LICENSE AGREEMENT

Exhibit 10.5

LICENSE AGREEMENT

     Effective as of May 6, 1998 (the “Effective Date”), TUFTS UNIVERSITY, a body having corporate powers under the laws of the State of Massachusetts (“TUFTS”), and ILLUMINA, Inc., a California corporation having a principal place of business at 2187 Newcastle Avenue, Suite 101, Cardiff, California 92007, (“LICENSEE”) enter into this license agreement (“Agreement”) and thereby agree as follows:

1 BACKGROUND

     1.1 TUFTS is the owner of the patents and patent applications listed in Exhibit 1 and any Licensed Patents, as hereinafter defined, which may issue therefrom.

     1.2 TUFTS desires to have its technology developed and marketed in order that products resulting therefrom may be available for public use and benefit.

     1.3 LICENSEE desires a worldwide, exclusive license, including the right to sublicense, to develop, market and sell products under the Licensed Patents and Know How (collectively, “Exclusive Technology”) in all fields.

2 DEFINITIONS

     2.1 “Affiliate” means any corporation or other entity that is directly or indirectly controlling, controlled by or under common control with LICENSEE. For the purpose of this definition, “control” shall mean the direct or indirect beneficial ownership of at least fifty percent (50%) in the income or stock of such corporation or business.

     2.2 “Exclusive” means that, subject to the provision in Section 3.3, TUFTS shall not grant further licenses to the Licensed Patents.

     2.3 “Know-How” means trade secrets, know-how, data and other information (whether or not patentable or qualifying as a trade secret) relating to the field of use relating to Licensed Patents discovered or developed at Tufts, or revealed to LICENSEE pursuant to the research agreement referred to in Section 3 of the Master Agreement of even date herewith (“Research Agreement”) between Tufts and LICENSEE. Know-How shall not include Licensed Patents.

     2.4 “Licensed Product” means any product, the manufacture or sale of which is within a Valid Claim within the Licensed Patents in the country of manufacture or sale.

     2.5 “Licensed Patents” means (i) the U.S. and foreign patents and patent applications listed on Exhibit 1 hereto, (ii) all U.S. or foreign patent applications filed after the Effective Date owned by TUFTS or which TUFTS has the right to license which claim one or more inventions which would be dominated by any patent issuing on a patent application within the Licensed Patents pending as of the Effective Date (or a division, or continuation in whole or part of such a pending application), (iii) all divisions, and continuations in whole or part of any of the preceding, (iv) all foreign patent applications corresponding to or claiming priority from any of the preceding, and (v) all U.S. and foreign patents issuing on any of the preceding, including patents of addition, reexaminations, and reissues.

     2.6 “Licensed Territory” means worldwide.

     2.7 “LICENSEE” shall mean Illumina, Inc. and its Affiliates.

     2.8 “Net Sales” means the gross revenue actually received by LICENSEE from sales of Licensed Products, less the following items, but only insofar as they are included in such gross revenue and are separately stated on the invoice:

     2.9 “Valid Claim” means a claim of (i) an issued, unexpired patent which has not been held unenforceable or invalid by a court or other governmental entity of competent jurisdiction, and which has not been disclaimed, or withdrawn or found invalid or unenforceable in a reissue application or re-examination proceeding; or (ii) a patent application, provided that not more than five (5) years have elapsed from the date the claim takes priority for filing purposes.

3 GRANT

     3.1 Subject to Public Law 96-517 and Public Law 98-620, TUFTS hereby grants, to the extent that it lawfully may, to LICENSEE and LICENSEE hereby accepts an exclusive license under the Exclusive Technology to make, have made, import, have imported, use, lease, sell and offer for sale, have sold and otherwise commercialize and exploit Licensed Products, and to practice any method, process, or procedure within the Exclusive Technology, in the Licensed Territory.

     3.2 Said license is Exclusive, including the right to sublicense pursuant to Section 12, in the Licensed Territory for a term commencing as of the Effective Date, and ending upon expiration of the last to expire of Licensed Patents.

     3.3 LICENSEE agrees that TUFTS shall have the right to practice the Exclusive Technology both on its own and/or in collaboration with third party academic or not-for-profit research institutions, solely for non-commercial purposes, and not for sale, license, or other distribution.

4 DILIGENCE

     4.1 LICENSEE will use reasonable best efforts to diligently and continuously commercialize the Exclusive Technology. To support the commercialization of the Exclusive Technology, LICENSEE will raise $500,000 in equity financing from third parties during the first year after the Effective Date and use its best efforts to raise $2,000,000 in total financing (including but not limited to equity or debt financing, government grant funding, sponsored research and development funding, etc.) (“First Financing”) during the second year after the Effective Date. If LICENSEE fails to meet any one of the foregoing milestones within the time specified, TUFTS shall have the right to terminate the license granted hereunder, provided that such action by TUFTS is consistent with a determination of the arbitrators pursuant to Section 15 hereof that LICENSEE has failed to exercise due diligence in the commercialization of the Exclusive Technology pursuant to its obligations under this Section 4.1.

     4.2 LICENSEE shall further use its best efforts to bring one or more Licensed Products to market through a thorough, vigorous and diligent exploitation of Licensed Patents and to continue thereafter active, diligent marketing of more Licensed Products throughout the life of this Agreement.

     4.3 In addition LICENSEE shall adhere to the following milestones:

1999 – an expenditure of $1,000,000
2000 – an expenditure of $1,500,000
2001 – an expenditure of $2,000,000
2002 – an expenditure of $2,500,000

1999 – an expenditure of $250,000
2000 – an expenditure of $375,000
2001 – an expenditure of $500,000
2002 – an expenditure of $625,000

     4.4 If LICENSEE fails to meet any of the milestones in this Section 4, and the default has not been remedied within ninety (90) days after the date of notice in writing of such default by TUFTS, TUFTS shall have the right to change the license granted hereunder to a non-exclusive license.

5 PAYMENTS

     5.1 LICENSEE shall pay to TUFTS royalties equal to three percent (3.0%) of the Net Sales received by LICENSEE from the sale of Licensed Products. In the event that a Licensed Product under this Agreement is sold in a combination product containing one or more other active ingredients or components which are or could be separately available on a commercial basis, then Net Sales on the combination product shall be calculated as follows:

By multiplying the net selling price of the combination product by the fraction A/A+B, where A is the gross selling price, during the royalty-paying period being considered, of the Licensed Product sold separately, and B is the gross selling price, during the royalty period in question, of the other active ingredients or components sold separately.

     5.2 In the event that LICENSEE is required to take a license from any third party in order to commercialize any Licensed Product, and LICENSEE must make royalty payments to such third party (“Third Party Royalty Payment”), the royalties payable to TUFTS pursuant to Section 5.1 above shall be reduced by an amount equal to fifty percent (50%) of the Third Party Royalty Payment, provided, however, that such reduction shall not reduce the royalty payment owed to Tufts

in any single year to an amount which is less than fifty per cent (50%) of that which would have been due to TUFTS in the absence of Third Party Royalty Payments.

     5.3 LICENSEE shall pay TUFTS a sublicensing fee (the “Sublicensing Fee”) equal to twenty five percent (25%) of the net revenue received from sublicensing of Licensed Patents and Licensed Products covered by one or more valid claims of the Licensed Patents in the country in which such Product is sold. The Sublicensing Fee shall be based upon the amount actually paid to LICENSEE by a sublicensee, including fees, royalties and milestone payments, provided that the Sublicensing Fee shall not include research and development support payments, payments in compensation for the grant of rights to any other intellectual property of LICENSEE, or equity or debt financing received by LICENSEE from such sublicensee.

     5.4 LICENSEE hereby grants to TUFTS the right to purchase 500,000 shares of LICENSEE’S common stock which represents 10.0% of the founding capitalization (see Exhibit 2), at fair market value as determined by LICENSEE’s Board of Directors as of the date of purchase (such fair market value is currently $0.01 per share) pursuant to a separate stock purchase agreement (“Stock Agreement”).

     5.5 The royalty on Net Sales made in currencies other than U.S. Dollars shall be calculated using the appropriate foreign exchange rate for such currency quoted by the Bank of America (San Francisco) foreign exchange desk, on the close of business on the last banking day of each calendar quarter. Royalties and payments to TUFTS shall be made in U.S. Dollars.

     5.6 Within thirty (30) days after receipt of a statement from TUFTS, LICENSEE shall reimburse TUFTS for all costs incurred by TUFTS after the Effective Date in connection with the preparation, filing and prosecution of all patent applications and maintenance of Licensed Patents.

     5.7 In the event that in any country all of the valid claims within the Licensed Patents which cover a particular Licensed Product are held invalid or unenforceable, then LICENSEE’s obligation to pay royalties on Net Sales with respect to such Licensed Product shall terminate in such country. LICENSEE’s obligation to pay royalties on Net Sales shall terminate on a country-by-country basis upon the expiration of the last to expire of any issued Licensed Patent in each country.

6 ROYALTY REPORTS, PAYMENTS AND ACCOUNTING

     6.1 Beginning with the first sale of a Licensed Product, LICENSEE shall make written reports (even if there are no further sales) of royalty payments due, if any, to TUFTS within thirty (30) days after the end of each calendar quarter. This report shall state the number, description, and aggregate Net Sales of Licensed Products during such completed calendar quarter by LICENSEE, its Affiliates and Sublicensees, and resulting calculations of earned royalty payments due TUFTS pursuant to Section 5 for such completed calendar quarter. Each such statement shall be certified by an officer of the LICENSEE as being true, correct and complete. Concurrent with the submission of

each such report, LICENSEE shall pay TUFTS any royalties due for the calendar quarter covered by such report.

     6.2 LICENSEE agrees to keep and maintain records for a period of three (3) years showing the manufacture, sale, use and other disposition of products sold or otherwise disposed of under the license herein granted. Such records will include sufficient detail to enable the royalties payable hereunder by LICENSEE to be determined. LICENSEE further agrees to permit its books and records to be examined by an independent certified public accountant selected by TUFTS and acceptable to LICENSEE once per calendar year during the term of this Agreement, for the sole purpose of verifying the reports and royalty payments made by LICENSEE. Such examination shall be made at LICENSEE’S place of business during ordinary business hours with at least thirty (30) days prior written notice. The accountant shall report to TUFTS only whether there has been a royalty underpayment and, if so, the amount thereof. Such examination is to be at the expense of TUFTS except in the event that the results of the audit reveal an under reporting of royalties due TUFTS of five percent (5%) or more, then the audit costs shall be paid by LICENSEE within thirty (30) days of notice by TUFTS to LICENSEE.

7 REPRESENTATIONS AND WARRANTIES

     7.1 TUFTS Disclaimer . TUFTS MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED (INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PURPOSE), AND ASSUMES NO RESPONSIBILITIES WHATSOEVER, WITH RESPECT TO THE LICENSED PATENTS OR KNOW-HOW OR THE USE THEREOF, OR THE MANUFACTURE, POSSESSION, USE, MARKETING, SALE, OR OTHER DISPOSITION BY TUFTS, LICENSEE, OR ANYONE ELSE, OF LICENSED PRODUCT(S) OR ANY OTHER PRODUCTS OF SERVICES (INCLUDING, WITHOUT LIMITATION, PRODUCTS MADE BY TUFTS, AND TUFTS SERVICES, THAT ARE OR WERE FURNISHED TO LICENSEE AT ANY TIME BEFORE, ON, OR AFTER THE DATE HEREOF), EXCEPT ONLY AS EXPRESSLY STATED HEREIN. Without limitation of the foregoing generality, nothing contained herein or in any disclosure of the Licensed Patents or Know-How made by or on behalf of TUFTS shall be construed as extending any representation or warranty with respect to the Licensed Patents or Know-How or Licensed Products or the results to be obtained by the use of the Licensed Patents or Know-How or any Licensed Products, or that anything made, used, or sold by use of the Licensed Patents or Know-How or any part thereof, alone or in combination, will be free from infringement of patents of third parties. TUFTS SHALL NOT BE LIABLE TO LICENSEE, ITS AFFILIATES, ITS SUBLICENSEES, OR ANY OTHER PARTY, REGARDLESS OF THE FORM OR THEORY OF ACTION (WHETHER CONTRACT, TORT, INCLUDING NEGLIGENCE, STRICT LIABILITY, OR OTHERWISE), FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, OR OTHER EXTRAORDINARY DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, LICENSED PATENTS, THE KNOW-HOW, THE LICENSED PRODUCTS, OR ANY PRODUCTS OR SERVICES FURNISHED OR NOT FURNISHED BY TUFTS, EVEN IF TUFTS HAS BEEN ADVISED OF THE POSSIBILITY THEREOF.

     LICENSEE agrees that all warranties, if any, in connection with the sale or other disposition of any Licensed Products (or any products made by TUFTS and furnished at any time to LICENSEE) by LICENSEE, its Affiliates, or its sublicensees will be made by them and will not directly or impliedly obligate TUFTS.

     7.2 TUFTS Representations . Notwithstanding the first sentence of Section 7.1, TUFTS:

               (a) Warrants to LICENSEE that TUFTS has good title to the Exclusive Technology and any tangible personal property furnished hereunder by TUFTS to LICENSEE, including any quantities of materials similar to the products to be made by LICENSEE as Licensed Products (but TUFTS makes no infringement or other representations or warranties with respect thereto).

               (b) Represents that TUFTS is a corporation organized and existing under the laws of the Commonwealth of Massachusetts and has the power and authority to enter into this Agreement and the right to grant all the rights described in this Agreement, including the rights to the Licensed Patents and Know-How described herein.

               (c) Represents that TUFTS has taken all necessary action to authorize its execution and delivery of this Agreement by the representatives of TUFTS who carried out such execution and delivery, and to authorize the performance by TUFTS of its obligations hereunder.

               (d) Represents that execution and delivery of this Agreement and its performance by TUFTS will not result in any breach or violation of, or constitute a default under, any agreement, instrument, judgment, or order to which TUFTS is a party or by which it is bound.

   &nb