the participant as provided in Section 10 hereof.

                                      -3-
<PAGE>

     6.  Payroll Deductions.
         ------------------

            (a)  At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each pay
day during the Offering Period in an amount not exceeding fifteen percent
(15%) of the Compensation which he or she receives on each pay day during the
Offering Period; provided, however, that should a pay day occur on an Exercise
Date, a participant shall have the payroll deductions made on such day applied
to his or her account under the new Offering Period or Purchase Period, as the
case may be.

            (b)  All payroll deductions made for a participant shall be
credited to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into such
account.

            (c)  A participant may discontinue his or her participation in the
Plan as provided in Section 10 hereof, or may increase or decrease the rate of
his or her payroll deductions during the Offering Period by completing or
filing with the Company a new subscription agreement authorizing a change in
payroll deduction rate. The Company may, in its discretion, limit the nature
and/or number of participation rate changes during any Offering Period, and
may establish such other conditions or limitations as it deems appropriate for
Plan administration. The change in rate shall be effective with the first full
payroll period following five (5) business days after the Company's receipt of
the new subscription agreement unless the Company elects to process a given
change in participation more quickly. A participant's subscription agreement
shall remain in effect for successive Offering Periods unless terminated as
provided in Section 10 hereof.

            (d)  Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be decreased to zero percent (0%) at any
time during a Purchase Period. Payroll deductions shall recommence at the rate
provided in such participant's subscription agreement at the beginning of the
first Purchase Period which is scheduled to end in the following calendar
year, unless terminated by the participant as provided in Section 10 hereof.

            (e)  At the time the option is exercised, in whole or in part, or
at the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any
time, the Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or benefits attributable to sale
or early disposition of Common Stock by the Employee.

     7.  Grant of Option.  On the Enrollment Date of each Offering Period, each
         ---------------
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Purchase Period more than
25,000 shares of the Company's Common Stock

                                      -4-
<PAGE>

(subject to any adjustment pursuant to Section 19), and provided further that
such purchase shall be subject to the limitations set forth in Sections 3(b)
and 12 hereof. The Board may, for future Offering Periods, increase or
decrease, in its absolute discretion, the maximum number of shares of the
Company's Common Stock an Employee may purchase during each Purchase Period of
such Offering Period. Exercise of the option shall occur as provided in
Section 8 hereof, unless the participant has withdrawn pursuant to Section 10
hereof. The option shall expire on the last day of the Offering Period.

     8.  Exercise of Option.
         ------------------

            (a)  Unless a participant withdraws from the Plan as provided in
Section 10 hereof, his or her option for the purchase of shares shall be
exercised automatically on the Exercise Date, and the maximum number of full
shares subject to option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions in his or
her account. No fractional shares shall be purchased; any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share shall be retained in the participant's account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.

            (b)  If the Board determines that, on a given Exercise Date, the
number of shares with respect to which options are to be exercised may exceed
(i) the number of shares of Common Stock that were available for sale under
the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the
number of shares available for sale under the Plan on such Exercise Date, the
Board may in its sole discretion (x) provide that the Company shall make a pro
rata allocation of the shares of Common Stock available for purchase on such
Enrollment Date or Exercise Date, as applicable, in as uniform a manner as
shall be practicable and as it shall determine in its sole discretion to be
equitable among all participants exercising options to purchase Common Stock
on such Exercise Date, and continue all Offering Periods then in effect, or
(y) provide that the Company shall make a pro rata allocation of the shares
available for purchase on such Enrollment Date or Exercise Date, as
applicable, in as uniform a manner as shall be practicable and as it shall
determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Exercise Date, and
terminate any or all Offering Periods then in effect pursuant to Section 20
hereof. The Company may make pro rata allocation of the shares available on
the Enrollment Date of any applicable Offering Period pursuant to the
preceding sentence, notwithstanding any authorization of additional shares for
issuance under the Plan by the Company's stockholders subsequent to such
Enrollment Date.

     9.  Delivery. As promptly as practicable after each Exercise Date on
         --------
which a purchase of shares occurs, the Company shall arrange the delivery to
each participant, as appropriate, of a certificate representing the shares
purchased upon exercise of his or her option.

                                      -5-
<PAGE>

     10. Withdrawal.
         ----------

            (a)  A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan. All of the participant's
payroll deductions credited to his or her account shall be paid to such
participant promptly after receipt of notice of withdrawal and such
participant's option for the Offering Period shall be automatically
terminated, and no further payroll deductions for the purchase of shares shall
be made for such Offering Period. If a participant withdraws from an Offering
Period, payroll deductions shall not resume at the beginning of the succeeding
Offering Period unless the participant delivers to the Company a new
subscription agreement.

            (b)  A participant's withdrawal from an Offering Period shall not
have any effect upon his or her eligibility to participate in any similar plan
which may hereafter be adopted by the Company or in succeeding Offering
Periods which commence after the termination of the Offering Period from which
the participant withdraws.

     11. Termination of Employment.
         -------------------------

            Upon a participant's ceasing to be an Employee, for any reason, he
or she shall be deemed to have elected to withdraw from the Plan and the
payroll deductions credited to such participant's account during the Offering
Period but not yet used to exercise the option shall be returned to such
participant or, in the case of his or her death, to the person or persons
entitled thereto under Section 15 hereof, and such participant's option shall
be automatically terminated. The preceding sentence notwithstanding, a
participant who receives payment in lieu of notice of termination of
employment shall be treated as continuing to be an Employee for the
participant's customary number of hours per week of employment during the
period in which the participant is subject to such payment in lieu of notice.

     12. Interest.  No interest shall accrue on the payroll deductions of a
         --------
participant in the Plan.

     13. Stock.
         -----

            (a)  Subject to adjustment upon changes in capitalization of the
Company as provided in Section 19 hereof, the maximum number of shares of the
Company's Common Stock which shall be made available for sale under the Plan
shall be 300,000 shares, plus an annual increase to be added on the first day
of the Company's fiscal year, beginning in 2001, equal to the lesser of (i)
1,500,000 shares, (ii) 3% of the outstanding shares of Common Stock on the
last day of the immediately preceding fiscal year, or (iii) an amount
determined by the Board.

            (b)  The participant shall have no interest or voting right in
shares covered by his option until such option has been exercised.

            (c)  Shares to be delivered to a participant under the Plan shall
be registered in the name of the participant or in the name of the participant
and his or her spouse.

                                      -6-
<PAGE>

     14. Administration. The Plan shall be administered by the Board or a
         --------------
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision
and determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.

     15.  Designation of Beneficiary.
          --------------------------

            (a)  A participant may file a written designation of a beneficiary
who is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to an
Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash from the
participant's account under the Plan in the event of such participant's death
prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required
for such designation to be effective.

            (b)  Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known
to the Company, then to such other person as the Company may designate.

     16. Transferability. Neither payroll deductions credited to a
         ---------------
participant's account nor any rights with regard to the exercise of an option
or to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

     17. Use of Funds. All payroll deductions received or held by the Company
         ------------
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.

     18.  Reports. Individual accounts shall be maintained for each
          -------
participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

                                      -7-
<PAGE>

     19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
         ---------------------------------------------------------------------
Merger or Asset Sale.
--------------------

            (a)  Changes in Capitalization. Subject to any required action by
                 -------------------------
the stockholders of the Company, the Reserves (including the number of shares
automatically added annually to the Plan pursuant to Section 13(a)(i)), the
maximum number of shares each participant may purchase each Purchase Period
(pursuant to Section 7), as well as the price per share and the number of
shares of Common Stock covered by each option under the Plan which has not yet
been exercised shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except
as expressly provided herein, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an option.

            (b)  Dissolution or Liquidation. In the event of the proposed
                 --------------------------
dissolution or liquidation of the Company, the Offering Period then in
progress shall be shortened by setting a new Exercise Date (the "New Exercise
Date"), and shall terminate immediately prior to the consummation of such
proposed dissolution or liquidation, unless provided otherwise by the Board.
The New Exercise Date shall be before the date of the Company's proposed
dissolution or liquidation. The Board shall notify each participant in
writing, at least ten (10) business days prior to the New Exercise Date, that
the Exercise Date for the participant's option has been changed to the New
Exercise Date and that the participant's option shall be exercised
automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in Section 10
hereof.

            (c)  Merger or Asset Sale. In the event of a proposed sale of all
                 --------------------
or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each outstanding option shall be
assumed or an equivalent option substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, any
Purchase Periods then in progress shall be shortened by setting a new Exercise
Date (the "New Exercise Date") and any Offering Periods then in progress shall
end on the New Exercise Date. The New Exercise Date shall be before the date
of the Company's proposed sale or merger. The Board shall notify each
participant in writing, at least ten (10) business days prior to the New
Exercise Date, that the Exercise Date for the participant's option has been
changed to the New Exercise Date and that the participant's option shall be
exercised automatically on the New Exercise Date, unless prior to such date
the participant has withdrawn from the Offering Period as provided in Section
10 hereof.

     20. Amendment or Termination.
         ------------------------

                                      -8-
<PAGE>

            (a)  The Board of Directors of the Company may at any time and for
any reason terminate or amend the Plan. Except as provided in Section 19
hereof, no such termination can affect options previously granted, provided
that an Offering Period may be terminated by the Board of Directors on any
Exercise Date if the Board determines that the termination of the Offering
Period or the Plan is in the best interests of the Company and its
stockholders. Except as provided in Section 19 and this Section 20 hereof, no
amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to
comply with Section 423 of the Code (or any successor rule or provision or any
other applicable law, regulation or stock exchange rule), the Company shall
obtain stockholder approval in such a manner and to such a degree as required.

            (b)  Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods,
limit the frequency and/or number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to amounts withheld
in a currency other than U.S. dollars, permit payroll withholding in excess of
the amount designated by a participant in order to adjust for delays or
mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or
accounting and crediting procedures to ensure that amounts applied toward the
purchase of Common Stock for each participant properly correspond with amounts
withheld from the participant's Compensation, and establish such other
limitations or procedures as the Board (or its committee) determines in its
sole discretion advisable which are consistent with the Plan.

            (c)  In the event the Board determines that the ongoing operation
of the Plan may result in unfavorable financial accounting consequences, the
Board may, in its discretion and, to the extent necessary or desirable, modify
or amend the Plan to reduce or eliminate such accounting consequence
including, but not limited to:

                 (i)   altering the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change in Purchase
Price;

                 (ii)  shortening any Offering Period so that Offering Period
ends on a new Exercise Date, including an Offering Period underway at the time
of the Board action; and

                 (iii) allocating shares.

            Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants.

     21. Notices.  All notices or other communications by a participant to the
         -------
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

     22.  Conditions Upon Issuance of Shares.  Shares shall not be issued with
          ----------------------------------
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as

                                      -9-
<PAGE>

amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

            As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.

     23. Term of Plan. The Plan shall become effective upon the earlier to
         ------------
occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company. It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 20 hereof.

     24. Automatic Transfer to Low Price Offering Period. To the extent
         -----------------------------------------------
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering
Period is lower than the Fair Market Value of the Common Stock on the
Enrollment Date of such Offering Period, then all participants in such
Offering Period shall be automatically withdrawn from such Offering Period
immediately after the exercise of their option on such Exercise Date and
automatically re-enrolled in the immediately following Offering Period.

                                      -10-
<PAGE>

                                  EXHIBIT A
                                  ---------

                               ILLUMINA, INC.
                      2000 EMPLOYEE STOCK PURCHASE PLAN

                           SUBSCRIPTION AGREEMENT


_____ Original Application                           Enrollment Date:___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)

1.   ____________________ hereby elects to participate in the Illumina, Inc.
     2000 Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and
     subscribes to purchase shares of the Company's Common Stock in accordance
     with this Subscription Agreement and the Employee Stock Purchase Plan.

2.   I hereby authorize payroll deductions from each paycheck in the amount of
     ____% of my Compensation on each payday (from 0 to 15%) during the Offering
     Period in accordance with the Employee Stock Purchase Plan.  (Please note
     that no fractional percentages are permitted.)

3.   I understand that said payroll deductions shall be accumulated for the
     purchase of shares of Common Stock at the applicable Purchase Price
     determined in accordance with the Employee Stock Purchase Plan.  I
     understand that if I do not withdraw from an Offering Period, any
     accumulated payroll deductions will be used to automatically exercise my
     option.

4.   I have received a copy of the complete Employee Stock Purchase Plan.  I
     understand that my participation in the Employee Stock Purchase Plan is in
     all respects subject to the terms of the Plan.  I understand that my
     ability to exercise the option under this Subscription Agreement is subject
     to stockholder approval of the Employee Stock Purchase Plan.

5.   Shares purchased for me under the Employee Stock Purchase Plan should be
     issued in the name(s) of (Employee or Employee and Spouse only).

6.   I understand that if I dispose of any shares received by me pursuant to the
     Plan within 2 years after the Enrollment Date (the first day of the
     Offering Period during which I purchased such shares) or one year after the
     Exercise Date, I will be treated for federal income tax purposes as having
     received ordinary income at the time of such disposition in an amount equal
     to the excess of the fair market value of the shares at the time such
     shares were purchased by me over the price which I paid for the shares.  I
                                                                              -
     hereby agree to notify the Company in writing within 30 days after the date
     ---------------------------------------------------------------------------
     of any disposition of my shares and I will make adequate provision for
     ----------------------------------------------------------------------
     Federal, state or other tax withholding obligations, if any, which arise
     ------------------------------------------------------------------------
     upon the disposition of the Common Stock.  The Company may, but will not be
     ----------------------------------------
     obligated to, withhold
<PAGE>

     from my compensation the amount necessary to meet any applicable
     withholding obligation including any withholding necessary to make
     available to the Company any tax deductions or benefits attributable to
     sale or early disposition of Common Stock by me. If I dispose of such
     shares at any time after the expiration of the 2-year and 1-year holding
     periods, I understand that I will be treated for federal income tax
     purposes as having received income only at the time of such disposition,
     and that such income will be taxed as ordinary income only to the extent
     of an amount equal to the lesser of (1) the excess of the fair market
     value of the shares at the time of such disposition over the purchase
     price which I paid for the shares, or (2) 15% of the fair market value of
     the shares on the first day of the Offering Period. The remainder of the
     gain, if any, recognized on such disposition will be taxed as capital
     gain.

7.   I hereby agree to be bound by the terms of the Employee Stock Purchase
     Plan.  The effectiveness of this Subscription Agreement is dependent upon
     my eligibility to participate in the Employee Stock Purchase Plan.

8.   In the event of my death, I hereby designate the following as my
     beneficiary(ies) to receive all payments and shares due me under the
     Employee Stock Purchase Plan:

     NAME:  (Please print)_____________________________________________________
                          (First)               (Middle)                (Last)

     _________________________                  ________________________________
     Relationship
                                                ________________________________
                                                (Address)
     Employee's Social
     Security Number:                           ________________________________

     Employee's Address:                        ________________________________

                                                ________________________________

                                                ________________________________


I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:_________________________                 ________________________________
                                                Signature of Employee


                                                ________________________________
                                                Spouse's Signature (If
                                                beneficiary other than spouse)

                                     -2-
<PAGE>

                                  EXHIBIT B
                                  ---------

                               ILLUMINA, INC.
                      2000 EMPLOYEE STOCK PURCHASE PLAN

                            NOTICE OF WITHDRAWAL


     The undersigned participant in the Offering Period of the Illumina, Inc.
2000 Employee Stock Purchase Plan which began on ____________, ______ (the
"Enrollment Date") hereby notifies the Company that he or she hereby withdraws
from the Offering Period.  He or she hereby directs the Company to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period.  The undersigned
understands and agrees that his or her option for such Offering Period will be
automatically terminated.  The undersigned understands further that no further
payroll deductions will be made for the purchase of shares in the current
Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.

                                    Name and Address of Participant:

                                    ________________________________

                                    ________________________________

                                    ________________________________

                                    Signature:

                                    ________________________________

                                    Date:____________________________
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>11
<FILENAME>0011.txt
<DESCRIPTION>MASTER LOAN AND SECURITY AGREEMENT
<TEXT>

<PAGE>

                                                                    EXHIBIT 10.9

                                                            FINANCIAL INNOVATORS

                                                                   [FINOVA LOGO]

                                                      FINOVA Capital Corporation
                                                              10 Waterside Drive
                                                       Farmington, CT 06032-3065
                                                                  (860) 676-1818



                      MASTER LOAN AND SECURITY AGREEMENT

      Master Loan and Security Agreement No. S7680,  dated March 6, 2000


FINOVA Capital Corporation  ("we," "us" or "FINOVA"), having its principal place
of business at FINOVA Corporate Center, 4800 North Scottsdale Road, Scottsdale,
Arizona 85251-7623 is willing to make a loan (the "Loan") to Illumina, Inc.
("you" or "Borrower"), having its principal place of business at 9390 Towne
Centre Drive, Suite 200, San Diego, CA  92121, in one or more advances made from
time to time (individually, an "Advance" and collectively, the "Advances"), in
the aggregate principal amount of up to Three Million Dollars  ($3,000,000.00),
under the terms and conditions contained in this Master Loan and Security
Agreement (this "Master Agreement").  The entire Loan will be "cross
collateralized" and secured by the collateral (the "Collateral") described in
each schedule (individually, a "Schedule" and collectively, "Schedules") which
will be executed in connection with each Advance and the related Note (as
hereinafter defined).  The Collateral includes the Equipment hereinafter
described and any and all replacement parts, additions, accessories and
accessions that you may add to the Equipment, as well as all replacements and
substitutions of the Equipment and all proceeds of the Equipment, including,
without limitation, insurance proceeds.  We may treat any Schedule as a separate
loan and security agreement containing all of the provisions of this Master
Agreement.

1.   THE CREDIT

     (a) Advances.  Each Advance shall be evidenced by and the specific terms
applicable thereto set forth in a Note and related Schedule.  All of the Notes
and Schedules, taken together, will evidence the entire Loan. We will only make
the Loan to you if all the conditions in this Master Agreement have been met to
our satisfaction.  We will rely on your representations and warranties contained
in this Master Agreement, in making the Loan.  The terms of this Master
Agreement will each apply to the entire Loan.

     (b) Use of Proceeds.  The proceeds of the Advances will be used solely to
reimburse you for your payment of the purchase price for equipment which is
satisfactory to us and which is described in the applicable Schedule
("Equipment").  If you have not yet paid for the Equipment (but the same is
otherwise satisfactory to us), the proceeds of the Advance will be paid by us
directly to the supplier (which you have chosen) to pay the purchase price of
the Equipment.

     (c) Notes. Your obligation to repay the Advance and to pay interest thereon
will be evidenced by separate secured promissory notes (individually, a "Note"
and collectively, the "Notes"). Each Note will be dated the date of the
<PAGE>

Schedule to which the Advance evidenced by the Note is related. The related
Schedule will be deemed to be part of the Note.

     (d) Term. The term ("Term") of each Schedule (and the related Advance)
begins upon the date that we make payment for the Collateral covered under the
Schedule (the "Closing Date"). The Term continues until you fully perform all of
your obligations under this Master Agreement, each related Schedule and the
related Note(s).

     (e) Loan Account.  We will keep a loan account on our books and records for
the Loan.  We will record all payments of principal and interest in the loan
account.  Unless the entries in the loan account are clearly in error, the loan
account will definitively indicate the outstanding principal balance and accrued
interest on the Loan.

     (f) Payments.  The scheduled payments of principal and interest (the
"Payments") are indicated on and due and payable in accordance with the terms of
the applicable Note and Schedule.  The Payments are payable in advance and
otherwise on the dates and in the amounts set forth on the applicable Schedule.

     (g) First Payment and Subsequent Payments.  The first Payment under a Note
and Advance ("First Payment") is due at the beginning of its Term and shall, at
our option, either be deducted from the proceeds of the Advance or paid directly
to us by you.  Subsequent Payments are due on the thirtieth (30th) day of each
successive month as set forth on the Schedule until you pay to us in full all of
the Payments and any other fees, costs, charges and expenses that you owe us.

     (h) Interest.  Prior to Maturity of an Advance, you will pay us interest on
the Advance at the interest rate indicated in the applicable Schedule (the
"Interest Rate"). "Maturity" means the scheduled maturity or any earlier date on
which we accelerate the Loan.  The Payment amount indicated in the Schedule
includes interest at the applicable Interest Rate.  Interest is calculated in
advance using a year of 360 days with twelve months of 30 days.

     (i) Interim Interest Payment. If an Advance is made on a day other than the
thirtieth (30th) or thirty-first (31st) day of a month, you will also pay to us,
together with the First Payment, interest on the Advance at the applicable
interest rate for the period from the date the Advance is made until the twenty-
ninth (29th) day of the month in which the Advance is made. If an Advance is
made on the thirty-first (31st) day of a month, you will also pay to us,
together with the First Payment, interest on the Advance at the applicable
interest rate for the period from the date the Advance is made until the twenty-
ninth (29th) day of the following month. If an Advance is made on the thirtieth
(30th) day of a month, no interim interest will be due.

     (j) Default Interest Rate.  After Maturity of the Loan or any Advance, you
will pay us interest thereon at a rate of four (4%) percent per year above the
applicable Interest Rate.  This is referred to as the "Default Rate."

     (k) Usury. You and we intend to obey the law. If the Interest Rate charged
would exceed the maximum legal rate, you will only have to pay the maximum legal
rate. You do not have to pay any excess interest over and above the maximum
legal rate of interest. However, if it later becomes legal for you to pay all or
part of any excess interest, you will then pay it to us upon our request.

     (l) Payment Details.  You will make all Payments due under this Master
Agreement by 12:00 P.M., Connecticut time, on the day they are due.  You will
make all Payments in US Dollars (US$) in immediately available funds.  We do not
have to make or give "presentment, demand, protest or notice" to get paid.  You
waive "presentment, demand, protest and notice."

     (m) Application of Payments. Each Payment under this Master Agreement is to
be applied in the following order: first, to any fees, costs, expenses and
charges you may owe us; second, to any interest due; and third to the principal
balance.

                                       2
<PAGE>

     (n) Prepayment. You may prepay the Loan as specifically permitted by
Exhibit B to the applicable Schedule.

     (o) No Setoffs.  Your obligation to pay us all Payments is absolute and
unconditional.  You are not excused from making the Payments, in full, for any
reason.  You agree that you have no defense for failure to make the Payments and
you will not make any counterclaims or setoffs to avoid making the Payments.

2.   SECURITY INTEREST

     (a)  You grant us a first and only lien on and security interest in the
Collateral.  The Collateral secures the full and timely payment and performance
of all of your now existing or hereafter arising indebtedness, liabilities and
obligations to us, whether under this Master Agreement, the Schedules, the Notes
and any other agreement, loan or lease that you may at any time or times have
with us or otherwise (collectively, the "Obligations").  You also grant us a
security interest in any additional collateral identified in any Schedule.  Any
additional collateral is considered to be "Collateral" and it secures all of the
Obligations.

     (b) If we request, you will put labels supplied by us stating  "PROPERTY
SUBJECT TO A SECURITY INTEREST HELD BY FINOVA CAPITAL CORPORATION" on the
Collateral where they are clearly visible.

     (c) You give us permission to add to this Master Agreement or any Schedule
the serial numbers and other information about the Collateral.

     (d) You give us permission to file this Master Agreement or Uniform
Commercial Code financing statements, at your expense, in order to perfect our
security interest in the Collateral.  You also give us permission to sign your
name on the Uniform Commercial Code financing statements where this is permitted
by law.

     (e) You will pay our fees and costs for documentation, closing,
administration and termination of this Master Agreement, the Notes and
Schedules. These fees include such items as reasonable attorneys fees and
expenses incurred in preparing this Master Agreement and all agreements,
instruments and documents executed in connection herewith, and all amendments,
supplements and waivers hereto and thereto, as well as due diligence searches
and fees for preparing and filing UCC terminations and releases. You will also
pay any filing, recording or stamp fees or taxes resulting from filing this
Master Agreement or Uniform Commercial Code financing statements.

     (f) At your expense, you will defend our first priority security interest
in the Collateral against, and keep the Collateral free of, any legal process,
liens, other security interests, attachments, levies and executions. You will
give us immediate written notice of any legal process, liens, attachments,
levies or executions, and you will indemnify us against any loss that results to
us from these causes.

     (g) You will notify us at least 15 days before you change the address of
your principal executive office or principal place of business. Your principal
executive office and principal place of business are set forth at the beginning
of this Master Agreement.

     (h) You will notify us at least 15 days before you change your state of
incorporation.

     (i) You will promptly sign and return additional documents that we may
reasonably request in order to protect our first priority security interest in
the Collateral.

     (j) Except as set forth in a Schedule, the Collateral is personal property
and will remain personal property.  Except as set forth in a Schedule, you will
not incorporate it into real estate and will not do anything that will cause the
Collateral to become part of real estate or a fixture.

3.   CONDITIONS OF LENDING

     (a)  See our Commitment Letter to you dated February 28, 2000 (the
"Commitment Letter"),

                                       3
<PAGE>

which you and we consider to be a part of this Master Agreement. The terms and
conditions of the Commitment Letter continue following the making of the first
Advance, including, without limitation, conditions to the Loan. However, if
there is a conflict between the terms and conditions of this Master Agreement,
any Schedule or any Note and the terms and conditions of the Commitment Letter,
then you and we agree that the terms and conditions of this Master Agreement,
the Schedules and the Notes control over the Commitment Letter terms and
conditions.

     (b)  Before we disburse any proceeds of any Advance, we also require the
following:

          (i)   That no payment is past due to us under any other agreement,
loan or lease that you have with us.

          (ii)  That you are complying with all terms of this Master Agreement,
the Schedules and the Notes and there are no defaults hereunder or thereunder.

          (iii) That we have received all the documents we requested, including
the signed Schedule and Note.

          (iv)  That there has been no material adverse change in your financial
condition, business or operations, or that of any guarantor, from the financial
condition that you have disclosed to us.

          (v)   All conditions contained in the Commitment Letter have been
satisfied.

4.   REPRESENTATIONS AND WARRANTIES

You represent and warrant to us as follows:

     (a)  You and each guarantor are duly organized, existing and in good
standing wherever you or it are required by law to be so qualified. You and each
guarantor have full power and authority to execute, deliver and carry out the
provisions of this Master Agreement, the Schedules and the Notes and to borrow
hereunder and thereunder. This Master Agreement, the Schedules and the Notes are
validly executed and delivered by you and the guarantors and are the legal,
valid and binding obligations of you and the guarantors, each enforceable in
accordance with its terms.

     (b)  Neither you nor any guarantor is a defendant under any material
litigation and there are no judgments outstanding against you.

     (c)  All of the Equipment has been delivered to you and installed at the
location set forth on the Schedule and you have accepted all of the Equipment
for all purposes of this Master Agreement.

     (d)  You have good title to all of your assets, including, without
limitation, the Collateral, and in the case of the Collateral, free and clear of
all security interests, liens and other encumbrances. Upon filing of UCC-1
financing statements in all applicable filing offices, we will be granted a
first and only perfected lien on and security interest in all of the Collateral.
There are no other security interests, liens or encumbrances covering the
Collateral.

     (e)  You have supplied us with information about the Collateral. You
promise to us that the amount of our Advance as to each item of Equipment is no
more than the fair and usual price for this kind of Equipment, taking into
account any discounts, rebates and allowances that you or any affiliate of yours
may have been given for the Equipment.

     (f)  The Collateral is located at the premises set forth on the Schedule.

     (g)  All financial information and other information that you have given us
is true and complete. You have not failed to tell us anything that would make
the financial information not misleading. There has been no material adverse
change in your financial condition, business or operations, or the financial
condition of any guarantor, from the financial condition that you disclosed to
us.

                                       4
<PAGE>

     (h)  You have complied with all "environmental laws" and will continue to
comply with all "environmental laws."  No "hazardous substances" are used,
generated, treated, stored or disposed of by you or at your properties except in
compliance with all environmental laws.  "Environmental laws" mean all federal,
state or local environmental laws and regulations, including the following laws:
CERCLA, RCRA, Hazardous Materials Transport Act and The Federal Water Pollution
Control Act.  "Hazardous substances" means all hazardous or toxic wastes,
materials or substances, as defined in the environmental laws, as well as oil,
flammable substances, asbestos that is or could become friable, urea
formaldehyde insulation, polychlorinated biphenyls and radon gas.

(i)  You have taken all action necessary to assure that there has been no
material adverse change to your business by reason of the advent of the year
2000; this includes, without limitation, your representation that all computer-
based systems, embedded microchips and other processing capabilities effectively
recognize and process dates after December 31, 1999.

5.   COVENANTS

You agree to do the following things (or not to do the following things if so
stated) until full payment of all amounts due to us under this Master Agreement,
the Schedules and the Notes:

     (a)  Care, Use, Location, Transfer, Encumbrance And Alteration of The
Collateral.

          (i)     You will make sure that the Collateral is maintained in good
operating condition, and that it is serviced, repaired and overhauled when this
is necessary to keep the Collateral in good operating condition. All maintenance
must be done according to the Supplier's or Manufacturer's requirements or
recommendations. All maintenance must also comply with any legal or regulatory
requirements.

          (ii)    You will maintain service logs for the Collateral, if
applicable, and permit us or our agents to inspect the Collateral, the service
logs and service reports. You give us and our agents permission to make copies
of the service logs and service reports.

          (iii)   We will give you prior notice if we, or our agents, want to
inspect the Collateral or the service logs or service reports. We may inspect it
during regular business hours. If we find during an inspection that you are not
complying with this Master Agreement or if you are otherwise in default under
this Master Agreement, you (and not us) will pay our travel, meals and lodging
costs, our salary costs, and our costs and fees and those of our agents for
reinspection. You will promptly cure any problems with the Collateral that are
discovered during our inspections.

          (iv)    You will use the Collateral only for business purposes. You
will obey all legal and regulatory requirements in your use of the Collateral.

          (v)     You will make all additions, modifications and improvements to
the Collateral that are required by law or government regulation. Otherwise, you
will not alter the Collateral without our written permission. You will replace
all worn, lost, stolen or destroyed parts of the Collateral with replacement
parts that are as good or better than the original parts. The new parts will
become subject to our security interest upon replacement.

          (vi)    You will not remove the Collateral from the location indicated
in the Schedule.

          (vii)   You have and will have good and merchantable title to all of
the Collateral.

          (viii)  You will not convey, assign, sell, mortgage, transfer,
encumber, pledge, hypothecate, grant a security interest in, grant options with
respect to, lease or otherwise dispose of all or any part of any interest
whatsoever in or to any or all of the Collateral, or any interest therein.

          (viiii) Borrower shall at all times have and maintain cash, cash
equivalents and short term investments in bank or securities accounts in an
aggregate amount of not less than 200% of the then outstanding principal balance
of the Loan.

                                       5
<PAGE>

Borrower shall deliver to Lender such financial and other information and in
such form as Lender shall from time to time request in order to evidence
compliance with this section.

     (b)  Year 2000 Compliant.

You shall take all action necessary to assure that there will be no material
adverse change to your business by reason of the advent of the year 2000,
including, without limitation, that all computer-based systems, embedded
microchips and other processing capabilities effectively recognize and process
all dates after December 31, 1999.  At our request, you shall provide to us
assurance reasonably acceptable to us that your computer-based systems, embedded
microchips and other processing capabilities are year 2000 compatible.

     (c)  Risk of Loss.

          (i)  You have the complete risk of loss or damage to the Collateral.
Loss or damage to the Collateral will not relieve you of your obligation to make
the Payments.

          (ii) If any Collateral is lost or damaged, you have two choices
although if you are in default under this Master Agreement, we and not you will
have the two options. The choices are:

          (A) Repair or replace the damaged or lost Collateral so that, once
again, the Collateral is in good operating condition and we have a perfected
first priority security interest in it.

          (B) Pay us the present value (as of the date of payment) of the
remaining Payments. We will calculate the present value using a discount rate of
five (5%) percent per year. Once you have paid us this amount and any other
amount that you may owe us, we will release our security interest in the damaged
or lost Collateral and you (or your insurer) may keep the Collateral for salvage
purposes, on an "AS IS, WHERE IS" basis and without any representation or
warranty whatsoever.

     (d)  Insurance.

          (i)   Until you have made all Payments to us under this Master
Agreement, the Schedules and the Notes and all Obligations have been satisfied
in full, you will keep the Collateral insured. The amount of insurance, the
coverage, and the insurance company must be acceptable to us.

          (ii)  If you do not provide us with written evidence of insurance that
is acceptable to us, we may buy the insurance ourselves, at your expense. You
will promptly pay us the cost of this insurance. We have no obligation to
purchase any insurance. Any insurance that we purchase will be our insurance,
and not yours, and we may insure the Collateral beyond the date of satisfaction
of the Obligations.

          (iii) Insurance proceeds may be used to repair or replace damaged or
lost Collateral or to pay us the present value of the Payments, as provided
above.

          (iv)  You appoint us as your "attorney-in-fact" to make claims under
the insurance policies, to receive payments under the insurance policies, and to
endorse your name on all documents, checks or drafts relating to insurance
claims for Collateral.

     (e)  Taxes.

          (i)   You will pay all sales, use, excise, stamp, documentary and ad
valorum taxes, license, recording and registration fees, assessments, fines,
penalties and similar charges imposed on the ownership, possession, use, lease
or rental of the Collateral or on the Loan.

          (ii)  You will pay all taxes (other than our federal or state net
income taxes) imposed on you or on us regarding the Payments.

          (iii) You will reimburse us for any of these taxes that we pay or
advance.

          (iv)  You will file and pay for any personal property taxes on the
Collateral.

     (f)  Information Supplied By You.

                                       6
<PAGE>

     (i) During the Term you will promptly provide us with copies of any
current, quarterly and annual reports and all proxy (or information) statements
you file with the Securities and Exchange Commission ("SEC").

     (ii) You will also provide us with the following financial statements:

     (A)  Quarterly balance sheet and statements of earnings and cash flow -
within 45 days after the end of your first three fiscal quarters in each fiscal
year.  These may be internally prepared in accordance with GAAP will be
certified by the Chief Financial Officer and accompanied by a Compliance
Certificate.

     (B)  Annual balance sheet and statements of earnings and cash flow - within
90 days after the end of each fiscal year.  These will be audited and prepared
in accordance with GAAP accounting principles by independent auditors acceptable
to us.  Their audit report must be unqualified.

All financial statements will be prepared according to generally accepted
accounting principles, consistently applied.  All financial statements and SEC
filings that you provide us will be true and complete. They will not fail to
tell us anything that would make them not misleading.

     (iii) At the same time you deliver the financial statements described in
paragraph 5(f)(ii)(A), you will also provide us with a certificate of your chief
financial officer stating that no default exists, or, if he cannot certify this
because a default does exist, he must specify in reasonable detail the nature of
the default.

     (iv)  The audited financial statements described in paragraph 5(f)(ii)(B),
must be accompanied by a certificate of such independent auditor stating that no
default exists, or, if it cannot certify this because a default does exist, it
must specify in reasonable detail the nature of the default.

6.   DEFAULTS

     (a)  Defaults.  You are in default if any of the following happens:

          (i)    You do not pay us, when it is due, any Payment or other payment
that you owe us under this Master Agreement, any Schedule or any Note or that
you owe under any other agreement, loan, lease or other financial arrangement
that you have with us.

          (ii)   Any of the financial information that you give us is not true
and complete, or you fail to tell us anything that would make the financial
information not misleading.

          (iii)  You do something you are not permitted to do, or you fail to do
anything that is required of you, under this Master Agreement, any Schedule or
any other lease, loan or other financial arrangement that you have with us.

          (iv)   An event of default occurs for any other lease, loan or
obligation of yours that exceeds $50,000 in the aggregate.

          (v)    You file bankruptcy, or involuntary bankruptcy is filed against
you and such involuntary bankruptcy is not dismissed within sixty (60) days.

          (vi)   You are subject to any other insolvency proceeding other than
bankruptcy (for example, a receivership action or an assignment for the benefit
of creditors) and such proceeding that is involuntary is not dismissed within
sixty (60) days.

          (vii)  Without our permission, which shall not be unreasonably
withheld provided that the transferee surviving or consolidated entity, as the
case may be (1) assumes your obligations in writing satisfactory to us and (2)
has a tangible net worth determined in accordance with the GAAP with no less
than what your tangible net worth was immediately before the acquisition, you
sell all or a substantial part of its assets, merge or consolidate, or a
majority of your voting stock or interests are transferred.

          (viii) There is a material adverse change in your financial condition,
business or

                                       7
<PAGE>

operations, or that of any guarantor as noted in Section 5 subparagraph (viiii).

     (b)  Remedies, Default Interest, Late Fees.

          If you are in default we may exercise one or more of our "remedies."
Each of our remedies is independent. We may exercise any of our remedies, all of
our remedies or none of our remedies. We may exercise them in any order we
choose. Our exercise of any remedy will not prevent us from exercising any other
remedy or be an "election of remedies." If we do not exercise a remedy, or if we
delay in exercising a remedy, this does not mean that we are forgiving your
default or that we are giving up our right to exercise the remedy. Our remedies
allow us to do one or more of the following:

     (i)   "Accelerate" the Loan balance under any or all Notes. This means that
we may require you to immediately pay us the entire outstanding principal
balance of the entire Loan.

     (ii)   Require you to immediately pay us all amounts that you are required
to pay us for the entire Term of any other agreements, loans, leases or
financial arrangements that you have with us.

     (iii)  Sue you for the entire outstanding principal balance of the Loan and
all other amounts you owe us (including, without limitation, all accrued and
unpaid interest, including interest at the Default Rate), outstanding fees,
costs, expenses and charges, plus all prepayment premiums.

     (iv)   Require you at your expense to assemble the Collateral at a location
we request in the United States of America.

     (v)    Exercise any remedy under the Uniform Commercial Code or otherwise
permitted by law including to the extent permitted retaking and removing the
Collateral.  If required, we may disconnect and separate the Collateral from
your other property.  You will not be entitled to any damages resulting from
removal or repossession of the Collateral.  We may use, ship, store, repair or
lease any Collateral that we repossess.  We may sell any repossessed Collateral
at private or public sale.  You give us permission to show the Collateral to
buyers at your location free of charge during normal business hours.  If we do
this, we do not have to remove the Collateral from your location.  If we
repossess the Collateral and sell it, we will give you credit for the net sale
price, after subtracting our costs of repossessing and selling the Collateral.
If we rent the Collateral to somebody else, we will give you credit for the net
rent received, after subtracting our costs of repossessing and renting the
Collateral, but the credit will be discounted to present value using a discount
rate equal to the Default Rate.  The credit will be applied against what you owe
us under this Master Agreement, the Schedules, the Notes and any other
agreements, loans, leases and other financial arrangements that you have with
us.  If the credit exceeds the amount you owe under this Master Agreement, the
Schedule, the Notes and any other agreements, loans, leases or financial
arrangements that you have with us, we will refund the amount of the excess to
you.

     (vi)   We will have all of our rights and remedies under this Master
Agreement, the Notes, the Schedules and all agreements, instruments and
documents executed in connection herewith and therewith and all of our rights
and remedies under applicable law, whether as a secured party or otherwise.

     (vii)  Return conditions:

     (A)  Following a default, at our request you will return the Collateral,
freight and insurance prepaid by you, to us at a location we request in the
United States of America.  It will be returned in good operating condition, as
required by Section 5 above.  The Collateral will not be subject to any liens
when it is returned.

     (B)  You will pack or crate the Collateral for shipping in the original
containers, or comparable ones.  You will do this carefully and follow all
recommendations of the Supplier and the Manufacturer as to packing or crating.

     (C)  You will also return to us the plans, specifications, operating
manuals, software, documentation, discs, warranties and other

                                       8
<PAGE>

documents furnished by the Manufacturer or Supplier. You will also return to us
all service logs and service reports, as well as all written materials that you
may have concerning the maintenance and operation of the Collateral.

     (D)  At our request, you will provide us with up to 60 days free storage of
the Collateral at your location, and will let us (or our agent) have access to
the Collateral in order to inspect it, display it to others for purchase and
sell it.

     (E)  You will pay us what it costs us to repair the Collateral if you do
not return it in the required condition.

     (viii) You will also pay us the following:

     (A)  All our expenses of enforcing our remedies.  This includes all our
expenses to repossess, store, ship, repair and sell the Collateral.

     (B)  Our reasonable attorney's fees and expenses.

     (C)  Default interest on everything you owe us from the date of your
default to the date on which we are paid in full at the Default Rate.

     (D)  A premium in the amount of five percent (5%) of the outstanding
principal balance  of the Loan.

     (ix)   You will pay us a late fee whenever you pay any amount that you owe
us more than ten (10) days after it is due. You will pay the late fee within one
month after the late Payment was originally due. The late fee will be ten (10%)
percent of the late Payment. If this exceeds the highest legal amount we can
charge you, you will only be required to pay the highest legal amount. The late
fee is intended to reimburse us for our collection costs that are caused by late
Payment. It is charged in addition to all other amounts you are required to pay
us, including Default Interest.

     (x)    You realize that the damages we could suffer as a result of your
default are very uncertain.  This is why we have agreed with you in advance on
the Default Rate to be used in calculating the payments you will owe us if you
default.  You agree that, for these reasons, the payments you will owe us if you
default are "agreed" or "liquidated" damages.  You understand that these
payments are not "penalties" or "forfeitures."

7.   PERFORMING YOUR OBLIGATIONS IF YOU DO NOT

If you do not perform one or more of your obligations under this Master
Agreement or a Schedule or Note, we may perform it for you.  We will notify you
in writing at least ten (10) days before we do this.  We do not have to perform
any of your obligations for you.  If we do choose to perform them, you will pay
us all of our expenses to perform the obligations.  You will also reimburse us
for any money that we advance to perform your obligations, together with
interest at the Default Rate on that amount.  These will be additional
"Payments" that you will owe us and you will pay them at the same time that your
next Payment is due.


8.   INDEMNITY

     (a)  You will indemnify us, defend us and hold us harmless from and against
any and all claims, expenses and attorney's fees concerning or arising from the
Collateral, this Master Agreement, any Schedule or Note, or your breach of any
representation, warranty or covenant. It includes, without limitation, any
claims, losses or charges concerning, arising out of or in connection with the
manufacture, selection, delivery, possession, use, operation or return of the
Collateral and any claims, losses or damages concerning, arising out of or in
connection with this Master Agreement, any Schedule or the Notes.

     (b) This obligation of yours to indemnify us continues even after the Term
is over.

9.   MISCELLANEOUS

 (a) Assignment.

                                       9
<PAGE>

WE MAY ASSIGN OR GRANT A SECURITY INTEREST IN THIS MASTER AGREEMENT, ANY
SCHEDULE, ANY NOTE OR ANY PAYMENTS WITHOUT YOUR PERMISSION.  THE PERSON TO WHOM
WE ASSIGN IS CALLED THE "ASSIGNEE."  THE ASSIGNEE WILL NOT HAVE ANY OF OUR
OBLIGATIONS UNDER THIS MASTER AGREEMENT.  YOU WILL NOT BE ABLE TO RAISE ANY
DEFENSE, COUNTERCLAIM OR OFFSET AGAINST THE ASSIGNEE.  NOTWITHSTANDING ANY SUCH
ASSIGNMENT OR GRANTING OF A SECURITY INTEREST, WE WILL CONTINUE TO BE LIABLE FOR
ALL OF OUR OBLIGATIONS UNDER THIS MASTER AGREEMENT.

UNLESS YOU RECEIVE OUR WRITTEN PERMISSION, YOU MAY NOT ASSIGN OR TRANSFER YOUR
RIGHTS UNDER THIS MASTER AGREEMENT OR ANY SCHEDULE.  YOU ALSO ARE NOT ALLOWED TO
LEASE OR RENT THE COLLATERAL OR LET ANYBODY ELSE USE IT UNLESS WE GIVE YOU OUR
WRITTEN PERMISSION.

     (b)  Acceptance By FINOVA, Governing Law, Jurisdiction, Venue, Service of
Process, Waiver of Jury Trial.

THIS MASTER AGREEMENT WILL ONLY BE BINDING WHEN WE HAVE ACCEPTED IT IN WRITING.

THIS MASTER AGREEMENT IS GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF
ARIZONA (NOT INCLUDING THE "CHOICE OF LAW" DOCTRINE), THE STATE IN WHICH OUR
OFFICE IS LOCATED IN WHICH FINAL APPROVAL OF THE TERMS OR CONDITIONS OF THIS
MASTER AGREEMENT OCCURRED AND FROM WHICH DISBURSEMENT OF THE LOAN PROCEEDS WILL
BE ORDERED. HOWEVER, IF THIS MASTER AGREEMENT IS UNENFORCEABLE UNDER ARIZONA
LAW, IT WILL INSTEAD BE GOVERNED BY THE LAWS OF THE STATE IN WHICH THE
COLLATERAL IS LOCATED.

YOU MAY ONLY SUE US IN A FEDERAL OR STATE COURT THAT IS LOCATED IN MARICOPA
COUNTY, ARIZONA. THIS APPLIES TO ALL LAWSUITS UNDER ALL LEGAL THEORIES,
INCLUDING CONTRACT, TORT AND STRICT LIABILITY. YOU CONSENT TO THE PERSONAL
JURISDICTION OF THESE ARIZONA COURTS. YOU WILL NOT CLAIM THAT MARICOPA COUNTY,
ARIZONA, IS AN "INCONVENIENT FORUM" OR THAT IT IS NOT A PROPER "VENUE."

WE MAY SUE YOU IN ANY COURT THAT HAS JURISDICTION. WE MAY SERVE YOU WITH PROCESS
IN A LAWSUIT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO YOUR ADDRESS
INDICATED AFTER YOUR SIGNATURE BELOW.

YOU AND WE EACH WAIVE ANY RIGHT YOU OR WE MAY HAVE TO A JURY TRIAL IN ANY
LAWSUIT BETWEEN YOU AND US.

     (c)  Notices. Your address for notices is your address set forth below your
name on the signature page of this Master Agreement. We may give you written
notice in person, by mail, by overnight delivery service, or by fax. Mail notice
will be effective three (3) days after we deposit it with the U.S. Postal
Service. Overnight delivery notice requires a receipt and tracking number. Fax
notice requires a receipt from the sending machine showing that it has been sent
to your fax number and received.

Our address for notices is our address set forth below our name on the signature
page of this Master Agreement, with Attention: Director, Contract
Administration.  You will also give copies of all notices to us at our principal
place of business at the address set forth in the opening paragraph of this
Master Agreement, with attention to Vice President, Law Department.  You may
give us notice the same way that we may give you notice.

     (d)  General.

                                       10
<PAGE>

This Master Agreement benefits our successors and assigns. This Master Agreement
benefits only those successors and assigns of yours that we have approved in
writing.

This Master Agreement binds your successors and assigns.  This Master Agreement
binds only those successors and assigns of ours that clearly assume our
obligations in writing.

TIME IS OF THE ESSENCE OF THIS MASTER AGREEMENT

This Master Agreement, all of the Schedules and the Notes and the Commitment
Letter are together the entire agreement between you and us concerning the
Collateral.

Only an employee of FINOVA who is authorized by corporate resolution or policy
may modify or amend this Master Agreement or any Schedule or Note on our behalf,
and this must be in writing.

Only he or she may give up any of our rights, and this must be in writing. If
more than one person is the Borrower under this Master Agreement, then each of
you is jointly and severally liable for your obligations under this Master
Agreement and all Schedules and Notes.

This Master Agreement is only for your benefit and for our benefit, as well as
our successors and assigns. It is not intended to benefit any other person.

If any provision in this Master Agreement is unenforceable, then that provision
must be deleted. Only unenforceable provisions are to be deleted. The rest of
this Master Agreement will remain as written.

We may make press releases and publish a tombstone announcing this transaction
and its total amount. You may publicize this transaction with our prior written
consent.

LENDER:                                   BORROWER:
FINOVA CAPITAL CORPORATION                ILLUMINA, INC.
10 Waterside Drive                        9390 TOWNE CENTRE DRIVE
Farmington, CT  06032-3065                SAN DIEGO, CA  92121

BY:____________________________           BY:_________________________

PRINTED NAME:__________________           PRINTED NAME:_______________

TITLE:_________________________           TITLE:______________________

FAX NUMBER: (860) 676-1814                Taxpayer ID#________________

DATE ACCEPTED:____________, 2000          FAX NUMBER:_________________

                                          DATED:_________________, 2000

STATE OF _______________________
COUNTY OF ______________________
I acknowledge that ___________________, who stated that he/she is
_______________ of the Borrower named above, signed this Master Loan and
Security Agreement in my presence today: _______________.  He/She acknowledged
to me that his/her signature on this Master Loan and Security Agreement was
authorized by a valid resolution or other valid authorization from Borrower's
board of directors or other governing body.

                                               _________________________________
                                               Notary Public

                                                    [SEAL]

                                       11
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>12
<FILENAME>0012.txt
<DESCRIPTION>2000 STOCK PLAN
<TEXT>

<PAGE>

                                                                   Exhibit 10.10

                                 ILLUMINA, INC.

                                2000 STOCK PLAN


        1.  Purposes of the Plan.  The purposes of this 2000 Stock Plan are:
            --------------------

            .  to attract and retain the best available personnel for positions
               of substantial responsibility,

            .  to provide additional incentive to Employees, Directors and
               Consultants, and

            .  to promote the success of the Company's business.

            Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant.

        2.  Definitions.  As used herein, the following definitions shall apply:
            -----------

             (a)  "Administrator" means the Board or any of its Committees as
                   -------------
shall be administering the Plan, in accordance with Section 4 of the Plan.

             (b)  "Applicable Laws" means the requirements relating to the
                   ---------------
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any other country or jurisdiction where Options are granted under the Plan.

             (c)  "Board" means the Board of Directors of the Company.
                   -----

             (d)  "Code" means the Internal Revenue Code of 1986, as amended.
                   ----

             (e)  "Committee" means a committee of Directors appointed by the
                   ---------
Board in accordance with Section 4 of the Plan.

             (f)  "Common Stock" means the common stock of the Company.
                   ------------

             (g)  "Company" means Illumina, Inc., a Delaware Corporation.
                   -------

             (h)  "Consultant" means any natural person, including an advisor,
                   ----------
engaged by the Company or a Parent or Subsidiary to render services to such
entity.

             (i)  "Director" means a member of the Board.
                   --------

             (j)  "Disability" means total and permanent disability as defined
                   ----------
in Section 22(e)(3) of the Code.
<PAGE>

             (k)  "Employee" means any person, including Officers and Directors,
                   --------
employed by the Company or any Parent or Subsidiary of the Company.  A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract.  If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, then three (3) months following the 91st day of
such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.  Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by
the Company.

             (l)  "Exchange Act" means the Securities Exchange Act of 1934, as
                   ------------
amended.

             (m)  "Fair Market Value" means, as of any date, the value of Common
                   -----------------
Stock determined as follows:

                   (i)  If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or the Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;

                   (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable; or


                  (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

             (n)  "Incentive Stock Option" means an Option intended to qualify
                   ----------------------
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

             (o)  "Inside Director" means a Director who is an Employee.
                   ---------------

             (p)  "Nonstatutory Stock Option" means an Option not intended to
                   -------------------------
qualify as an Incentive Stock Option.

             (q)  "Notice of Grant" means a written or electronic notice
                   ---------------
evidencing certain terms and conditions of an individual Option grant.  The
Notice of Grant is part of the Option Agreement.
<PAGE>

             (r)  "Officer" means a person who is an officer of the Company
                   -------
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

             (s)  "Option" means a stock option granted pursuant to the Plan.
                   ------

             (t)  "Option Agreement" means an agreement between the Company and
                   ----------------
an Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.

             (u)  "Optioned Stock" means the Common Stock subject to an Option.
                   --------------

             (v)  "Optionee" means the holder of an outstanding Option granted
                   --------
under the Plan.

             (w)  "Outside Director" means a Director who is not an Employee.
                   ----------------

             (x)  "Parent" means a "parent corporation," whether now or
                   ------
hereafter existing, as defined in Section 424(e) of the Code.

             (y)  "Plan" means this 2000 Stock Plan.
                   ----

             (z)  "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
                   ----------
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

             (aa) "Section 16(b) " means Section 16(b) of the Exchange Act.
                   -------------

             (bb) "Service Provider" means an Employee, Director or Consultant.
                   ----------------

             (cc) "Share" means a share of the Common Stock, as adjusted in
                   -----
accordance with Section 13 of the Plan.

             (dd) "Subsidiary" means a "subsidiary corporation", whether now or
                   ----------
hereafter existing, as defined in Section 424(f) of the Code.

        3.  Stock Subject to the Plan.  Subject to the provisions of Section 13
            -------------------------
of the Plan, the maximum aggregate number of Shares that may be optioned and
sold under the Plan is 4,000,000 Shares, plus the number of reserved, but
unissued shares under the Illumina, Inc. 1998 Incentive Stock Plan as of the
effective date of the Company's registration statement. An annual increase shall
occur on the first day of the Company's fiscal year, beginning in 2001, equal to
the lesser of (i) 1,500,000 Shares, (ii) 5% of the outstanding Shares of Common
Stock on the last day of the immediately preceding fiscal year or (iii) an
amount determined by the Board. The Shares may be authorized, but unissued, or
reacquired Common Stock.

            If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan upon exercise of an Option shall not be returned to the Plan and shall
not become available for future distribution under the Plan, except that if
unvested Shares are
<PAGE>

repurchased by the Company at their original purchase price, such Shares shall
become available for future grant under the Plan.

        4.  Administration of the Plan.
            --------------------------

            (a)  Procedure.
                 ---------

                 (i)   Multiple Administrative Bodies. Different Committees with
                       ------------------------------
respect to different groups of Service Providers may administer the Plan.

                 (ii)  Section 162(m).  To the extent that the Administrator
                       -------------
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

                 (iii) Rule 16b-3.  To the extent desirable to qualify
                       ----------
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.

                 (iv)  Other Administration.  Other than as provided above, the
                       --------------------
Plan shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.

            (b)  Powers of the Administrator.  Subject to the provisions of the
                 ---------------------------
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

                 (i)   to determine the Fair Market Value;

                 (ii)  to select the Service Providers to whom Options may be
granted hereunder;

                 (iii) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;

                 (iv)  to approve forms of agreement for use under the Plan;

                 (v)   to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Option granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

                 (vi)  to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;
<PAGE>

                 (vii)  to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of satisfying applicable foreign laws;

                 (viii) to modify or amend each Option (subject to Section 15(c)
of the Plan), including the discretionary authority to extend the post-
termination exercisability period of Options longer than is otherwise provided
for in the Plan;

                 (ix)   to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the minimum amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined. All elections by an Optionee to have
Shares withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable;

                 (x)    to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option previously
granted by the Administrator;

                 (xi)   to make all other determinations deemed necessary or
advisable for administering the Plan.

            (c)  Effect of Administrator's Decision.  The Administrator's
                 ----------------------------------
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Shares issued under the Plan.

        5.  Eligibility.  Nonstatutory Stock Options may be granted to Service
            -----------
Providers.  Incentive Stock Options may be granted only to Employees.

        6.  Limitations.
            -----------

            (a)  Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

            (b)  Neither the Plan nor any Option shall confer upon an Optionee
any right with respect to continuing the Optionee's relationship as a Service
Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.

            (c)  The following limitations shall apply to grants of Options:
<PAGE>

                 (i)    No Service Provider shall be granted, in any fiscal year
of the Company, Options to purchase more than 500,000 Shares.

                 (ii)   In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional 1,000,000
Shares, which shall not count against the limit set forth in subsection (i)
above.

                 (iii)  The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.

        7.  Term of Plan.  Subject to Section 19 of the Plan, the Plan shall
            ------------
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 15 of the Plan.

        8.  Term of Option.  The term of each Option shall be stated in the
            --------------
Option Agreement. In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.

        9.  Option Exercise Price and Consideration.
            ---------------------------------------

            (a)  Exercise Price.  The per share exercise price for the Shares to
                 --------------
be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following :

                 (i)  In the case of an Incentive Stock Option

                      (A)  granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

                      (B)  granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.

                 (ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
<PAGE>

                 (iii)  Notwithstanding the foregoing, Options may be granted
with a per Share exercise price of less than 100% of the Fair Market Value per
Share on the date of grant pursuant to a merger or other corporate transaction.

            (b)  Waiting Period and Exercise Dates.  At the time an Option is
                 ---------------------------------
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised .

            (c)  Form of Consideration.  The Administrator shall determine the
                 ---------------------
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

                 (i)    cash;

                 (ii)   check;

                 (iii)  promissory note;

                 (iv)   other Shares which, in the case of Shares acquired
directly or indirectly from the Company, (A) have been owned by the Optionee for
more than six (6) months on the date of surrender, and (B) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised;

                 (v)    consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

                 (vi)   a reduction in the amount of any Company liability to
the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;

                 (vii)  any combination of the foregoing methods of payment; or

                 (viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

Notwithstanding the foregoing, the Administrator may permit an Option to be
exercised by delivery of a full-recourse promissory note secured by the
purchased shares.  All other terms of such promissory note shall be determined
by the Administrator in its sole discretion.

        10.  Exercise of Option.
             ------------------

             (a)  Procedure for Exercise; Rights as a Stockholder.  Any Option
                  -----------------------------------------------
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be suspended during any unpaid leave
of absence. An Option may not be exercised for a fraction of a Share.
<PAGE>

              An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 13 of the Plan.

              Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.

         (b)  Termination of Relationship as a Service Provider.  If an Optionee
              -------------------------------------------------
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

         (c)  Disability of Optionee.  If an Optionee ceases to be a Service
              ----------------------
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

         (d)  Death of Optionee.  If an Optionee dies while a Service Provider,
              -----------------
the Option may be exercised following Optionee's death within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of death (but in no event may the option be exercised later
than the expiration of the term of such Option as set forth in the Option
Agreement) by the Optionee's designated beneficiary, provided such beneficiary
has been desig-
<PAGE>

nated prior to Optionee's death in a form acceptable by the Administrator. If no
such beneficiary has been designated by the Optionee, then such Option may be
exercised by the personal representative of the Optionee's estate or by the
person(s) to whom the Option is transferred pursuant to the Optionee's will or
in accordance with the laws of descent and distribution. In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following Optionee's death. If, at the time of death, the
Optionee is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall immediately revert to the Plan. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

          11.  Formula Option Grants to Outside Directors. Outside Directors
               ------------------------------------------
shall automatically be granted Options in accordance with the following
provisions:

               (a)  All Options granted pursuant to this Section shall be
Nonstatutory Stock Options and, except as otherwise provided herein, shall be
subject to the other terms and conditions of the Plan.

               (b)  Each individual shall be automatically granted an Option to
purchase 20,000 Shares (the "First Option") on the date such individual first
attends a board meeting as an Outside Director, whether through election by the
stockholders of the Company or appointment by the Board to fill a vacancy;
provided, however, that an Inside Director who ceases to be an Inside Director
but who remains a Director shall not receive a First Option.

               (c)  Each Outside Director shall be automatically granted an
Option to purchase 10,000 Shares (a "Subsequent Option") on each annual
stockholder meeting following the effective date of the Company registration
statement with the Securities and Exchange Commission.

               (d)  Notwithstanding the provisions of subsections (b) and (c)
hereof, any exercise of an Option granted before the Company has obtained
stockholder approval of the Plan in accordance with Section 19 hereof shall be
conditioned upon obtaining such stockholder approval of the Plan in accordance
with Section 19 hereof.

               (e)  The terms of a First Option granted pursuant to this Section
shall be as follows:

                    (i)   the term of the First Option shall be ten (10) years.

                    (ii)  the First Option shall be exercisable only while the
Outside Director remains a Director of the Company.

                    (iii) the exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the First Option.

                    (iv)  subject to Section 13, the First Option shall become
exercisable as to 25% of the Shares subject to the First Option on each
anniversary of its date of grant, provided that the Optionee continues to serve
as a Director on such dates.
<PAGE>

               (f)  The terms of a Subsequent Option granted hereunder shall be
as follows:

                    (i)   the term of the Subsequent Option shall be ten (10)
years.

                    (ii)  the Subsequent Option shall be exercisable only while
the Outside Director remains a Director of the Company.

                    (iii) the exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the Subsequent Option.

                    (iv)  subject to Section 13 hereof, the Subsequent Option
shall become exercisable as to 25% of the Shares subject to the Subsequent
Option on each anniversary of its date of grant, provided that the Optionee
continues to serve as a Director on such date.

        12.  Limited Transferability of Options.  Unless determined otherwise by
             ----------------------------------
the Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.

        13.  Adjustments Upon Changes in Capitalization, Dissolution, Merger or
             ------------------------------------------------------------------
Asset Sale.
----------

             (a)  Changes in Capitalization.  Subject to any required action
                  -------------------------
by the stockholders of the Company, the number of shares of Common Stock which
have been authorized for issuance under the Plan but as to which no Options have
yet been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, the number of Shares that may be added annually to the
Plan pursuant to Section 3(i), the number of shares granted under First Options
and Subsequent Options under Section 11, and the number of shares of Common
Stock covered by each outstanding Option as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration."  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

             (b)  Dissolution or Liquidation.  In the event of the proposed
                  --------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any
<PAGE>

Company repurchase option applicable to any Shares purchased upon exercise of an
Option shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the
extent it has not been previously exercised, an Option will terminate
immediately prior to the consummation of such proposed action.

             (c)  Merger or Asset Sale.  In the event of a merger of the Company
                  --------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option shall be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option, the Optionee shall fully vest in and have
the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets is
not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option, for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

        14.  Date of Grant.  The date of grant of an Option shall be, for all
             -------------
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

        15.  Amendment and Termination of the Plan.
             -------------------------------------

             (a)  Amendment and Termination.  The Board may at any time amend,
                  -------------------------
alter, suspend or terminate the Plan.

             (b)  Stockholder Approval.  The Company shall obtain stockholder
                  --------------------
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

             (c)  Effect of Amendment or Termination.  No amendment, alteration,
                  ----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to
<PAGE>

exercise the powers granted to it hereunder with respect to Options granted
under the Plan prior to the date of such termination.

        16.  Conditions Upon Issuance of Shares.
             ----------------------------------

             (a)  Legal Compliance.  Shares shall not be issued pursuant to the
                  ----------------
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

             (b)  Investment Representations. As a condition to the exercise of
                  --------------------------
an Option, the Company may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

        17.  Inability to Obtain Authority.  The inability of the Company to
             -----------------------------
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

        18.  Reservation of Shares.  The Company, during the term of this Plan,
             ---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

        19.  Stockholder Approval.  The Plan shall be subject to approval by the
             --------------------
stockholders of the Company within twelve (12) months after the date the Plan is
adopted.  Such stockholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>13
<FILENAME>0013.txt
<DESCRIPTION>CONSENT OF ERNST & YOUNG
<TEXT>

<PAGE>

                                                                    EXHIBIT 23.1

               CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

   We consent to the references to our firm under the captions "Selected
Financial Data" and "Experts" and to the use of our opinion dated February 29,
2000 in the Registration Statement (Form S-1) and related Prospectus of
Illumina, Inc. for the registration of shares of its common stock.

                                          /s/ Ernst & Young LLP

San Diego, California

June 29, 2000
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27.1
<SEQUENCE>14
<FILENAME>0014.txt
<DESCRIPTION>FINANCIAL DATA SCHEDULE
<TEXT>

<TABLE> <S> <C>

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ILLUMINA,
INC.'S BALANCE SHEETS AS OF DECEMBER 31, 1998, DECEMBER 31, 1999 AND MARCH 31,
2000 AND RELATED STATEMENTS OF OPERATIONS STOCKHOLDERS' EQUITY, AND CASH FLOWS
FOR THE PERIOD FROM APRIL 28, 1998 (INCEPTION) TO DECEMBER 31, 1998, FOR THE
YEAR ENDED DECEMBER 31, 1999 AND FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S>                             <C>                     <C>                     <C>
<PERIOD-TYPE>                   8-MOS                   YEAR                    3-MOS
<FISCAL-YEAR-END>                          DEC-31-1998             DEC-31-1999             DEC-31-2000
<PERIOD-START>                             APR-28-1998             JAN-01-1999             JAN-01-2000
<PERIOD-END>                               DEC-31-1998             DEC-31-1999             MAR-31-2000
<CASH>                                       8,233,729              21,164,114              15,067,452
<SECURITIES>                                         0              11,924,163              17,649,664
<RECEIVABLES>                                        0                  49,818                  22,701
<ALLOWANCES>                                         0                       0                       0
<INVENTORY>                                          0                       0                       0
<CURRENT-ASSETS>                             8,408,249              33,493,045              33,487,535
<PP&E>                                           1,000                 296,286                 836,780
<DEPRECIATION>                                       0                 (4,972)                 (34,749)
<TOTAL-ASSETS>                               8,557,415              33,894,658              34,430,208
<CURRENT-LIABILITIES>                          177,170                 612,408               1,095,851
<BONDS>                                              0                       0                       0
<PREFERRED-MANDATORY>                                0                       0                       0
<PREFERRED>                                  9,397,998              37,397,998              37,397,998
<COMMON>                                        34,560                  51,391                  67,048
<OTHER-SE>                                  (1,052,313)             (5,417,139)             (6,630,689)
<TOTAL-LIABILITY-AND-EQUITY>                 8,557,415              33,894,658              34,430,208
<SALES>                                              0                       0                       0
<TOTAL-REVENUES>                                     0                 474,026                  83,205
<CGS>                                                0                       0                       0
<TOTAL-COSTS>                                1,194,168               6,354,568               4,471,740
<OTHER-EXPENSES>                                     0                       0                       0
<LOSS-PROVISION>                                     0                       0                       0
<INTEREST-EXPENSE>                                   0                  48,517                       0
<INCOME-PRETAX>                             (1,145,620)             (5,517,645)             (3,900,853)
<INCOME-TAX>                                         0                       0                       0
<INCOME-CONTINUING>                         (1,145,620)             (5,517,645)             (3,900,853)
<DISCONTINUED>                                       0                       0                       0
<EXTRAORDINARY>                                      0                       0                       0
<CHANGES>                                            0                       0                       0
<NET-INCOME>                                (1,145,620)             (5,517,645)             (3,900,853)
<EPS-BASIC>                                      (1.71)                  (3.91)                  (2.31)
<EPS-DILUTED>                                    (1.71)                  (3.91)                  (2.31)


</TABLE>
</TEXT>
</DOCUMENT>
</SUBMISSION>
