S-1/A

As filed with the Securities and Exchange Commission on June 25, 2004

Registration No. 333-114735

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 4

To

Form S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Nanosys, Inc.

(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 3674
(Primary Standard Industrial
Classification Code Number) 13-4182327
(I.R.S. Employer
Identification Number)

2625 Hanover Street

Palo Alto, CA 94304

(650) 331-2100

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Calvin Y. H. Chow

Chief Executive Officer

Nanosys, Inc.

2625 Hanover Street

Palo Alto, CA 94304

(650) 331-2100

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Please send copies of all communications to:

Michael J. O’Donnell, Esq.
Mark L. Reinstra, Esq.
Julia Reigel, Esq.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
(650) 493-9300 Patrick A. Pohlen, Esq.
Mark V. Roeder, Esq.
Edward F. Vermeer, Esq.
Latham & Watkins LLP
135 Commonwealth Drive
Menlo Park, CA 94025
(650) 463-2600

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

     If any of 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, check the following box.    o

     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.    o

     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.    o

     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.    o

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

     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.

EXPLANATORY NOTE

          Nanosys, Inc. has prepared this Amendment No. 4 to the Registration Statement on Form S-1 (File No. 333-114735) for the purpose of filing exhibits to the Registration Statement. Amendment No. 4 does not modify any provision of the Prospectus constituting Part I of the Registration Statement or Items 13, 14, 15 or 17 of Part II of the Registration Statement. Accordingly, such provisions of the Prospectus have not been included herein.

Item 16.  Exhibits and Financial Statement Schedules

          a.     Exhibits. The following exhibits are included herein or incorporated herein by reference:

Exhibit
Number
	1	.1*	Form of Underwriting Agreement
	3	.1†	Third Amended and Restated Certificate of Incorporation of Registrant, as amended
	3	.1.1†	Amended and Restated Certificate of Incorporation to be in effect upon closing of this offering
	3	.2†	Bylaws of Registrant
	3	.2.1†	Amended and Restated Bylaws of Registrant to be in effect upon closing of this offering
	4	.1†	Form of Specimen Stock Certificate
	4	.2†	Second Amended and Restated Investors’ Rights Agreement by and between Registrant and the persons and entities listed on Exhibit A thereto, dated as of April 10, 2003
	4	.2.1†	Waiver of Right of First Offer and Amendment No. 1 to Second Amended and Restated Investors’ Rights Agreement by and between Registrant, the Joining Parties, as defined therein, and the Majority Holders, as defined therein, dated as of September 4, 2003
	4	.2.2†	Joinder Agreement by and between Registrant, Silicon Valley Bank and the Majority Holders, as defined therein, dated as of May 17, 2002
	5	.1*	Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
	10	.1†	2001 Stock Plan, as amended
	10	.2†	2004 Stock Plan
	10	.3†	Form of Scientific Advisor Agreement entered into between the Registrant and its scientific advisory board members
	10	.4†	Form of Indemnification Agreement entered into between the Registrant, its directors and officers
	10	.5(1)	Form of License Agreement by and between Registrant and President and Fellows of Harvard College, effective as of October 4, 2001
	10	.5.1(1)	Co-Exclusive License Agreement between the Registrant and President and Fellows of Harvard College, effective as of October 4, 2001
	10	.5.2(1)	License Agreement by and between Registrant and President and Fellows of Harvard College, effective as of February 1, 2002
	10	.5.3(1)	Exclusive License Agreement by and between Registrant and President and Fellows of Harvard College, effective as of October 2, 2002
	10	.5.4(1)	Exclusive License Agreement by and between Registrant and President and Fellows of Harvard College, effective as of April 25, 2003
	10	.6†	Lease Agreement by and between Registrant and ARE-2625/2627/2631 Hanover, LLC, dated as of January 30, 2002
	10	.6.1†	First Amendment to Lease Agreement by and between Registrant and ARE-2625/2627/2631 Hanover, LLC, dated September 27, 2002
	10	.7†	Loan and Security Agreement by and between Registrant and Silicon Valley Bank, dated as of May 17, 2002

II-4

Exhibit
Number
	10	.8(1)	License Agreement for Nanocrystal Technology by and between Registrant and the Regents of the University of California through the Ernest Orlando Lawrence Berkeley National Laboratory, effective as of November 9, 2002
	10	.8.1(1)	Amendment A to the License Agreement by and between Registrant and the Regents of the University of California through the Ernest Orlando Lawrence Berkeley National Laboratory, effective as of March 20, 2003
	10	.9(1)	Development Agreement by and between Registrant and Matsushita Electric Works, Ltd., effective as of November 18, 2002
	10	.9.1(1)	First Amendment to the Development Agreement by and between Registrant and Matsushita Electric Works, Ltd., effective as of February 18, 2004
	10	.10(1)	Exclusive Patent License Agreement by and between Registrant and Massachusetts Institute of Technology, effective as of September 5, 2002
	10	.10.1(1)	Amendment One to the Exclusive Patent License Agreement by and between Registrant and Massachusetts Institute of Technology, effective as of December 13, 2002
	10	.10.2(1)	Amendment Two to the Exclusive Patent License Agreement by and between Registrant and Massachusetts Institute of Technology, effective as of March 12, 2003
	10	.11(1)	Patent License Agreement by and between Registrant and the Trustees of Columbia University in the City of New York, effective as of May 20, 2003
	10	.12(1)	Master Marketing and Business Development Agreement by and between Registrant and Science Applications International Corporation, effective as of July 9, 2003
	10	.13(1)	Development Agreement by and between Registrant and In-Q-Tel, Inc., effective as of September 4, 2003
	10	.14(1)	Cooperative Development Agreement by and between Registrant and Intel Corporation, effective as of December 15, 2003
	10	.15(1)	Cooperative Development Agreement by and between Registrant and E.I. du Pont de Nemours and Company, effective as of January 22, 2004
	10	.15.1(1)	Amendment A to Cooperative Development Agreement by and between Registrant and E.I. du Pont de Nemours and Company dated April 21, 2004
	10	.15.2†	Amendment B to Cooperative Development Agreement by and between Registrant and E.I. du Pont de Nemours and Company dated May 17, 2004
	10	.16.(1)†	Exclusive License Agreement by and between Registrant and The Regents of the University of California, effective as of May 31, 2002
	10	.17†	Nanosys/CW Group/Lawrence A. Bock Status Agreement by and among Registrant, CW Group, Inc., CW Ventures III, L.P., CW Ventures III-A Co-Investment Fund, L.P., J.P. Morgan/CW Ventures III (Nanosys), L.P., and CW Partners IV, L.L.C., Barry Weinberg, Walter Channing and Charles Hartman, effective as of February 10, 2004
	23	.2*	Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (included in Exhibit 5.1)
	24	.1†	Power of Attorney

* To be filed by amendment.

† Previously Filed.

(1)  Pursuant to a request for confidential treatment, portions of the Exhibit have been redacted from the publicly filed document and have been furnished separately to the SEC as required by Rule 406 under the Securities Act.

II-5

          (b) Financial Statement Schedules

          Schedules 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.

II-6

SIGNATURES

          Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this amendment number 4 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Palo Alto, State of California on June 25, 2004.

By:  /s/ CALVIN Y. H. CHOW

Calvin Y. H. Chow

Chief Executive Officer

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

Signature	Title	Date
/s/ CALVIN Y. H. CHOW (Calvin Y. H. Chow)	Chief Executive Officer and Director (Principal Executive Officer)	June 25, 2004
/s/ KAREN L. VERGURA (Karen L. Vergura)	Vice President, Finance (Principal Accounting and Financial Officer)	June 25, 2004
* (Lawrence A. Bock)	Executive Chairman of the Board of Directors	June 25, 2004
* (Clinton W. Bybee)	Director	June 25, 2004
* (Regis P. McKenna)	Director	June 25, 2004
* (Bryan E. Roberts)	Director	June 25, 2004
* (Sasson Somekh)	Director	June 25, 2004
* (John A. Young)	Director	June 25, 2004
* (Gregory J. Yurek)	Director	June 25, 2004
*By:/s/ CALVIN Y. H. CHOW (Calvin Y. H. Chow) Attorney-in-Fact

II-7

EXHIBIT INDEX

Exhibit
Number
	1	.1*	Form of Underwriting Agreement
	3	.1†	Third Amended and Restated Certificate of Incorporation of Registrant, as amended
	3	.1.1†	Amended and Restated Certificate of Incorporation to be in effect upon closing of this offering
	3	.2†	Bylaws of Registrant
	3	.2.1†	Amended and Restated Bylaws of Registrant to be in effect upon closing of this offering
	4	.1†	Form of Specimen Stock Certificate
	4	.2†	Second Amended and Restated Investors’ Rights Agreement by and between Registrant and the persons and entities listed on Exhibit A thereto, dated as of April 10, 2003
	4	.2.1†	Waiver of Right of First Offer and Amendment No. 1 to Second Amended and Restated Investors’ Rights Agreement by and between Registrant, the Joining Parties, as defined therein, and the Majority Holders, as defined therein, dated as of September 4, 2003
	4	.2.2†	Joinder Agreement by and between Registrant, Silicon Valley Bank and the Majority Holders, as defined therein, dated as of May 17, 2002
	5	.1*	Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
	10	.1†	2001 Stock Plan, as amended
	10	.2†	2004 Stock Plan
	10	.3†	Form of Scientific Advisor Agreement entered into between the Registrant and its scientific advisory board members
	10	.4†	Form of Indemnification Agreement entered into between the Registrant, its directors and officers
	10	.5(1)	Form of License Agreement by and between Registrant and President and Fellows of Harvard College, effective as of October 4, 2001
	10	.5.1(1)	Co-Exclusive License Agreement between the Registrant and President and Fellows of Harvard College, effective as of October 4, 2001
	10	.5.2(1)	License Agreement by and between Registrant and President and Fellows of Harvard College, effective as of February 1, 2002
	10	.5.3(1)	Exclusive License Agreement by and between Registrant and President and Fellows of Harvard College, effective as of October 2, 2002
	10	.5.4(1)	Exclusive License Agreement by and between Registrant and President and Fellows of Harvard College, effective as of April 25, 2003
	10	.6†	Lease Agreement by and between Registrant and ARE-2625/2627/2631 Hanover, LLC, dated as of January 30, 2002
	10	.6.1†	First Amendment to Lease Agreement by and between Registrant and ARE-2625/2627/2631 Hanover, LLC, dated September 27, 2002
	10	.7†	Loan and Security Agreement by and between Registrant and Silicon Valley Bank, dated as of May 17, 2002
	10	.8(1)	License Agreement for Nanocrystal Technology by and between Registrant and the Regents of the University of California through the Ernest Orlando Lawrence Berkeley National Laboratory, effective as of November 9, 2002
	10	.8.1(1)	Amendment A to the License Agreement by and between Registrant and the Regents of the University of California through the Ernest Orlando Lawrence Berkeley National Laboratory, effective as of March 20, 2003
	10	.9(1)	Development Agreement by and between Registrant and Matsushita Electric Works, Ltd., effective as of November 18, 2002

Exhibit
Number
	10	.9.1(1)	First Amendment to the Development Agreement by and between Registrant and Matsushita Electric Works, Ltd., effective as of February 18, 2004
	10	.10(1)	Exclusive Patent License Agreement by and between Registrant and Massachusetts Institute of Technology, effective as of September 5, 2002
	10	.10.1(1)	Amendment One to the Exclusive Patent License Agreement by and between Registrant and Massachusetts Institute of Technology, effective as of December 13, 2002
	10	.10.2(1)	Amendment Two to the Exclusive Patent License Agreement by and between Registrant and Massachusetts Institute of Technology, effective as of March 12, 2003
	10	.11(1)	Patent License Agreement by and between Registrant and the Trustees of Columbia University in the City of New York, effective as of May 20, 2003
	10	.12(1)	Master Marketing and Business Development Agreement by and between Registrant and Science Applications International Corporation, effective as of July 9, 2003
	10	.13(1)	Development Agreement by and between Registrant and In-Q-Tel, Inc., effective as of September 4, 2003
	10	.14(1)	Cooperative Development Agreement by and between Registrant and Intel Corporation, effective as of December 15, 2003
	10	.15(1)	Cooperative Development Agreement by and between Registrant and E.I. du Pont de Nemours and Company, effective as of January 22, 2004
	10	.15.1(1)	Amendment A to Cooperative Development Agreement by and between Registrant and E.I. du Pont de Nemours and Company dated April 21, 2004
	10	.15.2†	Amendment B to Cooperative Development Agreement by and between Registrant and E.I. du Pont de Nemours and Company dated May 17, 2004
	10	.16.(1)†	Exclusive License Agreement by and between Registrant and The Regents of the University of California, effective as of May 31, 2002
	10	.17†	Nanosys/CW Group/Lawrence A. Bock Status Agreement by and among Registrant, CW Group, Inc., CW Ventures III, L.P., CW Ventures III-A Co-Investment Fund, L.P., J.P. Morgan/CW Ventures III (Nanosys), L.P., and CW Partners IV, L.L.C., Barry Weinburg, Walter Channing and Charles Hartman, effective as of February 10, 2004
	23	.2*	Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (included in Exhibit 5.1)
	24	.1†	Power of Attorney

* To be filed by amendment.

† Previously Filed.

(1)  Pursuant to a request for confidential treatment, portions of the Exhibit have been redacted from the publicly filed document and have been furnished separately to the SEC as required by Rule 406 under the Securities Act.

EX-10.5 2 f97636a4exv10w5.txt EXHIBIT 10.5 EXHIBIT 10.5 LICENCE AGREEMENT (CASE #1243) Between President and Fellows of Harvard College And NanoSys, Inc. Effective as of October 4, 2001 ("Effective Date") Re: Harvard Case #1243 In consideration of the mutual promises and covenants set forth below, the parties hereto agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: 1.1 ACADEMIC RESEARCH PURPOSE: use of PATENT RIGHTS solely for academic non-commercial research or other non-for-profit scholarly purposes, which use in undertaken at a non-profit or governmental institution. ACADEMIC RESEARCH PURPOSES does not include selling products covered by PATENT RIGHTS or using PATENT RIGHTS in researching, developing, producing or manufacturing products for sale, or performance of services a free or other financial consideration. It is understood that using the PATENT RIGHTS to conduct normal research activities at non-profit or governmental institution is within the defined term of ACADEMIC RESEARCH PURPOSE. 1.2 AFFILIATE: any entity which controls, is controlled by, or is under common control with a party. An entity shall be regarded as in control of another entity for purposes of this definition if it owns or control at least fifty percent (50%) of the shares entitled to vote in the election of directors (or in the case of an entity that is not a corporation, for the election of the corresponding managing authority). Unless otherwise specified, the term LICENSEE includes AFFILIATES. 1.3 FIELD: All fields of use. 1.4 HARVARD: President and Fellows of Harvard College, a nonprofit Massachusetts educational corporation having offices at the Office for Technology and Trademark Licensing, Holyoke Centre, Suite 727, 1350 Massachusetts Avenue, Cambridge, Massachusetts 02138. 1.5 LICENSED PROCESSES: methods, processes or procedures covered by at least one VALID CLAIM included within the PATENT RIGHTS. 1.6 LICENSED PRODUCTS: products covered by at least one VALID CLAIM included within the PATENT RIGHTS or products made in accordance with LICENSED PROCESSES. 1.7 LICENSEE: Nanosys, Inc., a corporation organized under the laws of Delaware having its principal offices at CW Group East, 1041 Third Avenue, New York, New York 10021. 1.8 NET SALES: the amounts actually received for sales, leases, or other dispositions of LICENSED PRODUCTS to non-AFFILIATE third parties, less: (a) customary [*** Redacted] actually allowed and taken; (b) amounts [*** Redacted] by reason of [*** Redacted] (c) to the extent separately stated on purchase orders, invoices, or other documents of sale: (i) [*** Redacted] levied on the production, sale, transportation, delivery, importation, exportation or use of LICENSED PRODUCTS; (ii) charges for [*** Redacted] provided by third parties, including any [*** Redacted] thereon. NET SALES also includes the fair market value of any non-cash consideration received for the sale, lease or other disposition of LICENSED PRODUCTS to non-AFFILIATE third parties; provided NET SALES shall not include any [*** Redacted] payments in consideration for the [*** Redacted] to the intellectual property of LICENSEE or third parties, including the [*** Redacted] hereunder, bona fide [*** Redacted] made in good faith and any payments for [*** Redacted]. In the event that a LICENSED PRODUCT is sold or leased as a combination product containing the LICENSED PRODUCT and one or more other components, NET SALES shall be calculated by multiplying the gross amount invoiced for the sale of the combination product by the fraction [*** Redacted] where A is the [*** Redacted] price of the LICENSED PRODUCT sold separately by LICENSEE, and B is the [*** Redacted] of such other components of the combination products sold separately by LICENSEE during the relevant royalty payment period. In the event a substantial number of such separate sales were not made during the relevant royalty period, then NET SALES shall be reasonably allocated by LICENSEE between such LICENSED PRODUCT and such other components of the combination based on their relative importance or value; provided that such LICENSED PRODUCT and such other components shall not be considered a "combination product" unless such LICENSED PRODUCT and such other components are offered for sale or marketed by LICENSEE separately as well as together. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 2 1.9 PATENT RIGHTS: PATENT RIGHTS shall include (i) the applications and patents as listed in Appendix A of this Agreement, (ii) any foreign counterparts to such patents and patent applications, (iii) the inventions described and claimed in the foregoing, (iv) any divisions, continuations, substitution of the foregoing, and (v) specific claims of any continuations-in-part of the foregoing to the extent the specific claims are directed to subject matter described in the foregoing in a manner sufficient to support such specific claims under 35 U.S.C. and to the extent Licensable by HARVARD, (vi) all patents issuing on any of the foregoing, and (vii) registrations, renewals, reissues, reexaminations, extensions or patents of addition of any kind with respect to any of such patents. For purposes of this Agreement "Licensable" shall mean those claims of continuations-in-parts filed after the Effective Date for which HARVARD has sole ownership (or has been granted the sole right to license by a co-owner) and where there are no obligations to grant licenses to a third party as the result of research support provided to one or more of the inventors. 1.10 SERVICE INCOME: the financial consideration actually received for the utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE which is contracted for by a non-AFFILIATE third party, less the deductions stated in Sections 1.8(a), (b) and (c); provided, however, that such amounts shall only be included in SERVICE INCOME if LICENSEE does not [*** Redacted] with respect to the PATENT RIGHTS licensed in this Agreement on the NET SALE of such LICENSED PRODUCTS or the NET SALE of LICENSED PRODUCTS made in accordance with such use of the LICENSED PROCESSES. SERVICE INCOME shall specifically exclude any [*** Redacted], payments in consideration for the [*** Redacted] of the LICENSEE or third parties, including the [*** Redacted] made in good faith and any[*** Redacted]. In the event that any service contemplated hereunder includes any services other than the utilization of [*** Redacted] or [*** Redacted] LICENSEE shall in good faith determine the portion of the payments received for such service that are intended as consideration for the utilization of [*** Redacted] or [*** Redacted] by LICENSEE, and such portion shall be used to determine the SERVICE INCOME for such service. In such event, LICENSEE shall promptly deliver to HARVARD a written report detailing such calculation, together with a copy of the applicable provisions of the agreements related to such service. All such reports and provisions of agreements shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE of SERVICE INCOME for such service, HARVARD shall so notify LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with paragraph 11.10. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 3 1.11 SUBLICENSE INCOME: the amount paid to LICENSEE by a third party (other than an AFFILIATE of LICENSEE) for the granting of a sublicense under Section 3.1, including but not limited to (i) [*** Redacted], (ii) [*** Redacted], (iii) [*** Redacted] and (vi) the [*** Redacted] in cash of any non-cash consideration for such sublicense, but specifically excluding any [*** Redacted] payments in consideration for the [*** Redacted], [*** Redacted] and any [*** Redacted]. It is understood and agreed that sublicense income received by LICENSEE shall be net of withholding taxes. If LICENSEE sublicenses [*** Redacted] to a third party and at the same time also grants such third party rights to [*** Redacted] or [*** Redacted] then all compensation received from the third party for such rights shall be combined and [*** Redacted] that would constitute SUBLICENSE INCOME under Section 1.11 and shall promptly deliver to HARVARD a written report detailing such calculation, together with a copy of the applicable provisions of the agreements with the third party. All such reports and provisions of agreements shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE of SUBLICENSE INCOME, HARVARD shall so notify LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with Section 11.10. 1.12 TERRITORY: Worldwide. 1.13 VALID CLAIM: either (i) a claim of an issued patent that has not expired or been held unenforceable or invalid by an agency or a court of competent jurisdiction, and which has not been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise; provided, however, that if the holding of such court or agency is later reversed by a court or agency with overriding authority, the claim shall be reinstated as a Valid Claim with respect to Net Sales made after the date of such reversal, of (ii) a claim of a pending patent application that has not been abandoned or finally rejected without the possibility of appeal or re-filing and that has been pending for less than five (5) years from its priority date, and is being actively prosecuted in good faith. 1.14 The terms "Public Law 96-517" and "Public Law 98-620" include all amendments to those statutes. 1.15 The terms "sold" and "sell" include, without limitation, leases and other dispositions and similar transactions. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 4 1.16 RELATED LICENSE AGREEMENTS: Other patent license agreements between LICENSEE and HARVARD licensing patent rights known internally at HARVARD as Case #1852, #1765, #1923, #1924, #1678, #1641, #1489, #1352, #1243, #1137, #1816, #1865, and #1935 to LICENSEE. 1.17 R&D SPENDING, MINIMUM INVESTMENT: shall have the meanings as set forth in Section 4.5. 1.18 DEVELOPMENT PAYMENT: DEVELOPMENT PAYMENTS shall mean (a) any payments, in consideration for, or to support, research and/or development efforts by LICENSEE and (b) any reimbursement of expenses including without limitation patent expenses. ARTICLE II RECITALS 2.1 HARVARD is owner (or HARVARD will be owner) by assignment from Charles Lieber and Piedong Yang of their entire right, title and interest in United States Patents 5,897,584, issued April 27, 1999 and 6,036,774 issued March 14, 2000 entitled Metal Oxide Nanorods (Harvard Case #1243), in the foreign patent applications corresponding thereto, and in the inventions described and claimed therein. 2.2 HARVARD has the authority to issue license under PATENT RIGHTS. 2.3 HARVARD is committed to the policy that ideas or creative works produced at HARVARD should be used for the greatest possible public benefit, and believes that every reasonable incentive should be provided for the prompt introduction of such ideas into public use, all in a manner consistent with the public interest. 2.4 LICENSEE intends to use commercially reasonable efforts to develop the invention(s), and to bring to market at least one product falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in the patents rights licensed under such agreements. 2.5 LICENSEE is desirous of obtaining an exclusive license in the TERRITORY in order to practice the above-referenced in invention covered by PATENT RIGHTS in the United States and in certain foreign countries, and to manufacture, use and sell in the commercial market the products made in accordance therewith, and HARVARD is desirous of granting such a license to LICENSEE in accordance with the terms of this Agreement. ARTICLE III GRANT OF RIGHTS 3.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the terms and conditions hereof, an exclusive (except as set forth in Sections 3.2(a) and 3.2(b) license under PATENT RIGHTS in the TERRITORY and in the FIELD (i) to make and have made, to use and have used, to sell and have sold, to offer for sale, import, export, or 5 otherwise distribute the LICENSED PRODUCTS, (ii) to practice the LICENSED PROCESSES, and (iii) to otherwise fully exploit the PATENT RIGHTS, and (iv) to have the foregoing performed on behalf of LICENSEE by a third party, in each case for the life of the PATENT RIGHTS. The foregoing license under PATENT RIGHTS shall include the full right to grant sublicenses, and LICENSEE shall promptly provide copies of any sublicenses of PATENT RIGHTS to HARVARD for its review. Unless HARVARD has rendered the license under PATENT RIGHTS non-exclusive under Section 3.2 (d), HARVARD agrees that it will not grant licenses under PATENT RIGHTS to others, nor make, use, sell, offer for sale, import or otherwise exploit PATENT RIGHTS itself except as required by HARVARD's obligations in Section 3.2 (a) or as permitted in Section 3.2 (b). 3.2 The granting and exercise of this license is subject to the following conditions: (a) HARVARD's "Statement of Policy in Regard to Inventions, Patents and Copyrights," dated August 10, 1998, Public Law 96-517 and Public Law 98-620, and HARVARD's obligations under prior or current agreements with other sponsors of research and, with regard to continuations-in-part. contained in the PATENT RIGHTS, any future agreements with other sponsors of research related to such continuations-in-part. Any right granted in this Agreement greater than that permitted under Public Law 96-517, or Public Law 98-620, shall be subject to modification to the extent required to conform to the provisions of those status. (b) HARVARD reserves the right to make and use, and grant to other non-profit or governmental institutions non-exclusive licenses to make and use, in each case solely for ACADEMIC RESEARCH PURPOSES the subject matter described and claimed in PATENT RIGHTS. HARVARD shall promptly notify LICENSEE of any rights granted to any third party (other than the U.S. government) under Sections 3.2(a) and (b). (c) LICENSEE shall use commercially reasonable efforts to effect introduction into the commercial market at least one product falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in PATENT RIGHTS, consistent with sound and reasonable business practice and judgment; thereafter, until the expiration of this Agreement, LICENSEE shall use commercially reasonable efforts to endeavor to keep any such product reasonably available to the public so long as it shall be a sound and reasonable commercial practice to do so. (d) At any time after five (5) years from the effective date of this Agreement, HARVARD may render this license non-exclusive if LICENSEE has not: (i) used commercially reasonable efforts to put the licensed subject matter into commercial use in one or more of the countries hereby licensed, directly or through a sublicense; nor 6 (ii) used commercially reasonable efforts to keep products falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in PATENT RIGHTS reasonably available to the public so long as it shall be a sound and reasonable commercial practice to do so; nor (iii) engaged in research, development, manufacturing, marketing or sublicensing activity that is commercially reasonably appropriate to achieving Section 3.2(d)(i) or 3.2(d)(ii). LICENSEE shall be deemed to have satisfied Section 3.2(d)(iii), and HARVARD shall not render the license of PATENT RIGHTS granted hereunder non-exclusive, if LICENSEE'S R&D SPENDING exceeds the MINIMUM INVESTMENT for such year as set forth in Section 4.5. (e) In all sublicenses granted by LICENSEE hereunder, LICENSEE shall include a requirement that the sublicensee use commercially reasonable efforts to put the subject matter of the sublicense into commercial use, provided that such sublicensee is authorized to develop and sell to the public a new product covered by PATENT RIGHTS on its own behalf. LICENSEE shall further provide that such sublicenses are subject and subordinate to the terms and conditions of this Agreement, except for the rate of royalty on NET SALES paid by such sublicensee to the LICENSEE. Copies of all sublicense agreements hereunder shall be provided promptly to HARVARD. All sublicense agreements of LICENSEE provided to HARVARD shall deemed Confidential Information of LICENSEE subject to Section 11.1. (f) At any time eight (8) years after the effective date of this Agreement, if LICENSEE is unable or unwilling to grant sublicenses, either as suggested by HARVARD or by a potential sublicensee or otherwise, then HARVARD may directly license such potential sublicensee, but only if: (i) LICENSEE is not currently pursuing development of LICENSED PRODUCTS for the same application as contemplated by the potential sublicensee, or LICENSEE commits to do so within a two-year period, (ii) the granting of such a license by HARVARD to the potential sublicensee will increase the availability of useful products to the public, (iii) the granting of such license by HARVARD will not materially adversely affect LICENSEE'S then current business or reasonably foreseeable future business (e.g., such license is not intended for an application competitive with LICENSEE) and (iv) HARVARD notifies LICENSEE of its intention to grant such license and permits LICENSEE a reasonable period to negotiate a sublicense on its own. (g) To the extent required by law, during the period of exclusivity of this license in the United States, LICENSEE shall cause any LICENSED PRODUCT produced for sale in the United States to be manufactured substantially in the United States. 3.3 All rights reserved to the United States Government and others under Public Law 96-517, and Public Law 98-620, shall remain and shall in no way be affected by this Agreement. 7 3.4 HARVARD shall promptly notify LICENSEE when any new patent or patent application arises from (i) research conducted in the laboratory of Dr. Lieber or Dr. Park, or (ii) improvements made by HARVARD under the direction of Dr. Lieber or Dr. Park on the subject matter described in PATENT RIGHTS. If LICENSEE so requests and the intellectual property is available for licensing, HARVARD will evaluate in good faith LICENSEE'S proposal along with proposals received from any third parties. Any decision to grant a license to LICENSEE shall be subject to approval by HARVARD'S Committee on Patents and Copyrights. In the event LICENSEE and HARVARD cannot agree on terms for a license to any new intellectual property which is dominated by PATENT RIGHTS, HARVARD shall not offer any third party terms more favorable than the terms offered to LICENSEE. ARTICLE IV ROYALTIES 4.1 LICENSEE shall pay to HARVARD a non-refundable license royalty fee in the sum of [*** Redacted] dollars ($[*** Redacted]) upon execution of this Agreement. 4.2 As consideration for the rights granted hereunder, LICENSEE shall pay to HARVARD a non-refundable fee in the form of stock of LICENSEE as follows: (i) LICENSEE shall issue to HARVARD [*** Redacted] ([*** Redacted]) fully vested shares, at a price per share of $0.001 per share and an aggregate value of $[*** Redacted] of LICENSEE'S common stock which represent [*** Redacted] percent ([*** Redacted]%) of the reserved shares for founders (total 3.2 million shares) shown on the capitalization table of LICENSEE attached as Appendix B ("Shares") upon execution of this Agreement, provided, however, that HARVARD shall be subject to and enter into (1) appropriate agreements and related documents as required of other stockholders of LICENSEE, including without limitation a Common Stock Purchase Agreement, and (2) a Voting Agreement by and among the LICENSEE, HARVARD and certain other holders of common stock of LICENSEE dated as of even date hereof. (ii) HARVARD'S ownership rights to Shares shall not be affected should the license pursuant to this Agreement be terminated by LICENSEE or HARVARD. 4.3(a) LICENSEE shall pay to HARVARD during the term of this Agreement a royalty on NET SALES by LICENSEE according to the following schedule: (i) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] applications; (ii) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] applications; or *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 8 (iii) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] applications. In the event, any NET SALES by LICENSEE reasonably falls within more than one of categories (i) to (iii) above, LICENSEE shall pay to HARVARD the lowest applicable royalty set forth in such categories. (b) For each LICENSED PRODUCT sold by LICENSEE, LICENSEE may credit up to [*** Redacted] ([*** Redacted]) of royalties that LICENSEE is paying to third parties (or HARVARD under agreements not included within section 4.3(c)) on LICENSEE'S sales of that LICENSED PRODUCT, provided that the royalty paid to HARVARD shall not be reduced below [*** Redacted] percent ([*** Redacted]%) of the NET SALES of that LICENSED PRODUCT for which such third party royalties are being paid. (c) In the event that sales of a LICENSED PRODUCT are subject to the payment of royalties under one or more of the RELATED LICENSE AGREEMENTS or any license agreements with HARVARD with the same effective date as this Agreement, then the total royalty payment due HARVARD under all such agreements including this Agreement shall be at most the royalty payment due under this Section 4.3 on such NET SALE, no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such agreement. LICENSEE shall notify HARVARD of the identity of each license agreement that includes patent rights covering the product or process, and HARVARD shall distribute the royalties evenly among such agreements, including this Agreement. (d) LICENSEE shall pay HARVARD [*** Redacted] percent ([*** Redacted]%) of SUBLICENSE INCOME received by LICENSEE for a sublicense of PATENT RIGHTS. If compensation for such a sublicense of PATENT RIGHTS is bundled with compensation received for the sublicensing of the other HARVARD patents rights or other HARVARD intellectual property licensed to LICENSEE under the RELATED LICENSE AGREEMENTS or any agreements with HARVARD having the same effective date as this Agreement, then LICENSEE shall pay HARVARD at most the royalty payment due under this Section 4.3(d) for such SUBLICENSE INCOME no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such license agreements. In such a case, LICENSEE shall notify HARVARD of the identity of each license agreement involved and HARVARD shall distribute the royalties equally among those license agreements, including this Agreement. (e) For provision of services under PATENT RIGHTS, LICENSEE shall pay a royalty of [*** Redacted] percent ([*** Redacted]%) of SERVICE INCOME received by LICENSEE from each and every third party ("Third Party") to whom LICENSEE provides such services. In the event any services from which SERVICE INCOME is derived are subject to the payment of royalties under the RELATED LICENSE AGREEMENTS or any agreement with HARVARD having the same effective date as this Agreement, then the total royalty due under all such agreements, including this Agreement, shall be at most the royalty *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 9 payment due under this Section 4.3 on such services, no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such license agreements. In such event, LICENSEE shall notify HARVARD of the identity of each license agreement involved and HARVARD shall distribute the royalties equally among those license agreements, including this Agreement. (f) If the license pursuant to this Agreement is converted to a non-exclusive one under Section 3.2(d) and if another non-exclusive license to any of PATENT RIGHTS is granted or otherwise exists for any field or territory, then the royalty rate of this Agreement shall be adjusted so as not to exceed the royalty rate payable by such other non-exclusive licensee under such PATENT RIGHTS in such field or territory, provided that LICENSEE agrees to amend this Agreement to include terms requested by HARVARD that have been accepted by such other non-exclusive licensee. (g) On sales between LICENSEE and its AFFILIATES for resale, the royalty shall be paid on the NET SALES of the AFFILIATE. (h) In the event that more than one VALID CLAIM within PATENT RIGHTS is applicable to any LICENSED PRODUCT subject to royalties under this Section 4.3, then only one royalty shall be paid to HARVARD in respect of such LICENSED PRODUCT. In no event shall more than one royalty be due to HARVARD with respect to any LICENSED PRODUCT unit; nor shall a royalty be payable under this Section 4.3 with respect to sales of LICENSED PRODUCTS for clinical trials or as samples nor the use of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE for such purposes, in each case whether or not in collaboration with a third party. 4.4 No later than January 1 of each calendar year after the effective date of this Agreement, LICENSEE shall pay to HARVARD the following non-refundable license maintenance royalty and/or advance on royalties. Such payments may be credited against running royalties due for that calendar year and Royalty Reports shall reflect such a credit. Such payments shall not be credited against milestone payments (if any) nor against royalties due for any subsequent calendar year. January 1, 2002 $[*** Redacted] January 1, 2003 $[*** Redacted] January 1, 2004 $[*** Redacted] January 1, 2005 $[*** Redacted] January 1, 2006 $[*** Redacted] January 1, 2007 $[*** Redacted] each year thereafter $[*** Redacted] 4.5 Notwithstanding Section 4.4, the minimum royalty set forth in Section 4.4 for the years 2002, 2003, and 2004 will be waived if LICENSEE'S spending on research and development (LICENSEE'S "R&D SPENDING") exceeds the amount set forth below for each category for such year (such amounts below, the "MINIMUM INVESTMENT"). *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 10

CHEMICAL AND BIOLOGICAL SENSOR OPTOELECTRONICS NANOELECTRONICS APPLICATIONS APPLICATIONS APPLICATIONS ----------------- --------------- --------------- Year 2002: $ [*** Redacted] [*** Redacted] [*** Redacted] Year 2003: $ [*** Redacted] [*** Redacted] [*** Redacted] Year 2004: $ [*** Redacted] [*** Redacted] [*** Redacted] Year 2005 $ [*** Redacted] [*** Redacted] [*** Redacted] Year 2006 $ [*** Redacted] [*** Redacted] [*** Redacted] Each Year Thereafter $ [*** Redacted] [*** Redacted] [*** Redacted]

LICENSEE'S MINIMUM INVESTMENT may be allocated by LICENSEE in any way within the three categories set forth above among the different subject matter of the RELATED LICENSE AGREEMENTS. ARTICLE V REPORTING 5.1 Within six (6) months of the Effective Date, LICENSEE will provide to HARVARD a written research and development plan acceptable to LICENSEE'S investors under which LICENSEE intends to bring the subject matter of the licenses granted hereunder into commercial use upon execution of this Agreement. Such plan will include projections of sales and proposed marketing efforts. It is understood that LICENSEE may provide one research and development plan for all RELATED LICENSE AGREEMENTS. 5.2 No later than sixty (60) days after June 30 of each calendar year, LICENSEE shall provide to HARVARD a written annual Progress Report describing progress on the commercialization of PATENT RIGHTS during the most recent twelve (12) month period ending June 30, the amount of LICENSEE'S R&D SPENDING relating to the subject matter described or claimed in PATENT RIGHTS during such time, and plans for the forthcoming year. If multiple technologies are covered by the license granted hereunder, the Progress Report shall provide the information set forth above for each technology. If progress differs from that anticipated in the plan required under Section 5.1, LICENSEE shall explain the reasons for the difference and, if appropriate or necessary, provide a modified research and development plan for HARVARD'S review. It is understood that LICENSEE may provide one Progress Report covering all RELATED LICENSE AGREEMENTS. 5.3 LICENSEE shall report to HARVARD the date of its first NET SALE of a LICENSED PRODUCT (or the date of its first use of a LICENSED PROCESS from which SERVICE INCOME is derived) in each country within thirty (30) days of occurrence. It is understood that LICENSEE shall be obligated to report the date of first sale of LICENSED PRODUCTS (or the first commercial use of LICENSED PROCESSES) under this Section 5.3 only once for each country. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 11 5.4 (a) LICENSEE shall submit to HARVARD within sixty (60) days after each calendar half year ending June 30 and December 31, a Royalty Report setting forth, for the most recent half year that ended on June 30 or December 31, at least the following information: (i) the number and identification of LICENSED PRODUCTS sold by LICENSEE that constitute a NET SALE, in each country; (ii) total amounts received for such LICENSED PRODUCTS; (iii) an accounting for all LICENSED PROCESSES used or sold; (iv) deductions applicable to determine the NET SALES thereof; (v) the amount of SUBLICENSE INCOME received by LICENSEE; (vi) the amount of SERVICE INCOME received by LICENSEE; and (vii) the amount of royalty due for such reporting period, or, if no royalties are due to HARVARD for such reporting period, the statement that no royalties are due. Such report shall be certified as correct by an officer of LICENSEE and shall include a listing of all deductions from royalties. It is understood that LICENSEE may submit one Royalty Report covering all RELATED LICENSE AGREEMENTS. However, the Royalty Report shall, for each type of income, provide a detailed listing of the RELATED LICENSE AGREEMENTS that are involved. (b) LICENSEE shall pay to HARVARD with each such Royalty Report the amount of royalty due with respect to such half year. If multiple technologies are covered by the license granted hereunder, LICENSEE shall specify which PATENT RIGHTS are utilized for each category of LICENSED PRODUCTS and/or LICENSED PROCESSES for which royalties are separately reported in the Royalty Report. (c) All payments due hereunder shall be deemed received when funds are credited to HARVARD'S bank account and shall be payable by check or wire transfer in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the New York Times or the Wall Street Journal) on the last working day of each royalty period. No transfer, exchange, collection or other charges shall be deducted from such payments. If legal restrictions block the removal of local currency from any country where a LICENSED PRODUCT is sold, the royalties payable under this Agreement on NET SALES, SERVICE INCOME and SUBLICENSING INCOME earned in such currency in such country shall continue to be reported and accrued, but will not be paid until such currency may be removed from such country. 12 (d) All plans or reports received under Sections 5.1, 5.2, 5.3, 5.4 shall deemed Confidential Information of LICENSEE subject to Section 11.1; provided, however, that HARVARD may disclose such information as required by law under Section 11.1 (b), and may include in its usual reports the annual amounts of royalties paid. (e) Late payments shall be subject to a charge of one and one-half percent (1.5%) per month, or $250, whichever is greater. 5.5 In the event of acquisition, merger, change of corporate name, or change of make-up, organization, or identity, LICENSEE shall notify HARVARD in writing within thirty (30) days of such event. 5.6 If LICENSEE or any of its sublicensees does not qualify as a "small entity" as provided by the United States Patent and Trademark Office, LICENSEE must notify HARVARD immediately. ARTICLE VI RECORD KEEPING 6.1 LICENSEE shall keep accurate records (together with supporting documentation) of LICENSED PRODUCTS made, used or sold under this Agreement, sufficient to determine the amount of royalties due to HARVARD hereunder. Such records shall be retained for at least three (3) years following the end of the reporting period to which they relate. They shall be available during normal business hours for examination, upon HARVARD'S reasonable request, not more than once in any twelve (12) month period and upon at least twenty (20) days prior notice, by an independent accountant under a duty of confidentiality, selected by HARVARD and reasonably acceptable to LICENSEE, for the sole purpose of verifying reports and payments under Section 5.4. In conducting examinations pursuant to this Section, HARVARD'S accountant shall have access to records materially relevant to the calculation of royalties under Article IV. 6.2 HARVARD'S accountant shall only disclose to HARVARD whether the reports and payments of royalties hereunder are accurate, and the amount of the underreporting or underpayment of royalties by LICENSEE, if any. 6.3 Such examination by HARVARD'S accountant shall be at HARVARD'S expense, except that if such examination shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then LICENSEE shall pay the reasonable out-of-pocket cost of such examination as well as any additional sum that would have been payable to HARVARD had the LICENSEE reported correctly, plus interest on said sum at the rate of one and one-half percent (1.5%) per month. 13 ARTICLE VII DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE 7.1 Within 30 days of the closing of LICENSEE'S sale of Series A Preferred Stock to venture capital investors, but not later than 60 days after the Effective Date, LICENSEE shall reimburse HARVARD for all reasonable out-of-pocket expenses HARVARD has incurred for the preparation, filing, prosecution and maintenance of PATENT RIGHTS, including for counseling with regard to such preparation, filing, prosecution and maintenance. Such expenses total [*** Redacted] as of the most recent invoice paid by HARVARD. Thereafter, LICENSEE shall reimburse HARVARD for all such future expenses upon receipt of quarterly invoices from HARVARD. Late payment of these invoices shall be subject to interest charges of one and one-half percent (1.5%) per month. HARVARD shall be responsible for the preparation, filing, prosecution and maintenance of any and all patent applications and patents included in PATENT RIGHTS. HARVARD will instruct counsel to directly notify HARVARD and LICENSEE and provide them copies of any communications to and from the United States and foreign patent offices relating to said prosecution, and drafts of all communications to the various patent offices, and will instruct counsel to consider any comments on such drafts, so that LICENSEE will be informed and apprised of the continuing prosecution of patent applications in PATENT RIGHTS. LICENSEE shall have reasonable opportunity to participate in decision making on key decisions affecting filing, prosecution and maintenance of patents and patent applications in PATENT RIGHTS. 7.2 HARVARD and LICENSEE shall cooperate fully in the preparation, filing, prosecution and maintenance of PATENT RIGHTS and of all patents and patent applications licensed to LICENSEE hereunder, executing all papers and instruments or requiring members of HARVARD to execute such papers and instruments so as to enable HARVARD to apply for, to prosecute and to maintain patent applications and patents in HARVARD'S name in any country. Each party shall provide to the other prompt notice as to all matters which come to its attention and which may affect the preparation, filing, prosecution or maintenance of any such patent applications or patents. In particular, LICENSEE must immediately notify HARVARD if LICENSEE does not qualify as a "small entity" as provided by the United States Patent and Trademark Office. 7.3 LICENSEE may elect to surrender its rights to any patent or patent application within PATENT RIGHTS in any country upon sixty (60) days written notice to HARVARD. Such notice shall not relieve LICENSEE from responsibility to reimburse HARVARD for expenses under Section 7.1 relating to the filing, prosecution or maintenance of such patent or patent application incurred prior to the receipt of the written notice by HARVARD (or a longer period if specified in LICENSEE'S notice). *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 14 ARTICLE VIII INFRINGEMENT 8.1 With respect to any PATENT RIGHTS that have not been rendered non-exclusive under Section 3.2(d), LICENSEE shall have the right to enforce in its own name and at its own expense any patents within such PATENT RIGHTS. HARVARD agrees to notify LICENSEE promptly of each infringement of such patents of which HARVARD is or becomes aware. 8.2 (a) If LICENSEE elects to commence an action as described above, HARVARD may, to the extent permitted by law, elect to join as a party in that action. Regardless of whether HARVARD elects to join as a party, HARVARD shall cooperate fully with LICENSEE in connection with any such action, including making available relevant personnel, information, records, papers, samples, specimens and other similar materials for the purposes of such action as reasonably requested by LICENSEE through the Office of Technology and Trademark Licensing at HARVARD. (b) If HARVARD elects to join as a party pursuant to Subsection (a), HARVARD shall jointly control the action with LICENSEE. (c) LICENSEE shall reimburse HARVARD for any out-of-pocket costs HARVARD reasonably incurs, including reasonable attorneys' fees, as part of an action brought by LICENSEE under Section 8.1, whether or not HARVARD becomes a co-plaintiff. 8.3 If LICENSEE elects to commence an action as described above, LICENSEE may deduct from its royalty payments to HARVARD with respect to the patent(s) subject to suit an amount not exceeding fifty percent (50%) of LICENSEE'S expenses and costs of such action, including reasonable attorneys' fees and reimbursement of amounts under Section 8.2(c) above; provided, however, that such reduction shall not exceed fifty percent (50%) of the total royalty due to HARVARD with respect to the patent(s) subject to suit for each calendar year. If such fifty percent (50%) of LICENSEE'S expenses and costs exceeds the amount of royalties deducted by LICENSEE for any calendar year, LICENSEE may to that extent reduce the royalties due to HARVARD from LICENSEE in succeeding calendar years, but never by more than fifty percent (50%) of the total royalty due in any one year with respect to the patent(s) subject to suit. 8.4 Neither party may enter into a settlement, consent judgment or other voluntary final disposition of any suit under Section 8.1, 8.6, 8.7 and 8.8 without the prior written consent of other party, which consent shall not be unreasonably withheld, if such settlement, consent judgment or other voluntary final disposition includes any admissions or statements about the validity or enforceability of PATENT RIGHTS. 8.5 Recoveries or reimbursements from actions commenced pursuant to this Article shall first be applied to reimburse LICENSEE and HARVARD for litigation costs not paid from royalties deducted by LICENSEE. 15 pursuant to Section 8.3. Any remaining recoveries or reimbursements shall be shared as follows: 80% to LICENSEE and 20% to HARVARD. 8.6 If LICENSEE elects not to exercise its right to enforce the PATENT RIGHTS against any infringement pursuant to this Article, HARVARD may do so at its own expense, controlling such action and retaining all recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in connection with any such action. 8.7 Without limiting the generality of Section 8.6, HARVARD may, at its election and by notice to LICENSEE, establish a time limit of ninety (90) days for LICENSEE to decide whether to enforce the PATENT RIGHTS against any infringement of which HARVARD is or becomes aware. If, by the end of such ninety (90) day period, LICENSEE has not commenced such an action or taken reasonable efforts to settle such infringement, HARVARD may enforce the PATENT RIGHTS against such an infringement at its own expense, controlling such action and retaining all recoveries therefrom. Notwithstanding sections 8.6 and 8.7, HARVARD shall not bring any action alleging the infringement of PATENT RIGHTS against any sublicensee of LICENSEE under PATENT RIGHTS, without the consent of LICENSEE. 8.8 If a declaratory judgment action is brought naming LICENSEE as a defendant and alleging invalidity of any of the PATENT RIGHTS, if both parties agree, HARVARD may take over the sole defense of the action at its own expense. LICENSEE shall cooperate fully with HARVARD in connection with any such action. 8.9 If LICENSEE or any sublicensee, distributor or other customer is sued by a third party charging infringement of patent rights that dominate a claim of PATENT RIGHTS, with respect to the manufacture, use, distribution or sale of LICENSED PRODUCT or practice or use of a LICENSED PROCESS, LICENSEE will promptly notify HARVARD. As between the parties to this Agreement, LICENSEE will be entitled to control the defense in any such action(s) and withhold up to one-half (1/2) of the amounts otherwise payable to HARVARD hereunder to pay for defense costs, attorneys fees and any liability incurred in such infringement suit(s). If Licensee is required to pay a royalty or other amount to a third party as a result of a final judgment or settlement, the amounts payable to HARVARD hereunder will be reduced as provided in Section 4.3 above. ARTICLE IX TERMINATION OF AGREEMENT 9.1 This Agreement, unless terminated as provided herein, shall remain in effect until the last patent or patent application in PATENT RIGHTS has expired or been abandoned. 9.2 HARVARD may terminate this Agreement as follows: (a) If LICENSEE does not make a payment due hereunder and fails to cure such nonpayment (including the payment of interest in accordance with Section 5.4(e)) within forty-five (45) days after the date of notice in writing of such non-payment by HARVARD. If LICENSEE disputes the amount of such non-payment in writing 16 within such forty-five (45) day period, HARVARD shall not have the right to terminate this Agreement until it has been determined in an arbitration proceeding under Section 11.10 below that LICENSEE has failed to pay amounts owed hereunder, and thereafter Licensee does not cure such failure within sixty (60) days after such determination. This Section 9.2(a) shall not, however, suspend any obligation of LICENSEE to compensate HARVARD for any undisputed amounts, as provided for under any term of this Agreement, during the pendency of the foregoing arbitration and cure period. (b) If LICENSEE defaults in its obligations under Sections 11.2(c) and 11.2(d) to procure and maintain insurance, and fails to cure such breach within sixty (60) days after notice in writing of such breach by HARVARD. (c) If LICENSEE shall make an assignment for the benefit of creditors, or shall have a petition in bankruptcy filed for or against it, provided that such bankruptcy petition is not dismissed within sixty (60) days after its filing. Such termination shall be effective immediately upon HARVARD giving written notice to LICENSEE. (d) If LICENSEE is convicted of a felony within the United States relating to the manufacture, use, or sale of LICENSED PRODUCTS. (e) Except as provided in Subsections (a), (b), (c), (d) above, if LICENSEE materially breaches any obligations under this Agreement and the breach has not been cured within ninety (90) days after the date of notice in writing of such breach by HARVARD. If LICENSEE disputes in writing that it has materially breached this Agreement within such ninety (90) day period, HARVARD shall not have the right to terminate this Agreement until it has been determined in an arbitration proceeding under Section 11.10 below that LICENSEE has materially breached this Agreement, and thereafter Licensee does not cure such breach within sixty (60) days after such determination. This Section 9.2(e) shall not, however, suspend any obligation of LICENSEE to compensate HARVARD for any undisputed amounts, as provided for under any term of this Agreement, during the pendency of the foregoing arbitration and cure period. 9.3 All sublicenses granted by LICENSEE under this Agreement in compliance with the terms and conditions hereof shall survive the termination of this Agreement upon the request of the party to whom such sublicense is granted, provided that such party agrees in writing that (i) it will pay all royalties or other amounts that otherwise would have been due thereafter under such sublicense directly to HARVARD rather than LICENSEE, and (ii) HARVARD shall not be held liable for the breach or the performance of any obligations stated in such sublicense unless such obligations have been expressly assumed in writing by HARVARD. 9.4 LICENSEE may terminate this Agreement by giving ninety (90) days advance written notice of termination to HARVARD. Upon termination, LICENSEE shall promptly 17 submit a Royalty Report to HARVARD for the final reporting period and any royalty payments incurred during such reporting period, and any unreimbursed patent expenses under Section 7 that have been invoiced by HARVARD, shall become immediately payable with such Royalty Report. 9.5 Articles I, VI, IX, X and XI (except for Section 11.7) of this Agreement shall survive termination. Article VIII shall survive with respect to any infringement of third parties and/or any lawsuits filed by or against LICENSEE, prior to the termination of this Agreement. In the event this Agreement is terminated for any reason, LICENSEE may, within six months after the effective date of such termination, sell or otherwise dispose of all LICENSED PRODUCTS that LICENSEE may have on hand on the effective date of such termination, and fulfill any contracts requiring the use of LICENSED PRODUCTS and/or LICENSED PROCESSES that LICENSEE may have entered into prior to the date of such termination, subject to LICENSEE'S payment of amounts due to HARVARD under Section 4.3 of this Agreement. 9.6 In the event that after termination of this Agreement, HARVARD licenses PATENT RIGHTS to another licensee, HARVARD shall use commercially reasonable efforts to require such other licensee to pay the costs of the preparation, filing, prosecution and maintenance of PATENT RIGHTS. HARVARD shall reimburse LICENSEE for any costs so paid by such other licensee to the extent LICENSEE paid for such costs under Section 7.1. ARTICLE X REPRESENTATIONS AND WARRANTIES 10.1 Except for the rights, if any, of the Government of the United States, HARVARD represents and warrants that: (a) HARVARD is the owner of the entire right, title and interest in and to the PATENT RIGHTS as they exist on the Effective Date; (b) HARVARD has the right and authority to enter into this Agreement and grant the rights and licenses set forth herein, including without limitation under PATENT RIGHTS; (c) HARVARD has not previously granted, and will not grant in the future, any rights in the PATENT RIGHTS that are inconsistent with the rights and licenses granted to LICENSEE herein; (d) To the best knowledge of HARVARD without having made an investigation, as of the Effective Date, practice of inventions within the PATENT RIGHTS does not infringe any patent rights, trade secrets or other proprietary rights of any third party, (e) To the best knowledge of HARVARD, as of the Effective Date, HARVARD does not own any rights in any other patent or patent application, the claims of which would 18 dominate the claims of a patent or patent application within the PATENT RIGHTS or any practice of PATENT RIGHTS. If HARVARD owns, now or thereafter, any such rights in such patents or patent applications on which Dr. Lieber is an inventor, HARVARD will negotiate in good faith to the extent it has the legal right to do so with LICENSEE to grant LICENSEE rights to the extent sufficient to practice PATENT RIGHTS. (f) To the best knowledge of HARVARD, all prior and current agreements between HARVARD and other sponsors of research under which HARVARD has obligations relating to PATENT RIGHTS are listed on Appendix C. 10.2 Except as set forth in this Agreement, HARVARD does not warrant the validity of the PATENT RIGHTS licensed hereunder and makes no representations whatsoever with regard to the scope of the licensed PATENT RIGHTS or that such PATENT RIGHTS may be exploited by LICENSEE, an AFFILIATE, or sublicensee without infringing other patents. 10.3 EXCEPT FOR THE WARRANTIES STATED IN THIS AGREEMENT, HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS OR INFORMATION SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT. ARTICLE XI GENERAL 11.1 (a) The parties may, from time to time, in connection with this Agreement disclose to each other Confidential Information. Any Confidential Information shall be in writing and marked "confidential" and disclosed only to the Office of Technology and Trademark Licensing. As used in the this Agreement, "Confidential Information" of a party shall mean (i) any information disclosed in writing by such party to the other party, which is marked by such party with the legend "CONFIDENTIAL" or other similar legend sufficient to identify the information as its confidential information, (ii) any information disclosed orally by such party to the other party which is identified as confidential at the time of disclosure and is confirmed as confidential in writing within thirty (30) days after such time of disclosure, or (iii) any information deemed Confidential Information under the terms of this Agreement. With respect to categories (i) and (ii) above, "Confidential Information" shall not include any information that is: (1) already known to the receiving party at the time of disclosure hereunder, or (2) now or hereafter becomes publicly known other than through acts or omissions of the receiving party, or (3) is disclosed to the receiving party by a third party under no obligation of confidentiality to the disclosing party or (4) is independently developed by the receiving party without use of the Confidential Information of the disclosing party. 19 (b) Each party shall maintain in confidence, and shall not use for any purpose or disclose to any third party, the Confidential Information of the other party. Notwithstanding the foregoing, the receiving party may use or disclose the Confidential Information of the disclosing party (i) to the extent necessary to exercise its rights or fulfill its obligations and/or duties under this Agreement, and (ii) to comply with applicable law or governmental regulations or court order, provided that the receiving party will give reasonable advance notice to the disclosing party, and will use its reasonable efforts to minimize the disclosure of Confidential Information and to secure confidential treatment of any Confidential Information disclosed. (c) The terms of this Agreement shall be deemed "Confidential Information" of both parties. In addition to the permissible disclosures set forth in subsection (b) above, LICENSEE may disclose such terms in confidence to its financial and legal advisors, consultants, potential or actual investors, potential or actual merger or acquisition partners, and others on a need-to-know basis. 11.2 (a) LICENSEE shall indemnify, defend and hold harmless HARVARD and its current or former and future directors, governing board members, trustees, officers, faculty and employees (collectively, the "INDEMNITEES"), from and against any lawsuit or cause or action against the INDEMNITEES brought by a third party (collectively, "Claims"), based upon, arising out of, or otherwise relating to this Agreement, including without limitation any cause of action relating to product liability concerning any product, process, or service made, used or sold pursuant to any right or license granted under this Agreement, except to the extent such Claims arise out of or otherwise relate to the gross negligence or intentional misconduct of any INDEMNITEES; and further provided that (i) LICENSEE receives prompt notice of any such Claims; (ii) LICENSEE is given the exclusive right to control the defense and settlement of such Claims; and (iii) LICENSEE shall not be obligated to indemnify any INDEMNITEE in connection with any settlement for any Claim unless LICENSEE consents in writing to such settlement. (b) LICENSEE shall, at its own expense, defend against any actions brought or filed against any INDEMNITEE hereunder with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought. (c) Beginning at the time any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a SUBLICENSEE, AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than [*** Redacted] per incident and [*** Redacted] annual aggregate and naming the Indemnitees as additional insureds. During clinical trials of any such product, process or service, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in such equal or lesser amount as HARVARD shall require, naming the Indemnitees as additional insureds. Such commercial general liability insurance shall provide: (i) product liability coverage; and (ii) broad form contractual liability coverage for LICENSEE'S indemnification under this Agreement. If LICENSEE elects to self- *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 20 insure all or part of the limits described above (including deductibles or retentions which are in excess of [*** Redacted] annual aggregate) such self-insurance program must be acceptable to HARVARD and the Risk Management Foundation of the Harvard Medical Institutions, Inc. in their sole discretion. The minimum amounts of insurance coverage required shall not be construed to create a limit of LICENSEE's liability with respect to its indemnification under this Agreement. (d) LICENSEE shall provide HARVARD with written evidence of such insurance upon request of HARVARD. LICENSEE shall provide HARVARD with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance; if LICENSEE does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, HARVARD shall have the right to terminate this Agreement in accordance with Section 9.2(b). (e) LICENSEE shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during: (i) the period that any product, process, or service, relating to, or developed pursuant to, this Agreement is being commercially distributed or sold by LICENSEE or by a sublicensee, AFFILIATE or agent of LICENSEE; and (ii) a reasonable period after the period referred to in Subsection (e)(i) above which in no event shall be less than fifteen (15) years. 11.3 Nothing in this Agreement shall be construed as conferring any right to use HARVARD's name or insignia, or any adaptation of them, or the name of any of HARVARD's inventors in any advertising, promotional or sales literature without the prior written approval of HARVARD, or the inventor in the case of the use of the name of an inventor. 11.4 Except as stated in this Section 11.4, without the prior written approval of HARVARD in each instance, neither this Agreement nor the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE to any person whether voluntarily or involuntarily, by operation of law or otherwise. LICENSEE may transfer or assign this Agreement and all rights hereunder, upon notice to HARVARD but without its consent, to any entity that succeeds to all or substantially all of the business of LICENSEE to which this Agreements pertains, whether by merger, operation of law, purchase or sale of all or substantially all of LICENSEE's stock or assets or otherwise; provided that such assignee or transferee promptly agrees in writing to be bound by the terms and conditions of this Agreement. Subject to the foregoing, this Agreement shall be binding upon the respective successors, legal representatives and assignees of HARVARD and LICENSEE. 11.5 The interpretation and application of the provisions of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. 11.6 LICENSEE shall comply with all applicable laws and regulations. In particular, it is understood and acknowledged that the transfer of certain commodities and technical data is subject to United States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations among other things, prohibit or *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 21 require a license for the export of certain types of technical data to certain specified countries. LICENSEE hereby agrees and gives written assurance that it will comply with all United States laws and regulations controlling the export of commodities and technical data, that it will be solely responsible for any violation of such by LICENSEE or its AFFILIATES or sublicensees, and that it will defend and hold HARVARD harmless in the event of any legal action of any nature occasioned by such violation with respect to LICENSED PRODUCTS. 11.7 LICENSEE agrees: (i) to obtain all regulatory approvals required for the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES; and (ii) to mark LICENSED PRODUCTS with the numbers of the applicable patents within PATENT RIGHTS, to the extent required by law. LICENSEE also agrees to register or record this Agreement as is required by law or regulation in any country where the license is in effect, and HARVARD shall cooperate fully with LICENSEE in connection with any such registration or recordation. 11.8 Any notices to be given hereunder shall be sufficient if signed by the party (or party's attorney) giving same and either: (i) delivered in person; (ii) mailed certified mail return receipt requested; or (iii) faxed to other party if the sender has evidence of successful transmission and if the sender promptly sends the original by ordinary mail, in any event to the following addresses: If to LICENSEE: c/o CW Group East 1041 Third Avenue New York, New York 10021 Attn: Lawrence A. Bock Fax: 212/644-0354 cc: Wilson, Sonsini, Goodrich & Rosati 650 Page Mill Road Palo Alto, California 94304 Attn: Michael J. O'Donnell, Esq. Fax: 650/493-6811 If to HARVARD: Office for Technology and Trademark Licensing Harvard University Holyoke Center, Suite 727 1350 Massachusetts Avenue Cambridge, MA 02138 Fax: (617)495-9568 By such notice either party may change their address for future notices. 22 Notices delivered in person shall be deemed given on the date delivered. Notices sent by fax shall be deemed given on the date faxed. Notices mailed shall be deemed given on the date postmarked on the envelope. 11.9 Should a court of competent jurisdiction later hold any provision of this Agreement to be invalid, illegal, or unenforceable, and such holding is not reversed on appeal, it shall be considered severed from this Agreement. All other provisions, rights and obligations shall continue without regard to the severed provision, provided that the remaining provisions of this Agreement are in accordance with the intention of the parties. 11.10 In the event of any controversy or claim arising out of or relating to any provision of this Agreement or the breach thereof, the parties shall try to settle such conflict amicably between themselves. Subject to the limitation stated in the final sentence of this Section, any such conflict which the parties are unable to resolve promptly shall be settled through arbitration conducted in accordance with the rules of the American Arbitration Association. The demand for arbitration shall be filed within a reasonable time after the controversy or claim has arisen, and in no event after the date upon which institution of legal proceedings based on such controversy or claim would be barred by the applicable statute of limitation. Such arbitration shall be held in Boston, Massachusetts. The award through arbitration shall be final and binding. Either party may enter any such award in a court having jurisdiction or may make application to such court for judicial acceptance of the award and an order of enforcement, as the case may be. Notwithstanding the foregoing, either party may, without recourse to arbitration, assert against the other party a third-party claim or cross-claim in any action brought by a third party, to which the subject matter of this Agreement may be relevant. 11.11 This Agreement constitutes the entire understanding between the parties and neither party shall be obligated by any condition or representation other than those expressly stated herein or as may be subsequently agreed to by the parties hereto in writing. 11.12 Nothing in this Agreement shall be deemed to require LICENSEE to exploit the PATENT RIGHTS, except to the extent expressly set forth in this Agreement, and nothing in this Agreement shall be deemed to prevent LICENSEE from commercializing products similar to or competitive with a LICENSED PRODUCT. 11.13 The relationship between HARVARD and LICENSEE established by this Agreement is that of independent contractors. Nothing in this Agreement shall be construed to create any other relationship between HARVARD and LICENSEE. Neither party shall have any right, power or authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other. 11.14 In the event either party hereto is prevented from or delayed in the performance of any of its obligations hereunder by reason of acts of God, war, strikes, riots, storms, fires or any other cause whatsoever beyond the reasonable control of the party, the party so prevented or delayed shall be excused from the performance of any such obligation to the extent and during the period of such prevention or delay. 23 11.15 NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OF LIKELIHOOD OF SAME. 11.16 This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives. PRESIDENT AND FELLOWS OF HARVARD COLLEGE COMPANY /s/ Joyce Brinton /s/ Lawrence A. Bock - --------------------------------------------- --------------------------- Joyce Brinton, Director Signature Office for Technology and Trademark Licensing 10/2/01 Lawrence A. Bock ------------ --------------------------- Date Name President and CEO --------------------------- Title 10/3/01 ------------------- Date 24 APPENDIX A The following comprise PATENT RIGHTS: US Patent 5,897,945, issued 4/27/99, US Patent 6,036,774, issued 3/14/00 and pending applications in Japan, France and the United Kingdom 25 APPENDIX B NANOSYS, INC. CAPITALIZATION TABLE - CONFIDENTIAL FOUNDERS' STOCK (Common Stock Capitalization Before Series A Preferred Stock Financing)

% of Founders Stock # of Shares of Common Stock Amount Invested ------------------- --------------------------- -------------------- Charles Lieber # 11.0% 550,000 $ 550 Hongkun Park # 9.0% 450,000 $ 450 Michael Evans + 2.0% 100,000 $ 100 CW Group * 12.0% 600,000 $ 600 Other advisors (tbd) 2 % 100,000 $ 100 Reserve 64.0% 3,200,000 $ 3,200 Total Common Shares 100.0% 5,000,000 $ 5,000

PROPOSED SERIES A PREFERRED STOCK Investors as a group 5,000,000-6,666,667 $ 1,500-2,000,000 Total Series A Preferred Shares 5,000,000-6,666,667 $ 1,500-2,000,000 # Founders stock will vest monthly over a five year period + Evans shares will be fully vested * Shares will be issued in the form of an option 26 APPENDIX C

CASE LEAD INVENTOR REPORT DATE TITLE AGENCY GRANT NUMBERS - ---- --------------- ----------- -------------------- ------------------------ ---------------- 1243 Lieber, Charles 2/8/96 Metal Oxide Nanorods NSF DMR-94-00396 1243 Lieber, Charles 2/8/96 Metal Oxide Nanorods Office of Naval Research N00014-94-1-0302

EX-10.5.1 3 f97636a4exv10w5w1.txt EXHIBIT 10.5.1 EXHIBIT 10.5.1 CO-EXCLUSIVE LICENSE AGREEMENT (CASE #1641) Between President and Fellows of Harvard College And NanoSys, Inc. Effective as of October 4, 2001 ("Effective Date") Re: Harvard Case #1641 In consideration of the mutual promises and covenants set forth below, the parties hereto agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: 1.1 ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS solely for academic non-commercial research or other not-for-profit scholarly purposes, which use is undertaken at a non-profit or governmental institution. ACADEMIC RESEARCH PURPOSES does not include selling products covered by PATENT RIGHTS or using PATENT RIGHTS in researching, developing, producing or manufacturing products for sale, or performance of services for a fee or other financial consideration. It is understood that using the PATENT RIGHTS to conduct normal research activities at non-profit or governmental institution is within the defined term of ACADEMIC RESEARCH PURPOSES. 1.2 AFFILIATE: any entity which controls, is controlled by, or is under common control with a party. An entity shall be regarded as in control of another entity for purposes of this definition if it owns or controls at least fifty percent (50%) of the shares entitled to vote in the election of directors (or in the case of an entity that is not a corporation, for the election of the corresponding managing authority). Unless otherwise specified, the term LICENSEE includes AFFILIATES. 1.3 FIELD: All fields of use. 1.4 HARVARD: President and Fellows of Harvard College, a nonprofit Massachusetts educational corporation having offices at the Office for Technology and Trademark Licensing, Holyoke Center, Suite 727, 1350 Massachusetts Avenue, Cambridge, Massachusetts 02138. 1.5 LICENSED PROCESSES: methods, processes or procedures covered by at least one VALID CLAIM included within the PATENT RIGHTS. 1.6 LICENSED PRODUCTS: products covered by at least one VALID CLAIM included within the PATENT RIGHTS or products made in accordance with LICENSED PROCESSES. 1.7 LICENSEE: Nanosys, Inc., a corporation organized under the laws of Delaware having its principal offices at CW Group East, 1041 Third Avenue, New York, New York 10021. 1.8 NET SALES: the amounts actually received for sales, leases, or other dispositions of LICENSED PRODUCTS to non-AFFILIATE third parties, less: (a) customary [*** Redacted] actually allowed and taken; (b) amounts [*** Redacted] by reason of [*** Redacted]; (c) to the extent separately stated on purchase orders, invoices, or other documents of sale: (i) [*** Redacted] levied on the production, sale, transportation, delivery, importation, exportation or use of LICENSED PRODUCTS; (ii) charges for [*** Redacted] provided by third parties, including any [*** Redacted] thereon. NET SALES also includes the fair market value of any non-cash consideration received for the sale, lease or other disposition of LICENSED PRODUCTS to non-AFFILIATE third parties; provided NET SALES shall not include any [*** Redacted] payments in consideration for the [*** Redacted] to the intellectual property of LICENSEE or third parties, including the [*** Redacted] hereunder, bona fide [*** Redacted] made in good faith and any payments for [*** Redacted]. In the event that a LICENSED PRODUCT is sold or leased as a combination product containing the LICENSED PRODUCT and one or more other components, NET SALES shall be calculated by multiplying the gross amount invoiced for the sale of the combination product by the fraction [*** Redacted] where A is the [*** Redacted] price of the LICENSED PRODUCT sold separately by LICENSEE, and B is the [*** Redacted] of such other components of the combination products sold separately by LICENSEE during the relevant royalty payment period. In the event a substantial number of such separate sales were not made during the relevant royalty period, then NET SALES shall be reasonably allocated by LICENSEE between such LICENSED PRODUCT and such other components of the combination based on their relative importance or value; provided that such LICENSED PRODUCT and such other components shall not be considered a "combination product" unless such LICENSED PRODUCT and such other components or offered for sale or marketed by LICENSEE separately as well as together. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 2 1.9 PATENT RIGHTS: PATENT RIGHTS shall include (i) the applications and patents as listed in Appendix A of this Agreement, (ii) any foreign counterparts to such patents and patent applications, (iii) the inventions described and claimed in the foregoing; (iv) any divisions, continuations, substitutions of the foregoing, and (v) specific claims of any continuations-in-part of the foregoing to the extent the specific claims are directed to subject matter described in the foregoing in a manner sufficient to support such specific claims under 35 U.S.C. and to the extent Licensable by HARVARD, (vi) all patents issuing on any of the foregoing, and (vii) registrations, renewals, reissues, reexaminations, extensions or patents of addition of any kind with respect to any of such patents. For purposes of this Agreement "Licensable" shall mean those claims of continuations-in- part filed after the Effective Date for which HARVARD has sole ownership (or has been granted the sole right to license by a co-owner) and where there are no obligations to grant licenses to a third party as the result of research support provided to one or more of the inventors. 1.10 SERVICE INCOME: the financial consideration actually received for the utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE which is contracted for by a non-AFFILIATE third party, less the deductions stated in Sections 1.8(a), (b) and (c); provided, however, that such amounts shall only be included in SERVICE INCOME if LICENSEE does not [*** Redacted] with respect to the PATENT RIGHTS licensed in this Agreement on the NET SALE of such LICENSED PRODUCTS or the NET SALE of LICENSED PRODUCTS made in accordance with such use of the LICENSED PROCESSES. SERVICE INCOME shall specifically exclude any [*** Redacted] payments in consideration for the [*** Redacted] of the LICENSEE of third parties, including the [*** Redacted] made in good faith and any [*** Redacted] In the event that any service contemplated hereunder includes any services other than the utilization of [*** Redacted] or [*** Redacted] LICENSEE shall in good faith determine the portion of the payments received for such service that are intended as consideration for the utilization of [*** Redacted] or [*** Redacted] by LICENSEE, and such portion shall be used to determine the SERVICE INCOME for such service. In such event, LICENSEE shall promptly deliver to HARVARD a written report detailing such calculation, together with a copy of the applicable provisions of the agreements related to such service. All such reports and provisions of agreements shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE of SERVICE INCOME for such service, HARVARD shall so notify LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with paragraph 11.10. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 3 1.11 SUBLICENSE INCOME: the amount paid to LICENSEE by a third party (other than an AFFILIATE of LICENSEE) for the granting of a sublicense under Section 3.1, including but not limited to (i) [*** Redacted], (ii) [*** Redacted], (iii) [*** Redacted] and (iv) the [*** Redacted] in case of any non-cash consideration for such sublicense, but specifically excluding any [*** Redacted] payments in consideration for the [*** Redacted], [*** Redacted] and any [*** Redacted]. It is understood and agreed that sublicense income received by LICENSEE shall be net of withholding taxes. If LICENSEE sublicenses [*** Redacted] to a third party and at the same time also grants such third party rights to [*** Redacted] or then all compensation received from the third party for such rights shall be combined and [*** Redacted] that would constitute SUBLICENSE INCOME under Section 1.13 and shall promptly deliver to HARVARD a written report detailing such calculation, together with a copy of the applicable provisions of the agreements with the third party. All such reports and provisions of agreements shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE of SUBLICENSE INCOME, HARVARD shall so notify LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with Section 11.10. 1.12 TERRITORY: Worldwide. 1.13 VALID CLAIM: either (i) a claim of an issued patent that has not expired or been held unenforceable or invalid by an agency or a court of competent jurisdiction, and which has not been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise; provided, however, that if the holding of such court or agency is later reversed by a court or agency with overriding authority, the claim shall be reinstated as a Valid Claim with respect to Net Sales made after the date of such reversal, or (ii) a claim of a pending patent application that has not been abandoned or finally rejected without the possibility of appeal or re-filing and that has been pending for less than five (5) years from its priority date, and is being actively prosecuted in good faith. 1.14 The terms "Public Law 96-517" and "Public Law 98-620" include all amendments to those statutes. 1.15 The terms "sold" and "sell" include, without limitation, leases and other dispositions and similar transactions. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -4- 1.16 RELATED LICENSE AGREEMENTS: Other patent license agreements between LICENSEE and HARVARD licensing patent rights known internally at HARVARD as Case #1852, #1765, #1923, #1924, #1678, #1641, #1489, #1382, #1243, #1137, #1816, #1685 and #1935 to LICENSEE. 1.17 R&D SPENDING, MINIMUM INVESTMENT: shall have the meanings as set forth in Section 4.5. 1.18 DEVELOPMENT PAYMENTS: DEVELOPMENT PAYMENTS shall mean (a) any payments, in consideration for, or to support, research and/or development efforts by LICENSEE and (b) any reimbursement of expenses including without limitation patent expenses. ARTICLE II RECITALS 2.1 HARVARD is owner (or HARVARD will be owner) by assignment from Charles Lieber, Thomas Rueckes, Ernesto Joselevich, and Kevin Kim of their entire right, title and interest in the PCT application (PCT/US00/18138) filed 7/2/00 (claiming priority to US Provisional Application 60/142,216, filed 7/1/99 in the foreign and US patent applications corresponding thereto, and in the inventions described and claimed therein. 2.2 HARVARD has the authority to issue licenses under PATENT RIGHTS. 2.3 HARVARD is committed to the policy that ideas or creative works produced at HARVARD should be used for the greatest possible public benefit, and believes that every reasonable incentive should be provided for the prompt introduction of such ideas into public use, all in a manner consistent with the public interest. 2.4 LICENSEE intends to use commercially reasonable efforts to develop the invention(s), and to bring to market at least one product falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in the patents rights licensed under such agreements. 2.5 LICENSEE is desirous of obtaining a co-exclusive license in the TERRITORY in order to practice the above-referenced invention covered by PATENT RIGHTS in the United States and in certain foreign countries, and to manufacture, use and sell in the commercial market the products made in accordance therewith, and HARVARD is desirous of granting such a license to LICENSEE in accordance with the terms of this Agreement. ARTICLE III GRANT OF RIGHTS 3.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the terms and conditions hereof, a co-exclusive license (with Nantero, Inc. and except as set forth in Sections 3.2(a) and 3.2(b)) under PATENT RIGHTS in the TERRITORY and in the FIELD (i) to make and have made, to use and have used, to sell and have sold, to offer for 5 sale, import, export, or otherwise distribute the LICENSED PRODUCTS, (ii) to practice the LICENSED PROCESSES, and (iii) to otherwise fully exploit the PATENT RIGHTS, and (iv) to have the foregoing performed on behalf of LICENSEE by a third party, in each case for the life of the PATENT RIGHTS. The foregoing license under PATENT RIGHTS shall include the right to grant sublicenses only in accordance with Section 3.2(b)(iii). LICENSEE shall promptly provide copies of any sublicenses of PATENT RIGHTS to HARVARD for its review. Unless HARVARD has rendered the license under PATENT RIGHTS non-exclusive under Section 4.3(d), HARVARD agrees that it will not grant licenses under PATENT RIGHTS to others, nor make, use, sell, offer for sale, import or otherwise exploit PATENT RIGHTS itself except to Nantero Inc. and as required by HARVARD's obligations in Section 3.2(a) or as permitted in Section 3.2(b) 3.2 The granting and exercise of this license is subject to the following conditions: (a) HARVARD's "Statement of Policy in Regard to Inventions, Patents and Copyrights," dated August 10, 1998, Public Law 96-517 and Public Law 98-620, and HARVARD's obligations under prior or current agreements with other sponsors of research and, with regard to continuations-in-part contained in the PATENT RIGHTS, any future agreements with other sponsors of research related to such continuations-in-part. Any right granted in this Agreement greater than that permitted under Public Law 96-517, or Public Law 98-620, shall be subject to modification to the extent required to conform to the provisions of those statutes. (b) This co-exclusive license shall mean that LICENSEE shall have the exclusive rights to PATENT RIGHTS except as provided in 3.2(a) and as provided below. (i) HARVARD reserves the right to make and use, and grant to other non-profit or governmental institutions non-exclusive licenses to make and use, in each case solely for ACADEMIC RESEARCH PURPOSES the subject matter described and claimed in PATENT RIGHTS. HARVARD shall promptly notify LICENSEE of any rights granted to any third party (other than the U.S. government) under Sections 3.2(a) and (b). (ii) LICENSEE expressly recognizes that Nantero, Inc. ("NANTERO") currently has the right to obtain a co-exclusive license under PATENT RIGHTS. In the event that NANTERO's rights should expire or terminate for any reason, HARVARD shall immediately notify LICENSEE, and LICENSEE shall have the right to convert its license to PATENT RIGHTS hereunder to an exclusive (subject to Sections 3.2(a) and 3.2(b)(i)) and fully sublicensable license upon the payment of [*** Redacted]($[*** Redacted]) to HARVARD. (iii) Neither LICENSEE nor NANTERO may grant sublicenses under PATENT RIGHTS unless (x) such entity can demonstrate to HARVARD that it has added significant value to the PATENT RIGHTS to be sublicensed, and that its sublicense of PATENT RIGHTS accompanies a substantial and essentially simultaneous license of such added value in the form of LICENSEE-owned intellectual property, or (y) such entity is granting an authorized sublicense under other patent rights licensed exclusively from HARVARD which are *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. dominated by PATENT RIGHTS, and its sublicense of PATENT RIGHTS is therefore necessary to permit the sublicensee to practice such other HARVARD patent rights, or (z) such entity obtains the approval of HARVARD and the other co-exclusive licensee of PATENT RIGHTS. Notwithstanding the foregoing, the restrictions on sublicensing set forth in this Section 3.2(b)(iii) shall not apply to LICENSEE, and LICENSEE shall have the full unrestricted right to grant sublicenses, in the event LICENSEE's license to PATENT RIGHTS is converted to an exclusive license under Section 3.2(b)(ii). (c) LICENSEE shall use commercially reasonable efforts to effect introduction into the commercial market at least one product falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in PATENT RIGHTS, consistent with sound and reasonable business practice and judgment; thereafter, until the expiration of this Agreement, LICENSEE shall use commercially reasonable efforts to endeavor to keep any such product reasonably available to the public so long as it shall be a sound and reasonable commercial practice to do so. (d) At any time after five (5) years from the effective date of this Agreement, HARVARD may render the license non-exclusive if LICENSEE has not: (i) used commercially reasonable efforts to put the licensed subject matter into commercial use in one or more of the countries hereby licensed, directly or through a sublicense; nor (ii) used commercially reasonable efforts to keep products falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in PATENT RIGHTS reasonably available to the public so long as it shall be a sound and reasonable commercial practice to do so; nor (iii) engaged in research, development, manufacturing, marketing or sublicensing activity that is commercially reasonably appropriate to achieving Section 3.2(d)(i) or 3.2(d)(ii). LICENSEE shall be deemed to have satisfied Section 3.2(d)(iii), and HARVARD shall not render the license of PATENT RIGHTS granted hereunder non-exclusive, if LICENSEE's R&D SPENDING exceeds the MINIMUM INVESTMENT for such year as set forth in Section 4.5. (e) In all sublicenses granted by LICENSEE hereunder, LICENSEE shall include a requirement that the sublicensee use commercially reasonable efforts to put the subject matter of the sublicense into commercial use, provided that such sublicensee is authorized to develop and sell to the public a new product covered by PATENT RIGHTS on its own behalf. LICENSEE shall further provide that such sublicenses are subject and subordinate to the terms and conditions of this Agreement, except for 7 the rate of royalty on NET SALES paid by such sublicensee to the LICENSEE. Copies of all sublicense agreements hereunder shall be provided promptly to HARVARD. All sublicense agreements of LICENSEE provided to HARVARD shall deemed Confidential Information of LICENSEE subject to Section 11.1. (f) At any time eight (8) years after the effective date of this Agreement, if LICENSEE is unable or unwilling to grant sublicenses, either as suggested by HARVARD or by a potential sublicensee or otherwise, then HARVARD may directly license such potential sublicensee, but only if: (i) LICENSEE is not currently pursuing development of LICENSED PRODUCTS for the same application as contemplated by the potential sublicensee, or LICENSEE commits to do so within a two-year period, (ii) the granting of such a license by HARVARD to the potential sublicensee will increase the availability of useful products to the public, (iii) the granting of such license by HARVARD will not materially adversely affect LICENSEE's then current business or reasonably foreseeable future business (e.g., such license is not intended for an application competitive with LICENSEE) and (iv) HARVARD notifies LICENSEE of its intention to grant such license and permits LICENSEE a reasonable period to negotiate a sublicense on its own. (g) To the extent required by law, until this license is rendered non-exclusive in the United States under Section 3.2 (d), LICENSEE shall cause any LICENSED PRODUCT produced for sale in the United States to be manufactured substantially in the United States. 3.3 All rights reserved to the United States Government and others under Public Law 96-517, and Public Law 98-620, shall remain and shall in no way be affected by this Agreement. 3.4 HARVARD shall promptly notify LICENSEE when any new patent or patent application arises from (i) research conducted in the laboratory of Dr. Lieber or Dr. Park, or (ii) improvements made by HARVARD under the direction of Dr. Lieber or Dr. Park on the subject matter described in PATENT RIGHTS. If LICENSEE so requests and the intellectual property is available for licensing, HARVARD will evaluate in good faith LICENSEE's proposal along with proposals received from any third parties. Any decision to grant a license to LICENSEE shall be subject to approval by HARVARD's Committee on Patents and Copyrights. In the event LICENSEE and HARVARD cannot agree on terms for a license to any new intellectual property which is dominated by PATENT RIGHTS, HARVARD shall not offer any third party terms more favorable than the terms offered to LICENSEE. ARTICLE IV ROYALTIES 4.1 LICENSEE shall pay to HARVARD a non-refundable license royalty fee in the sum of [*** Redacted] $[*** Redacted] upon execution of this Agreement. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 8 4.2 As consideration for the rights granted hereunder, LICENSEE shall pay to HARVARD a non-refundable fee in the form of stock of LICENSEE as follows: (i) LICENSEE shall issue to HARVARD [*** Redacted] fully vested shares, at a price per share of $0.001 per share and an aggregate value of $[*** Redacted] of LICENSEE's common stock which represent [*** Redacted] percent ([*** Redacted]%) of the reserved shares for founders (total 3.2 million shares) shown on the capitalization table of LICENSEE attached as Appendix B ("Shares") upon execution of this Agreement, provided, however, that HARVARD shall be subject to and enter into (1) appropriate agreements and related documents as required of other stockholders of LICENSEE, including without limitation a Common Stock Purchase Agreement, and (2) a Voting Agreement by and among the LICENSEE, HARVARD and certain other holders of common stock of LICENSEE dated as of even date hereof. (ii) HARVARD's ownership rights to Shares shall not be affected should the license pursuant to this Agreement be terminated by LICENSEE or HARVARD. 4.3 (a) LICENSEE shall pay to HARVARD during the term of this Agreement a royalty on NET SALES by LICENSEE according to the following schedule: (i) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] applications; (ii) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] applications; or (iii) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] applications. In the event, any NET SALES by LICENSEE reasonably falls within more than one of categories (i) to (iii) above, LICENSEE shall pay to HARVARD the lowest applicable royalty set forth in such categories. (b) For each LICENSED PRODUCT sold by LICENSEE, LICENSEE may credit up to [*** Redacted] of royalties that LICENSEE is paying to third parties (or HARVARD under agreements not included within section 4.3(c)) on LICENSEE's sales of that LICENSED PRODUCT, provided that the royalty paid to HARVARD shall not be reduced below [*** Redacted] percent ([*** Redacted]%) of the NET SALES of that LICENSED PRODUCT for which such third party royalties are being paid. (c) In the event that sales of a LICENSED PRODUCT are subject to the payment of royalties under one or more of the RELATED LICENSE AGREEMENTS or any license agreements with HARVARD with the same effective date as this Agreement, then the total royalty payment due HARVARD under all such agreements including this Agreement shall be at most the royalty payment due under this Section 4.3 on such *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 9 NET SALE, no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such agreement. LICENSEE shall notify HARVARD of the identity of each license agreement that includes patent rights covering the product or process, and HARVARD shall distribute the royalties evenly among such agreements, including this Agreement. (d) LICENSEE shall pay HARVARD [*** Redacted] percent ([*** Redacted]%) of SUBLICENSE INCOME received by LICENSEE for a sublicense of PATENT RIGHTS. If compensation for such a sublicense of PATENT RIGHTS is bundled with compensation received for the sublicensing of the other HARVARD patents rights or other HARVARD intellectual property, licensed to LICENSEE under the RELATED LICENSE AGREEMENTS or any agreements with HARVARD having the same effective date as this Agreement, then LICENSEE shall pay HARVARD at most the royalty payment due under this Section 4.3(d) for such SUBLICENSE INCOME no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such license agreements. In such a case, LICENSEE shall notify HARVARD of the identity of each license agreement involved and HARVARD shall distribute the royalties equally among those license agreements, including this Agreement. (e) For provision of services under PATENT RIGHTS, LICENSEE shall pay a royalty of [*** Redacted] percent ([*** Redacted]%) of SERVICE INCOME received by LICENSEE from each and every third party ("Third Party") to whom LICENSEE provides such services. In the event any services from which SERVICE INCOME is derived are subject to the payment of royalties under the RELATED LICENSE AGREEMENTS or any agreement with HARVARD having the same effective date as this Agreement, then the total royalty due under all such agreements, including this Agreement, shall be at most the royalty payment due under this Section 4.3 on such services, no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such license agreements. In such event, LICENSEE shall notify HARVARD of the identity of each license agreement involved and HARVARD shall distribute the royalties equally among those license agreements, including this Agreement. (f) If the license pursuant to this Agreement is converted to a non-exclusive one under Section 3.2(d) and if another non-exclusive license to any of PATENT RIGHTS is granted or otherwise exists for any field or territory, then the royalty rate of this Agreement shall be adjusted so as not to exceed the royalty rate payable by such other non-exclusive licensee under such PATENT RIGHTS in such field or territory, provided that LICENSEE agrees to amend this Agreement to include terms requested by HARVARD that have been accepted by such other non-exclusive licensee. (g) On sales between LICENSEE and its AFFILIATES for resale, the royalty shall be paid on the NET SALES of the AFFILIATE. (h) In the event that more than one VALID CLAIM within PATENT RIGHTS is applicable to any LICENSED PRODUCT subject to royalties under this Section 4.3, then only one royalty shall be paid to HARVARD in respect of such LICENSED PRODUCT. In no *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 10 event shall more than one royalty be due to HARVARD with respect to any LICENSED PRODUCT unit; nor shall a royalty be payable under this Section 4.3 with respect to sales of LICENSED PRODUCTS for clinical trials or as samples nor the use of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE for such purposes, in each case whether or not in collaboration with a third party. 4.4 No later than January 1 of each calendar year after the effective date of this Agreement, LICENSEE shall pay to HARVARD the following non-refundable license maintenance royalty and/or advance on royalties. Such payments may be credited against running royalties due for that calendar year and Royalty Reports shall reflect such a credit. Such payments shall not be credited against milestone payments (if any) nor against royalties due for any subsequent calendar year.

January 1, 2002 [*** Redacted] January 1, 2003 [*** Redacted] January 1, 2004 [*** Redacted] January 1, 2005 [*** Redacted] January 1, 2006 [*** Redacted] January 1, 2007 [*** Redacted] each year thereafter [*** Redacted]

4.5 Notwithstanding Section 4.4, the minimum royalty set forth in Section 4.4 for the years 2002, 2003, and 2004 will be waived if LICENSEE's spending on research and development (LICENSEE's "R&D SPENDING") exceeds the amount set forth below for each category for such year (such amounts below, the "MINIMUM INVESTMENT").

CHEMICAL AND BIOLOGICAL SENSOR OPTOELECTRONICS NANOELECTRONICS APPLICATIONS APPLICATIONS APPLICATIONS Year 2002: [*** Redacted] [*** Redacted] [*** Redacted] Year 2003: [*** Redacted] [*** Redacted] [*** Redacted] Year 2004: [*** Redacted] [*** Redacted] [*** Redacted] Year 2005 [*** Redacted] [*** Redacted] [*** Redacted] Year 2006 [*** Redacted] [*** Redacted] [*** Redacted] Each Year Thereafter [*** Redacted] [*** Redacted] [*** Redacted]

LICENSEE's MINIMUM INVESTMENT may be allocated by LICENSEE in any way within the three categories set forth above among the different subject matter of the RELATED LICENSE AGREEMENTS. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 11 ARTICLE V REPORTING 5.1 Within six (6) months of the Effective Date, LICENSEE will provide to HARVARD a written research and development plan acceptable to LICENSEE's investors under which LICENSEE intends to bring the subject matter of the licenses granted hereunder into commercial use upon execution of this Agreement. Such plan will include projections of sales and proposed marketing efforts. It is understood that LICENSEE may provide one research and development plan for all RELATED LICENSE AGREEMENTS. 5.2 No later than sixty (60) days after June 30 of each calendar year, LICENSEE shall provide to HARVARD a written annual Progress Report describing progress on the commercialization of PATENT RIGHTS during the most recent twelve (12) month period ending June 30, the amount of LICENSEE's R&D SPENDING relating to the subject matter described or claimed in PATENT RIGHTS during such time, and plans for the forthcoming year. If multiple technologies are covered by the license granted hereunder, the Progress Report shall provide the information set forth above for each technology. If progress differs from that anticipated in the plan required under Section 5.1, LICENSEE shall explain the reasons for the difference and, if appropriate or necessary, provide a modified research and development plan for HARVARD's review. It is understood that LICENSEE may provide one Progress Report covering all RELATED LICENSE AGREEMENTS. 5.3 LICENSEE shall report to HARVARD the date of its first NET SALE of a LICENSED PRODUCT (or the date of its first use of a LICENSED PROCESS from which SERVICE INCOME is derived) in each country within thirty (30) days of occurrence. It is understood that LICENSEE shall be obligated to report the date of first sale of LICENSED PRODUCTS (or the first commercial use of LICENSED PROCESSES) under this Section 5.3 only once for each country. 5.4 (a) LICENSEE shall submit to HARVARD within sixty (60) days after each calendar half year ending June 30 or December 31, a Royalty Report setting forth, for the most recent half year that ended on June 30 or December 31, at least the following information: (i) the number and identification of LICENSED PRODUCTS sold by LICENSEE that constitute a NET SALE, in each country; (ii) total amounts received for such LICENSED PRODUCTS; (iii) an accounting for all LICENSED PROCESSES used or sold; (iv) deductions applicable to determine the NET SALES thereof; (v) the amount of SUBLICENSE INCOME received by LICENSEE; 12 (vi) the amount of SERVICE INCOME received by LICENSEE; and (vii) the amount of royalty due for such reporting period, or, if no royalties are due to HARVARD for such reporting period, the statement that no royalties are due. Such report shall be certified as correct by an officer of LICENSEE and shall include a listing of all deductions from royalties. It is understood that LICENSEE may submit one Royalty Report covering all RELATED LICENSE AGREEMENTS. However, the Royalty Report shall, for each type of income, provide a detailed listing of the RELATED LICENSE AGREEMENTS that are involved. (b) LICENSEE shall pay to HARVARD with each such Royalty Report the amount of royalty due with respect to such half year. If multiple technologies are covered by the license granted hereunder, LICENSEE shall specify which PATENT RIGHTS are utilized for each category of LICENSED PRODUCTS and/or LICENSED PROCESSES for which royalties are separately reported in the Royalty Report. (c) All payments due hereunder shall be deemed received when funds are credited to HARVARD's bank account and shall be payable by check or wire transfer in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the New York Times or the Wall Street Journal) on the last working day of each royalty period. No transfer, exchange, collection or other charges shall be deducted from such payments. If legal restrictions block the removal of local currency from any country where a LICENSED PRODUCT is sold, the royalties payable under this Agreement on NET SALES, SERVICE INCOME and SUBLICENSING INCOME earned in such currency in such country shall continue to be reported and accrued, but will not be paid until such currency may be removed from such country. (d) All plans or reports received under Sections 5.1, 5.2, 5.3, 5.4 shall deemed Confidential Information of LICENSEE subject to Section 11.1; provided, however, that HARVARD may disclose such information as required by law under Section 11.1(b), and may include in its usual reports the annual amounts of royalties paid. (e) Late payments shall be subject to a charge of one and one-half percent (1.5%) per month, or $250, whichever is greater. 5.5 In the event of acquisition, merger, change of corporate name, or change of make-up, organization, or identity, LICENSEE shall notify HARVARD in writing within thirty (30) days of such event. 5.6 If LICENSEE or any of its sublicensees does not qualify as a "small entity" as provided by the United States Patent and Trademark Office, LICENSEE must notify HARVARD immediately. 13 ARTICLE VI RECORD KEEPING 6.1 LICENSEE shall keep accurate records (together with supporting documentation) of LICENSED PRODUCTS made, used or sold under this Agreement, sufficient to determine the amount of royalties due to HARVARD hereunder. Such records shall be retained for at least three (3) years following the end of the reporting period to which they relate. They shall be available during normal business hours for examination, upon HARVARD's reasonable request, not more than once in any twelve (12) month period and upon at least twenty (20) days prior notice, by an independent accountant under a duty of confidentiality, selected by HARVARD and reasonably acceptable to LICENSEE, for the sole purpose of verifying reports and payments under Section 5.4. In conducting examinations pursuant to this Section, HARVARD's accountant shall have access to records materially relevant to the calculation of royalties under Article IV. 6.2 HARVARD's accountant shall only disclose to HARVARD whether the reports and payments of royalties hereunder are accurate, and the amount of the underreporting or underpayment of royalties by LICENSEE, if any. 6.3 Such examination of HARVARD's accountant shall be at HARVARD's expense, except that if such examination shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then LICENSEE shall pay the reasonable out-of-pocket cost of such examination as well as any additional sum that would have been payable to HARVARD had the LICENSEE reported correctly, plus interest on said sum at the rate of one and one-half percent (1.5%) per month. ARTICLE VII DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE 7.1 Within 30 days of the closing of LICENSEE's sale of Series A Preferred Stock to venture capital investors, but not later than 60 days after the Effective Date, LICENSEE shall reimburse HARVARD for [*** Redacted] percent ([*** Redacted]%) of all reasonable out-of-pocket expenses HARVARD has incurred for the preparation, filing, prosecution and maintenance of PATENT RIGHTS, including for counseling with regard to such preparation, filing, prosecution and maintenance. [*** Redacted] percent of such expenses total $[*** Redacted] as of the most recent invoice paid by HARVARD. Thereafter, LICENSEE shall reimburse HARVARD for [*** Redacted] percent ([*** Redacted]%) of all such future expenses upon receipt of quarterly invoices from HARVARD. Should this license be converted to an exclusive one, LICENSEE shall then reimburse all such expenses. Late payment of these invoices shall be subject to interest charges of one and one-half percent (1.5%) per month. HARVARD shall be responsible for the preparation, filing, prosecution and maintenance of any and all patent applications and patents included in PATENT RIGHTS. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 14 HARVARD will instruct counsel to directly notify HARVARD and LICENSEE and provide them copies of any communications to and from the United States and foreign patent offices relating to said prosecution, and drafts of all communications to the various patent offices, and will instruct counsel to consider any comments on such drafts, so that LICENSEE will be informed and apprised of the continuing prosecution of patent applications in PATENT RIGHTS. LICENSEE (as well as NANTERO) shall have reasonable opportunity to participate in decision making on key decisions affecting filing, prosecution and maintenance of patents and patent applications in PATENT RIGHTS. 7.2 HARVARD and LICENSEE shall cooperate fully in the preparation, filing, prosecution and maintenance of PATENT RIGHTS and of all patents and patent applications licensed to LICENSEE hereunder, executing all papers and instruments or requiring members of HARVARD to execute such papers and instruments so as to enable HARVARD to apply for, to prosecute and to maintain patent applications and patents in HARVARD's name in any country. Each party shall provide to the other prompt notice as to all matters which come to its attention and which may affect the preparation, filing, prosecution or maintenance of any such patent applications or patents. In particular, LICENSEE must immediately notify HARVARD if LICENSEE does not qualify as a "small entity" as provided by the United States Patent and Trademark Office. 7.3 LICENSEE may elect to surrender its rights to any patent or patent application within PATENT RIGHTS in any country upon sixty (60) days written notice to HARVARD. Such notice shall not relieve LICENSEE from responsibility to reimburse HARVARD for expenses under Section 7.1 relating to the filing, prosecution or maintenance of such patent or patent application incurred prior to the receipt of the written notice by HARVARD (or a longer period if specified in LICENSEE'S notice). ARTICLE VIII INFRINGEMENT 8.1 With respect to any PATENT RIGHTS that have not been rendered non-exclusive under Section 4.3(d), LICENSEE shall have the right to enforce in its own name and at its own expense any patents within such PATENT RIGHTS. HARVARD agrees to notify LICENSEE promptly of each infringement of such patents of which HARVARD is or becomes aware. 8.2 LICENSEE acknowledges that the other co-exclusive licensee of PATENT RIGHTS shall have rights identical to LICENSEE to prosecute infringers and that both co-exclusive licensees shall be bound by the identical terms of this Section 8.2. In any prosecution instituted by LICENSEE, LICENSEE must notify the other co-exclusive licensee of the existence of such legal action and allow the other co-exclusive licensee to join as a plaintiff. In addition, in the event the other co-exclusive licensee instigates and infringement prosecution, LICENSEE hereby consents to being joined as a plaintiff in such suit solely for the purpose of procuring standing to bring the action and at the sole expenses of the instigating party. To the extent that LICENSEE desires to participate in 15 any strategic decisions affecting the prosecution of an action brought by the other co-exclusive licensee, LICENSEE acknowledges and it and the other co-exclusive licensee will necessarily have to reach a mutual agreement concerning litigation expenses and strategy. In no event shall HARVARD incur any liability or expense in connection with any action brought by LICENSEE or the other co-exclusive licensee, joint or otherwise. During any such litigation, HARVARD will agree to not license any defendant or accused infringer of the PATENT RIGHTS in the litigation, without LICENSEE's prior written consent. 8.3 (a) If LICENSEE elects to commence an action as described above, HARVARD may, to the extent permitted by law, elect to join as a party in that action. Regardless of whether HARVARD elects to join as a party, HARVARD shall cooperate fully with LICENSEE in connection with any such action, including making available relevant personnel, information, records, papers, samples, specimens and other similar materials for the purposes of such action as reasonably requested by LICENSEE through the Office of Technology and Trademark Licensing at HARVARD. (b) If HARVARD elects to join as a party pursuant to Subsection (a), HARVARD shall jointly control the action with LICENSEE. (c) LICENSEE shall reimburse HARVARD for any out-of-pocket costs HARVARD reasonably incurs, including reasonable attorneys' fees, as part of an action brought by LICENSEE under Section 8.1, whether or not HARVARD becomes a co-plaintiff. 8.4 If LICENSEE elects to commence an action as described above, LICENSEE may deduct from its royalty payments to HARVARD with respect to the patent(s) subject to suit an amount not exceeding fifty percent (50%) of LICENSEE's expenses and costs of such action, including reasonable attorneys' fees and reimbursement of amounts under Section 8.3(c) above; provided, however, that such reduction shall not exceed fifty percent (50%) of the total royalty due to HARVARD with respect to the patent(s) subject to suit for each calendar year. If such fifty percent (50%) of LICENSEE's expenses and costs exceeds the amount of royalties deducted by LICENSEE for any calendar year, LICENSEE may to that extent reduce the royalties due to HARVARD from LICENSEE in succeeding calendar years, but never by more than fifty percent (50%) of the total royalty due in any one year with respect to the patent(s) subject to suit. 8.5 Neither LICENSEE nor the other co-exclusive licensee may enter into a settlement, consent judgment or other voluntary final disposition of any suit under Article 8 (except for Section 8.10) without the prior written consent of HARVARD, which consent shall not be unreasonably withheld. 8.6 Recoveries or reimbursements from actions commenced by LICENSEE pursuant to this Article shall first be applied to reimburse LICENSEE and HARVARD for litigation costs not paid from royalties and then to reimburse HARVARD for royalties deducted by Licensee pursuant to Section 8.4. Any remaining recoveries or reimbursements shall be shared as follows: 80% to LICENSEE and 20% to HARVARD. In the event both co- 16 exclusive licensees undertake the suit, the provisions of this Section will be modified to take into account each licensee's expenses and lost profits/revenues. Such modification shall be negotiated by the parties and the other co-exclusive licensee in good faith. 8.7 If LICENSEE elects not to exercise its right to enforce the PATENT RIGHTS against any infringement pursuant to this Article, HARVARD may do so at its own expense, controlling such action and retaining all recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in connection with any such action. 8.8 Without limiting the generality of Section 8.7, HARVARD may, at its election and by notice to LICENSEE, establish a time limit of ninety (90) days for LICENSEE to decide whether to enforce the PATENT RIGHTS against any infringement of which HARVARD is or becomes aware. If, by the end of such ninety (90) day period, LICENSEE has not commenced such an action or taken reasonable efforts to settle such infringement, HARVARD may enforce the PATENT RIGHTS against such an infringement at its own expense, controlling such action and retaining all recoveries therefrom. Notwithstanding sections 8.7 and 8.8, HARVARD shall not bring any action alleging the infringement of PATENT RIGHTS against any sublicensee of LICENSEE under PATENT RIGHTS, without the consent of LICENSEE. 8.9 If a declaratory judgment action is brought naming LICENSEE as a defendant and alleging invalidity of any of the PATENT RIGHTS, if both parties agree, HARVARD may take over the sole defense of the action at its own expense. LICENSEE shall cooperate fully with HARVARD in connection with any such action. 8.10 If LICENSEE or any sublicensee, distributor or other customer is sued by a third party charging infringement of patent rights that dominate a claim of PATENT RIGHTS, with respect to the manufacture, use, distribution or sale of LICENSED PRODUCT or practice or use of a LICENSED PROCESS, LICENSEE will promptly notify HARVARD. As between the parties to this Agreement, LICENSEE will be entitled to control the defense in any such action(s) and withhold up to one-half (1/2) of the amount otherwise payable to HARVARD hereunder to pay for defense costs, attorneys fees and any liability incurred in such infringement suit(s). If Licensee is required to pay a royalty or other amount to a third party as a result of a final judgment or settlement, the amounts payable to HARVARD hereunder will be reduced as provided in Section 4.3 above. ARTICLE IX TERMINATION OF AGREEMENT 9.1 This Agreement, unless terminated as provided herein, shall remain in effect until the last patent or patent application in PATENT RIGHTS has expired or been abandoned. 9.2 HARVARD may terminate this agreement as follows: (a) If LICENSEE does not make a payment due hereunder and fails to cure such non-payment (including the payment of interest in accordance with Section 5.4(e)) within forty-five (45) days after date of notice in writing of such non-payment by 17 HARVARD. If LICENSEE disputes the amount of such non-payment in writing within such forty-five (45) day period, HARVARD shall not have the right to terminate this Agreement until it has been determined in an arbitration proceeding under Section 11.10 below that LICENSEE has failed to pay amounts owed hereunder, and thereafter Licensee does not cure such failure within sixty (60) days after such determination. This Section 9.2(a) shall not, however, suspend any obligation of LICENSEE to compensate HARVARD for any undisputed amounts, as provided for under any term of this Agreement, during the pendency of the foregoing arbitration and cure period. (b) If LICENSEE defaults in its obligations under Sections 11.2(c) and 11.2(d) to procure and maintain insurance, and fails to cure such breach within sixty (60) days after notice in writing of such breach by HARVARD. (c) If LICENSEE shall make an assignment for the benefit of creditors, or shall have a petition in bankruptcy filed for or against it, provided that such bankruptcy petition is not dismissed within sixty (60) days after its filing. Such termination shall be effective immediately upon HARVARD giving written notice to LICENSEE. (d) If LICENSEE is convicted of a felony within the United States relating to the manufacture, use, or sale of LICENSED PRODUCTS. (e) Except as provided in Subsections (a), (b), (c), (d) above, if LICENSEE materially breaches any obligations under this Agreement and the breach has not been cured within ninety (90) days after the date of notice in writing of such breach by HARVARD. If LICENSEE disputes in writing that it has materially breached this Agreement within such ninety (90) day period, HARVARD shall not have the right to terminate this Agreement until it has been determined in an arbitration proceeding under Section 11.10 below that LICENSEE has materially breached this Agreement, and thereafter Licensee does not cure such breach within sixty (60) days after such determination. This Section 9.2(e) shall not, however, suspend any obligation of LICENSEE to compensate HARVARD for any undisputed amounts, as provided for under any term of this Agreement, during the pendency of the foregoing arbitration and cure period. 9.3 All sublicenses granted by LICENSEE under this Agreement in compliance with the terms and conditions hereof shall survive the termination of this Agreement upon the request of the party to whom such sublicense is granted, provided that such party agrees in writing that (i) it will pay all royalties or other amounts that otherwise would have been due thereafter under such sublicense directly to HARVARD rather than LICENSEE, and (ii) HARVARD shall not be held liable for the breach or the performance of any obligations stated in such sublicense unless such obligations have been expressly assumed in writing by HARVARD. 18 9.4 LICENSEE may terminate this Agreement by giving ninety (90) days advance written notice of termination to HARVARD. Upon termination, LICENSEE shall promptly submit a Royalty Report to HARVARD for the final reporting period and any royalty payments incurred during such reporting period, and any unreimbursed patent expenses under Section 7 that have been invoiced by HARVARD, shall become immediately payable with such Royalty Report. 9.5 Articles I, VI, IX, X and XI (except for Section 11.7) of this Agreement shall survive termination. Article VIII shall survive with respect to any infringement of third parties and/or any lawsuits filed by or against LICENSEE, prior to the termination of this Agreement. In the event this Agreement is terminated for any reason, LICENSEE may, within six months after the effective date of such termination, sell or otherwise dispose of all LICENSED PRODUCTS that LICENSEE may have on hand on the effective date of such termination, and fulfill any contracts requiring the use of LICENSED PRODUCTS and/or LICENSED PROCESSES that LICENSEE may have entered into prior to the date of such termination, subject to LICENSEE's payment of amounts due to HARVARD under Section 4.3 of this Agreement. 9.6 In the event that after termination of this Agreement, HARVARD licenses PATENT RIGHTS to another licensee, HARVARD shall use commercially reasonable efforts to require such other licensee to pay the costs of the preparation, filing, prosecution and maintenance of PATENT RIGHTS. HARVARD shall reimburse LICENSEE for any costs so paid by such other licensee to the extent LICENSEE paid for such costs under Section 7.1. ARTICLE X REPRESENTATIONS AND WARRANTIES 10.1 Except for the rights, if any, of the Government of the United States, HARVARD represents and warrants that: (a) HARVARD is the owner of the entire right, title and interest in and to the PATENT RIGHTS as they exist on the Effective Date; (b) HARVARD has the right and authority to enter into this Agreement and grant the rights and licenses set forth herein, including without limitation under PATENT RIGHTS; (c) HARVARD has not previously granted, and will not grant in the future, any rights in the PATENT RIGHTS that are inconsistent with the rights and licenses granted to LICENSEE herein; (d) To the best knowledge of HARVARD without having made an investigation, as of the Effective Date, practice of inventions within the PATENT RIGHTS does not infringe any patent rights, trade secrets or other proprietary rights of any third party, 19 (e) To the best knowledge of HARVARD, as of the Effective Date, HARVARD does not own any rights in any other patent application, the claims of which would dominate the claims of a patent or patent application within the PATENT RIGHTS, or any practice of PATENT RIGHTS. IF HARVARD owns, now or thereafter, any such rights in such patents or patent applications on which Dr. Lieber is an inventor, HARVARD will negotiate in good faith to the extent it has the legal right to do so with LICENSEE to grant LICENSEE rights to the extent sufficient to practice PATENT RIGHTS. (f) To the best knowledge of HARVARD, all prior and current agreements between HARVARD and other sponsors of research under which HARVARD has obligations relating to PATENT RIGHTS are listed on Appendix C. 10.2 Except as set forth in this Agreement, HARVARD does not warrant the validity of the PATENT RIGHTS licensed hereunder and makes no representations whatsoever with regard to the scope of the licensed PATENT RIGHTS or that such PATENT RIGHTS may be exploited by LICENSEE, an AFFILIATE, or sublicensee without infringing other patents. 10.3 EXCEPT FOR THE WARRANTIES STATED IN THIS AGREEMENT, HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS OR INFORMATION SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT. ARTICLE XI GENERAL 11.1 (a) The parties may, from time to time, in connection with this Agreement disclose to each Confidential Information. Any Confidential Information shall be in writing and marked "confidential" and disclosed only to the Office of Technology and Trademark Licensing. As used in this Agreement, "Confidential Information" of a party shall mean (i) any information disclosed in writing by such party to the other party, which is marked by such party with the legend "CONFIDENTIAL" or other similar legend sufficient to identify the information as its confidential information, (ii) any information disclosed orally by such party to the other party which is identified as confidential at the time of disclosure and is confirmed as confidential in writing within thirty (30) days after such time of disclosure, or (iii) any information deemed "Confidential Information under the terms of this Agreement. With respect to categories (i) and (ii) above, "Confidential Information" shall not include any information that is: (1) already known to the receiving party at the time of disclosure hereunder, or (2) now or hereafter becomes publicly known other than through acts or omissions of the receiving party, or (3) is disclosed to the receiving party by a third party under no obligation of confidentiality 20 to the disclosing party or (4) is independently developed by the receiving party without use of the Confidential Information of the disclosing party. (b) Each party shall maintain in confidence, and shall not use for any purpose or disclose to any third party, the Confidential Information of the other party. Notwithstanding the foregoing, the receiving party may use or disclose the Confidential Information of the disclosing party (i) to the extent necessary to exercise its rights or fulfill its obligations and/or duties under this Agreement, and (ii) to comply with applicable law or governmental regulations or court order, provided that the receiving party will give reasonable advance notice to the disclosing party, and will use its reasonable efforts to minimize the disclosure of Confidential Information and to secure confidential treatment of any Confidential Information disclosed. (c) The terms of this Agreement shall be deemed "Confidential Information" of both parties. In addition to the permissible disclosures set forth in subsection (b) above, LICENSEE may disclose such terms in confidence to its financial and legal advisors, consultants, potential or actual investors, potential or actual merger or acquisition partners, and others on a need-to-know basis. 11.2 (a) LICENSEE shall indemnify, defend and hold harmless HARVARD and its current or former and future directors, governing board members, trustees, officers, faculty and employees (collectively, the "INDEMNITEES"), from and against any lawsuit or cause or action against the INDEMNITEES brought by a third party (collectively, "Claims"), based upon, arising out of, or otherwise relating to this Agreement, including without limitation any cause of action relating to product liability concerning any product, process, or service made, used or sold pursuant to any right of license granted under this Agreement, except to the extent such Claims arise out of or otherwise relate to the gross negligence or intentional misconduct of any INDEMNITEES; and further provided that (i) LICENSEE receives prompt notice of any such Claims; (ii) LICENSEE is given the exclusive right to control the defense and settlement of such Claims; and (iii) LICENSEE shall not be obligated to indemnify any INDEMNITEE in connection with any settlement for any Claim unless LICENSEE consents in writing to such settlement. (b) LICENSEE shall, at its own expense, defend against any actions brought or filed against any INDEMNITEE hereunder with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought. (c) Beginning at the time any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a SUBLICENSEE, AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sold cost and expense, procure and maintain commercial general liability insurance in amounts not less than $[*** Redacted] per incident and $[*** Redacted] annual aggregate and naming the Indemnitees as additional insureds. During clinical trials of any such product, process or service, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in such equal or lesser amount as HARVARD shall require, naming the Indemnitees as *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 21 additional insureds. Such commercial general liability insurance shall provide: (i) product liability coverage; and (ii) broad form contractual liability coverage for LICENSEE's indemnification under this Agreement. If LICENSEE elects to self-insure all or part of the limits described above (including deductibles or retentions which are in excess of $[*** Redacted] annual aggregate) such self-insurance program must be acceptable to HARVARD and the Risk Management Foundation of the Harvard Medical Institutions, Inc. in their sole discretion. The minimum amounts of insurance coverage required shall not be construed to create a limit of LICENSEE's liability with respect to its indemnification under this Agreement. (d) LICENSEE shall provide HARVARD with written evidence of such insurance upon request of HARVARD. LICENSEE shall provide HARVARD with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance; if LICENSEE does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, HARVARD shall have the right to terminate this Agreement in accordance with Section 9.2(c). (e) LICENSEE shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during: (i) the period that any product, process, or service, relating to, or developed pursuant to, this Agreement is being commercially distributed or sold by LICENSEE or by a sublicensee, AFFILIATE or agent of LICENSEE; and (ii) a reasonable period after the period referred to in Subsection (e)(i) above which in no event shall be less than fifteen (15) years. 11.3 Nothing in this Agreement shall be construed as conferring any right to use HARVARD's name or insignia, or any adaptation of them, or the name of any of HARVARD's inventors in any advertising, promotional or sales literature without the prior written approval of HARVARD, or the inventor in the case of the use of the name of an inventor. 11.4 Except as stated in this Section 11.4, without the prior written approval of HARVARD in each instance, neither this Agreement nor the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE to any person whether voluntarily or involuntarily, by operation of law or otherwise. LICENSEE may transfer or assign this Agreement and all rights hereunder, upon notice to HARVARD but without its consent, to any entity that succeeds to all or substantially all of the business of LICENSEE to which this Agreement pertains, whether by merger, operation of law, purchase or sale of all or substantially all of LICENSEE's stock or assets or otherwise; provided that such assignee or transferee promptly agrees in writing to be bound by the terms and conditions of this Agreement. Subject to the foregoing, this Agreement shall be binding upon the respective successors, legal representatives and assignees of HARVARD and LICENSEE. 11.5 The interpretation and application of the provisions of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. 11.6 LICENSEE shall comply with all applicable laws and regulations. In particular, it is understood and acknowledged that the transfer of certain commodities and technical data *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 22 is subject to United States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations among other things, prohibit or require a license for the export of certain types of technical data to certain specified countries. LICENSEE hereby agrees and gives written assurance that it will comply with all United States laws and regulations controlling the export of commodities and technical data, that it will be solely responsible for any violation of such by LICENSEE or its AFFILIATES or sublicensees, and that it will defend and hold HARVARD harmless in the event of any legal action of any nature occasioned by such violation with respect to LICENSED PRODUCTS. 11.7 LICENSEE agrees: (i) to obtain all regulatory approvals required for the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES; and (ii) to mark LICENSED PRODUCTS with the numbers of the applicable patents within PATENT RIGHTS, to the extent required by law. LICENSEE also agrees to register or record this Agreement as is required by law or regulation in any country where the license is in effect, and HARVARD shall cooperate fully with LICENSEE in connection with any such registration or recordation. 11.8 Any notices to be given hereunder shall be sufficient if signed by the party (or party's attorney) giving same and either: (i) delivered in person; (ii) mailed certified mail return receipt requested; or (iii) faxed to other party if the sender has evidence of successful transmission and if the sender promptly sends the original by ordinary mail, in any event to the following addresses: If to LICENSEE: c/o CW Group East 1041 Third Avenue New York, New York 10021 Attn: Lawrence A. Bock Fax: 212/644-0354 cc: Wilson, Sonsini, Goodrich & Rosati 650 Page Mill Road Palo Alto, California 94304 Attn: Michael J. O'Donnell, Esq. Fax: 650/493-6811 If to HARVARD: Office for Technology and Trademark Licensing Harvard University Holyoke Center, Suite 727 1350 Massachusetts Avenue Cambridge, MA 02138 Fax: (617)495-9568 23 By such notice either party may change their address for future notices. Notices delivered in person shall be deemed given on the date delivered. Notices sent by fax shall be deemed given on the date faxed. Notices mailed shall be deemed given on the date postmarked on the envelope. 11.9 Should a court of competent jurisdiction later hold any provision of this Agreement to be invalid, illegal, or unenforceable, and such holding is not reversed on appeal, it shall be considered severed from this Agreement. All other provisions, rights and obligations shall continue without regard to the severed provision, provided that the remaining provisions of this Agreement are in accordance with the intention of the parties. 11.10 In the event of any controversy or claim arising out of or relating to any provision of this Agreement or the breach thereof, the parties shall try to settle such conflict amicably between themselves. Subject to the limitation stated in the final sentence of this Section, any such conflict which the parties are unable to resolve promptly shall be settled through arbitration conducted in accordance with the rules of the American Arbitration Association. The demand for arbitration shall be filed within a reasonable time after the controversy or claim has arisen, and in no event after the date upon which institution of legal proceedings based on such controversy or claim would be barred by the applicable statute of limitation. Such arbitration shall be held in Boston, Massachusetts. The award through arbitration shall be final and binding. Either party may enter any such award in a court having jurisdiction or may make application to such court for judicial acceptance of the award and an order of enforcement, as the case may be. Notwithstanding the foregoing, either party may, without recourse to arbitration, assert against the other party a third-party claim or cross-claim in any action brought by a third party, to which the subject matter of this Agreement may be relevant. 11.11 This Agreement constitutes the entire understanding between the parties and neither party shall be obligated by any condition or representation other than those expressly stated herein or as may be subsequently agreed to by the parties hereto in writing. 11.12 Nothing in this Agreement shall be deemed to require LICENSEE to exploit the PATENT RIGHTS, except to the extent expressly set forth in this Agreement, and nothing in this Agreement shall be deemed to prevent LICENSEE from commercializing products similar to or competitive with a LICENSED PRODUCT. 11.13 The relationship between HARVARD and LICENSEE established by this Agreement is that of independent contractors. Nothing in this Agreement shall be construed to create any other relationship between HARVARD and LICENSEE. Neither party shall have any right, power or authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other. 11.14 In the event either party hereto is prevented from or delayed in the performance of any of its obligations hereunder by reason of acts of God, war, strikes, riots, storms, fires or any other cause whatsoever beyond the reasonable control of the party, the party so prevented 24 or delayed shall be excused from the performance of any such obligation to the extent and during the period of such prevention or delay. 11.15 NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OF LIKELIHOOD OF SAME. 11.16 This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives.

PRESIDENT AND FELLOWS COMPANY OF HARVARD COLLEGE /s/ Joyce Brinton /s/ Lawrence A. Bock - --------------------------------------------- --------------------------------------------- Joyce Brinton, Director Signature Office for Technology and Trademark Licensing Lawrence A. Bock --------------------------------------------- Name 10/2/01 President and CEO - --------------------------------------------- --------------------------------------------- Date Title 10/3/01 --------------------------------------------- Date

25 APPENDIX A The following comprise PATENT RIGHTS: US Provisional Application. 60/142,216, filed 7/1/99 which has been converted to a PCT application, PCT/USOO/18138, filed 7/2/00, designating the US, Australia, Canada, Japan and the EPO. Harvard Case 1641 26 APPENDIX B NANOSYS, INC. CAPITALIZATION TABLE - CONFIDENTIAL FOUNDERS' STOCK (Common Stock Capitalization Before Series A Preferred Stock Financing)

% of Founders Stock # of Shares of Common Stock Amount Invested Charles Lieber 11.0% 550,000 $550 Hongkun Park # 9.0% 450,000 $450 Michael Evans @ 2.0% 100,000 $100 CW Group * 12.0% 600,000 $600 Other advisor (tbd) 2% 100,000 $100 Reserve 64.0% 3,200,000 $3,200 Total Common Shares 100.0% 5,000,000 $5,000 PROPOSED SERIES A PREFERRED STOCK Investors as a group 5,000,000-6,666,667 $1,500-2,000,000 Total Series A Preferred Shares 5,000,000-6,666,667 $1,500-2,000,000

# Founders stock will vest monthly over a five year period @ Evans shares will be fully vested * Shares will be issued in the form of an option APPENDIX C CASE LEAD INVENTOR REPORT TITLE AGENCY GRANT NUMBERS DATE 1641 Charles Lieber 6/9/99 Molecular Wire, Arrays Office of Naval Research N 00014-99-1-0495 and the Methods of the Manufacture EX-10.5.2 4 f97636a4exv10w5w2.txt EXHIBIT 10.5.2 EXHIBIT 10.5.2 LICENSE AGREEMENT (CASE #1988) Between President and Fellows of Harvard College And NanoSys, Inc. Effective as of February 1, 2002 ("Effective Date") Re: Harvard Case #1988 In consideration of the mutual promises and covenants set forth below, the parties hereto agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: 1.1 ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS solely for academic non-commercial research or other not-for-profit scholarly purposes, which use is undertaken at a non-profit or governmental institution. ACADEMIC RESEARCH PURPOSES does not include selling products covered by PATENT RIGHTS or using PATENT RIGHTS in researching, developing, producing or manufacturing products for sale, or performance of services for a fee of other financial consideration. It is understood that using the PATENT RIGHTS to conduct normal research activities at non-profit or governmental institution is within the defined term of ACADEMIC RESEARCH PURPOSES. 1.2 AFFILIATE: any entity which controls, is controlled by, or is under common control with a party. An entity shall be regarded as in control of another entity for purposes of this definition if it owns or controls at least fifty percent (50%) of the shares entitled to vote in the election of directors (or in the case of an entity that is not a corporation, for the election of the corresponding managing authority). Unless otherwise specified, the term LICENSEE includes AFFILIATES. 1.3 FIELD: All fields of use. 1.4 HARVARD: President and Fellows of Harvard College, a nonprofit Massachusetts educational corporation having offices at the Office for Technology and Trademark Licensing, Holyoke Center, Suite 727, 1350 Massachusetts Avenue, Cambridge, Massachusetts 02138. 1.5 LICENSED PROCESSES: methods, processes or procedures covered by at least one VALID CLAIM included within the PATENT RIGHTS. 1.6 LICENSED PRODUCTS: products covered by at least one VALID CLAIM included within the PATENT RIGHTS or products made in accordance with LICENSED PROCESSES. 1.7 LICENSEE: Nanosys, Inc., a corporation organized under the laws of Delaware having its principal offices at CW Group East, 1041 Third Avenue, New York, New York 10021. 1.8 NET SALES: the amounts actually received for sales, leases, or other dispositions of LICENSED PRODUCTS to non-AFFILIATE third parties, less: (a) customary [*** Redacted]; (b) amounts [*** Redacted] by reason of [*** Redacted]; (c) to the extent separately stated on purchase orders, invoices, or other documents of sale: (i) [*** Redacted] levied on the production, sale, transportation, delivery, importation, exportation or use of LICENSED PRODUCTS; (ii) charges for [*** Redacted] provided by third parties, including any [*** Redacted] thereon. NET SALES also includes the fair market value of any non-cash consideration received for the sale, lease or other disposition of LICENSED PRODUCTS to non-AFFILIATE third parties; provided NET SALES shall not include any [*** Redacted] payments in consideration for the [*** Redacted] to the intellectual property of LICENSEE or third parties, including the [*** Redacted] hereunder, bona fide [*** Redacted] made in good faith and any payments for [*** Redacted]. In the event that a LICENSED PRODUCT is sold or leased as a combination product containing the LICENSED PRODUCT and one or more other components, NET SALES shall be calculated by multiplying the gross amount invoiced for the sale of the combination product by the fraction [*** Redacted] where A is the [*** Redacted] price of the LICENSED PRODUCT sold separately by LICENSEE, and B is the [*** Redacted] of such other components of the combination products sold separately by LICENSEE during the relevant royalty payment period. In the event a substantial number of such separate sales were not made during the relevant royalty period, then NET SALES shall be reasonably allocated by LICENSEE between such LICENSED PRODUCT and such other components of the combination based on their relative importance or value; provided that such LICENSED PRODUCT and such other components shall not be considered a "combination product" unless such LICENSED PRODUCT and such other components are offered for sale or marketed by LICENSEE separately as well as together. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 2 1.9 PATENT RIGHTS: PATENT RIGHTS shall include (i) the applications and patents as listed in Appendix A of this Agreement, (ii) any foreign counterparts to such patents and patent applications, (iii) the inventions described and claimed in the foregoing, (iv) any divisions, continuations, substitutions of the foregoing, and (v) specific claims of any continuations-in-part of the foregoing to the extent the specific claims are directed to subject matter described in the foregoing in a manner sufficient to support such specific claims under 35 U.S.C. and to the extent Licensable by HARVARD, (vi) all patents issuing on any of the foregoing, and (vii) registrations, renewals, reissues, reexaminations, extensions or patents of addition of any kind with respect to any of such patents. For purposes of this Agreement "Licensable" shall mean those claims of continuations-in-part filed after the Effective Date for which HARVARD has sole ownership (or has been granted the sole right to license by a co-owner) and where there are no obligations to grant licenses to a third party as the result of research support provided to one or more of the inventors. 1.10 SERVICE INCOME: the financial consideration actually received for the utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE which is contracted for by a non-AFFILIATE third party, less the deductions stated in Sections 1.8(a), (b) and (c); provided, however, that such amounts shall only be included in SERVICE INCOME if LICENSEE does not [*** Redacted] with respect to the PATENT RIGHTS licensed in this Agreement on the NET SALE of such LICENSED PRODUCTS or the NET SALE of LICENSED PRODUCTS made in accordance with such use of the LICENSED PROCESSES. SERVICE INCOME shall specifically exclude any [*** Redacted] payments in consideration for the [*** Redacted] of the LICENSEE or third parties, including the [*** Redacted] hereunder, [*** Redacted] made in good faith and any [*** Redacted]. In the event that any service contemplated hereunder includes any services other than the utilization of [*** Redacted] or [*** Redacted] LICENSEE shall in good faith determine the portion of the payments received for such service that are intended as consideration for the utilization of [*** Redacted] or [*** Redacted] by LICENSEE, and such portion shall be used to determine the SERVICE INCOME for such service. In such event, LICENSEE shall promptly deliver to HARVARD a written report detailing such calculation, together with a copy of the applicable provisions of the agreements related to such service. All such reports and provisions of agreements shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE of SERVICE INCOME for such service, HARVARD shall so notify LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with paragraph 11.10. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 3 1.11 SUBLICENSE INCOME: the amount paid to LICENSEE by a third party (other than an AFFILIATE of LICENSEE) for the granting of a sublicense under Section 3.1, including but not limited to (i) [*** Redacted], (ii) [*** Redacted], (iii) [*** Redacted] and (vi) the [*** Redacted] in cash of any non-cash consideration for such sublicense, but specifically excluding any [*** Redacted] payments in consideration for the [*** Redacted], [*** Redacted] and any [*** Redacted]. It is understood and agreed that sublicense income received by LICENSEE shall be net of withholding taxes. If LICENSEE sublicenses [*** Redacted] to a third party and at the same time also grants such third party rights to [*** Redacted] or [*** Redacted], then all compensation received from the third party for such rights shall be combined and [*** Redacted] that would constitute SUBLICENSE INCOME under Section 1.11 and shall promptly deliver to HARVARD a written report detailing such calculation, together with a copy of the applicable provisions of the agreements with the third party. All such reports and provisions of agreements shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE of SUBLICENSE INCOME, HARVARD shall so notify LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with Section 11.10. 1.12 TERRITORY: Worldwide. 1.13 VALID CLAIM: either (i) a claim of an issued patent that has not expired or been held unenforceable or invalid by an agency or a court of competent jurisdiction, and which has not been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise; provided, however, that if the holding of such court or agency is later reversed by a court or agency with overriding authority, the claim shall be reinstated as a Valid Claim with respect to Net Sales made after the date of such reversal, or (ii) a claim of a pending patent application that has not been abandoned or finally rejected without the possibility of appeal or re-filing and that has been pending for less than five (5) years from its priority date, and is being actively prosecuted in good faith. 1.14 The terms "Public Law 96-517" and "Public Law 98-620" include all amendments to those statutes. 1.15 The terms "sold" and "sell" include, without limitation, leases and other dispositions and similar transactions. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately, with the Commission. 4 1.16 RELATED LICENSE AGREEMENTS: Other patent license agreements between LICENSEE and HARVARD licensing patent rights known internally at HARVARD as Case #1852, #1765, #1923, #1924, #1678, #1641, #1489, #1352, #1243, #1137, #1816, #1685, #1988, and #1935 to LICENSEE. 1.17 R&D SPENDING, MINIMUM INVESTMENT: shall have the meanings as set forth in Section 4.5. 1.18 DEVELOPMENT PAYMENTS: DEVELOPMENT PAYMENTS shall mean (a) any payments, in consideration for, or to support, research and/or development efforts by LICENSEE and (b) any reimbursement of expenses including without limitation patent expenses. ARTICLE II RECITALS 2.1 HARVARD is owner (or HARVARD will be owner) by assignment from Charles Lieber et al of his/their entire right, title and interest in a United States Provisional Patent Application [serial number N/A] filed November 9, 2001, entitled Transistors, Diodes, Logic Gates, Computational Devices and other Devices Assembled from Nanowire Building Blocks (Harvard Case #1988), in the U.S., and foreign patent applications corresponding thereto, and in the inventions described and claimed therein. 2.2 HARVARD has the authority to issue licenses under PATENT RIGHTS. 2.3 HARVARD is committed to the policy that ideas or creative works produced at HARVARD should be used for the greatest possible public benefit, and believes that every reasonable incentive should be provided for the prompt introduction of such ideas into public use, all in a manner consistent with the public interest. 2.4 LICENSEE intends to use commercially reasonable efforts to develop the invention(s), and to bring to market at least one product falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in the patents rights licensed under such agreements. 2.5 LICENSEE is desirous of obtaining on exclusive license in the TERRITORY in order to practice the above-referenced invention covered by PATENT RIGHTS in the United States and in certain foreign countries, and to manufacture, use and sell in the commercial market the products made in accordance therewith, and HARVARD is desirous of granting such a license to LICENSEE in accordance with the terms of this Agreement. 2.6 LICENSEE and HARVARD recognize that this invention is dominated by and is an improvement upon inventions already licensed to LICENSEE under RELATED LICENSE AGREEMENTS. 5 ARTICLE III GRANT OF RIGHTS 3.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the terms and conditions hereof, an exclusive (except as set forth in Sections 3.2(a) and 3.2(b)) license under PATENT RIGHTS in the TERRITORY and in the FIELD (i) to make and have made, to use and have used, to sell and have sold, to offer for sale, import, export, or otherwise distribute the LICENSED PRODUCTS, (ii) to practice the LICENSED PROCESSES, and (iii) to otherwise fully exploit the PATENT RIGHTS, and (iv) to have the foregoing performed on behalf of LICENSEE by a third party, in each case for the life of the PATENT RIGHTS. The foregoing license under PATENT RIGHTS shall include the full right to grant sublicenses, and LICENSEE shall promptly provide copies of any sublicenses of PATENT RIGHTS to HARVARD for its review. Unless HARVARD has rendered the license under PATENT RIGHTS non-exclusive under Section 3.2(d), HARVARD agrees that it will not grant licenses under PATENT RIGHTS to others, nor make, use, sell, offer for sale, import or otherwise exploit PATENT RIGHTS itself except as required by HARVARD's obligations in Section 3.2(a) or as permitted in Section 3.2(b). 3.2 The granting and exercise of this license is subject to the following conditions: (a) HARVARD's "Statement of Policy in Regard to Inventions, Patents and Copyrights," dated August 10, 1998, Public law 96-517 and Public Law 98-620, and HARVARD's obligations under prior or current agreements with other sponsors of research and, with regard to continuations-in-part contained in the PATENT RIGHTS, any future agreements with other sponsors of research related to such continuations-in-part. Any right granted in this Agreement greater than that permitted under Public Law 96-517, or Public Law 98-620, shall be subject to modification to the extent required to conform to the provisions of those statutes. (b) HARVARD reserves the right to make and use, and grant to other non-profit or governmental institutions non-exclusive licenses to make and use, in each case solely for ACADEMIC RESEARCH PURPOSES the subject matter described and claimed in PATENT RIGHTS. HARVARD shall promptly notify LICENSEE of any rights granted to any third party (other than the U.S. government) under Sections 3.2(a) and (b). (c) LICENSEE shall use commercially reasonable efforts to effect introduction into the commercial market at least one product falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in PATENT RIGHTS, consistent with sound and reasonable business practice and judgment; thereafter, until the expiration of this Agreement, LICENSEE shall use commercially reasonable efforts to endeavor to keep any such product reasonably available to the public so long as it shall be a sound and reasonable commercial practice to do so. 6 (d) At any time after five (5) years from the effective date of this Agreement, HARVARD may render this license non-exclusive if LICENSEE has not: (i) used commercially reasonable efforts to put the licensed subject matter into commercial use in one or more of the countries hereby licensed, directly or through a sublicense; nor (ii) used commercially reasonable efforts to keep products falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in PATENT RIGHTS reasonably available to the public so long as it shall be a sound and reasonable commercial practice to do so; nor (iii) engaged in research, development, manufacturing, marketing or sublicensing activity that is commercially reasonably appropriate to achieving Section 3.2(d)(i) or 3.2(d)(ii). LICENSEE shall be deemed to have satisfied Section 3.2(d)(iii), and HARVARD shall not render the license of PATENT RIGHTS granted hereunder non-exclusive, if LICENSEE's R&D SPENDING exceeds the MINIMUM INVESTMENT for such year as set forth in Section 4.5. (e) In all sublicenses granted by LICENSEE hereunder, LICENSEE shall include a requirement that the sublicensee use commercially reasonable efforts to put the subject matter of the sublicense into commercial use, provided that such sublicensee is authorized to develop and sell to the public a new product covered by PATENT RIGHTS on its own behalf. LICENSEE shall further provide that such sublicenses are subject and subordinate to the terms and conditions of this Agreement, except for the rate of royalty on NET SALES paid by such sublicensee to the LICENSEE. Copies of all sublicense agreements hereunder shall be provided promptly to HARVARD. All sublicense agreements of LICENSEE provided to HARVARD shall deemed Confidential Information of LICENSEE subject to Section 11.1. (f) At any time eight (8) years after the effective date of this Agreement, if LICENSEE is unable or unwilling to grant sublicenses, either as suggested by HARVARD or by a potential sublicensee or otherwise, then HARVARD may directly license such potential sublicensee, but only if: (i) LICENSEE is not currently pursuing development of LICENSED PRODUCTS for the same application as contemplated by the potential sublicensee, or LICENSEE commits to do so within a two-year period, (ii) the granting of such a license by HARVARD to the potential sublicensee will increase the availability of useful products to the public, (iii) the granting of such license by HARVARD will not materially adversely affect LICENSEE's then current business or reasonably foreseeable future business (e.g., such license is not intended for an application competitive with LICENSEE) and (iv) HARVARD notifies LICENSEE of its intention to grant such license and permits LICENSEE a reasonable period to negotiate a sublicense on its own. 7 (g) To the extent required by law, during the period of exclusivity of this license in the United States, LICENSEE shall cause any LICENSED PRODUCT produced under the direction of Dr. Lieber or Dr. Park for sale in the United States to be manufactured substantially in the United States. 3.3 All rights reserved to the United States Government and others under Public Law 96-517, and Public Law 98-620, shall remain and shall in no way be affected by this Agreement. 3.4 HARVARD shall promptly notify LICENSEE when any new patent or patent application arises from (i) research conducted in the laboratory of Dr. Lieber or Dr. Park, or (ii) improvements made by HARVARD under the direction of Dr. Lieber or Dr. Park on the subject matter described in PATENT RIGHTS. If LICENSEE so requests and the intellectual property is available for licensing, HARVARD will evaluate in good faith LICENSEE's proposal along with proposals received from any third parties. Any decision to grant a license to LICENSEE shall be subject to approval by HARVARD's Committee on Patents and Copyrights. In the event LICENSEE and HARVARD cannot agree on terms for a license to any new intellectual property which is dominated by PATENT RIGHTS, HARVARD shall not offer any third party terms more favorable than the terms offered to LICENSEE. ARTICLE IV ROYALTIES 4.1 LICENSEE shall pay to HARVARD a non-refundable license royalty fee in the sum of [*** Redacted] upon execution of this Agreement. 4.2 (a) LICENSEE shall pay to HARVARD during the term of this Agreement a royalty on NET SALES by LICENSEE according to the following schedule: (i) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted]; (ii) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted]; or (iii) [*** Redacted] of NET SALES by LICENSEE in nanotechnology applications [*** Redacted] applications and [*** Redacted] applications. In the event, any NET SALES by LICENSEE reasonably falls within more than one of categories (i) to (iii) above, LICENSEE shall pay to HARVARD the lowest applicable royalty set forth in such categories. (b) For each LICENSED PRODUCT sold by LICENSEE, LICENSEE may credit up to [*** Redacted] of royalties that LICENSEE is paying to third parties (or HARVARD under agreements not included within section 4.3(c)) on LICENSEE's sales of that LICENSED PRODUCT, provided that the royalty paid to HARVARD shall not be *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 8 reduced below [*** Redacted] percent ([*** Redacted]%) of the NET SALES of that LICENSED PRODUCT for which such third party royalties are being paid. (c) In the event that sales of a LICENSED PRODUCT arc subject to the payment of royalties under one or more of the RELATED LICENSE AGREEMENTS or any license agreements with HARVARD with the same effective date as this Agreement, then the total royalty payment due HARVARD under all such agreements including this Agreement shall be at most the royalty payment due under this Section 4.3 on such NET SALE, no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such agreement. LICENSEE shall notify HARVARD of the identity of each license agreement that includes patent rights covering the product or process, and HARVARD shall distribute the royalties evenly among such agreements, including this Agreement. (d) LICENSEE shall pay HARVARD [*** Redacted] percent ([*** Redacted]%) of SUBLICENSE INCOME received by LICENSEE for a sublicense of PATENT RIGHTS. If compensation for such a sublicense of PATENT RIGHTS is bundled with compensation received for the sublicensing of the other HARVARD patents rights or other HARVARD intellectual property, licensed to LICENSEE under the RELATED LICENSEE AGREEMENTS or any agreements with HARVARD having the same effective date as this Agreement, then LICENSEE shall pay HARVARD at most the royalty payment due under this Section 4.3(d) for such SUBLICENSE INCOME no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such license agreements. In such a case, LICENSEE shall notify HARVARD of the identity of each license agreement involved and HARVARD shall distribute the royalties equally among those license agreements, including this Agreement. (e) For provision of services under PATENT RIGHTS, LICENSEE shall pay a royalty of [*** Redacted] percent ([*** Redacted]%) of SERVICE INCOME received by LICENSEE from each and every third party ("Third Party") to whom LICENSEE provides such services. In the event any services from which SERVICE INCOME is derived are subject to the payment of royalties under the RELATED LICENSE AGREEMENTS or any agreement with HARVARD having the same effective date as this Agreement, then the total royalty due under all such agreements, including this Agreement, shall be at most the royalty payment due under this Section 4.3 on such services, no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such license agreements. In such event, LICENSEE shall notify HARVARD of the identity of each license agreement involved and HARVARD shall distribute the royalties equally among those license agreements, including this Agreement. (f) If the license pursuant to this Agreement is converted to a non-exclusive one under Section 3.2(d) and if another non-exclusive license to any of PATENT RIGHTS is granted or otherwise exists for any field or territory, then the royalty rate of this Agreement shall be adjusted so as not to exceed the royalty rate payable by such other non-exclusive licensee under such PATENT RIGHTS in such field or territory, provided *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 9 that LICENSEE agrees to amend this Agreement to include terms requested by HARVARD that have been accepted by such other non-exclusive licensee. (g) On sales between LICENSEE and its AFFILIATES for resale, the royalty shall be paid on the NET SALES of the AFFILIATE. (h) In the event that more than one VALID CLAIM within PATENT RIGHTS is applicable to any LICENSED PRODUCT subject to royalties under this Section 4.3, then only one royalty shall be paid to HARVARD in respect of such LICENSED PRODUCT. In no event shall more than one royalty be due to HARVARD with respect to any LICENSED PRODUCT unit; nor shall a royalty be payable under this Section 4.3 with respect to sales of LICENSED PRODUCTS for clinical trials or as samples nor the use of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE for such purposes, in each case whether or not in collaboration with a third party. 4.3 No later than January 1 of each calendar year after the effective date of this Agreement, LICENSEE shall pay to HARVARD the following non-refundable license maintenance royalty and/or advance on royalties. Such payments may be credited against running royalties due for that calendar year and Royalty Reports shall reflect such a credit. Such payments shall not be credited against milestone payments (if any) nor against royalties due for any subsequent calendar year. January 1, 2003 $[*** Redacted] January 1, 2004 $[*** Redacted] January 1, 2005 $[*** Redacted] January 1, 2006 $[*** Redacted] January 1, 2007 $[*** Redacted] each year thereafter $[*** Redacted] 4.5 Notwithstanding Section 4.4, the minimum royalty set forth in Section 4.3 for the years 2003, and 2004 will be waived if LICENSEE's spending on research and development (LICENSEE's "R&D SPENDING") exceeds the amount set forth below for each category for such year (such amounts below, the "MINIMUM INVESTMENT").

CHEMICAL AND BIOLOGICAL SENSOR OPTOELECTRONICS NANOELECTRONICS APPLICATIONS APPLICATIONS APPLICATIONS Year 2002: $[*** Redacted] [*** Redacted] [*** Redacted] Year 2003: $[*** Redacted] [*** Redacted] [*** Redacted] Year 2004: $[*** Redacted] [*** Redacted] [*** Redacted] Year 2005 $[*** Redacted] [*** Redacted] [*** Redacted] Year 2006 $[*** Redacted] [*** Redacted] [*** Redacted] Each Year Thereafter $[*** Redacted] [*** Redacted] [*** Redacted]

*** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 10 LICENSEE's MINIMUM INVESTMENT may be allocated by LICENSEE in any way within the three categories set forth above among the different subject matter of the RELATED LICENSE AGREEMENTS. ARTICLE V REPORTING 5.1 Within six(6) months of the Effective Date, LICENSEE will provide to HARVARD a written research and development plan acceptable to LICENSEE's investors under which LICENSEE intends to bring the subject matter of the licenses granted hereunder into commercial use upon execution of this Agreement. Such plan will include projections of sales and proposed marketing efforts. It is understood that LICENSEE may provide one research and development plan for all RELATED LICENSE AGREEMENTS. 5.2 No later than sixty(60) days after June 30 of each calendar year, LICENSEE shall provide to HARVARD a written annual Progress Report describing progress on the commercialization of PATENT RIGHTS during the most recent twelve(12) period ending June 30, the amount of LICENSEE's R&D SPENDING relating to the subject matter described or claimed in PATENT RIGHTS during such time, and plans for the forthcoming year. If multiple technologies are covered by the license granted hereunder, the Progress Report shall provide the information set forth above for each technology. If progress differs from that anticipated in the plan required under Section 5.1, LICENSEE shall explain the reasons for the difference and, if appropriate or necessary, provide a modified research and development plan for HARVARD's review. It is understood that LICENSEE may provide one Progress Report covering all RELATED LICENSE AGREEMENTS. 5.3 LICENSEE shall report to HARVARD the date of its first NET SALE of a LICENSED PRODUCT (or the date of its first use of a LICENSED PROCESS from which SERVICE INCOME is derived) in each country within thirty(30) days of occurrence. It is understood that LICENSEE shall be obligated to report the date of first sale of LICENSED PRODUCTS (or the first commercial use of LICENSED PROCESSES) under this Section 5.3 only once for each country. 5.4 (a) LICENSEE shall submit to HARVARD within sixty (60) days after each calendar half year ending June 30 and December 31, a Royalty Report setting forth, for the most recent half year that ended on June 30 or December 31, at least the following information: (i) the number and identification of LICENSED PRODUCTS sold by LICENSEE that constitute a NET SALE, in each country; (ii) total amounts received for such LICENSED PRODUCTS; (iii) an accounting for all LICENSED PROCESSES used or sold; (iv) deductions applicable to determine the NET SALES thereof; 11 (v) the amount of SUBLICENSE INCOME received by LICENSEE; (vi) the amount of SERVICE INCOME received by LICENSEE; and (vii) the amount of royalty due for such reporting period, or, if no royalties are due to HARVARD for such reporting period, the statement that no royalties are due. Such report shall be certified as correct by an officer of LICENSEE and shall include a listing of all deductions from royalties. It is understood that LICENSEE may submit one Royalty Report covering all RELATED LICENSE AGREEMENTS. However, the Royalty Report shall, for each type of income, provide a detailed listing of the RELATED LICENSE AGREEMENTS that are involved. (b) LICENSEE shall pay to HARVARD with each such Royalty Report the amount of royalty due with respect to such half year. If multiple technologies are covered by the license granted hereunder, LICENSEE shall specify which PATENT RIGHTS are utilized for each category of LICENSED PRODUCTS and/or LICENSED PROCESSES for which royalties are separately reported in the Royalty Report. (c) All payments due hereunder shall be deemed received when funds are credited to HARVARD's bank account and shall be payable by check or wire transfer in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the New York Times or the Wall Street Journal) on the last working day of each royalty period. No transfer, exchange, collection or other charges shall be deducted from such payments. If legal restrictions block the removal of local currency from any country where a LICENSED PRODUCT is sold, the royalties payable under this Agreement on NET SALES, SERVICE INCOME and SUBLICENSING INCOME earned in such currency in such country shall continue to be reported and accrued, but will not be paid until such currency may be removed from such country. (d) All plans or reports received under Sections 5.1, 5.2, 5.3, 5.4 shall deemed Confidential Information of LICENSEE subject to Section 11.1; provided, however, that HARVARD may disclose such information as required by law under Section 11.1 (b), and may include in its usual reports the annual amounts of royalties paid. (e) Late payments shall be subject to a charge of one and one-half percent (1.5%) per month, or $250, whichever is greater. 5.5 In the event of acquisition, merger, change of corporate name, or change of make-up, organization, or identity, LICENSEE shall notify HARVARD in writing within 30 days of such event. 12 5.6 If LICENSEE or any of its sublicensees does not qualify as a "small entity" as provided by the United States Patent and Trademark Office, LICENSEE must notify HARVARD immediately. ARTICLE VI RECORD KEEPING 6.1 LICENSEE shall keep accurate records (together with supporting documentation) of LICENSED PRODUCTS made, used or sold under this Agreement, sufficient to determine the amount of royalties due to HARVARD hereunder. Such records shall be retained for at least three(3) years following the end of the reporting period to which they relate. They shall be available during normal business hours for examination, upon HARVARD's reasonable request, not more than once in any twelve(12) month period and upon at least twenty (20) days prior notice, by an independent accountant under a duty of confidentiality, selected by HARVARD and reasonably acceptable to LICENSEE, for the sole purpose of verifying reports and payments under Section 5.4. In conducting examinations pursuant to this Section, HARVARD's accountant shall have access to records materially relevant to the calculation of royalties under Article IV. 6.2 HARVARD's accountant shall only disclose to HARVARD whether the reports and payments of royalties hereunder are accurate, and the amount of the underreporting or underpayment of royalties by LICENSEE, if any. 6.3 Such examination by HARVARD's accountant shall be at HARVARD's expense, except that if such examination shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then LICENSEE shall pay the reasonable out-of-pocket cost of such examination as well as any additional sum that would have been payable to HARVARD had the LICENSEE reported correctly, plus interest on said sum at the rate of one and one-half percent (1.5%) per month. ARTICLE VII DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE 7.1 LICENSEE shall reimburse HARVARD for all reasonable out-of-pocket expenses HARVARD has incurred, or will incur during the term of this Agreement, for the preparation, filing, prosecution and maintenance of PATENT RIGHTS, including for counseling with regard to such preparation, filing, prosecution and maintenance upon receipt of quarterly invoices from HARVARD. Late payment of these invoices shall be subject to interest charges of one and one-half percent (1.5%) per month. HARVARD shall be responsible for the preparation, filing, prosecution and maintenance of any and all patent applications and patents included in PATENT RIGHTS. HARVARD will instruct counsel to directly notify HARVARD and LICENSEE and 13 provide them copies of any communications to and from the United States and foreign patent offices relating to said prosecution, and drafts of all communications to the various patent offices, and will instruct counsel to consider any comments on such drafts, so that LICENSEE will be informed and apprised of the continuing prosecution of patent applications in PATENT RIGHTS. LICENSEE shall have reasonable opportunity to participate in decision making on key decisions affecting filing, prosecution and maintenance of patents and patent applications in PATENT RIGHTS. 7.2 HARVARD and LICENSEE shall cooperate fully in the preparation, filing, prosecution and maintenance of PATENT RIGHTS and of all patents and patent applications licensed to LICENSEE hereunder, executing all papers and instruments or requiring members of HARVARD to execute such papers and instruments so as to enable HARVARD to apply for, to prosecute and to maintain patent applications and patents in HARVARD's name in any country. Each party shall provide to the other prompt notice as to all matters which come to its attention and which may affect the preparation, filing, prosecution or maintenance of any such patent applications or patents. In particular, LICENSEE must immediately notify HARVARD if LICENSEE does not qualify as a "small entity" as provided by the United States Patent and Trademark Office. 7.3 LICENSEE may elect to surrender its rights to any patent or patent application within PATENT RIGHTS in any country upon sixty (60) days written notice to HARVARD. Such notice shall not relieve LICENSEE from responsibility to reimburse HARVARD for expenses under Section 7.1 relating to the filing, prosecution or maintenance of such patent or patent application incurred prior to the receipt of the written notice by HARVARD (or a longer period if specified in LICENSEE's notice). ARTICLE VIII INFRINGEMENT 8.1 With respect to any PATENT RIGHTS that have not been rendered non-exclusive under Section 3.2(d), LICENSEE shall have the right to enforce in its own name and at its own expense any patents within such PATENT RIGHTS. HARVARD agrees to notify LICENSEE promptly of each infringement of such patents of which HARVARD is or becomes aware. 8.2 (a) If LICENSEE elects to commence an action as described above, HARVARD may, to the extent permitted by law, elect to join as a party in that action. Regardless of whether HARVARD elects to join as a party, HARVARD shall cooperate fully with LICENSEE in connection with any such action, including making available relevant personnel, information, records, papers, samples, specimens and other similar materials for the purposes of such action as reasonably requested by LICENSEE through the Office of Technology and Trademark Licensing at HARVARD. (b) If HARVARD elects to join as a party pursuant to Subsection (a), HARVARD shall jointly control the action with LICENSEE. 14 (c) LICENSEE shall reimburse HARVARD for any out-of-pocket costs HARVARD reasonably incurs, including reasonable attorneys' fees, as part of an action brought by LICENSEE under Section 8.1, whether or not HARVARD becomes a co-plaintiff. 8.3 If LICENSEE elects to commence an action as described above, LICENSEE may deduct from its royalty payments to HARVARD with respect to the patent(s) subject to suit an amount not exceeding fifty percent (50%) of LICENSEE's expenses and costs of such action, including reasonable attorneys' fees and reimbursement of amounts under Section 8.2(c) above; provided, however, that such reduction shall not exceed fifty percent (50%) of the total royalty due to HARVARD with respect to the patent(s) subject to suit for each calendar year. If such fifty percent (50%) of LICENSEE's expenses and costs exceeds the amount of royalties deducted by LICENSEE for any calendar year, LICENSEE may to that extent reduce the royalties due to HARVARD from LICENSEE in succeeding calendar years, but never by more than fifty percent (50%) of the total royalty due in any one year with respect to the patent(s) subject to suit. 8.4 Neither party may enter into a settlement, consent judgment or other voluntary final disposition of any suit under Section 8.1, 8.6, 8.7 and 8.8 without the prior written consent of other party, which consent shall not be unreasonably withheld, if such settlement, consent judgment or other voluntary final disposition includes any admissions or statements about the validity or enforceability of PATENT RIGHTS. 8.5 Recoveries or reimbursements from actions commenced pursuant to this Article shall first be applied to reimburse LICENSEE and HARVARD for litigation costs not paid from royalties and then to reimburse HARVARD for royalties deducted by LICENSEE pursuant to Section 8.3. Any remaining recoveries or reimbursements shall be shared as follows: 80% to LICENSEE and 20% to HARVARD. 8.6 If LICENSEE elects not to exercise its right to enforce the PATENT RIGHTS against any infringement pursuant to this Article, HARVARD may do so at its own expense, controlling such action and retaining all recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in connection with any such action. 8.7 Without limiting the generality of Section 8.6, HARVARD may, at its election and by notice to LICENSEE, establish a time limit of ninety (90) days for LICENSEE to decide whether to enforce the PATENT RIGHTS against any infringement of which HARVARD is or becomes aware. If, by the end of such ninety(90) day period, LICENSEE has not commenced such an action or taken reasonable efforts to settle such infringement, HARVARD may enforce the PATENT RIGHTS against such an infringement at its own expense, controlling such action and retaining all recoveries therefrom. Notwithstanding sections 8.6 and 8.7, HARVARD shall not bring any action alleging the infringement of PATENT RIGHTS against any sublicensee of LICENSEE under PATENT RIGHTS, without the consent of LICENSEE. 15 8.8 If a declaratory judgment action is brought naming LICENSEE as a defendant and alleging invalidity of any of the PATENT RIGHTS, if both parties agree, HARVARD may take over the sole defense of the action at its own expense. LICENSEE shall cooperate fully with HARVARD in connection with any such action. 8.9 If LICENSEE or any sublicensee, distributor or other customer is sued by a third party charging infringement of patent rights that dominate a claim of PATENT RIGHTS, with respect to the manufacture, use, distribution or sale of LICENSED PRODUCT or practice or use of a LICENSED PROCESS, LICENSEE will promptly notify HARVARD. As between the parties to this Agreement, LICENSEE will be entitled to control the defense in any such action(s) and withhold up to one-half (1/2) of the amounts otherwise payable to HARVARD hereunder to pay for defense costs, attorneys fees and any liability incurred in such infringement suit(s). If Licensee is required to pay a royalty or other amount to a third party as a result of a final judgment or settlement, the amounts payable to HARVARD hereunder will be reduced as provided in Section 4.3 above. ARTICLE IX TERMINATION OF AGREEMENT 9.1 This Agreement, unless terminated as provided herein, shall remain in effect until the last patent or patent application in PATENT RIGHTS has expired or been abandoned. 9.2 HARVARD may terminate this Agreement as follows; (a) If LICENSEE does not make a payment due hereunder and fails to cure such non-payment (including the payment of interest in accordance with Section 5.4(e)) within forty five (45) days after the date of notice in writing of such non-payment by HARVARD. If LICENSEE disputes the amount of such non-payment in writing within such forty five (45) day period, HARVARD shall not have the right to terminate this Agreement until it has been determined in an arbitration proceeding under Section 11.10 below that LICENSEE has failed to pay amounts owed hereunder, and thereafter Licensee does not cure such failure within sixty(60) days after such determination. This Section 9.2(a) shall not, however, suspend any obligation of LICENSEE to compensate HARVARD for any undisputed amounts, as provided for under any term of this Agreement, during the pendency of the foregoing arbitration and cure period. (b) If LICENSEE defaults in its obligations under Sections 11.2(c) and 11.2(d) to procure and maintain insurance, and fails to cure such breach within sixty(60) days after notice in writing of such breach by HARVARD. (c) If LICENSEE shall make an assignment for the benefit of creditors, or shall have a petition in bankruptcy filed for or against it, provided that such bankruptcy petition is not dismissed within sixty(60) days after its filing. Such termination shall be effective immediately upon HARVARD giving written notice to LICENSEE. 16 (d) If LICENSEE is convicted of a felony within the United States relating to the manufacture, use, or sale of LICENSED PRODUCTS. (e) Except as provided in Subsections (a), (b), (c), (d) above, if LICENSEE materially breaches any obligations under this Agreement and the breach has not been cured within ninety (90) days after the date of notice in writing of such breach by HARVARD. If LICENSEE disputes in writing that it has materially breached this Agreement within such ninety (90) day period, HARVARD shall not have the right to terminate this Agreement until it has been determined in an arbitration proceeding under Section 11.10 below that LICENSEE has materially breached this Agreement, and thereafter Licensee does not cure such breach within sixty (60) days after such determination. This Section 9.2(c) shall not, however, suspend any obligation of LICENSEE to compensate HARVARD for any undisputed amounts, as provided for under any term of this Agreement, during the pendency of the foregoing arbitration and cure period. 9.3 All sublicenses granted by LICENSEE under this Agreement in compliance with the terms and conditions hereof shall survive the termination of this Agreement upon the request of the party to whom such sublicense is granted, provided that such party agrees in writing that (i) it will pay all royalties or other amounts that otherwise would have been due thereafter under such sublicense directly to HARVARD rather than LICENSEE, and (ii) HARVARD shall not be held liable for the breach or the performance of any obligations stated in such sublicense unless such obligations have been expressly assumed in writing by HARVARD. 9.4 LICENSEE may terminate this Agreement by giving ninety (90) days advance written notice of termination to HARVARD. Upon termination, LICENSEE shall promptly submit a Royalty Report to HARVARD for the final reporting period and any royalty payments incurred during such reporting period, and any unreimbursed patent expenses under Section 7 that have been invoiced by HARVARD, shall become immediately payable with such Royalty Report. 9.5 Articles I, VI, IX, X and XI (except for Section 11.7) of this Agreement shall survive termination. Article VIII shall survive with respect to any infringement of third parties and/or any lawsuits filed by or against LICENSEE, prior to the termination of this Agreement. In the event this Agreement is terminated for any reason, LICENSEE may, within six months after the effective date of such termination, sell or otherwise dispose of all LICENSED PRODUCTS that LICENSEE may have on hand on the effective date of such termination, and fulfill any contracts requiring the use of LICENSED PRODUCTS and/or LICENSED PROCESSES that LICENSEE may have entered into prior to the date of such termination, subject to LICENSEE's payment of amounts due to HARVARD under Section 4.3 of this Agreement. 9.6 In the event that after termination of this Agreement, HARVARD licenses PATENT RIGHTS to another licensee, HARVARD shall use commercially reasonable efforts to 17 require such other licensee to pay the costs of the preparation, filing, prosecution and maintenance of PATENT RIGHTS. HARVARD shall reimburse LICENSEE for any costs so paid by such other licensee to the extent LICENSEE paid for such costs under Section 7.1. ARTICLE X REPRESENTATIONS AND WARRANTIES 10.1 Except for the rights, if any, of the Government of the United States, HARVARD represents and warrants that: (a) HARVARD is the owner of the entire right, title and interest in and to the PATENT RIGHTS as they exist on the Effective Date; (b) HARVARD has the right and authority to enter into this Agreement and grant the rights and licenses set forth herein, including without limitation under PATENT RIGHTS; (c) HARVARD has not previously granted, and will not grant in the future, any rights in the PATENT RIGHTS that are inconsistent with the rights and licenses granted to LICENSEE herein; (d) To the best knowledge of HARVARD without having made an investigation, as of the Effective Date, practice of inventions within the PATENT RIGHTS does not infringe any patent rights, trade secrets or other proprietary rights of any third party. (e) To the best knowledge of HARVARD, as of the Effective Date, HARVARD does not own any rights in any other patent or patent application, the claims of which would dominate the claims of a patent or patent application within the PATENT RIGHTS or any practice of PATENT RIGHTS. If HARVARD owns, now or thereafter, any such rights in such patents or patent applications on which Dr. Lieber is an inventor, HARVARD will negotiate in good faith to the extent it has the legal right to do so with LICENSEE to grant LICENSEE rights to the extent sufficient to practice PATENT RIGHTS. (f) To the best knowledge of HARVARD, all prior and current agreements between HARVARD and other sponsors of research under which HARVARD has obligations relating to PATENT RIGHTS are listed on Appendix B. 10.2 Except as set forth in this Agreement, HARVARD does not warrant the validity of the PATENT RIGHTS licensed hereunder and makes no representations whatsoever with regard to the scope of the licensed PATENT RIGHTS or that such PATENT RIGHTS may be exploited by LICENSEE, an AFFILIATE, or sublicensee without infringing other patents. 18 10.3 EXCEPT FOR THE WARRANTIES STATED IN THIS AGREEMENT, HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS OR INFORMATION SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT. ARTICLE XI GENERAL 11.1 (a) The parties may, from time to time, in connection with this Agreement disclose to each other Confidential Information. Any Confidential Information shall be in writing and marked "confidential" and disclosed only to the Office of Technology and Trademark Licensing. As used in the this Agreement, "Confidential Information" of a party shall mean (i) any information disclosed in writing by such party to the other party, which is marked by such party with the legend "CONFIDENTIAL" or other similar legend sufficient to identify the information as its confidential information, (ii) any information disclosed orally by such party to the other party which is identified as confidential at the time of disclosure and is confirmed as confidential in writing within thirty (30) days after such time of disclosure, or (iii) any information deemed Confidential Information under the terms of this Agreement. With respect to categories (i) and (ii) above, "Confidential Information" shall nor include any information that is: (1) already known to the receiving party at the time of disclosure hereunder, or (2) now or hereafter becomes publicly known other than through acts or omissions of the receiving party, or (3) is disclosed to the receiving party by a third party under no obligation of confidentiality to the disclosing party or (4) is independently developed by the receiving party without use of the Confidential Information of the disclosing party. (b) Each party shall maintain in confidence, and shall not use for any purpose or disclose to any third party, the Confidential Information of the other party. Notwithstanding the foregoing, the receiving party may use or disclose the Confidential Information of the disclosing party (i) to the extent necessary to exercise its rights or fulfill its obligations and/or duties under this Agreement, and (ii) to comply with applicable law or governmental regulations or court order, provided that the receiving party will give reasonable advance notice to the disclosing party, and will use its reasonable efforts to minimize the disclosure of Confidential Information and to secure confidential treatment of any Confidential Information disclosed. (c) The terms of this Agreement shall be deemed "Confidential Information" of both parties. In addition to the permissible disclosures set forth in subsection (b) above, LICENSEE may disclose such terms in confidence to its financial and legal advisors, consultants, potential or actual investors, potential or actual merger or acquisition partners, and others on a need-to-know basis. 11.2 (a) LICENSEE shall indemnify, defend and hold harmless HARVARD and its current or former and future directors, governing board members, trustees, officers, faculty and 19 employees (collectively, the "INDEMNITEES"), from and against any lawsuit or cause or action against the INDEMNITEES brought by a third party (collectively, "Claims"), based upon, arising out of, or otherwise relating to this Agreement, including without limitation any cause of action relating to product liability concerning any product, process, or service made, used or sold pursuant to any right or license granted under this Agreement, except to the extent such Claims arise out of or otherwise relate to the gross negligence or intentional misconduct of any INDEMNITEES; and further provided that (i) LICENSEE receives prompt notice of any such Claims; (ii) LICENSEE is given the exclusive right to control the defense and settlement of such Claims; and (iii) LICENSEE shall not be obligated to indemnify any INDEMNITEE in connection with any settlement for any Claim unless LICENSEE consents in writing to such settlement. (b) LICENSEE shall, at its own expense, defend against any actions brought or filed against any INDEMNITEE hereunder with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought. (c) Beginning at the time any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a SUBLICENSEE, AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than [*** Redacted] per incident and [*** Redacted] annual aggregate and naming the Indemnitees as additional insureds. During clinical trials of any such product, process or service, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in such equal or lesser amount as HARVARD shall require, naming the Indemnitees as additional insureds. Such commercial general liability insurance shall provide: (i) product liability coverage; and (ii) broad form contractual liability coverage for LICENSEE's indemnification under this Agreement. If LICENSEE elects to self-insure all or part of the limits described above (including deductibles or retentions Which are in excess of [*** Redacted] annual aggregate) such self-insurance program must be acceptable to HARVARD and the Risk Management Foundation of the Harvard Medical Institutions, Inc. in their sole discretion. The minimum amounts of insurance coverage required shall not be construed to create a limit of LICENSEE's liability with respect to its indemnification under this Agreement. (d) LICENSEE shall provide HARVARD with written evidence of such insurance upon request of HARVARD. LICENSEE shall provide HARVARD with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance; if LICENSEE does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, HARVARD shall have the right to terminate this Agreement in accordance with Section 9.2(b). (e) LICENSEE shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during: (i) the period that any product, process, or service, relating to, or developed pursuant to, this Agreement is being *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 20 commercially distributed or sold by LICENSEE or by a sublicensee, AFFILIATE or agent of LICENSEE; and (ii) a reasonable period after the period referred to in Subsection (c)(i) above which in no event shall be less than fifteen (15) years. 11.3 Nothing in this Agreement shall be construed as conferring any right to use Harvard's name or insignia, or any adaptation of them, or the name of any of HARVARD'S inventors in any advertising, promotional or sales literature without the prior written approval of HARVARD, or the inventor in the case of the use of the name of an inventor. 11.4 Except as stated in this Section 11.4, without the prior written approval of HARVARD in each instance, neither this Agreement nor the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE to any person whether voluntarily or involuntarily, by operation of law or otherwise. LICENSEE may transfer or assign this Agreement and all rights hereunder, upon notice to HARVARD but without its consent, to any entity that succeeds to all or substantially all of the business of LICENSEE to which this Agreements pertains, whether by merger, operation of law, purchase or sale of all or substantially all of LICENSEE's stock or assets or otherwise; provided that such assignee or transferee promptly agrees in writing to be bound by the terms and conditions of this Agreement. Subject to the foregoing, this Agreement shall be binding upon the respective successors, legal representatives and assignees of HARVARD and LICENSEE. 11.5 The interpretation and application of the provisions of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. 11.6 LICENSEE shall comply with all applicable laws and regulations. In particular, it is understood and acknowledged that the transfer of certain commodities and technical data is subject to United States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations among other things, prohibit or require a license for the export of certain types of technical data to certain specified countries. LICENSEE hereby agrees and gives written assurance that it will comply with all United States laws and regulations controlling the export of commodities and technical data, that it will be solely responsible for any violation of such by LICENSEE or its AFFILIATES or sublicensees, and that it will defend and hold HARVARD harmless in the event of any legal action of any nature occasioned by such violation with respect to LICENSED PRODUCTS. 11.7 LICENSEE agrees: (i) to obtain all regulatory approvals required for the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES; and (ii) to mark LICENSED PRODUCTS with the numbers of the applicable patents within PATENT RIGHTS, to the extent required by law. LICENSEE also agrees to register or record this Agreement as is required by law or regulation in any country where the license is in effect, and HARVARD shall cooperate fully with LICENSEE in connection with any such registration or recordation. 21 11.8 Any notices to be given hereunder shall be sufficient if signed by the party (or party's attorney) giving same and either: (i) delivered in person; (ii) mailed certified mail return receipt requested; or (iii) faxed to other party if the sender has evidence of successful transmission and if the sender promptly sends the original by ordinary mail, in any event to the following addresses: If to LICENSEE: Nanosys Inc. 200 Boston Ave Suite 4700 Medford, MA 02l55 Attn: Lawrence A. Bock Fax: 718-391-3803 cc: Wilson, Sonsini, Goodrich & Rosati 650 Page Mill Road Palo Alto, California 94304 Attn: Michael J. O'Donnell, Esq. Fax: 650/493-6811 If to HARVARD: Office for Technology and Trademark Licensing Harvard University Holyoke Center, Suite 727 1350 Massachusetts Avenue Cambridge, MA 02138 Fax: (617) 495-9568 by such notice either party may change their address for future notices. Notices delivered in person shall be deemed given on the date delivered. Notices sent by fax shall be deemed given on the date faxed. Notices mailed shall be deemed given on the date postmarked on the envelope. 11.9 Should a court of competent jurisdiction later hold any provision of this Agreement to be invalid, illegal, or unenforceable, and such holding is not reversed on appeal, it shall be considered severed from this Agreement. All other provisions, rights and obligations shall continue without regard to the severed provision, provided that the remaining provisions of this Agreement are in accordance with the intention of the parties. 11.10 In the event of any controversy or claim arising out of or relating to any provision of this Agreement or the breach thereof, the parties shall try to settle such conflict amicably between themselves. Subject to the limitation stated in the final sentence of this Section, any such conflict which the parties are unable to resolve promptly shall be settled through arbitration conducted in accordance with the rules of the American Arbitration Association. The demand for arbitration shall be filed within a reasonable time after the controversy or claim has arisen, and in no event after the date upon which institution of *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 22 legal proceeding based on such controversy or claim would be barred by the applicable statute of limitation. Such arbitration shall be held in Boston, Massachusetts. The award through arbitration shall be final and binding. Either party may enter any such award in a court having jurisdiction or may make application to such court for judicial acceptance of the award and an order of enforcement, as the case may be. Notwithstanding the foregoing, either party may, without recourse to arbitration, assert against the other party a third-party claim or cross-claim in any action brought by a third party, to which the subject matter of this Agreement may be relevant. 11.11 This Agreement constitutes the entire understanding between the parties and neither party shall be obligated by any condition or representation other than those expressly stated herein or as may be subsequently agreed to by the parties hereto in writing. 11.12 Nothing in this Agreement shall be deemed to require LICENSEE to exploit the PATENT RIGHTS, except to the extent expressly set forth in this Agreement, and nothing in this Agreement shall be deemed to prevent LICENSEE from commercializing products similar to or competitive with a LICENSED PRODUCT. 11.13 The relationship between HARVARD and LICENSEE established by this Agreement is that of independent contractors. Nothing in this Agreement shall be construed to create any other relationship between HARVARD and LICENSEE. Neither party shall have any right, power or authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other. 11.14 In the event either party hereto is prevented from or delayed in the performance of any of its obligations hereunder by reason of acts of God, war, strikes, riots, storms, fires or any other cause whatsoever beyond the reasonable control of the party, the party so prevented or delayed shall be excused from the performance of any such obligation to the extent and during the period of such prevention or delay. 11.15 NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OF LIKELIHOOD OF SAME. 23 11.16 This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives. PRESIDENT AND FELLOWS COMPANY OF HARVARD COLLEGE /s/ JOYCE BRINTON /s/ LAWRENCE BOCK ----------------- ----------------- Joyce Brinton, Director Signature Office for Technology and Trademark Licensing LAWRENCE BOCK ----------------- Name President ----------------- 2/11/02 Title ------------ Date 2/18/02 ----------------- Date 24 APPENDIX A The following comprise PATENT RIGHTS: US Provisional Application , filed November 9, 2001, "Transistors, Diodes, Logic Gates, Computational Devices and Other Devices Assembled from Nanowire Building Boxes" by Lieber, et al. 25 APPENDIX B Sponsorship for the research which led to PATENT RIGHTS was provided by the following grants/contractor: Sponsorship for the research which led to PATENT RIGHTS was provided by the following grants/contractor ONR - N0014-00-0476 ONR - N0014-01-0651 (DARPA) 26 EX-10.5.3 5 f97636a4exv10w5w3.txt EXHIBIT 10.5.3 EXHIBIT 10.5.3 EXCLUSIVE LICENSE AGREEMENT Between President and Fellows of Harvard College And NanoSys, Inc. Re: Harvard Case #1935 In consideration of the mutual promises and covenants set forth below, the parties hereto agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: 1.1 ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS solely for academic non-commercial research or other not-for-profit scholarly purposes, which use is undertaken at a non-profit or governmental institution. ACADEMIC RESEARCH PURPOSES does not include selling products covered by PATENT RIGHTS or using PATENT RIGHTS in researching, developing, producing or manufacturing products for sale, or performance of services for a fee or other financial consideration. It is understood that using the PATENT RIGHTS to conduct normal research activities at non-profit or governmental institution is within the defined term of ACADEMIC RESEARCH PURPOSES. 1.2 AFFILIATE: any entity which controls, is controlled by, or is under common control with a party. An entity shall be regarded as in control of another entity for purposes of this definition if it owns or controls at least fifty percent (50%) of the shares entitled to vote in the election of directors (or in the case of an entity that is not a corporation, for the election of the corresponding managing authority). Unless otherwise specified, the term LICENSEE includes AFFILIATES. 1.3 FIELD: All fields of use. 1.4 HARVARD: President and Fellows of Harvard College, a nonprofit Massachusetts educational corporation having offices at the Office for Technology and Trademark Licensing, Holyoke Center, Suite 727, 1350 Massachusetts Avenue, Cambridge, Massachusetts 02138. 1.5 LICENSED PROCESSES: methods, processes or procedures covered by at least one VALID CLAIM included within the PATENT RIGHTS. 1.6 LICENSED PRODUCTS: products covered by at least one VALID) CLAIM included within the PATENT RIGHTS or products made in accordance with LICENSED PROCESSES. 1.7 LICENSEE: Nanosys, Inc., a corporation organized under the laws of Delaware having its principal offices at 2625 Hanover Street, Palo Alto, CA 94304 1.8 NET SALES: the amounts actually received for sales, leases, or other dispositions of LICENSED PRODUCTS to non-AFFILIATE third parties, less: (a) customary [*** Redacted], (b) amounts [*** Redacted] by reason of [*** Redacted], (c) to the extent separately stated on purchase orders, invoices, or other documents of sale: (i) [*** Redacted] levied on the production, sale, transportation, delivery, importation, exportation, or use of LICENSED PRODUCTS; (ii) charges for [*** Redacted] provided by third parties, including any [*** Redacted] thereon. NET SALES also includes the fair market value of any non-cash consideration received for the sale, lease or other disposition of LICENSED PRODUCTS to non-AFFILIATE third parties; provided NET SALES shall not include any [*** Redacted] payments in consideration for the [*** Redacted] to the intellectual property of LICENSEE or third parties, including the [*** Redacted] hereunder, bona fide [*** Redacted] made in good faith and any payments for [*** Redacted]. In the event that a LICENSED PRODUCT is sold or leased as a combination product containing the LICENSED PRODUCT and one or more other components, NET SALES shall be calculated by multiplying the gross amount invoiced for the sale of the combination product by the fraction [*** Redacted] where A is the [*** Redacted] price of the LICENSED PRODUCT sold separately by LICENSEE, and B is the [*** Redacted] of such other components of the combination products sold separately by LICENSEE during the relevant royalty payment period. In the event a substantial number of such separate sales were not made during the relevant royalty period, then NET SALES shall be reasonably allocated by LICENSEE between such LICENSED PRODUCT and such other components of the combination based on their relative importance or value; provided that such LICENSED PRODUCT and such other components shall not be considered a "combination product" unless such LICENSED PRODUCT and such other components are offered for sale or marketed by LICENSEE separately as well as together. If LICENSEE does so allocate, LICENSEE shall promptly deliver to HARVARD a written report providing a detailed explanation of how LICENSEE determined said relative importance or value. All such reports shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with Section 11.10. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 2 1.9 PATENT RIGHTS: PATENT RIGHTS shall include (i) the applications and patents as listed in Appendix A of this Agreement, (ii) any foreign counterparts to such patents and patent applications, (iii) the inventions described and claimed in the foregoing, (iv) any divisions- or continuations of the foregoing, and (v) specific claims of any continuations-in-part of the foregoing to the extent the specific claims are directed to subject matter described in the foregoing in a manner sufficient to support such specific claims under 35 U.S.C. and to the extent Licensable by HARVARD; claims in said continuations-in-part covering minor improvements over the claims of parent patent applications may, at HARVARD'S discretion, be included in PATENT RIGHTS by amendment of this Agreement for no increase in the royalties of Article IV, (vi) all patents issuing on any of the foregoing, and (vii) registrations, renewals, reissues, reexaminations, extensions or patents of addition of any kind with respect to any of such patents. For purposes of this Agreement "Licensable" shall mean those claims of continuations-in-part filed after the Effective Date for which HARVARD has sole ownership (or has been granted the sole right to license by a co-owner) and where there are no obligations to grant licenses to a third party as the result of research support provided to one or more of the inventors. 1.10 SERVICE INCOME: the financial consideration actually received for the utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE which is contracted for by a non-AFFILIATE third party, less the deductions stated in Sections 1.8(a), (b) and (c); provided, however, that such amounts shall only be included in SERVICE INCOME if LICENSEE does not [*** Redacted] with respect to the PATENT RIGHTS licensed in this Agreement on the NET SALE of such LICENSED PRODUCTS or the NET SALE of LICENSED PRODUCTS made in accordance with such use of the LICENSED PROCESSES. SERVICE INCOME shall specifically exclude any [*** Redacted], payments in consideration for the [*** Redacted] of the LICENSEE or third parties, including the [*** Redacted] hereunder, [*** Redacted] made in good faith and any [*** Redacted]. In the event that any service contemplated hereunder includes any services other than the utilization of a [*** Redacted] or [*** Redacted], LICENSEE shall in good faith determine the portion of the payments received for such service that are intended as consideration for the utilization of [*** Redacted] or [*** Redacted] by LICENSEE, and such portion shall be used to determine the SERVICE INCOME for such service. In such event, LICENSEE shall promptly deliver to HARVARD a written report detailing such calculation, together with a copy of the applicable provisions of the agreements related to such service. All such reports and provisions of agreements shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE of SERVICE INCOME for such service, HARVARD shall so notify LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with paragraph 11.10. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 3 1.11 SUBLICENSE INCOME: the amount paid to LICENSEE by a third party (other than an AFFILIATE of LICENSEE) for the granting of a sublicense under Section 3.1, including but not limited to (i) [*** Redacted] (ii) [*** Redacted] (iii) [*** Redacted] and (vi) the [*** Redacted] in cash of any non-cash consideration for such sublicense, but specifically excluding any [*** Redacted] payments in consideration for the [*** Redacted], [*** Redacted] and any payments for products purchased or services performed. It is understood and agreed that sublicense income received by LICENSEE shall be net of withholding taxes. If LICENSEE sublicenses [*** Redacted] to a third party and at the same time also grants such third party rights to [*** Redacted] or LICENSEE's in-licensed non-HARVARD technologies, then all compensation received from the third party for such rights shall be combined and [*** Redacted] that would constitute SUBLICENSE INCOME under Section 1.11 and shall promptly deliver to HARVARD a written report detailing such calculation, together with a copy of the applicable provisions of the agreements with the third party. All such reports and provisions of agreements shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE of SUBLICENSE INCOME, HARVARD shall so notify LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with Section 11.10. 1.12 TERRITORY: Worldwide. 1.13 VALID CLAIM: either (i) a claim of an issued patent that has not expired or been held unenforceable or invalid by an agency or a court of competent jurisdiction, and which has not been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise; provided, however, that if the holding of such court or agency is later reversed by a court or agency with overriding authority, the claim shall be reinstated as a Valid Claim with respect to Net Sales made after the date of such reversal, or (ii) a claim of a pending patent application that has not been abandoned or finally rejected without the possibility of *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 4 appeal or re-filing and that has been pending for less than seven (7) years from its priority date, and is being actively prosecuted in good faith. 1.14 The terms "Public Law 96-517" and "Public Law 98-620" include all amendments to those statutes. 1.15 The terms "sold" and "sell" include, without limitation, leases and other dispositions and similar transactions. 1.16 RELATED LICENSE AGREEMENTS: Other patent license agreements between LICENSEE and HARVARD licensing patent rights known internally at HARVARD as Case #1852, #1765, #1923, #1924, #1678, #1641, #1489, #1352, #1243, #1137, #1816, #1685, #1935, #2058. 1.17 DEVELOPMENT PAYMENTS: DEVELOPMENT PAYMENTS shall mean (a) any payments, in consideration for, or to support, research and/or development efforts by LICENSEE to develop inventions claimed in PATENT RIGHTS and (b) any reimbursement of LICENSEE'S patent expenses concerning PATENT RIGHTS. ARTICLE II RECITALS 2.1 HARVARD is owner (or HARVARD will be owner) by assignment from Hongkun Park, Jeffrey J. Urban, Qian Gu, Charles Lieber, and Wan S. Yun of their entire right, title and interest in the United States Provisional Application, 60/306,936, filed July 20, 2001, a PCT International Patent Application, filed July 22, 2002 and the foreign and US patent applications corresponding thereto, and in the inventions described and claimed therein. 2.2 HARVARD has the authority to issue licenses under PATENT RIGHTS. 2.3 HARVARD is committed to the policy that ideas or creative works produced at HARVARD should be used for the greatest possible public benefit, and believes that every reasonable incentive should be provided for the prompt introduction of such ideas into public use, all in a manner consistent with the public interest. 2.4 LICENSEE intends to use commercially reasonable efforts to develop the invention(s), and to bring to market at least one product falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in the patent rights licensed under such agreements. 2.5 LICENSEE is desirous of obtaining an exclusive license in the TERRITORY in order to practice the above-referenced invention covered by PATENT RIGHTS in the United States and in certain foreign countries, and to manufacture, use and sell in the commercial market the products made in accordance therewith, and HARVARD is desirous of granting such a license to LICENSEE in accordance with the terms of this Agreement. 5 ARTICLE III GRANT OF RIGHTS 3.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the terms and conditions hereof, an exclusive license (except as set forth in Sections 3.2(a) and 3.2(b)) under PATENT RIGHTS in the TERRITORY and in the FIELD (i) to make and have made, to use and have used, to sell and have sold, to offer for sale, import, export, or otherwise distribute the LICENSED PRODUCTS, (ii) to practice the LICENSED PROCESSES, and (iii) to otherwise fully exploit the PATENT RIGHTS, and (iv) to have the foregoing performed on behalf of LICENSEE by a third party, in each case for the life of the PATENT RIGHTS. The foregoing license under PATENT RIGHTS shall include the full right to grant sublicenses, and LICENSEE shall promptly provide copies of any sublicenses of PATENT RIGHTS to HARVARD for its review. Unless HARVARD has rendered the license under PATENT RIGHTS non-exclusive under Section 3.2(d), HARVARD agrees that it will not grant licenses under PATENT RIGHTS to others, nor make, use, sell, offer for sale, import or otherwise exploit PATENT RIGHTS itself except as required by HARVARD'S obligations in Section 3.2(a) or as permitted in Section 3.2(b). 3.2 The granting and exercise of this license is subject to the following conditions: (a) HARVARD'S "Statement of Policy in Regard to Inventions, Patents and Copyrights," dated August 10, 1998, Public Law 96-517 and Public Law 98-620, and HARVARD'S obligations under prior or current agreements with other sponsors of research and, with regard to continuations-in-part contained in the PATENT RIGHTS, any future agreements with other sponsors of research related to such continuations-in-part. Any right granted in this Agreement greater than that permitted under Public Law 96-517, or Public Law 98-620, shall be subject to modification to the extent required to conform to the provisions of those statutes. (b) HARVARD reserves the right to make and use, and grant to other non-profit or governmental institutions non-exclusive licenses to make and use, in each case solely for ACADEMIC RESEARCH PURPOSES the subject matter described and claimed in PATENT RIGHTS. HARVARD shall promptly notify LICENSEE of any rights granted to any third party (other than the U.S. government) under Sections 3.2(a) and (b). (c) LICENSEE shall use commercially reasonable efforts to effect introduction into the commercial market at least one falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in PATENT RIGHTS within six and one half (6.5) years of the effective date of this Agreement; thereafter, until the expiration of this Agreement, LICENSEE shall use commercially reasonable efforts to endeavor to keep any such product reasonably available to the public so long as it shall be a sound and reasonable commercial practice to do so. 6 (d) At any time after six and one half (6.5) years from the effective date of this Agreement, HARVARD may render this license non-exclusive if LICENSEE has not, either by itself or through a sublicensee: (i) introduced into commercial use at least one product falling within the definition of LICENSED PRODUCT or made by a LICENSED PROCESS; and (ii) used commercially reasonable efforts to put the licensed subject matter into commercial use as broadly as commercially reasonable in one or more of the countries hereby licensed, directly or through a sublicense, as described in LICENSEE'S development plan required by Paragraph 5.1 (b); and (iii) used commercially reasonable efforts to keep products falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in PATENT RIGHTS reasonably available to the public so long as it shall be a sound and reasonable commercial practice to do so; and (iv) engaged in research, development, manufacturing, marketing or sublicensing activity that is commercially reasonably appropriate to achieving Section 3.2(d)(ii) or 3.2(d)(iii). (e) In all sublicenses granted by LICENSEE hereunder, LICENSEE shall include a requirement that the sublicensee use commercially reasonable efforts to put the subject matter of the sublicense into commercial use, provided that such sublicensee is authorized to develop and sell to the public a new product covered by PATENT RIGHTS on its own behalf. LICENSEE shall further provide that such sublicenses are subject and subordinate to the terms and conditions of this Agreement, except for the rate of royalty on NET SALES paid by such sublicensee to the LICENSEE. Copies of all sublicense agreements hereunder shall be provided promptly to HARVARD. Such copies of sublicense agreements may be provided to HARVARD in redacted form, provided that such copies contain all relevant terms necessary for HARVARD to monitor LICENSEE'S compliance with the terms of this Agreement. Unredacted copies of said sublicense agreements shall be made available for review by HARVARD or its representatives at LICENSEE'S Medford, MA facility, or whichever facility is closest to HARVARD, within one week of HARVARD'S request. All sublicense agreements of LICENSEE provided to HARVARD shall be deemed Confidential Information of LICENSEE subject to Section 11.1. (f) At any time four (4) years after the effective date of this Agreement, if LICENSEE is unable or unwilling to grant sublicenses, either as suggested by HARVARD or by a potential sublicensee or otherwise, then HARVARD may directly license such potential sublicensee, but only if: (i) LICENSEE is not currently pursuing development of LICENSED PRODUCTS for the same application or an application that is reasonably competitive with the application as contemplated by the potential 7 sublicensee as demonstrated by annual progress reports from LICENSEE required by Paragraph 5.2, or the research and development plan required by Paragraph 5.1(b) of this agreement or within a one-year period LICENSEE makes a commitment to do so, said commitment being satisfied by a written research and development plan, acceptable to HARVARD and said acceptance given within the one-year period, said acceptance not to be unreasonably denied, any applications which LICENSEE fails to develop according to the research and development plan, as potentially amended according to Paragraph 5.2, immediately becomes subject to this Paragraph. (ii) the granting of such a license by HARVARD to the potential sublicensee will increase the availability of useful products to the public, and (iii) HARVARD notifies LICENSEE of its intention to grant such license and permits LICENSEE a reasonable period to negotiate a sublicense on its own. (g) To the extent required by law, until this license is rendered non-exclusive in the United States under Section 3.2(d), LICENSEE shall cause any LICENSED PRODUCT produced for sale in the United States to be manufactured substantially in the United States. (h) HARVARD recognizes that LICENSEE's success in meeting the obligations set forth in this paragraph may be enhanced by consultation with the inventor(s) of the PATENT RIGHTS. Accordingly, Harvard will use reasonable efforts to make such inventors reasonably available to LICENSEE for such consultation. 3.3 All rights reserved to the United States Government and others under Public Law 96-517, and Public Law 98-620, shall remain and shall in no way be affected by this Agreement. 3.4 HARVARD shall promptly notify LICENSEE when any new patent or patent application arises from (i) research conducted in the laboratory of Dr. Lieber or Dr. Park, or (ii) improvements made by HARVARD under the direction of Dr. Lieber or Dr. Park on the subject matter described in PATENT RIGHTS. If LICENSEE so requests and the intellectual property is available for licensing, HARVARD will evaluate in good faith LICENSEE's proposal along with proposals received from any third parties. Any decision to grant a license to LICENSEE shall be subject to approval by HARVARD's Committee on Patents and Copyrights. In the event LICENSEE and HARVARD cannot agree on terms for a license to any new intellectual property which is dominated by PATENT RIGHTS, HARVARD shall not offer any third party terms more favorable, in toto, than the terms offered to LICENSEE. ARTICLE IV ROYALTIES 4.1 LICENSEE shall owe to HARVARD a non-refundable license royalty fee in the sum of [*** Redacted] ($[*** Redacted]) dollars upon execution of this Agreement, which shall be payable as follows: [*** Redacted] ($[*** Redacted]) dollars payable within thirty days of this Agreement becoming effective, and another *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 8 [*** Redacted] ($[*** Redacted]) dollars at the first anniversary of this Agreement becoming effective.. 4.2 As consideration for the rights granted hereunder, LICENSEE shall pay to HARVARD a non-refundable fee in the form of stock of LICENSEE as follows: (i) LICENSEE shall issue to HARVARD twenty thousand (20,000) fully vested shares, at a price per share of $0.12 per share and an aggregate value of $2,400.00 of LICENSEE's common stock upon execution of this Agreement, provided, however, that HARVARD shall be subject to and enter into (1) appropriate agreements and related documents as required of other stockholders of LICENSEE, including without limitation a Common Stock Purchase Agreement, and (2) a Voting Agreement by and among the LICENSEE, HARVARD and certain other holders of common stock of LICENSEE dated as of even date hereof. (ii) HARVARD's ownership rights to Shares shall not be affected should the license pursuant to this Agreement be terminated by LICENSEE or HARVARD. 4.3 (a) LICENSEE shall pay to HARVARD during the term of this Agreement a royalty on NET SALES by LICENSEE according to the following schedule: (i) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] applications; (ii) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] applications; or (iii) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] excluding [*** Redacted] applications and [*** Redacted] applications. In the event, any NET SALES by LICENSEE reasonably falls within more than one of categories (i) to (iii) above, LICENSEE shall pay to HARVARD the lowest applicable royalty set forth in such categories. (b) For each LICENSED PRODUCT sold by LICENSEE, LICENSEE may credit up to [*** Redacted] of royalties that LICENSEE is paying to third parties (or HARVARD under agreements not included within section 4.3(c)) on LICENSEE's sales of that LICENSED PRODUCT, provided that the royalty paid to HARVARD shall not be reduced below [*** Redacted] percent ([*** Redacted]%) of the NET SALES of that LICENSED PRODUCT for which such third party royalties are being paid. LICENSEE may only offset royalties owed under license agreements to third parties where said license agreements provide for similar offsets of comparable scale of third party royalties. Any such offsets must be specifically and thoroughly reported in the royalty reports required by Paragraph 5.4. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 9 (c) In the event that sales of a LICENSED PRODUCT are subject to the payment of royalties under one or more of the RELATED LICENSE AGREEMENTS or any license agreements with HARVARD with the same effective date as this Agreement, then the total royalty payment due HARVARD under all such agreements including this Agreement shall be at most the royalty payment due under this Section 4.3 on such NET SALE, no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such agreement. LICENSEE shall notify HARVARD of the identity of each license agreement that includes patent rights covering the product or process, and HARVARD shall distribute the royalties evenly among such agreements, including this Agreement. (d) LICENSEE shall pay HARVARD [*** Redacted] percent ([*** Redacted]%) of SUBLICENSE INCOME received by LICENSEE for a sublicense of PATENT RIGHTS. If compensation for such a sublicense of PATENT RIGHTS is bundled with compensation received for the sublicensing of the other HARVARD patents rights or other HARVARD intellectual property licensed to LICENSEE under the RELATED LICENSE AGREEMENTS or any agreements with HARVARD having the same effective date as this Agreement, then LICENSEE shall pay HARVARD at most the royalty payment due under this Section 4.3(d) for such SUBLICENSE INCOME no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such license agreements. In such a case, LICENSEE shall notify HARVARD of the identity of each license agreement involved and HARVARD shall distribute the royalties equally among those license agreements, including this Agreement. (e) For provision of services under PATENT RIGHTS, LICENSEE shall pay a royalty of [*** Redacted] percent ([*** Redacted]%) of SERVICE INCOME received by LICENSEE from each and every third party ("Third Party") to whom LICENSEE provides such services. In the event any services from which SERVICE INCOME is derived are subject to the payment of royalties under the RELATED LICENSE AGREEMENTS or any agreement with HARVARD having the same effective date as this Agreement, then the total royalty due under all such agreements, including this Agreement, shall be at most the royalty payment due under this Section 4.3 on such services, no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such license agreements. In such event, LICENSEE shall notify HARVARD of the identity of each license agreement involved and HARVARD shall distribute the royalties equally among those license agreements, including this Agreement. (f) If the license pursuant to this Agreement is converted to a non-exclusive one under Section 3.2(d) and if another non-exclusive license to any of PATENT RIGHTS is granted or otherwise exists for any field or territory, then the royalty rate of this Agreement shall be adjusted so as not to exceed the royalty rate payable by such other non-exclusive licensee under such PATENT RIGHTS in such field or territory, provided that LICENSEE agrees to amend this Agreement to include terms requested by HARVARD that have been accepted by such other non-exclusive licensee. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 10 (g) On sales between LICENSEE and its AFFILIATES for resale, the royalty shall be paid on the NET SALES of the AFFILIATE. (h) In the event that more than one VALID CLAIM within PATENT RIGHTS is applicable to any LICENSED PRODUCT subject to royalties under this Section 4.3, then only one royalty shall be paid to HARVARD in respect of such LICENSED PRODUCT. In no event shall more than one royalty be due to HARVARD with respect to any LICENSED PRODUCT unit; nor shall a royalty be payable under this Section 4.3 with respect to sales of LICENSED PRODUCTS for clinical trials nor the use of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE for such a purpose whether or not in collaboration with a third party. 4.4 No later than January 1 of each calendar year after the effective date of this Agreement, LICENSEE shall pay to HARVARD the following non-refundable license maintenance royalty and/or advance on royalties. Such payments may be credited against running royalties due for that calendar year and Royalty Reports shall reflect such a credit. Such payments shall not be credited against milestone payments (if any) nor against royalties due for any subsequent calendar year. January 1, 2003 $[*** Redacted] January 1, 2004 $[*** Redacted] January 1, 2005 $[*** Redacted] January 1, 2006 $[*** Redacted] January 1, 2007 $[*** Redacted] January 1, 2008 $[*** Redacted] January 1, 2009 $[*** Redacted] January 1, 2010 $[*** Redacted] each year thereafter $[*** Redacted] ARTICLE V REPORTING 5.1 a) In compliance of earlier RELATED LICENSE AGREEMENTS, LICENSEE has provided to HARVARD a written research and development plan acceptable to LICENSEE's investors under which LICENSEE intends to bring the subject matter of the earlier RELATED LICENSE AGREEMENTS (though not specifically of this Agreement) granted earlier into commercial use. Such plan included projections of sales and proposed marketing efforts. b) LICENSEE agrees to provide, no later than three (3) years after the effective date of this Agreement, a written research and development plan, requiring written approval by HARVARD, which shall not unreasonably be denied, under which LICENSEE intends to bring the subject matter of PATENT RIGHTS into commercial use. Such a plan shall *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 11 include a description of each LICENSED PRODUCT to be developed, a developmental timeline showing the technical, regulatory, business and marketing steps (benchmarks) needed to bring the LICENSED PRODUCT into commercial use and the resources in funds and personnel that LICENSEE will bring to bear for the successful accomplishment of each such step, and shall include projected sales and a proposed marketing effort 5.2 No later than sixty (60) days after June 30 of each calendar year, LICENSEE shall provide to HARVARD a written annual Progress Report describing progress on the commercialization of PATENT RIGHTS during the most recent twelve (12) month period ending June 30, the amount of LICENSEE's R&D spending relating to the subject matter described or claimed in PATENT RIGHTS during such time, and plans for the forthcoming year. If multiple technologies are covered by the license granted hereunder, the Progress Report shall provide the information set forth above for each technology. If progress differs from that anticipated in the plan required under Section 5.1(b), LICENSEE shall explain the reasons for the difference and, if appropriate or necessary, provide a modified research and development plan for HARVARD's review and approval, such approval not to be unreasonably denied. It is understood that LICENSEE may provide one Progress Report covering all RELATED LICENSE AGREEMENTS. 5.3 LICENSEE shall report to HARVARD the date of its first NET SALE of a LICENSED PRODUCT (or the date of its first use of a LICENSED PROCESS from which SERVICE INCOME is derived) in each country within [*** Redacted] days of occurrence. It is understood that LICENSEE shall be obligated to report the date of first sale of LICENSED PRODUCTS (or the first commercial use of LICENSED PROCESSES) under this Section 5.3 only once for each country. 5.4 (a) LICENSEE shall submit to HARVARD within sixty (60) days after each calendar half year ending June 30 and December 31, a Royalty Report setting forth, for the most recent half year that ended on June 30 or December 31, at least the following information: (i) the number and identification of LICENSED PRODUCTS sold by LICENSEE and its AFFILIATES that constitute a NET SALE, in each country; (ii) total amounts received for such LICENSED PRODUCTS sold by LICENSEE and its AFFILIATES; (iii) an accounting for all LICENSED PROCESSES used or sold by LICENSEE and its AFFILIATES; (iv) deductions applicable to determine the NET SALES thereof; (v) the amount of SUBLICENSE INCOME received by LICENSEE from each sublicensee, and for each sublicensee the categories of LICENSED PRODUCTS sold and gross sales of each category; (vi) the amount of SERVICE INCOME received by LICENSEE; and *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 12 (vii) the amount of royalty due for such reporting period, or, if no royalties are due to HARVARD for such reporting period, the statement that no royalties are due. Such report shall be certified as correct by an officer of LICENSEE and shall include a listing of all deductions from royalties. It is understood that LICENSEE may submit one Royalty Report covering all RELATED LICENSE AGREEMENTS. However, the Royalty Report shall, for each type of income, provide a detailed listing of the RELATED LICENSE AGREEMENTS that are involved. (b) LICENSEE shall pay to HARVARD with each such Royalty Report the amount of royalty due with respect to such half year. If multiple technologies are covered by the license granted hereunder, LICENSEE shall specify which PATENT RIGHTS are utilized for each category of LICENSED PRODUCTS and/or LICENSED PROCESSES for which royalties are separately reported in the Royalty Report. (c) All payments due hereunder shall be deemed received when funds are credited to HARVARD's bank account and shall be payable by check or wire transfer in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the New York Times or the Wall Street Journal) on the last working day of each royalty period. No transfer, exchange, collection or other charges shall be deducted from such payments. If legal restrictions block the removal of local currency from any country where a LICENSED PRODUCT is sold, the royalties payable under this Agreement on NET SALES, SERVICE INCOME and SUBLICENSING INCOME earned in such currency in such country shall continue to be reported and accrued, but will not be paid until such currency may be removed from such country. (d) All plans or reports received under Sections 5.1, 5.2, 5.3, 5.4 shall be deemed Confidential Information of LICENSEE subject to Section 11.1; provided, however, that HARVARD may disclose such information as required by law under Section 11.1(b), and may include in its usual reports the annual amounts of royalties paid. (e) Late payments shall be subject to a charge of one and one-half percent (1.5%) per month, or $250, whichever is greater. 5.5 In the event of acquisition, merger, change of corporate name, or change of make-up, organization, or identity, LICENSEE shall notify HARVARD in writing within thirty (30) days of such event. 5.6 If LICENSEE or any of its sublicensees does not qualify as a "small entity" as provided by the United States Patent and Trademark Office, LICENSEE must notify HARVARD immediately. 13 ARTICLE VI RECORD KEEPING 6.1 LICENSEE shall keep accurate records (together with supporting documentation) of LICENSED PRODUCTS made, used or sold under this Agreement, sufficient to determine the amount of royalties due to HARVARD hereunder. Such records shall be retained for at least three (3) years following the end of the reporting period to which they relate. They shall be available during normal business hours for examination, upon HARVARD's reasonable request, not more than once in any twelve (12) month period and upon at least twenty (20) days prior notice, by an independent accountant under a duty of confidentiality, selected by HARVARD and reasonably acceptable to LICENSEE, for the sole purpose of verifying reports and payments under Section 5.4. In conducting examinations pursuant to this Section, HARVARD's accountant shall have access to records materially relevant to the calculation of royalties under Article IV. 6.2 HARVARD's accountant shall only disclose to HARVARD whether the reports and payments of royalties hereunder are accurate, and the amount of the underreporting or underpayment of royalties by LICENSEE, if any. 6.3 Such examination by HARVARD's accountant shall be at HARVARD's expense, except that if such examination shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then LICENSEE shall pay the reasonable out-of-pocket cost of such examination as well as any additional sum that would have been payable to HARVARD had the LICENSEE reported correctly, plus interest on said sum at the rate of one and one-half percent (1.5%) per month. ARTICLE VII DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE 7.1 Upon execution of this Agreement, LICENSEE shall reimburse HARVARD for all reasonable expenses HARVARD has incurred for the preparation, filing, prosecution and maintenance of PATENT RIGHTS. Thereafter, LICENSEE shall reimburse HARVARD for all such future expenses within thirty (30) days of receipt of invoices from HARVARD. Late payment of these invoices shall be subject to interest charges of one and one-half percent (1.5%) per month. HARVARD shall, in its sole discretion, be responsible for the preparation, filing, prosecution and maintenance of any and all patent applications and patents included in PATENT RIGHTS. HARVARD shall consult with LICENSEE as to the preparation, filing, prosecution and maintenance of such patent applications and patents and shall furnish to LICENSEE copies of documents relevant to any such preparation, filing, prosecution or maintenance. HARVARD shall be responsible for the preparation, filing, prosecution and maintenance of any and all patent applications and patents included in PATENT RIGHTS. HARVARD will instruct counsel to directly notify HARVARD and LICENSEE and 14 provide them copies of any communications to and from the United States and foreign patent offices relating to said prosecution, and drafts of all communications to the various patent offices, and will instruct counsel to consider any comments on such drafts, so that LICENSEE will be informed and apprised of the continuing prosecution of patent applications in PATENT RIGHTS. LICENSEE shall have reasonable opportunity to participate in decision making on key decisions affecting filing, prosecution and maintenance of patents and patent applications in PATENT RIGHTS. 7.2 HARVARD and LICENSEE shall cooperate fully in the preparation, filing, prosecution and maintenance of PATENT RIGHTS and of all patents and patent applications licensed to LICENSEE hereunder, executing all papers and instruments or requiring members of HARVARD to execute such papers and instruments so as to enable HARVARD to apply for, to prosecute and to maintain patent applications and patents in HARVARD's name in any country. Each party shall provide to the other prompt notice as to all matters which come to its attention and which may affect the preparation, filing, prosecution or maintenance of any such patent applications or patents. In particular, LICENSEE must immediately notify HARVARD if LICENSEE does not qualify as a "small entity" as provided by the United States Patent and Trademark Office. 7.3 LICENSEE may elect to surrender its rights to any patent or patent application within PATENT RIGHTS in any country upon sixty (60) days written notice to HARVARD. Such notice shall not relieve LICENSEE from responsibility to reimburse HARVARD for expenses under Section 7.1 relating to the filing, prosecution or maintenance of such patent or patent application incurred prior to the receipt of the written notice by HARVARD (or a longer period if specified in LICENSEE's notice). ARTICLE VIII INFRINGEMENT 8.1 With respect to any PATENT RIGHTS that have not been rendered non-exclusive under Section 3.2(d), LICENSEE shall have the right to enforce in its own name and at its own expense any patents within such PATENT RIGHTS. HARVARD agrees to notify LICENSEE promptly of each infringement of such patents of which HARVARD is or becomes aware. 8.2 (a) If LICENSEE elects to commence an action as described above, HARVARD may, to the extent permitted by law, elect to join as a party in that action. Regardless of whether HARVARD elects to join as a party, HARVARD shall cooperate fully with LICENSEE in connection with any such action, including making available relevant personnel, information, records, papers, samples, specimens and other similar materials for the purposes of such action as reasonably requested by LICENSEE through the Office of Technology and Trademark Licensing at HARVARD. (b) If HARVARD elects to join as a party pursuant to Subsection (a), HARVARD shall jointly control the action with LICENSEE. 15 (c) LICENSEE shall reimburse HARVARD for any out-of-pocket costs HARVARD reasonably incurs, including reasonable attorneys' fees, as part of an action brought by LICENSEE under Section 8.1, whether or not HARVARD becomes a co-plaintiff. 8.3 If LICENSEE elects to commence an action as described above and desires that HARVARD be responsible for some of its expenses as described immediately below, LICENSEE shall explain its strategy to HARVARD in any detail requested by HARVARD. If HARVARD approves of said action in writing, LICENSEE may deduct from its royalty payments to HARVARD with respect to the patent(s) subject to suit an amount not exceeding fifty percent (50%) of LICENSEE's expenses and costs of such action, including reasonable attorneys' fees and reimbursement of amounts under Section 8.2(c) above; provided, however, that such reduction shall not exceed fifty percent (50%) of the total royalty due to HARVARD with respect to the patent(s) subject to suit for each calendar year. If such fifty percent (50%) of LICENSEE's expenses and costs exceeds the amount of royalties deducted by LICENSEE for any calendar year, LICENSEE may to that extent reduce the royalties due to HARVARD from LICENSEE in succeeding calendar years, but never by more than fifty percent (50%) of the total royalty due in any one year with respect to the patent(s) subject to suit. 8.4 Neither party may enter into a settlement, consent judgment or other voluntary final disposition of any suit under Section 8.1, 8.6, 8.7 and 8.8 without the prior written consent of the other party, which consent shall not be unreasonably withheld. 8.5 Recoveries or reimbursements from actions commenced pursuant to this Article shall first be applied to reimburse LICENSEE and HARVARD for litigation costs not paid from royalties deducted by LICENSEE pursuant to Section 8.3. Any remaining recoveries or reimbursements shall be shared as follows: if HARVARD approved of said action(s) as described in Paragraph 8.3, 80% to LICENSEE and 20% to HARVARD, if HARVARD did not approve of said action(s) then any remaining royalties shall be treated as NET SALES and LICENSEE shall pay an earned royalty of [*** Redacted]% to HARVARD. 8.6 If LICENSEE elects not to exercise its right to enforce the PATENT RIGHTS against any infringement pursuant to this Article, HARVARD may do so at its own expense, controlling such action and retaining all recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in connection with any such action. 8.7 Without limiting the generality of Section 8.6, HARVARD may, at its election and by notice to LICENSEE, establish a time limit of one-hundred and eighty (180) days for LICENSEE to decide whether to enforce the PATENT RIGHTS against any infringement of which HARVARD is or becomes aware. If, by the end of such one-hundred and eighty (180) day period, LICENSEE has not (a) commenced such an action; (b) taken reasonable efforts to settle such infringement; or (c) provided HARVARD with a written report that provides LICENSEE's plans to commence such action or settle such infringement in the future and the reasons for any proposed delay in commencing such action or settling such *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 16 infringment, which report must be approved by HARVARD, which approval will not unreasonably be denied or delayed and which approval shall not be construed as giving approval for Paragraph 8.3 purposes, HARVARD may enforce the PATENT RIGHTS against such an infringement at its own expense, controlling such action and retaining all recoveries therefrom. Notwithstanding sections 8.6 and 8.7, HARVARD shall not bring any action alleging the infringement of PATENT RIGHTS against any sublicensee of LICENSEE under PATENT RIGHTS, without the consent of LICENSEE. 8.8 If a declaratory judgment action is brought naming LICENSEE as a defendant and alleging invalidity of any of the PATENT RIGHTS, if both parties agree, HARVARD may take over the sole defense of the action at its own expense. LICENSEE shall cooperate fully with HARVARD in connection with any such action. ARTICLE IX TERMINATION OF AGREEMENT 9.1 The effective date of this Agreement shall be the date that both parties have signed the Agreement. This Agreement, unless terminated as provided herein, shall remain in effect until the last patent or patent application in PATENT RIGHTS has expired or been abandoned. 9.2 HARVARD may terminate this Agreement as follows: (a) If LICENSEE does not make a payment due hereunder and fails to cure such non-payment (including the payment of interest in accordance with Section 5.4(e)) within forty-five (45) days after the date of notice in writing of such non-payment by HARVARD. If LICENSEE disputes the amount of such non-payment in writing within such forty-five (45) day period, HARVARD shall not have the right to terminate this Agreement until it has been determined in an arbitration proceeding under Section 11.10 below that LICENSEE has failed to pay amounts owed hereunder, in which case LICENSEE shall pay HARVARD'S expenses for the arbitration, and thereafter Licensee does not cure such failure within sixty (60) days after such determination. This Section 9.2(a) shall not, however, suspend any obligation of LICENSEE to compensate HARVARD for any undisputed amounts, as provided for under any term of this Agreement, during the pendency of the foregoing arbitration and cure period. (b) If LICENSEE defaults in its obligations under Sections 11.2(c) and 11.2(d) to procure and maintain insurance, and fails to cure such breach within sixty (60) days after notice in writing of such breach by HARVARD. (c) If LICENSEE shall make an assignment for the benefit of creditors, or shall have a petition in bankruptcy filed for or against it, provided that such bankruptcy petition is 17 not dismissed within sixty (60) days after its filing. Such termination shall be effective immediately upon HARVARD giving written notice to LICENSEE. (d) If LICENSEE is convicted of a felony within the United States relating to the manufacture, use, or sale of LICENSED PRODUCTS. (e) Except as provided in Subsections (a), (b), (c), (d) above, if LICENSEE materially breaches any obligations under this Agreement and the breach has not been cured within ninety (90) days after the date of notice in writing of such breach by HARVARD. If LICENSEE disputes in writing that it has materially breached this Agreement within such ninety (90) day period, HARVARD shall not have the right to terminate this Agreement until it has been determined in an arbitration proceeding under Section 11.10 below that LICENSEE has materially breached this Agreement, in which case LICENSEE shall pay HARVARD'S expenses for the arbitration, and thereafter Licensee does not cure such breach within sixty (60) days after such determination. This Section 9.2(e) shall not, however, suspend any obligation of LICENSEE to compensate HARVARD for any undisputed amounts, as provided for under any term of this Agreement, during the pendency of the foregoing arbitration and cure period. 9.3 All sublicenses granted by LICENSEE under this Agreement in compliance with the terms and conditions hereof shall survive the termination of this Agreement upon the request of the party to whom such sublicense is granted, provided that such party agrees in writing that (i) it will pay all royalties or other amounts that otherwise would have been due thereafter under such sublicense directly to HARVARD rather than LICENSEE, and (ii) HARVARD shall not be held liable for the breach or the performance of any obligations stated in such sublicense unless such obligations have been expressly assumed in writing by HARVARD. 9.4 LICENSEE may terminate this Agreement by giving ninety (90) days advance written notice of termination to HARVARD. Upon termination, LICENSEE shall promptly submit a Royalty Report to HARVARD for the final reporting period and any royalty payments incurred during such reporting period, and any unreimbursed patent expenses under Section 7 that have been invoiced by HARVARD, shall become immediately payable with such Royalty Report. 9.5 Articles I, VI, IX, X and XI (except for Section 11.7) of this Agreement shall survive termination. Article VIII shall survive with respect to any infringement of third parties and/or any lawsuits filed by or against LICENSEE, prior to the termination of this Agreement. In the event this Agreement is terminated for any reason, LICENSEE may, within six months after the effective date of such termination, sell or otherwise dispose of all LICENSED PRODUCTS that LICENSEE may have on hand on the effective date of such termination, and fulfill any contracts requiring the use of LICENSED PRODUCTS and/or LICENSED PROCESSES that LICENSEE may have entered into prior to the date of such termination, subject to LICENSEE'S payment of amounts due to HARVARD under Section 4.3 of this Agreement. 18 ARTICLE X REPRESENTATIONS AND WARRANTIES 10.1 Except for the rights, if any, of the Government of the United States, HARVARD represents and warrants that: (a) HARVARD is the owner of the entire right, title and interest in and to the PATENT RIGHTS as they exist on the Effective Date; (b) HARVARD has the right and authority to enter into this Agreement and grant the rights and licenses set forth herein, including without limitation under PATENT RIGHTS; (c) HARVARD has not previously granted, and will not grant in the future, any rights in the PATENT RIGHTS that are inconsistent with the rights and licenses granted to LICENSEE herein; (d) To the best knowledge of HARVARD without having made an investigation, as of the Effective Date, practice of inventions within the PATENT RIGHTS does not infringe any patent rights, trade secrets or other proprietary rights of any third party, (e) To the best knowledge of HARVARD, as of the Effective Date, HARVARD does not own any rights in any other patent or patent application, the claims of which would dominate the claims of a patent or patent application within the PATENT RIGHTS or any practice of PATENT RIGHTS. If HARVARD owns, now or thereafter, any such rights in such patents or patent applications on which Dr. Lieber or Dr. Park is an inventor, HARVARD will negotiate in good faith to the extent it has the legal right to do so with LICENSEE to grant LICENSEE rights to the extent sufficient to practice PATENT RIGHTS, and at commercially reasonable royalties. (f) To the best knowledge of HARVARD, all prior and current agreements between HARVARD and other sponsors of research under which HARVARD has obligations relating to PATENT RIGHTS are listed on Appendix C. 10.2 Except as set forth in this Agreement, HARVARD does not warrant the validity of the PATENT RIGHTS licensed hereunder and makes no representations whatsoever with regard to the scope of the licensed PATENT RIGHTS or that such PATENT RIGHTS may be exploited by LICENSEE, an AFFILIATE, or sublicensee without infringing other patents. 10.3 EXCEPT FOR THE WARRANTIES STATED IN THIS AGREEMENT, HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS OR 19 INFORMATION SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT. ARTICLE XI GENERAL 11.1 (a) The parties may, from time to time, in connection with this Agreement disclose to each other Confidential Information. Any Confidential Information shall be in writing and marked "confidential" and disclosed only to the Office of Technology and Trademark Licensing. As used in this Agreement, "Confidential Information" of a party shall mean (i) any information disclosed in writing by such party to the other party, which is marked by such party with the legend "CONFIDENTIAL" or other similar legend sufficient to identify the information as its confidential information, (ii) any information disclosed orally by such party to the other party which is identified as confidential at the time of disclosure and is confirmed as confidential in writing within thirty (30) days after such time of disclosure, or (iii) any information deemed Confidential Information under the terms of this Agreement. With respect to categories (i) and (ii) above, "Confidential Information" shall not include any information that is: (1) already known to the receiving party at the time of disclosure hereunder, or (2) now or hereafter becomes publicly known other than through acts or omissions of the receiving party, or (3) is disclosed to the receiving party by a third party under no obligation of confidentiality to the disclosing party or (4) is independently developed by the receiving party without use of the Confidential Information of the disclosing party. (b) Each party shall maintain in confidence, and shall not use for any purpose or disclose to any third party, the Confidential Information of the other party. Notwithstanding the foregoing, the receiving party may use or disclose the Confidential Information of the disclosing party (i) to the extent necessary to exercise its rights or fulfill its obligations and/or duties under this Agreement, and (ii) to comply with applicable law or governmental regulations or court order, provided that the receiving party will give reasonable advance notice to the disclosing party, and will use its reasonable efforts to minimize the disclosure of Confidential Information and to secure confidential treatment of any Confidential Information disclosed. (c) The royalty terms of this Agreement shall be deemed "Confidential Information" of both parties. In addition to the permissible disclosures set forth in subsection (b) above, LICENSEE may disclose such terms in confidence to its financial and legal advisors, consultants, potential or actual investors, potential or actual merger or acquisition partners, and others on a need-to-know basis. 11.2 (a) LICENSEE shall indemnify, defend and hold harmless HARVARD and its current or former and future directors, governing board members, trustees, officers, faculty and employees (collectively, the "INDEMNITEES"), from and against any claim, lawsuit, cause of action , liability, cost, expense, damage, deficiency, loss or obligation of any kind or nature (including, without limitation, reasonable attorney's fees and other costs and expenses of litigation) (collectively, "Claims"), based upon, 20 arising out of, or otherwise relating to: LICENSEE'S or any sublicensee's performance of (or failure to perform) any of its obligations under this Agreement or any sublicense agreement, or the practice by LICENSEE or any sublicensee of any right or license granted under this Agreement or any sublicense agreement, or any product, process, or service made, used or sold pursuant to any right or license granted under this Agreement or any sublicense agreement, including without limitation any Claim relating to product liability (whether based on negligence or other tort, warranty, strict liability, or any other theory), except to the extent such Claims are directly attributable to intentional misconduct of any INDEMNITEES. It shall be a condition of the foregoing obligation that (i) LICENSEE receives prompt notice of any such Claims; (ii) LICENSEE is given the exclusive right to control the defense and settlement of such Claims, provided that LICENSEE shall not settle any such Claim without the prior written consent of HARVARD, which consent shall not be unreasonably withheld; and (iii) LICENSEE shall not be obligated to indemnify any INDEMNITEE in connection with any settlement for any Claim unless LICENSEE consents in writing to such settlement. (b) LICENSEE shall, at its own expense, defend against any actions brought or filed against any INDEMNITEE hereunder with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought. (c) Beginning at the time any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a SUBLICENSEE, AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than $[*** Redacted] per incident and $[*** Redacted] annual aggregate and naming the Indemnitees as additional insureds. During clinical trials of any such product, process or service, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in such equal or lesser amount as HARVARD shall require, naming the Indemnitees as additional insureds. Such commercial general liability insurance shall provide: (i) product liability coverage; and (ii) broad form contractual liability coverage for LICENSEE'S indemnification under this Agreement. If LICENSEE elects to self-insure all or part of the limits described above (including deductibles or retentions which are in excess of $[*** Redacted] annual aggregate) such self-insurance program must be acceptable to HARVARD and the Risk Management Foundation of the Harvard Medical Institutions, Inc. in their sole discretion. The minimum amounts of insurance coverage required shall not be construed to create a limit of LICENSEE'S liability with respect to its indemnification under this Agreement. (d) LICENSEE shall provide HARVARD with written evidence of such insurance upon request of HARVARD. LICENSEE shall provide HARVARD with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance; if LICENSEE does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, HARVARD shall have the right to terminate this Agreement in accordance with Section 9.2(b). *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 21 (e) LICENSEE shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during: (i) the period that any product, process, or service, relating to, or developed pursuant to, this Agreement is being commercially distributed or sold by LICENSEE or by a sublicensee, AFFILIATE or agent of LICENSEE; and (ii) a reasonable period after the period referred to in Subsection (e)(i) above which in no event shall be less than fifteen (15) years. 11.3 Nothing in this Agreement shall be construed as conferring any right to use HARVARD's name or insignia, or any adaptation of them, or the name of any of HARVARD's inventors in any advertising, promotional or sales literature without the prior written approval of HARVARD, or the inventor in the case of the use of the name of an inventor. 11.4 Except as stated in this Section 11.4, without the prior written approval of HARVARD in each instance, neither this Agreement nor the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE to any person whether voluntarily or involuntarily, by operation of law or otherwise. LICENSEE may transfer or assign this Agreement and all rights hereunder, upon notice to HARVARD but without its consent, to any entity that succeeds to all or substantially all of the business of LICENSEE to which this Agreements pertains, whether by merger, operation of law, purchase or sale of all or substantially all of LICENSEE'S stock or assets or otherwise; provided that such assignee or transferee promptly agrees in writing to be bound by the terms and conditions of this Agreement. Subject to the foregoing, this Agreement shall be binding upon the respective successors, legal representatives and assignees of HARVARD and LICENSEE. 11.5 The interpretation and application of the provisions of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. 11.6 LICENSEE shall comply with all applicable laws and regulations. In particular, it is understood and acknowledged that the transfer of certain commodities and technical data is subject to United States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations among other things, prohibit or require a license for the export of certain types of technical data to certain specified countries. LICENSEE hereby agrees and gives written assurance that it will comply with all United States laws and regulations controlling the export of commodities and technical data, that it will be solely responsible for any violation of such by LICENSEE or its AFFILIATES or sublicensees, and that it will defend and hold HARVARD harmless in the event of any legal action of any nature occasioned by such violation with respect to LICENSED PRODUCTS. 11.7 LICENSEE agrees: (i) to obtain all regulatory approvals required for the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES; and (ii) to mark LICENSED PRODUCTS with the numbers of the applicable patents within PATENT RIGHTS, to the extent required by law. LICENSEE also agrees to register or record this Agreement as is required by law or regulation in any country where the license is in effect, 22 and HARVARD shall cooperate fully with LICENSEE in connection with any such registration or recordation. 11.8 Any notices to be given hereunder shall be sufficient if signed by the party (or party's attorney) giving same and either: (i) delivered in person; (ii) mailed certified mail return receipt requested; or (iii) faxed to other party if the sender has evidence of successful transmission and if the sender promptly sends the original by ordinary mail, in any event to the following addresses: If to LICENSEE: NanoSys, Inc. 2625 Hanover Street Palo Alto, CA 94304 Attn: Lawrence A. Bock Fax: 650-745-1273 cc: Wilson, Sonsini, Goodrich & Rosati 650 Page Mill Road Palo Alto, California 94304 Attn: Michael J. O'Donnell, Esq. Fax: 650/493-6811 If to HARVARD: Office for Technology and Trademark Licensing Harvard University Holyoke Center, Suite 727 1350 Massachusetts Avenue Cambridge, MA 02138 Fax: (617) 495-9568 By such notice either party may change their address for future notices. Notices delivered in person shall be deemed given on the date delivered. Notices sent by fax shall be deemed given on the date faxed. Notices mailed shall be deemed given on the date postmarked on the envelope. 11.9 Should a court of competent jurisdiction later hold any provision of this Agreement to be invalid, illegal, or unenforceable, and such holding is not reversed on appeal, it shall be considered severed from this Agreement. All other provisions, rights and obligations shall continue without regard to the severed provision, provided that the remaining provisions of this Agreement are in accordance with the intention of the parties. 11.10 In the event of any controversy or claim arising out of or relating to any provision of this Agreement or the breach thereof, the parties shall try to settle such conflict amicably between themselves. Subject to the limitation stated in the final sentence of this Section, any such conflict which the parties are unable to resolve promptly shall be settled through 23 arbitration conducted in accordance with the rules of the American Arbitration Association. The demand for arbitration shall be filed within a reasonable time after the controversy or claim has arisen, and in no event after the date upon which institution of legal proceedings based on such controversy or claim would be barred by the applicable statute of limitation. Such arbitration shall be held in Boston, Massachusetts. The award through arbitration shall be final and binding. Either party may enter any such award in a court having jurisdiction or may make application to such court for judicial acceptance of the award and an order of enforcement, as the case may be. Notwithstanding the foregoing, either party may, without recourse to arbitration, assert against the other party a third-party claim or cross-claim in any action brought by a third party, to which the subject matter of this Agreement may be relevant. 11.11 This Agreement constitutes the entire understanding between the parties and neither party shall be obligated by any condition or representation other than those expressly stated herein or as may be subsequently agreed to by the parties hereto in writing. 11.12 Nothing in this Agreement shall be deemed to prevent LICENSEE from commercializing products similar to or competitive with a LICENSED PRODUCT, so long as LICENSEE complies with its obligations under this Agreement. 11.13 The relationship between HARVARD and LICENSEE established by this Agreement is that of independent contractors. Nothing in this Agreement shall be construed to create any other relationship between HARVARD and LICENSEE. Neither party shall have any right, power or authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other. 11.14 In the event either party hereto is prevented from or delayed in the performance of any of its obligations hereunder by reason of acts of God, war, strikes, riots, storms, fires or any other cause whatsoever beyond the reasonable control of the party, the party so prevented or delayed shall be excused from the performance of any such obligation to the extent and during the period of such prevention or delay. 11.15 NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME. For the avoidance of doubt, the parties acknowledge that the foregoing limitation of liability is not intended to apply to any of the following damages of HARVARD (and accordingly such damages shall be recoverable by HARVARD to the same extent they would be in the absence of that limitation): (i) amounts owed to HARVARD pursuant to the terms of this Agreement; (ii) amounts covered by LICENSEE'S indemnity of Section 11.2; (iii) damages for infringement or violation of any patent, copyright, trademark, or other intellectual 24 property right of HARVARD; and (iv) damages arising from the willful misconduct of LICENSEE. 11.16 HARVARD'S AGGREGATE LIABILITY FOR ALL DAMAGES OF ANY KIND RELATING TO THIS AGREEMENT OR ITS SUBJECT MATTER (WHETHER SUCH DAMAGES ARE BASED ON CONTRACT, TORT, INCLUDING NEGLIGENCE, OR OTHERWISE) SHALL NOT EXCEED THE AMOUNT PAID BY LICENSEE TO HARVARD UNDER THIS AGREEMENT. 11.17 This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives. PRESIDENT AND FELLOWS NANOSYS, INC OF HARVARD COLLEGE /s/ JOYCE BRINTON /s/ LAWRENCE A. BOCK ----------------- -------------------- Joyce Brinton, Director Signature Office for Technology and Trademark Licensing LAWRENCE A. BOCK ---------------- Name PRESIDENT & CEO 9/23/02 --------------- ------- Title Date 10/2/02 ------- Date 25 APPENDIX A The following comprise PATENT RIGHTS: US Provisional Application 60/306,936, filed 7/20/01, a PCT application claiming priority to 60/306,936, filed 7/22/01, Harvard Case #1935. 26 APPENDIX B

CASE LEAD INVENTOR REPORT DATE TITLE AGENCY GRANT NUMBERS - ---- ------------- ----------- ----- ------ ------------- 1935 Lieber, Charles 12/07/01 Nanowire Based memory and Office of Naval Research N00014-01-1-0651 Switching Elements 1935 Lieber, Charles 12/07/01 Nanowire Based memory and Office of Naval Research N00014-00-1-0476 Switching Elements [*** Redacted]

27 EX-10.5.4 6 f97636a4exv10w5w4.txt EXHIBIT 10.5.4 EXHIBIT 10.5.4 EXCLUSIVE LICENSE AGREEMENT Between President and Fellows of Harvard College And NanoSys, Inc Re: Harvard Case #2058 In consideration of the mutual promises and covenants set forth below, the parties hereto agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: 1.1 ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS solely for academic non-commercial research or other not-for-profit scholarly purposes, which use is undertaken at a non-profit or governmental institution. ACADEMIC RESEARCH PURPOSES does not include selling products covered by PATENT RIGHTS or using PATENT RIGHTS in researching, developing, producing or manufacturing products for sale, or performance of services for a fee or other financial consideration. It is understood that using the PATENT RIGHTS to conduct normal research activities at non-profit or governmental institution is within the defined term of ACADEMIC RESEARCH PURPOSES. 1.2 AFFILIATE: any entity which controls, is controlled by, or is under common control with a party. An entity shall be regarded as in control of another entity for purposes of this definition if it owns or controls at least fifty percent (50%) of the shares entitled to vote in the election of directors (or in the case of an entity that is not a corporation, for the election of the corresponding managing authority). Unless otherwise specified, the term LICENSEE includes AFFILIATES. 1.3 FIELD: All fields of use. 1.4 HARVARD: President and Fellows of Harvard College, a nonprofit Massachusetts educational corporation having offices at the Office for Technology and Trademark Licensing, Holyoke Center, Suite 727, 1350 Massachusetts Avenue, Cambridge, Massachusetts 02138. 1.5 LICENSED PROCESSES: methods, processes or procedures covered by at least one VALID CLAIM included within the PATENT RIGHTS. 1.6 LICENSED PRODUCTS: products covered by at least one VALID CLAIM included within the PATENT RIGHTS or products made in accordance with LICENSED PROCESSES. 1.7 LICENSEE: Nanosys, Inc., a corporation organized under the laws of Delaware having its principal offices at 2625 Hanover Street, Palo Alto, CA 94304 1.8 NET SALES: the amounts actually received for sales, leases, or other dispositions of LICENSED PRODUCTS to non-AFFILIATE third parties, less: (a) customary [*** Redacted]; (b) amounts [*** Redacted] by reason of [*** Redacted]; (c) to the extent separately as stated on purchase orders, invoices, or other documents of sale: (i) [*** Redacted] levied on the production, sale, transportation, delivery, importation, exportation, or use of LICENSED PRODUCTS; (ii) charges for [*** Redacted] provided by third parties, including any [*** Redacted] thereon. NET SALES also includes the fair market value of any non-cash consideration received for the sale, lease or other disposition of LICENSED PRODUCTS to non-AFFILIATE third parties; provided NET SALES shall not include any [*** Redacted], payments in consideration for the [*** Redacted] to the intellectual property of LICENSEE or third parties, including the [*** Redacted] hereunder, bona fide [*** Redacted] made in good faith and any payments for [*** Redacted]. In the event that a LICENSED PRODUCT is sold or leased as a combination product containing the LICENSED PRODUCT and one or more other components, NET SALES shall be calculated by multiplying the gross amount invoiced for the sale of the combination product by the fraction [*** Redacted] where A is the [*** Redacted] price of the LICENSED PRODUCT sold separately by LICENSEE, and B is the [*** Redacted] of such other components of the combination products sold separately by LICENSEE during the relevant royalty payment period. In the event a substantial number of such separate sales were not made during the relevant royalty period, then NET SALES shall be reasonably allocated by LICENSEE between such LICENSED PRODUCT and such other components of the combination based on their relative importance or value; provided that such LICENSED PRODUCT and such other components shall not be considered a "combination product" unless such LICENSED PRODUCT is offered for sale or marketed by LICENSEE separately as well as together. If LICENSEE does so allocate, LICENSEE shall promptly deliver to HARVARD a written report providing a detailed explanation of how LICENSEE determined said relative importance or value. All such reports shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE of said allocation of importance or value, HARVARD shall so notify LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with Section 11.10. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 2 1.9 PATENT RIGHTS: PATENT RIGHTS shall include (i) the applications and patents as listed in Appendix A of this Agreement, (ii) any foreign counterparts to such patents and patent applications, (iii) the inventions described and claimed in the foregoing, (iv) any divisions- or continuations of the foregoing, (v) applications from which the patents and applications listed in Appendix A claim priority, and which have been abandoned, and (vi) specific claims of any continuations-in-part of the foregoing to the extent the specific claims are directed to subject matter described in the foregoing in a manner sufficient to support such specific claims under 35 U.S.C. and to the extent Licensable by HARVARD; claims in said continuations-in-part covering minor improvements over the claims of parent patent applications may, at HARVARD'S discretion, be included in PATENT RIGHTS by amendment of this Agreement for no increase in the royalties of Article IV, (vi) all patents issuing on any of the foregoing, and (vii) registrations, renewals, reissues, reexaminations, extensions or patents of addition of any kind with respect to any of such patents. For purposes of this Agreement "Licensable" shall mean those claims of continuations-in-part filed after the Effective Date for which HARVARD has sole ownership (or has been granted the sole right to license by a co-owner) and where there are no obligations to grant licenses to a third party as the result of research support provided to one or more of the inventors. 1.10 SERVICE INCOME: the financial consideration actually received for the utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE which is contracted for by a non-AFFILIATE third party, less the deductions stated in Sections 1.8(a), (b) and (c); provided, however, that such amounts shall only be included in SERVICE INCOME if LICENSEE does not [*** Redacted] with respect to the PATENT RIGHTS licensed in this Agreement on the NET SALE of such LICENSED PRODUCTS or the NET SALE of LICENSED PRODUCTS made in accordance with such use of the LICENSED PROCESSES. SERVICE INCOME shall specifically exclude any [*** Redacted] payments in consideration for the [*** Redacted] of the LICENSEE or third parties, including the sublicensing of rights hereunder, [*** Redacted] made in good faith and any [*** Redacted]. In the event that any service contemplated hereunder includes any services other than the utilization of a [*** Redacted] or [*** Redacted] LICENSEE shall in good faith determine the portion of the payments received for such service that are intended as consideration for the utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE, and such portion shall be used to determine the SERVICE INCOME for such service. In such event, LICENSEE shall promptly deliver to HARVARD a written report detailing such calculation, together with a copy of the applicable provisions of the agreements related to such service. All such reports and provisions of agreements shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE of SERVICE INCOME for such service, HARVARD shall so notify LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with Section 11.10. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 3 1.11 SUBLICENSE INCOME: the amount paid to LICENSEE by a third party (other than an AFFILIATE of LICENSEE for the granting of a sublicense under section 3.1, including but not limited to (i) [*** Redacted] (ii) [*** Redacted] (iii) [*** Redacted] and (vi) the [*** Redacted] in cash of any non-cash consideration for such sublicense, but specifically excluding any [*** Redacted] payments in consideration for the [*** Redacted], [*** Redacted] and any payments for products purchased or services performed. It is understood and agreed that sublicense income received by LICENSEE shall be net of withholding taxes. If LICENSEE sublicenses [*** Redacted] to a third party and at the same time also grants such third party rights to [*** Redacted] or LICENSEE's in licensed non-HARVARD technologies, then all compensation received from the third party for such rights shall be combined and [*** Redacted] that would constitute SUBLICENSE INCOME under Section 1.11 and shall promptly deliver to HARVARD a written report detailing such calculation, together with a copy of the applicable provisions of the agreements with the third party. All such reports and provisions of agreements shall be deemed Confidential Information of LICENSEE subject to Section 11.1. In the event that HARVARD disagrees with the determination made by LICENSEE of SUBLICENSE INCOME, HARVARD shall so notify LICENSEE in writing, and a representative of LICENSEE and a representative of HARVARD shall meet in order to discuss and resolve such disagreement. If such disagreement cannot be resolved within sixty (60) days, such disagreement shall be subject to resolution in accordance with Section 11.10. 1.12 TERRITORY: Worldwide. 1.13 VALID CLAIM: either (i) a claim of an issued patent that has not expired or been held unenforceable or invalid by an agency or a court of competent jurisdiction, and which has not been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise; provided, however, that if the holding of such court or agency is later reversed by a court or agency with overriding authority, the claim shall be reinstated as a Valid Claim with respect to Net Sales made after the date of such reversal, or (ii) a claim of a pending patent *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 4 application that has not been abandoned or finally rejected without the possibility of appeal or re-filing and that has been pending for less than seven (7) years from its priority date, and is being actively prosecuted in good faith. 1.14 The terms "Public Law 96-517" and "Public Law 98-620" include all amendments to those statutes. 1.15 The terms "sold" and "sell" include, without limitation, leases and other dispositions and similar transactions. 1.16 RELATED LICENSE AGREEMENTS: Other patent license agreements between LICENSEE and HARVARD licensing patent rights known internally at HARVARD as Case #1852, #1765, #1923, #1924, #1988, #1678, #1641, #1489, #1352, #1243, #1137, #1816, #1685, #1935, #2058 to LICENSEE. 1.17 DEVELOPMENT PAYMENTS: DEVELOPMENT PAYMENTS shall mean (a) any payments, in consideration for, or to support, research and/or development efforts by LICENSEE to develop inventions claimed in PATENT RIGHTS and (b) any reimbursement of LICENSEE'S patent expenses concerning PATENT RIGHTS. ARTICLE II RECITALS 2.1 HARVARD is owner (or HARVARD will be owner) by assignment from Charles Lieber, Mark S. Gudiksen, Lincoln J. Lauhon, Jianfeng Wang, Xiangfeng Duan, Yi Cui, Yu Huang, Hongkun Park, Qingqiao Wei, Wenjie Liang, Deli Wang, and Zhaohui Zhong of HARVARD and the University of Southhampton of their entire right, title and interest in the United States Patent Application Serial Number 10/152,490, filed May 21, 2002, and 10/196,337 filed July 16th, 2002, and corresponding International Patent Application Serial No. PCT/US 0216133, filed May 21, 2002, all entitled "Nanoscale Wires and Related Devices", and the foreign patent applications corresponding thereto, and in the inventions described and claimed therein. The University of Southhampton was an owner by assignment from David C. Smith, and has assigned its interest to HARVARD, a copy of said assignment is attached in Appendix C. 2.2 HARVARD has the authority to issue licenses under PATENT RIGHTS. 2.3 HARVARD is committed to the policy that ideas or creative works produced at HARVARD should be used for the greatest possible public benefit, and believes that every reasonable incentive should be provided for the prompt introduction of such ideas into public use, all in a manner consistent with the public interest. 2.4 LICENSEE intends to use commercially reasonable efforts to develop the invention(s), and to bring to market at least one product falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in the patent rights licensed under such agreements. 5 2.5 LICENSEE is desirous of obtaining an exclusive license in the TERRITORY in order to practice the above-referenced invention covered by PATENT RIGHTS in the United States and in certain foreign countries, and to manufacture, use and sell in the commercial market the products made in accordance therewith, and HARVARD is desirous of granting such a license to LICENSEE in accordance with the terms of this Agreement. ARTICLE III GRANT OF RIGHTS 3.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the terms and conditions hereof, an exclusive license (except as set forth in Sections 3.2(a) and 3.2(b)) under PATENT RIGHTS in the TERRITORY and in the FIELD (i) to make and have made, to use and have used, to sell and have sold, to offer for sale, import, export, or otherwise distribute the LICENSED PRODUCTS, (ii) to practice the LICENSED PROCESSES, and (iii) to otherwise fully exploit the PATENT RIGHTS, and (iv) to have the foregoing performed on behalf of LICENSEE by a third party, in each case for the life of the PATENT RIGHTS. The foregoing license under PATENT RIGHTS shall include the full right to grant sublicenses, and LICENSEE shall promptly provide copies of any sublicenses of PATENT RIGHTS to HARVARD for its review. Unless HARVARD has rendered the license under PATENT RIGHTS non-exclusive under Section 3.2(c), and with the exception of rights already granted to Nantero, Inc., under HARVARD Case #1641, as provided in Section 3.2(b)(ii), below, HARVARD agrees that it will not grant licenses under PATENT RIGHTS to others nor make, use, sell, offer for sale, import or otherwise exploit PATENT RIGHTS itself except as required by HARVARD'S obligations in Section 3.2(a) or as permitted in Sections 3.2(b)(i) and 3.2(f). 3.2 The granting and exercise of this license is subject to the following conditions: (a) HARVARD'S "Statement of Policy in Regard to Inventions, Patents and Copyrights," dated August 10, 1998, Public Law 96-517 and Public Law 98-620, and HARVARD'S obligations under prior or current agreements with other sponsors of research and, with regard to continuations-in-part contained in the PATENT RIGHTS, any future agreements with other sponsors of research related to such continuations-in-part. Any right granted in this Agreement greater than that permitted under Public Law 96-517, or Public Law 98-620, shall be subject to modification to the extent required to conform to the provisions of those statutes. (b) (i) HARVARD reserves the right to make and use, and grant to other non-profit or governmental institutions non-exclusive licenses to make and use, in each case solely for ACADEMIC RESEARCH PURPOSES the subject matter described and claimed in PATENT RIGHTS. HARVARD shall promptly notify LICENSEE of any rights granted to any third party (other than the U.S. government) under Sections 3.2(a) and (b). (c) (ii) LICENSEE expressly recognizes that Nantero, Inc. ("NANTERO") currently has a limited license under PATENT RIGHTS, to the extent PATENT RIGHTS are included in NANTERO'S co-exclusive license under the patent rights comprising 6 HARVARD case #1641 (but not to practice any technology of PATENT RIGHTS that is not within the technology of HARVARD case #1641). (d) LICENSEE shall use commercially reasonable efforts to effect introduction into the commercial market at least one product falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in PATENT RIGHTS within seven and one half (7.5) years of the effective date of this Agreement; thereafter, until the expiration of this Agreement, LICENSEE shall use commercially reasonable efforts to endeavor to keep any such product reasonably available to the public so long as it shall be a sound and reasonable commercial practice to do so. At any time after seven and one half (7.5) years from the effective date of this Agreement, HARVARD may render this license non-exclusive if LICENSEE has not, either by itself or through a sublicensee: (i) introduced into commercial use at least one product falling within the definition of LICENSED PRODUCT or made by a LICENSED PROCESS; and (ii) used commercially reasonable efforts to put the licensed subject matter into commercial use as broadly as commercially reasonable in one or more of the countries hereby licensed, directly or through a sublicense, as described in LICENSEE'S development plan required by Paragraph 5.1 (b);and (iii) used commercially reasonable efforts to keep products falling within the definition of LICENSED PRODUCT or otherwise embodying the subject matter described or claimed in PATENT RIGHTS reasonably available to the public so long as it shall be a sound and reasonable commercial practice to do so; and (iv) engaged in research, development, manufacturing, marketing or sublicensing activity that is commercially reasonably appropriate to achieving Section 3.2(d)(ii) or 3.2(d)(iii). (e) In all sublicenses granted by LICENSEE hereunder, LICENSEE shall include a requirement that the sublicensee use commercially reasonable efforts to put the subject matter of the sublicense into commercial use, provided that such sublicensee is authorized to develop and sell to the public a new product covered by PATENT RIGHTS on its own behalf. LICENSEE shall further provide that such sublicenses are subject and subordinate to the terms and conditions of this Agreement, except for the rate of royalty on NET SALES paid by such sublicensee to the LICENSEE. Copies of all sublicense agreements hereunder shall be provided promptly to HARVARD. Such copies of sublicense agreements may be provided to HARVARD in redacted form, provided that such copies contain all relevant terms necessary for HARVARD to monitor LICENSEE'S compliance with the terms of this Agreement. 7 Unredacted copies of said sublicense agreements shall be made available for review by HARVARD or its representatives at LICENSEE'S Medford, MA facility, or whichever facility is closest to HARVARD, within one week, of HARVARD'S request. All sublicense agreements of LICENSEE provided to HARVARD shall be deemed Confidential Information of LICENSEE subject to Section 11.1. (f) At any time five (5) years after the effective date of this Agreement, if LICENSEE is unable or unwilling to grant sublicenses, either as suggested by HARVARD or by a potential sublicensee or otherwise, then HARVARD may directly license such potential sublicensee, but only if: (i) LICENSEE is not currently pursuing development of LICENSED PRODUCTS for the same application, or an application that is reasonably competitive with the application as contemplated by the potential sublicensee, as demonstrated by annual progress reports from LICENSEE required by Paragraph 5.2, or the research and development plan required by Paragraph 5.1(b) of this agreement or within a one-year period LICENSEE makes a commitment to do so , said commitment being satisfied by a written research and development plan, acceptable to HARVARD and said acceptance given within the one-year period, said acceptance not to be unreasonably denied. (if, in subsequent reports by LICENSEE to HARVARD as required under Section 5.2, LICENSEE fails to develop any applications according to the research and development plan, as potentially amended according to Section 5.2, such applications become subject to this Paragraph); (ii) the granting of such a license by HARVARD to the potential sublicensee will increase the availability of useful products to the public, and (iii) HARVARD notifies LICENSEE of its intention to grant such license and permits LICENSEE a reasonable period to negotiate a sublicense on its own, said reasonable period, unless otherwise agreed to by the Parties, shall be no less than 6 months, nor greater than 12 months. (g) To the extent required by law, until this license is rendered non-exclusive in the United States under Section 3.2 (d), LICENSEE shall cause any LICENSED PRODUCT produced for sale in the United States to be manufactured substantially in the United States. (h) HARVARD recognizes that LICENSEE'S success in meeting the obligations set forth in this paragraph may be enhanced by consultation with the inventor(s) of the PATENT RIGHTS. Accordingly, Harvard will use reasonable efforts to make such inventors reasonably available to LICENSEE for such consultation. 3.3 All rights reserved to the United States Government and others under Public Law 96-517, and Public Law 98-620, shall remain and shall in no way be affected by this Agreement. 3.4 HARVARD shall promptly notify LICENSEE when any new patent or patent application arises from (i) research conducted in the laboratory of Dr. Lieber or Dr. Park, or (ii) improvements made by HARVARD under the direction of Dr. Lieber or Dr. Park on the subject matter described in PATENT RIGHTS. If LICENSEE so requests and the intellectual property is available for licensing, HARVARD will evaluate in good faith LICENSEE'S proposal along with proposals received from any third parties. Any decision to grant a license to LICENSEE shall be subject to approval by HARVARD'S Committee 8 on Patents and Copyrights. In the event LICENSEE and HARVARD cannot agree on terms for a license to any new intellectual property which is dominated by PATENT RIGHTS, HARVARD shall not offer any third party terms more favorable, in toto, than the terms offered to LICENSEE. ARTICLE IV ROYALTIES 4.1 LICENSEE shall owe to HARVARD a non-refundable license royalty fee in the sum of [*** Redacted] ($[*** Redacted]) dollars upon execution of this Agreement, which shall be payable within thirty days of this Agreement becoming effective. 4.2 As consideration for the rights granted hereunder, LICENSEE shall pay to HARVARD a non-refundable fee in the form of stock of LICENSEE as follows: (i) LICENSEE shall issue to HARVARD and HARVARD shall purchase ten thousand (10,000) fully vested shares, at a price per share of $0.19 per share and an aggregate value of $1,900.00 of LICENSEE'S common stock upon execution of this Agreement, provided, however, that HARVARD shall be subject to and enter into (1) appropriate agreements and related documents as required of other stockholders of LICENSEE, including without limitation a Common Stock Purchase Agreement, and (2) a Voting Agreement by and among the LICENSEE, HARVARD and certain other holders of common stock of LICENSEE dated as of even date hereof. (ii) HARVARD'S ownership rights to Shares shall not be affected should the license pursuant to this Agreement be terminated by LICENSEE or HARVARD. 4.3 (a) LICENSEE shall pay to HARVARD during the term of this Agreement a royalty on NET SALES by LICENSEE according to the following schedule: (i) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] applications; (ii) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] applications; or (iii) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted] excluding [*** Redacted] applications and [*** Redacted] applications. In the event, any NET SALES by LICENSEE reasonably falls within more than one of categories (i) to (iii) above, LICENSEE shall pay to HARVARD the lowest applicable royalty set forth in such categories. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 9 (b) For each LICENSED PRODUCT sold by LICENSEE, LICENSEE may credit up to [*** Redacted] of royalties that LICENSEE is paying to third parties (or HARVARD under agreements not included within section 4.3(c)) on LICENSEE'S sales of that LICENSED PRODUCT, provided that the royalty paid to HARVARD shall not be reduced below [*** Redacted] percent ([*** Redacted]%) of the NET SALES of that LICENSED PRODUCT for which such third party royalties are being paid. LICENSEE may only offset royalties owed under license agreements to third parties where said license agreements provide for similar offsets of comparable scale of third party royalties. Any such offsets must be specifically and thoroughly reported in the royalty reports required by Paragraph 5.4. (c) In the event that sales of a LICENSED PRODUCT are subject to the payment of royalties under one or more of the RELATED LICENSE AGREEMENTS or any license agreements with HARVARD with the same effective date as this Agreement, then the total royalty payment due HARVARD under all such agreements including this Agreement shall be at most the royalty payment due under this Section 4.3 on such NET SALE, no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such agreement. LICENSEE shall notify HARVARD of the identity of each license agreement that includes patent rights covering the product or process, and HARVARD shall distribute the royalties evenly among such agreements, including this Agreement. (d) LICENSEE shall pay HARVARD [*** Redacted] percent ([*** Redacted]%) of SUBLICENSE INCOME received by LICENSEE for a sublicense of PATENT RIGHTS. If compensation for such a sublicense of PATENT RIGHTS is bundled with compensation received for the sublicensing of the other HARVARD patents rights or other HARVARD intellectual property licensed to LICENSEE under the RELATED LICENSE AGREEMENTS or any agreements with HARVARD having the same effective date as this Agreement, then LICENSEE shall pay HARVARD at most the royalty payment due under this Section 4.3(d) for such SUBLICENSE INCOME no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such license agreements. In such a case, LICENSEE shall notify HARVARD of the identity of each license agreement involved and HARVARD shall distribute the royalties equally among those license agreements, including this Agreement. (e) For provision of services under PATENT RIGHTS, LICENSEE shall pay a royalty of [*** Redacted] percent ([*** Redacted]%) of SERVICE INCOME received by LICENSEE from each and every third party ("Third Party") to whom LICENSEE provides such services. In the event any services from which SERVICE INCOME is derived are subject to the payment of royalties under the RELATED LICENSE AGREEMENTS or any agreement with HARVARD having the same effective date as this Agreement, then the total royalty due under all such agreements, including this Agreement, shall be at most the royalty payment due under this Section 4.3 on such services, no matter how many license agreements from HARVARD are involved, and notwithstanding the terms of any such license agreements. In such event, LICENSEE shall notify HARVARD of the identity of each license agreement involved and HARVARD shall distribute the royalties equally among those license agreements, including this Agreement. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 10 (f) If the license pursuant to this Agreement is converted to a non-exclusive one under Section 3.2(d) and if another non-exclusive license to any of PATENT RIGHTS is granted or otherwise exists for any field or territory, then the royalty rate of this Agreement shall be adjusted so as not to exceed the royalty rate payable by such other non-exclusive licensee under such PATENT RIGHTS in such field or territory, provided that LICENSEE agrees to amend this Agreement to include terms requested by HARVARD that have been accepted by such other non-exclusive licensee. (g) On sales between LICENSEE and its AFFILIATES for resale, the royalty shall be paid on the NET SALES of the AFFILIATE. (h) In the event that more than one VALID CLAIM within PATENT RIGHTS is applicable to any LICENSED PRODUCT subject to royalties under this Section 4.3, then only one royalty shall be paid to HARVARD in respect of such LICENSED PRODUCT. In no event shall more than one royalty be due to HARVARD with respect to any LICENSED PRODUCT unit; nor shall a royalty be payable under this Section 4.3 with respect to sales of LICENSED PRODUCTS for clinical trials nor the use of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE for such a purpose whether or not in collaboration with a third party. 4.4 No later than January 1 of each calendar year after the effective date of this Agreement, LICENSEE shall pay to HARVARD the following non-refundable license maintenance royalty and/or advance on royalties. Such payments may be credited against running royalties due for that calendar year and Royalty Reports shall reflect such a credit. Such payments shall not be credited against milestone payments (if any) nor against royalties due for any subsequent calendar year. January 1, 2004 $ [*** Redacted] January 1, 2005 $ [*** Redacted] January 1, 2006 $ [*** Redacted] January 1, 2007 $ [*** Redacted] January 1, 2008 $ [*** Redacted] January 1, 2009 $ [*** Redacted] January 1, 2010 $ [*** Redacted] each January 1 thereafter $ [*** Redacted] ARTICLE V REPORTING 5.1 a) In compliance of earlier RELATED LICENSE AGREEMENTS, LICENSEE has provided to HARVARD a written research and development plan acceptable to LICENSEE'S investors under which LICENSEE intends to bring the subject matter of the *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 11 earlier RELATED LICENSE AGREEMENTS (though not specifically of this Agreement) granted earlier into commercial use. Such plan included projections of sales and proposed marketing efforts. b) LICENSEE agrees to provide, no later than three (3) years after the effective date of this Agreement, a written research and development plan, under which LICENSEE intends to bring the subject matter of PATENT RIGHTS into commercial use. Such research and development plan shall be subject to the written approval or disapproval of HARVARD, which written approval shall not be unreasonably withheld. Failure to provide written disapproval within 60 days of receipt of such research and development plan shall constitute HARVARD'S approval in accordance with this section. Such a plan shall include a description of each LICENSED PRODUCT to be developed, a developmental timeline showing the technical, regulatory, business and marketing steps (benchmarks) needed to bring the LICENSED PRODUCT into commercial use and the resources in funds and personnel that LICENSEE will bring to bear for the successful accomplishment of each such step, and shall include projected sales and a proposed marketing effort 5.2 No later than sixty (60) days after June 30 of each calendar year, LICENSEE shall provide to HARVARD a written annual Progress Report describing progress on the commercialization of PATENT RIGHTS during the most recent twelve (12) period ending June 30, the amount of LICENSEE'S R&D spending relating to the subject matter described or claimed in PATENT RIGHTS during such time, and plans for the forthcoming year. If multiple technologies are covered by the license granted hereunder, the Progress Report shall provide the information set forth above for each technology. If progress differs from that anticipated in the plan required under Section 5.1(b), LICENSEE shall explain the reasons for the difference and, if appropriate or necessary, provide a modified research and development plan for HARVARD'S review and approval, such approval not to be unreasonably denied. It is understood that LICENSEE may provide one Progress Report covering all RELATED LICENSE AGREEMENTS. 5.3 LICENSEE shall report to HARVARD the date of its first NET SALE of a LICENSED PRODUCT (or the date of its first use of a LICENSED PROCESS from which SERVICE INCOME is derived) in each country within thirty (30) days of occurrence. It is understood that LICENSEE shall be obligated to report the date of first sale of LICENSED PRODUCTS (or the first commercial use of LICENSED PROCESSES) under this Section 5.3 only once for each country. 5.4 (a) LICENSEE shall submit to HARVARD within sixty (60) days after each calendar half year ending June 30 and December 31, a Royalty Report setting forth, for the most recent half year that ended on June 30 and December 31, at least the following information: (i) the number and identification of LICENSED PRODUCTS sold by LICENSEE and its AFFILIATES that constitute a NET SALE, in each country; 12 (ii) total amounts received for such LICENSED PRODUCTS sold by LICENSEE and its AFFILIATES; (iii) an accounting for all LICENSED PROCESSES used or sold by LICENSEE and its AFFILIATES; (iv) deductions applicable to determine the NET SALES thereof; (v) the amount of SUBLICENSE INCOME received by LICENSEE from each sublicensee, and for each sublicensee the categories of LICENSED PRODUCTS sold and gross sales of each category; (vi) the amount of SERVICE INCOME received by LICENSEE; and (vii) the amount of royalty due for such reporting period, or, if no royalties are due to HARVARD for such reporting period, the statement that no royalties are due. Such report shall be certified as correct by an officer of LICENSEE and shall include a listing of all deductions from royalties. It is understood that LICENSEE may submit one Royalty Report covering all RELATED LICENSE AGREEMENTS. However, the Royalty Report shall, for each type of income, provide a detailed listing of the RELATED LICENSE AGREEMENTS that are involved. (b) LICENSEE shall pay to HARVARD with each such Royalty Report the amount of royalty due with respect to such half year. If multiple technologies are covered by the license granted hereunder, LICENSEE shall specify which PATENT RIGHTS are utilized for each category of LICENSED PRODUCTS and/or LICENSED PROCESSES for which royalties are separately reported in the Royalty Report. (c) All payments due hereunder shall be deemed received when funds are credited to HARVARD'S bank account and shall be payable by check or wire transfer in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the New York Times or the Wall Street Journal) on the last working day of each royalty period. No transfer, exchange, collection or other charges shall be deducted from such payments. If legal restrictions block the removal of local currency from any country where a LICENSED PRODUCT is sold, the royalties payable under this Agreement on NET SALES, SERVICE INCOME and SUBLICENSING INCOME earned in such currency in such country shall continue to be reported and accrued, but will not be paid until such currency may be removed from such country. (d) All plans or reports received under Sections 5.1, 5.2, 5.3, 5.4 shall be deemed Confidential Information of LICENSEE subject to Section 11.1; provided, however, that HARVARD may disclose such information as required by law under Section 1l.l(b), and may include in its usual reports the annual amounts of royalties paid. 13 (e) Late payments shall be subject to a charge of one and one-half percent (1.5%) per month, or $250, whichever is greater. 5.5 In the event of acquisition, merger, change of corporate name, or change of make-up, organization, or identity, LICENSEE shall notify HARVARD in writing within [*** Redacted] days of such event. 5.6 If LICENSEE or any of its sublicensees does not qualify as a "small entity" as provided by the United States Patent and Trademark Office, LICENSEE must notify HARVARD immediately. ARTICLE VI RECORD KEEPING 6.1 LICENSEE shall keep accurate records (together with supporting documentation) of LICENSED PRODUCTS made, used or sold under this Agreement, sufficient to determine the amount of royalties due to HARVARD hereunder. Such records shall be retained for at least three (3) years following the end of the reporting period to which they relate. They shall be available during normal business hours for examination, upon HARVARD'S reasonable request, not more than once in any twelve (12) month period and upon at least twenty (20) days prior notice, by an independent accountant under a duty of confidentiality, selected by HARVARD and reasonably acceptable to LICENSEE, for the sole purpose of verifying reports and payments under Section 5.4. In conducting examinations pursuant to this Section, HARVARD'S accountant shall have access to records materially relevant to the calculation of royalties under Article IV. 6.2 HARVARD'S accountant shall only disclose to HARVARD whether the reports and payments of royalties hereunder are accurate, and the amount of the underreporting or underpayment of royalties by LICENSEE, if any. 6.3 Such examination by HARVARD'S accountant shall be at HARVARD'S expense, except that if such examination shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then LICENSEE shall pay the reasonable out-of-pocket cost of such examination as well as any additional sum that would have been payable to HARVARD had the LICENSEE reported correctly, plus interest on said sum at the rate of one and one-half percent (1.5%) per month. ARTICLE VII DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE 7.1 Upon execution of this Agreement, LICENSEE shall reimburse HARVARD for all reasonable expenses HARVARD has incurred for the preparation, filing, prosecution and *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 14 maintenance of PATENT RIGHTS. Thereafter, LICENSEE shall reimburse HARVARD for all such future expenses within [*** Redacted] days of receipt of invoices from HARVARD. Late payment of these invoices shall be subject to interest charges of one and one-half percent (1.5%) per month. HARVARD shall, in its sole discretion, be responsible for the preparation, filing, prosecution and maintenance of any and all patent applications and patents included in PATENT RIGHTS. HARVARD shall consult with LICENSEE as to the preparation, filing, prosecution and maintenance of such patent applications and patents and shall furnish to LICENSEE copies of documents relevant to any such preparation, filing, prosecution or maintenance. HARVARD shall be responsible for the preparation, filing, prosecution and maintenance of any and all patent applications and patents included in PATENT RIGHTS. HARVARD will instruct counsel to directly notify HARVARD and LICENSEE and provide them copies of any communications to and from the United States and foreign patent offices relating to said prosecution, and drafts of all communications to the various patent offices, and will instruct counsel to consider any comments on such drafts, so that LICENSEE will be informed and apprised of the continuing prosecution of patent applications in PATENT RIGHTS. LICENSEE shall have reasonable opportunity to participate in decision making on key decisions affecting filing, prosecution and maintenance of patents and patent applications in PATENT RIGHTS. 7.2 HARVARD and LICENSEE shall cooperate fully in the preparation, filing, prosecution and maintenance of PATENT RIGHTS and of all patents and patent applications licensed to LICENSEE hereunder, executing all papers and instruments or requiring members of HARVARD to execute such papers and instruments so as to enable HARVARD to apply for, to prosecute and to maintain patent applications and patents in HARVARD'S name in any country. Each party shall provide to the other prompt notice as to all matters which come to its attention and which may affect the preparation, filing, prosecution or maintenance of any such patent applications or patents. In particular, LICENSEE must immediately notify HARVARD if LICENSEE does not qualify as a "small entity" as provided by the United States Patent and Trademark Office. 7.3 LICENSEE may elect to surrender its rights to any patent or patent application within PATENT RIGHTS in any country upon sixty (60) days written notice to HARVARD. Such notice shall not relieve LICENSEE from responsibility to reimburse HARVARD for expenses under Section 7.1 relating to the filing, prosecution or maintenance of such patent or patent application incurred prior to the receipt of the written notice by HARVARD (or a longer period if specified in LICENSEE'S notice). ARTICLE VIII INFRINGEMENT 8.1 With respect to any PATENT RIGHTS that have not been rendered non-exclusive under Section 3.2(d), LICENSEE shall have the right to enforce in its own name and at its own expense any patents within such PATENT RIGHTS. HARVARD agrees to notify *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 15 LICENSEE promptly of each infringement of such patents of which HARVARD is or becomes aware. 8.2 (a) If LICENSEE elects to commence an action as described above, HARVARD may, to the extent permitted by law, elect to join as a party in that action. Regardless of whether HARVARD elects to join as a party, HARVARD shall cooperate fully with LICENSEE in connection with any such action, including making available relevant personnel, information, records, papers, samples, specimens and other similar materials for the purposes of such action as reasonably requested by LICENSEE through the Office of Technology and Trademark Licensing at HARVARD. (b) If HARVARD elects to join as a party pursuant to Subsection (a), HARVARD shall jointly control the action with LICENSEE. (c) LICENSEE shall reimburse HARVARD for any out-of-pocket costs HARVARD reasonably incurs, including reasonable attorneys' fees, as part of an action brought by LICENSEE under Section 8.1, whether or not HARVARD becomes a co-plaintiff. 8.3 If LICENSEE elects to commence an action as described above and desires that HARVARD be responsible for some of its expenses as described immediately below, LICENSEE shall explain its strategy to HARVARD in any detail requested by HARVARD. If HARVARD approves of said action in writing, LICENSEE may deduct from its royalty payments to HARVARD with respect to the patent(s) subject to suit an amount not exceeding fifty percent (50%) of LICENSEE'S expenses and costs of such action, including reasonable attorneys' fees and reimbursement of amounts under Section 8.2(c) above; provided, however, that such reduction shall not exceed fifty percent (50%) of the total royalty due to HARVARD with respect to the patent(s) subject to suit for each calendar year. If such fifty percent (50%) of LICENSEE's expenses and costs exceeds the amount of royalties deducted by LICENSEE for any calendar year, LICENSEE may to that extent reduce the royalties due to HARVARD from LICENSEE in succeeding calendar years, but never by more than fifty percent (50%) of the total royalty due in any one year with respect to the patent(s) subject to suit. 8.4 Neither party may enter into a settlement, consent judgment or other voluntary final disposition of any suit under Section 8.1, 8.6, 8.7 and 8.8 without the prior written consent of the other party, which consent shall not be unreasonably withheld. 8.5 Recoveries or reimbursements from actions commenced pursuant to this Article shall first be applied to reimburse LICENSEE and HARVARD for litigation costs not paid from royalties deducted by LICENSEE pursuant to Section 8.3. Any remaining recoveries or reimbursements shall be shared as follows: if HARVARD approved of said action(s) as described in Paragraph 8.3, 80% to LICENSEE and 20% to HARVARD, if HARVARD did not approve of said action(s) then any remaining recoveries shall be treated as net sales and LICENSEE shall pay an earned royalty of [*** Redacted]% to HARVARD. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 16 8.6 If LICENSEE elects not to exercise its right to enforce the PATENT RIGHTS against any infringement pursuant to this Article, HARVARD may do so at its own expense, controlling such action and retaining all recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in connection with any such action. 8.7 Without limiting the generality of Section 8.6, HARVARD may, at its election and by notice to LICENSEE, establish a time limit of one- hundred and eighty days for LICENSEE to decide whether to enforce the PATENT RIGHTS against any infringement of which HARVARD is or becomes aware. If, by the end of such one-hundred and eighty day period, LICENSEE has not (a) commenced such an action; (b) taken reasonable efforts to settle such infringement; or (c) provided HARVARD with a written report that provides LICENSEE'S plans to commence such action or settle such infringement in the future and the reasons for any proposed delay in commensing such action or settling such infringment, which report must be approved by HARVARD, which approval will not unreasonably be denied or delayed and which approval shall not be construed as giving approval for Paragraph 8.3 purposes, HARVARD may enforce the PATENT RIGHTS against such an infringement at its own expense, controlling such action and retaining all recoveries therefrom. Notwithstanding sections 8.6 and 8.7, HARVARD shall not bring any action alleging the infringement of PATENT RIGHTS against any sublicensee of LICENSEE under PATENT RIGHTS, without the consent of LICENSEE. 8.8 If a declaratory judgment action is brought naming LICENSEE as a defendant and alleging invalidity of any of the PATENT RIGHTS, if both parties agree, HARVARD may take over the sole defense of the action at its own expense. LICENSEE shall cooperate fully with HARVARD in connection with any such action. ARTICLE IX TERMINATION OF AGREEMENT 9.1 The effective date of this Agreement shall be the date that both parties have signed the Agreement. This Agreement, unless terminated as provided herein, shall remain in effect until the last patent or patent application in PATENT RIGHTS has expired or been abandoned. 9.2 HARVARD may terminate this Agreement as follows: (a) If LICENSEE does not make a payment due hereunder and fails to cure such nonpayment (including the payment of interest in accordance with Section 5.4(e)) within forty-five days after the date of notice in writing of such non-payment by HARVARD. If LICENSEE disputes the amount of such non-payment in writing within such forty-five day period, HARVARD shall not have the right to terminate this Agreement until it has been determined in an arbitration proceeding under Section 11.10 below that LICENSEE has failed to pay amounts owed hereunder, in which case LICENSEE shall pay HARVARD'S expenses for the 17 arbitration, and thereafter Licensee does not cure such failure within sixty (60) days after such determination. This Section 9.2(a) shall not, however, suspend any obligation of LICENSEE to compensate HARVARD for any undisputed amounts, as provided for under any term of this Agreement, during the pendency of the foregoing arbitration and cure period. (b) If LICENSEE defaults in its obligations under Sections 11.2(c) and 11.2(d) to procure and maintain insurance, and fails to cure such breach within sixty (60) days after notice in writing of such breach by HARVARD. (c) If LICENSEE shall make an assignment for the benefit of creditors, or shall have a petition in bankruptcy filed for or against it, provided that such bankruptcy petition is not dismissed within sixty (60) days after its filing. Such termination shall be effective immediately upon HARVARD giving written notice to LICENSEE. (d) If LICENSEE is convicted of a felony within the United States relating to the manufacture, use, or sale of LICENSED PRODUCTS. (e) Except as provided in Subsections (a), (b), (c), (d) above, if LICENSEE materially breaches any obligations under this Agreement and the breach has not been cured within ninety (90) days after the date of notice in writing of such breach by HARVARD. If LICENSEE disputes in writing that it has materially breached this Agreement within such ninety (90) day period, HARVARD shall not have the right to terminate this Agreement until it has been determined in an arbitration proceeding under Section 11.10 below that LICENSEE has materially breached this Agreement, in which case LICENSEE shall pay HARVARD'S expenses for the arbitration, and thereafter Licensee does not cure such breach within sixty (60) days after such determination. This Section 9.2(e) shall not, however, suspend any obligation of LICENSEE to compensate HARVARD for any undisputed amounts, as provided for under any term of this Agreement, during the pendency of the foregoing arbitration and cure period. 9.3 All sublicenses granted by LICENSEE under this Agreement in compliance with the terms and conditions hereof shall survive the termination of this Agreement upon the request of the party to whom such sublicense is granted, provided that such party agrees in writing that (i) it will pay all royalties or other amounts that otherwise would have been due thereafter under such sublicense directly to HARVARD rather than LICENSEE, and (ii) HARVARD shall not be held liable for the breach or the performance of any obligations stated in such sublicense unless such obligations have been expressly assumed in writing by HARVARD. 9.4 LICENSEE may terminate this Agreement by giving ninety (90) days advance written notice of termination to HARVARD. Upon termination, LICENSEE shall promptly submit a Royalty Report to HARVARD for the final reporting period and any royalty payments incurred during such reporting period, and any unreimbursed patent expenses 18 under Section 7 that have been invoiced by HARVARD, shall become immediately payable with such Royalty Report. 9.5 Articles I, VI, IX, X and XI (except for Section 11.7) of this Agreement shall survive termination. Article VIII shall survive with respect to any infringement of third parties and/or any lawsuits filed by or against LICENSEE, prior to the termination of this Agreement. In the event this Agreement is terminated for any reason, LICENSEE may, within six months after the effective date of such termination, sell or otherwise dispose of all LICENSED PRODUCTS that LICENSEE may have on hand on the effective date of such termination, and fulfill any contracts requiring the use of LICENSED PRODUCTS and/or LICENSED PROCESSES that LICENSEE may have entered into prior to the date of such termination, subject to LICENSEE'S payment of amounts due to HARVARD under Section 4.3 of this Agreement. ARTICLE X REPRESENTATIONS AND WARRANTIES 10.1 Except for the rights, if any, of the Government of the United States, HARVARD represents and warrants that: (a) HARVARD is the owner of the entire right, title and interest in and to the PATENT RIGHTS as they exist on the Effective Date; (b) HARVARD has the right and authority to enter into this Agreement and grant the rights and licenses set forth herein, including without limitation under PATENT RIGHTS; (c) HARVARD has not previously granted, and will not grant in the future, any rights in the PATENT RIGHTS that are inconsistent with the rights and licenses granted to LICENSEE herein; (d) To the best knowledge of HARVARD without having made an investigation, as of the Effective Date, practice of inventions within the PATENT RIGHTS does not infringe any patent rights, trade secrets or other proprietary rights of any third party, (e) To the best knowledge of HARVARD, as of the Effective Date, HARVARD does not own any rights in any other patent or patent application, the claims of which would dominate the claims of a patent or patent application within the PATENT RIGHTS or any practice of PATENT RIGHTS. If HARVARD owns, now or thereafter, any such rights in such patents or patent applications on which Dr. Lieber or Dr. Park is an inventor, HARVARD will negotiate in good faith to the extent it has the legal right to do so with LICENSEE to grant LICENSEE rights to the extent sufficient to practice PATENT RIGHTS, and at commercially reasonable royalties. (f) To the best knowledge of HARVARD, all prior and current agreements between HARVARD and other sponsors of research under which HARVARD has obligations relating to PATENT RIGHTS are listed on Appendix C. 19 10.2 Except as set forth in this Agreement, HARVARD does not warrant the validity of the PATENT RIGHTS licensed hereunder and makes no representations whatsoever with regard to the scope of the licensed PATENT RIGHTS or that such PATENT RIGHTS may be exploited by LICENSEE, an AFFILIATE, or sublicensee without infringing other patents. 10.3 EXCEPT FOR THE WARRANTIES STATED IN THIS AGREEMENT, HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS OR INFORMATION SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT. ARTICLE XI GENERAL 11.1 (a) The parties may, from time to time, in connection with this Agreement disclose to each other Confidential Information. Any Confidential Information shall be in writing and marked "confidential" and disclosed only to the Office of Technology and Trademark Licensing. As used in this Agreement, "Confidential Information" of a party shall mean (i) any information disclosed in writing by such party to the other party, which is marked by such party with the legend "CONFIDENTIAL" or other similar legend sufficient to identify the information as its confidential information, (ii) any information disclosed orally by such party to the other party which is identified as confidential at the time of disclosure and is confirmed as confidential in writing within thirty (30) days after such time of disclosure, or (iii) any information deemed Confidential Information under the terms of this Agreement. With respect to categories (i) and (ii) above, "Confidential Information" shall not include any information that is: (1) already known to the receiving party at the time of disclosure hereunder, or (2) now or hereafter becomes publicly known other than through acts or omissions of the receiving party, or (3) is disclosed to the receiving party by a third party under no obligation of confidentiality to the disclosing party or (4) is independently developed by the receiving party without use of the Confidential Information of the disclosing party. (b) Each party shall maintain in confidence, and shall not use for any purpose or disclose to any third party, the Confidential Information of the other party. Notwithstanding the foregoing, the receiving party may use or disclose the Confidential Information of the disclosing party (i) to the extent necessary to exercise its rights or fulfill its obligations and/or duties under this Agreement, and (ii) to comply with applicable law or governmental regulations or court order, provided that the receiving party will give reasonable advance notice to the disclosing party, and will use its reasonable efforts to minimize the disclosure of Confidential Information and to secure confidential treatment of any Confidential Information disclosed. 20 (c) The royalty terms of this Agreement shall be deemed "Confidential Information" of both parties. In addition to the permissible disclosures set forth in subsection (b) above, LICENSEE may disclose such terms in confidence to its financial and legal advisors, consultants, potential or actual investors, potential or actual merger or acquisition partners, and others on a need-to-know basis. 11.2 (a) LICENSEE shall indemnify, defend and hold harmless HARVARD and its current or former and future directors, governing board members, trustees, officers, faculty and employees (collectively, the "INDEMNITEES"), from and against any claim, lawsuit, cause of action , liability, cost, expense, damage, deficiency, loss or obligation of any kind or nature (including, without limitation, reasonable attorney's fees and other costs and expenses of litigation) (collectively, "Claims"), based upon, arising out of, or otherwise relating to: LICENSEE'S or any sublicensee's performance of (or failure to perform) any of its obligations under this Agreement or any sublicense agreement, or the practice by LICENSEE or any sublicensee of any right or license granted under this Agreement or any sublicense agreement, or any product, process, or service made, used or sold pursuant to any right or license granted under this Agreement or any sublicense agreement, including without limitation any Claim relating to product liability (whether based on negligence or other tort, warranty, strict liability, or any other theory), except to the extent such Claims are directly attributable to intentional misconduct of any INDEMNITEES. It shall be a condition of the foregoing obligation that (i) LICENSEE receives prompt notice of any such Claims; (ii) LICENSEE is given the exclusive right to control the defense and settlement of such Claims, provided that LICENSEE shall not settle any such Claim without the prior written consent of HARVARD, which consent shall not be unreasonably withheld; and (iii) LICENSEE shall not be obligated to indemnify any INDEMNITEE in connection with any settlement for any Claim unless LICENSEE consents in writing to such settlement. (b) LICENSEE shall, at its own expense, defend against any actions brought or filed against any INDEMNITEE hereunder with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought. (c) Beginning at the time any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a SUBLICENSEE, AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than $ [*** Redacted] per incident and $ [*** Redacted] annual aggregate and naming the Indemnitees as additional insureds. During clinical trials of any such product, process or service, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in such equal or lesser amount as HARVARD shall require, naming the Indemnitees as additional insureds. Such commercial general liability insurance shall provide: (i) product liability coverage; and (ii) broad form contractual liability coverage for LICENSEE'S indemnification under this Agreement. If LICENSEE elects to self-insure all or part of the limits described above (including deductibles or retentions *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 21 which are in excess of [*** Redacted] annual aggregate) such self-insurance program must be acceptable to HARVARD and the Risk Management Foundation of the Harvard Medical Institutions, Inc. in their sole discretion. The minimum amounts of insurance coverage required shall not be construed to create a limit of LICENSEE'S liability with respect to its indemnification under this Agreement. (d) LICENSEE shall provide HARVARD with written evidence of such insurance upon request of HARVARD. LICENSEE shall provide HARVARD with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance; if LICENSEE does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, HARVARD shall have the right to terminate this Agreement in accordance with Section 9.2(b). (e) LICENSEE shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during: (i) the period that any product, process, or service, relating to, or developed pursuant to, this Agreement is being commercially distributed or sold by LICENSEE or by a sublicensee, AFFILIATE or agent of LICENSEE; and (ii) a reasonable period after the period referred to in Subsection (e)(i) above which in no event shall be less than fifteen (15) years. 11.3 Nothing in this Agreement shall be construed as conferring any right to use HARVARD's name or insignia, or any adaptation of them, or the name of any of HARVARD's inventors in any advertising, promotional or sales literature without the prior written approval of HARVARD, or the inventor in the case of the use of the name of an inventor. 11.4 Except as stated in this Section 11.4, without the prior written approval of HARVARD in each instance, neither this Agreement nor the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE to any person whether voluntarily or involuntarily, by operation of law or otherwise. LICENSEE may transfer or assign this Agreement and all rights hereunder, upon notice to HARVARD but without its consent, to any entity that succeeds to all or substantially all of the business of LICENSEE to which this Agreements pertains, whether by merger, operation of law, purchase or sale of all or substantially all of LICENSEE's stock or assets or otherwise; provided that such assignee or transferee promptly agrees in writing to be bound by the terms and conditions of this Agreement. Subject to the foregoing, this Agreement shall be binding upon the respective successors, legal representatives and assignees of HARVARD and LICENSEE. 11.5 The interpretation and application of the provisions of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. 11.6 LICENSEE shall comply with all applicable laws and regulations. In particular, it is understood and acknowledged that the transfer of certain commodities and technical data is subject to United States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations among other things, prohibit or require a license for the export of certain types of technical data to certain specified *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 22 countries. LICENSEE hereby agrees and gives written assurance that it will comply with all United States laws and regulations controlling the export of commodities and technical data, that it will be solely responsible for any violation of such by LICENSEE or its AFFILIATES or sublicensees, and that it will defend and hold HARVARD harmless in the event of any legal action of any nature occasioned by such violation with respect to LICENSED PRODUCTS. 11.7 LICENSEE agrees: (i) to obtain all regulatory approvals required for the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES; and (ii) to mark LICENSED PRODUCTS with the numbers of the applicable patents within PATENT RIGHTS, to the extent required by law. LICENSEE also agrees to register or record this Agreement as is required by law or regulation in any country where the license is in effect, and HARVARD shall cooperate fully with LICENSEE in connection with any such registration or recordation. 11.8 Any notices to be given hereunder shall be sufficient if signed by the party (or party's attorney) giving same and either: (i) delivered in person; (ii) mailed certified mail return receipt requested; or (iii) faxed to other party if the sender has evidence of successful transmission and if the sender promptly sends the original by ordinary mail, in any event to the following addresses: If to LICENSEE: NanoSys, Inc. 2625 Hanover Street Palo Alto, CA 94304 Attn: Lawrence A. Bock Fax: 650-745-1273 cc: Wilson, Sonsini, Goodrich & Rosati 650 Page Mill Road Palo Alto, California 94304 Attn: Michael J. O'Donnell, Esq. Fax: 650/493-6811 If to HARVARD: Office for Technology and Trademark Licensing Harvard University Holyoke Center, Suite 727 1350 Massachusetts Avenue Cambridge, MA 02138 Fax: (617) 495-9568 By such notice either party may change their address for future notices. 23 Notices delivered in person shall be deemed given on the date delivered. Notices sent by fax shall be deemed given on the date faxed. Notices mailed shall be deemed given on the date postmarked on the envelope. 11.9 Should a court of competent jurisdiction later hold any provision of this Agreement to be invalid, illegal, or unenforceable, and such holding is not reversed on appeal, it shall be considered severed from this Agreement. All other provisions, rights and obligations shall continue without regard to the severed provision, provided that the remaining provisions of this Agreement are in accordance with the intention of the parties. 11.10 In the event of any controversy or claim arising out of or relating to any provision of this Agreement or the breach thereof, the parties shall try to settle such conflict amicably between themselves. Subject to the limitation stated in the final sentence of this Section, any such conflict which the parties are unable to resolve promptly shall be settled through arbitration conducted in accordance with the rules of the American Arbitration Association. The demand for arbitration shall be filed within a reasonable time after the controversy or claim has arisen, and in no event after the date upon which institution of legal proceedings based on such controversy or claim would be barred by the applicable statute of limitation. Such arbitration shall be held in Boston, Massachusetts. The award through arbitration shall be final and binding. Either party may enter any such award in a court having jurisdiction or may make application to such court for judicial acceptance of the award and an order of enforcement, as the case may be. Notwithstanding the foregoing, either party may, without recourse to arbitration, assert against the other party a third-party claim or cross-claim in any action brought by a third party, to which the subject matter of this Agreement may be relevant. 11.11 This Agreement constitutes the entire understanding between the parties and neither party shall be obligated by any condition or representation other than those expressly stated herein or as may be subsequently agreed to by the parties hereto in writing. 11.12 Nothing in this Agreement shall be deemed to prevent LICENSEE from commercializing products similar to or competitive with a LICENSED PRODUCT, so long as LICENSEE complies with its obligations under this Agreement. 11.13 The relationship between HARVARD and LICENSEE established by this Agreement is that of independent contractors. Nothing in this Agreement shall be construed to create any other relationship between HARVARD and LICENSEE. Neither party shall have any right, power or authority to assume, create or incur any expense, liability or obligation, express or implied, on behalf of the other. 11.14 In the event either party hereto is prevented from or delayed in the performance of any of its obligations hereunder by reason of acts of God, war, strikes, riots, storms, fires or any other cause whatsoever beyond the reasonable control of the party, the party so prevented or delayed shall be excused from the performance of any such obligation to the extent and during the period of such prevention or delay. 24 11.15 NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME. For the avoidance of doubt, the parties acknowledge that the foregoing limitation of liability is not intended to apply to any of the following damages of HARVARD (and accordingly such damages shall be recoverable by HARVARD to the same extent they would be in the absence of that limitation): (i) amounts owed to HARVARD pursuant to the terms of this Agreement; (ii) amounts covered by LICENSEE's indemnity of Section 11.2; (iii) damages for infringement or violation of any patent, copyright, trademark, or other intellectual property right of HARVARD; and (iv) damages arising from the willful misconduct of LICENSEE. 11.16 HARVARD'S AGGREGATE LIABILITY FOR ALL DAMAGES OF ANY KIND RELATING TO THIS AGREEMENT OR ITS SUBJECT MATTER (WHETHER SUCH DAMAGES ARE BASED ON CONTRACT, TORT, INCLUDING NEGLIGENCE, OR OTHERWISE) SHALL NOT EXCEED THE AMOUNT PAID BY LICENSEE TO HARVARD UNDER THIS AGREEMENT. 11.17 This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives. PRESIDENT AND FELLOWS NANOSYS, INC OF HARVARD COLLEGE /s/ Joyce Brinton /s/ Calvin Chow ------------------------------------------ ----------------------- Joyce Brinton, Director Signature Office for Technology and Trademark Licensing Calvin Chow ----------------------- Name 4/15/03 Chief Operating Officer ------------------------------ ----------------------- Date Title 4-25-03 ----------------------- Date 25 APPENDIX A The following comprise PATENT RIGHTS: US Patent Applications 10/152,490, filed 5/20/02 and 10/196,337 filed 7/16/02, a PCT application, PCT/US02/16133 filed 5/20/02 all entitled Nanoscale Wires and Related Devices, Harvard Case #2058 26 APPENDIX B

CASE LEAD INVENTOR TITLE AGENCY GRANT NUMBERS - --------------------------------------------------------------------------------------------------------------------- 2058 Lieber,Charles Design and Hierarchical Assembly of Office of Naval Research N00014-01-1-0651 Nanotube-Based Moletronics 2058 Lieber,Charles Nanostructured Functional and Office of Naval Research N00014-00-1-0476 Multifunctional Materials 2058 Lieber,Charles Carbon Nanotube Molecular Electronics Office of Naval Research N00014-99-1-0495 2058 Lieber,Charles Nanowire Thermoelectrics Office of Naval Research N00014-98-1-0499 2058 Lieber,Charles Organized Nanorod-Superconductor Office of Naval Research N00014-94-1-0302 Composites

27 APPENDIX C Exclusive License of Harvard Case 2058 to Nano Sys, Inc. ASSIGNMENT THIS ASSIGNMENT is made effective on 1st day of January, 2003 between: (1) University of Southampton of University Road, Highfield, Southampton 5017 IBJ, a legal body organised under the laws of England (hereinafter the "Assignor") and (2) PRESIDENT AND FELLOWS OF HARVARD COLLEGE, a nonprofit Massachusetts educational corporation having offices at the Office for Technology and Trademark Licensing, Holyoke Center, Suite 727,1350 Massachusetts Avenue, Cambridge, Massachusetts 02138 (hereinafter the "Assignee"). WHEREAS: (A) The Assignor has ownership rights in the invention of U.S. Patent Application serial number 10/152,490, and corresponding International Patent Application Serial No. PCT/US02/16133, both entitled "Nanoscale Wires and Related Devices", both filed May 21, 2002, which carry the internal Assignee case number designation of 2058 and the internal Assignor case number designation of 2519 (hereinafter "the Patent Applications"), by virtue of the contract of employment of David C. Smith with the Assignor; and (B) The Assignor wishes to assign its ownership rights in the invention including the Patent Applications to the Assignee. NOW THIS ASSIGNMENT WITNESSETH: In consideration of the sum of one pound sterling and other good and valuable consideration the receipt of which the Assignor hereby acknowledges the Assignor hereby assigns and conveys unto the Assignee absolutely the invention and the Patent Applications thereto together with all right, title and interest in and to said applications and in and to any continuations, divisionals, continuation-in-part patent applications (to the extent a person under an obligation to assign patent rights to the Assignee and David C. Smith are both properly named inventors, based on U.S. patent law) and patents which issue on said applications including patents of reissue or re-examination, worldwide, together with all rights of action powers and benefits belonging or accrued to the same including the right to claim priority under the Paris Convention. IN WITNESS WHEREOF the parties have executed and delivered these presents in the United Kingdom: EXECUTED by The University of Southampton. in accordance with its charter of incorporation: /s/ Dr. Peter Hooper 19, Dec. 2002 - -------------------- ---------------------------------- Dr. Peter Hooper Date Deputy Director, Centre for Enterprise and Innovation EXECUTED by the PRESIDENT AND FELLOWS OF HARVARD COLLEGE. in accordance with the laws of its incorporation: /s/ Joyce Brinton 1/6/03 - ----------------------- ---------------------------------- Joyce Brinton Date Director of the Office for Technology and Trademark Licensing Harvard University EX-10.8 7 f97636a4exv10w8.txt EXHIBIT 10.8 EXHIBIT 10.8 LICENSE AGREEMENT FOR NANOCRYSTAL TECHNOLOGY BETWEEN NANOSYS, INC. AND THE REGENTS OF THE UNIVERSITY OF CALIFORNIA THROUGH THE ERNEST ORLANDO LAWRENCE BERKELEY NATIONAL LABORATORY TABLE OF CONTENTS 1. Background............................................................. 1 2. Definitions............................................................ 1 3. License Grant.......................................................... 3 4. License Issue Fee...................................................... 4 5. Milestone Fee.......................................................... 4 6. Royalties and Payments................................................. 4 7. Performance Requirements............................................... 6 8. Progress and Royalty Reports........................................... 7 9. Books and Records...................................................... 8 10. Life of the Agreement.................................................. 8 11. Termination by Berkeley Lab............................................ 9 12. Termination by Licensee................................................ 9 13. Disposition of Licensed Products upon Termination...................... 9 14. Use Of Names and Nondisclosure of Agreement............................ 9 15. Limited Warranty....................................................... 10 16. Patenting and foreign rights........................................... 11 17. Patent Infringement.................................................... 12 18. Waiver................................................................. 12 19. Assignment............................................................. 13 20. Indemnification........................................................ 13 21. Late Payments.......................................................... 14 22. Notices................................................................ 14 23. U.S. Manufacture....................................................... 15 24. Patent Marking......................................................... 15 25. Government Approval or Registration.................................... 15 26. Export Control Laws.................................................... 15 27. Force Majeure.......................................................... 15 28. Miscellaneous.......................................................... 15 Exhibit 1 Licensed (Exclusive) Patents....................................... 17 Exhibit 2 Licensed (FOU Exclusive) Patents................................... 18 LICENSE AGREEMENT FOR NANOCRYSTAL TECHNOLOGY This license agreement (the "Agreement") is entered into by The Regents of the University of California, Department of Energy contract-operators of the Ernest Orlando Lawrence Berkeley National Laboratory, 1 Cyclotron Road, Berkeley, CA 94720, ("Berkeley Lab"), and Nanosys, Inc., a Delaware corporation ("Licensee") having its principal place of business at 2625 Hanover St., Palo Alto, CA 94304. 1. BACKGROUND 1.1. Certain inventions, generally characterized as nanocrystals and related technology and covered by the Berkeley Lab cases listed herein, (the "Invention"), were made in the course of research at Berkeley Lab by Dr. Paul Alivisatos and colleagues under Berkeley Lab's contract with the United States Department of Energy ("DOE"). 1.2. As DOE sponsored development of the Invention, this Agreement and the resulting license are subject to overriding obligations to the federal government pursuant to the provisions of the applicable law or regulations. 1.3. Berkeley Lab wants the Invention developed and used to the fullest extent so that the general public enjoys the benefits of the government-sponsored research. 1.4. Licensee wants to obtain certain rights from Berkeley Lab for the commercial development, manufacture, use, and sale of the Invention. 1.5. Licensee is a "small business concern" as defined at Section 2 of Public Law 85-536 (15 U.S.C. 632). Therefore the parties agree as follows: 2. DEFINITIONS 2.1. "Effective Date" means November 9, 2002. 2.2. "Field of Use" means all uses of the Licensed Patents, except the following, which are specifically excluded: the use of the Licensed Patents for [*** Redacted], [*** Redacted], [*** Redacted] and [*** Redacted] for plant, animal, and human [*** Redacted] including, without limitation, [*** Redacted], [*** Redacted]. Licensee acknowledges that a third party has rights encompassing the exclusions to the Field of Use and in no event may a Field of Use under Licensed (FOU Exclusive) Patents be construed as covering the excluded fields. 2.3. "Highly Inflationary Currency" means the currency of any economy with a cumulative inflation rate of 100% or more over the most recent three calendar years, as measured by consumer price indices published by the International Monetary Fund (International Financial Statistics), Washington, D.C. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 1 of 19 2.4. "Licensed (Exclusive) Patents" means Berkeley Lab's interest in any subject matter claimed in or covered by any of the patents or patent applications listed in Exhibit 1. 2.5. "Licensed (FOU Exclusive) Patents" means Berkeley Lab's interest in any subject matter claimed in or covered by any of the patents or patent applications listed in Exhibit 2. 2.6. "Licensed Patents" means Berkeley Lab's interest in any subject matter claimed in or covered by any of the patents or patent applications listed in Exhibits 1 or Exhibit 2, and any additional corresponding foreign patent application or patent for which Licensee has met the requirements of paragraph 16.4; any division, reexamination, continuation, continuation-in-part (excluding new matter contained and claimed in that continuation-in-part), or other application that is a successor to any of the foregoing applications; any patents issuing on any of the foregoing; and all renewals, reissues and extensions thereof. 2.7. "Licensed Product" means any product, service or process that employs or is produced by the practice of any invention claimed in any of Licensed Patents or whose manufacture, use, practice, sale, offer for sale, or importation would constitute, but for the license Berkeley Lab grants to Licensee under this Agreement, an infringement of any Valid Claim in Licensed Patents. 2.8. "Selling Price" for the purpose of computing royalties means the price at which Licensee or its sublicensee sells a Licensed Product in an arms-length transaction. When a Licensed Product is not sold, but is otherwise disposed of, the Selling Price of that Licensed Product for the purpose of computing royalties is the selling price at which products of similar kind and quality, sold in similar quantities, are [*** Redacted]. When such products are not [*** Redacted], the Selling Price of a Licensed Product otherwise transferred, for the purpose of computing royalties, is the [*** Redacted] at which products of similar kind and quality, sold in similar quantities, are then currently being offered for sale [*** Redacted]. When such products are not currently sold or offered for sale by Licensee or others, then the Selling Price, for the purpose of computing royalties, shall be negotiated by the parties in good faith based on the [*** Redacted]. 2.9. "Sublicensing Income" means amounts received by Licensee from a non-affiliate third party in consideration for the right to make, use, offer for sale, sell, or import Licensed Products, including without limitation amounts received by way of license issue fees, milestone payments, minimum annual royalties and royalties on the sale or distribution of such Licensed Products. Notwithstanding the foregoing, Sublicensing Income shall not include the following: 2.9.1. income received by Licensee as reimbursement for Licensee's actual and reasonable [*** Redacted] as set forth in a written [*** Redacted] agreement between Licensee and its sublicensee; amounts received for services or products (provided, however, that Licensee sales of Licensed Product to a sublicensee is subject to the royalty provision of paragraph 6.1); 2.9.2. the fair market value of sales of [*** Redacted] sold by Licensee to a sublicensee; 2.9.3. amounts in consideration for [*** Redacted] or other [*** Redacted] other than that covered in the [*** Redacted]; or 2.9.4 amounts in consideration for the sale of all or [*** Redacted] or otherwise. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 2 of 19 2.10. "Valid Claim" means a claim within (a) an issued, unexpired patent that Berkeley Lab has not disclaimed or otherwise admitted to the relevant patent office or court to be invalid or otherwise unenforceable, and has not been held invalid by a court of competent jurisdiction from which no appeal has been or can be taken or (b) a patent application that has not been pending more than 5 years, provided that Berkeley Lab is pursuing such claim in a good faith belief in its patentability and enforceability upon issuance of a patent containing such claim. 3. LICENSE GRANT 3.1. Subject to the limitations set forth in this Agreement, Berkeley Lab grants to Licensee nontransferable, royalty-bearing licenses, under Licensed Patents to make, have made, use, offer for sale, sell, and import Licensed Products as follows: 3.1.1. limited exclusive for Licensed (Exclusive) Patents; and 3.1.2. limited exclusive and solely within the Field of Use for Licensed (FOU Exclusive) Patents. 3.2. Any license under this Agreement is subject to the following: (a) DOE's royalty-free license for federal government purposes only, and (b) DOE's option to grant licenses either if reasonable steps to commercialize the Invention are not carried out or in order to meet federal regulations. 3.3. Berkeley Lab also grants to Licensee the right to issue, royalty- bearing sublicenses only in the Field of Use to make, have made, use, offer for sale, sell, and import Licensed Products, so long as Licensee has current exclusive rights in the Field of Use for all Licensed Patents covered by the sublicense. 3.4. Any sublicense Licensee grants must be consistent with all the rights and obligations due Berkeley Lab and the United States Government under this Agreement, including, without limitation, the license back to the United States Government. 3.5. Licensee shall provide Berkeley Lab with a copy of each sublicense issued under this Agreement; collect payment of all royalties and payments due Berkeley Lab from sublicenses; and summarize and deliver all reports due Berkeley Lab from sublicenses under Article 8 (PROGRESS AND ROYALTY REPORTS). Sublicenses provided to Berkeley Lab under this section may be provided in redacted form, provided that such redacted sublicenses contain all terms necessary for Berkeley Lab to determine Licensee's compliance with the obligations of this Agreement; and provided further that upon request, Berkeley Lab's representatives can review the sublicenses in their entirety at Licensee's facility. 3.6. If this Agreement terminates for any reason, Licensee will assign to Berkeley Lab, and Berkeley Lab will honor any sublicenses granted hereunder, to the extent that Berkeley Lab's duties under such sublicenses are no greater than those arising under this Agreement. 3.7. Berkeley Lab expressly reserves the right to use the Invention and associated technology for educational and research purposes. 3 of 19 4. LICENSE ISSUE FEE 4.1. Licensee shall pay Berkeley Lab a license issue fee of [*** Redacted]. This license issue fee accrues on the Effective Date, and Licensee shall pay [*** Redacted] of this fee within 30 days of the Effective Date and [*** Redacted] within twelve months of the Effective Date. 4.2. This fee is [*** Redacted] and is [*** Redacted]. 5. MILESTONE FEE 5.1. Following an initial public offering or series of public offerings of Licensee securities which raises in the aggregate at least $5 million or sale of all or substantially all of the assets or equity of Licensee in a transaction(s) worth at least $5 million ("Offering"), Licensee shall pay to Berkeley Lab the equivalent of the price at the Offering of 60,000 shares of Licensee's common stock. Such payments shall be made in installments with one-third payable 9 months from the Offering, one-third payable 18 months from the Offering and one-third payable 26 months from the Offering. Such payments shall include interest from the date of the Offering to the date such payment is made. Interest shall be compounded on the date such payment is made, and shall be charged at the prime lending rate as published in the Wall Street Journal on the date such payment is made. Licensee shall adjust the 60,000 shares to take into account any stock splits or reverse stock splits since the Effective Date. 6. ROYALTIES AND PAYMENTS 6.1. Licensee shall pay to Berkeley Lab an earned royalty of [*** Redacted]% of the Selling Price of each Licensed Product. In no event shall more than one royalty apply to the sale of any given Licensed Product, regardless of the number of Licensed Patents embodied therein. 6.2. Under this Agreement a Licensed Product is considered as sold when invoiced, or if not invoiced, when delivered to a third party. But when the last patent covering a Licensed Product expires or when the license terminates, any shipment made on or before the day of that expiration or termination that has not been billed out before is considered as sold (and therefore subject to royalty). Berkeley Lab shall credit royalties that Licensee pays on a Licensed Product that the customer does not accept. 6.3. If a Licensed Product is sold as a combination product containing both the Licensed Product and one or more other components that Licensee customarily sells separately, Selling Price is calculated by multiplying the [*** Redacted] by the fraction [*** Redacted] where A is the [*** Redacted] of the Licensed Product sold separately by Licensee and B is the [*** Redacted] of the combination products sold separately by Licensee during the relevant royalty payment period. 6.4. If Licensee obtains a license from a third party(s) to a patent that must otherwise be infringed by Licensee in order to make the Licensed Products (" Third Party Patent") then Licensee may reduce the [*** Redacted] royalty rate specified in paragraph 6.1 by an amount equal to [*** Redacted] of the royalty Licensee pays the licensor of such Third Party Patent, provided, however, in no case shall the royalty rate paid to Berkeley Lab for Licensed Products be less than [*** Redacted]. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 4 of 19 6.5. For each sublicense, Licensee shall pay Berkeley Lab [*** Redacted]% of Sublicensing Income. If Sublicensing Income arises under an agreement in which both a Licensed Patent and one or more other patent, patent application or copyrighted software program are licensed to a third party by the Licensee, then the Licensee shall in good faith allocate its total compensation under such agreement to either the Licensed Patents or the other patent, patent application or copyrighted software, and such portion allocated to the Licensed Patent(s) shall constitute the Sublicensing Income; provided, however, that Licensee shall (i) promptly notify Berkeley Lab of any such agreement for which it intends to apportion the income; (ii) provide Berkeley Lab with a copy of that agreement (if it has not already done so pursuant to paragraph 3.5) together with a written report explaining its apportionment for the Sublicensing Income; (iii) consider and respond in good faith to Berkeley Lab's comments on the apportionment; and (iv) pay Berkeley Lab no less than [*** Redacted]% of the total amounts received by Licensee from the third party in consideration for a sublicense for Licensed Patents. 6.6. Licensee shall pay to Berkeley Lab by August 31 of each year the difference between the earned royalties for that calendar year Licensee has already paid to Berkeley Lab and the minimum annual royalty set forth in the following schedule. Berkeley Lab shall credit that minimum annual royalty paid against the earned royalty due and owing for the calendar year in which Licensee made the minimum payment.

Calendar Year Minimum Annual Royalty - ------------- ---------------------- 2002 $ [*** Redacted] 2003 $ [*** Redacted] 2004 $ [*** Redacted] 2005 $ [*** Redacted] 2006 $ [*** Redacted] 2007 $ [*** Redacted] 2008 $ [*** Redacted] 2009 and each year thereafter $ [*** Redacted]

6.7. Licensee shall send payment for royalties accruing to Berkeley Lab quarterly together with its royalty report under paragraph 8.3. 6.8. Licensee shall make checks payable to "The Regents of the University of California (Berkeley Lab/L-02-1364)." Licensee shall pay Berkeley Lab only in United States dollars. If a Licensed Product is sold for currency other than United States dollars (not including Highly Inflationary Currency), Licensee shall first determine the earned royalties in the foreign currency of the country in which the Licensed Product was sold and then convert them into equivalent United States dollars at the closing exchange rate published by The Wall Street Journal on the last business day of the reporting period. If a Licensed Product is sold for a Highly Inflationary Currency, Licensee shall convert the sales subject to royalties into equivalent United States funds using the closing exchange rates in effect on the date of invoicing (or if no invoicing, of delivery) as published by The Wall Street Journal. Licensee shall quote the exchange rate in the Continental method (local currency per U.S. dollar). 6.9. Licensee may not reduce royalties payable by any taxes, fees, other charges imposed on the remittance of royalty income. Licensee is also responsible for all bank transfer charges. 6.10. If Licensee cannot promptly remit any royalties for sales in any country where a Licensed Product is sold because of legal restrictions, upon notice to Berkeley Lab, Licensee may deposit in United States funds royalties due Berkeley Lab to Berkely Lab's account in a bank or other depository in that country. If Licensee is not permitted to deposit those payments *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 5 of 19 in U.S. funds under the laws of that country, Licensee may deposit those payments in the local currency to Berkeley Lab's account in a bank or other depository in that country. 6.11. If a court of competent jurisdiction and last resort holds invalid any patent or any of the patent claims within Licensed Patent in a final decision from which no appeal has or can be taken, Licensee's obligation to pay royalties based on that patent or claim will cease as of the date of that final decision. Licensee, however, shall pay any royalties that accrued before that decision or that are based on another patent or claim not involved in that decision. 6.12. Licensee has no duty to pay Berkeley Lab royalties under this Agreement on a Licensed Product Licensee sells to the United States Government including any United States Government agency. Licensee shall reduce the amount charged for a Licensed Product sold to the United States Government by an amount equal to the royalty otherwise due Berkeley Lab. 7. PERFORMANCE REQUIREMENTS 7.1. Licensee shall diligently proceed with the development, manufacture and sale of Licensed Products and shall diligently endeavor to market them within a reasonable time after the Effective Date in quantities sufficient to meet the market demand. 7.2. Licensee shall make best efforts to obtain all necessary governmental approvals for the manufacture, use and sale of Licensed Products. 7.3. Licensee is entitled to exercise prudent and reasonable business judgment in meeting its performance requirements under this Agreement. 7.4. If Licensee is unable to perform any of the following, then Berkeley Lab may either terminate this Agreement or reduce a limited exclusive license to a nonexclusive license. 7.4.1. by 18 months from the Effective Date, develop a process for the synthesis of nanodots and/or nanorods for prototype development; such [*** Redacted] must be at research quantities sufficient for prototype development of the Licensed Product(s) specified in the Licensee's progress reports submitted pursuant to paragraph 8.1, with [*** Redacted], yielding material with [*** Redacted] and [*** Redacted] of [*** Redacted]; 7.4.2. by 18 months from the Effective Date, develop application specific [*** Redacted] procedures for these materials, including [*** Redacted] with [*** Redacted], [*** Redacted], and [*** Redacted] and [*** Redacted]; 7.4.3. by 24 months from the Effective Date, develop [*** Redacted], which includes at least [*** Redacted], or equivalent, e.g., [*** Redacted], [*** Redacted] etc., of [*** Redacted] containing [*** Redacted] and/or [*** Redacted] with [*** Redacted] and [*** Redacted] and [*** Redacted]; 7.4.4. by 30 months from the Effective Date, perform and deliver to Berkeley Lab a market assessment of major benefits of Licensed Product materials versus existing commercial approaches; 7.4.5. by 30 months from the Effective Date, develop a [*** Redacted] for either [*** Redacted] or [*** Redacted] of amounts of nanorods and/or nanodots that are consistent with the Licensed Products identified as initial products by the market assessment provided under paragraph 7.4.4; *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 6 of 19 7.4.6. by 36 months from the Effective Date, develop initial prototypes demonstrating commercially useful functionality of nanorods and/or nanodots in Licensed Products, for example, [*** Redacted] and [*** Redacted] and related devices; for [*** Redacted], prototype devices with [*** Redacted] with [*** Redacted]; for [*** Redacted], [*** Redacted]; 7.4.7. by 36 months from the Effective Date, develop and provide to Berkeley Lab a technical and commercialization plan for applications in [*** Redacted], for example, [*** Redacted] and [*** Redacted]; 7.4.8. by 48 months from the Effective Date, enter into a letter of intent or other contract with an appropriate commercialization partner for Licensed Products; 7.4.9. by 56 months from the Effective Date, make commercial sales of Licensed Product; or 7.4.10. at any time during the exclusive period of this Agreement, reasonably fill the market demand for Licensed Products following commencement of commercial sales 7.5. Prior to termination of this Agreement or reduction of a limited exclusive license to a nonexclusive license for failure to meet any of the performance requirements set forth in paragraphs 7.4.1-7.4.10, or as mutually agreed upon, Licensee and Berkeley Lab shall meet within 30 days of Licensee's request to discuss Licensee's past and planned efforts to meet such performance requirements. That meeting shall take place at Berkeley Lab or other mutually agreed location, and shall only be required if Licensee makes that request within 21 days of Berkeley Lab's notice of termination or reduction to nonexclusive license. To the extent that Licensee demonstrates it has made reasonable efforts to meet such performance requirements, and by mutual written consent, the parties shall amend or extend the requirements of paragraphs 7.4.1 -7.4.10 at the written request of Licensee in response to legitimate business or technical reasons. 8. PROGRESS AND ROYALTY REPORTS 8.1. Beginning May 31, 2003 and semiannually thereafter, Licensee shall submit to Berkley Lab a progress report covering Licensee's activities related to the development and testing of all Licensed Products and the obtaining of the governmental approvals necessary for marketing. Licensee shall make these progress reports until commercial sales of the Licensed Product start. 8.2. The progress reports Licensee submits under paragraph 8.1 must include, but not be limited to, the following topics: 8.2.1. summary of work completed related to the requirements of paragraph 7.4; 8.2.2. key scientific discoveries; 8.2.3. summary of work in progress; 8.2.4. current schedule of anticipated milestones; and 8.2.5. market plans for introduction of Licensed Products; and 8.2.6. number of full-time equivalent employees or agents (FTEs) working on the development of Licensed Products and overall number of FTEs employed by Licensee. 8.3. Upon the earlier of four years after the Effective Date or after the first commercial sale of a Licensed Product anywhere in the world, Licensee shall make quarterly royalty reports to Berkeley Lab on or before February 28, May 31, August 31 and November 30 of each year. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 7 of 19 Each royalty report must cover the most recently completed calendar quarter and must show for all sales (or other transfer in accordance with paragraph 2.8): 8.3.1. the Selling Price of each type of Licensed Product sold by Licensee; 8.3.2. the number of each type of Licensed Product sold; 8.3.3. the royalties, in U.S. dollars, payable under this Agreement on those sales; 8.3.4. the exchange rates used in calculating the royalty due; 8.3.5. the royalties on government sales that otherwise would have been due under paragraph 6.12; and 8.3.5. for each sublicense, if any: (1) the sublicensee; (2) the information set forth in paragraphs 8.3.1 to 8.3.5 for that sublicensee's sales or other disposition of Licensed Product. 8.4. If no sales of Licensed Products have been made during any required reporting period, Licensee shall make a statement to this effect. 9. BOOKS AND RECORDS 9.1. Licensee shall keep books and records accurately showing all Licensed Products manufactured, used, sold, imported or otherwise disposed of under the terms of this Agreement. Licensee shall preserve those books and records for at least five years, from the date of the royalty payment to which they pertain and shall open them to inspection by representatives or agents of Berkeley Lab at reasonable times. 9.2. Berkeley Lab shall bear the fees and expenses of Berkeley Lab's representatives performing the examination of the books and records. But if the representatives discover an error in underpaying royalties to Berkeley Lab of more than 5% of the total royalties due for any year, then Licensee shall bear the fees and expenses of these representatives and the difference between the earned royalties and the reported royalties (which shall be subject to the provisions of Article 21 (LATE PAYMENTS)). 10. LIFE OF THE AGREEMENT 10.1. Unless otherwise terminated by operation of law or by acts of the parties in accordance with the terms of this Agreement, this Agreement is in force from the Effective Date and expires concurrently with the last-to-expire issued Licensed Patent. 10.2. Any termination of this Agreement shall not affect the rights and obligations set forth in the following Articles: Article 9 Books and Records Article 13 Disposition of Licensed Products on Hand upon Termination Article 14 Use of Names and Trademarks and Confidentiality Article 15 Limited Warranty Article 20 Indemnification Article 26 Export Control Laws 8 of 19 10.3. Termination does not affect in any manner any rights of Berkeley Lab arising under this Agreement before the termination. 11. TERMINATION BY BERKELEY LAB 11.1. Subject to paragraph 7.5, if Licensee violates or fails to perform any material term of this Agreement, then Berkeley Lab may give written notice of such default ("Default Notice") to Licensee. If Licensee fails to cure that default and provide Berkeley Lab with reasonable evidence of the cure within 60 days of the Default Notice, Berkeley Lab may terminate this Agreement and the licenses granted by a second written notice ("Termination Notice") to Licensee. If Berkeley Lab sends a Termination Notice to Licensee, this Agreement automatically terminates on the effective date of the Termination Notice. 12. TERMINATION BY LICENSEE 12.1. Licensee at any time may terminate this Agreement in whole or as to any portion of Licensed Patents by giving written notice to Berkeley Lab. Licensee's termination notice must indicate whether Licensee has any inventory of Licensed Products. Licensee's termination of this Agreement will be effective 90 days after its notice. 13. DISPOSITION OF LICENSED PRODUCTS UPON TERMINATION 13.1. Within 45 days of termination of this Agreement for any reason, Licensee shall provide Berkeley Lab with a written inventory of all Licensed Products in process of manufacture or in stock. Licensee shall dispose of those Licensed Products within 20 days of termination. The sale of any Licensed Product within the 20 days is subject to the terms of this Agreement. 14. USE OF NAMES AND CONFIDENTIALITY 14.1. In accordance with California Education Code Section 92000, Licensee shall not use in advertising, publicity or other promotional activities any name, trade name, trademark, or other designation of the University of California, nor shall Licensee so use "Ernest Orlando Lawrence Berkeley National Laboratory" or "Department of Energy" (including any contraction, abbreviation, or simulation of any of the foregoing) without Berkeley Lab's prior written consent. 14.2. Neither party may disclose the terms of this Agreement to a third party without express written permission of the other party, except when required under either the California Public Records Act or other applicable law or court order. Notwithstanding the foregoing, disclosures of the terms of this Agreement are permitted as follows: 14.2.1. as necessary for Licensee to secure financing through private markets, engage in corporate partnership discussions, or comply with applicable accounting requirements, or securities laws or regulations, Licensee may disclose the terms of this Agreement under a written confidentiality agreement with terms as protective as those of this Article 14; 14.2.2. as necessary for Licensee to publicly disclose terms of this Agreement in conjunction with a public financing or to comply with applicable securities laws or regula- 9 of 19 tions, after Licensee has provided Berkeley Lab with notice of such disclosure with sufficient opportunity to seek redaction of certain terms of the Agreement; and 14.2.3. Berkeley Lab may disclose the existence of this Agreement and the extent of the grant in Article 3 (License Grant), but shall not otherwise disclose the terms of this Agreement, except to the DOE. 14.3 All information provided to Berkeley Lab by Licensee under this agreement, including but not limited to information listed in Section 7.4 of this Agreement, e.g., sublicense agreements, technical reports, development plans, marketing evaluations and reports, and royalty reports, is deemed to be Confidential Information. 14.3.1 Berkeley Lab will maintain the confidentiality of the Confidential Information and will not disclose the Confidential Information to any third party, and will not use the Confidential Information for any purpose other than as necessary to administer this Agreement. 14.3.2 The obligations of Berkeley Lab with respect to Confidential Information will not apply to information disclosed under this agreement to the extent such information: (a) is generally known to the public at the time of disclosure or becomes generally known through no wrongful act on the part of Berkeley Lab; (b) is in Berkeley Lab's possession at the time of disclosure other than as a result of prior disclosure by Licensee or a breach of any legal obligation by Berkeley Lab or a third party; (c) becomes known to Berkeley Lab through disclosure by sources other than Licensee having no duty of confidentiality to Licensee, whether direct or indirect, with respect to such information and having the legal right to disclose such information; (d) is independently developed by Berkeley Lab without reference to or reliance upon the information as can be documented by written records; or (e) is required to be disclosed by Berkeley Lab to comply with applicable laws or governmental regulations, provided that the Berkeley Lab provides prior written notice of such disclosure to the Licensee and takes reasonable and lawful actions to avoid and/or minimize the extent of such disclosure. 14.3.3 The provisions of this Article 14 relating to confidentiality shall be in force and effect until at least 5 years following the termination of this Agreement. 15. LIMITED WARRANTY 15.1. Berkeley Lab warrants to Licensee that it has the lawful right to grant this license. 15.2. This license and the associated Invention are provided WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. BERKELEY LAB MAKES NO REPRESENTATION OR WARRANTY THAT LICENSED PRODUCTS WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT. 15.3. IN NO EVENT WILL BERKELEY LAB BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OF THE INVENTION OR LICENSED PRODUCTS. 15.4. Nothing in this Agreement may be construed as: 10 of 19 15.4.1. a warranty or representation by Berkeley Lab as to the validity of Licensed Patents or scope of any of Berkeley Lab's rights in Licensed Patents; 15.4.2. a warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement is or will be free from infringement of any patents other than Licensed Patents; 15.4.3. an obligation to bring or prosecute actions or suits against third parties for patent infringement, except as specifically provided for in Article 17 (Patent Infringement); or 15.4.4. a grant by implication, estoppel or otherwise of any license or rights under any patents of Berkeley Lab other than Licensed Patents, regardless of whether such patents are dominant or subordinate to Licensed Patents; 15.4.5. an obligation to furnish any know-how not provided in Licensed Patents. 16. PATENTING AND FOREIGN RIGHTS 16.1. Berkeley Lab shall prepare, file, prosecute and maintain patent applications and patents relating to inventions included in the Licensed Patents using patent counsel of its choice, and shall consult and cooperate with Licensee in connection therewith. Berkeley Lab shall copy Licensee promptly on all U.S.P.T.O. and foreign patent office actions, final drafts of proposed submissions and copies of actual submissions, to the extent reasonably practicable, so that Licensee shall be informed of the continuing prosecution, and have an opportunity to review and comment on such office actions and draft submissions. Notwithstanding the foregoing, Berkeley Lab may take any action useful or necessary to obtain and preserve its patent rights in Licensed Patents. Berkeley Lab shall use all reasonable efforts to amend any patent application to include claims and/or legal arguments reasonably requested by Licensee to protect the Licensed Products Licensee contemplates selling. Licensee shall keep confidential documents from patent offices and patent related filings and associated drafts. 16.2. licensee agrees to reimburse Berkeley Lab for Berkeley Lab's out-of-pocket patent preparation, filing, prosecution and maintenance costs as follows: 16.2.1. 100% of all such costs for Licensed (Exclusive) Patents; and 16.2.2. 50% of all such costs for Licensed (FOU Exclusive) Patents. 16.3. Berkeley Lab shall provide Licensee with documentation of patenting costs incurred when invoicing Licensee for those costs. Licensee shall pay Berkeley Lab within 30 days of receiving the invoice. Licensee shall also pay Berkeley Lab for reimbursement of such patent costs incurred prior to the Effective Date within 30 days of invoicing; such costs are estimated to be approximately [*** Redacted]. Licensee's obligation to reimburse patent costs continues for so long as this Agreement remains in effect, provided, however, that Licensee may terminate its obligations under this Agreement with respect to any given patent application or patent upon three months written notice to Berkeley Lab. Berkeley Lab shall use reasonable efforts to curtail patent costs when such a notice is received from Licensee. After such notice or when this Agreement terminates, Berkeley Lab may continue prosecution and/or maintenance of those application(s) or patent(s) at its sole discretion and expense; provided, however, that Licensee will have no further license or other right to them. 16.4. Licensee may request that Berkeley Lab seek patent protection on the Licensed Patents in foreign countries if available. Berkeley Lab has no obligation to take action to file foreign patent applications unless Licensee provides written notice to Berkeley Lab at least six weeks before any applicable bar and that notice states which countries, regions or Patent *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 11 of 19 Cooperation Treaty filing Licensee desires. If Licensee timely provides such notice, then Berkeley Lab shall timely make such foreign filings. The absence of the required notice from Licensee to Berkeley Lab acts as an election not to secure foreign rights. 16.5. Berkeley Lab may file patent applications at its own expense in any country in which Licensee has not elected to secure patent rights. Those applications and resultant patents shall not be subject to this Agreement. 16.6. Licensee shall promptly notify Berkeley Lab of any change in its status as a small business concern and of the first sublicense granted to an entity that does not qualify as a small business concern. A "small business concern" as used in this paragraph is as defined by the U.S. Patent and Trademark Office; currently, that is a company whose number of employees, including affiliates, does not exceed 500 persons (13 C.F.R. 121.802). 17. PATENT INFRINGEMENT 17.1. If Licensee learns of the substantial infringement of any of Licensed Patents, Licensee shall so inform Berkeley Lab in writing and shall provide Berkeley Lab with reasonable evidence of the infringement. During the period and in a jurisdiction where Licensee has exclusive rights under this Agreement, neither party may notify a third party of the infringement of any of Licensed Patents without first obtaining written consent of the other party, which consent shall not be unreasonably denied. Both parties shall use their best efforts in cooperation with each other to terminate such infringement without litigation. 17.2. Licensee may request that Berkeley Lab take legal action against the infringement of Licensed (Exclusive) Patents or Licensed (FOU Exclusive) Patents in the Field of Use in which Licensee has current exclusive rights under this Agreement. Licensee shall make that request in writing and include reasonable evidence of the infringement and damages to Licensee. If the infringing activity has not been abated within 90 days of that request, Berkeley Lab may elect to: (a) commence suit on its own account; or (b) refuse to participate in the suit. Berkeley Lab shall give written notice of its election to Licensee by the end of the 90 days after receiving notice of the request from Licensee. Licensee may thereafter bring suit for patent infringement only if Berkeley Lab elects not to commence suit and if the infringement occurred during the period and in a jurisdiction where Licensee has exclusive rights under this Agreement. If, however, Licensee elects to bring suit in accordance with this paragraph, Berkeley Lab may thereafter join such suit at its own expense. 17.3. Such legal action as is decided upon must be at the expense of the party on account of whom suit is brought and all consequent recoveries belong to that party. But if Berkeley Lab and Licensee jointly bring legal action and fully participate in it, the parties must jointly share both the expense and all recoveries in proportion to the share of expense each party pays. 17.4. Each party shall cooperate with the other in litigation proceedings instituted under this Agreement but at the expense of the party on account of whom suit is brought. The party bringing the suit will control that litigation, except that Berkeley Lab may elect to be represented by counsel of its choice in any suit brought by Licensee. 18. WAIVER 18.1. The waiver of any breach of any term of this Agreement does not waive any other breach of that or any other term. 12 of 19 19. ASSIGNMENT 19.1. This Agreement is binding upon and shall inure to the benefit of Berkeley Lab, its successors and assigns. Upon written notice to Berkeley Lab, Licensee may assign this Agreement to a Licensee wholly owned subsidiary, or in conjunction with a sale of all or substantially all of the assets of Licensee. Any other attempt by Licensee to assign this Agreement is void unless Licensee obtains the prior written consent of Berkeley Lab; Berkeley Lab shall not unreasonably withhold that consent. 20. INDEMNIFICATION 20.1. Licensee agrees to indemnify, hold harmless and defend Berkeley Lab and the U.S. Government and their officers, employees, and agents; the sponsors of the research that led to the Invention; and the inventors of the patents and patent applications in Licensed Patents and their employers against any and all claims, suits, losses, damage, costs, fees, and expenses resulting from or arising out of exercise of this license or any sublicense, except to the extent indemnification of Berkeley Lab is due to the gross negligence of Berkeley Lab. Licensee shall pay all costs incurred by Berkeley Lab in enforcing this indemnification, including reasonable attorney fees. The indemnity set forth herein shall apply only if Licensee shall have been given an opportunity, to the maximum extent afforded by applicable laws, rules, or regulations, to participate in and control its defense. No settlement for which Licensee would be responsible shall be made without Licensee's consent unless required by final decree of a court of competent jurisdiction. 20.2. Licensee, at its sole expense, shall insure its activities in connection with the work under this Agreement and obtain and keep in force Comprehensive or Commercial Form General Liability Insurance (contractual liability and products liability included) with limits as follows: 20.2.1. Each Occurrence $[*** Redacted] 20.2.2. Products/Completed Operations Aggregate $[*** Redacted] 20.2.3. Personal and Advertising Injury $[*** Redacted] 20.2.4. General Aggregate (commercial form only) $[*** Redacted] 20.3. The coverages and limits referred to in this Article 20 do not in any way limit the liability of Licensee. Licensee shall furnish Berkeley Lab with certificates of insurance, including renewals, evidencing compliance with all requirements at least 30 days prior to the first commercial sale, use, practice or distribution of a Licensed Product. 20.3.1. If such insurance is written on a claims-made form, coverage shall provide for a retroactive date of placement on or before the Effective Date. 20.3.2. Licensee shall maintain the general liability insurance specified during: (a) the period that the Licensed Product is being commercially distributed or sold by Licensee or by a sublicensee or agent of Licensee, and (b) a reasonable period thereafter, but in no event less than five years. 20.4. The insurance coverage of paragraph 20.2 must: 20.4.1. Provide for 30-day advance written notice to Berkeley Lab of cancellation or of any modification. 20.4.2. Indicate that DOE, "The Regents of the University of California" and its officers, employees, students, agents, are endorsed as additional insureds. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 13 of 19 20.4.3. Include a provision that the coverages are primary and do not participate with, nor are excess over, any valid and collectible insurance or program of self-insurance carried or maintained by Berkeley Lab. 21. LATE PAYMENTS 21.1 If Licensee does not make a payment to Berkeley Lab when due, Licensee shall pay to Berkeley Lab such reasonable administrative fees and interest as Berkeley Lab generally charges third parties on overdue accounts. 22. NOTICES 22.1. Any payment, notice or other communication this Agreement requires or permits either party to give must be in writing to the appropriate address given below, or to such other address as one party designates by written notice to the other party. The parties deem payment, notice or other communication to have been properly given and to be effective (a) on the date of delivery if delivered in person; (b) on the fourth day after mailing if mailed by first-class mail, postage paid; (c) on the second day after delivery to an overnight courier service such as Federal Express, if sent by such a service; or (d) upon confirmed transmission by telecopier. The parties' addresses are as follows: For Berkeley Lab: Lawrence Berkeley National Laboratory Technology Transfer Department Mailstop 90-1070 One Cyclotron Road Berkeley, California 94720 Attention: Licensing Manager Fax: 510/486-6457 Telephone: 510/486-6467 e-mail: viwolinsky@lbl.gov For Licensee: Nanosys, Inc. 2625 Hanover St. Palo Alto, Ca 94304 Attention: Larry Bock, CEO Fax: 650/ 846-2501 Telephone: 650/ 846-2500 e-mail: lbock@nanosysinc.com With a copy to: Michael O' Donnell, Esq. Wilson, Sonsini, Goodrich and Rosati 650 Page Mill Road Palo Alto, CA 94304 14 of 19 23. U.S. MANUFACTURE 23.1. Licensee shall have Licensed Products produced for sale in the United States manufactured substantially in the United States so long as Licensee has current exclusive rights in the Field of Use. 24. PATENT MARKING 24.1. Licensee shall mark all Licensed Products made, used or sold under this Agreement, or their containers, in accordance with the applicable patent marking laws and to the extent reasonably practicable. 25. GOVERNMENT APPROVAL OR REGISTRATION 25.1. If the law of any nation requires that any governmental agency either approve or register this Agreement or any associated transaction, Licensee shall assume all legal obligation to do so. Licensee shall notify Berkeley Lab if it becomes aware that this Agreement is subject to a U.S. or foreign government reporting or approval requirement. Licensee shall make all necessary filings and pay all costs, including fees, penalties, and all other costs associated with such reporting or approval process. 26. EXPORT CONTROL LAWS 26.1. Licensee shall observe all applicable United States and foreign laws and regulations with respect to the transfer of Licensed Products and related technical data, including, without limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations. 27. FORCE MAJEURE 27.1. If a party's performance required under this Agreement is rendered impossible or unfeasible due to any catastrophes or other major events beyond its reasonable control, including, without limitation, the following, the parties are excused from performance: war, riot, and insurrection; laws, proclamations, edicts, ordinances or regulations; strikes, lockouts or other serious labor disputes; and floods, fires, explosions, or other natural disasters. When such events abate, the parties' respective obligations under this Agreement must resume. 28. MISCELLANEOUS 28.1. The headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. 28.2. This Agreement is not binding upon the parties until it is signed below on behalf of each party. 28.3. No amendment or modification hereof shall be valid or binding upon the parties unless made in writing and signed on behalf of each party. 15 of 19 28.4. This Agreement embodies the entire and final understanding of the parties on this subject. It supersedes any previous representations, agreements, or understandings, whether oral or written. 28.5. If a court of competent jurisdiction holds any provision of this Agreement invalid, illegal or unenforceable in any respect, this Agreement must be construed as if that invalid or illegal or unenforceable provision is severed from the Agreement, provided, however, that the parties shall negotiate in good faith substitute enforceable provisions that most nearly effect the parties' intent in entering into this Agreement. 28.6. This Agreement must be interpreted under California law, without giving effect to any choice of law rules that would result in the application of laws of any jurisdiction other than California. Berkeley Lab and Licensee execute this Agreement in duplicate originals through their duly authorized respective officers in one or more counterparts, that taken together, are but one instrument. THE REGENTS OF THE UNIVERSITY OF NANOSYS, INC. CALIFORNIA, THROUGH THE ERNEST ORLANDO LAWRENCE BERKELEY NATIONAL LABORATORY By /s/ Piermaria Oddone By /s/ Lawrence Bock --------------------------------- ----------------------------- (Signature) (Signature) By Piermaria Oddone By Lawrence Bock (Please Print) Title Deputy Laboratory Director Title President Date 10/11/02 Date 10/15/02 Approved as to form /s/ Glenn R. Woods --------------------------- GLENN R. WOODS LAWRENCE BERKELEY NATIONAL LABORATORY 16 of 19 EXHIBIT 1 LICENSED (EXCLUSIVE) PATENTS

BERKELEY LAB CASE NUMBER PATENT APPLICATION/ PATENT IB-1576 US Patent Application Serial Number 09/702,219, filed 10/30/00, entitled, A non-hydrolytic single-precursor approach to surfactant-capped nanocrystals of transition metal oxides by A. Paul Alivisatos and Joerg Rocken-berger IB-1576A US Patent Application Serial Number 09/721,126, filed 11/22/00, entitled A Process for Making Surfactant Capped Nanocrystals, by A. Paul Alivisatos and Joerg Rockenberger IB-1402 [*** Redacted]

*** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 17 of 19 EXHIBIT 2 LICENSED (FOU EXCLUSIVE) PATENTS

BERKELEY LAB CASE NUMBER PATENT APPLICATION/ PATENT IB-1330JP Japanese Patent Application Number 11-80598, filed 3/24/99, entitled, Semiconductor nanocrystal probes for biological applications and process for making and using such probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330A-EPO European Patent Organization Application number 00915944.3, filed 2/28/00, entitled Semiconductor nanocrystal probes for biological applications and process for making and using such probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330A-CA Canadian Patent Application Number pending, filed 8/10/01, entitled Semiconductor nanocrystal probes for biological applications and process for making and using such probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330A-JP Japanese Patent Application Number pending, entitled Semiconductor nanocrystal probes for biological applications and process for making and using such probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330B US Patent Application Serial Number 09/349,833 filed 7/8/1999, entitled Semiconductor nanocrystal probes for biological applications and process for making and using such probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330C US Patent Application Serial Number 09/781,621, filed 2/12/2001, entitled Semiconductor nanocrystal probes for biological applications and process for making and using such probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330D US Patent Application Serial Number 09/865,130, filed 5/24/2001, entitled Semiconductor nanocrystal probes for biological applications and process for making and using such probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330E US Patent Application Serial Number pending,, filed 5/24/2002, entitled Organo luminescent semiconductor nanocrystal probes for biological applications and process for making and using such probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330F US Patent Application Serial Number pending,, filed 5/24/2002, entitled Semiconductor nanocrystal probes for biological applications and process for making and using such probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos

18 of 19 IB-1783P* US provisional patent application, serial number 60/346,253, filed 10/24/01, entitled, Quantum Rod Liquid Crystals and Process of Making, by A. Paul Alivisatos and Liang-shi Li IB-1773P* U.S. provisional patent application, serial number 60/335,435, filed 11/30/01, entitled Synthesis of Branched 3-Dimensional Inorganic Nanocrystals and Inorganic Dendrimers, by A. Paul Alivisatos, Erik Scher, and Liberato Manna IB-1527A US Patent Number 6,225,198, issued May 1, 2001, entitled Process for Forming Shaped Group II-VI Semiconductor Nanocrystals, and Product Formed Using Process, by A. Paul Alivisatos, Xiaogang Peng, and Liberato Manna IB-1527B US Patent Number 6,306,736, issued October 23, 2001, entitled Process for Forming Shaped Group III-V Semiconductor Nanocrystals, and Product Formed Using Process, by A. Paul Alivisatos, Xiaogang Peng, and Liberato Manna. IB-1330 US Patent Number 5,990,479, issued November 23, 1999, entitled Organoluminescent semiconductor nanocrystal probes for biological applications and process for making and using such probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330A US Patent Number 6,207,392, issued March 27, 2001, entitled Semiconductor nanocrystal probes for biological applications and process for making and using such probes by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos CIB-1030 US Patent Number 5,537,000, issued July 16, 1996, entitled Electroluminescent Devices Formed Using Semiconductor Nanocrystals as an Electron Transport Media and Method of Making Such Electroluminescent Devices, by A. Paul Alivisatos and Vicki L. Colvin IB-866A US Patent Number 5,751,018, issued May 12, 1998, entitled Semiconductor Nanocrystals Covalently Bound to Solid Inorganic Surfaces Using Self-Assembled Monolayers, by A. Paul Alivisatos and Vicki L. Colvin IB-865 US Patent Number 5,262,357, issued November 16, 1993, entitled Low Temperature Thin Films Formed Via Nanocrystal Precursors, by A. Paul Alivisatos and Avery N. Goldstein IB-864A US Patent Number 5,505,928, issued April 9,1996, entitled Preparation Of III-V Semiconductor Nanocrystals, by A. Paul Alivisatos and Michael A. Olshavsky - --------------- * If Berkeley Lab within 6 months from the Effective Date has not licensed to any third party the exclusions to the Field of Use for these Berkeley Lab case numbers IB-1773 and IB-1783 or provided written notice to Licensee that Berkeley Lab is in the process of doing so, then such cases shall automatically become Licensed (Exclusive) Patents. 19 of 19 EX-10.8.1 8 f97636a4exv10w8w1.txt EXHIBIT 10.8.1 EXHIBIT 10.8.1 AMENDMENT A TO LICENSE AGREEMENT This amendment agreement (the "Amendment A") is entered into by the parties to the existing license agreement effective November 9, 2002 (the "Prior Agreement") between The Regents of the University of California, Department of Energy contract-operators of the Ernest Orlando Lawrence Berkeley National Laboratory, 1 Cyclotron Road, Berkeley, CA 94720, ("Berkeley Lab"), and Nanosys, Inc., a Delaware corporation ("Licensee") having its principal place of business at 2625 Hanover St., Palo Alto, CA 94304. For good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, the Berkeley Lab and Licensee agree as follows: I. BACKGROUND The Berkeley Lab and Licensee are parties to the Prior Agreement (Berkeley Lab reference L-03-1364) relating generally to certain inventions characterized as nanocrystals and related technology. The Berkeley Lab and Licensee would like to amend the Prior Agreement by way of this Amendment A to include license rights to certain new inventions made in the course of research at Berkeley Lab by Dr. Paul Alivasatos and colleagues under Berkeley Lab's contract with the United States Department of Energy ("DOE"), relating generally to [*** Redacted] applications of [*** Redacted] and related technology. II. AMENDMENT FEE Licensee shall pay to the Berkeley Lab an Amendment Fee in the amount of [*** Redacted], which accrues upon execution of this Amendment, with [*** Redacted] being payable within 30 days of the execution of this Amendment, and the remaining [*** Redacted] being payable within 12 months of the execution date of this Amendment. III. AMENDMENTS TO THE PRIOR AGREEMENT A. Paragraph 5.1 of the Prior Agreement is hereby deleted in its entirety and replaced with the following amended paragraph 5.1: 5.1 Following an initial public offering or series of public offerings of Licensee securities which raises in the aggregate at least $5 million or sale of all or substantially all of the assets or equity of Licensee in a *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. transaction(s) worth at least $5 million ("Offering"), Licensee shall pay to Berkeley Lab the equivalent of the price at the Offering of 70,000 shares of Licensee's common stock. Such payments shall be made in installments with one-third payable 9 months from the Offering, one-third payable 18 months from the Offering and one-third payable 26 months from the Offering. Such payments shall include interest from the date of the Offering to the date such payment is made. Interest shall be compounded on the date such payment is made, and shall be charged at the prime lending rate as published in the Wall Street Journal on the date such payment is made. Licensee shall adjust the 70,000 shares to take into account any stock splits or reverse stock splits since the Effective Date. B. Paragraph 7.4 of the Prior Agreement is hereby amended to insert after paragraph 7.4.l0. the following additional paragraphs: 7.4.11 by 24 months from the Effective Date, have expended at least [*** Redacted] in the aggregate for direct costs in research and development for technology directly related to [*** Redacted] applications that use Licensed Patents; 7.4.12 by 24 months from the Effective Date, provide Berkeley Lab with a commercialization plan for [*** Redacted] devices based upon the Licensed Patents; 7.4.13 by 48 months from the Effective Date, produce in Licensee's facility, a working prototype [*** Redacted] device with at least [*** Redacted]; 7.4.14 by 60 months from the Effective Date, make commercial sales of Licensed Products that are [*** Redacted] devices C. Paragraph 9.1 of the Prior Agreement is hereby deleted in its entirety and replaced with the following amended paragraph 9.1: 9.1 Licensee shall keep books and records accurately showing all work performed in satisfaction of Article 7 and all Licensed Products manufactured, used, sold or imported under the terms of this Agreement, including without limitation books and records related to licenses for Third Party Patents under paragraph 6.4. Licensee shall preserve those *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 2 books and records for at least [*** Redacted] years from the date of the work performed or the royalty payment to which they pertain and shall open them to inspection by representatives or agents of Berkeley Lab at reasonable times. Licensee shall render all assistance reasonably requested by Berkeley Lab for the purposes of carrying out such inspections and examination of Licensee's royalty payments and performance under Article 7. D. Exhibit 1 and Exhibit 2 of the Prior Agreement are hereby deleted in their entirety and replaced with the attached amended Exhibit 1 and Exhibit 2. IV. NO OTHER AMENDMENTS Unless expressly amended herein or by subsequent amendments agreed to by the parties in a signed written amendment, all other terms of the Prior Agreement, including but not limited to terms related to interpretation and enforcement of the Prior Agreement, shall remain in full force and effect as originally agreed to in the Prior Agreement, and shall apply equally to the terms of this Amendment A. Berkeley Lab and Licensee execute this Agreement in duplicate originals through their duly authorized respective officers in one or more counterparts, that taken together, are but one instrument. THE RECENTS OF THE UNIVERSITY NANOSYS, INC. OF CALIFORNIA, THROUGH THE ERNEST ORLANDO LAWRENCE BERKELEY NATIONAL LABORATORY By /s/ Piermaria Oddone By /s/ Lawrence Bock ------------------------------- -------------------------- (Signature) (Signature) By Piermaria Oddone By Lawrence Bock Title Deputy Laboratory Director Title President Date 3/18/03 Date 3/20/03 Approved as to form /s/ Glenn R. Woods --------------------- GLENN R. WOODS LAWRENCE BERKELEY NATIONAL LABORATORY *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 3 EXHIBIT 1 LICENSED (EXCLUSIVE) PATENTS BERKELEY LAB CASE NUMBER PATENT APPLICATION/PATENT IB-1810 The following Provisional U.S. Patent Applications by A. Paul Alivisatos, Wendy U. Huynh, and Janke J. Dittmer: (1) 60/365,401, filed March 18, 2002, entitled Solar Cells, Photovoltaic Devices and Photodectectors Based on Inorganic Nanorods and Other 3D Objects Based on Nanorods; (2) 60/381,660, filed May 17, 2002, entitled, Hybrid Nanorod-Polymer Solar Cells; (3) 60/381,667, filed May 17, 2002, entitled, Hybrid Nanorod-Polymer Solar Cells IB-1783 US Patent Application Serial Number 10/280,135, filed 10/23/02, entitled, Semiconductor Liquid Crystal Composition and Methods for Making Same, by A. Paul Alivisatos and Liang-shi Li IB-1783PCT Patent Application filed under Chapter I of the Patent Cooperation Treaty, Serial Number PCT/US02/33970, filed 10/23/02, entitled, Quantum Rod Liquid Crystals, by A. Paul Alivisatos and Liang-shi Li IB-1576 US Patent Application Serial Number 09/702,219, filed 10/30/00, entitled, Process for Making Surfactant-capped Nanocrystals, by A. Paul Alivisatos and Joerg Rockenberger IB-1576A US Patent Application Serial Number 09/721,126, filed 11/22/00, entitled, A Process for Making Surfactant Capped Nanocrystals and Products Produced by the Process, by A. Paul Alivisatos and Joerg Rockenberger IB-1402 [*** Redacted] *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. EXHIBIT 2 LICENSED (FOU EXCLUSIVE) PATENTS BERKELEY LAB PATENT APPLICATION/PATENT CASE NUMBER IB-1773 U.S. patent application, Serial Number 10/301,510, filed 11/22/02, entitled Shaped Nanocrystal Particles and Methods for Making the Same, by A. Paul Alivisatos, Erik Scher, and Liberato Manna IB-1773PCT Patent Application filed under Chapter I of the Patent Cooperation Treaty, Serial Number pending, filed 11/22/02, entitled, Shaped Nanocrystal Particles and Methods for Making the Same, by A. Paul Alivisatos, Erik Scher, and Liberato Manna IB-1527A US Patent Number 6,225,198, issued May 1, 2001, entitled Process for Forming Shaped Group II-VI Semiconductor Nanocrystals, and Product Formed Using Process, by A. Paul Alivisatos, Xiaogang Peng, and Liberato Manna IB-1527B US Patent Number 6,306,736, issued October 23, 2001, entitled Process for Forming Shaped Group III-V Semiconductor Nanocrystals, and Product Formed Using Process, by A. Paul Alivisatos, Xiaogang Peng, and Liberato Manna IB-1330 US Patent Number 5,990,479, issued November 23, 1999, entitled Organoluminescent Semiconductor Nanocrystal Probes for Biological Applications and Process for Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330JP Japanese Patent Application Number 11-80598, filed 3/24/99, entitled, Semiconductor Nanocrystal Probes for Biological Applications and Process for Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330A US Patent Number 6,207,392, issued March 27, 2001, entitled Semiconductor Nanocrystal Probes for Biological Applications and Process for Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330A-EPO European Patent Organization Application number 00915944.3, filed 2/28/00, entitled Semiconductor Nanocrystal Probes for Biological Applications and Process for Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330A-CA Canadian Patent Application Number 2366303, filed 8/10/01, entitled Semiconductor Nanocrystal Probes for Biological Applications and Process for Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330A-JP Japanese Patent Application Number 2000-605212, entitled Semiconductor Nanocrystal Probes for Biological Applications and Process for Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330B US Patent Number 6,423,551 issued July 23, 2002, entitled Organo luminescent Semiconductor Nanocrystal Probes for Biological Applications and Process for Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330C US Patent Application Serial Number 09/781,621, filed 2/12/2001, entitled Semiconductor Nanocrystal Probes for Biological Applications and Process for Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos B-1330D US Patent Application Serial Number 09/865,130, filed 5/24/2001, entitled Organo luminescent Semiconductor Nanocrystal Probes for Biological Applications and Process for Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-1330E US Patent Application Serial Number 10/155,918, filed 5/24/2002, entitled Organo luminescent Semiconductor Nanocrystal Probes for Biological Applications and Process for Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos IB-I330F US Patent Application Seri al Number 10/155,759, filed 5/24/2002, entitled Semiconductor Nanocrystal Probes for Biological Applications and Process for Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos CIB-1030 US Patent Number 5,537,000, issued July 16, 1996, entitled Electroluminescent Devices Formed Using Semiconductor Nanocrystals as an Electron Transport Media and Method of Making Such Electroluminescent Devices, by A. Paul Alivisatos and Vicki L. Colvin IB-866A US Patent Number 5,751,018, issued May 12, 1998, entitled Semiconductor Nanocrystals Covalently Bound to Solid Inorganic Surfaces Using Self-Assembled Monolayers, by A. Paul Alivisatos and Vicki L. Colvin IB-865 US Patent Number 5,262,357, issued November 16, 1993, entitled Low Temperature Thin Films Formed Via Nanocrystal Precursors, by A. Paul Alivisatos and Avery N. Goldstein IB-864A US Patent Number 5,505,928, issued April 9, 1996, entitled Preparation Of III-V Semiconductor Nanocrystals, by A. Paul Alivisatos and Michael A. Olshavsky EX-10.9 9 f97636a4exv10w9.txt EXHIBIT 10.9 EXHIBIT 10.9 DEVELOPMENT AGREEMENT This DEVELOPMENT AGREEMENT ("Agreement") dated and effective as of November 18, 2002 ("Effective Date"), is entered into between Nanosys, Inc. ("Nanosys"), a Delaware corporation having offices at 2625 Hanover St., Palo Alto, CA 94304, and Matsushita Electric Works, Ltd. ("MEW"), a Japanese corporation having offices at 1048, Kadoma, Osaka 571-8686, Japan. WITNESSETH: WHEREAS, Nanosys possesses certain proprietary technology, know how and experience relating to the design, prototype development, development and manufacture of nanotechnology enabled systems in the field of solar cells; WHEREAS, MEW possesses certain proprietary technology, know how and experience relating to the development, manufacture and commercialization of Building Materials (as defined below) in Asia; WHEREAS, both parties desire to collaborate to investigate developing OPVs for use in Building Materials in Asia, as set forth herein; NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the parties hereby agree as follows: ARTICLE 1 -- DEFINITIONS For purposes of the Agreement, the terms defined in this Article I shall have the respective meanings set forth below: 1.1 "Asia" shall mean the countries of: China (including Hong Kong and Macau), Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan and Thailand. 1.2 "Background Technology" shall mean each party's technology, know-how, information and intellectual property rights disclosed, embodied or incorporated in the items provided by one party to the other party hereunder, which had existed prior to the Effective Date or were conceived, developed or otherwise made during the term of this Agreement outside of the Development Project and independent of the other party's Background Technology. 1.3 "Building Materials" shall mean materials primarily directed for use in the construction or fabrication of commercial, residential or other buildings or similar outdoor structures. Notwithstanding the foregoing, Building Materials shall exclude without limitation materials primarily directed for use in consumer products, portable and/or mobile power sources or structures, commercial power generation or supply, or for extraterrestrial applications. 1.4 "Development Goals" shall mean the development goals for each party under Development Project as set forth in Appendix A attached hereto. 1.5 "Development Period" shall mean the period commencing upon Nanosys' receipt of the Two Million United States Dollars (U.S. $2,000,000) payment set forth in Section 3.1, and unless terminated earlier upon termination of this Agreement pursuant to Article 6 or extended by the mutual written agreement of the parties, expiring fifteen (15) months after the Effective Date. Nanosys/MEW Confidential Page 1 1.6 "Development Project" shall mean the activities undertaken by each party during the Development Period that it reasonably determines, in consultation with the other party, are necessary and/or appropriate for achieving its Development Goals. 1.7 "FTE" shall mean a full-time employee, or in the case of less than a full-time dedicated person, a full-time equivalent person-year, based upon the total of one thousand eight hundred thirty two (1,832) hours per year. 1.8 "OPV" shall mean any photovoltaic device which incorporates Nanostructures or Nanocomposites as part of an active component. It is understood that OPVs shall include the primary encapsulation around such photovoltaic device. 1.9 "Phase I Technology" shall mean all materials, technology, know-how and information conceived, developed or otherwise made by either party during the term of this Agreement (i) in the course of performing the Development Project, or (ii) using the confidential or proprietary Background Technology of the other party. It Is understood that Phase I Technology shall include all patent, copyright, trade secret, confidential information and other intellectual property or proprietary rights therein and thereto. 1.10 "Nanocomposite" shall mean any material comprising a [*** Redacted] and a [*** Redacted] or composition, said [*** Redacted] acting as a matrix in which the Nanostructure is embedded or otherwise [*** Redacted]. Nanocomposites can be [*** Redacted] or [*** Redacted] and include without limitation mixtures of [*** Redacted] and [*** Redacted] or [*** Redacted] and/or [*** Redacted] or [*** Redacted]. Appendix B attached hereto illustrates the Nanocomposite of one potential OPV. 1.11 "Nanostructure" shall mean any material, structure or composition with any single dimension less than [*** Redacted]. Nanostructures include, but are not limited to semiconductors, metals, semimetals and insulators, and include, but are not limited to [*** Redacted], [*** Redacted], [*** Redacted] and [*** Redacted]. 1.12 "Nanotechnology" shall mean all materials, technology, know-how and information relating to, or useful for the exploitation of Nanostructures, Nanocomposites or properties thereof, or standalone functional devices incorporating or based on such Nanostructures, Nanocomposites or properties thereof, or components of such devices, including without limitation the properties, design and architecture (including without limitation [*** Redacted]), development (including without limitation methods and tools tor modeling and prototyping), manufacturing, synthesis, packaging, applications and commercialization thereof and interfaces therewith (including without limitation [*** Redacted], electrical and/or optical and/or magnetic contacts and integration components, methodologies). Nanotechnology shall exclude technology for integrating OPVs into surrounding Building Materials. For the avoidance of doubt, in no event shall Nanotechnology include inventions conceived after the end of the Development Period. 1.13 "Option Period" shall mean a period commencing upon the conclusion of the Election Period, and ending nine (9) months thereafter, unless terminated earlier by MEW upon written notice. ARTICLE 2 -- DEVELOPMENT PROJECT 2.1 Conduct Of the Development Project. Subject to the terms and conditions of this Agreement, Nanosys and MEW each shall use commercially reasonable efforts to conduct its activities under the Development Project. Nanosys and MEW each shall conduct its activities under the Development Project in good scientific manner and in compliance in all material respects with requirements of any applicable laws and regulations. It is understood that consistent with the Nanosys/MEW Confidential *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Page 2 requirements of this Agreement, each party shall determine in its sole discretion the manner and means by which it performs its activities under the Development Project. 2.2 Contemplated Allocation of Responsibilities and Level of Efforts. It is contemplated that Nanosys' activities under the Development Project will be primarily directed to the development of OPVs, which will ultimately meet the specifications of the Development Goals for such use in Building Materials and MEW's activities under the Development Project will be primarily directed to developing technology and manufacturing strategies for incorporating into Building Materials the OPVs developed by Nanosys hereunder, and performing market research relating thereto. Details in this connection shall be described in Appendix A attached hereto. During the Development Period, Nanosys will dedicate, the equivalent of [*** Redacted] FTEs on activities under the Development Project, and at least another [*** Redacted] FTEs on programs outside of the Development Project relating to core nanotechnologies which would be available to the development of OPVs under the Development Project if applicable. It is presently contemplated that MEW will expend Two Million United States Dollars (U.S. $2,000,000) on performing its activities under the Development Project. 2.3 Communications; Coordination. Nanosys and MEW each shall keep the other generally informed from time to time during the Development Period of any results from the Development Project. Without limiting the generality of the foregoing the parties shall hold during the Development Period a technical meeting every month, and a managerial meeting every three (3) months. Unless otherwise agreed such meeting shall be held at Nanosys' facilities. Each party shall appoint a "Project Manager," who shall oversee such party's efforts on the Development Project and any meetings, exchanges, visits and collaboration between the parties hereunder. The initial Project Manager for Nanosys is [*** Redacted]; the initial Project Manager for MEW is [*** Redacted]. The parties may from time to time change the identity of its Project Manager upon written notice. At any time upon the request of MEW, but in no event more frequent than once per calendar quarter, Nanosys will prepare a written report summarking the work done to-date and the results meeting the specifications of the Development Goals. 2.4 Visiting and Collaborating Personnel. During the Development Period, each party shall make its personnel available to visit with and collaborate with the other party's personnel in carrying out the Development Project, for the benefit of the collaboration upon a mutually agreeable schedule. Such activities may Include prototyping, testing and evaluation of devices developed under the Development Project, but shall not include any synthesis of Nanostructures or associated [*** Redacted] interface [*** Redacted]. In the event one party's personnel is performing or observing the performance of the Development Project at the other party's facilities, such visiting personnel shall agree to be bound by all reasonable orders, rules and regulations pertaining to the hosting party's facilities while at such facilities, including reasonable confidentiality obligations, In case of any direct conflict between the terms of the Agreement and such facilities' orders, rules, and regulations, the terms of this Agreement shall prevail. 2.5 Records. Nanosys and MEW each shall maintain records in English, in sufficient detail and in good scientific manner, which shall reflect work done and results achieved in the performance of the Development Project. Each party shall provide the other party with written disclosure describing each invention developed during the Development Project in which such other party has an ownership interest hereunder, upon the receipt of an invention disclosure from its personnel. 2.6 Formal Review Meeting. On or about nine (9) months after the Effective Date, the parties shall hold a meeting in person at Nanosys' facilities to formally review the results of the Development Project as of the date of such meeting. At such meeting each party shall have at least one representative who is at the director level or higher, and the parties shall make a joint formal presentation describing the outcomes and results of its activities to date. Additionally if MEW has not previously exercised its option pursuant to Section 3.2 below, at such meeting the parties Nanosys/MEW Confidential *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Page 3 shall discuss MEW's desire to exercise such option, provided such early discussion shall not shorten MEW's Election Period as defined in Section 3.2 below. It is understood that the meeting described in this Section 2.6 shall be in lieu of any meeting to be held pursuant to Section 2.3 above for such month. 2.7 Final Report. Promptly upon expiration of the Development Period, each party shall provide the other party with a final report describing the results of its activities under the Development Project, including the extent to which it has met its Development Goals (each, the "Final Report"). 2.8 Testing of Deliverables. Promptly upon the conclusion of the Development Period, Nanosys shall make available to MEW for testing a reasonable number of sample units of the OPVs created by Nanosys meeting or most closely meeting the Development Goals(or components if a complete OPV has not been created). Such testing shall take place at Nanosys' facilities, or may be conducted jointly by the parties at MEW's facilities. ARTICLE 3 -- PAYMENTS/EXCLUSIVITY 3.1 Payments. In consideration of Nanosys' performance of its activities under the Development Project, MEW shall pay Nanosys Two Million United States Dollars (U.S. $2,000,000) within fifteen (15) days of execution of this Agreement. It is contemplated that such amount shall be in consideration for the efforts undertaken and be partial reimbursement for the costs and expenses incurred by Nanosys in performing its activities hereunder. As additional consideration, within thirty (30) days of the conclusion of the Development Period, provided that Nanosys has met its Development Goals or MEW provides or has provided Nanosys with an Exercise Notice pursuant to Section 3.2 or MEW elects in its discretion to make such payment, MEW shall pay Nanosys an additional Five Hundred Thousand United States Dollars (U.S. $500,000). MEW shall make all payments hereunder by check or wire transfer in immediately available funds to an account designated by Nanosys. All amounts payable hereunder shall be paid in United States Dollars, and shall be net of any sales, use, withholding or other taxes. Except as set forth in this Section 3.1, each party shall be responsible for and bear its own costs for carrying out its activities under the Development Project. 3.2 Option to Negotiate Additional Development. At any time after the commencement of the Development Period and prior to a lapse of thirty (30) days after Nanosys provides its Final Report under Section 2.7 (the "Election Period"), MEW may provide Nanosys with written notice (the "Exercise Notice"), stating that MEW desires to negotiate the terms and conditions under which the parties would continue the development of OPVs for use in Building Materials ("Phase II") and would commercialize such OPVs and Building Materials in Asia, including Nanosys supplying certain components thereof ("Phase III") (collectively, the Phase II/III Projects"). Promptly after Nanosys' receipt of the Exercise Notice as set forth above, the parties shall meet to negotiate in good faith the terms and conditions of the Phase II and/or Phase III Projects for a period of sixty (60) days (the "Negotiation Period"). The Negotiation Period shall be extended to the extent mutually agreed between the parties. Such terms and conditions may include: (i) Nanosys having a nonexclusive, worldwide license under subject matter developed by MEW relating to Nanotechnology under mutually agreeable terms and conditions, and (ii) other customary and reasonable terms and conditions standard for development, supply and commercialization arrangements of the type contemplated above. If the parties have not mutually agreed on the terms and conditions for the Phase II/III Projects for any reason by the expiration of the Negotiation Period, neither party shall have any further obligation to the other party under this Section 3.2 thereafter. It is understood that Phase II/III Projects may include additional Asian countries as mutually agreed between the parties. 3.3 Exclusivity. During the period ("Exclusive Period") beginning upon the commencement of the Development Period and ending (i) upon the expiration of the Negotiation Period, if MEW provides the Exercise Notice in accordance with Section 3.2, or (ii) upon expiration of the Election Period, if MEW fails to provide the Exercise Notice in accordance with Section 3.2, each party Nanosys/MEW Confidential Page 4 agrees not to enter into any written agreement with any third party with respect to the development, commercialization or other exploitation of OPVs containing inorganic Nanostructures for use in Building Materials in Asia. Each party remains free to enter into collaborations with third parties relating to OPVs containing Nanostructures other than inorganic Nanostuctures. 3.4 Other Opportunities. Nanosys and MEW may discuss the possibility of and terms and conditions for the parties collaborating together with respect to the development and commercialization in Asia of the OPVs developed hereunder, other than for use in Building Materials. 3.5 Option to License Phase I Technology. Provided that MEW has made the Five Hundred Thousand Dollars ($500,000) payment to Nanosys pursuant to Section 3.1, if thereafter during the Option Period Nanosys enters into a written agreement ("Third Party Agreement") with a third party ("Third Party") with respect to the Field (as defined below) granting such Third Party license rights which includes a material portion of Phase I Technology, Nanosys shall notify MEW and disclose the scope of such license rights in the Field and the terms and conditions agreed to by such Third Party for such license rights ("Notice of Third Party Agreement"). Upon written request of MEW received by Nanosys within thirty (30) days after the Notice of Third Party Agreement, Nanosys shall enter into a written agreement with MEW ("Written License) granting to MEW the same license rights in the Field as set forth in such Notice of Third Party License, on the same terms and conditions as agreed to by the respective Third Party. The license rights offered to MEW in the Notice of Third Party Agreement shall include all intellectual property rights that Nanosys grants to the Third Party that relate directly to the Field; provided however, that the Written License is not required to grant MEW any rights with respect to any intellectual property (i) which has been funded by or in conjunction with such Third Party to the Third Party Agreement or created during the course of such Third Party Agreement, or (ii) for any use outside the Field. During the Option Period, MEW agrees not to enter into any written agreement with any third party with respect to the Field. As used herein, the "Field" shall mean commercialization in Asia of OPVs containing inorganic Nanostructures specifically for use in Building Materials. Each party remains free to enter into collaborations with third parties relating to OPVs containing inorganic Nanostructures other than inorganic Nanostuctures. ARTICLE 4- CONFIDENTIALITY/HANDLING OF MATERIALS 4.1 Confidential Information. Except as provided herein, each party shall maintain in confidence, and shall not use for any purpose or disclose to any third party, information that is disclosed by the other party in writing and marked "Confidential," or that is disclosed orally and identified as or should reasonably be considered confidential, or that is obtained through inspection of tangible items marked or located in a area designated as confidential (collectively, "Confidential Information"). Confidential Information shall not include any information that the receiving party can demonstrate was: (i) already known to the receiving party at the time of disclosure hereunder, or (ii) now or hereafter becomes publicly known other than through acts or omissions of the receiving party, or (iii) is rightfully disclosed without restriction to the receiving party by a third party or (iv) independently developed by the receiving party without use of or reference to the Confidential Information of the disclosing party. The obligations of this Section 4 shall survive for five (5) years after any termination or expiration of this Agreement. 4.2 Permitted Usage. Notwithstanding the provisions of Section 4.1 above, the receiving party may use or disclose Confidential Information of the disclosing party solely to the extent necessary to exercise the rights granted to it or perform its obligations hereunder (provided it uses commercially reasonable efforts to protect such information commensurate with the efforts used to protect its own information of a similar nature) or in prosecuting or defending litigation, filing for patent rights with respect to Phase I Technology, complying with applicable governmental regulations and/or submitting information to tax or other governmental authorities; provided that if the receiving party is required by law to make any public disclosures of Confidential Information of the disclosing party, to the extent it may legally do so, it will give reasonable advance notice to Nanosys/MEW Confidential Page 5 the disclosing party of such disclosure and will use its reasonable efforts to secure confidential treatment of Confidential Information prior to its disclosure (whether through protective orders or otherwise). 4.3 Materials. Each party may in the course of performance of the Development Project transfer Materials that are necessary for the other party's performance of its duties under the Development Project. As used herein, a party's "Materials" shall refer to such materials and any other proprietary materials, compositions or software, provided by such party to the other party hereunder. Notwithstanding, Nanosys' Materials shall include any and all OPVs, Nanostructures, Nanocomposites and components or parts thereof created during the course of the Development Project. Each party shall retain all of its right, title and interest in and to its Materials. a. Use. A party shall use the other party's Materials for the sole purpose of conducting the Development Project, and not for any other study or purpose without the prior written consent of providing party. Each party shall only allow its employees who are working on activities under the Development Project, who have agreed to be bound by obligations of confidentiality and non-use restrictions as materially protective as this Agreement, to have access to the other party's Materials. b. Restrictions. Each party agrees to retain control over the Materials of the other party and not to transfer such Materials to any third party without the prior written consent of the other party. Except as expressly provided, neither party shall reverse engineer, disassemble or decompile any of the Materials of the other party. c. Markings. Each party agrees not to remove any markings on any Materials of the other party. d. Unknown Characteristics. Each party acknowledges that the Materials are experimental in nature and may have unknown characteristics and therefore agrees to use prudence and reasonable care in the use, handling, storage, transportation and disposition and containment of the Materials. e. Limitations. Notwithstanding the foregoing, nothing in this Article 4 shall be construed (1) to impose any obligations on MEW with respect to MEW's Materials, and on Nanosys with respect to Nanosys' Materials, (ii) as a grant by either party to the other party of any license or other rights in or to the Materials, (iii) to require either party to transfer any Materials to the other party. ARTICLE 5 -- INTELLECTUAL PROPERTY 5.1 Phase I Technology. Nanosys shall solely own all Phase I Technology created by either party constituting Nanotechnology. MEW hereby irrevocably assigns, and agrees to assign, to Nanosys Phase I Technology created by MEW constituting Nanotechnology, and agrees to assist Nanosys, upon Nanosys' reasonable request, to secure or perfect any or all such rights without MEW assuming any financial obligation. Except as set forth in this Article 5, the ownership of any Phase I Technology shall be determined by inventorship under the intellectual property laws of the country where the technology is created. It is understood that neither party shall have any obligation to account to the other party for profits, or to obtain any approval of the other party to license or exploit any jointly owned Phase I Technology, by reason of their joint ownership thereof, and each party hereby waives any right it may have under the laws of any country to require such accounting or approval. During the term of this Agreement and one (1) year thereafter, Nanosys shall inform MEW reasonably promptly following the filing of any patent applications regarding Phase I Technology. In the event that Nanosys files a patent application for Phase I Technology in the United State, Nanosys shall file a counterpart application for the same technology in each country in Asia in a timely fashion in accordance with international conventions or treaties at Nanosys/MEW Confidential Page 6 Nanosys' expense, but only provided that the Option Period has not expired or the parties proceed with a Phase II/III Project. ARTICLE 6 -- TERMINATION 6.1 Expiration. Unless terminated earlier or extended by the mutual written agreement of the parties, this Agreement shall expire upon the later of (i) the expiration of the Development Period, or (ii) the expiration of the Exclusive Period (as defined in Section 3.3). 6.2 Termination. Either party may terminate this Agreement upon written notice in the event of material breach of this Agreement by the other party, which breach is not cured within thirty (30) days days after written notice specifying such breach and the notifying party's intention to terminate. 6.3 Obligations Surviving Expiration or Termination. Expiration or earlier termination of this Agreement shall not relieve the parties of any obligation accruing prior to such expiration or termination, and the provisions of Articles and Sections 2.5, 2.7, 3.1, 4, 5, 6 and 7 shall survive any expiration or termination of this Agreement. Upon termination or expiration of this Agreement (or earlier request of the other party), each party shall promptly return any and all Confidential Information and Materials of the other party. Section 3.5 shall survive the termination or expiration of this Agreement with respect to Nanosys' obligations, except in the case of termination due to MEW's breach. Section 3.5 shall survive the termination or expiration of this Agreement with respect to MEW's obligations, except in the case of termination due to Nanosys' breach. ARTICLE 7 -- ADDITIONAL PROVISIONS 7.1 Notices. Any consent, notice, or report required or permitted to be given or made under this Agreement by one party to the other party shall be in writing, delivered personally or by facsimile (receipt confirmed), first class mall postage prepaid, or internationally recognized courier or delivery service, and addressed to.the other party at its address indicated below, or to other such address as the addressee shall have last furnished in writing to the addressor. Except as otherwise provided in the Agreement, such consent, notice, or report shall be effective upon receipt by the addressee. If to Nanosys: If to MEW: Attn: Calvin Y.H. Chow Attn: Junji Adachi Nanosys, Inc. Matsushita Electric Works, Ltd. 2625 Hanover Street, Advanced Technology Research Laboratory Palo Alto, CA 94304 1048, Kadoma, Osaka 571-8686 United States of America Japan 7.2 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, United States of America, without regard to the conflicts of law principles thereof. The parties disclaim any application of the U.N. Convention on Contracts for the International Sale of Goods to this Agreement. 7.3 Arbitration. Any dispute or claim arising out of or in connection with this Agreement or the performance, breach or termination thereof, shall be finally settled by binding arbitration in Santa Clara County, California. U.S.A., in accordance with the rules then obtaining of the International Chamber of Commerce by three (3) arbitrators appointed in accordance with said rules, unless the parties have agreed on one (1) arbitrator. The decision and/or award rendered by the arbitrator(s) shall be written, final and non-appealable and may be entered in any court of competent jurisdiction. The arbitral proceedings and all pleadings and evidence shall be in the English language. Any evidence originally in a language other than English shall be submitted Nanosys/MEW Confidential Page 7 with an English translation accompanied by an original or true copy thereof. The costs of any arbitration, including administrative fees and fees of the arbitrator(s), shall be shared equally by the parties, unless otherwise determined by the arbitrator(s). Each party shall bear the cost of its own attorneys' and expert fees. The parties agree that, any provision of applicable law notwithstanding, they will not request, and the arbitrator shall have no authority to award, punitive or exemplary damages against any party. 7.4 Independent Contractors. The relationship of MEW and Nanosys established by this Agreement is that of independent contractors. This Agreement shall not constitute, create, or otherwise imply a joint venture, pooling arrangement, partnership, or formal business organization of any kind. The parties agree that the obligations and duties of each party arising under this Agreement regardless of whether shared, identical, or otherwise similar, are separate and distinct from the obligations and duties of the other party. Actions or failures to act by one party shall not confer joint and several liability to the other party. 7.5 Language. This Agreement is in the English language only, which language shall be controlling in all respects, and all versions hereof in any other language shall not be binding on the parties hereto. All communications and notices to be made or given pursuant to this Agreement shall be in the English language. 7.6 U.S. Export Laws and Regulations. Each party hereby acknowledges that the rights and obligations of this Agreement are subject to the laws and regulations of the United States relating to the export of products and technical information. Each party shall comply with all such laws and regulations. 7.7 Force Majeure. Except with respect to payment of amounts due hereunder, neither party shall be held liable or responsible to the other party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of the Agreement to the extent, and for so long as, such failure or delay is caused by or results from causes beyond the reasonable control of the affected party including but not limited to fires, earthquakes, floods, embargoes, wars, acts of war (whether war is declared or not), insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God or acts, omissions, or delays in acting by any governmental authority or other person. The term of the Development Period shall be extended by the number of days of any delay or interruption. 7.8 Representations and Warranties. Each party represents, warrants and covenants to the other party that (i) it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and (ii) the execution, delivery and performance of this Agreement by such party has been duly authorized by all requisite corporate action, and this Agreement constitutes such party's legal, valid and binding obligation enforceable against it in accordance with its term, (iii) to the knowledge of such party, it is the owner or licensee of all its Background Technology relied upon in its performance of this Agreement, (iv) to the knowledge of such party, its performance of this Agreement will not Infringe the intellectual property rights of any third party, and (v) such party shall not use any government funds for performance of the Development Project which would preclude or impair the ability to grant the other party commercialization rights to the Phase I Technology as contemplated under Section 3.2. 7.9 Disclaimer. Neither party makes any representation or warranty or guaranty that the Development Project will be successful, in whole or part, or that the parties will successfully meet their Development Goals or develop any OPV (or any other products or intellectual property) under the Development Project. EXCEPT AS SET FORTH HEREIN, MEW AND NANOSYS EXPRESSLY DISCLAIM ANY AND ALL WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE CONFIDENTIAL INFORMATION, MATERIALS, PHASE I TECHNOLOGY AND ANY OTHER MATERIALS, TECHNOLOGY OR INFORMATION PROVIDED HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY, Nanosys/MEWConfidential Page 8 USEFULNESS OR RELIABILITY OF ANY SUCH INFORMATION AND TECHNOLOGY, PATENTED OR UNPATENTED, OR NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. 7.10 Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE DAMAGES INCURRED BY SUCH PARTY ARISING UNDER OR AS A RESULT OF THIS AGREEMENT (OR THE PERFORMANCE, BREACH OR TERMINATION HEREOF) INCLUDING, BUT NOT LIMITED TO, THE LOSS OF PROSPECTIVE PROFITS OR ANTICIPATED SALES, OR ON ACCOUNT OF EXPENSES, INVESTMENTS, OR COMMITMENTS IN CONNECTION WITH THE BUSINESS OR GOODWILL OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME. 7.11 Assignment. Except as set forth in this Section 7.11, neither party shall assign Its rights or obligations under this Agreement, in whole or in part, by operation of law or otherwise, without the prior written consent of the nonassigning party. Either party may assign this Agreement, and all of its rights hereunder, to a person or entity that acquires all or substantially all of the business or assets of that party (or that portion thereof to which this Agreement pertains) in each case whether by merger, acquisition, operation of law or otherwise, provided that such assignee agrees in writing to be bound by the terms and conditions of this Agreement. Any purported assignment in violation of this provision shall be null and void. Subject to the foregoing, this Assignment shall bind and inure to the benefit of each party's permitted successors or assigns. 7.12 Entire Agreement. This Agreement, including Appendix A and Appendix B attached hereto, embodies the entire understanding between the parties and supersedes any prior understandings and agreements between and among them respecting the subject matter hereof. There are no representations, agreements, arrangements or understandings, oral or written, between the parties hereto relating to the subject matter of the Agreement which are not fully expressed herein. No change, modification, extension, termination, or waiver of the Agreement, or any of the provisions herein contained, shall be valid unless made in writing and signed by duly authorized representatives of the parties hereto. 7.13 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties through their duly authorized representatives have executed the Agreement as of the date first set forth above. NANOSYS, INC. MATSUSHITA ELECTRIC WORKS, LTD. By /s/ Calvin Chow By /s/ Hiroshi Kikuchi --------------------- ----------------------------- Name CALVIN CHOW Name Hiroshi Kikuchi Title CHIEF OPERATING OFFICER Title Senior Managing Director Nanosys/MEWConfidential Page 9 APPENDIX A Development Goals Nanosys A proof of concept of an OPV meeting the following specifications: -Device Size: [*** Redacted]. -Raw Device [*** Redacted]: At least [*** Redacted] and [*** Redacted] and not including [*** Redacted]. -Device Material: [*** Redacted], or other [*** Redacted] materials MEW 1. Developing technology and strategies for manufacturing OPVs for use in Building Materials. 2. Performing market research relating to OPVs for use in Building Materials in Asia. Nanosys Confidential *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. APPENDIX B DEFINITIONS OF WORDS IN THE DEVELOPMENT PROJECT [*** Redacted] *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. EX-10.9.1 10 f97636a4exv10w9w1.txt EXHIBIT 10.9.1 EXHIBIT 10.9.1 FIRST AMENDMENT TO DEVELOPMENT AGREEMENT Nanosys Inc. ("Nanosys"), and Matsushita Electric Works, Ltd. ("MEW") are parties to a certain Development Agreement ("the Agreement") dated and effective as of November 18th, 2002 ("the Effective Date"). This First Amendment to the Agreement is entered into and effective as of February 8, 2004 ("the First Amendment Date"). WHEREAS, MEW and Nanosys wish to extend the Development Period of the Agreement; NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the parties hereby agree to amend the Agreement as follows: A. Section 1.5 of the Agreement is hereby deleted and replaced with the following: 1.5 "Development Period" shall mean the period commencing upon Nanosys' receipt of the Two Million United States Dollars ($2,000,000) payment set forth in Section 3.1, and unless' terminated earlier upon termination of this Agreement pursuant to Article 6 or extended by mutual written agreement of the parties, expiring twenty one (21) months after the Effective Date. B. In Section 3.1 of the Agreement, the third sentence which states in its entirety "As additional consideration, within thirty (30) days of the conclusion of the Development Period, provided that Nanosys has met its Development Goals or MEW provides or has provided Nanosys with an Exercise Notice pursuant to Section 3.2 or MEW elects in its discretion to make such payment, MEW shall pay Nanosys an additional Five Hundred Thousand United States Dollars (U.S. $500,000)." is hereby deleted. C. In Section 3.5 of the Agreement, the opening clause that states in its entirety: "Option to License Phase I Technology. Provided that MEW has made the Five Hundred Thousand Dollars ($500,000) payment to Nanosys pursuant to Section 3.1," is hereby deleted and replaced with the following: "Option to License Phase I Technology. Provided that MEW has provided Nanosys with the Exercise Notice pursuant to Section 3.2," D. In consideration of the foregoing amendments, MEW shall pay to Nanosys the amount of Five Hundred Thousand United States Dollars ($500,000) ("Amendment Fee") within thirty (30) days of the First Amendment Date. Such payment shall be made in accordance with the terms respecting payment as set forth in the Article 3 of the Agreement. E. Unless expressly amended herein or by subsequent amendments agreed to by the parties in a signed written amendment, all other terms of the Agreement, including but not limited to terms related to interpretation and enforcement of the Agreement, shall remain in full force and effect as originally agreed to in the Agreement, and shall apply equally to the terms of this First Amendment. The parties hereby expressly reaffirm their obligations under the Agreement, including their obligation to prepare and provide a Final Report upon expiration of the Development Period (as amended), and the parties acknowledge that any delay in the delivery of such Final Report will result in a corresponding extension of the time periods measured by reference to the Final Report, including the Election Period. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Page 1 of 2 IN WITNESS WHEREOF, the parties through their duly authorized representatives have executed this First Amendment as of the date last set forth below NANOSYS, INC. MATSUSHITA ELECTRIC WORKS, LTD. By: /s/ Calvin Chow By: /s/ Hiroshi Kikuchi ---------------------------- -------------------------------- Name: Calvin Chow Name: Hiroshi Kikuchi Title: Chief Executive Officer Title: Executive Vice President Date: 2-17-04 Date: February 17, 2004 Page 2 of 2 EX-10.10 11 f97636a4exv10w10.txt EXHIBIT 10.10 EXHIBIT 10.10 MASSACHUSETTS INSTITUTE OF TECHNOLOGY EXCLUSIVE PATENT LICENSE AGREEMENT WITH NANOSYS, INC. TABLE OF CONTENTS RECITALS .................................................................... 1 1. Definitions .............................................................. 2 2. Grant of Rights .......................................................... 6 3. COMPANY Diligence Obligations ............................................ 7 4. Royalties and Payment Terms .............................................. 9 5. Reports and Records ...................................................... 13 6. Patent Prosecution ....................................................... 15 7. Infringement ............................................................. 16 8. Indemnification and Insurance ............................................ 17 9. No Representations or Warranties ........................................ 19 10. Assignment .............................................................. 19 11. General Compliance with Laws ............................................ 20 12. Termination ............................................................. 21 13. Dispute Resolution ...................................................... 22 14. Miscellaneous ........................................................... 23 APPENDIX A .................................................................. 28 APPENDIX B .................................................................. 29 EXHIBIT A ................................................................... 31 EXHIBIT B ................................................................... 32 EXHIBIT C ................................................................... 33 ii MASSACHUSETTS INSTITUTE OF TECHNOLOGY EXCLUSIVE PATENT LICENSE AGREEMENT This Agreement, effective as of the date set forth above the signatures of the parties below (the "EFFECTIVE DATE"), is between the Massachusetts Institute of Technology ("M.I.T."), a Massachusetts corporation, with a principal office at 77 Massachusetts Avenue, Cambridge, MA 02139-4307 and Nanosys, Inc. ("COMPANY"), a Delaware corporation, with a principal place of business at 2625 Hanover Street, Palo Alto, CA 94304. RECITALS WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS (as later defined herein) and has the right to grant licenses under said PATENT RIGHTS; WHEREAS, Moungi Bawendi, an inventor of the PATENT RIGHITS and current employee of M.I.T., has or will shortly acquire equity in COMPANY, the Conflict Avoidance Statement of Moungi Bawendi is attached as Exhibit A hereto; WHEREAS, Moungi Bawendi, an inventor of the PATENT RIGHTS, has or will shortly acquire equity in COMPANY not resulting from this Agreement, the Inventor/Author Acknowledgment of No Equity Distribution in M.I.T.'s institutional equity share is attached as Exhibit B hereto; WHEREAS, M.I.T.'s Vice President for Research has approved that Moungi Bawendi, an inventor of the PATENT RIGHTS, now holds or shall shortly acquire equity in COMPANY and that M.I.T. is accepting equity as partial consideration for the rights and licenses granted under this Agreement; WHEREAS, M.I.T. desires to have the PATENT RIGHTS developed and commercialized to benefit the public and is willing to grant a license thereunder; WHEREAS, COMPANY has represented to M.I.T., to induce M.I.T. to enter into this Agreement, that COMPANY shall commit itself to a thorough, vigorous and diligent program of exploiting the PATENT RIGHTS so that public utilization shall result therefrom; and WHEREAS, COMPANY desires to obtain a license under the PATENT RIGHTS upon the terms and conditions hereinafter set forth. NOW, THEREFORE, M.I.T. and COMPANY hereby agree as fellows: 1. DEFINITIONS. 1.1 "AFFILIATE" shall mean any legal entity (such as a corporation, partnership, or limited liability company) that is controlled by COMPANY. For the purposes of this definition, the term "control" means (i) beneficial ownership of at least fifty percent (50%) of the voting securities of a corporation or other business organization with voting securities or (ii) a fifty percent (50%) or greater interest in the net assets or profits of a partnership or other business organization without voting securities. 1.2 "COMBINATION PRODUCT" shall mean a LICENSED PRODUCT sold in combination with one or more other components which are themselves not LICENSED PRODUCTS and where such other components could reasonably be deemed to be separate product(s). 1.3 "FIELDS" shall mean FIELD A and FIELD B. 1.4 "FIELD A" shall mean all fields. 1.5 "FIELD B" shall mean all fields excluding the field of biological assay system and the field of combinatorial chemistry. 1.6 "LICENSED PRODUCT" shall mean any product or part thereof that: (a)absent the license granted hereunder, would infringe one or more claims of the PATENT RIGHTS; or (b) is manufactured by using a LICENSED PROCESS or that, when used, practices a LICENSED PROCESS. 1.7 "LICENSED PROCESS" shall mean any process that, absent the license granted hereunder, would infringe one or more claims of the PATENT RIGHTS or which uses a LICENSED PRODUCT. 2 ' 1.8 "NET SALES" shall mean the gross amount [*** Redacted] by COMPANY and its AFFILIATES and SUBLICENSEES for LICENSED PRODUCTS and LICENSED PROCESSES, less the following: (a) customary [*** Redacted] to the extent actually allowed and taken; (b) amounts [*** Redacted] by reason of [*** Redacted]; (c) an allowance for [*** Redacted] having occurred during the REPORTING PERIOD, said allowance being no greater than [*** Redacted]; (d) to the extent separately stated on purchase orders, invoices, or other documents of sale, any [*** Redacted] levied on the production, sale, [*** Redacted], or use of a LICENSED PRODUCT or LICENSED PROCESS which is paid by or on behalf of COMPANY; and (e) [*** Redacted] costs prepaid or allowed and costs of [*** Redacted] in [*** Redacted]. No deductions shall be made for commissions paid to individuals whether they are with independent sales agencies or regularly employed by COMPANY or an AFFILIATE and on the payroll, or for cost of collections. NET SALES shall occur on the date of [*** Redacted] for a LICENSED PRODUCT or LICENSED PROCESS. If a LICENSED PRODUCT or a LICENSED PROCESS is distributed [*** Redacted] charged by COMPANY or AFFILIATE, or distributed for non-cash consideration (whether or not at a discount), NET SALES shall be calculated based on [*** Redacted] of the LICENSED PRODUCT or LICENSED PROCESS charged to an independent third party during the same REPORTING PERIOD or, in the absence of such sales, on the fair market value of the LICENSED PRODUCT or LICENSED PROCESS. In the case of COMBINATION PRODUCTS, NET SALES shall mean the gross amount billed or invoiced for the COMBINATION PRODUCT less the deductions set forth above, multiplied by a proration factor that is determined as follows: (i) If all components of the COMBINATION PRODUCT were sold separately during the same or immediately preceding ROYALTY PERIOD, the proration factor shall be determined by the formula [*** Redacted] where A is the [*** Redacted] price of all LICENSED PRODUCT components during such period when sold separately from the other essential functional components, and B is the [*** Redacted] of the other essential functional components during such period when sold separately from the LICENSED PRODUCT components; or (ii) If all components of the COMBINATION PRODUCT were not sold separately during the same or immediately preceding ROYALTY PERIOD, the proration factor shall be determined by the formula [*** Redacted] where C is the [*** Redacted] of *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 3 the LICENSED PRODUCT components during the prior ROYALTY PERIOD and D is the [*** Redacted] during the prior ROYALTY PERIOD, with such costs being determined in accordance with generally accepted accounting principles. 1.9 "PATENT RIGHTS" shall mean PATENT RIGHTS A and PATENT RIGHTS B. 1.10 "PATENT RIGHTS A" shall mean: (a) the United States and international patents listed on Appendix A: (b) the United States and international patent applications and/or provisional applications listed on Appendix A and the resulting patents; (c) any patent applications resulting from the provisional applications listed on Appendix A, and any divisionals, continuations, continuation-in-part applications, and continued prosecution applications (and their relevant international equivalents) of the patent applications listed on Appendix A and of such patent applications that result from the provisional applications listed on Appendix A, to the extent the claims are directed to subject matter in or supported by the patent applications listed on Appendix A, and the resulting patents; (d) any patents resulting from reissues, reexaminations, or extensions (and their relevant international equivalents) of the patents described in (a), (b), and (c) above; and (e) international (non-United States) patent applications and provisional applications filed after the EFFECTIVE DATE and the relevant international equivalents to divisionals, continuations, continuation-in-part applications and continued prosecution applications of the patent applications to the extent the claims are directed to subject matter in or supported by the patents or patent applications referred to in (a), (b), (c), and (d) above, and the resulting patents. 1.11 "PATENT RIGHTS B" shall mean: (a) the United States and international patents listed on Appendix B; (b) the United States and international patent applications and/or provisional applications listed on Appendix B and the resulting patents; (c) any patent applications resulting from the provisional applications listed on Appendix B, and any divisional, continuations, continuation-in-part applications, and continued prosecution applications (and their relevant international equivalents) of the patent applications listed on Appendix B and of such patent applications that result from the provisional applications listed on Appendix B, to the extent the claims are directed to subject matter in or supported by the patent applications listed on Appendix B, and the resulting patents; *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 4 (d) any patents resulting from reissues, reexaminations, or extensions (and their relevant international equivalents) of the patents described in (a), (b), and (c) above; and (e) international (non-United States) patent applications and provisional applications filed after the EFFECTIVE DATE and the relevant International equivalents to divisisntinuations, continuation-in-part applications and continued prosecution applications of the patent applications to the extent the claims are directed to subject matter in or supported by the patents or patent applications referred to in (a), (b), (c), and (d) above, and the resulting parents. 1.12 "REPORTING PERIOD" shall begin on the first day of each calendar quarter and end on the last day of such calendar quarter. 1.13 "SUBLICENSE INCOME" shall mean any payments that COMPANY receives from a SUBLICENSEE, including any sublicense entered into in settlement of any claim of infringement in consideration of the sublicense of the rights granted COMPANY under Section 2.1, including without limitation license fees, milestone payments, license maintenance fees, royalties on NET SALES, and other payments, but specifically excluding, payment or reimbursement for research and development actually performed; costs incurred by or for COMPANY associated with materials, equipment or clinical testing used in performance of research and development; patent expenses; fair market value amounts received for COMPANY'S equity; and amounts in consideration of any other rights or licenses under any intellectual property owned by or licensed to the COMPANY other then the patent rights. 1.14 "SUBLICENSEE" shall mean any non-AFFILIATE sublicensee of the rights granted COMPANY under Section 2.1. 1.15 "TERM" shall mean the term of this Agreement, which shall commence on the EFFECTIVE DATE and shall remain in effect until the expiration, abandonment, or written express disclaimer of the validity or enforceability by M.I.T, of all issued patents and filed patent applications within the PATENT RIGHTS, unless earlier terminated in accordance with the provisions of this Agreement. 1.16 "TERRITORY" shall mean worldwide. 5 2. GRANT OF RIGHTS. 2.1 License Grants. (a) Subject to the terms of this Agreement, M.I.T. hereby grants to COMPANY and its AFFILIATES for the TERM a royalty-bearing license under the PATENT RIGHTS A to develop, make, have made, use, sell, offer to sell, lease, or import LICENSED PRODUCTS in FIELD A in the TERRITORY and to develop and perform LICENSED PROCESSES in FIELD A in the TERRITORY for the TERM. (b) Subject to the terms of this Agreement, M.I.T. hereby grants to COMPANY and its AFFILIATES for the TERM a royalty-bearing license under the PATENT RIGHTS B to develop, make, have made, use, sell, offer to sell, lease, or import LICENSED PRODUCTS in FIELD B in the TERRITORY and to develop and perform LICENSED PROCESSES in FIELD B in the TERRITORY for the TERM. 2.2 Exclusivity. (a) In order to establish exclusivity for COMPANY for PATENT RIGHTS A, M.I.T. agrees that it shall not grant any other license to develop, make, have made, use, sell, offer to sell, lease or import LICENSED PRODUCTS in FIELD A in the TERRITORY or to perform LICENSED PROCESSES in FIELD A in the TERRITORY for the TERM. (b) In order to establish exclusivity for COMPANY for PATENT RIGHTS B in FIELD B, M.I.T. agrees that it shall not grant any other license to develop, make, have made, use, sell, offer to sell, lease or import LICENSED PRODUCTS or to perform LICENSED PROCESSES in FIELD B in the TERRITORY for the TERM, subject to a pre-existing nonexclusive license to Quantum Dot Corporation dated November 18, 1998 which grants rights to Quantum Dot Corporation in the field of "applications of semiconductor nanoparticles for the purpose of the sale, lease, transfer of LICENSED PRODUCTS or LICENSED PROCESSES to not-for-profit entities for research and development purposes only." (c) M.I.T. hereby warrants that, to the best of its knowledge without due inquiry, it has the right to grant the licenses and establish exclusivity as set forth in Sections 2.1 and 2.2, subject to Article 9 of this Agreement. 2.3 Sublicenses. COMPANY shall have the right to grant sublicenses of its rights under Section 2.1. COMPANY shall incorporate terms and conditions into its sublicenses agreements sufficient to enable COMPANY to comply with this Agreement. COMPANY shall promptly furnish M.I.T. with a fully, signed photocopy of any sublicense agreement. Sublicense 6 agreements provided to M.I.T. under this section may be provided in redacted form, provided that such redacted sublicense agreements contain all terms necessary for M.I.T. to determine COMPANY'S compliance with the obligations of this Agreement; and provided further that upon request, M.I.T's representatives can review the sublicenses in their entirety at COMPANY'S facility. Upon termination of this Agreement for any reason, any SUBLICENSEE not then in default shall maintain their license under the then existing terms and conditions, provided that such terms and conditions are at least as favorable to M.I.T. as the terms of this Agreement, and provided that such SUBLICENSEE assume all unsatisfied and unwaived, past, current, and future obligations of COMPANY under this Agreement. 2.4 U.S. Manufacturing. COMPANY agrees that any LICENSED PRODUCTS used or sold in the United States will be manufactured substantially in the United States, to the extent required by law. 2.5 Retained Rights. (a) M.I.T. M.I.T. retains the right to practice under the PATENT RIGHTS for research, teaching, and educational purposes. (b) Federal Government. COMPANY acknowledges that the U.S. federal government retains a royalty-free, non-exclusive, non-transferable license to practice any government-funded invention claimed in any PATENT RIGHTS as set forth in 35 U.S.C. Sections 201-211, and the regulations promulgated thereunder, as amended, or any successor statutes or regulations. 2.6 No Additional Rights. Nothing in this Agreement shall be construed to confer any rights upon COMPANY by implication, estoppel, or otherwise as to any technology or patent rights of M.I.T. or any other entity other than the PATENT RIGHTS, regardless of whether such technology or patent rights shall be dominant or subordinate to any PATENT RIGHTS. 3. COMPANY DILIGENCE OBLIGATIONS. 3.1 Diligence Requirements. COMPANY shall use diligent efforts, or shall cause its AFFILIATES and SUBLICENSEES to use diligent efforts, to develop LICENSED PRODUCTS or LICENSED PROCESSES and to introduce LICENSED PRODUCTS or LICENSED PROCESSES into the commercial market; thereafter, COMPANY or its AFFILIATES or SUBLICENSEES shall make LICENSED PRODUCTS or LICENSED PROCESSES reasonably 7 available to the public. Specifically, COMPANY or AFFILIATE or SUBLICENSEE shall fulfill the following obligations: (a) Within seven (7) months after the EFFECTIVE DATE, COMPANY shall furnish M.I.T. with a written research and development plan describing the major tasks to be achieved in order to bring to market a LICENSED PRODUCT or a LICENSED PROCESS, specifying the number of staff and other resources to be devoted to such commercialization effort. (b) Within sixty (60) days after the end of each calendar year, COMPANY shall furnish M.I.T. with a written report (consistent with Section 5.1 (a)) on the progress of its efforts during the immediately preceding calendar year to develop and commercialize LICENSED PRODUCTS or LICENSED PROCESSES. The report shall also contain a discussion of intended efforts and sales projections for the year in which the report is submitted. (c) COMPANY shall develop a working model on or before the date two (2) years from the EFFECTIVE DATE, and permit an in-plant inspection by M.I.T. on or before the date twelve (12) months from the EFFECTIVE DATE, and thereafter permit in-plant inspections by M.I.T. at regular intervals with at least twelve (12) months between each such inspection. (d) COMPANY, its AFFILIATES or SUBLICENSEES, shall fund research toward the development of LICENSED PRODUCTS and/or LICENSED PROCESSES in each calendar year (pro-rated for partial years) beginning in 2003, and as provided below, and ending with the first commercial sale of a LICENSED PRODUCT or a first commercial performance of a LICENSED PROCESS. Such funding shall include funding of research and/or development of technology reasonably necessary for commercial or technical viability of the LICENSED PRODUCTS.

Year Funding 2003 $ 1,000,000 2004 $ 1,500,000 2005 and thereafter $ 2,000,000

(e) COMPANY shall make a first commercial sale of a LICENSED PRODUCT and/or a first commercial performance of a LICENSED PROCESS on or before January 2, 2007. 8 (f) COMPANY shall make annual NET SALES according to the following schedule: 2009 $1,000,000; 2010 $1,500,000; 2011 and each year through and including 2014 $2,250,000; 2015, and each year thereafter $5,000,000. In the event that M.I.T. determines that COMPANY (or an AFFILIATE or SUBLICENSEE) has failed to fulfill any of its obligations under this Section 3.1, then M.I.T. may treat such failure as a material breach in accordance with Section 12.3(b). To the extent that COMPANY has made commercially reasonable efforts to meet its obligations, then M.I.T. may, in its discretion, amend or extend the schedule of such obligations. 4. ROYALTIES AND PAYMENT TERMS. 4.1 Consideration for Grant of Rights. In consideration for the rights granted herein, COMPANY agrees to the following: (a) License Issue Fee and Patent Cost Reimbursement. COMPANY shall pay to M.I.T. within thirty (30) days of the EFFECTIVE DATE a license issue fee of [*** Redacted], and, in accordance with Section 6.3, shall reimburse M.I.T. for its actual expenses incurred as of the EFFECTIVE DATE in connection with obtaining the PATENT RIGHTS, less any expenses that have already been reimbursed by another party or for which another party is obligated to reimburse M.I.T. These payments are nonrefundable. (b) License Maintenance Fees. COMPANY shall pay to M.I.T. the following license maintenance fees on the dates set forth below: June 1, 2004 [*** Redacted] June 1, 2005 [*** Redacted] June 1, 2006 [*** Redacted] June 1, 2007 [*** Redacted] June 1, 2008 and every June 1 thereafter [*** Redacted] *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 9 This annual license maintenance fee is nonrefundable, however, the license maintenance fee may be credited to running royalties subsequently due on NET SALES earned during the same calendar year, if any. License maintenance fees paid in excess of running royalties due in such calendar year shall not be creditable to amounts due for future years. (c) Running Royalties. COMPANY shall pay to M.I.T. a running royalty of [*** Redacted] of NET SALES by COMPANY and AFFILIATES. Running royalties shall be payable for each REPORTING PERIOD and shall be due to M.I.T. within sixty (60) days of the end of each REPORTING PERIOD. (d) Sharing of SUBLICENSE INCOME. COMPANY shall pay M.I.T. a total of [*** Redacted] of all SUBLICENSE INCOME received by COMPANY. Such amount shall be payable for each REPORTING PERIOD and shall be due to M.I.T. within sixty (60) days of the end of each REPORTING PERIOD. This [*** Redacted] may be reduced by one percentage point per each [*** Redacted] of research directed by COMPANY specifically toward the development of LICENSED PRODUCTS and/or LICENSED PROCESSES, with the percentage of shared SUBLICENSE INCOME to be no less than [*** Redacted] of SUBLICENSE INCOME or [*** Redacted] of NET SALES by SUBLICENSEE, whichever is greater. (e) No Multiple Royalties. If the manufacture, use, lease, or sale of any LICENSED PRODUCT or the performance of any LICENSED PROCESS is covered by more than one of the PATENT RIGHTS, multiple royalties shall not be due. (f) Equity. (i) Initial Grant. Within thirty (30) days of the EFFECTIVE DATE, COMPANY shall sell and issue a total of Fifty Thousand (50,000) shares of Common Stock of COMPANY, $.001 par value per share, (the "Shares") to M.I.T. at a price of $0.12 per share for a total of $6,000.00. M.I.T. shall have the right to assign and transfer such shares to such persons as M.I.T. shall direct ("M.I.T. Holder"), and each M.I.T. Holder shall receive such a number of shares as M.I.T. shall direct provided that such M.I.T. Holder is an accredited investor as defined by Rule 50l(a) of Regulation D under the Securities Act of 1933, or provides COMPANY with an executed Investor Representation Statement in substantially the form attached hereto as Exhibit C. Upon issuance of shares hereunder, M.I.T. will, at COMPANY'S direction, execute a shareholder agreement, co-sale agreement and voting agreement in a mutually agreeable form. (ii) Participation in Future Private Equity Offerings. M.I.T. (specifically not including M.I.T. Holders) shall have the right of first offer to purchase an *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 10 amount of securities of COMPANY of any class or kind which COMPANY proposes to sell in a non-registered private placement ("Preemptive Securities") sufficient to maintain M.I.T.'s proportionate beneficial ownership interest in COMPANY (on an as-converted, fully diluted basis) (M.I.T's "Pro Rata Portion" as defined below). Notwithstanding the foregoing, Preemptive Securities will not include and, M.I.T. will not have a right of first offer as provided in this Agreement to purchase (i) securities issued upon the closing of a public offering of COMPANY's common stock resulting in gross proceeds to COMPANY of at least $10 million (a "Qualified Public Offering"), (ii) securities issued upon conversion of Preferred Stock or other warrants or other convertible or exercisable securities of COMPANY outstanding as of the date hereof, (iii) securities issued in connection with any stock split or stock dividend of COMPANY, recapitalizations or the like, (iv) Common Stock issued to employees, officers, or directors of, or contractors, consultants or advisors to, COMPANY pursuant to stock purchase or stock option plans, stock bonuses or awards, contracts or other arrangements approved by COMPANY's Board of Directors, (v) shares of capital stock issued to a financial institution which has loaned funds to COMPANY, the terms of which are approved by COMPANY's Board of Directors, (vi) shares of capital stock issued to equipment or real property lessors, the terms of which are approved by COMPANY's Board of Directors, (vii) shares of capital stock issued in connection with the acquisition of technology or licenses, the terms of which are approved by COMPANY's Board of Directors, or (viii) securities issued to non-financial corporations in connection with a license, distribution, development, foundry or similar "corporate partner" agreement, the terms of which are approved by COMPANY's Board of Directors. If COMPANY wishes to make any such sale of Preemptive Securities, it shall give M.I.T. prior written notice ("Prior Written Notice") of the proposed sale. The notice shall set forth (i) COMPANY's bona fide intention to offer Preemptive Securities and (ii) the material terms and conditions of the proposed sale (including the number of shares to be offered and the price, if any, for which COMPANY proposes to offer such share), and the date by which the Acceptance Notice (as defined below) is due, and shall constitute an offer to sell Preemptive Securities to M.I.T. on such terms and conditions. M.I.T. may accept such offer by delivering a written notice of acceptance (an "Acceptance Notice") to COMPANY within fifteen (15) days after receipt of the Prior Written Notice. Notwithstanding the foregoing, COMPANY shall provide M.I.T. with up to thirty (30) days after M.I.T.'s receipt of the Prior Written Notice before M.I.T.'s required delivery of the Acceptance Notice, if such additional time will not unduly delay or jeopardize the closing of the COMPANY's proposed sale of such Preemptive Securities. M.I.T. in exercising their rights of first offer shall be entitled at their option to participate in the purchase of Preemptive Securities on a pro rata basis to the extent necessary to maintain M.I.T.'s proportionate beneficial ownership interest in COMPANY (M.I.T.'s "Pro Rata Portion") (for purposes of determining M.I.T.'s Pro Rata Portion with respect to any issuance of Preemptive Securities, other security holders shall be 11 treated as owning that number of shares of Common Stock into which any outstanding Preferred Stock may be converted, while the total COMPANY interest will be calculated on an as-converted to Common Stock basis, assuming full conversion and exercise of all outstanding convertible or exercisable securities). If M.I.T. elects to exercise its right of first offer and does not complete the purchase of such Preemptive Securities within ten (10] days after delivery of its Acceptance Notice to COMPANY, COMPANY may complete the sale of Preemptive Securities on the terms and conditions specified in COMPANY's notice within the one hundred and twenty (120) day period following the expiration of such ten (10) day period. If COMPANY does not enter into an agreement for the sale of Preemptive Securities to M.I.T. pursuant to a delivered Acceptance Notice within such ten (10) day period, or if COMPANY does not otherwise consummate an agreement for the sale of Preemptive Securities within such one hundred and twenty (120) day period, the right provided hereunder shall be deemed to be revived and all future shares of Preemptive Securities shall not be offered unless first re-offered to M.I.T. in accordance with this Agreement. (iii) Waiver and Expiration of Right of First Offer. The right of first offer granted under this Agreement shall terminate upon the closing of a firm commitment for a Qualified Public Offering. The right of first offer granted to M.I.T. under this Agreement may not be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a specified period of time or indefinitely) by written consent from a majority of COMPANY'S Preferred Stock having a right of first offer to purchase COMPANY securities, unless M.I.T. also consents in writing to such waiver of the right granted to M.I.T. hereunder, which consent shall not be unreasonably withheld. 4.2 Payments. (a) Method of Payment. All payments under this Agreement should be made payable to "Massachusetts Institute of Technology" and sent to the address identified in Section 14.1. Each payment should reference this Agreement and identify the obligation under this Agreement that the payment satisfies. (b) Payments in U.S. Dollars. All payments due under this Agreement shall be drawn on a United States bank and shall be payable in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the Wall Street Journal) on the last working day of the calendar quarter of the applicable REPORTING PERIOD. Such payments shall be without deduction of exchange, collection, or other charges, and, specifically, without deduction of withholding or similar taxes or other government imposed fees or taxes, except as permitted in the definition of NET SALES. 12 (c) Late Payments. Any payments by COMPANY that are not paid on or before the date such payments are due under this Agreement shall bear interest, to the extent permitted by law, at two percentage points above the Prime Rate of interest as reported in the Wall Street Journal on the date payment is due. 5. REPORTS AND RECORDS. 5.1 Frequency of Reports- (a) Before First Commercial Sale. Prior to the first commercial sale of any LICENSED PRODUCT or first commercial performance of any LICENSED PROCESS, COMPANY shall deliver reports to M.I.T. annually, within sixty (60) days of the end of each calendar year, containing information concerning the immediately preceding calendar year, as further described in Section 5.2. (b) Upon First Commercial Sale of a LICENSED PRODUCT or Commercial Performance of a LICENSED PROCESS. COMPANY shall report to M.I.T. the date of first commercial sale of a LICENSED PRODUCT and the date of first commercial performance of a LICENSED PROCESS within sixty (60) days of occurrence in each country. (c) After First Commercial Sale. After the first commercial sale of a LICENSED PRODUCT or first commercial performance of a LICENSED PROCESS, COMPANY shall deliver reports to M.I.T. within sixty (60) days of the end of each REPORTING PERIOD, containing information concerning the immediately preceding REPORTING PERIOD, as further described in Section 5.2. 5.2 Content of Reports and Payments. Each report delivered by COMPANY to M.I.T. shall contain at least the following information for the immediately preceding REPORTING PERIOD: (a) the number of LICENSED PRODUCTS sold, leased or distributed by COMPANY, its AFFILIATES and SUBLICENSEES to independent third parties in each country, and, if applicable, the number of LICENSED PRODUCTS used by COMPANY, its AFFILIATES and SUBLICENSEES in the provision of services in each country; 13 (b) a description of LICENSED PROCESSES performed by COMPANY its AFFILIATES and SUBLICENSEES in each country as may be pertinent to a royalty accounting hereunder; (c) the gross price charged by COMPANY, its AFFILIATES and SUBLICENSEES for each LICENSED PRODUCT and, if applicable, the gross price charged for each LICENSED PRODUCT used to provide services in each country; and the gross price charged for each LICENSED PROCESS performed by COMPANY, its AFFILIATES and SUBLICENSEES in each country; (d) calculation of NET SALES for the applicable REPORTING PERIOD in each country, including a listing of applicable deductions; (e) total royalty payable on NET SALES in U.S. dollars, together with the exchange rates used for conversion; (f) the amount of SUBLICENSE INCOME received by COMPANY from each SUBLICENSEE and the amount due to M.I.T. from such SUBLICENSE INCOME, including an itemized breakdown of the sources of income comprising the SUBLICENSE INCOME; and (g) the number of sublicenses entered into for the PATENT RIGHTS, LICENSED PRODUCTS and/or LICENSED PROCESSES. (h) the dollar amount funded by COMPANY, AFFILIATES and SUBLICENSEES toward research and development pursuant to Section 4.1 (d) of this Agreement. If no amounts are due to M.I.T. for any REPORTING PERIOD, the report shall so state. 5.3 Financial Statements. On or before the ninetieth (90th) day following the close of COMPANY'S fiscal year, COMPANY shall provide M.I.T. with COMPANY'S financial statements for the preceding fiscal year including, at a minimum, a balance sheet and an income statement, certified by COMPANY's treasurer, chief financial officer, or vice president of finance, or by an independent auditor. All financial statements provided by COMPANY shall be treated as confidential in accordance with the requirements of Section 14.1. 14 5.4 Records. COMPANY shall maintain, and shall cause its AFFILIATES and SUBLICENSEES to maintain, complete and accurate records relating to the rights and obligations under this Agreement and any amounts payable to M.I.T. in relation to this Agreement, which records shall contain sufficient information to permit M.I.T. to confirm the accuracy of any reports delivered to M.I.T. and compliance in other respects with this Agreement. The relevant party shall retain such records for at least five (5) years following the end of the calendar year to which they pertain, during which time M.I.T., or M.I.T.'s appointed agents, shall have the right, at M.I.T.'s expense, to inspect such records during normal business hours to verify any reports and payments made or compliance in other respects under this Agreement. In the event that any audit performed under this Section reveals an underpayment in excess of five percent (5%), COMPANY shall bear the full cost of such audit and shall remit any amounts due to M.I.T. within thirty (30) days of receiving notice thereof from M.I.T. 6. PATENT PROSECUTION. 6.1 Responsibility for PATENT RIGHTS. M.I.T. shall prepare, file, prosecute, and maintain all of the PATENT RIGHTS. COMPANY shall have reasonable opportunities to advise M.I.T. and shall cooperate with M.I.T. in such filing, prosecution and maintenance. While both Parties accept the current counsel for the preparation, maintenance and prosecution of PATENT RIGHTS (PATENT COUNSEL), M.I.T. and COMPANY shall each have the right to notify the other Party of a desire to designate new or different PATENT COUNSEL. In the event of such notification, M.I.T. and COMPANY shall meet and mutually agree upon new or different PATENT COUNSEL. In the event the parties fail to agree, M.I.T., shall choose a new PATENT COUNSEL. 6.2 International (non-United States) Filings. Appendix A and Appendix B include a list of countries in which patent applications corresponding to the United States patent applications have been filed, prosecuted, and maintained. Each Appendix may be amended by mutual agreement of COMPANY and M.I.T. to add additional countries in which foreign applications shall be filed after the EFFECTIVE DATE. Notwithstanding the foregoing, failure to amend the Appendices to reflect international or foreign filings that are otherwise subject to this Agreement shall not limit the PATENT RIGHTS hereunder. 6.3 Payment of Expenses. Payment of all fees and costs, including attorneys fees, relating to the filing, prosecution and maintenance of the PATENT RIGHTS not reimbursed by other licensees shall be the responsibility of COMPANY, whether such amount were incurred before or after the EFFECTIVE DATE. As of M.I.T. has incurred 15 approximately [*** Redacted] for such patent-related fees and costs in FIELD A. As of August 23, 2002, COMPANY'S portion of patent related fees and costs in FIELD B equals approximately $0.00. COMPANY shall reimburse all amounts due pursuant to this Section within thirty (30) days of invoicing, which invoicing shall include reasonable documentation of amounts due, including copies of relevant portions of invoices to M.I.T.; late payments shall accrue interest pursuant to Section 4.2(c). In all instances, M.I.T. shall pay the fees prescribed for large entities to the United States Patent and Trademark Office. 7. INFRINGEMENT. 7.1 Notification of Infringement. Each party agrees to provide written notice to the other party promptly after becoming aware of any infringement of the PATENT RIGHTS. 7.2 Right to Prosecute Infringements. (a) COMPANY Right to Prosecute. So long as COMPANY remains the exclusive licensee of the PATENT RIGHTS in the relevant FIELD in the TERRITORY, COMPANY, to the extent permitted by law, shall have the right, under its own control and at its own expense, to prosecute any third party infringement of the PATENT RIGHTS in such FIELD in the TERRITORY, subject to Sections 7.4 and 7.5. If required by law, M.I.T. shall permit any action under this Section to be brought in its name, including being joined as a party-plaintiff, provided that COMPANY shall hold M.I.T. harmless from, and indemnify M.I.T. against, any costs, expenses, or liability that M.I.T. incurs in connection with such action. Prior to commencing any such action, COMPANY shall consult with M.I.T. and shall consider the views of M.I.T. regarding the advisability of the proposed action and its effect on the public interest. COMPANY shall not enter into any settlement, consent judgment, or other voluntary final disposition of any infringement action under this Section without the prior written consent of M.I.T. which consent shall not be unreasonably withheld. (b) M.I.T. Right to Prosecute. In the event that COMPANY is unsuccessful in persuading the alleged infringer to desist or fails to have initiated an infringement action within a reasonable time after COMPANY first becomes aware of the basis for such action, M.I.T. shall have the right, at its sole discretion, to prosecute such infringement under its sole control and at its sole expense, and any recovery obtained shall belong to M.I.T. 7.3 Declaratory Judgment Actions. In the event that a declaratory judgment action is brought against M.I.T. or COMPANY by a third party alleging invalidity, unenforceability, or *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 16 non-infringement of the PATENT RIGHTS, M.I.T., at its option, shall have the right within twenty (20) after commencement of such action to take over the sole defense of the action at its own expense. If M.I.T. does not exercise this right, COMPANY may take over the sole defense of the action at COMPANY's sole expense, subject to Sections 7.4 and 7.5. 7.4 Offsets. COMPANY may offset a total of [*** Redacted] of any expenses incurred under Sections 7.2 and 7.3 against any payments due to M.I.T. under Article 4, provided that in no event shall such payments under Article 4, when aggregated with any other offsets and credits allowed under this Agreement, be reduced by more than [*** Redacted] in any REPORTING PERIOD. 7.5 Recovery. Any recovery obtained in an action brought by COMPANY under Sections 7.2 or 7.3 shall be distributed as follows: (i) each party shall be reimbursed for any expenses incurred in the action (including the amount of any royalty or other payments withheld from M.I.T. as described in Section 7.4), (ii) as to ordinary damages, COMPANY shall receive an amount equal to its lost profits or a reasonable royalty on the infringing sales, or whichever measure of damages the court shall have applied, and COMPANY shall pay to M.I.T. based upon such amount a reasonable approximation of the royalties and other amounts that COMPANY would have paid to M.I.T. if Company had sold the infringing products, processes and services rather than the infringer, and (iii) as to special or punitive damages, the COMPANY shall pay M.I.T. 20% of any such award. 7.6 Cooperation. Each party agrees to cooperate in any action under this Article which is controlled by the other party, provided that the controlling party reimburses the cooperating party promptly for any costs and expenses incurred by the cooperating party in connection with providing such assistance. 8. INDEMNIFICATION AND INSURANCE 8.1 Indemnification. (a) Indemnity. Except in the case of a final determination of M.I.T.'s gross negligence, COMPANY shall indemnify, defend, and hold harmless M.I.T. and its trustees, officers, faculty, students, employees, and agents and their respective successors, heirs and assigns (the "Indemnitees"), against any liability, damage, loss, or expense (including reasonable attorneys fees and expenses) incurred by or imposed upon any of the Indemnitees in connection with any claims, suits, actions, demands or judgments arising out of any theory of liability *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 17 (including without limitation actions in the form of tort, warranty, or strict liability and regardless of whether such action has any factual basis) concerning any product, process, or service that is made, used, sold, imported, or performed pursuant to any right or license granted to COMPANY or AFFILIATES under this Agreement. (b) Procedures. The Indemnitees agree to provide COMPANY with prompt written notice of any claim, suit, action, demand, or judgment for which indemnification is sought under this Agreement. COMPANY agrees, at its own expense, to provide attorneys reasonably acceptable to M.I.T. to defend against any such claim. The Indemnitees shall cooperate fully with COMPANY in such defense and will permit COMPANY to conduct and control such defense and the disposition of such claim, suit, or action (including all decisions relative to litigation, appeal, and settlement); provided, however, that any Indemnitee shall have the right to retain its own counsel, at the expense of COMPANY, if representation of such Indemnitee by the counsel retained by COMPANY would be inappropriate because of actual or potential differences in the interests of such Indemnitee and any other party represented by such counsel. COMPANY agrees to keep M.I.T. informed of the progress in the defense and disposition of such claim and to consult with M.I.T. with regard to any proposed settlement. 8.2 Insurance. Prior to the first commercial sale of a LICENSED PRODUCT or LICENSED PROCESS, and thereafter, COMPANY shall obtain and carry in full force and effect commercial general liability insurance, including product liability and errors and omissions insurance which shall protect COMPANY and Indemnitees with respect to events covered by Section 8.1 (a) above. Such insurance (i) shall be issued by an insurer licensed to practice in the Commonwealth of Massachusetts or an insurer pre-approved by M.I.T., such approval not to be unreasonably withheld, (ii) shall list M.I.T. as an additional insured thereunder, (iii) shall be endorsed to include product liability coverage, and (iv) shall require thirty (30) days written notice to be given to M.I.T. prior to any cancellation or material change thereof. The limits of such insurance shall not be less than [*** Redacted] per occurrence with an aggregate of [*** Redacted] for bodily injury including death; [*** Redacted] per occurrence with an aggregate of [*** Redacted] for property damage; and [*** Redacted] per occurrence with an aggregate of [*** Redacted] for errors and omissions. In the alternative, COMPANY may self-insure subject to prior approval of M.I.T. COMPANY shall provide M.I.T. with Certificates of Insurance evidencing compliance with this Section. COMPANY shall continue to maintain such insurance or self-insurance after the expiration or termination of this Agreement during any period in which COMPANY or any AFFILIATE or SUBLICENSEE continues (i) to make, use, or sell a product that was a LICENSED PRODUCT under this Agreement or (ii) to *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 18 perform a service that was a LICENSED PROCESS under this Agreement, and thereafter for a period of [*** Redacted] years. 9. NO REPRESENTATIONS OR WARRANTIES EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT, M.I.T. MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING THE PATENT RIGHTS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY OF PATENT RIGHTS CLAIMS, WHETHER ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. Specifically, and not to limit the foregoing, M.I.T. makes no warranty or representation (i) regarding the validity or scope of the PATENT RIGHTS, and (ii) that the exploitation of the PATENT RIGHTS or any LICENSED PRODUCT or LICENSED PROCESS will not infringe any patents or other intellectual property rights of M.I.T. or of a third party. In no event shall M.I.T.'s liability for breaching any representation or warranty set forth herein exceed the cash amount actually received by M.I.T. from COMPANY under Article 4. IN NO EVENT SHALL M.I.T., ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGES OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER M.I.T. SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING. 10. ASSIGNMENT. This Agreement is personal to COMPANY and no rights or obligations may be assigned by COMPANY without the prior written consent of M.I.T., except in conjunction with a sale of all or substantially all of the assets of the COMPANY, provided that the Assignee agree in writing to accept all obligations of the COMPANY under this Agreement. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 19 11. GENERAL COMPLIANCE WITH LAWS 11.1 Compliance with Laws. COMPANY shall use reasonable commercial efforts to comply with all commercially material local, state, federal, and international laws and regulations relating to the development, manufacture, use, and sale of LICENSED PRODUCT and LICENSED PROCESSES. 11.2 Export Control. COMPANY and its AFFILIATES and SUBLICENSEES shall comply with all United States laws and regulations controlling the export of certain commodities and technical data, including without limitation all Export Administration Regulations of the United States Department of Commerce. Among other things, these laws and regulations prohibit or require a license for the export of certain types of commodities and technical data to specified countries. COMPANY hereby gives written assurance that it will comply with, and will cause its AFFILIATES and SUBLICENSEES to comply with, all United States export control laws and regulations, that it bears sole responsibility for any violation of such laws and regulations by itself or its AFFILIATES or SUBLICENSEES, and that it will indemnify, defend, and hold M.I.T. harmless (in accordance with Section 8.1) for the consequences of any such violation. 11.3 Non-Use of M.I.T. Name. COMPANY and its AFFILIATES and SUBLICENSEES shall not use the name of "Massachusetts Institute of Technology," "Lincoln Laboratory" or any variation, adaptation, or abbreviation thereof, or of any of its trustees, officers, faculty, students, employees, or agents, or any trademark owned by M.I.T., or any terms of this Agreement in any promotional material or other public announcement or disclosure without the prior written consent of M.I.T. The foregoing notwithstanding, without the consent of M.I.T., COMPANY may state that it is licensed by M.I.T. under one or more of the patents and/or patent applications comprising the PATENT RIGHTS. 11.4 Marking of LICENSED PRODUCTS. To the extent commercially feasible and consistent with prevailing business practices, COMPANY shall mark, and shall cause its AFFILIATES and SUBLICENSEES to mark, all LICENSED PRODUCTS that are manufactured or sold under this Agreement with the number of each issued patent under the PATENT RIGHTS that applies to such LICENSED PRODUCT. 20 12. TERMINATION 12.1 Voluntary Termination by COMPANY. COMPANY shall have the right to terminate this Agreement, for any reason, (i) upon at least three (3) months prior written notice to M.I.T., such notice to state the date at least three (3) months in the future upon which termination is to be effective, and (ii) upon payment of all amounts due to M.I.T. through such termination effective date. 12.2 Cessation of Business. If COMPANY ceases to carry on its business related to this Agreement as indicated by, inter alia, the COMPANY's failure to meet its diligence obligations as set forth in Article 3 of this Agreement, as originally executed, M.I.T. shall have the right to terminate this Agreement immediately upon written notice to COMPANY. Notwithstanding the foregoing, it is agreed that COMPANY'S failure to meet the diligence obligations set forth in Article 3 of this Agreement alone, either as originally executed or as amended from time to time, shall not be a cessation of business related to this Agreement, as contemplated by this section. 12.3 Termination for Default. (a) Nonpayment. In the event COMPANY fails to pay any amounts due and payable to M.I.T. hereunder, and fails to make such payments within sixty (60) days after receiving written notice of such failure, M.I.T. may terminate this Agreement immediately upon written notice to COMPANY. (b) Material Breach. In the event COMPANY commits a material breach of its obligations under this Agreement, except for breach as described in Section 12.3(a), and fails to cure that breach within sixty (60) after receiving written notice thereof, M.I.T. may terminate this Agreement immediately upon written notice to COMPANY. If COMPANY objects to the basis for such termination in writing within twenty (20) days of such written notice, then any such termination shall be stayed pending final resolution as provided under Section 13 of this Agreement. 12.4 Effect of Termination. (a) Survival. The following provisions shall survive the expiration or termination of this Agreement: Articles 1, 8, 9, 13 and 14, and Sections 4.1 (f), 5.2 (obligation to provide final report and payment), 5.4, 11.1, 11.2, 12.4 and 14.1 (Confidentiality). 21 (b) Inventory. Upon the early termination of this Agreement. COMPANY and its AFFILIATES and SUBLICENSEES may complete and sell any work-in-progress and inventory of LICENSED PRODUCTS that exist as of the effective date of termination, provided that (j) COMPANY pays M.I.T. the applicable running royalty or other amounts due on such sales of LICENSED PRODUCTS in accordance with the terms and conditions of this Agreement, and (ii) COMPANY and its AFFILIATES and SUBLICENSEES shall complete and sell all work-in-progress and inventory of LICENSED PRODUCTS within six (6) months after the effective date of termination. (c) Pre-termination Obligations. In no event shall termination of this Agreement release COMPANY, AFFILIATES, or SUBLICENSEES from the obligation to pay any amounts that became due on or before the effective date of termination. 13. DISPUTE RESOLUTION. 13.1 Mandatory Procedures. The parties agree that any dispute arising out of or relating to this Agreement shall be resolved solely by means of the procedures set forth in this Article, and that such procedures constitute legally binding obligations that are an essential provision of this Agreement. If either party fails to observe the procedures of this Article, as may be modified by their written agreement, the other party may bring an action for specific performance of these procedures in any court of competent jurisdiction. 13.2 Equitable Remedies. Although the procedures specified in his Article are the sole and exclusive procedures for the resolution of disputes arising out of or relating to this Agreement, either party may seek a preliminary injunction or other provisional equitable relief if, in its reasonable judgment, such action is necessary to avoid irreparable harm to itself or to preserve its rights under this Agreement. 13.3 Dispute Resolution Procedures. (a) Mediation. In the event any dispute arising out of or relating to this Agreement remains unresolved within sixty (60) days from the date the affected party informed the other party of such dispute, either party may initiate mediation upon written notice to the other party ("Notice Date"), whereupon both parties shall be obligated to engage in a mediation proceeding under the then current Center for Public Resources ("CPR") Model Procedure for Mediation of Business Disputes (http://www.cpradr.org), except that specific provisions of this Article shall override inconsistent provisions of the CPR Model Procedure, The mediator will be 22 selected from the CPR Panels of Neutrals. If the parties cannot agree upon the selection of a mediator within fifteen (15) business days after the Notice Date, then upon the request of either party, the CPR shall appoint the mediator. The parties shall attempt to resolve the dispute through mediation until the first of the following occurs: (i) the parties reach a written settlement; (ii) the mediator notifies the parties in writing that they have reached an impasse; (iii) the parties agree in writing that they have reached an impasse; or (iv) the parties have not reached a settlement within sixty (60) days after the Notice Date. (b) Trial Without Jury. If the parties fail to resolve the dispute through mediation, or if neither party ejects to initiate mediation, each party shall have the right to pursue any other remedies legally available to resolve the dispute, provided, however, that the parties expressly waive any right to a jury trial in any legal proceeding under this Article. 13.4 Performance to Continue. Each party shall continue to perform its undisputed obligations under this Agreement pending final resolution of any dispute arising out of or relating to this Agreement; provided, however, that a party may suspend performance of its undisputed obligations during any period in which the other party fails or refuses to perform its undisputed obligations. Nothing in this Article is intended to relieve COMPANY from its obligation to make undisputed payments pursuant to Articles 4 and 6 of this Agreement, not to permit M.I.T. to bring suit against COMPANY, its AFFILIATES and/or SUBLICENSEES for infringement of any of the PATENT RIGHTS, pending final resolution. 13.5 Statute of Limitations. The parties agree that all applicable statutes of limitation and time-based defenses (such as estoppel and laches) shall be tolled while the procedures set forth in Sections 13.3(a) are pending. The parties shall cooperate in taking any actions necessary to achieve this result. 14. MISCELLANEOUS. 14.1 Confidentiality. All information provided to M.I.T. by COMPANY under this agreement, including but not limited to relevant portions of sublicense agreements, technical reports, development plans, marketing evaluations and reports, information obtained from plant inspections, and royalty reports, shall be deemed to be Confidential Information if such information is marked "Confidential." (a) M.I.T. will maintain the confidentiality of the Confidential Information and will not disclose the Confidential Information to any third party, and will not use the Confidential Information for any purpose other than as necessary to administer this Agreement. 23 In maintaining the confidentiality of the Confidential Information, M.I.T. will use the same degree of care it uses in protecting its own information of like import, and in no event, less than reasonable care. (b) The obligations of M.I.T. with respect to Confidential Information will not apply to information disclosed under this agreement to the extent such information: (i) is generally known to the public at the time of disclosure or becomes generally known through no wrongful act on the part of M.I.T; (ii) is in M.I.T.'s possession at the time of disclosure other than as a result of prior disclosure by COMPANY or a breach of any legal obligation by M.I.T. or a third party; (iii) becomes known to M.I.T. through disclosure by sources other than COMPANY having no duty of confidentiality to COMPANY, whether direct or indirect, with respect to such information and having the legal right to disclose such information; (iv) is independently developed by M.I.T. without reference to or reliance upon the Confidential Information; or (v) is required to be disclosed by M.I.T. to comply with applicable laws or governmental regulations, provided that the M.I.T. provides prior written notice of such disclosure to the COMPANY and takes reasonable and lawful actions to avoid and/or minimize the extent of such disclosure. (c) The provisions of this section relating to Confidentiality of research and development reports provided pursuant to Article 3 and Sections 5.1 and 5.2 shall be in force and effect until 5 years following the termination of this Agreement. The provisions of this section relating to other disclosures of Confidential Information shall be in force and effect for three years, as to each specific disclosure, from the date of each such disclosure. 14.2 Notice. Any notices required or permitted under this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be sent by hand, recognized national overnight courier, confirmed facsimile transmission, confirmed electronic mail, or registered or certified mail, postage prepaid, return receipt requested, to the following addresses or facsimile numbers of the parties: 24 If to M.I.T., all matters relating to the license: Technology Licensing Office, Room NE25-230 Massachusetts Institute of Technology 77 Massachusetts Avenue Cambridge, MA 02139-4307 Attention: Director Tel: 617-253-6966 Fax: 617-258-6790 If to M.I.T., relating to any equity action after the initial issuance of shares: Massachusetts Institute of Technology Treasurer's Office 238 Main Street Cambridge, MA 02142 Attention: Phillips B. Moore Tel: 617-253-5422 Fax: 617-258-6676 If to COMPANY: Nanosys, Inc. 2625 Hanover Street Palo Alto, CA 94304 Attention: Vice President, Intellectual Property Tel: (650) 846-2500 Fax: (650) 846-2501 All notices under this Agreement shall be deemed effective upon receipt. A party may change its contact information immediately upon written notice to the other party in the manner provided in this Section. 14.3 Governing Law. This Agreement and all disputes arising out of or related to this Agreement, of the performance, enforcement, breach or termination hereof, and any remedies relating thereto, shall be construed, governed, interpreted and applied in accordance with the laws of the Commonwealth of Massachusetts, U.S.A., without regard to conflict of laws principles, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent shall have been granted. 14.4 Force Majeure. Neither party will be responsible for delays resulting from causes beyond the reasonable control of such party, including without limitation fire, explosion, flood, war, strike, or not, provided that the nonperforming party uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement with reasonable dispatch whenever such causes are removed. 25 14.5 Amendment and Waiver. This Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by both parties. Any waiver of any rights or failure to act in a specific instance shall relate only to such instance and shall not be construed as an agreement to waive any rights or fail to act in any other instance, whether or not similar. 14.6 Severability. In the event that any provision of this Agreement shall be held invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect any other provision of this Agreement, and the parties shall negotiate in good faith to modify the Agreement to preserve (to the extent possible) their original intent. If the parties fail to reach a modified agreement within thirty(30) days after the relevant provision is held invalid or unenforceable, then the dispute shall be resolved in accordance with the procedures set forth in Article 13. While the dispute is pending resolution, this Agreement shall be construed as if such provision we re deleted by agreement of the parties. 14.7 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns. 14.8 Headings. All headings are for convenience only and shall not affect the meaning of any provision of this Agreement. 14.9 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior agreements or understandings between the parties relating to its subject matter. 26 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives. THE EFFECTIVE DATE OF THIS AGREEMENT IS Sept 5, 2002. MASSACHUSETTS INSTITUTE OF TECHNOLOGY NANOSYS, INC. By: /s/ Lita L. Nelsen By: /s/ Lawrence A. Bock --------------------------------- --------------------------------- Name: LITA L. NELSEN, DIRECTOR Name: LAWRENCE BOCK TECHNOLOGY LICENSING OFFICE Title: President Title: MASSACHUSETTS INSTITUTE OF TECHNOLOGY By: /s/ Alice P. Gast ---------------------------------- Name: Alice P. Gast, Ph.D. Title: Robert T. Haslam Professor, Vice President for Research, and Associate Provost 27 APPENDIX A List of Patent Applications and Patents I. United States Patents and Applications M.I.T. Case No. 8726, "Creating Photon Atoms" by Moungi Bawendi, Mihai Ibanescu, John Joannopoulos, and Vikram Sundar. M.I.T. Case No. 8748, "Quantum Dot Laser" by Moungi Bawendi, John Haavisto, Farhad Hakimi and John Tumminelli Issued Patent No. 5/260,957 M.I.T. Case No. 8763, "Quantum Dot Optical Amplifiers and Lasers" by Moungi Bawendi, Jennifer Hollingsworth, Victor Klimov, Catherine Leatherdale and Alexandre Mikhailovski Pending Application No. 09/805,435, entering national phase in EP, CA, JP and the US M.I.T. Case No. 8801, "Synthesis and Applications of Magnetic Cobalt Nanorods and Nanowires" by Moungi Bawendi, Dmitri Dinega, Sungjee Kim and Edwin Thomas M.I.T. Case No. 9132, "Amine Brightening of CdSe Quantum Dots Overcoated With ZnS", by Moungi Bawendi and Wing-Keung Woo M.I.T. Case No. 9228, "Method for Encapsulating Nanocrystal Quantum Dots Into Polymer Microspheres" by Moungi Bawendi, Neal Devaraj, Klavs Jensen and Jinwook Lee M.I.T. Case No. 9470, "Nanocrystal/Titania Composite Matrices for Optical Applications" by Moungi Bawendi, Hans Eisler and Vikram Sundar Pending Application No. 60/322,466 M.I.T. Case No. 9495, "Distributed Feedback Nanocrystal Laser" by Moungi Bawendi, Hans Eisler, Victor Klimov, Henry Smith, Vikram Sundar, and Michael Walsh Pending Application No. 60/331,454 M.I.T. Case No. 9529, "Efficient QDLEDs Utilizing Organic Host Materials" by Moungi Bawendi, Vladimir Bulovic, Seth Coe and Wing-Keung Woo Pending Application Filed 3/29/02 II. International (non-U.S.) Patents and Applications M.I.T. Case No. 8763 Pending PCT Application No. US01/08001 28 APPENDIX B List of Patent Applications and Patents I. United States Patents and Applications M.I.T. Case No. 7699, "Quantum Dot White and Colored Light Emiting Diodes" by Moungi Bawendi, Jason Heine, Klavs Jensen, Jeffrey Miller and Ronald Moon Pending Application No. 09/167,795 Pending Application No. 09/350,956, CIP of 09/167,795 M.I.T. Case No. 7771, "Highly Luminescent, Color-Selective Quantum Dots" by Moungi Bawendi, Bashir Dabbousi, Klavs Jensen, Frederic Mikulec and Xavier Rodriguez-Viejo Issued Patent No. 6/322,901 Issued Patent No. 6/207,229 M.I.T. Case No. 7772, "Luminescent Tags for Use With Biological Substrates" by Moungi Bawendi, Frederic Mikulec and Vikram Sundar Issued Patent No. 6/326,144 Pending Application No. 09/397436, CIP of 6/326,144 Pending Application No. 09/832,959, DIV of 6/326,144 M.I.T. Case No. 8096, "Inventory Control" by Moungi Bawendi and Klavs Jensen Pending Application No. 09/160,458 Pending Application No. 09/397,432, CIP of 09/160/458 M.I.T. Case No. 8097, "Water Soluble Quantum Dots" by Moungi Bawendi, Jin-Kyu Lee and Frederic Mikulec Issued Patent No. 6/251,303 Issued Patent No. 6/319,426, CIP of 6/251,303 M.I.T. Case No. 8173, "11-Mercaptoundecanoic Acid as a Water Solubizing Capping Ligand for Luminescent (CdSe) ZNS Quantum Dots" by Moungi Bawendi, Jin-Kyu Lee and Frederic Mikulec Pending Application No. 09/156,457 M.I.T. Case No. 8529, "Highly Fluorescent CdTe Nanocrystals" by Moungi Bawendi, Sungjee Kim and Frederic Mikulec Pending Application No. 09/625,861 M.I.T. Case No. 8733, "A Comprehensive Procedure for Coating Surfaces, Such as Semiconductor Quantum Dots, With Recombinant Proteins to Create Bioconjugates..." by George Anderson, Moungi Bawendi, Hedi Mattoussi, J. Matthew Mauro and Vikram Sundar Pending Application No. 09/811,824 29 M.I.T. Case No. 8846, "Synthesis of CdSe Nanocrystals from Cadmium-2, 4-Pentanedionate" by Moungi Bawendi and Nathan Stott Pending Application No. 09/732,013 Pending Application Filed 12/06/01 II. International (non-U.S.) Patents and Applications M.I.T. Case No. 7699 Pending Europe Application No. 99915206.9 Pending Japan Application No. US99/07219 M.I.T. Case No. 7771 Pending Europe Application No. 98957785.3 Pending Canada Application No. 2309967 Pending Japan Application No. US98/23984 M.I.T. Case No. 7772 Pending Great Britain Application No. 9922072.5 Pending Europe Application No. 99307393.1 Pending Japan Application No. 2000-571252 Pending Canada Application No. 2344478 M.I.T. Case No. 8096 Pending Europe Application No. 99954615.3 Pending Canada Application No. 2344145 Pending Japan Application No. 2000-574022 M.I.T. Case No. 8097 Pending Europe Application No. 99948273.0 Pending Canada Application No. 2344479 Pending Japan Application No. 2000-571265 M.I.T. Case No. 8529 Pending PCT Application No. US00/20357 Pending Japan Application No. 2001-512953 M.I.T. Case No. 8733 Pending PCT Application No. US01/08788 M.I.T. Case No. 8846 Pending PCT Application No. US01/45815 30 EXHIBIT A CONFLICT AVOIDANCE STATEMENT Name: Moungi Bawendi Dept. or Lab.: Chemistry Company: Nanosys Address: _________________________________ __________________________________________ Licensed Technology: _____________________ __________________________________________ __________________________________________ Because of the M.I.T. license granted to the above company and my equity* position and continuing relationship with this company, I acknowledge the potential for a possible conflict of interest between the performance of research at M.I.T. and my contractual or other obligations to this company. Therefore, I will not: 1) use students at M.I.T. for research and development projects for the company; 2) restrict or delay access to information from my M.I.T. research; 3) take direct or indirect research support from the company in order to support my activities at M.I.T.; or 4) employ students at the company, except in accordance with Section 4.5.2, "Faculty and Students," in the Policies and Procedures Guide. In addition, in order to avoid the appearance of a conflict, I will attempt to differentiate clearly between the intellectual directions of my M.I.T. research and my contributions to the company. To that end, I will expressly inform my department head/laboratory director annually of the general nature of my activities on behalf of the company. Signed: Moungi Bawendi ---------------------- Date: 8/12/02 Approved by: /s/ Stephen J. Lippard Name (print): STEPHEN J. LIPPARD (Dept. Head or Lab Dir) 31 EXHIBIT B INVENTOR/AUTHOR ACKNOWLEDGMENT OF NO EQUITY DISTRIBUTION FORM VERSION 8/22/01 In partial reliance on the undersigned's execution of this Acknowledgment, M.I.T. has entered into the license agreement to which this Acknowledgment is attached (the "LICENSE") in which COMPANY received certain licenses to the technology listed below, on some or all of which the undersigned is a listed inventor or author. The undersigned, independently of the LICENSE, has received or will soon acquire equity in Nanosys ("COMPANY"), and, in accordance with M.I.T.'s licensing policies contained in M.I.T.'s Guide to the Ownership, Distribution and Commercial Development of M.I.T. Technology as that policy may be amended from time to time (specifically Section 4.2.5 as of this Form Version date), the undersigned, on his/her own behalf and on behalf of his/her heirs and assigns, acknowledges and agrees that he/she has no right to receive any share of equity income received by M.I.T. in consideration for the LICENSE. Technology Licensed as of the EFFECTIVE DATE of the LICENSE: _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Witness: /s/(ILLEGIBLE) Signed: /s/ Moungi Bawendi ------------------------- -------------------------- Print Name: Moungi Bawendi Date: 8/12/02 32 EXHIBIT C INVESTOR REPRESENTATION STATEMENT (attached) 33 INVESTOR REPRESENTATION STATEMENT _______________, 2002 In connection with the purchase of _______________shares of Common Stock (the "SHARES")of Nanosys, Inc. (the "COMPANY"), the undersigned M.I.T. Holder, as defined in the [AGREEMENT] dated as_______, does hereby represent to the Company as follows: (a) Preexisting Relationship with Company; Business and Financial Experience; Accredited Investor. I either (i) have a preexisting business and/or personal relationship with the Company and/or its officers, directors or controlling persons, or (ii) by reason of my business or financial experience or the business or financial experience of my professional advisors who are unaffiliated with the Company and who are not compensated by the Company, have the capacity to protect my own interests in connection with the receipt of the Shares. (b) Investment Intent; Blue Sky. I am acquiring the Shares for investment for my own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof. I understand that the issuance of the Shares has not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of my investment intent and the accuracy of my representations as expressed herein. My address set forth below represents my true and correct state of domicile, upon which the Company may rely for the purpose of complying with applicable "Blue Sky" laws. (c) Rule 144. I acknowledge that the Shares must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from such registration is available. I am aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares received in a private placement subject to the satisfaction of certain conditions, including, among other things, the existence of a public market for the shares, the availability of certain current public information about the Company, the resale occurring not less than one year after a party has purchased and paid for the security to be sold, the sale being effected through a "broker's transaction" or in a transaction directly with a "market maker" and the number of shares being sold during any three-month period not exceeding specified limitations. (d) No Public Market. I understand that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company's securities. (e) Restrictions on Transfer; Restrictive Legends. I understand that the transfer of the Shares is restricted by applicable state and Federal securities laws, and that the certificates representing the Shares will be imprinted with legends restricting transfer except in compliance therewith. (f) Access to Data. I have had an opportunity to discuss the Company's business, management and financial affairs with the Company's management. I have also had an opportunity to ask questions of officers of the Company. I understand that such discussions, as well as any written information issued by the Company, are intended to describe certain aspects of the Company's business and prospects but are not a thorough or exhaustive description. (g) Tax Liability. I have reviewed with my own tax advisors the tax consequences of the transactions contemplated by this Agreement. I will rely solely on such advisors and not on any statements or representations of the Company or any of the Company's agents with respect to such tax consequences. I understand that I, and not the Company, shall be responsible for my own tax liability that may arise as a result of my receipt of the Shares. (h) Limited Operating History. I acknowledge that the Company was incorporated on July 12, 2001 as a new business and has a limited operating history. (i) Risks. I am aware that the Securities are highly speculative and that there can be no assurance as to what return, if any, there may be. I am aware that the Company may issue additional securities in the future which could result in the dilution of my ownership interest in the Company. (j) Additional Undertaking. I hereby agree to take whatever additional action and execute whatever additional documents the Company may in its judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on either myself or the Shares pursuant to the express provisions described herein. M.I.T. HOLDER _______________________________ SIGNATURE _______________________________ PRINT NAME ADDRESS: _______________________________ _______________________________ _______________________________ -2- EX-10.10.1 12 f97636a4exv10w10w1.txt EXHIBIT 10.10.1 EXHIBIT 10.10.1 December 13, 2002 Matthew Murphy Nanosys Incorporated 2625 Hanover Street Palo Alto, CA 94304 Re: Exclusive Patent License Agreement - Amendment One Dear Matthew: This Amendment adds the following M.I.T. Cases to the indicated Appendices of the M.I.T. - Nanosys Inc. Exclusive Patent License Agreement effective September 5, 2002 (Agreement): (1) Add to Appendix A: M.I.T. Case No. 8800, "Quantum Dots As Luminescent Temperature Probes, "by Alfred A. Barney, Moungi G. Bawendi, Daniel C. Nocera, Christina M. Rudzinski, Vikram C. Sundar and Glen W. Walker. (2) Add to Appendix B: M.I.T. Case No. 8366, "Polarization Label For Measuring The 3-Dimensional Orientation of Sub-Diffraction Limited Objects, "by Moungi G. Bawendi and Stephen Empedocles. Except as specifically modified or amended hereby, the Agreement shall remain in full force and effect and, as modified or amended, is hereby ratified, confirmed and approved. No provision of this Amendment may be modified or amended except expressly in a writing signed by both parties nor shall any terms be waived except expressly in a writing signed by the party charged therewith. This Amendment shall be governed in accordance with the laws of the Commonwealth of Massachusetts. The Effective Date of this Amendment is Dec 13, 2002 ________________. Please indicate your acceptance of this First Amendment by countersigning this letter and returning it to M.I.T. Massachusetts Institute of Technology Nanosys Incorporated By: /s/ Lita Nelson By: /s/ Matthew Murphy _________________________________ ________________________________ Name: Lita Nelson Name: Matthew Murphy _________________________________ _______________________________ Title: Director, Title: Vice President, I.P. Technology Licensing Office ______________________________ _______________________________ Date: 12/31/02 Date: 12/19/02 _________________________________ _______________________________ EX-10.10.2 13 f97636a4exv10w10w2.txt EXHIBIT 10.10.2 EXHIBIT 10.10.2 March 10, 2003 Matthew Murphy Nanosys Incorporated 2625 Hanover Street Palo Alto, CA 94304 Re: Exclusive Patent License Agreement - Amendment Two Dear Matthew: This Amendment removes the following M.I.T. Case from Appendix A of the M.I.T. - Nanosys Inc. Exclusive License Agreement effective September 5, 2002 (Agreement): M.I.T. Case No. 9132, "Amime Brightening of CdSe Quantum Dots Overcoated with ZnS," by Moungi G. Bawendi and Wing-Keung Woo Except as specifically modified or amended hereby, the Agreement shall remain in full force and effect and, as modified or amended, is hereby ratified, confirmed, and approved. No provision of this Amendment may be modified or amended except expressly in a writing signed by both parties nor shall any terms be waived except expressly in a writing signed by the party charged therewith. This Amendment shall be governed in accordance with the laws of the Commonwealth of Massachusetts. The Effective Date of this Amendment is March 12, 2003. Please indicate your acceptance of this Second Amendment by countersigning this letter and returning it to M.I.T. Massachusetts Institute of Technology Nanosys Incorporated By: /s/ John H. Turner, Jr. By: /s/ Matthew Murphy --------------------------------- -------------------------------- Name: John H. Turner, Jr. Name: Matthew Murphy ------------------------------- ------------------------------ Title: Associate Director Title: V.P. Intellectual Property Technology Licensing Office ----------------------------- ------------------------------ Date: 10 March 2003 Date: 3/12/03 ------------------------------- ------------------------------ EX-10.11 14 f97636a4exv10w11.txt EXHIBIT 10.11 EXHIBIT 10.11 PATENT LICENSE AGREEMENT BETWEEN THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK AND NANOSYS, INC. This Agreement is entered into this 20th day of May, 2003 (the "Effective Date") by and between Nanosys, Inc. ("Licensee"), a Delaware Corporation having its principal place of business at 2625 Hanover Street, Palo Alto, California, 94304, and The Trustees of Columbia University in the City of New York, ("Licensor"). Licensee and Licensor are hereafter referred to herein individually as "Party" and collectively as "Parties." WHEREAS, Licensor is the owner by assignment of the right title and interest to certain U.S. and foreign patents and/or patent applications related to nanocrystal based photoelectric devices; WHEREAS, Licensor desires to have the technology described and claimed in such certain patents and applications developed for commercial and other useful applications; and WHEREAS, Licensee desires to obtain exclusive rights to practice the inventions described and claimed in such certain U.S. and foreign patents and applications, and to develop and commercialize nanocrystal based photoelectric devices; NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Parties, the Parties agree as follows: 1.0 DEFINITIONS 1.1 "Affiliate" means any entity which controls or is controlled by a party to this Agreement. An entity shall be regarded as in control of another entity for purposes of this Agreement if it owns or controls at least fifty percent (50%) of the shares entitled to vote in the election of directors of such entity (or in the case of an entity that is not a corporation, for the election of a corresponding managing authority). 1.2 "Combination Product" means a product sold by Licensee, where a Licensed Product is sold, in combination with another product that can reasonably be deemed to be a separate product, and which is not itself a Licensed Product. 1.3 "Licensed Patents" means U.S. Patent No. 6,239,355, entitled "Solid-State Photoelectric Device", all reissues (including the Reissue Patent), reexaminations, or other related U.S. patent filings directed to the same subject matter, and any foreign counterparts that claim priority to U.S. Patent No. 6,239,355 or other related U.S. filings directed to the same subject matter. 1.4 "Licensed Process" means any process, procedure or method, the practicing of which in a given country, practices any Valid Claim of the Licensed Patents existing in such country. 1.5 "Licensed Product" means any device, apparatus, composition of matter, or article of manufacture the existence, production or use of which in a given country practices any Valid Claim of the Licensed Patents existing in such country. 1.6 "Licensee" means Nanosys and its Affiliates. 1.7 "Net Sales" means amounts, and/or all other consideration (including any debt or equity securities or instruments), received by Licensee for the sale of Licensed Products in any country in which Patent Rights are granted or being prosecuted in good faith, less (i) customary trade, quantity, or cash discounts to the extent actually allowed and taken; (ii) amounts repaid or credited by reason of rejection or return; (iii) an allowance for actual bad debt having occurred during the reporting period, said allowance being no greater than [*** Redacted]%; (iv) to the extent separately stated on purchase orders, invoices, or other documents of sale, any taxes or other governmental charges levied on the production, sale, transportation, delivery, or use of a Licensed Product or Licensed Process which is paid by or on behalf of Licensee; and (v) outbound transportation costs prepaid or allowed and costs of insurance in transit. In the case of Combination Products Net Sales shall be determined by either(1) the formula [*** Redacted] where A is the [*** Redacted] of the Licensed Product components of the Combination Product during such period when sold individually, and B is the [*** Redacted] price of the separate product component(s) of the Combination Product when sold individually; or, if all components of the Combination Product were not sold individually during the same or immediately preceding reporting period then (2) the formula [*** Redacted] where C is the [*** Redacted] of the Licensed Product components during the prior reporting period and D is the [*** Redacted] during the prior reporting period, with such costs being determined in accordance with generally accepted accounting principles. 1.8 "Reissue Patent" a reissue of U.S. Patent No. 6,293,355 entitled "Solid State Photoelectric Device," under 35 U.S.C. Section 251 by the United States Patent and Trademark Office, in which at least the broadest reissue claim has [*** Redacted]. 1.9 "Sublicense Revenue" means all amounts and/or all other consideration (including any debt and/or equity securities or instruments) received by Licensee from its Sublicensee's in consideration for the granting of a sublicense to the Licensed Patents. In the case where the Licensed Patents are sublicensed by Licensee, Sublicense Revenue specifically excludes payments made to Licensee by its Sublicensees for bona fide research *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. - 2 - and/or development funding, or those specified payments made in consideration for the licensing or sublicensing of Licensee's own intellectual property or third party intellectual property for which Licensee has rights to sublicenses (but not including any intellectual property rights granted to Licensee hereunder). 1.10 "Valid Claim" means any issued claim of the Licensed Patents that has not expired, or been finally held as invalid or unenforceable by a court or administrative body of competent jurisdiction, as well as any pending claim of the Licensed Patents that is being prosecuted in good faith, and that has not been finally and conclusively rejected. 2.0 LICENSE GRANT 2.1 Except as expressly provided in sections 2.2, 2.3 and 2.4 Licensor hereby grants to Licensee an exclusive worldwide license, with a right to grant sublicenses, in all fields under the Licensed Patents, to make, have made, use, sell, offer for sale and import Licensed Products and to use Licensed Processes. 2.2 Notwithstanding the foregoing, Licensor shall retain a right to practice the Licensed Patents solely for noncommercial, academic research purposes. 2.3 Licensor grants to Licensee the right to grant sublicenses to third parties, provided that: (i) the Sublicensee agrees to abide by all the terms and provisions of this Agreement; (ii) the Licensee remains fully liable for the performance of its and its Sublicensee's obligations hereunder; (iii) each such sublicense is royalty-bearing at [*** Redacted], or provides or is supported by equivalent consideration; (iv) the Licensee notifies Licensor of any grant of a sublicense and provides to Licensor, upon request, a copy of any sublicense agreement; and (v) no such sublicense or attempt to obtain a sublicensee shall relieve the Licensee of its obligations under section 6 hereof to exercise its own best efforts, directly or through a sublicense, to discover, develop and market Licensed Product, nor relieve Licensee of its obligations to pay Licensor any and all license fees, royalties and other payments due under this Agreement. 2.4 All rights and licenses granted by Licensor to Licensee under this Agreement are subject to: (i) any limitations imposed by the terms of any government grant, government contract or government cooperative agreement applicable to the technology that is the subject of this Agreement, and/or (ii) applicable requirements of 35 U.S.C. Sections 200 et seq., as amended, and implementing regulations and policies. Without limitation of the foregoing, the Licensee agrees that, to the extent required under 35 U.S.C. Section 204, any Licensed Product used, sold, distributed, rented or leased by the Licensee, an Affiliate or a Sublicensee in the United States will be manufactured substantially in the United States. 3.0 LICENSE FEE *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. - 3 - 3.1 Within thirty (30) days of the effective date of this Agreement, Licensee shall pay to Licensor a non-refundable License Issue Fee in the amount of $6,900,000. 3.2 Licensee also hereby grants to Licensor an option (the "Initial Option") to purchase 10,000 shares of Licensee's common stock at the price of $0.19 per share (the "Exercise Price"), which is the current fair market value of the common stock. The Initial Option shall become exercisable upon the Effective Date of this Agreement. 3.3 Licensee also hereby grants to Licensor a contingent option (the "Contingent Option"; the Contingent Option and the Initial Option are sometimes hereinafter referred to singly as an "Option" and collectively as the "Options") to purchase an additional 15,000 shares of Licensee's common stock at the Exercise Price. The Contingent Option shall become exercisable upon the earliest of: (i) the issuance of a Reissue Patent based upon the Patent Rights; or (ii) Licensee's written notification to Licensee prior to May 29, 2003 that it does not wish to seek a Reissue Patent; or (iii) the business day immediately prior to the consummation of a merger, consolidation, other business combination or other transaction constituting an acquisition of the securities, assets or business of Licensee (or, if earlier, on the business day immediately prior to any applicable record date with respect thereto) as a result of which the shares of the class for which the Contingent Option is exercisable immediately prior to such event are to be changed or converted into or exchanged for any securities of another entity or other property (including cash) (an "Acquisition Transaction"). 3.4 Either Option may be exercised for a period of six months following the date that it first becomes exercisable in accordance with Section 3.2 or 3.3 (other than pursuant to clause (iii) of Section 3.3), as the case may be (the "Exercise Period"), by (i) Licensor's payment of an amount equal to the aggregate Exercise Price for the shares subject to such Option (A) by check payable to the order of the Licensee or by wire transfer to an account of Licensee, (B) at Licensor's election by offsetting against such payment, any Milestone Fee due pursuant to Section 4.0 or (C) in accordance with Section 3.6(d); and (ii) Licensor's furnishing to Licensee (in the manner provided for the giving of notice hereunder) a counterpart, executed on behalf of Licensor, of each of (1) the Common Stock Purchase Agreement (substantially in the form of the agreement attached hereto as Appendix A) (the "Purchase Agreement"); and (2) in the case of the Initial Option only, a Voting Agreement by and among Licensee and Licensor and certain other holders of common stock as of the Effective Date (substantially in the form of the agreement attached hereto as Appendix B) (the "Voting Agreement"); provided, however, that in the event of any exercise of an Option pursuant to Section 3.6(d), the Purchase Agreement shall be executed by the parties within 30 days following the consummation of an Acquisition Transaction. 3.5 Upon the exercise of either Option, Licensor shall be deemed to be the holder of record of the shares subject to such Option, notwithstanding that the transfer books of Licensee shall then be closed or certificates representing such shares shall not then have - 4 - been actually delivered to Licensor. Subject to the proviso contained in the last sentence of Section 3.4, as soon as practicable (and in any event within 10 days) after each such exercise of an Option, Licensee shall issue and deliver to Licensor (in the manner provided for the giving of notice hereunder) a certificate or certificates representing the shares issuable upon such exercise, registered in the name of Licensor, together with a counterpart, executed on behalf of each of the signatories thereto (other than Licensor) of each of the Purchase Agreement and, in the case of the Initial Option only, the Voting Agreement. 3.6 The Exercise Price and the number of shares issuable upon exercise of each of the Options, shall be subject to adjustment, as follows: (a) In the event that Licensee shall, at any time after the date hereof, declare a dividend or distribution on the outstanding shares of the class issuable upon exercise of an Option, payable in such shares, or subdivide or combine such shares or issue any such shares by reclassification of such shares (including any such reclassification in connection with a consolidation or merger in which Licensee is the continuing corporation), then, in each case, the Exercise Price per share in effect at the time of the record date for the determination of stockholders entitled to receive such dividend or distribution or upon the effective date of such subdivision, combination, or reclassification shall be adjusted so that it shall equal the price determined by multiplying such Exercise Price by a fraction, the numerator of which shall be the number of shares of such class outstanding immediately prior to such action, and the denominator of which shall be the number of shares of such class outstanding after giving effect to such action. The number of shares issuable upon exercise of each of the Options shall simultaneously be adjusted by multiplying the number of shares theretofore issuable upon exercise of each such Option by the Exercise Price in effect on the date hereof and dividing the product so obtained by the Exercise Price, as adjusted. (b) In the event of any transaction, including, without limitation, any conversion of Licensee or a recapitalization or reorganization of the class of shares issuable upon exercise of an Option, in which the previously outstanding shares of such class shall be changed or converted into or exchanged for different securities of Licensee, or if any dividend or distribution shall be declared in respect of the class of shares issuable upon exercise of an Option or any combination of any of the foregoing (but excluding any Acquisition Transaction and any transaction covered by Section 3.6(a)) (each such transaction being herein referred to as a "Non-Acquisition Transaction" and the date of consummation of the Non-Acquisition Transaction being herein referred to as the "Consummation Date"), then, lawful and adequate provision shall be made so that Licensor, upon the exercise of either or both of the Options at any time on or after the Consummation Date, shall be entitled to receive, in lieu of the shares issuable upon such exercise prior to the Consummation Date, the amount of securities or other property to which Licensor would actually have been entitled as a stockholder upon the consummation of the Non-Acquisition - 5 - Transaction if Licensor had exercised such Option immediately prior thereto (or, if earlier, immediately prior to any applicable record date with respect thereto) and (if applicable) had carried out the terms for the receipt of securities and/or property in connection with such Non-Acquisition Transaction. In each such case, appropriate adjustment shall be made in the application of the provisions herein set forth herein with respect to the Exercise Price and the number of shares or other securities or property issuable upon the exercise of an Option. (c) The provisions of this Section 3.6 shall similarly apply to successive events of the type described in subsection (a) or (b) above. (d) On the business day immediately prior to the consummation of an Acquisition Transaction, (or, if earlier, on the business day immediately prior to any applicable record date with respect thereto), Licensor shall be deemed to have exercised the Contingent Option and shall receive the amount of securities other property to which it was entitled as a stockholder holding the class of shares for which the Contingent Option was exercisable upon such date and as if it had carried out the terms for the receipt of such securities and/or property in connection with such Acquisition Transaction. Upon exercise of the Contingent Option in accordance with this Section 6(d), Licensor shall be deemed to have paid the aggregate Exercise Price for such exercise to Licensee by offsetting against such payment Licensee's obligation to pay the milestone fee due pursuant to Section 4.0; provided, that if such milestone fee has been paid prior to such date, Licensor shall be indebted to Licensee in the amount of such Exercise Price, shall receive the securities and other property in accordance with the preceding sentence and shall pay such Exercise Price to Licensee within 30 days following the consummation of any Non-Acquisition Transaction. 3.7 Promptly after any adjustment in accordance with Section 3.6, Licensee shall give written notice thereof to the Licensor setting forth in reasonable detail the adjustment, the method of calculation thereof and the facts upon which such adjustment and calculation are based. 4.0 MILESTONE FEE Upon the issuance of a Reissue Patent, Licensee shall pay to Licensor a Milestone Fee in the amount of [*** Redacted]. Such Milestone Fee shall be payable within thirty(30) days of Licensee's written notification to Licensee of such Reissue Patent. Prior to May 29, 2003, if Licensee notifies Licensor that it does not wish to cause Licensor to seek a Reissue Patent, then such notification shall trigger the milestone fee, requiring Licensee to pay to Licensor the Milestone Fee. In addition, [*** Redacted] of such Milestone Fee shall be payable to Licensor (if not previously paid) in the event that the Contingent Option is exercised pursuant to Section 3.6(d) of this Agreement, and any such payment shall reduce any Milestone Fee payable to Licensor under the preceding sentence of this Section 4.0; provided, however, in no event shall Licensee make any such payment to Licensor if the *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. - 6 - Licensee has previously paid Licensor the Milestone Fee in full asset forth in said preceding sentence. Notwithstanding the foregoing, Licensor shall have the sole discretion and right regarding the decision as to whether to submit U.S. Patent Office No. 6,239,355 for reissuance pursuant to 37 C.F.R. Section 1.178. 5.0 ROYALTIES 5.1 Licensee shall pay to Licensor a running royalty of [*** Redacted]% of Net Sales by Licensee. In the event that Licensee's making, use, sale, offer for sale or importation of Licensed Products requires Licensee to pay any amount to secure any necessary third party intellectual property rights to engage in such activity in view of such third party's intellectual property, including without limitation payment of royalties to such third parties, costs associated with establishing that such rights are not necessary or that such third party intellectual property is invalid or unenforceable, then Licensee shall be entitled to credit such amounts against royalties due hereunder up to [*** Redacted]% of the royalties due for any reporting period, but in no event shall the royalty rate paid to Licensor be less than [*** Redacted]% of Net Sales by Licensee. 5.2 Licensee shall pay to Licensor a royalty of [*** Redacted]% of Sublicense Revenue (hereafter termed a "Sublicense Royalty") where the Patent Rights are sublicensed to a third party ("Sublicensee") in conjunction with the granting of substantial intellectual property rights other than under the Licensed Patents, which other intellectual property rights are licensable by Licensee, including but not limited to patents, copyrights, trade marks, trade secrets and know-how. In the event that no other substantial intellectual property rights are included in a sublicense of the Patent Rights ("a Naked Sublicense"), then the Sublicense Royalty payable by Licensee to Licensor shall be [*** Redacted]% of Sublicense Revenues. 5.3 Royalty payments shall be made quarterly in accordance with and concurrent with the royalty reporting obligations set forth in sections 7.2 and 7.3, below. 6.0 DILIGENCE 6.1 Licensee shall use commercially reasonable efforts, or shall cause its Affiliates and/or Sublicensees to use commercially reasonable efforts to develop Licensed Products or Licensed Processes and to introduce Licensed Products or Licensed Processes into the commercial market. Specifically, Licensee, its Affiliates or Sublicensees shall: 6.1.1 apply funding to development of nanocomposite photovoltaic devices at least the following levels: *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. - 7 - 2003: $ [*** Redacted] 2004: $ [*** Redacted] 2005: $ [*** Redacted] 2006 and after: $ [*** Redacted]; and 6.1.2 make a first commercial sale of a Licensed Product by [*** Redacted]. 6.2 In the event that Licensor determines that Licensee has failed to meet its obligations under section 6.1(a) of this Agreement, then Licensor shall notify Licensee of such determination and provide Licensee 60 days to refute such determination. In the event Licensee is unable to refute such determination, then Licensor may request an updated funding plan from Licensee, which funding plan shall include one and one half times the amounts set forth herein, to be funded in the years following such determination. Failure by Licensee to meet such updated funding plan may be treated by Licensor as a material breach of this Agreement. 6.3 In the event that Licensee fails to make a first commercial sale by the date provided in Section 6.1(b), Licensee shall be obligated to pay to Licensor a minimum royalty in the amount specified below, for each year subsequent to 2007, until such time as Licensee makes a first commercial sale.

Year Minimum Royalty 2008 [*** Redacted] 2009 [*** Redacted] 2010 and thereafter [*** Redacted]

Minimum royalty payments shall be due within 30 days of the last day of the calendar year in which they are due. 7.0 REPORTING 7.1 Prior to the first commercial sale of a Licensed Product, and within 30 days after the end of each calendar year, Licensee shall provide Licensor with a written report of progress in the development and commercialization of Licensed Products or Licensed Processes, in accordance with the obligations set forth in Section 6.1, above. 7.2 Within 60 days of the end of each calendar quarter following the first commercial sale of a Licensed Product, Licensee shall provide Licensor with a royalty report that provides, in reasonable detail: (i) the selling price of each type of Licensed Product sold by Licensee; (ii) the number of each type of Licensed Product sold; (iii) the royalties, in U.S. dollars, payable under this Agreement on those sales *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. - 8 - 7.3 Within 60 days of the end of each calendar quarter following the granting of any sublicenses hereunder, Licensee shall provide Licensor with a Sublicense Royalty report (such Sublicense Royalty report may be combined with the royalty report identified in Section 7.2) which provides, in reasonable detail: (i) the identity of any such Sublicensee; (ii) amount of Sublicense Revenue received from each such Sublicensee; and (iii) the amount of Sublicense Royalty due to Licensor under this Agreement. 8.0 RECORD KEEPING Licensee shall keep books and records accurately showing all Licensed Products manufactured, used, sold, imported or otherwise disposed of under the terms of this Agreement. Licensee shall preserve those books and records for at least five years from the date of the royalty payment to which they pertain and shall open them to inspection by representatives or agents of Licensor at reasonable times at Licensee's facilities. In the event that such inspection shows that Licensee has underpaid royalties by five percent (5%) or more with respect to any calendar quarter, the Licensee shall pay, within ten days after demand by Licensor, the costs and expenses of such review. If such underpayment is in excess of $5,000.00 for any calendar quarter, or an aggregate of $10,000 during the inspection period, Licensee shall also reimburse Licensor for the costs of such inspection. In the event of a licensing inspection, Licensee is required to provide auditors with detailed information including detailed sales, inventory, manufacturing, purchasing, transfer records, customer lists, access to invoices, purchase orders, sales orders, shipping documentation, cost information, pricing policies, etc. 9.0 PATENT FILING AND MAINTENANCE 9.1 Licensee shall pay to Licensor all of Licensors actual past and future out of pocket expenses for the preparation, filing and maintenance of the Licensed Patents. As of the Effective Date of this Agreement, such past out of pocket expenses were approximately $24,872.26. All payments by Licensee for Licensor's actual out of pocket expenses in accordance with this section shall be due within thirty(30) days of Licensee's receipt of an invoice reasonably detailing such expenses. 9.2 Licensor shall bear responsibility for filing, maintenance and prosecution of the Licensed Patents. Notwithstanding the foregoing, in consideration of Licensee's payment of prosecution and maintenance costs, Licensee shall have the right to review and comment upon all material communications to and/or from any patent offices, which Licensor shall use reasonable efforts, subject to its reasonable discretion, to incorporate Licensee's comments into any such communications. 9.3 In the event that Licensee notifies Licensor that it does not wish to support the filing, continued prosecution or maintenance of Licensed Patents in any individual country, then Licensee's obligations to reimburse costs for such filing, prosecution or maintenance - 9 - shall terminate upon such notification. In the event that Licensor chooses to continue such filing, prosecution and/or maintenance in such country, then any patent issuing thereon shall not be included in Licensed Patents. Notwithstanding the foregoing, Columbia shall have the sole discretion and right regarding the decision as to whether to submit U.S. Patent Office No. 6,239,355 for reissuance pursuant to 37 C.F.R. Section 1.178. 10.0 INFRINGEMENT 10.1 Licensor will protect its Patents from infringement and prosecute infringers at its own expense when in its sole judgment such action maybe reasonably necessary, proper, and justified. 10.2 If Licensee shall have supplied Licensor with written evidence demonstrating prima facie infringement of a claim of the Patent Rights by a third party selling products in competition with the Licensee or any of its Affiliates or Sublicensees, Licensee may by notice request that Licensor take steps to assert the Patent Rights against such third party. Unless Licensor shall within three(3) months of receipt of such notice either (i) cause such infringement to terminate or (ii) initiate legal proceedings against the infringer, Licensee, upon written notice to Licensor, may initiate legal proceedings against the infringer at the Licensee's expense. Any settlement of a legal proceeding to enforce any Patent Rights against an alleged infringer shall be subject to Licensor's prior written approval. 10.3 Any recovery by a party that initiates and/or bears the of legal proceedings to enforce any Patent Rights against an alleged infringer shall first be used to reimburse such party for its reasonable costs and legal fees incurred to conduct such proceedings. The balance shall be divided 75% to the party that initiates legal proceedings and 25% to the other party. 10.4 In the event one party shall initiate or carry on legal proceedings to enforce any Patent Rights against an alleged infringer, the other party shall use its best efforts to reasonably cooperate fully with and shall supply all assistance (including legally joining the action) reasonably requested by the party initiating or carrying on such proceedings. The party that institutes any proceeding to protect or enforce Patent Rights shall have sole control of that proceeding and shall be responsible for the reasonable expenses incurred by said other party in providing such assistance and cooperation as is requested pursuant to this paragraph. 11.0 TERMINATION OF AGREEMENT 11.1 Unless terminated earlier in accordance with this Section 11.0, this Agreement shall expire on a country-by-country basis in each country where the Patent Rights exist, upon the expiration of the last to expire patent in such country, or in the event - 10 - the patent in such country is held to be invalid and/or unenforceable (by a court or government body of competent jurisdiction) or admitted to be invalid and/or unenforceable. 11.2 Licensee may terminate this license upon sixty(60) days written notice to Licensor, and shall pay to Licensor any and all royalties and costs that have accrued under Sections 5, 6 and 9 of this Agreement, up to the date of actual termination. 11.3 Subject to the dispute resolution provisions provided in Section 15.2, in the event Licensee fails to pay any amounts due and payable to Licensor hereunder, and fails to make such payments within sixty(60) days after receiving written notice of such failure, Licensor may terminate this Agreement immediately upon written notice to Licensee. 11.4 Subject to the dispute resolution provisions provided in Section 15.2, in the event Licensee commits a material breach of this Agreement, and fails to cure that breach within sixty (60) days after receiving written notice thereof, Licensor may terminate this Agreement immediately upon written notice to Licensee. 11.5 Upon early termination of this Agreement for any reason, Licensee shall provide Licensor with a written inventory of Licensed Products still owned by Licensee. Licensee shall be permitted to dispose of such inventory by sale, within 180 days following such early termination. Notwithstanding the termination of this Agreement, any disposal by sale of such inventory shall be subject to the terms of this Agreement relating, inter alia, to royalties and reporting. 11.6 Upon any termination of this Agreement pursuant to Section 11.2, 11.3 or 11.4, any Sublicensees of Licensee under this Agreement shall become a direct licensee of Licensor, provided as a condition precedent, that Licensors obligations to any such Sublicensees are no greater than Licensor's obligations to Licensee under this Agreement. Licensee shall provide written notice of such to each Sublicensee with a copy of such notice provided to Licensor. 12.0 REPRESENTATIONS AND WARRANTIES 12.1 Licensor represents and warrants that it has the right to enter into this Agreement. 12.2 EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, INCLUDING BUT NOT LIMITED TO THE PATENT RIGHTS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY OF PATENT RIGHTS CLAIMS, WHETHER ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. Specifically, and not to limit the - 11 - foregoing, Licensor makes no warranty or representation (i) regarding the validity or scope of the Licensed Patents, and (ii) that the exploitation of the Licensed Patents or any Licensed Product or Licensed Process will not infringe any patents or other intellectual property of any third party. 12.3 IN NO EVENT SHALL LICENSOR, ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGES OR INJURY TO PERSON OR PROPERTY AND LOST PROFITS, RESULTING FROM LICENSEE'S PRACTICE OF THE LICENSED PATENTS. 12.4 IN NO EVENT SHALL LICENSER'S LIABILITY TO THE LICENSEE EXCEED THE PAYMENTS MADE TO LICENSOR BY LICENSEE UNDER THIS AGREEMENT. 12.5 The parties hereto acknowledge that the limitations and exclusions of liability and disclaimers of warranty set forth in this Agreement form an essential basis of the bargain between the parties. 13.0 INDEMNIFICATION AND INSURANCE 13.1 The Licensee will indemnify, defend and hold Licensor harmless from and against any and all actions, suits, claims, demands, prosecutions, liabilities, costs, expenses, damages, deficiencies, losses or obligations (including attorneys fees) based on or arising out of this Agreement, including, without limitation, (i) the discovery, development, manufacture, packaging, use, sale, rental or lease of Licensed Products, even if altered for use for a purpose not intended, (ii) the use of Licensed Patents, by the Licensee, its Affiliates, its Sublicensees or its (or their) customers, (iii) any representation made or warranty given by the Licensee, its Affiliates or Sublicensees with respect to Licensed Products or Licensed Patents, (iv) any infringement claims relating to Licensed Products or Licensed Patents, and (v) any asserted violation of the Export Laws (as defined in Section 15.5 hereof) by the Licensee, its Affiliates or Sublicensees. The Licensee will reimburse Licensor for the cost of enforcing this provision. 13.2 The Licensee shall maintain, during the term of this Agreement, commercial general liability insurance (including product liability and contractual liability insurance) with reputable and financially secure insurance carriers acceptable to Licensor to cover the activities of the Licensee, its Affiliates and its Sublicensees, for minimum limits of [*** Redacted] combined single limit for bodily injury and property damage per occurrence and in the aggregate; provided further that before administration of any Licensed Product to any humans, for clinical, research, or any other use, Licensee, its Affiliates and its Sublicensees will increase such minimum limits to no less than [*** Redacted]. Such insurance shall include Licensor, its trustees, faculty, officers, employees and agents as additional insureds. The Licensee shall furnish a certificate of insurance evidencing such coverage, with thirty days *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. - 12 - written notice to Licensor of cancellation or material change in coverage. The minimum amounts of insurance coverage required herein shall not be construed as creating any limitation on the Licensee's indemnity obligation under Section 12(a) of this Agreement. 13.3 The Licensee's insurance shall be primary coverage; any insurance Licensor may purchase shall be excess and noncontributory. The Licensee's insurance shall be written to cover claims incurred, discovered, manifested, or made during or after the expiration of this Agreement. 14.0 NOTICES Any payment, notice or other communication this Agreement requires or permits either party to give must be in writing to the appropriate address given below, or to such other address as one party designates by written notice to the other party. The parties deem payment, notice or other communication to have been properly given and to be effective (a) on the date of delivery if delivered in person; (b) on the fourth day after mailing if mailed by first-class mail, postage paid; (c) on the second day after delivery to an overnight courier service such as Federal Express, if sent by such a service; or (d) upon confirmed transmission by telecopier. The parties' addresses are as follows: For Licensor: Executive Director Science & Technology Ventures Columbia Innovation Enterprises Columbia University Engineering Terrace, Suite 363 500 West 120th Street, Mail Code 2206 New York, New York 10027 with a copy to: Office of General Counsel Columbia University 412 Low Memorial Library 535 West 116th Street New York, New York 10027 For Licensee: Nanosys, Inc. 2625 Hanover St. Palo Alto, Ca 94304 Attention: Vice President, Intellectual Property - 13 - Fax: 650/ 846-2501 Telephone: 650/ 331-2100 15.0 PATENT MARKING Licensee shall include appropriate patent marking on all Licensed Products made, sold, or otherwise disposed of by Licensee, which patent marking shall be in accordance with appropriate patent marking laws of the country in which such products are made, sold or otherwise disposed of. Licensee shall cause its Affiliates and/or Sublicensees to similarly mark any Licensed Products made, sold or otherwise disposed of by such Affiliates or Sublicensees. 16.0 GENERAL 16.1 Confidentiality. All information provided to Licensor by Licensee under this agreement, including but not limited to progress and royalty reports, and other financial, business and/or technical information, is deemed to be Confidential Information. 16.1.1 Licensor will maintain the confidentiality of the Confidential Information and will not disclose the Confidential Information to any third party, and will not use the Confidential Information for any purpose other than as necessary to administer this Agreement. 16.1.2 The obligations of Licensor with respect to Confidential Information will not apply to information disclosed under this agreement to the extent such information: (a) is generally known to the public at the time of disclosure or becomes generally known through no wrongful act on the part of Licensor; (b) is in Licensor's possession at the time of disclosure other than as a result of prior disclosure by Licensee or a breach of any legal obligation by Licensor or a third party; (c) becomes known to Licensor through disclosure by sources other than Licensee having no duty of confidentiality to Licensee, whether direct or indirect, with respect to such information and having the legal right to disclose such information; (d) is independently developed by Licensor without reference to or reliance upon the information as can be documented by written records; or - 14 - (e) is required to be disclosed by Licensor to comply with applicable laws or governmental regulations, provided that the Licensor provides prior written notice of such disclosure to the Licensee and takes reasonable and lawful actions to avoid and/or minimize the extent of such disclosure. 16.1.3 The provisions of this Article 16 relating to confidentiality shall be in force and effect until at least 5 years following the termination of this Agreement. 16.2 Dispute Resolution. Any dispute arising between the Parties shall be first addressed by a meeting between the Parties to discuss, and in good faith, attempt to negotiate a settlement of such dispute. Pending the outcome of such discussions, which discussions shall not exceed 180 days unless mutually agreed to by the Parties, and attempts at settlement of such dispute, the Parties shall continue to perform in accordance with all provisions of this Agreement to the extent such terms are not in dispute, including but not limited to the maintenance of Licensee's rights to practice the Licensed Patents, and obligations to pay royalties under this Agreement. 16.3 Assignment. This Agreement and all rights and obligations hereunder may not be assigned by either party without the written consent of the other party, except in conjunction with a sale of all or substantially all of one Party's assets. 16.4 Waiver. The failure of either Party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that Party thereafter of the right to insist upon strict adherence to that term or any other term of this Agreement. All waivers must be in writing and signed by an authorized representative of the Party against which such waiver is being sought. 16.5 Compliance with Laws and Government Regulations. 16.5.1 Licensee shall observe all applicable United States and foreign laws and regulations with respect to the research, development, manufacture, marketing and transfer of Licensed Products and related technical data, including, without limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration("Export Laws"). To this end, the Licensee shall cooperate with Licensor as reasonably necessary to permit Licensor to comply with the Export Laws. The Licensee hereby represents and covenants that the Licensee: (a) is neither a national of nor controlled by a national of any country to which the United States prohibits the export or re-export of goods, services, or technology; (b) is not a person specifically designated as ineligible to export from the United States or deal in U.S.-origin goods, services, or technologies; (c) will not export or re-export, directly or indirectly, any goods, services, or technology, to any country or person (including juridical persons) to which the United States prohibits the export of goods, technology, or services; and (d) in the event that a U.S. government license or authorization is required for an export or re-export of goods, services, or technology (including technical information - 15 - acquired from Licensor under this Agreement and/or any products created by using such technical information or any part thereof), the Licensee shall obtain any necessary U.S. government license or other authorization prior to undertaking the export or re-export. 16.5.2 Notwithstanding any provision in this Agreement, Licensor disclaims any obligation or liability arising under the license provisions of this Agreement if the Licensee is charged in a governmental action for not complying with or fails to comply with governmental regulations in the course of taking steps to bring any Product to a point of practical application. The Licensee shall comply upon reasonable notice from Licensor with all governmental requests directed to either Licensor or the Licensee and provide all information and assistance necessary to comply with the governmental requests. 16.6 Governing Law. This Agreement and all disputes arising out of or related to this Agreement, or the performance, enforcement, breach or termination hereof, and any remedies relating thereto, shall be construed, governed, interpreted and applied in accordance with the laws of the State of New York, U.S.A., without regard to conflict of laws principles, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent shall have been granted. 16.7 Force Majeure. Neither party will be responsible for delays resulting from causes beyond the reasonable control of such party, including without limitation fire, explosion, flood, war, strike, or riot, provided that the nonperforming party uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement with reasonable dispatch whenever such causes are removed. 16.8 Amendment. This Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by both parties. 16.9 Severability. In the event that any provision of this Agreement shall be held invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect any other provision of this Agreement, and the parties shall negotiate in good faith to modify the Agreement to preserve (to the extent possible) their original intent. If the parties fail to reach a modified agreement within thirty (30) days after the relevant provision is held invalid or unenforceable, then the dispute shall be resolved in accordance with the procedures set forth in Article 13. While the dispute is pending resolution, this Agreement shall be construed as if such provision were deleted by agreement of the parties. 16.10 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns. 16.11 Headings. All headings are for convenience only and shall not affect the meaning of any provision of this Agreement. - 16 - 16.12 Non-use of Licensor's Name. Licensee will not use the name, insignia, or symbols of Licensor, its faculties or departments, or any variation or combination thereof, or the name of any trustee, faculty member, other employee, or student of Licensor for any purpose without Licensor's prior written consent. Notwithstanding the foregoing, Licensee may use Licensor's name in a factual context only referring to the existence of this Agreement, and the Licensed Patents in conjunction with Licensee's disclosure obligations in any private or public equity financing, or in seeking corporate collaborations for the development and commercialization of the Licensed Patents, but for no promotional, publicity or endorsement purposes whatsoever. 16.13 Entire Agreement. This Agreement, which may be executed in one or more counterparts, constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior agreements or understandings between the parties relating to its subject matter. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives. THE TRUSTEES OF COLUMBIA NANOSYS, INC. UNIVERSITY IN THE CITY OF NEW YORK By: /s/ Michael J. Cleare, PhD. By: /s/ J.W. Parce ---------------------------------- ------------------------ Name: Michael J. Cleare, PhD. Name: J.W. Parce Title: Executive Director Title: CTO Science and Technology Ventures - 17 - APPENDIX A NANOSYS, INC. COMMON STOCK PURCHASE AGREEMENT THIS AGREEMENT is made as of __________ (the "Effective Date") between Nanosys, Inc., a Delaware corporation (the "Company"), and ______________________ ("Purchaser"). WHEREAS in order to provide Purchaser an opportunity to acquire an equity interest in the Company, the Company is willing to sell to Purchaser and Purchaser desires to purchase shares of Common Stock according to the terms and conditions hereof. THEREFORE, the parties agree as follows: 1. PURCHASE AND SALE OF STOCK. Subject to the terms and conditions of this Agreement, the Company hereby agrees to issue to Purchaser _________shares of the Company's Common Stock (the "Stock") valued at a price of $0.19 per share, for an aggregate value of $_____, as part of the consideration to be paid by the Company pursuant to the License Agreement between the Company and the Purchaser dated as of the date here with (the "License Agreement"). Upon execution of this Agreement, the Company shall issue a duly executed certificate evidencing the Stock in the name of the Purchaser. 2. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS. a) LEGENDS. The share certificate evidencing the Stock issued hereunder shall be endorsed with the following legend (in addition to any legends required under applicable state securities laws): "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES. THESE TRANSFER RESTRICTIONS ARE BINDING UPON ALL TRANSFEREES OF THE SHARES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED FOR A PERIOD OF 180 DAYS FOLLOWING THE EFFECTIVE DATE OF A REGISTRATION STATEMENT FILED BY THE COMPANY FOR ITS INITIAL PUBLIC OFFERING." b) STOP-TRANSFER NOTICES. Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate "stop transfer" instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. 3. PURCHASER'S REPRESENTATIONS AND COVENANTS. In connection with the purchase of the Stock, Purchaser hereby represents and warrants to the Company as follows: a) INVESTMENT INTENT; CAPACITY TO PROTECT INTERESTS. Purchaser is purchasing the Stock solely for Purchaser's own account for investment and not with a view to or for sale in connection with any distribution of the Stock or any portion thereof and not with any present intention of selling, offering to sell or otherwise disposing of or distributing the Stock or any portion thereof. Purchaser also represents that the entire legal and beneficial interest of the Stock is being purchased, and will be held, for Purchaser's account only, and neither in whole or in part for any other person. Purchaser either (i) has a pre-existing business or personal relationship with the Company or at least one of its officers, directors or controlling persons, or (ii) by reason of Purchaser's business or financial experience (or the business or financial experience of Purchaser's professional advisors who are unaffiliated with and who are not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly), can be reasonably assumed to have the capacity to evaluate the merits and risks of an investment in the Company and to protect Purchaser's own interests in connection with this transaction. b) ADDRESS. Purchaser's place of business address is located at the address indicated beneath the signature of Purchaser's authorized representative, below. c) INFORMATION CONCERNING COMPANY. Purchaser has discussed the Company and its plans, operations and financial condition with the Company's officers and has received all such information as Purchaser has deemed necessary and appropriate to enable Purchaser to evaluate the financial risk inherent in making an investment in the Stock. Purchaser has received satisfactory and complete information concerning the business and financial condition of the Company in response to all inquiries in respect thereof. d) ECONOMIC RISK. Purchaser realizes that the purchase of the Stock will be a highly speculative investment and involves a high degree of risk. Purchaser is able, without impairing Purchaser's financial condition, to hold the Stock for an indefinite period of time and to suffer a complete loss on Purchaser's investment. e) RESTRICTED SECURITIES. Purchaser understands and acknowledges that: i) The Stock has not been registered under the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser's investment intent as expressed herein. In this connection, Purchaser understands that, in the view of the Securities and Exchange Commission ("SEC"), the statutory basis for such exemption may be unavailable if Purchaser's representation was predicated solely upon a present intention to hold the Stock for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Stock, or for a period of one year or any other fixed period in the future. ii) The Stock must be held indefinitely unless it is subsequently registered under the Securities Act or unless an exemption from such registration is otherwise available. Purchaser further acknowledges and understands that the Company is under no obligation to register the Stock. In addition, Purchaser understands that the certificate evidencing the Stock will be imprinted with a legend which prohibits the transfer of the Stock unless it is registered or such registration is not required in the opinion of counsel satisfactory to the Company. f) FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting Purchaser's representations set forth above, Purchaser further agrees that Purchaser shall in no event make any disposition of all or any portion of the Stock unless and until: i) Either: (A) There is then in effect a Registration Statement under the Securities Act covering such proposed disposition, and such disposition is made in accordance with said Registration Statement; or (B) (1) Purchaser shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition; (2) Purchaser shall have furnished the Company with an opinion of Purchaser's counsel to the effect that such disposition will not require registration of such shares under the Securities Act; and (3) such opinion of Purchaser's counsel shall have been concurred in by counsel for the Company, and the Company shall have advised Purchaser of such concurrence; and, ii) Purchaser shall have complied with the Standoff Agreement set forth in Section 5 hereof, and The proposed transferee executes an agreement with the Company to be bound by the restrictions on transfer contained herein, and in specific the Standoff Agreement contained in Section 5 hereof. g) VALUATION OF COMMON STOCK. Purchaser understands that the Stock has been valued by the Company's Board of Directors and that the Company believes this valuation represents a fair attempt at reaching an accurate appraisal of its worth. Purchaser understands, however, that the Company can give no assurances that such price is in fact the fair market value of the Stock, and that it is possible that, with the benefit of hindsight, the Internal Revenue Service would successfully assert that the value of the Stock on the date of purchase is substantially greater than so determined. If the Internal Revenue Service were to succeed in a tax determination that the Stock had a value greater than that upon which this transaction is based, the additional value would constitute ordinary income to Purchaser as of the date of its receipt. The additional taxes (and interest) due would be payable by Purchaser. There is no provision for the Company to reimburse Purchaser for that tax liability, and Purchaser assumes all responsibility therefor. h) ACCREDITED INVESTOR. The Purchaser is an accredited investor as defined in Rule 501 (a) of Regulation D promulgated under the Securities Act. 4. COMPANY'S REPRESENTATIONS AND COVENANTS. Company hereby represents and warrants to the Purchaser as follows: a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business, to execute and deliver this Agreement, to issue and sell the Stock, and to carry out the provisions of this Agreement. b) AUTHORIZATION. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder and the authorization, issuance and delivery of the Stock has been taken, and this Agreement, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of general application affecting enforcement of creditors' rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. c) VALID ISSUANCE OF SECURITIES. The Stock that is being issued to the Purchaser hereunder, when issued, sold and delivered in accordance with the terms hereof for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement and applicable state and federal securities laws. Based in part upon the representations of the Purchasers in this Agreement and subject to the provisions of subsection (d) below, the Stock will be issued in compliance with all applicable federal and state securities laws. d) GOVERNMENTAL CONSENTS. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the consummation of the transactions contemplated by this Agreement, except for applicable state securities laws. 5. STANDOFF AGREEMENT. Purchaser agrees, in connection with an initial public offering of the Company's equity securities, upon request of the Company or the underwriters managing such offering, (i) not to sell, make any short sale of, loan, grant any option for the purchase of or otherwise dispose of any shares of Stock (other than those included in the registration, if any) 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 such underwriters, and (ii) to execute any agreement regarding (i) above as may be requested by the Company or underwriters at the time of the public offering; provided, that the officers and directors of the Company who own stock of the Company also agree to such restrictions. 6. MISCELLANEOUS a) GOVERNING LAW. This Agreement shall be governed and construed by the laws of the Commonwealth of Massachusetts. b) NOTICES. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery (including by express courier) or upon deposit in the United States Post Office, by First Class mail with postage and fees prepaid, addressed to Purchaser and to the Company at the addresses provided below or at such other address as such party may designate by ten (10) days' advance written notice to the other party. For Purchaser: Executive Director Science and Technology Ventures Columbia Innovation Enterprises Columbia University Engineering Terrace, Suite 363 500 West 120th Street, Mail Code 2206 New York, New York 10027 For Company: Nanosys, Inc. 2625 Hanover Street Palo Alto, California 94304 Attn: President and CEO c) ASSIGNMENT. The Company may assign its rights and delegate its duties under this Agreement. This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer herein set forth, be binding upon Purchaser, his/her heirs, executors, administrators, successors and assigns. The rights of Purchaser under this Agreement may be assigned only with the prior written consent of the Company. d) WAIVER. Either party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party's right to assert all other legal remedies available to it under the circumstances. e) ENTIRE AGREEMENT. This Agreement and the License Agreement represent the entire agreement between the parties with respect to the purchase of Common Stock by Purchaser, may be modified or amended only in writing signed by both parties, and satisfy all of the Company's obligations to Purchaser with regard to the issuance or sale of securities. f) COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one instrument. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. THE COMPANY: PURCHASER: NANOSYS, INC. a Delaware corporation By: __________________________ By: ________________________ Name: ________________________ Name: ______________________ Title: _______________________ Title: _____________________ Address: _____________________ Address: ___________________ ______________________________ ____________________________ APPENDIX B NANOSYS, INC. VOTING AGREEMENT This Voting Agreement (the "Agreement") is made as of the ___ day of ________, by and among Nanosys, Inc. (the "Company"), _________________ ("________") and the holders of the Company's Common Stock listed on Exhibit A attached hereto (the "Investors"). RECITALS WHEREAS, the Company and _______ have entered into a certain License Agreement, each dated as of even date hereof (the "License Agreement") which calls for the execution and delivery of this Agreement by Company and _______ for the purpose of setting forth the terms and conditions pursuant to which _______ will vote shares of the Company's securities now or in the future held by _______ (the "Shares"); NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein and in the License Agreements, the Company, _________ and the Investors each desire to facilitate the arrangements set forth in this Agreement, and the sale and the transactions and obligations set forth in the License Agreement, by agreeing to the terms and conditions set forth below: AGREEMENT The parties agree as follows: 1. VOTING OF THE SHARES. The Shares shall be voted (including in any stockholder action by written consent) in a manner determined by the Board of Directors in the Board of Directors' sole discretion. 2. ADDITIONAL REPRESENTATIONS AND COVENANTS. 2.1 NO REVOCATION. The voting agreements contained herein are coupled with an interest and may not be revoked during the term of this Agreement. 2.2 LEGENDS. Each certificate representing shares of the Company's capital stock held by ________ or any assignee of ________ shall bear the following legend: "THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT." 2.3 TRANSFER OF SHARES. If ________ transfers any of the Shares in accordance with the provisions of the applicable Common Stock Purchase Agreement by and among the Company and ________ (each a "Stock Purchase Agreement"), each transferee must, as a condition precedent to the validity of such transfer under the Common Stock Purchase Agreement, acknowledge in writing to the Company that such transferee is bound by the provisions of this Agreement. 3. TERMINATION. 3.1 TERMINATION EVENTS. This Agreement shall terminate upon the earlier of: (a) A firm commitment underwritten public offering by the Company of shares of its Common Stock pursuant to a registration statement on Form S-1 under the Securities Act of 1933, as amended; or (b) The sale, conveyance, disposal, or encumbrance of all or substantially all of the Company's property or business or the Company's merger into or consolidation with any other corporation (other than a wholly-owned subsidiary corporation) or if the Company effects any other transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of, provided that this Section 3.1 (b) shall not apply to a merger effected exclusively for the purpose of changing the domicile of the Company or to a preferred stock financing of the Company in which a majority of the preferred stock issued by the Company is purchased by venture capital investors. 3.2 REMOVAL OF LEGEND. At any time after the termination of this Agreement in accordance with Section 3.1, any holder of a stock certificate legended pursuant to Section 2.2 may surrender such certificate to the Company for removal of the legend, and the Company will duly reissue a new certificate without the legend. 4. MISCELLANEOUS. 4.1 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 4.2 AMENDMENTS AND WAIVERS. Any term hereof may be amended or waived only with the written consent of the Company, ________ and the Investors holding a majority of the shares of Common Stock held by such Investors. Any amendment or waiver effected in accordance with this Section 4.2 shall be binding upon the Company, ________, the Investors and each of their respective successors and assigns. 4.3 NOTICES. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient on the date of delivery, when delivered personally or by overnight courier or sent by telegram or fax, or seventy-two (72) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such patty's address or fax number as set forth on the signature page, or as subsequently modified by written notice. 4.4 SEVERABILITY. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall. be enforceable in accordance with its terms. 4.5 GOVERNING LAW. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the Commonwealth of Massachusetts, without giving effect to principles of conflicts of law. 4.6 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. 4.7 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. [Signature Page Follows] The parties hereto have executed this ________ Voting Agreement as of the date first written above. COMPANY: Nanosys, Inc. By:______________________________ Title: Lawence A. Bock, President Address:__________________ __________________ ________ VOTING AGREEMENT _____________: By:___________________________ Title:________________________ Address:______________________ ______________________ ______________________ Fax Number:___________________ ________ VOTING AGREEMENT INVESTORS: ______________________________ ________ VOTING AGREEMENT EX-10.12 15 f97636a4exv10w12.txt EXHIBIT 10.12 EXHIBIT 10.12 SAIC/ NANOSYS MASTER MARKETING AND BUSINESS DEVELOPMENT AGREEMENT This Master Marketing Agreement ("Agreement"), is entered into as of the later of the dates set forth at the end of this Agreement (the "Effective Date"), by and between Nanosys, Incorporated, a corporation duly organized under the laws of the State of Delaware and having its principal place of business at 2625 Hanover Street, Palo Alto, California ("Nanosys"), and Science Applications International Corporation, a corporation duly organized under the laws of the State of Delaware and having its principal place of business at 10260 Campus Point Drive, San Diego, California 92121, through its Advanced Systems Group ("SAIC"). Nanosys and SAIC may hereinafter be referred to individually as a "Party" or collectively as the "Parties". WHEREAS, SAIC is recognized as a leader in the information technology and systems integration field with technologies and expertise that includes, but is not limited to, systems design and engineering, database architecture, software development, and large project management; WHEREAS, Nanosys is recognized as a leader in the development of nanotechnology materials and nanotechnology enabled modules, systems and processes; WHEREAS, the Parties, from time to time, have collaborated in order to bid for and to perform under contracts and grants awarded by various agencies of the United States government; and WHEREAS, Nanosys and SAIC mutually desire to establish a preferred marketing relationship with each other in order to identify and pursue additional contracts and awards with the United States government ("Opportunities") relating to nanoscience and nanotechnology as a team, to further both their businesses; NOW THEREFORE, in consideration of the mutual terms and conditions set forth herein, the Parties hereby agree as follows: 1. Scope of the Agreement. This Agreement is a master agreement that commits the Parties to work together for their mutual benefit to identify and advise each other as to specific Opportunities to market and advertise their respective services and products in accordance with the following terms, and as provided by Attachment A. SAIC will perform activities in the following areas: systems integration; joint prototype development; and marketing. Nanosys will perform activities in the following areas: nanotechnology materials and nanotechnology-enabled module development; joint prototype development; and marketing support. Each Opportunity that is to be jointly pursued by the Parties shall be defined and described in written, mutually agreed-upon exhibits attached hereto (each a "Marketing Exhibit"). Each Marketing Exhibit shall specify the particular Opportunity, the complementary products and/or services to be marketed, the prospective customer base, and the scope of effort required of each Party. Each Marketing Exhibit shall, when executed, become an addendum to this Agreement. The first Marketing Exhibit shall be titled "Marketing Exhibit No. 1," and additional Marketing Exhibits shall be numbered sequentially. (a) The obligations of the Parties under this Agreement are non-exclusive. `Either Party may, at any time and for any reason, enter into similar arrangements with any other entity with respect to the same or similar areas or Opportunities set forth in the Marketing Exhibits or for any other business purposes. However, notwithstanding the foregoing, for any given Opportunity for which: (1) the Parties have complementary technology and/or intellectual property for addressing such Opportunity; (2) a Party chooses not to pursue such Opportunity on its own, or with a partner entity or organization that is already a Strategic Commercial Partner of such Party at the time the Party chooses to pursue such opportunity; (3) a Party does not already have a proposal submitted for such Opportunity; (4) a Party has not had such Opportunity presented to such Party by a third party; and (5) resources for pursuing such Opportunity are supported Resources pursuant to Section 2 of this Agreement; then each Party agrees to offer to the other Party the first opportunity to enter into a Marketing Page 1 of 14 7/7/2003 Exhibit for such Opportunities contemplated to be pursued by such Party. In the event that a Party desires to pursue an Opportunity on its own, it shall notify the other Party to allow the other Party an opportunity to present information supporting the JOINT pursuit of such Opportunity by the Parties hereto. The Party being offered the first opportunity to enter into a Marketing Exhibit or to present information supporting the joint pursuit of an Opportunity, shall communicate any acceptance of such offer to the other Party within a reasonable time, which time is not to exceed ten(10) business days, unless otherwise agreed to by the Parties in writing. If the offer of first opportunity or to present information for joint pursuit is rejected, or not accepted within such reasonable time, either Party is then free to pursue the Opportunity on its own or with any other person or entity. Further, commencing upon the execution of a Marketing Exhibit and continuing during the effectiveness of any definitive agreement relating thereto, the Parties agree that they shall not participate in any effort to prepare or submit a separate proposal relating to the specific technology, application and customer of the Opportunity identified in the Marketing Exhibit. Strategic Commercial Partner shall mean a partner entity or organization with which the Party has a fully executed commercial development agreement. (b) Except as set forth in this Agreement or a Marketing Exhibit executed hereunder, each Party will bear all costs, risks and liabilities incurred by it arising out of its obligations and efforts under this Agreement and any such Marketing Exhibit. Unless otherwise specified in this Agreement or a Marketing Exhibit, neither Party shall have any right to any reimbursement, payment or compensation of any kind from the other Party for activities pursuant to this Agreement or a Marketing Exhibit. (c) This Agreement, including all Marketing Exhibits, sets forth the provisions and conditions pursuant to which the Parties may identify and advise each other of a mutually beneficial Opportunity. (d) Each Party shall designate one or more duly authorized representatives to interact with the other for purposes of this Agreement. Initially, [*** Redacted] and [*** Redacted] shall be the representatives of Nanosys and [*** Redacted] and [*** Redacted] shall be the representatives of SAIC. Each Party's representative(s) may select and submit to the other for its consideration such Opportunities that the Party believes may be of mutual interest and the representatives shall jointly determine whether to pursue such Opportunity together. If the Parties determine to pursue an Opportunity jointly, the representatives shall determine jointly the appropriate marketing strategy; including planning for directing the timing and use of the Resources described in Section 2 which efforts shall be reflected in a Marketing Exhibit hereto. At least one representative of each Party shall meet and confer periodically with at least one representative of the other as necessary, either in person or by telephone, to discuss prospective Opportunities and performance with respect to existing Marketing Exhibits (including, but not limited to the Parties obligations under Section 2 below). The Parties agree that the representatives shall meet at agreed-upon intervals but not less than once in any calendar quarter. Subject to the provisions of section 1(a) above relating to the Parties' actions commencing upon execution of a Marketing Exhibit and continuing during the effectiveness of any definitive agreement relating thereto, if either Party's representative determines that it is not in that Party's best interest to initiate or continue an Opportunity jointly, either Party is free to pursue such Opportunity, using its sole efforts or in conjunction with any other person or entity. (e) In those circumstances where the Parties' marketing efforts identify a specific Opportunity, and the Parties decide to pursue the Opportunity jointly as set forth in a Marketing Exhibit, then the Parties agree to enter into good faith negotiations to execute an appropriate definitive agreement for the particular Opportunity. Generally, it is anticipated that Nanosys would primarily apply its nanoscience and nanotechnology development expertise and be the *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Page 2 of 14 7/7/2003 preferred provider of any nanotechnology-based modules to the Opportunity, and SAIC would primarily apply its system integration expertise to the Opportunity. Each such definitive agreement shall contain terms and conditions that are customary for a teaming agreement, including, but not limited to, allocating responsibility for preparation of proposals and determining the structure of the proposal effort. Each such definitive agreement shall set forth additional mutually agreed-upon terms and conditions with respect to the rights and obligations of the Parties with regard to that specific Opportunity. 2. Mutual Commitment to Fund the Initiative. (a) The Parties agree that, in order to initially support the marketing activities associated with the Opportunities anticipated to be identified in Marketing Exhibits, the work of approximately [*** Redacted] full time employee equivalents ("FTEs", the FTEs and associated costs are collectively referred to as the "Resources") will be necessary to specifically support the marketing activities associated with the Opportunities. The effort of each individual supporting an Opportunity will be dedicated at a percentage agreed upon by the representatives of each party authorized by this Agreement. The Resources needed will include technical and marketing resources. The Parties agree that Nanosys shall be responsible for providing Resources equivalent to [*** Redacted] FTEs and SAIC shall be responsible for providing Resources equivalent to [*** Redacted] FTEs. (b) SAIC agrees, during the Initial Term, as defined in Section 3(a), to fund the cost of the Resources of both Parties set forth in Section 2(a). Such costs are expected to be burdened actual expenses, not including any fees or profit, and are invoiced monthly in accordance with 2f, below. The funding support will be subject to quarterly reviews, as stated in 1(d) above. The maximum Resources funded by SAIC under this section during the Initial Term of this Agreement, and that have not been reimbursed under section 2(c)(iii), are not to exceed $2.2 M, (It is currently estimated that $1.6 M will be allocated to Nanosys and $0.6 M to SAIC), unless otherwise agreed to by the Parties. Resources reimbursed under section 2(c)(iii) may, during the Initial Term, be reused to fund additional Resources if mutually agreed by the Parties. Unless specifically agreed upon by the Parties in writing, the work performed by the representatives of the Parties in carrying out their periodic review responsibilities under Section 1(d), shall not be included in the amounts funded by SAIC. Among the tasks to be performed by the Parties' FTEs are support for preparation of proposals for contracts and awards, demonstrations, and marketing presentations. (c) In consideration of SAIC's agreement to fund the Resources (including SAIC Resources) described in paragraph (b) above, the Parties agree that all United States government contract revenue, including the subcontract(s) from one Party to the other Party, ("Contracts") arising out of or resulting from work performed under this Agreement shall be allocated in accordance with the following priority schedule, with funds received under any Contract first being applied to the highest priority category until all costs thereunder are reimbursed, before applying any remaining funds to the next level of priority, etc.: i. First priority: Reimbursement of reasonable costs, not including any fee or profit, incurred in performance of the Contract. ii. Second priority: Reimbursement of costs, on a pro-rata basis between Nanosys and SAIC, not including any fee or profit, incurred under this Agreement that are incurred in the performance of the Contract but not billable to the Contract, and *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Page 3 of 14 7/7/2003 iii. Third priority: Reimbursement of costs incurred by SAIC in funding the initial Term of the Agreement under Section 2(b) above. Such reimbursement will be accomplished through allocation of fees earned from such Contracts not allocated under either of the first or second priorities, above, where 100% of such funds will be applied to the reimbursement until satisfied and the balance will be allocated between the parties at a to-be negotiated rate dependent upon the relative contributions and responsibilities of the parties for a given Contract. Unless otherwise agreed by the Parties in writing, Nanosys shall reimburse SAIC net 30 days after receipt of payment from its prime customer under the applicable Contract. (d) With the exception of income taxes imposed on the Parties, each Party agrees to pay all sales, use, value added, personal property or other taxes of any type that are imposed by any governmental authority on the payments due by such Party to the other Party under this Section 2. Any payment or part of a payment due under this Agreement that is not paid when due shall bear interest at the rate of 1.5% per month, or at the highest rate allowed by law, whichever is less, from its due date until paid. (e) Each Party shall have the right, at its sole expense, to inspect the books and records of the other Party for the purpose of verifying the amounts funded by SAIC and that Nanosys has complied with the payment obligations of this Section 2. Such inspections may be made not more than semi-annually, on not less than fifteen (15) days prior written notice to the other Party, during regular business hours. (f) To fund the Nanosys Resources, SAIC ASG will implement a purchase order with Nanosys which will be incrementally funded, against which Nanosys will submit monthly invoices in accordance with the terms of the purchase order. Invoices will be paid net 30 days. A proper invoice may be in Nanosys standard commercial format but must include, at a minimum, detailed costs for the period covered by the invoice and accumulated costs. Detailed costs are defined as hours by individual labor categories, fully burdened labor and other fully burdened expenses such as are described in general in 2a above and not including any fee or profit. To provide participation insight to Nanosys, SAIC ASG will prepare financial statements on an SAIC "financial-period" basis , to be made available to Nanosys, by the [*** Redacted] after the close of the [*** Redacted] for which the financial statement is prepared.. Financial statements will identify current and cumulative total costs for Labor and ODC's as defined in paragraphs 2(a) and 2(b) above. 3. Term and Termination. (a) This Agreement shall have an initial term of twenty-four (24) months commencing on the Effective Date (the "Initial Term"). Following the Initial Term, this Agreement may be extended only by the written, signed, mutual agreement of both Parties for an additional period of twelve (12) months (each, a "Renewal Term"), which such written mutual commitment shall be executed at least ninety (90) days prior to the end of the Term immediately preceding such Renewal Term. For purposes of this Agreement, the Initial Term and any Renewal Terms shall be known as the Term. (b) Either Party may terminate this Agreement as of the last day of each calender quarter including and after the first anniversary of the Effective Date, provided that such termination must be communicated to the other party in writing at least ninety (90) days prior to such termination date. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Page 4 of 14 7/7/2003 (c) Upon the termination or expiration of this Agreement, each Party will destroy or return to the other Party all drawings, specifications, manuals and other printed or reproduced material (including information stored on machine readable media) provided by the disclosing Party to the receiving Party and shall use commercially reasonable efforts to destroy all backup copies of such information made by the receiving Party or its employees, wherever located. The obligations of this section do not apply to any materials and/or information of the disclosing Party that is necessary for the perfection and/or enforcement of any rights to Intellectual Property developed under this Agreement that is owned in whole or in part by the receiving Party. Any Confidential Information retained by the receiving Party hereunder shall remain subject to the provisions of the Non-Disclosure Agreement attached a Exhibit A. (d) The Parties acknowledge that termination or expiration of this Agreement shall terminate each Marketing Exhibit executed hereunder, unless the Parties expressly agree to the contrary in writing. However, any definitive agreements entered into between the Parties as a result of their efforts hereunder shall not be terminated upon the termination or expiration of this Agreement and shall survive according to their terms. Additionally, the obligations of paragraph 2(c) shall survive any termination. 4. Intellectual Property. (a) The Parties shall each retain ownership of and all right, title and interest in and to their respective pre-existing Intellectual Property (as that term is defined in Article 4(c) below), and no license or right to use therein, whether express or implied, is granted by this Agreement or as a result of the work performed by either Party hereunder or in pursuit hereof. To the extent the Parties wish to grant to the other rights or interests in pre-existing Intellectual Property, separate license agreements on mutually acceptable terms will be executed. (b) For all Intellectual Property developed under this Agreement by the Parties (hereinafter referred to as "Collaboration Intellectual Property"), all Nanotechnology Related Collaboration Intellectual Property shall be solely owned by Nanosys, regardless of inventorship. For purposes of this Agreement, "Nanotechnology Related Collaboration Intellectual Property" is Intellectual Property in [*** Redacted] nanomaterials having at least [*** Redacted] of [*** Redacted], including [*** Redacted] of such materials, composites including such materials, nano to macro world interface technology for such materials, and the fabrication and processing of such materials. All non-Nanotechnology Related Collaboration Intellectual Property such as systems, use, and applications shall be owned according to U.S. laws of intellectual property inventorship and ownership with Collaboration Intellectual Property that is solely conceived by the employees, agents or contractors of one Party being solely owned by that Party with all rights appurtenant thereto, and with non-Nanotechnology related Collaboration Intellectual Property that is jointly conceived by the employees, agents or contractors of both Parties being jointly owned, with all joint rights appurtenant thereto and without obligation to obtain consent or account to the other Party to exploit, license or transfer jointly owned Intellectual Property. (c) As used herein the term "Intellectual Property" shall mean patents, copyrights, trade marks, trade names, inventions (whether or not patentable), works of authorship, trade secrets, techniques, know-how, ideas, concepts, algorithms and all other forms of intellectual property rights. As used herein the term "pre-existing Intellectual Property" means any Intellectual Property previously conceived, developed or reduced to tangible medium as demonstrated by written documentation. 5. Warranty Disclaimer and Limitation of Liability. Neither Party makes any warranties whatsoever to the other Party, express or implied, with regard to the products or services of that Party or any matter relating to this Agreement and any Marketing Exhibits, and each Party specifically disclaims all such *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Page 5 of 14 7/7/2003 warranties and conditions, including any warranty of title, merchantability, and fitness for a particular purpose. In no event shall either Party be liable to the other for any punitive, exemplary, special, indirect, incidental or consequential damages (including, but not limited to, lost profits, lost revenues, lost business opportunities, loss of use or equipment down time, and loss of or corruption to data) arising out of or relating to this Agreement or any Marketing Exhibit, regardless of the legal theory under which such damages are sought, and even if the Parties have been advised of the possibility of such damages or loss. The liability of either Party to the other for any claims, liabilities, actions or damages arising out of or relating to this Agreement or any Marketing Exhibit, howsoever caused and regardless of the legal theory asserted, including breach of contract or warranty, tort, strict liability, statutory liability or otherwise, shall not, in the aggregate, exceed the amount of out-of-pocket costs incurred by the other Party in connection with the specific Marketing Exhibit or opportunity under which such claim arose. 6. Confidentiality. In the performance of this Agreement and any Marketing Exhibits executed hereunder, certain information may be exchanged between the Parties that is proprietary and confidential in nature. This proprietary and confidential information is exchanged solely for the purposes set forth in this Agreement and any such Marketing Agreement. This proprietary and confidential information shall remain the property of the disclosing Party and shall be subject to the terms and conditions of the Non-Disclosure Agreement attached hereto as Exhibit A. Prior to any transfer of materials under this Agreement, the Parties agree that they will execute a Materials Transfer Agreement that will be separately agreed to by the Parties. 7. Export Control. The Parties to this Agreement shall comply with all applicable United States export and foreign import laws, rules, and regulations in the performance of the Parties' responsibilities and obligations under this Agreement. Without limiting the generality of the foregoing, the Parties shall not disclose any U.S.-origin products, know-how, technical data, documentation, or other products or materials furnished to it pursuant to this Agreement, to any person or in any manner which would constitute a violation of the export control regulations of the United States then in effect. 8. Disputes. Any controversy, claim or dispute ("Dispute") arising out of or relating to this Agreement shall be resolved by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. Before commencing any such arbitration, the Parties agree to enter into negotiations to resolve the Dispute. If the Parties are unable to resolve the Dispute by good faith negotiation within Sixty (60) days of entering into such negotiations, then either Party may refer the matter to arbitration. The arbitration shall take place in the County of San Diego, State of California. The arbitrator(s) shall be bound to follow the provisions of this Agreement in resolving the dispute, and may not award any damages which are excluded by this Agreement. The decision of the arbitrator(s) shall be final and binding on the Parties, and any award of the arbitrator(s) may be entered or enforced in any court of competent jurisdiction. Any request for arbitration of a claim by either Party against the other relating to this Agreement must be filed no later than one (1) year after the date on which this Agreement expires or terminates, or such claim shall be time barred. 9. Notices. All notices, certificates, acknowledgments or other written communications (hereinafter referred to as "Notices") required to be given under this Agreement shall be in writing and shall be deemed to have been given and properly delivered if duly mailed by certified or registered mail to the other Party at its address as follows, or to such other address as either Party may, by written notice, designate to the other. Additionally, Notices sent by any other means (i.e., facsimile, overnight delivery, courier, and the like) are acceptable subject to written confirmation of both the transmission and receipt of the Notice. Page 6 of 14 7/7/2003 Larry Bock Janet V. LaFever President and CEO Vice President for Administration Nanosys, Incorporated Science Applications 2625 Hanover Street International Corporation Palo Alto, CA 94304 1710 SAIC Drive, M/S 2-3-1 Telephone (650) 331-2105 McLean, VA 22102 Fax (650) 331-2101 Telephone 703-676-4031 e-mail lbock@nanosysinc.com Fax (703)-676-2298 e-mail Janet.v.lafever@saic.com 10. Assignment. This Agreement may not be assigned, novated or otherwise transferred by operation of law or otherwise by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Any change of control of a Party shall be deemed an assignment of this Agreement that does not require the prior written consent of the other Party. For purposes of this Agreement, "change of control" means any merger, consolidation, sale of all or substantially all of the assets or sale of a substantial block of stock, of a Party. Any such assignment, novation or transfer by one Party not in accordance with this provision shall be a material breach of this Agreement and shall be grounds for immediate termination thereof by the non-breaching Party, in addition to any other remedies that may be available at law or in equity to the non-breaching Party. 11. Waiver or Modification. This Agreement may be modified, or part(s) hereof waived, only by an instrument in writing specifically referencing this Agreement and signed by an authorized representative of the Party against whom enforcement of the purported modification or waiver is sought. 12. Relationship of Parties. The Parties are acting as independent contractors in all respects with regard to this Agreement. Nothing contained in this Agreement shall be deemed or construed to create a partnership, joint venture, agency, or otherwise as participants in a joint or common undertaking. Nothing in this Agreement shall be deemed to give either Party any power to direct or control any activities of the other, including marketing activities, or any power to bind or obligate the other. No employee of one Party shall be deemed an employee of the other. 13. Publicity. Neither Party may issue a press release or make any disclosure to any other person or entity regarding the existence of or the subject matter of this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, either Party may reasonably disclose the terms of this Agreement to the extent necessary to comply with any laws or government regulations, provided that the Party that is required to disclose the Agreement gives the other Party notice of such required disclosure and takes reasonable steps to minimize the extent of such disclosure. 14. Applicable Law. This Agreement shall be governed by and construed under the laws of the State of California, without regard to its laws relating to conflict or choice of laws. 15. Entire Agreement. This Agreement, including any and all Exhibits attached hereto, which are hereby incorporated by reference, constitutes the entire agreement and understanding between the Parties and supersedes and replaces any and all prior or contemporaneous proposals, agreements, understandings, commitments or representations of any kind, whether written or oral, relating to the subject matter hereof. 16. Multiple Copies or Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the Page 7 of 14 7/7/2003 same instrument. This Agreement shall not be effective until the execution and delivery between each of the parties of at least one (1) set of the counterparts. 17. Headings. The headings and titles of the various sections of this Agreement are intended solely for convenience of reference and are not intended to define, limit, explain, expand, modify or place any construction on any of the provisions of this Agreement. IN WITNESS WHEREOF, the Parties represent and warrant that this Agreement is executed by duly authorized representatives of each Party as set forth on the date indicated below. SCIENCE APPLICATIONS NANOSYS, INCORPORATED INTERNATIONAL CORPORATION /s/ Larry Bock /s/ [*** Redacted] ________________________________ ________________________________________ Larry Bock [*** Redacted] ________________________________ ________________________________________ Name Name President and CEO [*** Redacted] ________________________________ ________________________________________ Title Title 9 July 03 ________________________________ ________________________________________ Date Date *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Page 8 of 14 7/7/2003 ATTACHMENT A AREAS OF RESPONSIBILITY 1. SAIC is anticipated to perform activities in the area of systems integration. 2. Nanosys is anticipated to perform activities in the areas of nanotechnology and module development. 3. SAIC and Nanosys are anticipated to jointly perform activities in the areas of prototype development and marketing support. 4. Nanosys agrees to make its facilities, equipment, materials, etc., available at no additional cost above Nanosys' fully burdened FTE rate, as reasonably needed to support the joint prototype development and marketing support activities. 5. SAIC agrees to make its procurement and contract preparation and administration infrastructure, and its facilities, equipment materials, etc., available at no additional cost above SAIC's fully burdened FTE rate, as reasonably needed to support the joint prototype development and marketing support activities. 6. The Advanced Systems Group will promote its relationship with Nanosys within SAIC and act as a liaison to encourage and facilitate the development of additional Marketing Exhibits among Nanosys and other organizations within SAIC. Nanosys will reasonably support such additional efforts. Page 9 of 14 7/7/2003 MARKETING EXHIBIT NO. 1 Page 10 of 14 7/7/2003 EXHIBIT A NON-DISCLOSURE AGREEMENT Page 11 of 14 7/7/2003 NOTE: Each Party has a hardcopy of the signed NDA. SAIC STANDARD NON-DISCLOSURE (CONFIDENTIALITY) AGREEMENT (PAGE 1 OF 3) NON-DISCLOSURE AGREEMENT PROPRIETARY INFORMATION This is an Agreement, effective 4 June 2003 between Science Applications International Corporation, a Delaware Corporation (hereinafter referred to as "SAIC") and Nanosys Inc., a Delaware Corporation (hereinafter referred to as "Nanosys"). It is recognized that it may be necessary or desirable to exchange information between SAIC and Nanosys regarding inorganic semiconductor nanomaterials and their applications for the purpose of using the information to discuss potential marketing areas and for marketing the opportunities identified under the SAIC/Nanosys Master Marketing Agreement. With respect to the information exchanged between the parties subsequent to this date, the parties agree as follows: (1) "Proprietary Information" shall include, but not be limited to, performance, sales, financial, contractual and special marketing information, ideas, technical data and concepts originated by the disclosing party, not previously published or otherwise disclosed to the general public, not previously available without restriction to the receiving party or others, nor normally furnished to others without compensation, and which the disclosing party desires to protect against unrestricted disclosure or competitive use, and which is furnished pursuant to this Non-Disclosure Agreement and appropriately identified as being proprietary when furnished. (2) In order for proprietary information disclosed by one party to the other to be protected in accordance with this Non-Disclosure Agreement, it must be: (a) in writing; (b) clearly identified as proprietary information at the time of its disclosure by each page thereof being marked with an appropriate legend indicating that the information is deemed proprietary by the disclosing party; and (c) delivered by letter of transmittal to the individual designated in Paragraph 3 below, or his designee. Where the proprietary information has not been or cannot be reduced to written form at the time of disclosure and such disclosure is made orally and with prior assertion of proprietary rights therein, such orally disclosed proprietary information shall only be protected in accordance with this Non-Disclosure Agreement provided that complete written summaries of all proprietary aspects of any such oral disclosures shall have been delivered to the individual identified in Paragraph 3 below, within 20 calendar days of said oral disclosures. Neither party shall identify information as proprietary which is not in good faith believed to be confidential, privileged, a trade secret, or otherwise entitled to such markings or proprietary claims. (3) In order for either party's proprietary information to be protected as described herein, it must be submitted in written form as set forth in Paragraph 2 above to the individuals identified below: SCIENCE APPLICATIONS NANOSYS INC. INTERNATIONAL CORPORATION Name: Martin Fritts, Ph.D. Name: Stephen Empedocles, Ph.D. Title: Senior Scientist Title: Director of Business Development Address 2111 Eisenhower Avenue Address: Corporate Headquarters Suite 303 2625 Hanover Street Alexandria, VA 22314 Palo Alto, CA 94304 Telephone No: 703-842-2606 Telephone No: 650-776-8530 FAX No: 703-842-2618 FAX No: 650-745-1273 *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Page 12 of 14 7/7/2003 SAIC STANDARD NON-DISCLOSURE (CONFIDENTIALITY) AGREEMENT (PAGE 2 OF 3) (4) Each party covenants and agrees that it will, notwithstanding that this Non-Disclosure Agreement may have terminated or expired, keep in confidence, and prevent the disclosure to any person or persons outside its organization or to any unauthorized person or persons, any and all information which is received from the other under this Non-Disclosure Agreement and has been protected in accordance with paragraphs 2 and 3 hereof; provided however, that a receiving party shall not be liable for disclosure of any such information if the same: A. Was in the public domain at the time it was disclosed, or ____________ B. Becomes part of the public domain without breach of this Agreement, or C. Is disclosed with the written approval of the other party, or D. Is disclosed after three years from receipt of the information, or E. Was independently developed by the receiving party, or F. Is or was disclosed by the disclosing party to a third party without restriction, or G. Is disclosed pursuant to the provisions of a court order. As between the parties hereto, the provisions of this Paragraph 4 shall supersede the provisions of any inconsistent legend that may be affixed to said data by the disclosing party, and the inconsistent provisions of any such legend shall be without any force or effect. Any protected information provided by one party to the other shall be used only in furtherance of the purposes described in this Agreement, and shall be, upon request at any time, returned to the disclosing party. If either party loses or makes unauthorized disclosure of the other party's protected information, it shall notify such other party immediately and take all steps reasonable and necessary to retrieve the lost or improperly disclosed information. (5) The standard of care for protecting Proprietary Information imposed on the party receiving such information, will be that degree of care the receiving party uses to prevent disclosure, publication or dissemination of its own proprietary information. (6) Neither party shall be liable for the inadvertent or accidental disclosure of Proprietary Information if such disclosure occurs despite the exercise of the same degree of care as such party normally takes to preserve its own such data or information. (7) In providing any information hereunder, each disclosing party makes no representations, either express or implied, as to the information's adequacy, sufficiency, or freedom from defect of any kind, including freedom from any patent infringement that may result from the use of such information, nor shall either party incur any liability or obligation whatsoever by reason of such information, except as provided under Paragraph 4, hereof. (8) Notwithstanding the termination or expiration of any Teaming Agreement executed in conjunction with this Agreement, the obligations of the parties with respect to proprietary information shall continue to be governed by this Non-Disclosure Agreement. Page 13 of 14 7/7/2003 SAIC STANDARD NON-DISCLOSURE (CONFIDENTIALITY) AGREEMENT (PAGE 3 OF 3) (9) This Non-Disclosure Agreement contains the entire agreement relative to the protection of information to be exchanged hereunder, and supersedes all prior or contemporaneous oral or written understandings or agreements regarding this issue. This Non-Disclosure Agreement shall not be modified or amended, except in a written instrument executed by the parties. (10) Nothing contained in this Non-Disclosure Agreement shall, by express grant, implication, estoppel or otherwise, create in either party any right, title, interest, or license in or to the inventions, patents, technical data, computer software, or software documentation of the other party. (11) Nothing contained in this Non-Disclosure Agreement shall grant to either party the right to make commitments of any kind for or on behalf of any other party without the prior written consent of that other party. (12) The effective date of this Non-Disclosure Agreement shall be the date stipulated at the beginning of this Agreement. (13) This Non-Disclosure Agreement shall be governed and construed in accordance with the laws of the State of California. SCIENCE APPLICATIONS NANOSYS INC. INTERNATIONAL CORPORATION Signature: _____________________________ Name: Name: Janet V. LaFever Title: Deputy Group Director of Contracts Title: Address: 1710 SAIC Drive, M/S 2-3-1 Address: 2625 Hanover Street McLean, VA 22102 Palo Alto, CA 94304 Telephone No: (703) 676-4031 Telephone No: FAX No: (703) 676-2298 FAX No. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. Page 14 of 14 7/7/2003 EX-10.13 16 f97636a4exv10w13.txt EXHIBIT 10.13 EXHIBIT 10.13 CONTRACT NUMBER: Nanosys DA-01 DEVELOPMENT AGREEMENT This Agreement (the "Agreement"), dated as of September 4, 2003 (the "Effective Date"), is between In-Q-Tel, Inc., a Delaware corporation ("In-Q-Tel") and Nanosys, Inc., a Delaware corporation ("Developer"). 1. SERVICES, DELIVERABLES, AND SCHEDULE Developer shall perform the services ("Services") and provide the deliverables ("Deliverables") specified in the Statement of Work (attached as Exhibit 1), in accordance with the schedule set forth in the Statement of Work. Exhibit 1 is hereby incorporated into the Agreement. 2. PAYMENTS a. Generally. This is a Firm Fixed Price Agreement (including all third party licenses required to deliver the Deliverables). Developer shall receive payments in the amounts and at the times specified in the Statement of Work, and shall submit invoices as provided in Exhibit 2 (Invoice Procedure). Exhibit 2 is hereby incorporated into the Agreement. b. Expenses. The payments listed in Exhibit 1 include all out-of-pocket costs and expenses incurred by Developer in connection with this Agreement, provided, however, that In-Q-Tel shall reimburse Developer for such reasonable and customary actual out-of-pocket costs and expenses related to travel required in the performance of this Agreement as are authorized by In-Q-Tel in advance of Developer incurring such costs or expenses. To be reimbursed for costs and expenses, Developer shall submit invoices therefor as provided in Exhibit 2 and attach receipts for costs and expenses of twenty-five dollars ($25.00) or more. c. Payment Adjustments for Changes in Firm Fixed Price Work. (1) Developer's payments shall be adjusted to reflect the cost impact of any agreed-upon changes in the scope of work; and (2) any such changes in the scope of work and any associated payment adjustment shall be set forth in a written modification to the Agreement signed by both parties. If Developer believes that it has been requested by any In-Q-Tel representative to perform work that exceeds the Agreement's existing scope, it shall immediately bring this to In-Q-Tel's attention through a written notice delivered to the In-Q-Tel representatives designated to receive notices in Exhibit 5 to the Agreement. To the extent that such work exceeds the Agreement's existing scope, then Developer may, at Developer's election, perform such work if requested to do so in writing by one of the In-Q-Tel representatives listed in Exhibit 5, and if Developer elects to perform any work subsequently determined to be out of scope, its payments shall be adjusted to reflect the cost impact of that work. Exhibit 5 is hereby incorporated into the Agreement. 3. PERSONNEL a. At no time shall In-Q-Tel be deemed to be the employer of Developer's employees or employees of its contractors. b. Developer shall provide In-Q-Tel with advance written notice of the names, citizenship, date and place of birth, and addresses of any foreign nationals (including persons with dual citizenship) employed or contracted by Developer and assigned by Developer to perform any service with respect to the Statement of Work. 4. SECURITY REQUIREMENTS -1- In-Q-Tel Proprietary CONTRACT NUMBER: Nanosys DA-01 If at any time Developer's solution is to be installed or hosted on a Central Intelligence Agency ("CIA") system, the CIA must have adequate assurance that Developer's solution does not contain vulnerabilities such as viruses, Trojan horses, trap doors, or other similar malicious instruction or techniques. To provide this assurance, Developer must: (1) permit a CIA employee or representative access to source code that is [*** Redacted] (subject to a nondisclosure agreement, acceptable to Developer, that prohibits disclosure of the source code and limits the use of the source code to testing for vulnerabilities); or (2) adopt to any alternative approach that is specifically approved by the CIA. Any proposal for such an alternative approach may be negotiated directly with the CIA and shall be submitted in writing by the date specified by CIA. 5. INTELLECTUAL PROPERTY a. Ownership. As between In-Q-Tel and Developer, all patent, copyright, trade secret and other proprietary rights with respect to any designs, specifications, documentation, computer software, reports, training materials, inventions, discoveries and other items ("Intellectual Property") created or conceived ("Developed") by or on behalf of Developer during the performance of the Agreement shall be owned by Developer, and any Intellectual Property Developed by or on behalf of In-Q-Tel (other than work Developed for In-Q-Tel by Developer pursuant to the Agreement) in the performance of the Agreement shall be owned by In-Q-Tel. For purposes of this clause, Intellectual Property Developed "by or on behalf of Developer" means Intellectual Property Developed by Developer or its contractors or consultants. In-Q-Tel acknowledges that Developer owns, will own, has licensed, or will license Intellectual Property that was not or will not be Developed under this Agreement (such Intellectual Property is referred to collectively as "Developer Background IP"). To the extent that any Subject Invention is created or conceived by or on behalf of Developer during the performance of this Agreement requiring that Developer elect to take title to such Subject Invention, as set forth in Exhibit 3, then upon notification by Developer that it wishes to elect to take title to such Subject Invention, In-Q-Tel shall notify the CIA pursuant to the In-Q-Tel's agreements with the CIA of Developer's election to take title to such Subject Invention. b. In-Q-Tel License Rights. Developer hereby grants to In-Q-Tel a worldwide, perpetual, royalty-free, nonexclusive, nontransferable (except to a successor entity) license under Developer Intellectual Property and Developer Background IP solely to (i) use, perform and display the Deliverables (defined below), for (a) In-Q-Tel's internal noncommercial purposes, and (b) testing, demonstration and evaluation purposes. Except as expressly provided herein, and notwithstanding the Government Patent Rights and Government Data Rights set forth in Exhibits 3 and 4 with respect to Developer Intellectual Property, no other rights or licenses are granted to In-Q-Tel with respect to any Developer Intellectual Property or Developer Background IP. The inclusion of any third party software or intellectual property in the Deliverables shall be subject to In-Q-Tel's prior approval and Developer shall secure the license rights set forth in Sections 5(b) and 5(d) with respect to such software and intellectual property, with no inconsistent terms and conditions except as approved by In-Q-Tel. c. "Deliverables". For the purpose of this Section 5, the term "Deliverables" means all deliverables specified in the Statement of Work, including, but not limited to, computer programs, computer databases, documentation and other recorded information, in each case that are delivered to In-Q-Tel and the CIA pursuant to the Agreement. d. U.S. Government Rights. Exhibit 3 ("Government Patent Rights") and Exhibit 4 *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -2- In-Q-Tel Proprietary CONTRACT NUMBER: Nanosys DA-01 ("Government Data Rights") are hereby incorporated into this Agreement. Developer grants the United States Government the rights and licenses specified in Exhibit 3 and Exhibit 4. e. Marking of Deliverables. Developer shall prominently place the following notice on all Deliverables: "Use, reproduction, or disclosure is subject to restrictions set forth in Contract Number [*** Redacted] and Contract Number Nanosys DA-01. f. Subcontracting. Developer shall obtain from its contractors all Deliverables, Intellectual Property and rights necessary to fulfill Developer's obligations to the Government and In-Q-Tel under the Agreement. g. Precedence of Intellectual Property Clause. Nothing elsewhere in the Agreement shall be construed to modify or limit either party's rights (or the rights of the CIA or the Government) under this Section 5 of the Agreement. 6. PROPRIETARY INFORMATION a. The term "Proprietary Information" means information disclosed by one party to the other party relating to a party's research, development, trade secrets or business affairs that the party treats as confidential and that: (1) is marked "Proprietary Information" if disclosed in writing (including electronically); or (2) is identified as "Proprietary Information" prior to oral disclosure and reduced to writing, marked as "Proprietary Information," and delivered to the other party within thirty (30) days of the oral disclosure. The term "Receiving Party" means a party that receives Proprietary Information of the other party (the "Disclosing Party"). b. (i) Developer shall not use In-Q-Tel's Proprietary Information for any purpose, other than as expressly authorized by this Agreement and shall limit disclosure of In-Q-Tel's Proprietary Information to those of its employees, contractors, and consultants with a need to know (as determined by Developer) such Proprietary Information, subject to a nondisclosure obligation comparable in scope to this Section 6. (ii) In-Q-Tel shall not use Developer's Proprietary Information for any purpose, other than as expressly authorized by this Agreement and shall limit disclosure of Developer's Proprietary Information to those of its employees, contractors, and consultants with a need to know (as determined by In-Q-Tel) such Proprietary Information subject to, for In-Q-Tel's contractors and consultants, a nondisclosure obligation in In-Q-Tel's standard form. In-Q-Tel may also disclose Developer's Proprietary Information to the CIA and its contractors or consultants who have a need to know (as determined by In-Q-Tel) such Proprietary Information. In-Q-Tel and the CIA may disclose Developer's Proprietary Information to the National Imagery and Mapping Agency ("NIMA"). c. Each party shall protect the other party's Proprietary Information by using the same degree of care (but no less than a reasonable degree of care) that it uses to protect its own Proprietary Information. The obligations imposed by this section shall expire five (5) years after the Agreement's completion or termination, and shall not apply to any Proprietary Information that: (1) is or becomes publicly known through no fault of the Receiving Party; (2) is developed independently by the Receiving Party prior to the date of disclosure; or (3) is rightfully obtained by the Receiving Party from a third party entitled to disclose the information without confidentiality restrictions. A Receiving Party also may disclose Proprietary Information to the extent required by a court or other governmental authority, provided that the Receiving Party promptly notifies the Disclosing Party of the disclosure requirement and cooperates with the Disclosing Party (at the latter's expense and at its request) to resist or limit the disclosure. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -3- In-Q-Tel Proprietary CONTRACT NUMBER: Nanosys DA-01 d. Except as may be required by law (including without limitation, federal or state securities laws), Developer shall respect the confidentiality of, and shall not disclose, disseminate or publish the terms of the Agreement. In any case where Developer proposes to disclose the terms of the Agreement because disclosure is required by law, Developer shall provide In-Q-Tel with prior notice of the proposed disclosure and, in consultation with In-Q-Tel, shall undertake efforts to maintain the confidential nature of the Agreement, or appropriately redact portions thereof (and cooperate with In-Q-Tel in In-Q-Tel's actions to prevent disclosure). e. Either party's breach of this clause would cause the other party irreparable injury for which it would not have an adequate remedy at law. The non-breaching party shall be entitled to seek injunctive relief in a court of competent jurisdiction in addition to other legal or equitable remedies. 7. WARRANTIES a. Each party represents and warrants that it has the authority to enter into the Agreement. b. Developer represents and warrants that to the best of Developer's actual knowledge as of the Effective Date, neither the Services nor the Deliverables will infringe any patent, copyright, trade secret or other proprietary right of any third party or otherwise conflict with the rights of any third party. c. Developer represents and warrants that to the best of Developer's actual knowledge as of the Effective Date Developer has the right to incorporate Third Party IP licensed by the Developer into the Deliverables and to grant to In-Q-Tel and the CIA the rights contained in Sections 6.b. and 6.c. hereof, respectively, to such Third Party IP incorporated in Deliverables. Developer also represents and warrants that neither In-Q-Tel nor the CIA requires further licenses to such Third Party IP incorporated in Deliverables. d. THE EXPRESS WARRANTIES IN THE AGREEMENT SHALL BE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 8. INDEMNITY a. Subject to the conditions in Section 8(b) below, Developer shall defend, indemnify and hold harmless In-Q-Tel and its directors, officers, agents and employees from and against all third-party claims, liabilities, suits, losses, damages and expenses, including costs and reasonable attorney's fees (collectively, "Claims"), relating to or resulting from: (1) In-Q-Tel's or the CIA's use or possession of the Deliverables as set forth and authorized herein or in the attached Statement of Work, or Services actually or allegedly infringing any patent, copyright, trade secret or other proprietary right of any third party, or otherwise conflicting with the rights of any third party, including, but not limited to, a breach of the warranty in Sections 7.b and 7.c.; (2) acts and omissions of Developer's employees, contractors, or consultants (collectively, "Agents") or the presence of such Agents at In-Q-Tel's facilities (except Claims resulting solely from In-Q-Tel's gross negligence or willful misconduct), including Claims resulting from injuries to such Agents or injuries, property damage, or loss of data caused by such Agents; (3) Developer's failure to comply with applicable laws and regulations or to obtain necessary licenses, permits or approvals; and (4) Developer's failure to perform obligations arising from its relationships with its Agents, including any Claims by its Agents and Claims by a taxing authority, (collectively, "Developer Claims"). -4- In-Q-Tel Proprietary CONTRACT NUMBER: Nanosys DA-01 b. Indemnified parties shall have the right to reasonably participate in any litigation within the scope of this indemnity insofar as it concerns Claims against them, including the right to select and retain counsel to represent them at indemnifying party's expense. All indemnified parties shall cooperate with the indemnifying party to the extent reasonably necessary in the defense of any Claim within the scope of this indemnity and the Indemnifying party shall be promptly notified and shall have the control of the defense and settlement of any Claim for which indemnification is desired, provided that any settlement shall require the indemnified party's prior written consent. 9. LIMITATION OF LIABILITY EXCEPT IN CONNECTION WITH A CLAIM FOR INDEMNIFICATION PURSUANT TO THE AGREEMENT'S INDEMNITY CLAUSE, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL IN-Q-TEL BE LIABLE TO DEVELOPER FOR ANY CLAIMS ARISING FROM THE ACTS OR OMISSIONS OF IN-Q-TEL'S CONTRACTORS AND CONSULTANTS, THE CIA AND THE CIA'S CONTRACTORS AND CONSULTANTS. 10. MONITORING THE PROGRESS OF WORK; COOPERATION Monitoring Progress. In-Q-Tel and the CIA shall have access to Developer's premises and personnel, at reasonable times and with reasonable notice, as set forth in the Statement of Work attached hereto as Exhibit 1, for the purpose of monitoring the progress of work under the Agreement. Developer shall cooperate with In-Q-Tel and the CIA, as set forth in the Statement of Work attached hereto as Exhibit 1, to ensure that In-Q-Tel and the CIA are fully apprised of the status of work and the progress made and problems encountered by Developer. 11. TERMINATION a. Termination for Default By Either Party. Either party may terminate the Agreement for default based on a material breach by the other party that is not cured within fourteen (14) days after written notice from the other party. The party terminating for default shall notify the other party in writing of the default termination, specifying the reasons for the termination. b. Termination by In-Q-Tel. In-Q-Tel, at its discretion may, without liability and upon written notice to Developer, terminate this Agreement in the event of a sale of all or substantially all of the business assets of Developer in a merger or acquisition, which business assets relate to the subject matter of this Agreement. c. Post-Termination Procedures. Promptly after any termination, Developer shall: (1) stop all work being performed on behalf of In-Q-Tel under this Agreement, except any activities reasonably necessary (as reasonably determined by In-Q-Tel) for an orderly termination; and (2) furnish to In-Q-Tel all completed or uncompleted work requested by In-Q-Tel that if completed would have been delivered to In-Q-Tel or incorporated in a Deliverable (including property required to be transferred to In-Q-Tel under Section 13). Promptly upon Developer's compliance with item (2) above, In-Q-Tel shall pay to Developer any amounts due for performance of all work performed under this Agreement prior to such determination, but not with respect to work covered by Deliverables that have been rejected by In-Q-Tel under the Acceptance provision of the Statement of Work. Nothing in this section shall prohibit Developer from engaging in any research and development activities whether directed to technology related to that contemplated by this Agreement or otherwise. 12. PUBLICITY AND DISCLOSURE -5- In-Q-Tel Proprietary CONTRACT NUMBER: Nanosys DA-01 a. Developer shall not, without In-Q-Tel's prior written approval: (1) publicize the existence or terms of the Agreement or any other aspect of the parties' relationship; or (2) use In-Q-Tel's name in press releases or promotional materials. Developer agrees not to make any public statement on the possible uses of the Deliverables by In-Q-Tel or the Government (including any agency thereof) without the prior written consent of In-Q-Tel. b. If a news organization or other third party contacts Developer concerning In-Q-Tel, the CIA , or NIMA, Developer shall make no comment, but shall instead refer the third party to In-Q-Tel and promptly notify In-Q-Tel of the third party contact. c. The parties agree to develop mutually agreeable press releases or other information about their relationship. The parties may use the information in such press releases and other information (and make presentations conveying substantially the same substance as such approved information) without requiring further consent of the parties. Nothing in the Agreement, however, shall limit or restrict In-Q-Tel's ability to brief or inform its constituents, including but not limited to, the United States Congress, the CIA and NIMA, on its activities, whether related to the Agreement or otherwise. d. Developer shall provide to In-Q-Tel such non-confidential marketing materials regarding Developer and Developer's technology and products developed under this Agreement when and as In-Q-Tel may reasonably request , including as may be specified in the Statement of Work ("Marketing Materials"). Developer hereby grants to In-Q-Tel the a worldwide, perpetual, royalty-free, nonexclusive, nontransferable (except to a successor entity) license to use, reproduce, distribute, modify, perform and display the Marketing Materials to promote Developer's technology and deliverables to potential customers within the Government. 13. PROPERTY "Property" means any tangible personal property acquired for the performance of the Agreement. Developer shall obtain In-Q-Tel's written approval prior to acquiring any item of property with an acquisition value exceeding fifty thousand dollars ($50,000). Title to such items of property (as well as items of property with an acquisition value below fifty thousand dollars ($50,000)) shall vest in Developer upon acquisition. Upon completion or termination of the Agreement, Developer shall transfer title to and physical custody of unconsumed items of property with an acquisition value exceeding fifty thousand dollars ($50,000) to In-Q-Tel unless the parties agree otherwise in writing. Developer shall not deny the benefit of property to any person in violation of 42 U.S.C. Section 2000d. 14. NOTIFICATION OF EXPORT LICENSE APPLICATIONS Developer shall provide In-Q-Tel with written notification and a copy of any export license application pertaining to technology developed directly under the Agreement as soon as possible but no later than the date of Developer's filing of such application. Developer shall comply with the requirements imposed by the Export Administration Act of 1979, 50 U.S.C. Sections 2401 et seq.; the International Emergency Economic Powers Act, 50 U.S.C. Sections 1701 et seq.; the Arms Export Control Act, 22 U.S.C. Sections 2778 et seq.; and regulations and Executive Orders promulgated thereunder. 15. AUDIT PROVISION If any work is to be performed (1) on a cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable type or any combination of these; or (2) for which cost or pricing data are required, and the fees for such work exceed, on an aggregate basis, fifty thousand dollars ($50,000), the following provision shall apply: Developer shall maintain adequate records In-Q-Tel Proprietary -6- CONTRACT NUMBER: Nanosys DA-01 to account for all In-Q-Tel funding under the Statement of Work and to account for any Developer resources utilized to fulfill the requirements under the Statement of Work. Developer's financial records are subject to examination or audit on behalf of In-Q-Tel or the CIA for a period not to exceed three (3) years after the completion of the Agreement's performance or the termination of the Agreement. In-Q-Tel or the CIA or designees thereof shall have access and the right to examine any non-privileged and pertinent books, documents, papers and records of Developer involving transactions related to the Statement of Work, and any IRS-required reports prepared by Developer. Developer shall advise In-Q-Tel or CIA of any documents withheld as privileged, and shall provide relevant information substantiating a claim of privilege at In-Q-Tel's or the CIA's request. 16. GENERAL TERMS AND CONDITIONS a. Governing Law; Contract Interpretation. The Agreement shall be interpreted and enforced under the laws of the Commonwealth of Virginia, without regard to its conflict of law principles. The Agreement shall be construed without regard to the party or parties responsible for its preparation and shall be deemed to have been prepared jointly by the parties. All headings in the Agreement are included solely for convenient reference, and shall not affect its interpretation. The following sections or sub-sections of the Agreement shall remain in effect after its termination or completion: 4, 5, 6, 7, 8, 9, 11.c, 12, 13, 14, 15, 16.a and 16.e. If any provision of the Agreement is determined by a court to be unenforceable as drafted, that provision shall be construed in a manner designed to effectuate its purpose to the greatest extent possible under applicable law, and the enforceability of other provisions shall not be affected. b. Notices. All notices sent under the Agreement shall be in writing and: (1) hand delivered; (2) transmitted by fax or electronic mail, with a copy sent concurrently by certified mail, return receipt requested; or (3) delivered by prepaid overnight courier. Notices shall be sent to the representatives of the parties identified in Exhibit 5. c. Relationship of the Parties. Nothing in the Agreement shall be construed as creating a partnership, joint venture or agency relationship between the parties, or as authorizing either party to act as agent for the other or to enter into contracts on behalf of the other. d. Compliance with Laws. Developer shall comply with all laws applicable to the performance of the Agreement, including the Anti-Kickback Act (41 U.S.C. Sections 51-58) and the Byrd Amendment (31 U.S.C. Section 1352). e. Unauthorized Use of Name, Seal, and Initials. Developer and its contractors may not, except with the written permission of the CIA, use the words Central Intelligence Agency the initials CIA the seal of the CIA, or any colorable imitation of such words, initials or seal in connection with any merchandise, retail product, impersonation, solicitation or commercial activity in a manner reasonably calculated to convey the impression that such use is approved, endorsed or authorized by the CIA. Developer and its contractors may not, except with the written permission of NIMA, use the words "Natural Imagery and Mapping Agency", the initials "NIMA," the seal of NIMA or any colorable imitation of such words, initials or seal in connection with any merchandise, retail product, impersonation, solicitation or commercial activity in a manner reasonably calculated to convey the impression that such use is approved, endorsed or authorized by NIMA. f. Academic Institutions. Developer shall notify any academic institution that it proposes to In-Q-Tel Proprietary -7- CONTRACT NUMBER: Nanosys DA-01 use as a subcontractor that the work will be funded by the CIA. g. Reservation of Rights. Except as specifically provided in the Agreement, the Agreement does not offer or grant to either party any rights or licenses under any present or future Intellectual Property of the other party, and neither party shall copy, distribute or disclose Intellectual Property of the other party without the other party's consent, remove, alter or obfuscate any copyright or other proprietary rights notices placed on or embedded in the other party's Intellectual Property, or fail to reproduce such notices on any copies it is authorized to make. h. Assignment and Delegation. Neither party may assign any of its rights or delegate any of its duties under the Agreement to any third party without the prior written consent of the other, which shall not be withheld unreasonably; provided that the foregoing does not impose any restrictions on the assignment or other disposition of Intellectual Property rights beyond those specified in the Agreement's Intellectual Property clause. The parties agree that consent for the foregoing provision shall be deemed to have been granted if the party to whom consent has been requested does not respond with a written approval or rejection of consent within forty-five (45) days after receipt of a written request. A "delegation" by Developer shall include subcontracting. Notwithstanding the foregoing, in the event of a sale of all or substantially all of the business assets of Developer in a merger or acquisition, which business assets relate to the subject matter of this Agreement, the rights and duties of Developer shall be assigned and delegated pursuant to such transaction unless In-Q-Tel elects to terminate this Agreement. i. Agreement Modifications. The Agreement may be modified or amended only by a written agreement signed by both parties. j. Entire Agreement. The Agreement, inclusive of all exhibits, constitutes the entire agreement between the parties concerning its subject matter and supersedes any prior agreements between the parties concerning the subject matter of the Agreement. [SIGNATURE PAGE FOLLOWS] In-Q-Tel Proprietary -8- CONTRACT NUMBER: Nanosys DA-01 The parties have caused this Development Agreement to be executed by their respective duly authorized officers as of the Effective Date. IN-Q-TEL, INC. NANOSYS, INC. By: [*** Redacted] By: /s/ Lawrence A. Bock Name: [*** Redacted] Name: Lawrence A. Bock Title: President and Title: President and CEO Chief Operating Officer *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -9- CONTRACT NUMBER: Nanosys DA-01 EXHIBIT 1 STATEMENT OF WORK 1. INTRODUCTION Nanosys, Inc. ("Nanosys" or "Developer") possesses nanowire technology which may result in improved device characteristics when applied to [*** Redacted]; these characteristics include [*** Redacted] and [*** Redacted] compared to existing devices. In addition, present [*** Redacted] processing steps used in device manufacturing may be eliminated when using nanowires, enabling the use of [*** Redacted] such as [*** Redacted]. This in turn simplifies device packaging, potentially eliminating components and subsequently lowering cost. All of these improved device characteristics would be desirable to In-Q-Tel and the CIA. Nanosys has already produced and brought to operation [*** Redacted] using nanowire technology. However, these [*** Redacted] have been [*** Redacted] devices, and the technology has not yet been extended to [*** Redacted] applications such as [*** Redacted] that utilize [*** Redacted]. [*** Redacted] applications introduce new complexities for materials and interfaces, where [*** Redacted] must be tailored to accomplish acceptable time [*** Redacted] for proper device operation. The bulk of the work described in this document is expected to result in the extension of nanowire [*** Redacted] technology to [*** Redacted] applications. Specifically, nanowire technology will be utilized to develop [*** Redacted], which when combined with an appropriate [*** Redacted]. In its most basic form, [*** Redacted] is created from [*** Redacted]; the output of [*** Redacted]. Approximately designed, this configuration results in [*** Redacted] that can be tailored to [*** Redacted]. Alternatively, [*** Redacted] can use [*** Redacted] to determine [*** Redacted]. [*** Redacted]. There are several engineering phases inherent to the development of a device product. Generally speaking the process begins with a Feasibility Phase, which is designed to determine if the concepts upon which the device is based are possible. The next step is the Breadboard Phase, which is a laboratory based system that is aimed at showing feasibility of all of the key technical unknowns for a particular product, but with no regard to form factor. The third stage results in the development of a prototype, which ideally reflects the configuration of the desired final product. Under this Statement of Work, Nanosys will complete the Feasibility Phase and Breadboard Phase for a nanowire component to an rf transmitter: an oscillator with an operational frequency that falls between 200 and 800MHz, inclusive. The Feasibility Phase will be targeted to culminate in the demonstration of a baseline device that will serve as a fiducial upon which Breadboard Phase performance optimization can be compared. 2. DELIVERABLES AND SERVICES This project is divided into two phases: a six-month Feasibility Phase followed by a twelve-month Breadboard Phase. The Feasibility Phase must be satisfactorily completed and a Notice to Proceed obtained from In-Q-Tel before proceeding to the Breadboard Phase. Nanosys covenants and agrees that over the entire course of the program (both Feasibility and Breadboard Phases), it will spend at least $3 Million on the research and development of nanowire [*** Redacted] outside of this program, but which technology may be applied to this program. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -10- CONTRACT NUMBER: Nanosys DA-01 The following deliverables and services are common to both phases of the program: - - Kickoff Meetings Nanosys shall participate in kickoff meetings with representatives of In-Q-Tel and the CIA at a location designated by In-Q-Tel. The parties will review the development program for the current phase and will confirm logistical arrangements for execution of the effort. The parties will also have an opportunity to clarify any ambiguity in the technical description of the effort. - - Progress Reports Nanosys shall provide progress reports (of a quality and comprehensiveness that would be contained in a Government funded research report) with approximately every six months that include: detailed description of work performed since the previous reporting period - detailed description of Services performed, - engineering support hours expended during the progress period, - description of technical issues pertinent to the deliverables, - disclosure of any potential risk to timely delivery of the deliverables, and - identification of any "subject inventions" as contemplated by Exhibit 3 ("subject inventions"). - - Interim Progress Reports Nanosys shall provide Interim Progress Reports approximately monthly that include: - progress towards Deliverables and plans for the next period, - description of Services performed, - engineering support hours expended during the progress period, - description of technical issues pertinent to the deliverables, - disclosure of any potential risk to timely delivery of the deliverables, and - identification of any "subject inventions". The description of Services performed and progress towards Deliverables in an Interim Progress Report may be in summary form, e.g. not required to exceed two pages. - - Technical Exchanges Nanosys shall conduct meetings with In-Q-Tel and/or the CIA approximately every 6 months, or as otherwise agreed to by the Parties, during the term of the Development Agreement to provide updates on any technologies that may be of interest to the CIA. I. FEASIBILITY PHASE Subject to the qualifications below, the goal of the Feasibility Phase is for Nanosys to [*** Redacted]. This device would not be required to [*** Redacted] but will serve as a basis platform for modeling and optimizing device performance during the Breadboard Phase. In-Q-Tel personnel and/or the CIA may perform informal site visits, e.g., not requiring any formal agenda or presentation, from time to time as necessary and reasonable to view technical progress, provided that reasonable advance notice, e.g., five days, is provided for any such visits, and that such visits reasonably take into account Nanosys' allocation of resources and schedules. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -11- CONTRACT NUMBER: Nanosys DA-01 A. FEASIBILITY PHASE DELIVERABLES - - Baseline [*** Redacted] Demonstration [*** Redacted]. The demonstration shall take place at Nanosys' facilities. [*** Redacted]. In-Q-Tel understands that although Nanosys is obligated to deliver the deliverables specified for the Feasibility Phase and use its commercially reasonable efforts to have an [*** Redacted] result, this Statement of Work is for a research program, and that a commercially reasonable effort by Nanosys does not guarantee that [*** Redacted] will result from the Feasibility Phase. For purposes of this Agreement, Nanosys' commercially reasonable effort under the Feasibility and Breadboard Phases of this Statement of Work, shall include the devotion of at least [*** Redacted] ([*** Redacted] in the Feasibility Phase and [*** Redacted] in the Breadboard Phase; provided, however that the [*** Redacted] for the Breadboard Phase will be increased by the [*** Redacted] (or portion thereof), if any, not expended in the Feasibility Phase) to development and optimization of the oscillator contemplated by this Statement of Work, over both phases of the program. For purposes of this Agreement, "[*** Redacted]" means [*** Redacted]. In-Q-Tel further understands that the purpose of the Deliverable for the Feasibility Phase is to demonstrate that a functional [*** Redacted] has been achieved on which to measure the initial baseline performance of this technology, and the platform will be used to identify [*** Redacted] improvements during the development of the breadboard device. - - Summary Research Report Nanosys shall supply to In-Q-Tel a detailed report describing the findings and results of the development program. The report shall include the following items: - a summary abstract of the work performed during the Feasibility Phase, - a description of the technical development work performed during the course of the feasibility phase of the program, - conclusions to the work performed during the course of the program, - engineering support hours expended during the Feasibility Phase, and - identification of any "subject inventions" conceived under the Feasibility Phase of the program. The Summary Research Report shall also include a description and the results of the following: - work performed under the program to develop [*** Redacted] (where [*** Redacted] is understood to be [*** Redacted]), - the evaluation of [*** Redacted] under the program for [*** Redacted] and - work performed under the program to develop [*** Redacted]. - - Design Document Nanosys shall supply to In-Q-Tel a detailed design and manufacturing document that provides the following: *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -12- CONTRACT NUMBER: Nanosys DA-01 - a detailed description of the specifications of the Feasibility Phase [*** Redacted] including both design and performance, and - a description of the processes employed to produce the Feasibility Phase [*** Redacted]. The description shall be at the level of detail consistent with a "Materials and Methods" section of a scientific publication. - - Breadboard Phase Technical Development Plan Nanosys shall provide to In-Q-Tel a Breadboard Phase Technical Development Plan that details the proposed breadboard technical development and optimization work to be conducted by Nanosys during a twelve month Breadboard Phase program. - - Staffing Plan Nanosys shall provide to In-Q-Tel a Staffing Plan that details the following: - staffing resources reasonably expected to be required to execute the Breadboard Phase Technical Development Plan, - a schedule for implementing the required staffing, and - a description of how the needed resources will be obtained. II. BREADBOARD PHASE The Breadboard Phase of the program shall not commence unless and until In-Q-Tel has delivered a Notice to Proceed to Nanosys. Upon the completion of the Feasibility Phase, In-Q-Tel will assess the results of the Feasibility Phase and the applicability of the program to its and the CIA's needs and interests. This assessment will be independent of acceptance of Deliverables but In-Q-Tel may use information contained in the Deliverables in furtherance of its assessment activity. In-Q-Tel may, at its option and sole discretion, terminate this Agreement and not proceed to the Breadboard Phase if it determines that is appropriate. In-Q-Tel shall notify Nanosys in writing of such termination, but need not specify any reasons for termination. Such termination shall not constitute a "default" as contemplated by Section 11.a of the Development Agreement and the post-termination language in Section 11.c of the Development Agreement shall apply to any such termination. If In-Q-Tel determines to proceed to the Breadboard Phase, In-Q-Tel shall deliver a Notice to Proceed to Nanosys and the Breadboard Phase shall commence promptly. Upon commencement of the Breadboard Phase, [*** Redacted] that was constructed and brought to operation during the Feasibility Phase will be used as a baseline platform for [*** Redacted] and Nanosys shall continue to use its commercially reasonable efforts, as set forth above, toward [*** Redacted] as contemplated by this Statement of Work. Optimization efforts shall focus on [*** Redacted]. The final breadboard device resulting from the Breadboard Phase is targeted to [*** Redacted] A. BREADBOARD PHASE DELIVERABLES Projected tasks for the Breadboard Phase are as follows. In-Q-Tel personnel (and optionally the CIA) may perform informal site visits from time to time as necessary and reasonable, to view technical progress, provided that reasonable advance notice, e.g., five days, is provided for any such visits, and provided that such visits take account of Nanosys' resources and schedules. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -13- CONTRACT NUMBER: Nanosys DA-01 - - Marketing Materials Nanosys shall provide product marketing presentations and technical materials related to the technology developed under the Development Agreement to enable In-Q-Tel to present and promote Nanosys' technology, organizational capability and associated products to Government customers. Such materials shall include items such as Technical Presentations, Demonstration Materials, Product Technical Data Sheets and Press Releases that are available at the time of request. - - Oscillator Nanosys shall deliver to In-Q-Tel and optionally the CIA the current state of [*** Redacted]. [*** Redacted] shall be targeted to have [*** Redacted], to the extent such [*** Redacted] with such capability is produced in accordance with this Agreement. For the purposes of this section, delivery of the [*** Redacted] shall constitute: (1) a [*** Redacted] for In-Q-Tel and, optionally, the CIA at Nanosys' facilities, and (2) [*** Redacted] to In-Q-Tel, and optionally the CIA, and (3) to the extent that Nanosys has not already devoted 7.5 Person Years toward the work program, sufficient on-site technical support to enable In-Q-Tel, and optionally the CIA to be able to operate [*** Redacted] in the absence of Nanosys personnel. The level of on-site technical support will not be required to exceed 40 man-hours. Nanosys may, at its sole discretion, elect to continue support beyond the 7.5 Person Years already devoted to the program. Alternatively, further support, if deemed necessary by In-Q-Tel, may be arranged under a separate agreement. The [*** Redacted] shall incorporate [*** Redacted] and processes that are optimized during the course of the Breadboard Phase. The key technologies used for the [*** Redacted] will be targeted to be compatible with known, commercially proven, [*** Redacted] with a target of allowing a product to [*** Redacted] having a [*** Redacted]. The delivered [*** Redacted] may utilize [*** Redacted] upon which [*** Redacted], or may include a [*** Redacted]. In any event, provision shall be made to accommodate [*** Redacted]. The specific [*** Redacted] design will be determined separately from this program; the breadboard device shall [*** Redacted], using [*** Redacted] of Nanosys' choice. In-Q-Tel understands that this Statement of Work is for a research program, and that the state of optimization will be in accordance with the state of technical understanding as of the end of the contract period. - - Summary Research Report Nanosys shall supply to In-Q-Tel a detailed report describing the findings and results of the development program. The report shall include the following items: - a summary abstract of the work performed during the Breadboard Phase, - a description of the technical development work performed during the course of the Breadboard Phase of the program, - conclusions to the work performed during the course of the program, - engineering support hours expended during the Breadboard Phase, and - identification of any "subject inventions" conceived under the Breadboard Phase of the program. The Summary Research Report shall also include a description and results of the following: *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -14- CONTRACT NUMBER: Nanosys DA-01 - Work performed under the program to evaluate the effects of different materials on device performance leading to the selection of an optimal material for an oscillator operating at a frequency falling between 200 and 800 MHz, inclusive, - Work performed under the program to improve nanowire deposition processes, and - Work performed under the program to improve source, gate, and drain electrode contact metallization. - - Design Document Nanosys shall supply to In-Q-Tel a detailed set of design documents that provides the following: - A detailed description of materials and improvements for the Breadboard Phase oscillator including both design and performance, and - a description of the processes employed to produce the Breadboard Phase. The description shall be at the level of detail consistent with a "Materials and Methods" section of a scientific publication. 3. DELIVERY AND PAYMENT SCHEDULE A. DELIVERY DATES. Nanosys shall deliver to In-Q-Tel and/or, at the direction of In-Q-Tel, the CIA, the Deliverables in accordance with the dates specified in the table below. B. PAYMENT DATES. Subject to the rights to terminate the Development Agreement and not proceed from the Feasibility Phase to the Breadboard Phase, the total fee for the Deliverables and Services for both Phases of the program to be provided under this Agreement is [*** Redacted]. The total fee for the Feasibility Phase of the program is [*** Redacted] ("Feasibility Phase Payment") and the total fee for the Breadboard Phase of the program is [*** Redacted] ("Breadboard Phase Payment"). In-Q-Tel shall pay the entire [*** Redacted] Feasibility Phase Payment for the Feasibility Phase of the program within ten (10) business days of the Effective Date. In-Q-Tel expressly acknowledges and agrees that the Feasibility Phase Payment is in consideration of Nanosys' delivering the Deliverables for the Feasibility Phase and that such payment shall have been earned in its entirety by Nanosys at the end of the Feasibility Phase regardless of whether [*** Redacted], provided that the other Deliverables specified for the Feasibility Phase have been delivered and the commercially reasonable effort required by Section 1.A of this Statement of Work shall have been given. Upon delivery of a Notice to Proceed by In-Q-Tel, payment of the remaining [*** Redacted] by In-Q-Tel to Nanosys shall be made in accordance with the dates specified in the table below. Payments made by In-Q-Tel hereunder shall be in accordance with and subject to Section 2 of the Development Agreement. DELIVERABLES SCHEDULE

PAYMENT UPON IN-Q-TEL'S DELIVERABLE/SERVICE DELIVERY DATE ACCEPTANCE OF DELIVERABLE - ------------------- ------------- ------------------------- FEASIBILITY PHASE No deliverable within 10 days of the Effective Date [*** Redacted]

*** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -15- CONTRACT NUMBER: Nanosys DA-01 Kickoff meeting within 15 days of the Effective Date No payment Interim Progress Reports 1, 2, 3, 4 and 5 Months from the No payment Effective Date [*** Redacted] Technical Exchange meeting 6 months from the Effective Date No payment [*** Redacted]; 6 months from the Effective Date No payment Summary Research Report; Design Document; Breadboard Phase Technical Development Plan; Staffing Plan; BREADBOARD PHASE No deliverable within 10 days of Notice to Proceed [*** Redacted] by In-Q-Tel Kickoff meeting within 15 days of Notice to Proceed No payment Interim Progress Reports 1, 2, 3, 4 and 5 months from Notice No payment to Proceed 12 Month Progress Report 6 months from Notice to Proceed [*** Redacted] 12 Month Technical Exchange meeting 6 months from Notice to Proceed No payment Interim Progress Reports 7, 8, 9, 10 and 11 months from No payment Notice to Proceed Final Technical Exchange meeting 12 months from Notice to Proceed No payment [*** Redacted]; Summary 12 months from Notice to Proceed Research Report; Design Documents [*** Redacted] 4. ACCEPTANCE PROCESS All Deliverables are subject to review and acceptance by In-Q-Tel. Each Deliverable shall be deemed to have been accepted by In-Q-Tel thirty (30) days after In-Q-Tel's receipt of such Deliverable, unless In-Q-Tel provides Nanosys with written notice (containing reasonable detail) of the defects in the Deliverable regarding such Deliverable's failure to conform with the specifications and requirements set forth in this Statement of Work (including, without limitation, Section 5 of this SOW (Quality Assurance Statement)). *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -16- CONTRACT NUMBER: Nanosys DA-01 Nanosys shall have ten (10) business days following In-Q-Tel's notice of rejection in which to correct such defects in the Deliverable and to deliver a corrected Deliverable to In-Q-Tel for its review and acceptance as set forth above. In the event that in-Q-Tel does not accept such corrected Deliverable, In-Q-Tel may, in its sole discretion and in addition to any other available remedies: (a) extend the correction period and repeat the acceptance process set forth herein; (b) deem Nanosys' failure to provide an acceptable Deliverable to be a default, and immediately terminate this Agreement for cause pursuant to Section 11.a of the Development Agreement, provided however, that In-Q-Tel need not provide Nanosys the cure period specified in Section 11.a. In the event that In-Q-Tel does not accept a Deliverable which acceptance is a condition of a payment in accordance with the schedule set forth herein, Nanosys shall not be obligated to continue any work toward subsequent Deliverables under this Agreement until such time as the Deliverable has been accepted and payment is made, or as otherwise agreed to by the parties. 5. QUALITY ASSURANCE STATEMENT Nanosys will assure that the quality of the Deliverables and the Services provided hereunder are consistent with the requirements outlined in this Statement of Work, are of professional quality, and are reflective of the level of effort (as measured in Person Years) required hereunder. All labor hours credited to the work program throughout the period covered by the Statement of Work shall be contributed from professional scientific or engineering staff possessing educational credentials or relevant years of experience commensurate with a highly skilled research group performing nanotechnology development research (i.e. representative of the current professional scientific or engineering staff at Nanosys). Nanosys agrees to provide In-Q-Tel with resumes of participating Nanosys personnel upon request. [END OF EXHIBIT] In-Q-Tel Proprietary -17- CONTRACT NUMBER: Nanosys DA-01 EXHIBIT 2 INVOICE PROCEDURE Developer's invoices may be submitted upon satisfactory completion of the relevant milestone in the Statement of Work, and shall be paid within [*** Redacted] of In-Q-Tel's receipt of a proper invoice. For invoices items associated with delivery of Deliverable(s), the terms "satisfactory completion of the relevant milestone" shall include In-Q-Tel acceptance of such Deliverable(s) pursuant to Section 4 of the Statement of Work ("Acceptance Process"). Developer shall send invoices to: Accounts Payable In-Q-Tel, Inc. 1000 Wilson Blvd. Suite 2900-3910 Arlington, VA 22209 Each invoice must contain the following information: (i) Invoice number and invoice date; (ii) Name and address of Developer and address for sending payment; (iii) Agreement or purchase order number; (iv) Contact person for questions; and (v) Certification signed by Contracting Officer as follows: "The services or goods being invoiced have been performed or delivered as required and conform in all respects with the Agreement's terms. The amount claimed for the services or goods being invoiced agrees with the established prices in the Agreement. Appropriate technical and financial representatives have authorized and reviewed, as necessary, this invoice for compliance with the Agreement. Any exceptions are as noted as below." [END OF EXHIBIT] *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -18- CONTRACT NUMBER: Nanosys DA-01 EXHIBIT 3 GOVERNMENT PATENT RIGHTS 1. DEFINITIONS The following terms shall have the meanings specified below. Any term not defined below shall have the meaning set forth in the Agreement. "Government Purpose" means any activity in which the Government is a party, including cooperative agreements with international or multi-national defense organizations or sales or transfers by the Government to foreign governments or international organizations. Government Purposes include competitive procurement, but do not include the rights to practice a Subject Invention for commercial purposes or authorize others to do so. "Invention" means any invention or discovery that is or may be patentable or otherwise protectable under Title 35 of the U.S. Code. "Made," when used in relation to any Invention, means the conception or first actual reduction to practice of such Invention. "Practical Application" means to manufacture a composition or product, to practice a process or method, or to operate a machine or system; and, in each case, under such conditions as to establish that the Invention is capable of being utilized and that its benefits are, to the extent permitted by law or Government regulations, available to the public on reasonable terms. "Subject Invention" means any Invention conceived or first actually reduced to practice by or on behalf of Developer in the performance of work under the Agreement. 2. ALLOCATION OF PRINCIPAL RIGHTS Developer may retain the entire right, title, and interest throughout the world to each Subject Invention subject to the provisions of this exhibit and 35 U.S.C. Section 203. With respect to any Subject Invention in which Developer retains title, the Government shall have a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the Government the Subject Invention throughout the world for Government Purposes. 3. INVENTION DISCLOSURE, ELECTION OF TITLE, AND FILING OF PATENT APPLICATIONS 3.1 Developer shall disclose each Subject Invention to In-Q-Tel in writing within [*** Redacted] months after the inventor discloses it in writing to Developer's personnel responsible for patent matters. The disclosure shall identify the Agreement and the identity of the inventor(s), and shall be sufficiently complete in technical detail to convey a clear understanding of the Invention to the extent known at the time of the disclosure. 3.2 Developer will elect in writing whether or not to retain title to any Subject Invention by notifying In-Q-Tel within the shorter of the following periods: (1) [*** Redacted] months of disclosure to In-Q-Tel; or (2) in any case where publication, sale, or public use has initiated the one (1) year statutory period wherein valid patent protection can still be obtained in the United States, [*** Redacted] calendar days prior to the end of the statutory period. When it elects to retain title to a Subject Invention, Developer shall file its initial patent application prior to the end of any statutory period wherein valid patent protection can be obtained in the United States, and shall thereafter file corresponding patent applications in other countries in which it wishes to retain title within reasonable times. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -19- CONTRACT NUMBER: Nanosys DA-01 4. CONDITIONS WHEN THE GOVERNMENT MAY OBTAIN TITLE Upon In-Q-Tel's written request, Developer shall convey title to any Subject Invention to the Government under any of the following conditions: (a) If Developer elects not to retain title, or if Developer fails to disclose or elect title to the Subject Invention within the times specified in Section 3 of this exhibit and In-Q-Tel requests conveyance of title within ninety (90) days after it has advised the CIA of such a failure. (b) In those countries in which Developer fails to file patent applications within the times specified in Section 3 of this exhibit; however, if Developer has filed a patent application in a country after the times specified in Section 3 but before In-Q-Tel requests conveyance of title, Developer shall continue to retain title in that country. (c) In any country in which Developer decides not to continue the prosecution of any application for, to pay the maintenance fees on, or defend in reexamination or opposition proceedings on, a patent on a Subject Invention. 5. MINIMUM RIGHTS TO DEVELOPER AND PROTECTION OF DEVELOPER'S RIGHT TO FILE Developer shall retain a nonexclusive, royalty-free license to practice or have practiced throughout the world each Subject Invention to which the Government obtains title. Developer's license extends to the domestic subsidiaries and affiliates, if any, of Developer within the corporate structure of which it is a part and includes the right to grant sublicenses of the same scope. Any transfer of the license requires CIA approval (except a transfer to the successor of that part of the business to which the Subject Invention pertains). 6. ACTION TO PROTECT THE GOVERNMENT'S INTEREST 6.1 Developer agrees to execute or to have executed and promptly deliver to In-Q-Tel for delivery to the CIA all instruments necessary: (1) to establish or confirm the Government's rights in those Subject Inventions to which Developer elects to retain title; and (2) to convey title to the Government when requested under Section 4 of this exhibit and to enable the Government to obtain patent protection in that Subject Invention. 6.2 Developer shall: (1) require its technical employees to execute written agreements obligating them to disclose Subject Inventions, promptly and in writing, to Developer personnel responsible for administering patents; and (2) instruct employees, through suitable educational programs, on the importance of reporting inventions in sufficient time to permit the filing of patent applications prior to United States or foreign statutory bars. 6.3 Developer shall notify In-Q-Tel of any decisions not to continue the prosecution of a patent application, pay maintenance fees, or defend in a reexamination or opposition proceedings on a patent, in any country, not less than [*** Redacted] before the expiration of the response period required by the relevant patent office. 6.4 Developer shall include, within the specification of any United States patent application and any patent issuing thereon covering a Subject Invention, the following statement: "This invention was made with Government support under Contract No. [*** Redacted] awarded by the Central Intelligence Agency. The Government has certain rights in the invention." 7. SUBCONTRACTING *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -20- CONTRACT NUMBER: Nanosys DA-01 Developer shall include in its agreements with subcontractors and employees provisions sufficient to obtain for the Government the rights granted to the Government in this exhibit. 8. REPORTING ON UTILIZATION OF SUBJECT INVENTIONS At In-Q-Tel's request, Developer shall submit annual reports, in a mutually agreeable form, on the utilization of a Subject Invention or on efforts at obtaining such utilization that are being made by Developer or its licensees or assignees. Developer shall also submit any additional reports CIA may request in connection with any march-in proceedings under Section 10 of this exhibit. As required by 35 U.S.C. Section 202(c)(5), CIA shall not disclose such information to persons outside the Government without Developer's permission. 9. PREFERENCE FOR UNITED STATES INDUSTRY Neither Developer nor any assignee shall grant any person the exclusive right to use or sell any Subject Invention in the United States or Canada unless such person agrees that any product embodying the Subject Invention or produced through the use of the Subject Invention shall be manufactured substantially in the United States or Canada. The CIA may waive this requirement in individual cases if Developer shows that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that domestic manufacture is not commercially feasible. 10. MARCH-IN RIGHTS When Developer holds title to a Subject Invention, the CIA has the right, in accordance with the procedures in 37 CFR 401.6 and any supplemental CIA regulations, to require Developer or its assignee or exclusive licensee to grant a nonexclusive license to a responsible applicant or applicants upon reasonable terms (and to grant such a license itself if Developer or its assignee or exclusive licensee refuse to do so) upon determining that such action is necessary: (1) because Developer or its assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve Practical Application of the Subject Invention within such field of use; (2) to alleviate health or safety needs that are not reasonably satisfied by Developer, its assignee or their licensees; (3) to meet requirements for public use specified by federal regulations that are not reasonably satisfied by Developer, its assignee or their licensees; or (4) because of a violation of Section 9 of this exhibit. 11. SPECIAL PROVISIONS APPLICABLE TO NONPROFIT ORGANIZATIONS If Developer is a nonprofit organization, Developer agrees to comply with the requirements set forth in section 52.227-11(k) of the Federal Acquisition Regulation (48 CFR 52.227-11(k)). [END OF EXHIBIT] In-Q-Tel Proprietary -21- CONTRACT NUMBER: Nanosys DA-01 EXHIBIT 4 GOVERNMENT DATA RIGHTS 1. DEFINITIONS The following terms shall have the meanings specified below. Any term not defined below shall have the meaning set forth in this Agreement. "Computer Software" means computer programs, computer databases, and documentation thereof. "Data" means recorded information, regardless of form or the media on which it may be recorded, which represents Technical Data or Computer Software. "Form, Fit, and Function Data" means Data relating to items, components, or processes that are sufficient to enable physical and functional interchangeability as well as Data identifying source, size, configuration, mating, and attachment characteristics, functional characteristics, and performance requirements, except the source code, algorithm, process, formulae, and flow charts for Computer Software. "Government Purpose" means any activity in which the Government is a party, including cooperative agreements with international or multi-national defense organizations or sales or transfers by the Government to foreign governments or international organizations. Government Purposes include competitive procurement, but do not include the rights to use, modify, reproduce, release, perform, display or disclose Data for commercial purposes or to authorize others to do so. "Government Purpose License Rights" means the rights: (1) to use, modify, reproduce, release, perform, display or disclose Data within the Government without restriction; and (2) to release or disclose Data outside the Government and authorize persons to whom release or disclosure has been made to use, modify, reproduce, release, perform, display, or disclose the Data for Government Purposes only. "Limited rights" means the rights of the Government in Limited Rights Data as set forth in the Limited Rights Notice at Section 7.2 of this Exhibit 4. "Limited Rights Data" means Data (other than Computer Software) developed at private expense that embody trade secrets or are commercial or financial and confidential or privileged. "Restricted Computer Software" means Computer Software developed at private expense and that is a trade secret; is commercial or financial and is confidential or privileged; or is published copyrighted Computer Software, including minor modifications of such Computer Software. "Restricted Rights" means the rights of the Government in Restricted Computer Software (including minor modifications of such Computer Software), as set forth in a Restricted Rights Notice at Section 7.3 of this Exhibit 4. "Technical Data" means Data (other than Computer Software) that are of a scientific or technical nature. 2. ALLOCATION OF RIGHTS 2.1. The Government shall have Government Purpose License Rights in: In-Q-Tel Proprietary -22- CONTRACT NUMBER: Nanosys DA-01 (i) Data first produced by Developer in the performance of this Agreement; (ii) Form, Fit, and Function Data delivered by Developer to In-Q-Tel under this Agreement, if In-Q-Tel delivers such Data to the Government; (iii) Data delivered by Developer to In-Q-Tel under this Agreement (except for Restricted Computer Software) that constitute manuals or instructional and training material for installation, operation, or routine maintenance and repair of items, components, or processes delivered or furnished for use under this Agreement, if In-Q-Tel delivers such Data to the Government; and (iv) All other Data delivered by Developer to In-Q-Tel under this Agreement (unless provided otherwise for Limited Rights Data or Restricted Computer Software pursuant to Section 7 of this Exhibit 4) if such Data is delivered by In-Q-Tel to the Government. 2.2. Developer shall retain its ownership of Data, and specifically shall have the rights referenced in Sections 3.1, 4, 5, 6, and 7 of this Exhibit 4. 3. COPYRIGHT 3.1 Developer may establish claim to copyright subsisting in any Data first produced by Developer in the performance of this Agreement. When claim to copyright is made, Developer shall affix to the Data the applicable copyright notice of 17 U.S.C. 401 or 402 and acknowledgment of Government sponsorship (including contract No. [*** Redacted] between the Government and In-Q-Tel) when such Data are delivered to In-Q-Tel or are published or deposited for registration as a published work in the U.S. Copyright Office. Developer hereby grants to the Government the license rights specifically granted in Sections 2.1 and 7 of this Exhibit 4. 3.2 Developer shall not, without prior written permission of In-Q-Tel, incorporate in Data delivered under this Agreement any Data not first produced in the performance of this Agreement that contains the copyright notice of 17 U.S.C. 401 or 402, unless Developer identifies such Data to In-Q-Tel and grants to the Government, or acquires on its behalf, a license of the same scope as set forth in Section 3.1 of this Exhibit 4. 3.3 Pursuant to its contract with In-Q-Tel, the Government has agreed not to remove any copyright notices placed on Data pursuant to this Section 3, and to include such notices on all reproductions of the Data. 4. RELEASE, PUBLICATION AND USE OF DATA 4.1 Developer shall have the right to use, reproduce, modify, release, perform, display, distribute, and disclose any Data first produced by Developer, or specifically used by Developer, in the performance of this Agreement consistent with the Federal export control and national security laws and regulations. 4.2. If Developer receives or is given access to Data that contain restrictive markings, it shall treat the Data in accordance with such markings unless otherwise specifically authorized in writing by In-Q-Tel. 5. UNAUTHORIZED MARKING OF DATA If any Data delivered by Developer to In-Q-Tel bear any restrictive markings not authorized by this Exhibit 4, In-Q-Tel or the Government may at any time either return the Data to Developer or In-Q-Tel Proprietary -23- *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. CONTRACT NUMBER: Nanosys DA-01 cancel or ignore the markings. 6. OMITTED OR INCORRECT MARKINGS 6.1. Data delivered by Developer to In-Q-Tel without any of the restrictive notices authorized by Sections 3 or 7 of this Exhibit 4 shall be deemed to have been furnished with Government Purpose License Rights in such Data. However, if the Data has not been disclosed without restriction outside In-Q-Tel and the Government, Developer may request permission to have notices placed on qualifying Data, and the Government may agree to do so if Developer: (i) Identifies the Data to which the omitted notice is to be applied; (ii) Demonstrates that the omission of the notice was inadvertent; (iii) Establishes that the use of the proposed notice is authorized; and (iv) Acknowledges that neither In-Q-Tel nor the Government has any liability with respect to the disclosure, use, or reproduction of any such Data made prior to the addition of the notice or resulting from the omission of the notice. 6.2. The Government may permit correction of incorrect notices if Developer identifies the Data on which correction of the notice is to be made and demonstrates that the correct notice is authorized. 7. PROTECTION OF LIMITED RIGHTS DATA AND RESTRICTED COMPUTER SOFTWARE 7.1. When Data other than that listed in Paragraphs 2. 1 (i)-(iii) of this Exhibit 4 are specified to be delivered under this Agreement and qualify as either Limited Rights Data or Restricted Computer Software, if Developer desires to continue protection of such Data, Developer may instruct In-Q-Tel to withhold such Data from the Government. As a condition to this withholding, Developer shall identify to In-Q-Tel the Data being withheld and furnish Form, Fit, and Function Data to In-Q-Tel for delivery to the Government in lieu thereof. Limited Rights Data that are formatted as a computer database for delivery to the Government shall be treated as Limited Rights Data and not Restricted Computer Software. 7.2. This Agreement may identify and specify the delivery of Limited Rights Data to the Government or the Government may require the delivery of such Data by written request. If delivery of such Data is so required, Developer may affix the following "Limited Rights Notice" to the Data and the Government will thereafter treat the Data, subject to the provisions of Sections 5 and 6 of this Exhibit 4, in accordance with such Notice: LIMITED RIGHTS NOTICE These data are submitted with limited rights under Government contract No. [*** Redacted] (and Agreement No. [*** Redacted]). These data may *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -24- CONTRACT NUMBER: Nanosys DA-01 be reproduced and used by the Government with the express limitation that they will not, without written permission of the Developer, be used for purposes of manufacture or distribution of commercial products nor disclosed outside the Government. This Notice shall be marked on any reproduction of these data, in whole or in part. (End of notice) 7.3 This Agreement may identify and specify the delivery of Restricted Computer Software to the Government or the Government may require the delivery of such Computer Software by written request. If delivery of such Computer Software is so required, Developer may affix the following "Restricted Rights Notice" to the Computer Software and the Government will thereafter treat the Computer Software, subject to Sections 5 and 6 of this Exhibit 4, in accordance with the Notice: RESTRICTED RIGHTS NOTICE (This computer software is submitted with restricted rights under Government Contract No. [*** Redacted] (and Agreement No. [*** Redacted]). It may not be used, reproduced, or disclosed by the Government except as provided in paragraph (b) of this Notice. (b) This computer software may be: (1) Used or copied for use in or with the computer or computers for which it was acquired, including use at any Government installation to which such computer or computers may be transferred; (2) Used or copied for use in a backup computer if any computer for which it was acquired is inoperative; (3) Reproduced for safekeeping (archives) or backup purposes; (4) Modified, adapted, or combined with other computer software, provided that the modified, combined, or adapted portions of the derivative software incorporating restricted computer software are made subject to the same restricted rights; (5) Disclosed to and reproduced for use by support service contractors in accordance with subparagraphs (b) (1) through (4) of this Notice, provided the Government makes such disclosure or reproduction subject to these restricted rights; and (6) Used or copied for use in or transferred to a replacement computer. (c) This Notice shall be marked on any reproduction of this computer software, in whole or in part. (End of notice) Where it is impractical to include the Restricted Rights Notice on Restricted Computer Software, the following short-form Notice may be used in lieu thereof. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -25- CONTRACT NUMBER: Nanosys DA-01 RESTRICTED RIGHTS NOTICE SHORT FORM Use, reproduction, or disclosure is subject to restrictions set forth in Contract No. [*** Redacted] and Agreement No. [*** Redacted]. (End of notice) 8. SUBCONTRACTING Developer has the responsibility to obtain from its subcontractors all Data and rights necessary to fulfill Developer's obligations to the Government under this Agreement. If a subcontractor refuses to grant the Government such rights, Developer shall promptly notify In-Q-Tel and not proceed with subcontract award without further authorization. 9. RELATIONSHIP TO PATENTS Nothing contained in this Exhibit 4 shall imply a license to the Government under any patent. 10. COMMERCIAL ITEMS Notwithstanding anything else contained in this Exhibit 4, when a "commercial item" (as defined in FAR ss. 2.101) is acquired under this Agreement, the Government shall acquire only the Technical Data and the rights in Technical Data and Computer Software customarily provided to the public with the commercial item. [END OF EXHIBIT] *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. In-Q-Tel Proprietary -26- EXHIBIT 5 REPRESENTATIVES OF THE PARTIES TO RECEIVE NOTICES IN-Q-TEL'S REPRESENTATIVES: [*** Redacted] With a copy to: [*** Redacted] [*** Redacted] DEVELOPER'S REPRESENTATIVES: Dr. J. Wallace Parce Chief Technical Officer Nanosys, Inc. 2625 Hanover Street Palo Alto, CA 94304 Phone: 650) 331-2131 Email: wparce@nanosysinc.com With a copy to: Ms. Karen Vergura Vice President, Finance Nanosys, Inc. 2625 Hanover Street Palo Alto, CA 94304 Email: kvergura@nanosysinc.com Mr. Matthew Murphy, Esq. Vice President, Intellectual Property Nanosys, Inc. 2625 Hanover Street Palo Alto, CA 94304 Phone: (650) 331-2109 Email: mmurphy@nanosysinc.com *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. [END OF EXHIBIT] -28- THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO A VOTING AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST IN THIS WARRANT OR SUCH SHARES THE PERSON ACCEPTING ANY SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT. STOCK PURCHASE WARRANT To Purchase Shares of Series C Preferred Stock of Nanosys, Inc. THIS CERTIFIES that, for value received, In-Q-Tel, Inc., a Delaware corporation (the "Investor"), is entitled, upon the terms and subject to the conditions hereinafter set forth, at any time on or after the Payment Date, as defined below, and on or prior to September 4, 2008 (the "Termination Date"), but not thereafter, to subscribe for and purchase, from Nanosys, Inc., a Delaware corporation (the "Company"), up to a total of 542,314 shares of Series C Preferred Stock (the "Shares"), with the exact number of shares for which this Warrant is exercisable determined as set forth below, at an exercise price (the "Exercise Price") of $0.001 per Share. 1. Title to Warrant. Prior to the expiration hereof and subject to compliance with applicable laws, this Warrant and all rights hereunder are transferable, in whole or in part, in accordance with the terms of this Warrant upon delivery of this Warrant by the holder hereof together with the Assignment Form annexed hereto as Attachment C properly endorsed to the office or agency of the Company, referred to in Sections 2 and 3 hereof. 2. Exercise of Warrant. (a) This Warrant shall be exercisable after the date of actual receipt by the Company of an aggregate of $2,000,000 of payments from In-Q-Tel, Inc. (the "Payment Date") pursuant to the Development Agreement, dated as of even date hereof by and among the Company and the In-Q-Tel, Inc. (the "DA"), for the number of Shares determined as follows (the number of Shares as to which this warrant is exercisable pursuant to the terms of this Section 2 hereinafter referred to as "Vested Shares"): (i) This Warrant shall be exercisable after the Payment Date for the number of Shares equal to (i) 542,314 multiplied by (ii) a fraction, (A) the numerator of which is the amount, up to $3,000,000, actually paid to the Company (or its assigns) from time to time pursuant to the DA minus (x) the total dollar amount of all equipment or other assets (based on the acquisition price to the Company) as to which title is transferred by the Company to In-Q-Tel, Inc. pursuant to Section 13 of the DA and (y) all cash or cash equivalents transferred by the Company to In-Q-Tel, Inc. pursuant to a request by In-Q-Tel, Inc. or pursuant to any other action through which In-Q-Tel, Inc. seeks refund or payment of such funds, and (B) the denominator of which is $3,000,000. (b) The right to purchase Vested Shares represented by this Warrant is exercisable by the registered holder hereof, as to all of the Vested Shares as of the date of such exercise, at any time before the close of business on the Termination Date by the delivery of this Warrant and the Notice of Exercise form annexed hereto as Attachment B duly executed to the office of the Company in Palo Alto, California (or such other office or agency of the Company as it may designate by notice in writing to the registered holder hereof at the address of such holder appearing on the books of the Company), and upon payment of the Exercise Price for the Vested Shares thereby purchased (by cash or by check or bank draft payable to the order of the Company or by cancellation of indebtedness of the Company to the holder hereof, if any, at the time of exercise in an amount equal to the purchase price of the Shares thereby purchased); whereupon the holder of this Warrant shall be entitled to receive a certificate for the number of shares of Preferred Stock so purchased. The Company agrees that if at the time of the surrender of this Warrant and purchase the holder hereof shall be entitled to exercise this Warrant, the shares so purchased shall be and be deemed to be issued to such holder as the record owner of such shares at the close of business on the date on which this Warrant shall have been exercised as aforesaid. If this Warrant is exercised, or converted pursuant to Section 3 below, for a number of Vested Shares that are less than the total number of Shares, promptly after surrender of the Warrant upon such exercise or conversion, the Company will execute and deliver a new warrant evidencing the right of the Holder to the balance of the Shares purchasable hereunder upon the same terms and conditions set forth herein, provided that the issuance of such new warrant shall not accelerate, or be deemed or construed to accelerate, the vesting of any Shares as set forth in Section 2(a) above, and the terms of such new warrant shall be modified to the extent necessary to prevent the acceleration of vesting of any Shares under the terms of this Warrant. 3. Right to Convert Warrant. The registered holder hereof shall have the right to convert this Warrant, by the delivery of this Warrant and the Notice of Conversion form annexed hereto as Attachment B duly executed to the office of the Company in Palo Alto, California (or such other office or agency of the Company as it may designate by notice in writing to the registered holder hereof at the address of such holder appearing on the books of the Company), as to all Shares that are Vested Shares at the time of such conversion, at any time before the close of business on the Termination Date, into the shares of Series C Preferred Stock as provided for in this Section 3. Upon exercise of this conversion right, the holder hereof shall be entitled to receive that number of Vested Shares equal to the quotient obtained by dividing [(A - B)(X)] by (A), where: (A) = the Fair Market Value (as defined below) of one (1) Share on the date of conversion of this Warrant. -2- (B) = the Exercise Price for one (1) Share under this Warrant. (X) = the number of Vested Shares issuable upon exercise of this Warrant. "Fair Market Value" of a Share shall mean: (a) if the conversion right is being exercised upon the occurrence of the Company's initial public offering, the initial public offering price per share (before deducting underwriting commissions and discounts and offering expenses) multiplied by the number of shares of Common Stock issuable upon conversion of one (1) Share issuable upon exercise of this Warrant; and (b) in all other cases, the fair value as determined in good faith by the Company's Board of Directors. Upon conversion of this Warrant, the registered holder hereof shall be entitled to receive a certificate for the number of Vested Shares determined as aforesaid. 4. Issuance of Stock; No Fractional Shares or Scrip. Certificates for the stock purchased hereunder or issuable upon conversion hereof shall be delivered to the holder hereof promptly after the date on which this Warrant shall have been exercised or converted as aforesaid. The Company covenants that all Shares which may be issued upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant, be fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). The Company agrees that, if at the time of the surrender of this Warrant and exercise of the rights represented hereby, the holder hereof shall be entitled to exercise such rights, the Shares so issued shall be and be deemed to be issued to such holder as the record owner of such Shares as of the close of business on the date on which this Warrant shall have been exercised or converted as aforesaid. No fractional shares or scrip representing fractional shares shall be issued upon the exercise or conversion of this Warrant, and any fractional share amounts shall be rounded down to the nearest whole share issuable upon exercise of this Warrant. 5. Charges, Taxes and Expenses. Issuance of certificates for the Shares upon the exercise or conversion of this Warrant shall be made without charge to the holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the holder of this Warrant or in such name or names as may be directed by the holder of this Warrant; provided, however, that in the event certificates for Shares are to be issued in a name other than the name of the holder of this Warrant, this Warrant when surrendered for exercise or conversion shall be accompanied by the Assignment Form attached hereto duly executed by the holder hereof; and provided further, that upon any transfer involved in the issuance or delivery of any certificates for the Shares, the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. -3- 6. No Rights as Shareholders. This Warrant does not entitle the holder hereof to any voting rights or other rights as a shareholder of the Company prior to the exercise or conversion hereof. 7. Exchange and Registry of Warrant. This Warrant is exchangeable, upon the surrender hereof by the registered holder at the above-mentioned office or agency of the Company, for a new Warrant of like tenor and dated as of such exchange. The Company shall maintain at the above-mentioned office or agency a registry showing the name and address of the registered holder of this Warrant. This Warrant may be surrendered for exchange, transfer or exercise, in accordance with its terms, at such office or agency of the Company, and the Company shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry. 8. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor and dated as of such cancellation, in lieu of this Warrant. 9. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a legal holiday. 10. Acquisition, Initial Public Offering and Dilution. (a) Merger, Sale of Assets, etc. (i) "Acquisition." For the purpose of this Warrant, "Acquisition" means any sale, license, or other disposition of all or substantially all of the assets of the Company (including a sale of all or substantially all of the intellectual property of the Company), or any reorganization, consolidation, acquisition or merger of the Company where the holders of the Company's securities before the transaction own less than 50% of the outstanding voting securities of the surviving entity after the transaction. (ii) If at any time after the date hereof the Company proposes to consummate an Acquisition in which the shareholders of the Company shall receive cash or publicly traded securities in exchange for their shares of stock in the Company pursuant to such transaction, then the Company shall give the holder of this Warrant written notice (the "Merger Notice") of such impending transaction not later than fifteen (15) days prior to the shareholders' meeting called to approve such transaction, or fifteen (15) days prior to the closing of such transaction, whichever is earlier, and shall also notify the holder of this Warrant of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction, and the Company shall thereafter give the holder of this Warrant prompt notice of any material -4- changes. If this Warrant has not been exercised or converted by the closing of such transaction then this Warrant shall terminate and shall no longer be exercisable pursuant to the terms of Sections 2 or 3 hereof. (iii) If this Warrant is not terminated in an Acquisition pursuant to the provisions of Section 10(a)(ii), (a "Non-Terminating Acquisition") then, as a condition of such Non-Terminating Acquisition, lawful and adequate provisions shall be made by the Company whereby the Investor shall thereafter have the right to purchase and receive (in lieu of the shares of the Preferred Stock or Common Stock, as applicable, of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented by this Warrant) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Preferred Stock or Common Stock, as applicable, equal to the number of shares of such stock immediately theretofore purchasable and receivable upon the exercise of the rights represented by this Warrant. In the event of any Non-Terminating Acquisition, appropriate provision shall be made by the Company with respect to the rights and interests of the Investor that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. (b) Initial Public Offering. If at any time after the date hereof the Company proposes to consummate the initial public offering ("IPO") of its Common Stock in a bona fide firm commitment underwriting pursuant to a registration statement on Form S-1 (or successor form) under the Securities Act of 1933, as amended, (the "Securities Act"), then the Company shall give the Investor written notice of such impending transaction not later than thirty (30) days prior to the closing of the IPO. Such notice shall describe the material terms and conditions of the IPO, and the Company shall thereafter give the holder of this Warrant prompt notice of any material changes. If this Warrant has not been exercised or converted by the closing of the IPO it shall terminate and shall no longer be exercisable or convertible pursuant to the terms of Section 2 or 3 hereof. (c) Reclassification, etc. If the Company at any time shall, by subdivision, combination or reclassification of securities or otherwise, change any of the securities to which purchase rights under this Warrant exist into the same or a different number of securities of any class or classes, this Warrant shall thereafter be to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately prior to such subdivision, combination, reclassification or other change. If the Shares issuable upon the exercise of this Warrant are subdivided or combined into a greater or smaller number of the Shares, the purchase price under this Warrant shall be proportionately reduced in case of subdivision of shares or proportionately increased in the case of combination of shares, in both cases by the ratio which the total number of Shares to be outstanding immediately after such event bears to the total number of Shares outstanding immediately prior to such event. -5- (d) Cash Distributions. No adjustment on account of dividends on the Shares issuable upon the exercise of this Warrant will be made to the purchase price under this Warrant. (e) Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Preferred Stock and Common Stock a sufficient number of shares to provide for the issuance of the Shares upon the exercise or conversion of this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Shares upon the exercise of the purchase rights under this Warrant. (f) Conversion Price Adjustments. The rate at which the Shares are convertible into shares of Common Stock of the Company is subject to adjustment as set forth in the Company's Certificate of Incorporation, as amended from time to time. Any adjustment to the conversion rate of the Shares issuable upon the exercise of this Warrant effected prior to any exercise or conversion of this Warrant shall apply to any Shares thereafter issued pursuant to the terms hereof. (g) Option to Accelerate Vesting of Shares. Prior to the termination of this Warrant pursuant to the provisions of Section 10(a) or 10(b) hereunder, In-Q-Tel, Inc. shall have the right to pay to the Company any amounts that remain unpaid to the Company under the DA and thereby accelerate the vesting of the Shares in accordance with the formula set forth in Section 2(a) above, provided that, no acceleration of vesting of the Shares under this warrant shall be effective unless the payments by In-Q-Tel, Inc. to the Company are irrevocable under the terms of the DA and not subject to refund to In-Q-Tel, Inc. 11. Restrictions on Transferability of Securities. (a) Restrictions on Transferability. This Warrant, the Shares issuable upon exercise of this Warrant, and the shares of Common Stock issuable upon conversion of the Shares (collectively the "Securities") shall not be sold, assigned, transferred or pledged except upon the conditions specified in this Section 11, which conditions are intended to ensure compliance with the provisions of the Securities Act. Each holder of any of the Securities will cause any proposed purchaser, assignee, transferee, or pledgee of the Securities held by such holder to agree in writing to take and hold such Securities subject to the provisions and upon the conditions specified in this Warrant as if such purchaser, assignee, transferee or pledgee were the Investor hereunder. (b) Restrictive Legend. Each certificate representing the Securities and any other securities issued in respect of the Securities upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall (unless otherwise permitted by the provisions of Section 11(c) below) be stamped or otherwise imprinted with legends in the following form (in addition to any legend required under applicable state securities laws): (i) 33 Act Legend. -6- THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. (ii) Lock-Up Legend. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR OTHERWISE TRANSFERRED FOR A PERIOD NOT TO EXCEED 180 DAYS FOLLOWING THE EFFECTIVE DATE OF A REGISTRATION STATEMENT FILED BY THE COMPANY FOR ITS INITIAL PUBLIC OFFERING. The Investor and each holder of Securities and each subsequent transferee, assignee, transferee or pledgee (hereinafter collectively, including the Investor, referred to as a "Holder") consents to the Company making a notation on its records and giving instructions to any transfer agent of the Securities in order to implement the restrictions on transfer established in Sections 11 and 15. (c) Notice of Proposed Transfers. Each Holder of a certificate representing the Securities, by acceptance thereof, agrees to comply in all respects with the provisions of Sections 11 and 15. Prior to any proposed sale, assignment, transfer or pledge of any Securities (other than (i) a transfer not involving a change in beneficial ownership, (ii) in transactions involving the distribution without consideration of Securities by a Holder to any of its partners, or retired partners, or to the estate of any of its partners or retired partners, (iii) a transfer to an affiliated fund, partnership or company, which is not a competitor of the Company, subject to compliance with applicable securities laws or (iv) transfers in compliance with Rule 144, so long as the Company is furnished with satisfactory evidence of compliance with such Rule), unless there is in effect a registration statement under the Securities Act covering the proposed transfer, the Holder thereof shall give prior written notice to the Company of such Holder's intention to effect such transfer, sale, assignment or pledge. Each such notice shall describe the manner and circumstances of the proposed transfer, sale, assignment or pledge in sufficient detail, and shall be accompanied, at such Holder's expense, by either (i) an opinion of counsel (who shall, and whose opinion shall be, addressed to the Company and reasonably satisfactory to the Company) to the effect that the proposed transfer of the Securities may be effected without registration under the Securities Act or (ii) a "no action" letter from the Securities and Exchange Commission (the "Commission") to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the Holder of such Securities shall be entitled to transfer such Securities in accordance with the terms of the notice delivered by such Holder to the Company. Each certificate evidencing the Securities transferred as above provided shall bear (except if such transfer is made pursuant to Rule 144, in which case the legend set forth in Section -7- 11(b)(i) shall not be required) the restrictive legends set forth in Section 11(b) above, except that each such certificate shall not bear the legend set forth in Section 11(b)(i) if in the opinion of counsel for such Holder and in the opinion of counsel for the Company such legend is not required in order to establish compliance with any provision of the Securities Act. (d) Removal of Restrictions on Transfer of Securities. The legend referred to in Section 11(b)(i) hereof stamped on a certificate evidencing the Securities and the stock transfer instructions and record notations with respect to the Securities shall be removed, and the Company shall issue a certificate without such legend to the Holder of the Securities, if the Securities are registered under the Securities Act, or if such Holder provides the Company with an opinion of counsel (which may be counsel for the Company) reasonably satisfactory to the Company to the effect that a public sale or transfer of such security may be made without registration under the Securities Act or such Holder provides the Company with reasonable assurances, which may, at the option of the Company, include an opinion of counsel (which may be counsel for the Company) reasonably satisfactory to the Company, that such security can be sold pursuant to paragraph (k) of Rule 144 (or any successor provision) under the Securities Act. After the expiration of the Lock-Up Period (as defined in Section 15 below), and upon request of the Holder, the legend referred to in Section 11(b)(ii) hereof stamped on a certificate evidencing the Securities and the stock transfer instructions and record notations with respect to the Securities shall be removed, and the Company shall issue a certificate without such legend to the Holder of the Securities. 12. Investment Representations of the Investor. With respect to the acquisition of any of the Securities, the Investor hereby represents and warrants to the Company as follows: (a) Experience. The Investor has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. The Investor is an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act. (b) Investment. The Investor is acquiring the Securities for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. The Investor understands that the Securities have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investor's representations as expressed herein. (c) Rule 144. The Investor acknowledges that the Securities must be held indefinitely unless subsequently registered under the Securities Act, or unless an exemption from such registration is available. The Investor is aware of the provisions of Rules 144 and 144A promulgated under the Securities Act that permit limited resale of securities purchased in a private placement subject to satisfaction of certain conditions. -8- (d) No Public Market. The Investor understands that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Securities. (e) Access to Data. The Investor has had an opportunity to discuss the Company's business, management and financial affairs with the Company's management and has also had an opportunity to ask questions of the Company's officers, which questions were answered to the Investor's satisfaction. 13. Representations of the Company. (a) Series C Stock Purchase Agreement Representations. The Company hereby represents that the representations and warranties of the Company set forth in Section 3 of the Series C Preferred Stock Purchase Agreement, dated as of April 10, 2003 (the "SPA"), were true and correct in all material respects as of April 10, 2003. (b) Representations and Warranties as of the September 4, 2003. The Company represents and warrants as of September 4, 2003 as follows: (i) Corporate Power. The Company has all requisite corporate power and authority to: (A) execute and deliver this Warrant; (B) to issue the Shares hereunder; (C) to issue the shares of the Common Stock of the Company issuable upon conversion of the Shares; and (D) to carry out and perform its obligations under the terms of this Warrant. (ii) Capitalization. As of September 4, 2003, the entire authorized capital stock of the Company consists of: (A) 53,500,000 shares of Common Stock, of which 6,194,500 shares are issued and outstanding and no shares are held as treasury shares, and (B) 40,250,000 shares of Preferred Stock, 5,500,000 of which are designated Series A Preferred Stock of which 5,499,998 are issued and outstanding, 13,000,000 of which are designated Series B Preferred of which 12,500,003 are issued and outstanding, and 21,750,000 of which are designated Series C Preferred Stock 19,948,022 of which are issued and outstanding. As of September 4, 2003, and other than options to purchase Common Stock outstanding under the Option Plan, as defined below, and warrants for Series C Preferred Stock issued to the Investor or its affiliates, the Company has outstanding (A) warrants to purchase 116,250 shares of Series B Preferred Stock, and (B) options to purchase 17,000 shares of Common Stock. (1) The outstanding shares of Common Stock and Preferred Stock have been duly authorized and validly issued in compliance with applicable laws, and are fully paid and nonassessable. (2) The Company has reserved a) the Shares of Series C Preferred Stock for issuance upon the exercise or conversion of this Warrant; -9- b) the shares of Common Stock (as may be adjusted in accordance with the provisions of the Company's Third Amended and Restated Certificate of Incorporation) for issuance upon the conversion of the Shares; and c) 6,037,000 shares of Common Stock authorized for issuance to employees, consultants and directors pursuant to its 2001 Stock Plan (the "Option Plan"). (iii) Litigation. There are no actions, suits, proceedings or investigations pending against (A) the Company, (B) its directors, officers, and key employees in their official capacity as directors, officers and employees of the Company, or (C) its properties (nor has the Company received notice of any threat thereof) before any court or governmental agency, nor, to the Company's knowledge, does there exist any basis therefor. To its knowledge, the Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. (iv) Intellectual Property. (1) To the Company's knowledge, other than software and technology licenses that are generally commercially available, the Company owns or possesses adequate licenses or other rights to use all patents, patent applications, trademarks, trademark applications, service marks, service mark applications, trade names, copyrights, manufacturing processes, formulae, trade secrets, customer lists and know-how (collectively, "Intellectual Property") necessary to the business of the Company as presently conducted, the lack of which could reasonably be expected to have a material adverse effect on the Company's financial condition, results of operations, assets, liabilities, business or prospects, and no claim is pending or, to the Company's knowledge, threatened to the effect that the operations of the Company infringe upon or conflict with the asserted rights of any other person under any Intellectual Property, and, to the Company's knowledge, there is no reasonable basis for any such claim (whether or not pending or threatened). No claim is pending or, to the Company's knowledge, threatened to the effect that any such Intellectual Property owned or licensed by the Company, or which the Company otherwise has the right to use, is invalid or unenforceable by the Company, and, to the Company's knowledge, there is no reasonable basis for any such claim (whether or not pending or threatened). To the Company's knowledge, all Intellectual Property developed by and belonging to the Company that has not been patented has been kept confidential. The Company has not granted or assigned to any other person or entity any right to provide the services or proposed services of the Company. There are no agreements, understandings, instruments, contracts, judgments, orders or decrees to which the Company is a party or by which it is bound which involve indemnification by the Company with respect to infringements of Intellectual Property. (2) To the knowledge of the Company, no third party may assert any valid claim against the Company or any Designated Person (as defined below) with respect to (A) the continued employment by or association with the Company of any of the present officers or employees of, or consultants to, the Company (collectively, the "Designated Persons"), or (B) the use or disclosure by the Company or any Designated Person of any information which the Company or any Designated Person would be prohibited from using or disclosing under any prior agreements -10- or arrangements or under any laws, including, without limitation, laws applicable to unfair competition, trade secrets or proprietary information. The Company does not believe it is or will be necessary to use any inventions of any Designated Person made prior to his or her employment or engagement by the Company. (v) Financial Statements. The Company has previously delivered to In-Q-Tel, Inc. audited financial statements (including balance sheet, income statement and statement of cash flows) as of December 31, 2002 for the fiscal year then ended, and its unaudited financial statements (including balance sheet, income statement and statement of cash flows) as of June 30, 2003 and for the six-month period then ended (collectively, the "Financial Statements"). The Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods indicated, except that the unaudited Financial Statements may not contain all footnotes required by generally accepted accounting principles. The Financial Statements fairly present the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein, subject to normal year-end audit adjustments. (vi) Material Contracts. All of the contracts and obligations set forth in Section 3.9 of the Schedule of Exceptions to the SPA (the "Material Contracts") are valid, binding and in full force and effect subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies and to general principles of equity. The Company is not in default or arrears under and, to the knowledge of the Company, no other party to any Material Contract is in default or arrears under, any term of any Material Contract 14. Notices. If at any time prior to the exercise or conversion of this Warrant in full the Company takes a record of the holders of the Company's stock for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, the Company will give to the holder of this Warrant, at least thirty (30) days prior to the date specified therein, written notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right. 15. Lock-Up Agreement. Each Holder hereby agrees that, upon request of the Company or the managing underwriter of a public offering of any securities of the Company, such Holder shall not sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of all or any portion of the Securities without the prior written consent of the Company or the managing underwriter, as the case may be, for such period of time (not to exceed one hundred eighty (180) days from the date upon which the registration statement relating to such public offering is declared or ordered effective by the Securities and Exchange Commission) as may be requested by the Company or the underwriters, as the case may be (the "Lock-Up Period"). 16. Miscellaneous. -11- (a) Issue Date. The provisions of this Warrant shall be construed and shall be given effect in all respect as if it had been issued and delivered by the Company on the date hereof. This Warrant shall be binding upon any successors or assigns of the Company. This Warrant shall be governed in all respects by the laws of the State of California. (b) Waivers and Amendments. With the written consent of the Company and the Investor, the obligations of the Company and the right of the Investor may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely), and with the same consent the Company and the Investor may enter into a supplementary agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Warrant. (c) Notices. All notices and other communications required or permitted to be given under this Warrant shall be in writing and shall be deemed effectively given upon personal delivery, delivery by nationally recognized courier or upon deposit with the United States Post Office (by first class mail, postage prepaid) addressed as follows: (i) if to the Company, at the address of its principal office in the State of California, or at such other address as the Company shall have furnished Investor in writing, and (ii) if to the Investor, to 1000 Wilson Blvd., Suite 2900, Arlington, VA 22209, Attn: General Counsel, or such other address as the Investor shall have furnished the Company in writing. (d) Survival. The provisions of Sections 11 and 15 hereof shall survive the exercise or conversion of this Warrant and shall remain in effect until such time as the Investor or any Holder no longer holds Securities. (e) Binding Effect on Successors. This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets. All of the covenants and agreements of the Company shall inure to the benefit of successors and assigns of the holder hereof. -12- IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized. Dated: September 4, 2003 NANOSYS, INC. Name: /s/ Lawrence A. Bock -------------------- By: Lawrence A. Bock -------------------- Title: President and Chief Executive Officer ------------------------------------- Agreed and Accepted: In-Q-Tel, Inc. Name: [*** Redacted] -------------- By: [*** Redacted] -------------- Title: President and COO of In-Q-Tel, Inc., Manager -------------------------------------------- *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. ATTACHMENT A NOTICE OF EXERCISE To: Nanosys, Inc. (1) The undersigned hereby elects to purchase ________________ shares of the Vested Shares of Series C Preferred Stock of Nanosys, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price in full for such Vested Shares, together with all applicable transfer taxes, if any. (2) Please issue a certificate of certificates representing said shares of Series C Preferred Stock in the name of the undersigned or in such other name as is specified below: (Name) (Address) (3) The undersigned represents that the aforesaid shares of Series C Preferred Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. _______________________________ (Date) (Signature) ATTACHMENT B NOTICE OF CONVERSION To: Nanosys, Inc. (1) The undersigned hereby elects to convert _______________ shares of the Vested Shares of the attached Warrant into such number of shares of Series C Preferred Stock of Nanosys, Inc. as is determined pursuant to Sections 2 and 3 of such Warrant, which conversion shall be effected pursuant to the terms of the attached Warrant. (2) Please issue a certificate or certificates representing said shares of Nanosys, Inc. Series C Preferred Stock in the name of the undersigned or in such other name as is specified below: (Name) (Address) (3) The undersigned represents that the aforesaid shares of Nanosys, Inc. Series C Preferred Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. ______________________________ (Date) (Signature) -2- ATTACHMENT C ASSIGNMENT FORM (To assign the foregoing warrant, execute this form and supply the required information. Do not use this form to purchase shares.) FOR VALUE RECEIVED, ____% of the foregoing Warrant and all rights evidenced thereby are hereby assigned to ________________________________________________________________________________ (Please Print) whose address is________________________________________________________________ (Please Print) Dated: ____________, 20__ Transferring Holder's Signature: _________________________ Transferring Holder's Address: _________________________ _________________________ Signed in the presence of: ___________________________ NOTE: The signature to this Assignment Form set forth above must correspond with the name of the Investor as it appears on the face of the Warrant, without alteration or enlargement or any change whatever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant. In connection with the transfer of the Warrant (or a portion thereof) to the undersigned, the undersigned hereby agrees to be bound by and comply with all of the provisions and obligations applicable to the Investor contained in the Warrant and to execute any further documentation necessary to carry out the intent of the foregoing agreement to be bound. Transferee Holder's Signature: ______________________ Transferee Holder's Name (printed): ______________________ Transferee Holder's Address: ______________________ ______________________ THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO A VOTING AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST IN THIS WARRANT OR SUCH SHARES THE PERSON ACCEPTING ANY SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT. STOCK PURCHASE WARRANT To Purchase Shares of Series C Preferred Stock of Nanosys, Inc. THIS CERTIFIES that, for value received, In-Q-Tel Employee Fund (the "Investor"), is entitled, upon the terms and subject to the conditions hereinafter set forth, at any time on or after the Payment Date, as defined below, and on or prior to September 4, 2008 (the "Termination Date"), but not thereafter, to subscribe for and purchase, from Nanosys, Inc., a Delaware corporation (the "Company"), up to a total of 180,771 shares of Series C Preferred Stock (the "Shares"), with the exact number of shares for which this Warrant is exercisable determined as set forth below, at an exercise price (the "Exercise Price") of $0.001 per Share. 1. Title to Warrant. Prior to the expiration hereof and subject to compliance with applicable laws, this Warrant and all rights hereunder are transferable, in whole or in part, in accordance with the terms of this Warrant upon delivery of this Warrant by the holder hereof together with the Assignment Form annexed hereto as Attachment C properly endorsed to the office or agency of the Company, referred to in Sections 2 and 3 hereof. 2. Exercise of Warrant. (a) This Warrant shall be exercisable after the date of actual receipt by the Company of an aggregate of [*** Redacted] of payments from In-Q-Tel, Inc. (the "Payment Date") pursuant to the Development Agreement, dated as of even date hereof by and among the Company and the In-Q-Tel, Inc. (the "DA"), for the number of Shares determined as follows (the number of Shares as to which this warrant is exercisable pursuant to the terms of this Section 2 hereinafter referred to as "Vested Shares"): (i) This Warrant shall be exercisable after the Payment Date for the number of Shares equal to (i) 180,771 multiplied by (ii) a fraction, (A) the numerator of which is the *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. amount, up to [*** Redacted], actually paid to the Company (or its assigns) from time to time pursuant to the DA minus (x) the total dollar amount of all equipment or other assets (based on the acquisition price to the Company) as to which title is transferred by the Company to In-Q-Tel, Inc. pursuant to Section 13 of the DA and (y) all cash or cash equivalents transferred by the Company to In-Q-Tel, Inc. pursuant to a request by In-Q-Tel, Inc. or pursuant to any other action through which In-Q-Tel, Inc. seeks refund or payment of such funds, and (B) the denominator of which is [*** Redacted]. (b) The right to purchase Vested Shares represented by this Warrant is exercisable by the registered holder hereof, as to all of the Vested Shares as of the date of such exercise, at any time before the close of business on the Termination Date by the delivery of this Warrant and the Notice of Exercise form annexed hereto as Attachment B duly executed to the office of the Company in Palo Alto, California (or such other office or agency of the Company as it may designate by notice in writing to the registered holder hereof at the address of such holder appearing on the books of the Company), and upon payment of the Exercise Price for the Vested Shares thereby purchased (by cash or by check or bank draft payable to the order of the Company or by cancellation of indebtedness of the Company to the holder hereof, if any, at the time of exercise in an amount equal to the purchase price of the Shares thereby purchased); whereupon the holder of this Warrant shall be entitled to receive a certificate for the number of shares of Preferred Stock so purchased. The Company agrees that if at the time of the surrender of this Warrant and purchase the holder hereof shall be entitled to exercise this Warrant, the shares so purchased shall be and be deemed to be issued to such holder as the record owner of such shares at the close of business on the date on which this Warrant shall have been exercised as aforesaid. If this Warrant is exercised, or converted pursuant to Section 3 below, for a number of Vested Shares that are less than the total number of Shares, promptly after surrender of the Warrant upon such exercise or conversion, the Company will execute and deliver a new warrant evidencing the right of the Holder to the balance of the Shares purchasable hereunder upon the same terms and conditions set forth herein, provided that the issuance of such new warrant shall not accelerate, or be deemed or construed to accelerate, the vesting of any Shares as set forth in Section 2(a) above, and the terms of such new warrant shall be modified to the extent necessary to prevent the acceleration of vesting of any Shares under the terms of this Warrant. 3. Right to Convert Warrant. The registered holder hereof shall have the right to convert this Warrant, by the delivery of this Warrant and the Notice of Conversion form annexed hereto as Attachment B duly executed to the office of the Company in Palo Alto, California (or such other office or agency of the Company as it may designate by notice in writing to the registered holder hereof at the address of such holder appearing on the books of the Company), as to all Shares that are Vested Shares at the time of such conversion, at any time before the close of business on the Termination Date, into the shares of Series C Preferred Stock as provided for in this Section 3. Upon exercise of this conversion right, the holder hereof shall be entitled to receive that number of Vested Shares equal to the quotient obtained by dividing [(A - B)(X)] by (A), where: (A) = the Fair Market Value (as defined below) of one (1) Share on the date of conversion of this Warrant. (B) = the Exercise Price for one (1) Share under this Warrant. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -2- (X) = the number of Vested Shares issuable upon exercise of this Warrant. "Fair Market Value" of a Share shall mean: (a) if the conversion right is being exercised upon the occurrence of the Company's initial public offering, the initial public offering price per share (before deducting underwriting commissions and discounts and offering expenses) multiplied by the number of shares of Common Stock issuable upon conversion of one (1) Share issuable upon exercise of this Warrant; and (b) in all other cases, the fair value as determined in good faith by the Company's Board of Directors. Upon conversion of this Warrant, the registered holder hereof shall be entitled to receive a certificate for the number of Vested Shares determined as aforesaid. 4. Issuance of Stock; No Fractional Shares or Scrip. Certificates for the stock purchased hereunder or issuable upon conversion hereof shall be delivered to the holder hereof promptly after the date on which this Warrant shall have been exercised or converted as aforesaid. The Company covenants that all Shares which may be issued upon the exercise of rights represented by this Warrant will, upon exercise of the rights represented by this Warrant, be fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). The Company agrees that, if at the time of the surrender of this Warrant and exercise of the rights represented hereby, the holder hereof shall be entitled to exercise such rights, the Shares so issued shall be and be deemed to be issued to such holder as the record owner of such Shares as of the close of business on the date on which this Warrant shall have been exercised or converted as aforesaid. No fractional shares or scrip representing fractional shares shall be issued upon the exercise or conversion of this Warrant, and any fractional share amounts shall be rounded down to the nearest whole share issuable upon exercise of this Warrant. 5. Charges, Taxes and Expenses. Issuance of certificates for the Shares upon the exercise or conversion of this Warrant shall be made without charge to the holder hereof for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the holder of this Warrant or in such name or names as may be directed by the holder of this Warrant; provided, however, that in the event certificates for Shares are to be issued in a name other than the name of the holder of this Warrant, this Warrant when surrendered for exercise or conversion shall be accompanied by the Assignment Form attached hereto duly executed by the holder hereof; and provided further, that upon any transfer involved in the issuance or delivery of any certificates for the Shares, the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. 6. No Rights as Shareholders. This Warrant does not entitle the holder hereof to any voting rights or other rights as a shareholder of the Company prior to the exercise or conversion hereof. -3- 7. Exchange and Registry of Warrant. This Warrant is exchangeable, upon the surrender hereof by the registered holder at the above-mentioned office or agency of the Company, for a new Warrant of like tenor and dated as of such exchange. The Company shall maintain at the above-mentioned office or agency a registry showing the name and address of the registered holder of this Warrant. This Warrant may be surrendered for exchange, transfer or exercise, in accordance with its terms, at such office or agency of the Company, and the Company shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry. 8. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor and dated as of such cancellation, in lieu of this Warrant. 9. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a legal holiday. 10. Acquisition, Initial Public Offering and Dilution. (a) Merger, Sale of Assets, etc. (i) "Acquisition." For the purpose of this Warrant, "Acquisition" means any sale, license, or other disposition of all or substantially all of the assets of the Company (including a sale of all or substantially all of the intellectual property of the Company), or any reorganization, consolidation, acquisition or merger of the Company where the holders of the Company's securities before the transaction own less than 50% of the outstanding voting securities of the surviving entity after the transaction. (ii) If at any time after the date hereof the Company proposes to consummate an Acquisition in which the shareholders of the Company shall receive cash or publicly traded securities in exchange for their shares of stock in the Company pursuant to such transaction, then the Company shall give the holder of this Warrant written notice (the "Merger Notice") of such impending transaction not later than fifteen (15) days prior to the shareholders' meeting called to approve such transaction, or fifteen (15) days prior to the closing of such transaction, whichever is earlier, and shall also notify the holder of this Warrant of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction, and the Company shall thereafter give the holder of this Warrant prompt notice of any material changes. If this Warrant has not been exercised or converted by the closing of such transaction then this Warrant shall terminate and shall no longer be exercisable pursuant to the terms of Sections 2 or 3 hereof. -4- (iii) If this Warrant is not terminated in an Acquisition pursuant to the provisions of Section 10(a)(ii), (a "Non-Terminating Acquisition") then, as a condition of such Non-Terminating Acquisition, lawful and adequate provisions shall be made by the Company whereby the Investor shall thereafter have the right to purchase and receive (in lieu of the shares of the Preferred Stock or Common Stock, as applicable, of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented by this Warrant) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Preferred Stock or Common Stock, as applicable, equal to the number of shares of such stock immediately theretofore purchasable and receivable upon the exercise of the rights represented by this Warrant. In the event of any Non-Terminating Acquisition, appropriate provision shall be made by the Company with respect to the rights and interests of the Investor that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. (b) Initial Public Offering. If at any time after the date hereof the Company proposes to consummate the initial public offering ("IPO") of its Common Stock in a bona fide firm commitment underwriting pursuant to a registration statement on Form S-1 (or successor form) under the Securities Act of 1933, as amended, (the "Securities Act"), then the Company shall give the Investor written notice of such impending transaction not later than thirty (30) days prior to the closing of the IPO. Such notice shall describe the material terms and conditions of the IPO, and the Company shall thereafter give the holder of this Warrant prompt notice of any material changes. If this Warrant has not been exercised or converted by the closing of the IPO it shall terminate and shall no longer be exercisable or convertible pursuant to the terms of Section 2 or 3 hereof. (c) Reclassification, etc. If the Company at any time shall, by subdivision, combination or reclassification of securities or otherwise, change any of the securities to which purchase rights under this Warrant exist into the same or a different number of securities of any class or classes, this Warrant shall thereafter be to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately prior to such subdivision, combination, reclassification or other change. If the Shares issuable upon the exercise of this Warrant are subdivided or combined into a greater or smaller number of the Shares, the purchase price under this Warrant shall be proportionately reduced in case of subdivision of shares or proportionately increased in the case of combination of shares, in both cases by the ratio which the total number of Shares to be outstanding immediately after such event bears to the total number of Shares outstanding immediately prior to such event. (d) Cash Distributions. No adjustment on account of dividends on the Shares issuable upon the exercise of this Warrant will be made to the purchase price under this Warrant. (e) Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Preferred Stock and Common Stock a sufficient number of shares to provide for the issuance of the Shares upon the exercise or conversion of this Warrant. The Company further covenants that its issuance of this Warrant shall constitute -5- full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Shares upon the exercise of the purchase rights under this Warrant. (f) Conversion Price Adjustments. The rate at which the Shares are convertible into shares of Common Stock of the Company is subject to adjustment as set forth in the Company's Certificate of Incorporation, as amended from time to time. Any adjustment to the conversion rate of the Shares issuable upon the exercise of this Warrant effected prior to any exercise or conversion of this Warrant shall apply to any Shares thereafter issued pursuant to the terms hereof. (g) Option to Accelerate Vesting of Shares. Prior to the termination of this Warrant pursuant to the provisions of Section 10(a) or 10(b) hereunder, In-Q-Tel, Inc. shall have the right to pay to the Company any amounts that remain unpaid to the Company under the DA and thereby accelerate the vesting of the Shares in accordance with the formula set forth in Section 2(a) above, provided that, no acceleration of vesting of the Shares under this warrant shall be effective unless the payments by In-Q-Tel, Inc. to the Company are irrevocable under the terms of the DA and not subject to refund to In-Q-Tel, Inc. 11. Restrictions on Transferability of Securities. (a) Restrictions on Transferability. This Warrant, the Shares issuable upon exercise of this Warrant, and the shares of Common Stock issuable upon conversion of the Shares (collectively the "Securities") shall not be sold, assigned, transferred or pledged except upon the conditions specified in this Section 11, which conditions are intended to ensure compliance with the provisions of the Securities Act. Each holder of any of the Securities will cause any proposed purchaser, assignee, transferee, or pledgee of the Securities held by such holder to agree in writing to take and hold such Securities subject to the provisions and upon the conditions specified in this Warrant as if such purchaser, assignee, transferee or pledgee were the Investor hereunder. (b) Restrictive Legend. Each certificate representing the Securities and any other securities issued in respect of the Securities upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall (unless otherwise permitted by the provisions of Section 11(c) below) be stamped or otherwise imprinted with legends in the following form (in addition to any legend required under applicable state securities laws): (i) 33 Act Legend. THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. -6- (ii) Lock-Up Legend. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR OTHERWISE TRANSFERRED FOR A PERIOD NOT TO EXCEED 180 DAYS FOLLOWING THE EFFECTIVE DATE OF A REGISTRATION STATEMENT FILED BY THE COMPANY FOR ITS INITIAL PUBLIC OFFERING. The Investor and each holder of Securities and each subsequent transferee, assignee, transferee or pledgee (hereinafter collectively, including the Investor, referred to as a "Holder") consents to the Company making a notation on its records and giving instructions to any transfer agent of the Securities in order to implement the restrictions on transfer established in Sections 11 and 15. (c) Notice of Proposed Transfers. Each Holder of a certificate representing the Securities, by acceptance thereof, agrees to comply in all respects with the provisions of Sections 11 and 15. Prior to any proposed sale, assignment, transfer or pledge of any Securities (other than (i) a transfer not involving a change in beneficial ownership, (ii) in transactions involving the distribution without consideration of Securities by a Holder to any of its partners, or retired partners, or to the estate of any of its partners or retired partners, (iii) a transfer to an affiliated fund, partnership or company, which is not a competitor of the Company, subject to compliance with applicable securities laws or (iv) transfers in compliance with Rule 144, so long as the Company is furnished with satisfactory evidence of compliance with such Rule), unless there is in effect a registration statement under the Securities Act covering the proposed transfer, the Holder thereof shall give prior written notice to the Company of such Holder's intention to effect such transfer, sale, assignment or pledge. Each such notice shall describe the manner and circumstances of the proposed transfer, sale, assignment or pledge in sufficient detail, and shall be accompanied, at such Holder's expense, by either (i) an opinion of counsel (who shall, and whose opinion shall be, addressed to the Company and reasonably satisfactory to the Company) to the effect that the proposed transfer of the Securities may be effected without registration under the Securities Act or (ii) a "no action" letter from the Securities and Exchange Commission (the "Commission") to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the Holder of such Securities shall be entitled to transfer such Securities in accordance with the terms of the notice delivered by such Holder to the Company. Each certificate evidencing the Securities transferred as above provided shall bear (except if such transfer is made pursuant to Rule 144, in which case the legend set forth in Section 11(b)(i) shall not be required) the restrictive legends set forth in Section 11(b) above, except that each such certificate shall not bear the legend set forth in Section 11(b)(i) if in the opinion of counsel for such Holder and in the opinion of counsel for the Company such legend is not required in order to establish compliance with any provision of the Securities Act. (d) Removal of Restrictions on Transfer of Securities. The legend referred to in Section 11(b)(i) hereof stamped on a certificate evidencing the Securities and the stock transfer instructions and record notations with respect to the Securities shall be removed, and the Company shall issue a certificate without such legend to the Holder of the Securities, if the Securities are registered under the Securities Act, or if such Holder provides the Company with an opinion of counsel (which may be counsel for the Company) reasonably satisfactory to the Company to the -7- effect that a public sale or transfer of such security may be made without registration under the Securities Act or such Holder provides the Company with reasonable assurances, which may, at the option of the Company, include an opinion of counsel (which may be counsel for the Company) reasonably satisfactory to the Company, that such security can be sold pursuant to paragraph (k) of Rule 144 (or any successor provision) under the Securities Act. After the expiration of the Lock-Up Period (as defined in Section 15 below), and upon request of the Holder, the legend referred to in Section 11(b)(ii) hereof stamped on a certificate evidencing the Securities and the stock transfer instructions and record notations with respect to the Securities shall be removed, and the Company shall issue a certificate without such legend to the Holder of the Securities. 12. Investment Representations of the Investor. With respect to the acquisition of any of the Securities, the Investor hereby represents and warrants to the Company as follows: (a) Experience. The Investor has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. (b) Investment. The Investor is acquiring the Securities for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. The Investor understands that the Securities have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investor's representations as expressed herein. (c) Rule 144. The Investor acknowledges that the Securities must be held indefinitely unless subsequently registered under the Securities Act, or unless an exemption from such registration is available. The Investor is aware of the provisions of Rules 144 and 144A promulgated under the Securities Act that permit limited resale of securities purchased in a private placement subject to satisfaction of certain conditions. (d) No Public Market. The Investor understands that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Securities. (e) Access to Data. The Investor has had an opportunity to discuss the Company's business, management and financial affairs with the Company's management and has also had an opportunity to ask questions of the Company's officers, which questions were answered to the Investor's satisfaction. 13. Representations of the Company. (a) Series C Stock Purchase Agreement Representations. The Company hereby represents that the representations and warranties of the Company set forth in Section 3 of the Series C Preferred Stock Purchase Agreement, dated as of April 10, 2003 (the "SPA"), were true and correct in all material respects as of April 10, 2003. -8- (b) Representations and Warranties as of the September 4, 2003. The Company represents and warrants as of September 4, 2003 as follows: (i) Corporate Power. The Company has all requisite corporate power and authority to: (A) execute and deliver this Warrant; (B) to issue the Shares hereunder; (C) to issue the shares of the Common Stock of the Company issuable upon conversion of the Shares; and (D) to carry out and perform its obligations under the terms of this Warrant. (ii) Capitalization. As of September 4, 2003, the entire authorized capital stock of the Company consists of: (A) 53,500,000 shares of Common Stock, of which 6,194,500 shares are issued and outstanding and no shares are held as treasury shares, and (B) 40,250,000 shares of Preferred Stock, 5,500,000 of which are designated Series A Preferred Stock of which 5,499,998 are issued and outstanding, 13,000,000 of which are designated Series B Preferred of which 12,500,003 are issued and outstanding, and 21,750,000 of which are designated Series C Preferred Stock 19,948,022 of which are issued and outstanding. As of September 4, 2003, and other than options to purchase Common Stock outstanding under the Option Plan, as defined below, and warrants for Series C Preferred Stock issued to the Investor or its affiliates, the Company has outstanding (A) warrants to purchase 116,250 shares of Series B Preferred Stock, and (B) options to purchase 17,000 shares of Common Stock. (1) The outstanding shares of Common Stock and Preferred Stock have been duly authorized and validly issued in compliance with applicable laws, and are fully paid and nonassessable. (2) The Company has reserved a) the Shares of Series C Preferred Stock for issuance upon the exercise or conversion of this Warrant; b) the shares of Common Stock (as may be adjusted in accordance with the provisions of the Company's Third Amended and Restated Certificate of Incorporation) for issuance upon the conversion of the Shares; and c) 6,037,000 shares of Common Stock authorized for issuance to employees, consultants and directors pursuant to its 2001 Stock Plan (the "Option Plan"). (iii) Litigation(c) . There are no actions, suits, proceedings or investigations pending against (A) the Company, (B) its directors, officers, and key employees in their official capacity as directors, officers and employees of the Company, or (C) its properties (nor has the Company received notice of any threat thereof) before any court or governmental agency, nor, to the Company's knowledge, does there exist any basis therefor. To its knowledge, the Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. (iv) Intellectual Property. -9- (1) To the Company's knowledge, other than software and technology licenses that are generally commercially available, the Company owns or possesses adequate licenses or other rights to use all patents, patent applications, trademarks, trademark applications, service marks, service mark applications, trade names, copyrights, manufacturing processes, formulae, trade secrets, customer lists and know-how (collectively, "Intellectual Property") necessary to the business of the Company as presently conducted, the lack of which could reasonably be expected to have a material adverse effect on the Company's financial condition, results of operations, assets, liabilities, business or prospects, and no claim is pending or, to the Company's knowledge, threatened to the effect that the operations of the Company infringe upon or conflict with the asserted rights of any other person under any Intellectual Property, and, to the Company's knowledge, there is no reasonable basis for any such claim (whether or not pending or threatened). No claim is pending or, to the Company's knowledge, threatened to the effect that any such Intellectual Property owned or licensed by the Company, or which the Company otherwise has the right to use, is invalid or unenforceable by the Company, and, to the Company's knowledge, there is no reasonable basis for any such claim (whether or not pending or threatened). To the Company's knowledge, all Intellectual Property developed by and belonging to the Company that has not been patented has been kept confidential. The Company has not granted or assigned to any other person or entity any right to provide the services or proposed services of the Company. There are no agreements, understandings, instruments, contracts, judgments, orders or decrees to which the Company is a party or by which it is bound which involve indemnification by the Company with respect to infringements of Intellectual Property. (2) To the knowledge of the Company, no third party may assert any valid claim against the Company or any Designated Person (as defined below) with respect to (A) the continued employment by or association with the Company of any of the present officers or employees of, or consultants to, the Company (collectively, the "Designated Persons"), or (B) the use or disclosure by the Company or any Designated Person of any information which the Company or any Designated Person would be prohibited from using or disclosing under any prior agreements or arrangements or under any laws, including, without limitation, laws applicable to unfair competition, trade secrets or proprietary information. The Company does not believe it is or will be necessary to use any inventions of any Designated Person made prior to his or her employment or engagement by the Company. (v) Financial Statements. The Company has previously delivered to In-Q-Tel, Inc. audited financial statements (including balance sheet, income statement and statement of cash flows) as of December 31, 2002 for the fiscal year then ended, and its unaudited financial statements (including balance sheet, income statement and statement of cash flows) as of June 30, 2003 and for the six-month period then ended (collectively, the "Financial Statements"). The Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods indicated, except that the unaudited Financial Statements may not contain all footnotes required by generally accepted accounting principles. The Financial Statements fairly present the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein, subject to normal year-end audit adjustments. -10- (vi) Material Contracts. All of the contracts and obligations set forth in Section 3.9 of the Schedule of Exceptions to the SPA (the "Material Contracts") are valid, binding and in full force and effect subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies and to general principles of equity. The Company is not in default or arrears under and, to the knowledge of the Company, no other party to any Material Contract is in default or arrears under, any term of any Material Contract 14. Notices. If at any time prior to the exercise or conversion of this Warrant in full the Company takes a record of the holders of the Company's stock for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, the Company will give to the holder of this Warrant, at least thirty (30) days prior to the date specified therein, written notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right. 15. Lock-Up Agreement. Each Holder hereby agrees that, upon request of the Company or the managing underwriter of a public offering of any securities of the Company, such Holder shall not sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of all or any portion of the Securities without the prior written consent of the Company or the managing underwriter, as the case may be, for such period of time (not to exceed one hundred eighty (180) days from the date upon which the registration statement relating to such public offering is declared or ordered effective by the Securities and Exchange Commission) as may be requested by the Company or the underwriters, as the case may be (the "Lock-Up Period"). 16. Miscellaneous. (a) Issue Date. The provisions of this Warrant shall be construed and shall be given effect in all respect as if it had been issued and delivered by the Company on the date hereof. This Warrant shall be binding upon any successors or assigns of the Company. This Warrant shall be governed in all respects by the laws of the State of California. (b) Waivers and Amendments. With the written consent of the Company and the Investor, the obligations of the Company and the right of the Investor may be waived (either generally or in a particular instance, either retroactively or prospectively and either for a specified period of time or indefinitely), and with the same consent the Company and the Investor may enter into a supplementary agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Warrant. (c) Notices. All notices and other communications required or permitted to be given under this Warrant shall be in writing and shall be deemed effectively given upon personal delivery, delivery by nationally recognized courier or upon deposit with the United States Post Office (by first class mail, postage prepaid) addressed as follows: (i) if to the Company, at the address of its principal office in the State of California, or at such other address as the Company shall have furnished Investor in writing, and (ii) if to the Investor, to 1000 Wilson Blvd., Suite 2900, Arlington, -11- VA 22209, Attn: General Counsel, or such other address as the Investor shall have furnished the Company in writing. (d) Survival. The provisions of Sections 11 and 15 hereof shall survive the exercise or conversion of this Warrant and shall remain in effect until such time as the Investor or any Holder no longer holds Securities. (e) Binding Effect on Successors. This Warrant shall be binding upon any corporation succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets. All of the covenants and agreements of the Company shall inure to the benefit of successors and assigns of the holder hereof. -12- IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officers thereunto duly authorized. Dated: September 4, 2003 NANOSYS, INC. Name: /s/ Lawrence A. Bock -------------------- By: Lawrence A. Bock -------------------- Title: President and Chief Executive Officer ------------------------------------- Agreed and Accepted: In-Q-Tel Employee Fund Name: [*** Redacted] -------------- By: [*** Redacted] -------------- Title: President and Chief Operating Officer ------------------------------------- *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. ATTACHMENT A NOTICE OF EXERCISE To: Nanosys, Inc. (1) The undersigned hereby elects to purchase ________________ shares of the Vested Shares of Series C Preferred Stock of Nanosys, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price in full for such Vested Shares, together with all applicable transfer taxes, if any. (2) Please issue a certificate of certificates representing said shares of Series C Preferred Stock in the name of the undersigned or in such other name as is specified below: (Name) (Address) (3) The undersigned represents that the aforesaid shares of Series C Preferred Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. ___________________________________________ (Date) (Signature) ATTACHMENT B NOTICE OF CONVERSION To: Nanosys, Inc. (1) The undersigned hereby elects to convert _______________ shares of the Vested Shares of the attached Warrant into such number of shares of Series C Preferred Stock of Nanosys, Inc. as is determined pursuant to Sections 2 and 3 of such Warrant, which conversion shall be effected pursuant to the terms of the attached Warrant. (2) Please issue a certificate or certificates representing said shares of Nanosys, Inc. Series C Preferred Stock in the name of the undersigned or in such other name as is specified below: (Name) (Address) (3) The undersigned represents that the aforesaid shares of Nanosys, Inc. Series C Preferred Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares. ____________________________________________ (Date) (Signature) ATTACHMENT C ASSIGNMENT FORM (To assign the foregoing warrant, execute this form and supply the required information. Do not use this form to purchase shares.) FOR VALUE RECEIVED, ____% of the foregoing Warrant and all rights evidenced thereby are hereby assigned to ________________________________________________________________________________ (Please Print) whose address is _______________________________________________________________ (Please Print) Dated: ____________, 20__ Transferring Holder's Signature: __________________ Transferring Holder's Address: __________________ __________________ Signed in the presence of: ______________________ NOTE: The signature to this Assignment Form set forth above must correspond with the name of the Investor as it appears on the face of the Warrant, without alteration or enlargement or any change whatever. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant. In connection with the transfer of the Warrant (or a portion thereof) to the undersigned, the undersigned hereby agrees to be bound by and comply with all of the provisions and obligations applicable to the Investor contained in the Warrant and to execute any further documentation necessary to carry out the intent of the foregoing agreement to be bound. Transferee Holder's Signature: ______________________ Transferee Holder's Name (printed): ______________________ Transferee Holder's Address: ______________________ ______________________ EX-10.14 17 f97636a4exv10w14.txt EXHIBIT 10.14 EXHIBIT 10.14 COOPERATIVE DEVELOPMENT AGREEMENT This Cooperative Development Agreement (the "Agreement") is entered into as of December 15, 2003 (the "Effective Date") by and between Nanosys Inc. ("Nanosys"), a Delaware corporation with a place of business at 2625 Hanover Street, Palo Alto, California 94304 and Intel Corporation ("Intel"), a Delaware corporation with a place of business at 2200 Mission College Boulevard, Santa Clara, California 95052. RECITALS Whereas: A. Intel has expertise with respect to memory devices and the development, design, and manufacture thereof, and Nanosys has expertise with respect to the design and synthesis of nanomaterials and the development of nanotechnology-enabled systems. B. Intel and Nanosys desire to enter into an agreement to cooperate to investigate the feasibility of using [*** Redacted] in memory devices. AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. DEFINITIONS. In this Agreement, the following words and expressions shall have the following meanings: 1.1 "Background IP" of a party means any and all intellectual property rights that such party either (i) owned, controlled, or had rights with respect to prior to the Effective Date; or (ii) develops, or acquires ownership, control, or rights with respect to, during the term of this Agreement but which is not Collaboration IP. 1.2 "CNDA" means the parties' October 11, 2002 Corporate Non-Disclosure Agreement #5085138. 1.3 "Collaboration" means the research and development work set forth in Exhibit A hereto. 1.4 "Collaboration Commencement Date" means the date of commencement of the Collaboration under Section 2.1 below. 1.5 "Collaboration IP" shall mean (i) all Intellectual Property rights in Collaboration Technology, which Intellectual Property rights were created by the parties' Listed Representatives (solely or jointly) in the course of working on the Collaboration and (ii) all Intellectual Property of either party conceived or created by or for either party ("Party") prior to the termination or *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. expiration of the Collaboration based on the other party's Confidential Information disclosed to such Party in connection with the Collaboration. 1.6 "Collaboration Right" means any patent, patent right (or similar right under foreign law), utility model, copyright or mask work right issued or registered as a result of a Filing. 1.7 "Collaboration Technology" means (i) any and all Technology that either party's Listed Representatives conceive (solely or jointly) in the course of working on the Collaboration, and (ii) any and all Technology conceived (solely or jointly) prior to the termination or expiration of the Collaboration by or for either party ("Party") based on Confidential Information of the other party disclosed to such Party in connection with the Collaboration, but, in each case, excluding Technology resulting from University/Government Activities. 1.8 "Confidential Information" is defined in the CNDA, as set forth in Section 6 below. 1.9 "Conventional Processes" means standard semiconductor manufacturing processes (where "standard" semiconductor manufacturing processes may include Intel proprietary semiconductor manufacturing processes) and reasonable incremental improvements (e.g. standard processes) thereof, including those resulting in one or more features of [*** Redacted] of [*** Redacted], and the resultant devices fabricated using such standard semiconductor manufacturing processes (but excluding such resultant devices incorporating Deposited Nanomaterials). 1.10 "Deposited Nanomaterials" means shape or size controlled [*** Redacted], such as [*** Redacted], and [*** Redacted], having at least one cross sectional dimension of less than 500 nanometers and such that the size related properties of the nanomaterials are advantageous to their function, that are subsequently [*** Redacted] as such nanomaterials [*** Redacted] 1.11 "Exclusivity Date" means the earlier of (i) the Collaboration Commencement Date or (ii) March 31, 2004. 1.12 "Exclusivity Period" means the period from the Effective Date until the earlier of (i) March 31, 2006, (ii) the Exclusivity Expiration (as defined in Section 3.3 below), or (iii) any termination of this Agreement. 1.13 "Field of Interest" means memory devices based on [*** Redacted] used primarily as [*** Redacted] (e.g. this would not include [*** Redacted] devices, [*** Redacted], or [*** Redacted]). 1.14 "Filing" means any application for or registration of a patent, patent right (or similar right under foreign law), utility model, copyright or mask work right with respect to Collaboration Technology. 1.15 "Intel's Exclusive Field" means (i) compositions, devices, articles and methods involving or involved in memory and logic devices, but only if such compositions, devices, *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -2- articles or methods are outside of Nanosys' Exclusive Field, and in each case excluding Conventional Processes, and (ii) all Conventional Processes other than Conventional Processes used in conjunction with Deposited Nanomaterials. For the avoidance of doubt, (i) Conventional Processes used in conjunction with Deposited Nanomaterials are not in Intel's Exclusive Field nor in Nanosys' Exclusive Field and (ii) devices incorporating Deposited Nanomaterials are in Nanosys' Exclusive Field. 1.16 "Intellectual Property" shall mean patents (and similar rights under foreign law, and applications therefor), trade secrets, copyrights and mask works. 1.17 "Listed Representatives" of a party means, at any time, that party's employees, agents, and contractors then working on the Collaboration on behalf of that party, as such individuals are identified by that party by written notice to the other party. A party's notice of Listed Representatives shall be in effect until a subsequent such notice by that party modifying the list. Each party shall at all times in good faith maintain an accurate list of Listed Representatives. At commencement, Intel's Listed Representatives shall include [*** Redacted], and Nanosys' Listed Representatives shall include [*** Redacted]. 1.18 "Nanosys' Exclusive Field" means compositions, devices, articles and methods involving or involved in Deposited Nanomaterials, but excluding Conventional Processes. 1.19 "Nanosys Facility" means and includes Nanosys' operations at 2625 Hanover Street in Palo Alto, CA, any ancillary engineering facilities owned or controlled by Nanosys, and any successor facilities owned or controlled by Nanosys during the term of this Agreement.. 1.20 "Nanosys IP" shall mean Nanosys' Intellectual Property Rights including Background IP and Collaboration IP. 1.21 "Technology" means any and all developments, ideas, designs, inventions, information, know-how, and technology. 1.22 "University/Government Activities" means any and all research, development, and other activities performed either (i) with any university (or other educational institution) funding or any government or government agency (U.S. or otherwise) funding, (ii) in collaboration with any university (or other educational institution) or with any government or government agency (U.S. or otherwise), or (iii) with a primary purpose of obtaining government funding. 2. COLLABORATION WORK. 2.1 Each party shall use its commercially reasonable efforts to perform its Collaboration obligations as set forth in Exhibit A. It is understood and agreed that the Collaboration is in the nature of research, that successful completion of the research is not assured, and that, so long as a party uses its commercially reasonable efforts as set forth in the preceding sentence, that party will not be in default for any failure to achieve any particular result or to complete any particular deliverable. The parties shall commence the Collaboration December 15, 2003, provided that on one or more written notices to Nanosys received by Nanosys at least fifteen *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -3- [*** Redacted] prior to the date when the Collaboration is then scheduled to commence (provided that if this Agreement is signed by Intel after November 30, 2003, Intel shall be entitled to provide the initial such notice on the date of such signature, but only if such signature date is on or before December 10, 2003), Intel shall be entitled to delay commencement of the Collaboration to any date on or before March 31, 2004. Delays resulting in commencement of the Collaboration after December 31, 2003 shall be subject to the payments in Section 3.2 below. It is understood and agreed that commencement of the Collaboration may not be delayed past March 31, 2004. 2.2 Nanosys agrees to allocate to the Collaboration at least [*** Redacted] full-time equivalent individuals during the first quarter of the Collaboration, at least [*** Redacted] full-time equivalent individuals during the second quarter of the Collaboration, at least [*** Redacted] full-time equivalent individuals during the third quarter of the Collaboration, and at least "X" full-time equivalent individuals (FTEs) during the fourth quarter of the Collaboration, where "X" is a number between [*** Redacted] and [*** Redacted], inclusive, chosen by Intel by written notice to Nanosys at least [*** Redacted] days prior to the beginning of such fourth quarter. If Intel fails to provide such notice, "X" will be deemed to equal [*** Redacted]. 2.3 It is the parties' mutual intent that most of the work and deliverable creation under this Agreement to investigate [*** Redacted] memory feasibility shall occur at the Nanosys Facility. Nanosys shall host Intel's Listed Representatives on a mutually agreed upon basis, such agreement not to be unreasonably withheld, on site at the Nanosys Facility to work on this project and get deeply involved in complementary collaborative activities (e.g., device integration and characterization, but not the synthesis of Deposited Nanomaterials). Information on the design and modeling of Deposited Nanomaterials, as well as [*** Redacted], [*** Redacted], and [*** Redacted] related to Deposited Nanomaterials, shall be provided to Intel's Listed Representatives, but in each case only as reasonably required for device integration and characterization for the purpose of the Collaboration, including but not limited to, making an informed decision about the complexity of integrating Deposited Nanomaterials with Conventional Processes. Nanosys' Listed Representatives may also be invited to work at Intel's facilities, for circumstances including but not limited to, using a metrology tool that may not be available at the Nanosys Facility. The parties shall adhere to the following guidelines in connection with Listed Representatives working at the site of the other party: (a) all employees of one party visiting the other party's facility shall comply with the rules and regulations applicable at that facility as communicated to such employees, and each party retains the right to reasonably refuse admittance for violation of these rules; (b) the hosting party shall maintain reasonable firewall procedures so that employees of a visiting party are not exposed to the confidential information of a third party; (c) each party shall maintain reasonable firewall procedures so that third parties at a party's site are not exposed to the confidential information of the other party or non-public information about the status of this Collaboration; and (d) in the case of Nanosys only, cubicle space, secure Internet access, and badge access shall be made available for use by Intel's Listed Representatives when such a person or persons are working on site at the Nanosys Facility. 2.4 Except as set forth in Section 5, any and all materials supplied by one party to the other party shall be used by the recipient only to perform its Collaboration obligations. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -4- 2.5 Except as set forth in Section 3 below, each party shall bear its own costs and expenses in carrying out the Collaboration. 2.6 Except for University/Government Activities, each party agrees to work exclusively with the other party in the Field of Interest during the Exclusivity Period. 2.7 The following persons ("Collaboration Managers") shall be appointed to direct the conduct of the parties with respect to the Collaboration: (a) For Intel: Eric Hannah Sector Director, Intel Research Intel Corporation 2200 Mission College Blvd. Mail Stop RN6-661 Santa Clara, CA 95052 Phone: 408-765-4441 Fax: 408-765-6271 E-mail: eric.hannah@intel.com (b) For Nanosys: Calvin Y.H. Chow Chief Executive Officer Nanosys Inc. 2625 Hanover Street Palo Alto, CA 94304 Phone: (650) 331-2102 Fax: (650) 331-2101 E-mail: cchow@nanosysinc.com The Collaboration Managers shall have the authority to approve in writing changes to Exhibit A, including, as applicable, specifications, scope of work, and milestones. The Collaboration Managers shall have no other authority to amend this Agreement. Each party may change its Collaboration Manager on written notice to the other party, provided that the replacement Collaboration Manager is at a similar level of authority at the party making the replacement, or as otherwise agreed by the parties. 2.8 If either party desires to propose changes to the Collaboration, it shall notify the other party in writing of such proposal and the reasons for such proposal. The other party will give each such proposal its prompt attention. If Intel and Nanosys agree to any such change, the change shall be evidenced by a written confirmation signed by the Collaboration Managers of both parties. Such a written confirmation shall amend the terms of Exhibit A. 2.9 If the Collaboration is completed successfully (i.e., neither party has terminated this Agreement under Section 10, and the parties agree that the subject technology is promising and warrants pursuing further), then it is the parties' intent that, at Intel's request, the parties will negotiate, in good faith, during the Exclusivity Period to enter into a follow-on development agreement (the "Development Agreement") to further develop and commercialize the technology -5- which is the subject of this Agreement If Intel requests such a negotiation, then, for the duration of the Exclusivity Period, Nanosys agrees that Nanosys will not enter into any discussions regarding the subject of the Collaboration with any third party. The parties further intend that any such Development Agreement would reflect that, if the development and commercialization of this technology are successful, and Intel has a good-faith intent to use the Collaboration Materials in anticipation of a high-volume manufacturing ramp, then: (a) It is the parties' mutual intent that the parties would negotiate in good faith a supply agreement that reasonably assures the supply of Deposited Nanomaterials and any related Nanosys enabling technology or rights to Intel (for use in the Field of Interest, the "Collaboration Materials"). Upon Intel's request to commence such negotiations, the parties would negotiate diligently and in good faith to reach agreement. Further, if at the expiration of the Development Agreement the parties have not reached agreement, notwithstanding their diligent and good faith efforts, then Nanosys would not enter into any supply agreement, within six (6) months after the expiration of the Development Agreement, to supply Collaboration Materials to any third party, in the Field of Interest, on terms which are more favorable to that third party than the terms last offered by Nanosys to Intel during this negotiation. In the first instance, the parties would use reasonable efforts to qualify Nanosys as a supplier to Intel of the Collaboration Materials. Nanosys acknowledges that, in order to be selected as an Intel qualified supplier, Nanosys must demonstrate supply capability (in areas including, but not limited to, cost, quality, and availability). Nanosys further acknowledges that the supply agreement would include a "most favored customer" provision which guarantees that, at any time, Nanosys' price to Intel for Collaboration Materials is no higher than the price charged by Nanosys to any third party for Collaboration Materials, in the Field of Interest, on similar terms and conditions. Further, if the parties enter into a supply agreement, the supply agreement will include provisions to help ensure a reliable supply of Collaboration Materials to Intel, which may include (i) safety stock and (ii) if Nanosys is unable to reasonably provide Intel with the Collaboration Materials, then upon notice from Intel, Nanosys' would take prompt action to arrange for such supply, which may include designating a subcontractor, subject to Intel's consent of such subcontractor (which shall not be unreasonably withheld), to manufacture such quantity of Collaboration Materials that cannot be obtained from Nanosys, providing such subcontractor agrees to pay Nanosys a reasonable royalty and agrees to reasonable confidentiality, intellectual property protection, and commercial provisions. Nanosys agrees to fully reasonably cooperate with Intel and the chosen subcontractor in the transfer of technology and sufficient collaborative engineering resources necessary to allow the subcontractor to produce Collaboration Materials for Intel's intended use as soon as practicable after Intel's request. Nanosys reserves the right to seek any and all legal recourse against the subcontractor if confidentiality or other provisions of the agreement between Nanosys and the subcontractor are violated. (b) It is the parties' mutual intent that, if the parties have not entered into a supply agreement as set forth in Section 2.9(a), notwithstanding their diligent and good faith efforts, then upon Intel's request within [*** Redacted] after the expiration of the Development Agreement, Nanosys would designate a contract manufacturer, subject to Intel's consent of such contract manufacturer (which would not be unreasonably withheld), to manufacture Collaboration Materials, licensing such contract manufacturer to applicable Nanosys intellectual property on reasonable and non-discriminatory terms, provided that such contract manufacturer agrees to pay Nanosys a reasonable royalty and agrees to reasonable confidentiality, intellectual property *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -6- protection, and commercial provisions. Nanosys shall fully and reasonably cooperate with Intel and the chosen contract manufacturer in the transfer of technology and sufficient collaborative engineering resources necessary to allow the contract manufacturer to produce Collaboration Materials for Intel's intended use as soon as practicable after Intel's request. Nanosys reserves the right to seek all legal recourse against the contract manufacturer if confidentiality or other provisions of the license between Nanosys and the contract manufacturer are violated. If Nanosys fails to enter into a license with a contract manufacturer as contemplated in this Section 2.9(b) within [*** Redacted] after Intel's request to Nanosys, then Nanosys would be deemed not to be entering the business of high-volume supply of Collaboration Materials. (c) The parties further intend that if Nanosys chooses not to enter into the business of supply of Collaboration Materials, and Nanosys does not license the necessary enabling technology to a third party manufacturer as provided in Section 2.9(b) above, then Nanosys would provide to Intel a royalty-bearing, capped fee, worldwide, perpetual, non-exclusive license under Nanosys IP, to have made Collaboration Materials and to make, have made, use, sell, offer to sell and import, products using or incorporating Collaboration Materials. 3. PAYMENTS TO NANOSYS. 3.1 Intel shall pay to Nanosys the following payments at the following times:

TIME OF PAYMENT AMOUNT OF PAYMENT - ---------------------------------------- ------------------------ Collaboration Commencement Date $ [*** Redacted]. Three (3) months after the Collaboration $ [*** Redacted]. Commencement Date Six (6) months after the Collaboration $ [*** Redacted]. Commencement Date Nine (9) months after the Collaboration $ [*** Redacted]*. Commencement Date

* $[*** Redacted] per FTE, according to the number of FTEs chosen by Intel, pursuant to Section 2.2 above, for the fourth quarter of the Collaboration. For the avoidance of doubt, the latter two payments (of $[*** Redacted] and ([*** Redacted])) will not be due if Intel terminates this Agreement under Section 10.2 below. 3.2 For each month (or portion thereof) that Intel delays the Collaboration Commencement Date, pursuant to Section 2.1 above, to a date after December 31,2003, Intel shall pay to Nanosys [*** Redacted] dollars ($[*** Redacted]) (prorated on a day for day basis for partial months). Such payment shall be due and payable within thirty (30) days after Intel's notice of delay. (By way of example only, if upon execution of this Agreement Intel notified Nanosys of a Collaboration Commencement Date delay to January 15, 2004, Intel would pay Nanosys $[*** Redacted] within thirty (30) days after such notice date. If on December 15,2003 Intel then notified Nanosys of a further delay *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -7- in the Collaboration Commencement Date, until March 10, 2004, Intel would pay to Nanosys an additional $[*** Redacted] by January 14, 2004 (i.e., in this example, a total of $[*** Redacted]).) 3.3 As of the Effective Date, the "Exclusivity Expiration" shall be fifteen (15) months after the Exclusivity Date. (i) Intel shall be entitled to extend the Exclusivity Expiration by three (3) months, to twenty-one (21) months after the Exclusivity Date, by written notice to Nanosys no later than seventeen (17) months after the Exclusivity Date, and payment to Nanosys of [*** Redacted] dollars ($[*** Redacted]). This payment shall be due and payable no later than eighteen (18) months after the Exclusivity Date. (ii) If Intel has extended the Exclusivity Expiration pursuant to paragraph (i) hereinabove, then Intel shall be entitled to further extend the Exclusivity Expiration by an additional [*** Redacted], to [*** Redacted] after the Exclusivity Date, by written notice to Nanosys no later than [*** Redacted] after the Exclusivity Date, and payment to Nanosys of [*** Redacted] dollars ($[*** Redacted]). This payment will be due and payable no later than [*** Redacted] after the Exclusivity Date. (iii) If Intel has extended the Exclusivity Expiration pursuant to paragraph (ii) hereinabove, then Intel shall be entitled to further extend the Exclusivity Expiration by an additional [*** Redacted], to [*** Redacted] after the Exclusivity Date, by written notice to Nanosys no later than [*** Redacted] after the Exclusivity Date, and payment to Nanosys of [*** Redacted] dollars ($[*** Redacted]). This payment will be due and payable no later than [*** Redacted] after the Exclusivity Date. [*** Redacted] paid by Intel pursuant to this Section 3.3 may, at Intel's option, be credited to [*** Redacted] of Intel to Nanosys under [*** Redacted] by the parties, in the Field of Interest, entered into prior to termination of the Exclusivity Period. 4. OWNERSHIP. 4.1 Each party shall retain its ownership of its Background IP. No rights are granted pursuant to this Agreement with respect to any Background IP. 4.2 Subject to the licenses set forth in Section 5 below, Nanosys shall own all Collaboration IP. Subject to the licenses set forth in Section 5 below, Intel irrevocably hereby agrees to, and hereby does, transfer, convey and assign to Nanosys all of Intel's right, title, and interest in the Collaboration IP, including without limitation all Intellectual Property rights with respect thereto. Intel agrees to execute such documents, render such assistance, and take such other action as Nanosys may reasonably request to apply for, register, perfect, confirm, and protect Nanosys' rights in the Collaboration IP. Subject to Sections 5, 6, and 7 below, ownership of Collaboration Technology shall vest in Nanosys the exclusive right to determine whether and how the Collaboration IP is to be protected and exercised throughout the world. 5. LICENSES. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -8- 5.1 Subject to the terms and conditions of this Agreement, Nanosys agrees to grant, and hereby grants, to Intel a worldwide, nonexclusive (except as set forth in Section 5.1(i) hereinbelow), nontransferable (except as set forth in Section 11.7 below), royalty free license, only under Collaboration IP, to design, develop, make, have made, use, import, offer to sell, and sell or distribute any product or item and to practice any method or process, provided that: (i) this license shall be exclusive (including as to Nanosys) for use of the Collaboration IP in Intel's Exclusive Field, and (ii) no license is granted by Nanosys for use of any Collaboration IP in Nanosys' Exclusive Field. 5.2 Intel shall have the right to grant sublicenses (and authorize the granting of further sublicenses) under the license granted to it in Section 5.1 above. 5.3 No party shall be obligated to provide any Technology or deliverable in connection with the licenses granted in this Section 5; all deliverables under this Agreement are specified exclusively in Exhibit A. 5.4 Notwithstanding this Section 5 or Section 2.4, nothing in this Agreement shall be construed as preventing Intel or Nanosys employees from using [*** Redacted] of the Confidential Information of the other party, provided that such use of [*** Redacted] shall not grant to Intel or Nanosys any implied license to any of the other party's [*** Redacted]. [*** Redacted] means information in [*** Redacted] which is [*** Redacted]. An [*** Redacted] if the [*** Redacted] the information for the purpose of [*** Redacted]. 5.5 For purposes of this Section 5.5, the following definitions apply: "Applicable Intel Patents" means those claims of Intel patents which claim inventions conceived by Intel during the 24 months following the termination or expiration of the Collaboration, which inventions were based on Nanosys' Confidential Information. "Applicable Nanosys Patents" means those claims of Nanosys patents which claim inventions conceived by Nanosys during the 24 months following the termination or expiration of the Collaboration, which inventions were based on Intel's Confidential Information. "Applicable Intel Sublicensable Patents" means those claims of Intel patents which claim inventions conceived by Intel during the 12 months following the termination or expiration of the Collaboration, which inventions were based on Nanosys' Confidential Information. "Applicable Nanosys Sublicensable Patents" those claims of Nanosys patents which claim inventions conceived by Nanosys during the 12 months following the termination or expiration of the Collaboration, which inventions were based on Intel's Confidential Information. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -9- (a) Subject to the terms and conditions of this Agreement, Nanosys agrees to grant, and hereby grants, to Intel a worldwide, nonexclusive, nontransferable (except as set forth in Section 11.7 below), [*** Redacted] license, only under the Applicable Nanosys Patents, to design, develop, make, have made, use, import, offer to sell, and sell or distribute any product or item and to practice any method or process, provided that this license shall be limited to use within Intel's Exclusive Field and the Field of Interest. Intel shall have the right to grant sublicenses (and authorize the granting of further sublicenses) under the license granted to it in this Section 5.5(a), as provided in Section 5.5(b) below. (b) Under the licenses granted under Section 5.5(a) above, but only under Applicable Nanosys Sublicensable Patents, and only outside of the Field of Interest, Intel shall have the right to grant sublicenses (and authorize the granting of further sublicenses). (c) Subject to the terms and conditions of this Agreement, Intel agrees to grant, and hereby grants, to Nanosys a worldwide, nonexclusive, nontransferable (except as set forth in Section 11.7 below), [*** Redacted] license, only under the Applicable Intel Patents, to design, develop, make, have made, use, import, offer to sell, and sell or distribute any product or item and to practice any method or process, provided that this license shall be limited to use within Nanosys' Exclusive Field and the Field of Interest. Nanosys shall have the right to grant sublicenses (and authorize the granting of further sublicenses) under the license granted to it in this Section 5.5(c), as provided in Section 5.5(d) below. (d) Under the licenses granted under Section 5.5(c) above, but only under Applicable Intel Sublicensable Patents, and only outside of the Field of Interest, Nanosys shall have the right to grant sublicenses (and authorize the granting of further sublicenses). 6. CONFIDENTIAL INFORMATION. 6.1 The CNDA shall apply to this Agreement, provided that, for purposes of this Agreement: (i) "Confidential Information" shall also include information disclosed as a result of access to the other party's premises or property, which information relates to any information in tangible form subject to clause (i) of Section 1 of the CNDA, whether such disclosure or access occurs prior to, concurrent with, or following the disclosure of such information in tangible form. (ii) In Section 2 of the CNDA, "a need to know" means a need to know for the purposes of this Agreement. (iii) The third sentence of Section 6 of the CNDA shall not apply to this Agreement; rather, the Termination and Survival sections of this Agreement shall govern the disposition of Confidential Information. (iv) If the CNDA is terminated, the terms and conditions of the CNDA shall continue to apply to disclosures in connection with this Agreement. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -10- (v) In addition, each party shall be entitled to disclose the other party's Confidential Information to the extent such disclosure is required by the order or requirement of a court, administrative agency, or other governmental body; provided, that the party required to make the disclosure shall provide at least fifteen (15) days (or such lesser period as may apply if the party required to make the disclosure received fewer than fifteen (15) days notice of the disclosure obligation), advance written notice thereof to enable the other party to seek a protective order or otherwise prevent such disclosure. 7. INTELLECTUAL PROPERTY PROTECTION. 7.1 Nanosys IP. Nanosys shall have the sole right at its expense to prepare, file and prosecute Filings related to any Collaboration Technology, subject to Section 7.2 below. 7.2 Protection of Collaboration Technology. The parties shall confer on (i) protection of Collaboration Technology (other than Collaboration Technology developed solely by Nanosys) through Filings and/or through maintenance of the Collaboration IP as a trade secret, and (ii) preparation, filing, prosecution and maintenance of Filings and Collaboration Rights related to Collaboration Technology (other than Collaboration Technology developed solely by Nanosys). Nanosys shall be responsible for all Filing(s) in all jurisdictions for Collaboration IP. Provided however, if only Intel wants to protect a Collaboration development through a Filing on that development, then Intel shall be entitled to do so, at its sole expense, and in such a case shall be deemed sole owner of the affected Collaboration Right and Filing. In such event, Intel shall be deemed to have granted to Nanosys a nonexclusive (except as set forth hereinbelow), irrevocable, perpetual, fully paid, royalty free license, with right to sublicense (and authorize the granting of further sublicenses), only under such Collaboration Right, without restriction, including to practice any process or method, and to design, develop, make, use, have made, offer to sell, and sell or distribute any product or item, provided that (A ) this license shall be exclusive (including as to Intel) for use of the Collaboration Right in Nanosys' Exclusive Field and (B) no license is granted by Intel for use of the Collaboration Right in Intel's Exclusive Field. 7.3 Infringement Prosecution. (i) Nanosys shall have the sole right to prosecute claims of infringement or misappropriation of Collaboration IP, where such infringement or misappropriation is primarily in Nanosys' Exclusive Field. In each such case, Intel shall, at Nanosys' expense, take all actions reasonably requested by Nanosys in such prosecution, subject to indemnification by Nanosys of Intel for any liability to third parties resulting from such participation. (ii) Intel shall have the sole right to prosecute claims of infringement or misappropriation of Collaboration IP where such infringement or misappropriation is primarily in Intel's Exclusive Field. In each such case, Nanosys shall, at Intel's expense, take all actions reasonably requested by Intel in such prosecution (which may include participation as a named plaintiff, subject to indemnification by Intel of Nanosys for any liability to third parties resulting from such participation as a plaintiff). -11- 7.4 Further Assurances. At any time or from time to time on and after the date of this Agreement, each party shall at the request of the other party (i) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of license, assignment, and transfer, and (ii) take or cause to be taken all such other actions, in each case at the other party's expense and as the other party may reasonably deem necessary or desirable in order for the other party to obtain the full benefits of Section 4.2 and this Section 7 and the activities contemplated thereby. 8. WARRANTY DISCLAIMER. NEITHER NANOSYS NOR INTEL MAKES ANY WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. WITHOUT LIMITING THE FOREGOING, ALL DELIVERABLES AND OTHER ITEMS ARE PROVIDED BY EACH PARTY "AS IS," AND ALL LICENSES GRANTED BY EACH PARTY ARE GRANTED "AS IS." 9. LIMITATION OF LIABILITY. NEITHER PARTY SHALL HAVE ANY LIABILITY FOR COSTS OF SUBSTITUTE PRODUCTS OR SERVICES, OR FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR INDIRECT DAMAGES OR LIABILITIES, INCLUDING WITHOUT LIMITATION SUCH DAMAGES OR LIABILITIES FOR LOSS OF REVENUE, LOSS OF BUSINESS, FRUSTRATION OF ECONOMIC OR BUSINESS EXPECTATIONS, LOSS OF PROFITS, OR COST OF CAPITAL, REGARDLESS OF THE FORM OF THE ACTION, WHETHER IN CONTRACT OR OTHERWISE, EVEN IF ANY REPRESENTATIVE OF A PARTY HERETO HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL EITHER PARTY'S LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNTS PAID OR PAYABLE BY INTEL TO NANOSYS UNDER THIS AGREEMENT, provided that, as to Intel, this shall be in addition to Intel's obligation to pay such amounts. These limitations, however, shall not apply to either party's liability, if any, (i) for contribution or indemnity with respect to liability to third parties for personal injury, death, or damage to tangible property, (ii) exceeding the scope of the licenses in Section 5 (Licenses), (iii) breach of Section 6 (Confidential Information), or (iv) infringement of the other party's intellectual property rights. 10. TERM AND TERMINATION. 10.1 Term. This Agreement shall commence as of the Effective Date and shall continue until the expiration of the Exclusivity Period, unless earlier terminated as set forth herein. 10.2 Q2 Checkpoint. Intel shall be entitled to terminate this Agreement, for its convenience, on notice to Nanosys at any time within ten (10) days after completion of the "Q2 Formal Review Meeting" milestone in Exhibit A. 10.3 Termination Due to Bankruptcy, etc. In the event a party: (i) becomes insolvent; (ii) voluntarily files or has filed against it a petition under applicable bankruptcy or insolvency laws which such party fails to have released within thirty (30) days after filing; -12- (iii) proposes any dissolution, composition or financial reorganization with credit ors or if a receiver, trustee, custodian or similar agent is appointed or takes possession with respect to all or substantially all property or business of such party; or (iv) such party makes a general assignment for the benefit of creditors; then the other party may terminate this Agreement by notice to the non-terminating party. 10.4 Termination Due to Breach. Either party shall have the right to terminate this Agreement if the other party is in material breach of any material term or condition of this Agreement and fails to remedy such breach within thirty (30) days after receipt of written notice of such breach given by the non-breaching party. To terminate this Agreement, the nonbreaching party must provide further written notice of such termination to the breaching party prior to a cure of the breach. 10.5 Survival. Neither the termination nor expiration of this Agreement shall relieve either party from its obligations to pay the other any sums accrued hereunder. Upon the termination or expiration of this Agreement, (i) Intel shall promptly return to Nanosys all Nanosys Confidential Information and (ii) Nanosys shall promptly return to Intel all Intel Confidential Information. The parties agree that their respective rights, obligations and duties under Sections 1, 2.9, 4 (Ownership), 5 (Licenses), 6 (Confidential Information), 7 (Intellectual Property Protection), 8 (Warranty Disclaimer), 9 (Limitation of Liability), 10.5 (Survival), and 11 (Miscellaneous) shall survive any termination or expiration of this Agreement. 11. MISCELLANEOUS. 11.1 Announcement. On or after the Effective Date, Nanosys shall be entitled to issue a press release pertaining to this Agreement, upon written consent from Intel to the content of the press release. 11.2 Notices. All notices, requests, demands and other communications given or made in accordance with the provisions of this Agreement shall be in writing and shall be deemed to have been given (i) three days after mailing when mailed (by registered or certified mail, postage paid, only), (ii) on the date sent when made by facsimile transmission with confirmation of receipt (with hard copy to follow by registered or certified mail, postage paid, only), and (iii) on the date received when delivered in person or by courier, provided that notices and communications with respect to administrative and project matters (e.g., changes in meeting times and dates, program specifications, and specific program development activities) (but not legal matters or matters pertaining to or establishing rights under this Agreement), may be provided by e-mail and will be deemed given when sent. All notices shall be provided to the address set forth below or such other place as such party may from time to time designate in writing. Each party may alter its address set forth below by notice in writing to the other party, and such notice shall be considered to have been given three (3) days after the sending thereof: If to Nanosys: Nanosys Inc. 2625 Hanover Street Palo Alto, California 94304 Fax:(650)331-2101 *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -13- Attn: Calvin Y.H. Chow E-mail: cchow@nanosysinc.com with a copy, for matters pertaining to intellectual property, to: Nanosys Inc. 2625 Hanover Street Palo Alto, California 94304 Fax: (650) 331-2101 Attn: Matt Murphy E-mail: mmurphy@nanosysinc.com If to Intel: Intel Corporation 2200 Mission College Blvd. Santa Clara, CA 95052 ATTN: General Counsel 11.3 Amendment; Waiver. This Agreement may be amended, modified or supplemented only by a writing that is signed by duly authorized representatives of both parties and that specifically identifies the provision or provisions of this Agreement being amended, modified or supplemented. No term or provision hereof will be considered waived by either party, and no breach excused by either party, unless such waiver or consent is in writing signed on behalf of the party against whom the waiver is asserted. Without limiting the foregoing, no consent by either party to, or waiver of, a breach by either party, whether express or implied, will constitute a consent to, waiver of, or excuse of any other, different, or subsequent breach by either party. 11.4 Severability. If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. 11.5 Governing Law. This Agreement shall be governed by and construed under the laws of the United States and the State of California, not including its conflict of law provisions. 11.6 Force Majeure. Except for the payment of sums accrued, neither party will be liable for any failure or delay in performance under this Agreement due to fire, explosion, earthquake, storm, flood or other weather, unavailability of necessary utilities or raw materials, war, insurrection, riot, act of God or the public enemy, law, act, order, proclamation, decree, regulation, ordinance, or instructions of government or other public authorities, or any other event beyond the reasonable control of the party whose performance is to be excused. If, however, a party's performance is prevented for sixty (60) days, then the other party shall be entitled to terminate this Agreement on written notice to the party suffering the force majeure at any time prior to resumption of performance by the party suffering the force majeure. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -14- 11.7 Assignment. Neither party may transfer or assign this Agreement, whether by operation of law or otherwise, without the prior written consent of the other party and any attempt to do so without such consent will be void. This Agreement will bind and inure to the benefit of the parties and their respective permitted successors and permitted assigns. Notwithstanding anything in this Agreement, however, either party may assign this Agreement without the other party's prior written consent to a successor to all or substantially all of its assets pertaining to the Collaboration (e.g., the surviving entity in a merger or consolidation in which it participates or to a purchaser of all or substantially all of its assets pertaining to the Collaboration), so long as such surviving entity or purchaser shall assume (expressly in writing or by operation of law) the performance of all of the terms of this Agreement. 11.8 No Third Party Beneficiaries. No person or entity other than Intel and Nanosys will have any rights or obligations pursuant to this Agreement. 11.9 Relationship of the Parties. The parties to this Agreement are independent contractors. There is no relationship of agency, partnership, joint venture, employment, or franchise between the parties and this Agreement is negotiated at arm' s length with both sides represented by counsel of their choice. Neither party has the authority to bind the other or to incur any obligation on its behalf. Any such act will create a separate liability in the party so acting to any and all third parties affected thereby. 11.10 Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. If this Agreement is executed in counterparts, no signatory hereto shall be bound until both the parties named below have duly executed or caused to be duly executed a counterpart of this Agreement. 11.11 Confidentiality of Agreement. Subject to Section 6.1(v) and Section 11.1, each party agrees that the existence of and the terms and conditions of this Agreement shall be treated as confidential, provided, however, that each party may disclose the terms and conditions of this Agreement: (i) as required by any court or other governmental body; (ii) as otherwise required by law; (iii) to legal counsel of the parties; (iv) in connection with the requirements of a public offering or securities filing; (v) in confidence, to accountants, banks, and financing sources and their advisors; (vi) in confidence, in connection with the enforcement of this Agreement or rights under this Agreement; or (vii) in confidence, in connection with a merger or acquisition or proposed merger or acquisition, or the like. 11.12 Authority. Each party represents and warrants to the other party at the Effective Date (i) that it has the legal right, power, and authority to enter into this Agreement and to fully perform its obligations under this Agreement, and (ii) that the performance of such obligations will not conflict with any agreements, contracts or other arrangements to which it is a party or by which it is bound. 11.13 Entire Agreement. This Agreement, including all Exhibits to this Agreement, together with the CNDA (as set forth in Section 6 above), constitutes the entire agreement between the parties relating to this subject matter and supersedes all prior or simultaneous representations, -15- discussions, negotiations, letters of intent, and agreements, whether written or oral, with respect to the subject matter hereof. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates set forth below effective as of the Effective Date. NANOSYS INC. INTEL CORPORATION By: /s/ CALVIN CHOW By: /s/ PATRICK P GELSINGER ----------------------------- ----------------------------- Print Name: CALVIN CHOW Print Name: PATRICK P GELSINGER Title: CEO Title: Sr VP / CTO LEGAL OK ---------- p 12/8/03 -16- EXHIBIT A Collaboration Statement of Work (SOW) Summary Construction of [*** Redacted] devices (similar to the concept figure below) to evaluate key technical areas required for a [*** Redacted] memory unit and to project the performance limits of the technology. [*** Redacted] Device will have an [*** Redacted] and will be utilized to evaluate: - [*** Redacted] and [*** Redacted]. - [*** Redacted] characteristics (e.g. [*** Redacted], etc.) - [*** Redacted] - including [*** Redacted] characteristics. - Effects of [*** Redacted], and [*** Redacted] modifications. - Variations of [*** Redacted]. - [*** Redacted] (e.g. [*** Redacted]) - Variations of processing means. and to construct a model for [*** Redacted] of a [*** Redacted] or [*** Redacted] device. In Q1 and Q2, the project would focus on modeling and generating/testing [*** Redacted] in order to reconcile the validity of the model. Q3 and Q4 would focus on a [*** Redacted] to better select [*** Redacted]. The [*** Redacted] work would be done on [*** Redacted] devices in a [*** Redacted]. A more detailed plan of activities will be generated by the Collaboration team upon Commencement of the Collaboration. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. The parties will hold a Q2 Formal Review Meeting no later than two weeks after the end of Q2. -2- EX-10.15 18 f97636a4exv10w15.txt EXHIBIT 10.15 EXHIBIT 10.15 COOPERATIVE DEVELOPMENT AGREEMENT This Cooperative Development Agreement (the "Agreement") is entered into as of January 22, 2004 (the "Effective Date") by and between Nanosys Inc. ("Nanosys"), a California corporation with a place of business at 2625 Hanover Street, Palo Alto, California 94304 and E.I. du Pont de Nemours and Company ("DuPont"), a Delaware corporation with a place of business at 1007 Market Street, Wilmington, DE 19898. RECITALS Whereas: A. DuPont has expertise with respect to [*** Redacted] using DuPont's [*** Redacted] and the development, design, and manufacture thereof, and Nanosys has expertise with respect to the design and synthesis of nanomaterials and the development of nanotechnology-enabled systems. B. DuPont and Nanosys desire to enter into an agreement to cooperate to investigate the commercial feasibility of combining Nanosys' [*** Redacted] nanomaterials technology with DuPont's [*** Redacted] technology for high-performance [*** Redacted] applications AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. DEFINITIONS. In this Agreement, the following words and expressions shall have the following meanings: 1.1 "Collaboration" means the research and development work set forth in Exhibit A hereto. 1.2 "Statement of Work ("SOW")" means Exhibit A hereto. 1.3 "Collaboration Commencement Date" means the date of commencement of the Collaboration under Section 2.1 below. 1.4 "Technology" means any and all developments, ideas, designs, inventions, information, know-how, and technology. 1.5 "Collaboration Technology" of a party ("Party") means (i) any and all Technology that such Party's employees or contractors conceive or develop (solely or jointly) in the course of working specifically on the Collaboration, and (ii) any and all Technology conceived or developed (solely or jointly) by or for such Party based on Confidential Information of the other party disclosed to such Party in connection with, or generated under, the Collaboration. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. 1.6 "Nanosys Collaboration IP" shall mean (i) Nanosys' intellectual property rights in Collaboration Technology of Nanosys, which intellectual property rights were created by Nanosys' employees or contractors (solely or jointly) in the course of specifically working on the Collaboration and (ii) all intellectual property of Nanosys created by or for Nanosys based on DuPont Confidential Information disclosed to Nanosys in connection with, or DuPont Confidential Information generated under, the Collaboration. 1.7 "DuPont Collaboration IP" shall mean (i) DuPont's intellectual property rights in Collaboration Technology of DuPont, which intellectual property rights were created by DuPont's employees or contractors (solely or jointly) in the course of specifically working on the Collaboration and (ii) all intellectual property of DuPont created by or for DuPont based on Nanosys Confidential Information disclosed to DuPont in connection with, or Nanosys Confidential Information generated under, the Collaboration. 1.8 "Background IP" of a party means any and all intellectual property rights that such party either (i) owned, controlled, or had rights with respect to prior to the Effective Date; or (ii) develops, or acquires ownership, control, or rights with respect to, during the term of this Agreement but which is not that party's Collaboration IP. 1.9 "Nanosys [*** Redacted] Nanomaterials Technology" means (i) [*** Redacted] semiconductors formed as [*** Redacted] (such as [*** Redacted], [*** Redacted], [*** Redacted], and [*** Redacted] etc.), having at least [*** Redacted] that are subsequently [*** Redacted] as such nanomaterials [*** Redacted]; (ii) any [*** Redacted], [*** Redacted], or [*** Redacted] incorporating such [*** Redacted]; and (iii) all applications and products incorporating [*** Redacted] that rely on such materials. 1.10 "DuPont [*** Redacted] Technology" means (i) any method for fabricating [*** Redacted], where such [*** Redacted] is enabled by [*** Redacted]; (ii) any [*** Redacted] used in such methods; and (iii) all applications and products incorporating [*** Redacted] that rely on such methods. 1.11 "Conventional Materials" means traditional semiconducting polymers and semiconducting organic materials such as pentacene; carbon nanotubes; and traditional, continuous inorganic semiconductor [*** Redacted] such as [*** Redacted] and [*** Redacted], including those having at least one cross sectional dimension of [*** Redacted]. 1.12 "Nanosys' Exclusive Field" means compositions, devices, articles, and methods involving or involved in Nanosys [*** Redacted] Nanomaterials Technology, but excluding Conventional Materials, except including [*** Redacted] when used in an architecture such that [*** Redacted] (e.g. substantially similar to replacing the nanowives in the applications described in Nanosys' Nature Paper (Duan et al, Nature, 425, p 274, 2003) with [*** Redacted]). *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -2- 1.13 "DuPont's Exclusive Field" means compositions (including without limitation Conventional Materials), devices, articles, and methods involving or involved in Dupont [*** Redacted] Technology, but excluding Conventional Materials used in conjunction with Nanosys [*** Redacted] Nanomaterials Technology, and excluding [*** Redacted] when used in an architecture such that [*** Redacted] (e.g. substantially similar to replacing the nanowives in the applications described in Nanosys' Nature Paper (Duan et al, Nature, 425, p 274, 2003) with [*** Redacted]). For the avoidance of doubt, Conventional Processes used in conjunction with Nanosys [*** Redacted] Nanomaterials Technology are not in DuPont's Exclusive Field nor in Nanosys' Exclusive Field. 1.14 "Overlap Field" means the fields which fall within both Nanosys' Exclusive Field and DuPont's Exclusive Field. 1.15 "Confidential Information" is defined in Section 6 below. 1.16 "Joint Developments" is defined in Section 4.4 below. 1.17 "Filing" means any application for or registration of a patent, patent right (or similar right under foreign law), utility model, copyright or mask work right with respect to Collaboration Technology. 1.18 "Collaboration Right" means any patent, patent right (or similar right under foreign law), utility model, copyright or mask work right issued or registered as a result of a Filing. 2. COLLABORATION WORK. 2.1 Each party shall use its commercially reasonable efforts to perform its Collaboration obligations as set forth in Exhibit A. It is understood and agreed that the Collaboration is in the nature of research, that successful completion of the research is not assured, and that, so long as a party uses its commercially reasonable efforts as set forth in the preceding sentence, that party will not be in default for any failure to achieve any particular result or to complete any particular deliverable. The parties shall commence the Collaboration January 22, 2004. 2.2 Nanosys agrees to allocate to the Collaboration the number of full-time equivalent individuals (FTEs) specified in the SOW. 2.3 Where appropriate and agreed in each case, and in accordance with the SOW, either party's employees may work with the other party at the other party's facility. All employees of one party visiting the other party's facility shall comply with the rules and regulations applicable at that facility, as communicated to such employees. 2.4 Any and all materials supplied by one party to the other party shall be used by the recipient only to perform its Collaboration obligations. *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -3- 2.5 Except as set forth in Section 3 below, each party shall bear its own costs and expenses in carrying out the Collaboration. 2.6 The following persons ("Collaboration Managers") shall be appointed to direct the conduct of the parties with respect to the Collaboration: (a) For DuPont: Dr. Kurt L. Adams Research Manager, DuPont CR&D Experimental Station, E328/225 Rt. 41 Between Rt. 202 & 52 Wilmington, DE 19880-0356 Phone: 302-695-7878 fax: 302-695-7742 E-mail: Kurt.L.Adams@usa.dupont.com (b) For Nanosys: Stephen Empedocles Director, Business Development Nanosys Inc. 2625 Hanover Street Palo Alto, CA 94304 Phone: (650) 331-2103 fax: (650) 331-2101 E-mail: sempedocles@nanosysinc.com The Collaboration Managers shall have the authority to approve in writing changes to Exhibit A, including, as applicable, specifications, scope of work, and milestones. The Collaboration Managers shall have no other authority to amend this Agreement. Each party may change its Collaboration Manager on written notice to the other party, provided that the replacement Collaboration Manager is at a similar level of authority at the party making the replacement, or as otherwise agreed to by the parties. 2.7 If either party desires to propose changes to the Collaboration, it shall notify the other party in writing of such proposal and the reasons for such proposal. The other party will give each such proposal its prompt attention. If DuPont and Nanosys agree to any such change, the change shall be evidenced by a written confirmation signed by the Collaboration Managers of both parties. Such a written confirmation shall amend Exhibit A. -4- 3. PAYMENTS TO NANOSYS. 3.1 DuPont shall pay to Nanosys the following payments at the following times:

Time of Payment Amount of Payment --------------- ----------------- Collaboration Commencement Date Three (3) months after the Collaboration Commencement Date $ [*** Redacted] Six (6) months after the Collaboration Commencement Date $ [*** Redacted] Nine (9) months after the Collaboration Commencement Date $ [*** Redacted]

* These amounts (for the latter three (3) quarters) are nonbinding estimates of the effort that may be required from Nanosys in these quarters, based on experience in similar investigations. These estimates may be revised on a quarterly basis based on the learnings from the previous quarter. All amounts are and will be based on a rate of [*** Redacted] per FTE-quarter. For the avoidance of doubt, the latter [*** Redacted] payments will not be due if this Agreement terminates under Section 10.2 below. 4. OWNERSHIP. 4.1 Each party shall retain its ownership of its Background IP. No rights are granted pursuant to this Agreement with respect to any Background IP. 4.2 Whether Collaboration Technology is jointly or solely made shall be determined according to United States patent law or, as to original works of authorship, according to United States copyright law. Except as to patent ownership, all other questions concerning the construction or effect of patent applications and patents shall be decided in accordance with the laws of the country in which the particular patent application concerned has been filed or granted. 4.3 Each of Nanosys and DuPont shall own the Collaboration Technology solely made by its respective employees, agents, and contractors. Subject to Sections 4.5, 5, 6, and 7 below, sole ownership of Collaboration Technology shall vest in the owning party the exclusive right to determine whether and how the Collaboration Technology and the associated intellectual property rights are to be protected and exercised throughout the world. 4.4 Nanosys and DuPont shall jointly own jointly made Collaboration Technology ("Joint Developments"), with no duty to account, and, subject to Sections 4.5, 5, 5, 6, and 7 below, each party shall have the right to use and exploit such Joint Developments without consent of the *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portion have been filed separately with the Commission. -5- other party. Each party waives any rights under applicable law that it may have to require consent or an accounting. Subject to Sections 4.5, 5, 6, and 7 below, joint ownership of Collaboration Technology and the associated intellectual property rights shall vest in the parties the joint right to determine whether and how the Collaboration Technology and the associated intellectual property rights are to be protected and exercised throughout the world. 4.5 Each party agrees that it will not use any of its solely owned or jointly owned Collaboration Technology (or any associated solely owned or jointly owned Collaboration IP) in the Overlap Field, except as may be agreed by the parties in writing. If either party desires to use any such Collaboration Technology and/or Collaboration IP in the Overlap Field, it may provide written notice to the other party, in appropriate detail, of the proposed scope of such use. Within ninety (90) days after such notice, the other party shall, by written notice to the original notifying party, respond either (i) granting permission for such use, or (ii) offering to negotiate the terms and conditions of such use, it being understood that neither party shall be obligated to enter into any particular agreement or arrangement, nor shall either party be obligated to enter into any agreement or arrangement that is inconsistent with its then current obligations to third parties. Any failure to so respond within this ninety (90) day period shall be irrevocably deemed permission for the originally notifying party to use such Collaboration Technology and/or Collaboration IP as proposed in the original party's notice. With respect to Collaboration IP for which permission is so granted, to the extent such Collaboration IP is solely owned by the party granting such permission, such party shall be deemed to have granted to the other party a worldwide, nontransferable (except as set forth in Section 11.7 below), royalty free license, only under such Collaboration IP, to design, develop, make, have made, use, import, offer to sell, and sell or distribute any product or item and to practice any method or process, in each case limited to the scope of use specified in the licensee's notice provided as set forth hereinabove. 5. LICENSES. 5.1 Subject to the terms and conditions of this Agreement, Nanosys agrees to grant, and hereby grants, to DuPont a worldwide, nonexclusive (except as set forth in Section 5.1(i) hereinbelow), nontransferable (except as set forth in Section 11.7 below), royalty free license, only under the Nanosys Collaboration IP, to design, develop, make, have made, use, import, offer to sell, and sell or distribute any product or item and to practice any method or process, provided that: (i) this license shall be exclusive (including as to Nanosys) for use of the Nanosys Collaboration IP in DuPont's Exclusive Field, subject to Section 5.1(ii) below, and (ii) no license is granted by Nanosys for use of any Nanosys Collaboration IP in Nanosys' Exclusive Field (it being understood that Nanosys' Exclusive Field includes, without limitation, the Overlap Field). 5.2 Subject to the terms and conditions of this Agreement, DuPont agrees to grant, and hereby grants, to Nanosys a worldwide, nonexclusive (except as set forth in Section 5.2(i) hereinbelow), nontransferable (except as set forth in Section 11.7 below), royalty free license, only under the DuPont Collaboration IP, to design, develop, make, have made, use, import, offer to sell, and sell or distribute any product or item and to practice any method or process, provided that: -6- (i) this license shall be exclusive (including as to DuPont) for use of the DuPont Collaboration IP in Nanosys' Exclusive Field, subject to Section 5.2(ii) below, and (ii) no license is granted by DuPont for use of any DuPont Collaboration IP in DuPont's Exclusive Field (it being understood that DuPont's Exclusive Field includes, without limitation, the Overlap Field). 5.3 Each party shall have the right to grant sublicenses (and authorize the granting of further sublicenses) under the license granted to it in Section 5.1 or 5.2 above, as applicable. 5.4 No party shall be obligated to provide any Technology or deliverable in connection with the licenses granted in this Section 5; all deliverables under this Agreement are specified exclusively in Exhibit A. 6. CONFIDENTIAL INFORMATION. 6.1 The term "Confidential Information" shall mean any information or materials disclosed by one party to the other, pursuant to this Agreement, which is in written, graphic, machine readable or other tangible form and is marked "Confidential", "Proprietary" or in some other manner to indicate its confidential nature. Confidential Information may also include oral information disclosed by one party to the other, provided that such information is designated as confidential at the time of disclosure and reduced to a written summary by the disclosing party, within thirty (30) days after its oral disclosure or disclosure resulting from such access, which written summary is marked in a manner to indicate its confidential nature and delivered to the receiving party. Confidential Information shall also include any information disclosed as a result of access to the other party's premises or property. 6.2 Each party shall treat as confidential all Confidential Information of the other party, shall not use such Confidential Information except for the Collaboration, shall implement reasonable procedures to prohibit the disclosure, unauthorized duplication, misuse or removal of the other party's Confidential Information, and shall not disclose such Confidential Information to any third party except as reasonable and necessary to exercise its rights and perform its obligations pursuant to this Agreement, and under substantially similar restrictions as those set forth in this section. Without limiting the foregoing, each party shall use at least the same procedures and degree of care which it uses to prevent the disclosure or misuse of its own confidential information of like importance to prevent the disclosure or misuse of Confidential Information disclosed to it by the other party under this Agreement, but in no event less than reasonable care. 6.3 Notwithstanding the above, neither party shall have liability to the other with regard to any Confidential Information of the other which: (i) was generally known and available at the time it was disclosed or becomes generally known and available through no fault of the receiving party; (ii) was known to the receiving party, without restriction, at the time of disclosure as shown by the files of the receiving party in existence at the time of disclosure; -7- (iii) is disclosed with the prior written approval of the disclosing party; (iv) was independently developed by the receiving party without any use of the Confidential Information and by employees or other agents of the receiving party who have not been exposed to the Confidential Information, provided that the receiving party can demonstrate such independent development by documented evidence prepared contemporaneously with such independent development; or (v) becomes known to the receiving party, without restriction, from a source other than the disclosing party without breach of this Agreement by the receiving party and otherwise not in violation of the disclosing party's rights. In addition, each party shall be entitled to disclose the other party's Confidential Information to the extent such disclosure is required by the order or requirement of a court, administrative agency, or other governmental body; provided, that the party required to make the disclosure shall provide prompt, advance notice thereof to enable the other party to seek a protective order or otherwise prevent such disclosure. 7. INTELLECTUAL PROPERTY PROTECTION. 7.1 Nanosys and DuPont Collaboration Technology. Nanosys shall have the sole right at its expense to prepare, file and prosecute Filings related to any Collaboration Technology solely owned by Nanosys and to maintain Collaboration Rights issued thereon. DuPont shall have the sole right at its expense to prepare, file and prosecute Filings related to any Collaboration Technology solely owned by DuPont and to maintain Collaboration Rights issued thereon. 7.2 Joint Developments. The parties shall confer on (i) protection of Joint Developments through Filings on the Joint Development and/or through maintenance of the Joint Development as a trade secret, and (ii) preparation, filing, prosecution and maintenance of Filings and Collaboration Rights related to Joint Developments. The parties shall agree by whom Filings will be done in a country for a particular Joint Development. If only one party wants to protect a Joint Development through a Filing on that Joint Development, then that party shall be entitled to do so, at its sole expense and in its own name. If both parties share the expense of such Filing, then the Filing shall be made on behalf of both parties and shall name each party as joint and equal owner in such country of the Joint Development and of the resulting Collaboration Right. If one party does not share the expense of such Filing, then the Filing shall be made on behalf of the party which makes the Filing and shall name such party as the sole owner in such country of the Collaboration Right pertaining to such Joint Development, and the party which makes the Filing shall be deemed to have granted the other party a nonexclusive (except as set forth hereinbelow), irrevocable, perpetual, fully paid, royalty free license, with right to sublicense (and authorize the granting of further sublicenses), only under such Collaboration Right, without restriction, including to practice any process or method, and to design, develop, make, use, have made, offer to sell, and sell or distribute any product or item, provided that (A) in the case of such license from Nanosys to DuPont (I) this license shall be exclusive (including as to Nanosys) for use of the Collaboration Right in DuPont's Exclusive Field, subject to clause (A)(II) hereinbelow, and (II) no license is granted by -8- Nanosys for use of the Collaboration Right in Nanosys' Exclusive Field (it being understood that Nanosys' Exclusive Field includes, without limitation, the Overlap Field); and (B) in the case of such a license from DuPont to Nanosys (I) this license shall be exclusive (including as to DuPont) for use of the Collaboration Right in Nanosys' Exclusive Field, subject to clause (B)(II) hereinbelow, and (II) no license is granted by DuPont for use of the Collaboration Right in DuPont's Exclusive Field (it being understood that DuPont's Exclusive Field includes, without limitation, the Overlap Field). If either party does not pay its one-half share of maintenance expenses with respect to a Collaboration Right, then sole ownership of that Collaboration Right shall be transferred and assigned to the other party, subject to a license to the non-owning party as set forth hereinabove. 7.3 Infringement Prosecution. (a) (i) Nanosys shall have the sole right to prosecute claims of infringement or misappropriation of Collaboration Rights (whether owned by Nanosys, owned by DuPont, or jointly owned by Nanosys and DuPont) or misappropriation of any trade secret with respect to Collaboration Technology (whether of Nanosys, of DuPont, or jointly of Nanosys and DuPont), where such infringement or misappropriation is primarily in Nanosys' Exclusive Field. In each such case, DuPont shall, at Nanosys' expense, take all actions reasonably requested by Nanosys in such prosecution (which may include participation as a named plaintiff, subject to indemnification by Nanosys of DuPont for any liability to third parties resulting from such participation as a plaintiff). (ii) DuPont shall have the sole right to prosecute claims of infringement or misappropriation of Collaboration Rights (whether owned by Nanosys, owned by DuPont, or jointly owned by Nanosys and DuPont) or misappropriation of any trade secret with respect to Collaboration Technology (whether of Nanosys, of DuPont, or jointly of Nanosys and DuPont), where such infringement or misappropriation is primarily in DuPont's Exclusive Field. In each such case, Nanosys shall, at DuPont's expense, take all actions reasonably requested by DuPont in such prosecution (which may include participation as a named plaintiff, subject to indemnification by DuPont of Nanosys for any liability to third parties resulting from such participation as a plaintiff). (iii) For the avoidance of doubt, the determination of whether any infringement or misappropriation is primarily in Nanosys Exclusive Field or Dupont's Exclusive field shall be determined by good-faith discussions between the parties, when such infringement or misappropriation occurs in the Overlap Field. Regardless of this determination, either party shall have the right to prosecute claims of infringement or misappropriation of Collaboration Rights (whether owned by Nanosys, owned by DuPont, or jointly owned by Nanosys and DuPont) or misappropriation of any trade secret with respect to Collaboration Technology (whether of Nanosys, of DuPont, or jointly of Nanosys and DuPont), where such infringement or misappropriation is in the Overlap Field, if the other party chooses not to pursue such prosecution. In each such case, the obligations of Nanosys and DuPont to support a prosecution initiated by the other party shall be as set forth in paragraphs (i) and (ii) of this Section 7.3(a). (b) Except as set forth in Section 7.3(a) above, each party shall have the sole right to prosecute claims of infringement of any Collaboration Right owned solely by such party -9- or infringement or misappropriation of any trade secret with respect to Collaboration Technology owned solely by such party. (c) Except as set forth in Section 7.3(a) above, if either party (the "Notifying Party") wishes to commence an action against a third party for actual or potential infringement or misappropriation ("Infringement") of any jointly owned Joint Development or related jointly owned Collaboration Right, then such party shall promptly so notify the other party (the "Other Party") in writing of such Infringement (the "Infringement Notice"), and the following shall apply: (i) The Notifying Party shall have the sole right to prosecute such Infringement for a period of ninety (90) days after the date of the Infringement Notice, provided that the Other Party may, by written notice within thirty (30) days after the Infringement Notice, elect to participate in the Infringement action and agree to pay one-half of the costs of such prosecution. In such event, the parties shall jointly control and cooperate in prosecution of such Infringement action and shall share equally in any monetary award resulting from such prosecution. (ii) If the Other Party elects to participate and share costs as set forth in Section 73(c)(i), but the Notifying Party does not take reasonable actions to prosecute the Infringement action before the end of such ninety (90) day period, or notifies the Other Party that it does not intend to prosecute such Infringement, then (A) the Other Party shall have the sole right for sixty (60) days at its expense to prosecute such Infringement and retain any monetary award resulting therefrom, and (B) the Notifying Party shall, at the Other Party's expense, take all actions reasonably requested by the Other Party in such prosecution (which may include participation as a named plaintiff, subject to indemnification by the Other Party of the Notifying Party for any liability to third parties resulting from such participation as a plaintiff). If the Other Party does not take reasonable actions to prosecute such Infringement action before the end of such sixty (60) day period, or notifies the Notifying Party that it does not intend to prosecute such Infringement, then Section 7.3(c) shall become applicable again. (iii) If the Other Party does not elect to participate and share expenses as set forth in Section 7.3(c)(i): (A) If the Notifying Party takes reasonable actions to prosecute the Infringement action during the ninety (90) days after the date of the Infringement Notice, then (I) the Notifying Party shall have the sole right to prosecute such Infringement and retain any monetary award resulting therefrom, and (II) the Other Party shall, at the Notifying Party's expense, take all actions reasonably requested by the Notifying Party in such prosecution (which may include participation as a named plaintiff, subject to indemnification by the Notifying Party of the Other Party for any liability to third parties resulting from such participation as a plaintiff). (B) If the Notifying Party does not take reasonable actions to prosecute the Infringement action before the end of such ninety (90) day period, or notifies the Other Party that it does not intend to prosecute such Infringement, then Section 7.3(c) shall become applicable again. -10- (iv) If a party prosecutes an Infringement and the other party does not bear one-half the costs of such prosecution as set forth above, then the prosecuting party shall retain the entire amount of any monetary award resulting from such prosecution. (d) If a party prosecuting an Infringement action with respect to any jointly owned Joint Development or jointly owned Collaboration Right on its own abandons the Infringement action, then Section 7.3(c) above shall again apply with respect to that Infringement. 7.4 Further Assurances. At any time or from time to time on and after the date of this Agreement, each party shall at the request of the other party (i) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of license, and (ii) take or cause to be taken all such other actions, in each case as the other party may reasonably deem necessary or desirable in order for the other party to obtain the full benefits of this Section 7 and the activities contemplated hereby. 8. WARRANTY DISCLAIMER. NEITHER NANOSYS NOR DUPONT MAKES ANY WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. WITHOUT LIMITING THE FOREGOING, ALL DELIVERABLES AND OTHER ITEMS ARE PROVIDED BY EACH PARTY "AS IS," AND ALL LICENSES GRANTED BY EACH PARTY ARE GRANTED "AS IS." 9. LIMITATION OF LIABILITY. NEITHER PARTY SHALL HAVE ANY LIABILITY FOR COSTS OF SUBSTITUTE PRODUCTS OR SERVICES, OR FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR INDIRECT DAMAGES OR LIABILITIES, INCLUDING WITHOUT LIMITATION SUCH DAMAGES OR LIABILITIES FOR LOSS OF REVENUE, LOSS OF BUSINESS, FRUSTRATION OF ECONOMIC OR BUSINESS EXPECTATIONS, LOSS OF PROFITS, OR COST OF CAPITAL, REGARDLESS OF THE FORM OF THE ACTION, WHETHER IN CONTRACT OR OTHERWISE, EVEN IF ANY REPRESENTATIVE OF A PARTY HERETO HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL EITHER PARTY'S LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNTS PAID OR PAYABLE BY DUPONT TO NANOSYS UNDER THIS AGREEMENT, provided that, as to DuPont, this shall be in addition to DuPont's obligation to pay such amounts. These limitations, however, shall not apply to either party's liability, if any, (i) for contribution or indemnity with respect to liability to third parties for personal injury, death, or damage to tangible property, (ii) exceeding the scope of the licenses in Section 5 (Licenses), (iii) breach of Section 6 (Confidential Information), or (iv) infringement of the other party's intellectual property rights. -11- 10. TERM AND TERMINATION. 10.1 Term. This Agreement shall commence as of the Effective Date and, subject to Section 10.2 below, shall continue until January 22, 2005 unless earlier terminated as set forth herein. 10.2 Q1 Checkpoint. This Agreement shall terminate three (3) months after the Collaboration Commencement Date, unless the parties have agreed, in a writing referencing this Section 10.2, to continue the Collaboration under this Agreement. 10.3 Termination Due to Bankruptcy, etc. In the event a party: (i) becomes insolvent; (ii) voluntarily files or has filed against it a petition under applicable bankruptcy or insolvency laws which such party fails to have released within thirty (30) days after filing; (iii) proposes any dissolution, composition or financial reorganization with creditors or if a receiver, trustee, custodian or similar agent is appointed or takes possession with respect to all or substantially all property or business of such party; or (iv) such party makes a general assignment for the benefit of creditors; then the other party may terminate this Agreement by notice to the non-terminating party. 10.4 Termination Due to Breach. Either party shall have the right to terminate this Agreement if the other party is in material breach of any material term or condition of this Agreement and fails to remedy such breach within thirty (30) days after receipt of written notice of such breach given by the non-breaching party. To terminate this Agreement, the nonbreaching party must provide further written notice of such termination to the breaching party prior to a cure of the breach. 10.5 Survival. Neither the termination nor expiration of this Agreement shall relieve either party from its obligations to pay the other any sums accrued hereunder. Upon the termination or expiration of this Agreement, (i) DuPont shall promptly return, or certify the destruction of, to Nanosys all Nanosys Confidential Information, except for such Nanosys Confidential Information as may be reasonable and necessary for DuPont to exercise its surviving rights and licenses under this Agreement, and (ii) Nanosys shall promptly return, or certify the destruction of, to DuPont all DuPont Confidential Information, except for such DuPont Confidential Information as may be reasonable and necessary for Nanosys to exercise its surviving rights and licenses under this Agreement. The parties agree that their respective rights, obligations and duties under Sections 4 (Ownership), 5 (Licenses), 6 (Confidential Information), 7 (Intellectual Property Protection), 8 (Warranty Disclaimer), 9 (Limitation of Liability), 10.5 (Survival), and 11 (Miscellaneous) shall survive any termination or expiration of this Agreement. 11. MISCELLANEOUS. 11.1 Publicity. Any press release or other public announcement with respect to this Agreement shall be subject to the mutual agreement of the parties, which agreement shall not be unreasonably withheld. -12- 11.2 Notices. All notices, requests, demands and other communications given or made in accordance with the provisions of this Agreement shall be in writing and shall be deemed to have been given (i) three days after mailing when mailed (by registered or certified mail, postage paid, only), (ii) on the date sent when made by facsimile transmission with confirmation of receipt (with hard copy to follow by registered or certified mail, postage paid, only), and (iii) on the date received when delivered in person or by courier, provided that notices and communications with respect to administrative and project matters (e.g., changes in meeting times and dates, program specifications, and specific program development activities) (but not legal matters or matters pertaining to or establishing rights under this Agreement), may be provided by e-mail and will be deemed given when sent. All notices shall be provided to the address set forth below or such other place as such party may from time to time designate in writing. Each party may alter its address set forth below by notice in writing to the other party, and such notice shall be considered to have been given three (3) days after the sending thereof If to Nanosys: Nanosys Inc. 2625 Hanover Street Palo Alto, California 94304 Fax: (650) 331-2101 Attn: Calvin Y.H. Chow E-mail: cchow@nanosysinc.com with a copy, for matters pertaining to intellectual property, to: Nanosys Inc. 2625 Hanover Street Palo Alto, California 94304 Fax: (650) 331-2101 Attn: Matt Murphy E-mail: mmurphy@nanosysinc.com If to DuPont: Planning Manager, DuPont CR&D Experimental Station, E328/409 Rt. 41 Between Rt. 202 & 52 Wilmington, DE 19880-0356 Phone: 302 695-4571 Fax: 302-695-4571 E-mail: Krishna.C.Doraiswamy@usa.dupont.com -13- with a copy, for matters pertaining to intellectual property, to: Barbara C. Sugell, Esg. DuPont Legal Barley Mill Plaza 25-1218 Wilmington, DE 19880-0025 Fax: 302-992-5374 E-mail: Krishna.C.Doraiswamy@usa.dupont.com 11.3 Amendment; Waiver. This Agreement may be amended, modified or supplemented only by a writing that is signed by duly authorized representatives of both parties and that specifically identifies the provision or provisions of this Agreement being amended, modified or supplemented. No term or provision hereof will be considered waived by either party, and no breach excused by either party, unless such waiver or consent is in writing signed on behalf of the party against whom the waiver is asserted. Without limiting the foregoing, no consent by either party to, or waiver of, a breach by either party, whether express or implied, will constitute a consent to, waiver of, or excuse of any other, different, or subsequent breach by either party. 11.4 Severability. If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. 11.5 Governing Law. This Agreement shall be governed by and construed under the laws of the United States and the State of California, not including its conflict of law provisions. 11.6 Force Majeure. Except for the payment of money, neither party will be liable for any failure or delay in performance under this Agreement due to fire, explosion, earthquake, storm, flood or other weather, unavailability of necessary utilities or raw materials, war, insurrection, riot, act of God or the public enemy, law, act, order, proclamation, decree, regulation, ordinance, or instructions of government or other public authorities, or any other event beyond the reasonable control of the party whose performance is to be excused. If, however, a party's performance is prevented for sixty (60) days, then the other party shall be entitled to terminate this Agreement on written notice to the party suffering the force majeure at any time prior to resumption of performance by the party suffering the force majeure. 11.7 Assignment. Neither party may transfer or assign this Agreement, whether by operation of law or otherwise, without the prior written consent of the other party and any attempt to do so without such consent will be void. This Agreement will bind and inure to the benefit of the parties and their respective permitted successors and permitted assigns. Notwithstanding anything in this Agreement, however, either party may assign this Agreement without the other party's prior written consent to a successor to all or substantially all of its assets pertaining to the Collaboration -14- (e.g., the surviving entity in a merger or consolidation in which it participates or to a purchaser of all or substantially all of its assets pertaining to the Collaboration), so long as such surviving entity or purchaser shall assume (expressly in writing or by operation of law) the performance of all of the terms of this Agreement. 11.8 No Third Party Beneficiaries. No person or entity other than DuPont and Nanosys will have any rights or obligations pursuant to this Agreement. 11.9 Relationship of the Parties. The parties to this Agreement are independent contractors. There is no relationship of agency, partnership, joint venture, employment, or franchise between the parties and this Agreement is negotiated at arm's length with both sides represented by counsel of their choice. Neither party has the authority to bind the other or to incur any obligation on its behalf. Any such act will create a separate liability in the party so acting to any and all third parties affected thereby. 11.10 Counterparts. This Agreement maybe executed in two counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. If this Agreement is executed in counterparts, no signatory hereto shall be bound until both the parties named below have duly executed or caused to be duly executed a counterpart of this Agreement. 11.11 Confidentiality of Agreement: Each party agrees that the terms and conditions, but not the existence or general nature, of this Agreement shall be treated as confidential, provided, however, that each party may disclose the terms and conditions of this Agreement: (i) as required by any court or other governmental body; (ii) as otherwise required by law; (iii) to legal counsel of the parties; (iv) in connection with the requirements of a public offering or securities filing; (v) in confidence, to accountants, banks, and financing sources and their advisors; (vi) in confidence, in connection with the enforcement of this Agreement or rights under this Agreement; or (vii) in confidence, in connection with a merger or acquisition or proposed merger or acquisition, or the like. 11.12 Authority. Each party represents and warrants to the other party at the Effective Date (i) that it has the legal right, power, and authority to enter into this Agreement and to fully perform its obligations under this Agreement, and (ii) that the performance of such obligations will not conflict with any agreements, contracts or other arrangements to which it is a party or by which it is bound. 11.13 Entire Agreement. This Agreement, including all Exhibits to this Agreement, constitutes the entire agreement between the parties relating to this subject matter and supersedes all prior or simultaneous representations, discussions, negotiations, letters of intent, term sheets, and agreements, whether written or oral, with respect to the subject matter hereof (including, without limitation, any prior non-disclosure agreement entered into by Nanosys and DuPont). -15- IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates set forth below effective as of the Effective Date. NANOSYS INC. E.I. DU PONT DE NEMOURS AND COMPANY By: /s/ Calvin Chow By: James C. Romine Print Name: Calvin Chow Print Name: James C. Romine Title: Chief Executive Officer Title: Science Director Date: 1-20-04 Date: Jan. 20, 2004 -16- EXHIBIT A Collaboration Statement of Work (SOW) FIRST QUARTER ACTIVITIES: TASK O: PRELIMINARY WORK Milestone: Set-up for Tasks 1 and 2.

SUBTASK DESCRIPTION DELIVERABLES ------- ----------- ------------ Order [*** Redacted] etc [Nanosys] - Order [*** Redacted] Materials required for task 2 - Order required [*** Redacted] tools to [*** Redacted] in the [*** Redacted] of [*** Redacted]. [*** Redacted] [Nanosys] Fabricate [*** Redacted] to Capability of [*** Redacted] [*** Redacted] from samples. [*** Redacted] [*** Redacted] to [*** Redacted]. Examine [*** Redacted] [DuPont] - Measure [*** Redacted] of [*** Redacted] [*** Redacted] conductors. - Establish [*** Redacted] for [*** Redacted] of the [*** Redacted] Prepare [*** Redacted] [DuPont] Prepare [*** Redacted] and [*** Redacted] Nanosys [*** Redacted] on [*** Redacted] of [*** Redacted]

*** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. TASK 1: TRANSISTOR PERFORMANCE TARGETS Milestone: Specify near-term and long-term performance targets for [*** Redacted].

SUBTASK DESCRIPTION DELIVERABLES ------- ----------- ------------ Define [*** Redacted] performance Near-term and long-term specifications, DuPont provides written requirements for targets [DuPont] including: near-term ([*** Redacted]) and long-term ([*** Redacted]) performance - [*** Redacted] - [*** Redacted] - [*** Redacted] - [*** Redacted] - [*** Redacted] - [*** Redacted]

TASK 2: ASSESS [*** Redacted] for [*** Redacted] for [*** Redacted] to the [*** Redacted] Milestone: Determine appropriate [*** Redacted] for [*** Redacted] to the [*** Redacted], or determine that [*** Redacted] is not a suitable for use with [*** Redacted].

SUBTASK DESCRIPTION DELIVERABLES ------- ----------- ------------ Prepare [*** Redacted] - Use [*** Redacted] None [Nanosys] - Use [*** Redacted] to [*** Redacted] in the [*** Redacted] of [*** Redacted]

*** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -2-

SUBTASK DESCRIPTION DELIVERABLES ------- ----------- ------------ Determine [*** Redacted] - Allow for [*** Redacted] Evaluation of [*** Redacted] [Nanosys] on the [*** Redacted] and [*** Redacted] and [*** Redacted]. - [*** Redacted] - Measure [*** Redacted] the [*** Redacted] - [*** Redacted] in [*** Redacted]

TASK 3: [*** Redacted] SYNTHESIS, [*** Redacted] AND SUPPLY Milestone: Supply [*** Redacted] for [*** Redacted] testing in Task 4, and electrical testing in Tasks 5 and 6.

SUBTASK DESCRIPTION DELIVERABLES ------- ----------- ------------ Fabricate [*** Redacted] for - Standard [*** Redacted] [*** Redacted] for use in Task 4 [*** Redacted] testing (no Task 4 [*** Redacted] specification) [Nanosys] - [*** Redacted] and [*** Redacted] [*** Redacted] evaluated to [*** Redacted] onto [*** Redacted] Fabricate [*** Redacted] with - [*** Redacted] - [*** Redacted] for Task 5 [*** Redacted] selected based on results of Task 2 [Nanosys] - [*** Redacted] selected based - [*** Redacted] for Task 6 on Task 2 - [*** Redacted] optimization based on results of Task 5

-3- *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. TASK 4: DETERMINE WHETHER [*** Redacted] and [*** Redacted] are compatible Milestone: Determine whether [*** Redacted] can be [*** Redacted] by one or more [*** Redacted] methods. Remarks: We have identified [*** Redacted] potential routes for incorporating the [*** Redacted] into the [*** Redacted]: [*** Redacted], [*** Redacted], and [*** Redacted]. All [*** Redacted] routes will be explored in parallel. In order to expedite testing, the [*** Redacted] used in these experiments will be whatever is on hand in sufficient quantity, since no [*** Redacted] tests are envisioned.

SUBTASK DESCRIPTION DELIVERABLES ------- ----------- ------------ Prepare [*** Redacted] [DuPont] - [*** Redacted] will be prepared: [*** Redacted] for [*** Redacted] [*** Redacted], [*** Redacted], and [*** Redacted]. - There will be at least [*** Redacted] [*** Redacted] of each type, and at least [*** Redacted], so the total number of [*** Redacted] will be in the [*** Redacted] range. - The [*** Redacted] will be [*** Redacted] wide and approximately [*** Redacted]. [*** Redacted] - To effectively assess None. [Nanosys] [*** Redacted], they should have [*** Redacted] commensurate with [*** Redacted] [*** Redacted] - For the maximum of information [*** Redacted] [Nanosys] with the minimum of effort, each [*** Redacted] should have [*** Redacted].

*** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -4-

SUBTASK DESCRIPTION DELIVERABLES ------- ----------- ------------ - Selecting the [*** Redacted] will require a judgment call. It should be at least [*** Redacted], but probably not [*** Redacted] [*** Redacted] [DuPont] - [*** Redacted] None will be [*** Redacted] to look for [*** Redacted] - [*** Redacted] will be [*** Redacted] - [*** Redacted] will be [*** Redacted] Analysis of [*** Redacted] - A combination of [*** Redacted] [*** Redacted] and a detailed [DuPont] and [*** Redacted] will be report on what worked, what used to assess the results of failed, and how it failed. these [*** Redacted]. Determine whether we have - Joint assessment of results. Go/no go decision on [*** Redacted] a viable path for [*** Redacted] - Joint determination of possible paths forward

*** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -5- TASK 5: BUILD [*** Redacted] Milestone: Verify that chosen [*** Redacted] in simple test structures made from [*** Redacted] materials.

SUBTASK DESCRIPTION DELIVERABLES ------- ----------- ------------ Build [*** Redacted] structures Build up [*** Redacted] [*** Redacted] test [DuPont] test structures. structures [*** Redacted] Depending on the outcome of our [*** Redacted] test structures test structures or [*** Redacted] our [*** Redacted], either: or [Nanosys] - [*** Redacted] will be [*** Redacted] [*** Redacted] or: - [*** Redacted] will be [*** Redacted] and [*** Redacted] the test structures. Finish [*** Redacted] test Depending on the outcome of our [*** Redacted] structures [DuPont] [*** Redacted], either: - [*** Redacted] are [*** Redacted] test structure, or: - [*** Redacted] and [*** Redacted] will be [*** Redacted] the test structures. Verify [*** Redacted] [*** Redacted] [*** Redacted] [DuPont and Nanoys]

TASK 6: [*** Redacted] Milestone: Functioning [*** Redacted] that meet the [*** Redacted] performance targets. [*** Redacted] At the end of this task, [*** Redacted] *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -6- TASK 7: DEVELOP A PLAN FOR ACHIEVING THE [*** Redacted] PERFORMANCE TARGETS WITHIN THE [*** Redacted] Figure 1. Gantt chart.

[*** Redacted]

*** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -7- NANOSYS PROJECT TEAM MAKEUP: - [*** Redacted] Engineer (95% effort) - [*** Redacted] Engineer (95% effort) - [*** Redacted] Engineer (95% effort) - [*** Redacted] ([*** Redacted] for 25%) ([*** Redacted] effort) Total effort during first quarter: 3.10 FTEs *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -8- EX-10.15.1 19 f97636a4exv10w15w1.txt EXHIBIT 10.15.1 EXHIBIT 10.15.1 [NANOSYS LOGO] 2625 Hanover Street, Palo Alto, CA 84204 850 331 2100, 850 331 2101 fax. www.nanosysinc.com AMENDMENT A TO COOPERATIVE DEVELOPMENT AGREEMENT This Amendment ("Amendment A") to the Cooperative Development Agreement dated January 22, 2004 (the "Agreement"), is entered into this 21st Day of April, 2004, (the "Amendment A Date") by and between Nanosys, Inc. ("Nanosys"), a Delaware Corporation with a place of business at 2625 Hanover Street, Palo Alto, California 94304 and E.I. duPont de Nemours and Company ("DuPont"), a Delaware Corporation with a place of business at 1007 Market Street, Wilmington, Delaware, the parties to the Agreement. RECITALS Whereas: A. Nanosys and DuPont entered into the Agreement on the Effective Date to cooperate to investigate the commercial feasibility of combining Nanosys' [*** Redacted] nanomaterials technology with DuPont's [*** Redacted]. B. Nanosys and DuPont acknowledge that actual cooperative work began under the Agreement on February 17th, 2004. C. Nanosys and DuPont wish to amend the Agreement so that the Collaboration Commencement Date is reflective of the date that actual collaborative work began. AGREEMENT NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: A. In Section 2.1 of the Agreement, the last sentence stating in its entirety: "The parties shall commence the Collaboration January 22, 2004" is hereby deleted in its entirety and replaced with the following sentence: "The Parties shall commence the Collaboration on February 17th, 2004" B. Unless expressly amended herein or by subsequent amendments agreed to by the parties in a signed written amendment, all other terms of the Agreement, including but not limited to terms related to definition, interpretation and enforcement of the Agreement, shall remain in full force and effect as originally agreed to in the Agreement, and shall apply equally to the terms of this Amendment A. IN WITNESS WHEREOF, the parties through their duly authorized representatives have executed this First Amendment as of the date last set forth below. NANOSYS, INC. E.I. DU PONT DE NEMOURS and COMPANY. By: /s/ Calvin Chow By: /s/ James C. Romine --------------------------- --------------------------- Name: Calvin Chow Name: James C. Romine --------------------------- ------------------------- Title: Chief Executive Officer Title: Science Director ---------------------------- ------------------------- Date: 4/20/04 Date: 4/20/04 ---------------------------- -------------------------- *** Confidential treatment requested pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.5

                                                                    EXHIBIT 10.5

                         LICENCE AGREEMENT (CASE #1243)

                                    Between

                    President and Fellows of Harvard College

                                      And

                                 NanoSys, Inc.

               Effective as of October 4, 2001 ("Effective Date")
                             Re: Harvard Case #1243

         In consideration of the mutual promises and covenants set forth below,
         the parties hereto agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

         As used in this Agreement, the following terms shall have the following
         meanings:

1.1      ACADEMIC RESEARCH PURPOSE: use of PATENT RIGHTS solely for academic
         non-commercial research or other non-for-profit scholarly purposes,
         which use in undertaken at a non-profit or governmental institution.
         ACADEMIC RESEARCH PURPOSES does not include selling products covered by
         PATENT RIGHTS or using PATENT RIGHTS in researching, developing,
         producing or manufacturing products for sale, or performance of
         services a free or other financial consideration. It is understood that
         using the PATENT RIGHTS to conduct normal research activities at
         non-profit or governmental institution is within the defined term of
         ACADEMIC RESEARCH PURPOSE.

1.2      AFFILIATE: any entity which controls, is controlled by, or is under
         common control with a party. An entity shall be regarded as in control
         of another entity for purposes of this definition if it owns or control
         at least fifty percent (50%) of the shares entitled to vote in the
         election of directors (or in the case of an entity that is not a
         corporation, for the election of the corresponding managing authority).
         Unless otherwise specified, the term LICENSEE includes AFFILIATES.

1.3      FIELD: All fields of use.

1.4      HARVARD: President and Fellows of Harvard College, a nonprofit
         Massachusetts educational corporation having offices at the Office for
         Technology and Trademark



         Licensing, Holyoke Centre, Suite 727, 1350 Massachusetts Avenue,
         Cambridge, Massachusetts 02138.

1.5      LICENSED PROCESSES: methods, processes or procedures covered by at
         least one VALID CLAIM included within the PATENT RIGHTS.

1.6      LICENSED PRODUCTS: products covered by at least one VALID CLAIM
         included within the PATENT RIGHTS or products made in accordance with
         LICENSED PROCESSES.

1.7      LICENSEE: Nanosys, Inc., a corporation organized under the laws of
         Delaware having its principal offices at CW Group East, 1041 Third
         Avenue, New York, New York 10021.

1.8      NET SALES: the amounts actually received for sales, leases, or other
         dispositions of LICENSED PRODUCTS to non-AFFILIATE third parties, less:

         (a) customary [*** Redacted] actually allowed and taken;

         (b) amounts [*** Redacted] by reason of [*** Redacted]

         (c) to the extent separately stated on purchase orders, invoices, or
             other documents of sale: (i) [*** Redacted] levied on the
             production, sale, transportation, delivery, importation,
             exportation or use of LICENSED PRODUCTS; (ii) charges for [***
             Redacted] provided by third parties, including any [*** Redacted]
             thereon.

         NET SALES also includes the fair market value of any non-cash
         consideration received for the sale, lease or other disposition of
         LICENSED PRODUCTS to non-AFFILIATE third parties; provided NET SALES
         shall not include any [*** Redacted] payments in consideration for the
         [*** Redacted] to the intellectual property of LICENSEE or third
         parties, including the [*** Redacted] hereunder, bona fide [***
         Redacted] made in good faith and any payments for [*** Redacted].

         In the event that a LICENSED PRODUCT is sold or leased as a combination
         product containing the LICENSED PRODUCT and one or more other
         components, NET SALES shall be calculated by multiplying the gross
         amount invoiced for the sale of the combination product by the fraction
         [*** Redacted] where A is the [*** Redacted] price of the LICENSED
         PRODUCT sold separately by LICENSEE, and B is the [*** Redacted] of
         such other components of the combination products sold separately by
         LICENSEE during the relevant royalty payment period.  In the event a
         substantial number of such separate sales were not made during the
         relevant royalty period, then NET SALES shall be reasonably allocated
         by LICENSEE between such LICENSED PRODUCT and such other components of
         the combination based on their relative importance or value; provided
         that such LICENSED PRODUCT and such other components shall not be
         considered a "combination product" unless such LICENSED PRODUCT and
         such other components are offered for sale or marketed by LICENSEE
         separately as well as together.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               2



1.9      PATENT RIGHTS: PATENT RIGHTS shall include (i) the applications and
         patents as listed in Appendix A of this Agreement, (ii) any foreign
         counterparts to such patents and patent applications, (iii) the
         inventions described and claimed in the foregoing, (iv) any divisions,
         continuations, substitution of the foregoing, and (v) specific claims
         of any continuations-in-part of the foregoing to the extent the
         specific claims are directed to subject matter described in the
         foregoing in a manner sufficient to support such specific claims under
         35 U.S.C. and to the extent Licensable by HARVARD, (vi) all patents
         issuing on any of the foregoing, and (vii) registrations, renewals,
         reissues, reexaminations, extensions or patents of addition of any kind
         with respect to any of such patents. For purposes of this Agreement
         "Licensable" shall mean those claims of continuations-in-parts filed
         after the Effective Date for which HARVARD has sole ownership (or has
         been granted the sole right to license by a co-owner) and where there
         are no obligations to grant licenses to a third party as the result of
         research support provided to one or more of the inventors.

1.10     SERVICE INCOME: the financial consideration actually received for the
         utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE
         which is contracted for by a non-AFFILIATE third party, less the
         deductions stated in Sections 1.8(a), (b) and (c); provided, however,
         that such amounts shall only be included in SERVICE INCOME if LICENSEE
         does not [*** Redacted] with respect to the PATENT RIGHTS licensed in
         this Agreement on the NET SALE of such LICENSED PRODUCTS or the NET
         SALE of LICENSED PRODUCTS made in accordance with such use of the
         LICENSED PROCESSES. SERVICE INCOME shall specifically exclude any [***
         Redacted], payments in consideration for the [*** Redacted] of the
         LICENSEE or third parties, including the [*** Redacted] made in good
         faith and any[*** Redacted].

         In the event that any service contemplated hereunder includes any
         services other than the utilization of [*** Redacted] or [*** Redacted]
         LICENSEE shall in good faith determine the portion of the payments
         received for such service that are intended as consideration for the
         utilization of [*** Redacted] or [*** Redacted] by LICENSEE, and such
         portion shall be used to determine the SERVICE INCOME for such service.
         In such event, LICENSEE shall promptly deliver to HARVARD a written
         report detailing such calculation, together with a copy of the
         applicable provisions of the agreements related to such service.  All
         such reports and provisions of agreements shall be deemed Confidential
         Information of LICENSEE subject to Section 11.1.  In the event that
         HARVARD disagrees with the determination made by LICENSEE of SERVICE
         INCOME for such service, HARVARD shall so notify LICENSEE in writing,
         and a representative of LICENSEE  and a representative of HARVARD shall
         meet in order to discuss and resolve such disagreement.  If such
         disagreement cannot be resolved within sixty (60) days, such
         disagreement shall be subject to resolution in accordance with
         paragraph 11.10.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               3



1.11     SUBLICENSE INCOME: the amount paid to LICENSEE by a third party (other
         than an AFFILIATE of LICENSEE) for the granting of a sublicense under
         Section 3.1, including but not limited to (i) [*** Redacted], (ii) [***
         Redacted], (iii) [*** Redacted] and (vi) the [*** Redacted] in cash of
         any non-cash consideration for such sublicense, but specifically
         excluding any [*** Redacted] payments in consideration for the
         [*** Redacted], [*** Redacted] and any [*** Redacted]. It is understood
         and agreed that sublicense income received by LICENSEE shall be net of
         withholding taxes.

         If LICENSEE sublicenses [*** Redacted] to a third party and at the same
         time also grants such third party rights to [*** Redacted] or [***
         Redacted] then all compensation received from the third party for such
         rights shall be combined and [*** Redacted] that would constitute
         SUBLICENSE INCOME  under Section 1.11 and shall promptly deliver to
         HARVARD a written report detailing such calculation, together with a
         copy of the applicable provisions of the agreements with the third
         party. All such reports and provisions of agreements shall be deemed
         Confidential Information of LICENSEE subject to Section 11.1.  In the
         event that HARVARD disagrees with the determination made by LICENSEE of
         SUBLICENSE INCOME, HARVARD shall so notify LICENSEE in writing, and a
         representative of LICENSEE and a representative of HARVARD shall meet
         in order to discuss and resolve such disagreement. If such disagreement
         cannot be resolved within sixty (60) days, such disagreement shall be
         subject to resolution in accordance with Section 11.10.

1.12     TERRITORY: Worldwide.

1.13     VALID CLAIM: either (i) a claim of an issued patent that has not
         expired or been held unenforceable or invalid by an agency or a court
         of competent jurisdiction, and which has not been admitted to be
         invalid or unenforceable through reissue, disclaimer or otherwise;
         provided, however, that if the holding of such court or agency is later
         reversed by a court or agency with overriding authority, the claim
         shall be reinstated as a Valid Claim with respect to Net Sales made
         after the date of such reversal, of (ii) a claim of a pending patent
         application that has not been abandoned or finally rejected without the
         possibility of appeal or re-filing and that has been pending for less
         than five (5) years from its priority date, and is being actively
         prosecuted in good faith.

1.14     The terms "Public Law 96-517" and "Public Law 98-620" include all
         amendments to those statutes.

1.15     The terms "sold" and "sell" include, without limitation, leases and
         other dispositions and similar transactions.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               4


1.16     RELATED LICENSE AGREEMENTS: Other patent license agreements between
         LICENSEE and HARVARD licensing patent rights known internally at
         HARVARD as Case #1852, #1765, #1923, #1924, #1678, #1641, #1489, #1352,
         #1243, #1137, #1816, #1865, and #1935 to LICENSEE.

1.17     R&D SPENDING, MINIMUM INVESTMENT: shall have the meanings as set forth
         in Section 4.5.

1.18     DEVELOPMENT PAYMENT: DEVELOPMENT PAYMENTS shall mean (a) any payments,
         in consideration for, or to support, research and/or development
         efforts by LICENSEE and (b) any reimbursement of expenses including
         without limitation patent expenses.

                                   ARTICLE II
                                    RECITALS

2.1      HARVARD is owner (or HARVARD will be owner) by assignment from
         Charles Lieber and Piedong Yang of their entire right, title and
         interest in United States Patents 5,897,584, issued April 27, 1999 and
         6,036,774 issued March 14, 2000 entitled Metal Oxide Nanorods (Harvard
         Case #1243), in the foreign patent applications corresponding thereto,
         and in the inventions described and claimed therein.

2.2      HARVARD has the authority to issue license under PATENT RIGHTS.

2.3      HARVARD is committed to the policy that ideas or creative works
         produced at HARVARD should be used for the greatest possible public
         benefit, and believes that every reasonable incentive should be
         provided for the prompt introduction of such ideas into public use, all
         in a manner consistent with the public interest.

2.4      LICENSEE intends to use commercially reasonable efforts to develop the
         invention(s), and to bring to market at least one product falling
         within the definition of LICENSED PRODUCT or otherwise embodying the
         subject matter described or claimed in the patents rights licensed
         under such agreements.

2.5      LICENSEE is desirous of obtaining an exclusive license in the TERRITORY
         in order to practice the above-referenced in invention covered by
         PATENT RIGHTS in the United States and in certain foreign countries,
         and to manufacture, use and sell in the commercial market the products
         made in accordance therewith, and HARVARD is desirous of granting such
         a license to LICENSEE in accordance with the terms of this Agreement.

                                  ARTICLE III
                                GRANT OF RIGHTS

3.1      HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
         terms and conditions hereof, an exclusive (except as set forth in
         Sections 3.2(a) and 3.2(b) license under PATENT RIGHTS in the TERRITORY
         and in the FIELD (i) to make and have made, to use and have used, to
         sell and have sold, to offer for sale, import, export, or


                                                                               5


         otherwise distribute the LICENSED PRODUCTS, (ii) to practice the
         LICENSED PROCESSES, and (iii) to otherwise fully exploit the PATENT
         RIGHTS, and (iv) to have the foregoing performed on behalf of LICENSEE
         by a third party, in each case for the life of the PATENT RIGHTS. The
         foregoing license under PATENT RIGHTS shall include the full right to
         grant sublicenses, and LICENSEE shall promptly provide copies of any
         sublicenses of PATENT RIGHTS to HARVARD for its review. Unless HARVARD
         has rendered the license under PATENT RIGHTS non-exclusive under
         Section 3.2 (d), HARVARD agrees that it will not grant licenses under
         PATENT RIGHTS to others, nor make, use, sell, offer for sale, import or
         otherwise exploit PATENT RIGHTS itself except as required by HARVARD's
         obligations in Section 3.2 (a) or as permitted in Section 3.2 (b).

3.2      The granting and exercise of this license is subject to the following
         conditions:

         (a)      HARVARD's "Statement of Policy in Regard to Inventions,
                  Patents and Copyrights," dated August 10, 1998, Public Law
                  96-517 and Public Law 98-620, and HARVARD's obligations under
                  prior or current agreements with other sponsors of research
                  and, with regard to continuations-in-part. contained in the
                  PATENT RIGHTS, any future agreements with other sponsors of
                  research related to such continuations-in-part. Any right
                  granted in this Agreement greater than that permitted under
                  Public Law 96-517, or Public Law 98-620, shall be subject to
                  modification to the extent required to conform to the
                  provisions of those status.

         (b)      HARVARD reserves the right to make and use, and grant to other
                  non-profit or governmental institutions non-exclusive licenses
                  to make and use, in each case solely for ACADEMIC RESEARCH
                  PURPOSES the subject matter described and claimed in PATENT
                  RIGHTS. HARVARD shall promptly notify LICENSEE of any rights
                  granted to any third party (other than the U.S. government)
                  under Sections 3.2(a) and (b).

         (c)      LICENSEE shall use commercially reasonable efforts to effect
                  introduction into the commercial market at least one product
                  falling within the definition of LICENSED PRODUCT or
                  otherwise embodying the subject matter described or claimed in
                  PATENT RIGHTS, consistent with sound and reasonable business
                  practice and judgment; thereafter, until the expiration of
                  this Agreement, LICENSEE shall use commercially reasonable
                  efforts to endeavor to keep any such product reasonably
                  available to the public so long as it shall be a sound and
                  reasonable commercial practice to do so.

         (d)      At any time after five (5) years from the effective date of
                  this Agreement, HARVARD may render this license non-exclusive
                  if LICENSEE has not:

                  (i)               used commercially reasonable efforts to put
                           the licensed subject matter into commercial use in
                           one or more of the countries hereby licensed,
                           directly or through a sublicense; nor


                                                                               6



                  (ii)              used commercially reasonable efforts to keep
                           products falling within the definition of LICENSED
                           PRODUCT or otherwise embodying the subject matter
                           described or claimed in PATENT RIGHTS reasonably
                           available to the public so long as it shall be a
                           sound and reasonable commercial practice to do so;
                           nor

                  (iii)             engaged in research, development,
                           manufacturing, marketing or sublicensing activity
                           that is commercially reasonably appropriate to
                           achieving Section 3.2(d)(i) or 3.2(d)(ii).

                  LICENSEE shall be deemed to have satisfied Section
                  3.2(d)(iii), and HARVARD shall not render the license of
                  PATENT RIGHTS granted hereunder non-exclusive, if LICENSEE'S
                  R&D SPENDING exceeds the MINIMUM INVESTMENT for such year as
                  set forth in Section 4.5.

         (e)      In all sublicenses granted by LICENSEE hereunder, LICENSEE
                  shall include a requirement that the sublicensee use
                  commercially reasonable efforts to put the subject matter of
                  the sublicense into commercial use, provided that such
                  sublicensee is authorized to develop and sell to the public a
                  new product covered by PATENT RIGHTS on its own behalf.
                  LICENSEE shall further provide that such sublicenses are
                  subject and subordinate to the terms and conditions of this
                  Agreement, except for the rate of royalty on NET SALES paid by
                  such sublicensee to the LICENSEE. Copies of all sublicense
                  agreements hereunder shall be provided promptly to HARVARD.
                  All sublicense agreements of LICENSEE provided to HARVARD
                  shall deemed Confidential Information of LICENSEE subject to
                  Section 11.1.

         (f)      At any time eight (8) years after the effective date of this
                  Agreement, if LICENSEE is unable or unwilling to grant
                  sublicenses, either as suggested by HARVARD or by a potential
                  sublicensee or otherwise, then HARVARD may directly license
                  such potential sublicensee, but only if: (i) LICENSEE is not
                  currently pursuing development of LICENSED PRODUCTS for the
                  same application as contemplated by the potential sublicensee,
                  or LICENSEE commits to do so within a two-year period, (ii)
                  the granting of such a license by HARVARD to the potential
                  sublicensee will increase the availability of useful products
                  to the public, (iii) the granting of such license by HARVARD
                  will not materially adversely affect LICENSEE'S then current
                  business or reasonably foreseeable future business (e.g., such
                  license is not intended for an application competitive with
                  LICENSEE) and (iv) HARVARD notifies LICENSEE of its intention
                  to grant such license and permits LICENSEE a reasonable period
                  to negotiate a sublicense on its own.

         (g)      To the extent required by law, during the period of
                  exclusivity of this license in the United States, LICENSEE
                  shall cause any LICENSED PRODUCT produced for sale in the
                  United States to be manufactured substantially in the United
                  States.

3.3      All rights reserved to the United States Government and others under
         Public Law 96-517, and Public Law 98-620, shall remain and shall in no
         way be affected by this Agreement.


                                                                               7



3.4      HARVARD shall promptly notify LICENSEE when any new patent or patent
         application arises from (i) research conducted in the laboratory of
         Dr. Lieber or Dr. Park, or (ii) improvements made by HARVARD under the
         direction of Dr. Lieber or Dr. Park on the subject matter described in
         PATENT RIGHTS. If LICENSEE so requests and the intellectual property is
         available for licensing, HARVARD will evaluate in good faith LICENSEE'S
         proposal along with proposals received from any third parties. Any
         decision to grant a license to LICENSEE shall be subject to approval by
         HARVARD'S Committee on Patents and Copyrights. In the event LICENSEE
         and HARVARD cannot agree on terms for a license to any new intellectual
         property which is dominated by PATENT RIGHTS, HARVARD shall not offer
         any third party terms more favorable than the terms offered to
         LICENSEE.

                                   ARTICLE IV
                                    ROYALTIES

4.1      LICENSEE shall pay to HARVARD a non-refundable license royalty fee in
         the sum of [*** Redacted] dollars ($[*** Redacted]) upon execution of
         this Agreement.

4.2      As consideration for the rights granted hereunder, LICENSEE shall pay
         to HARVARD a non-refundable fee in the form of stock of LICENSEE as
         follows:

                  (i)     LICENSEE shall issue to HARVARD [*** Redacted]
                          ([*** Redacted]) fully vested shares, at a price per
                          share of $0.001 per share and an aggregate value of
                          $[*** Redacted] of LICENSEE'S common stock which
                          represent [*** Redacted] percent ([*** Redacted]%) of
                          the reserved shares for founders (total 3.2 million
                          shares) shown on the capitalization table of LICENSEE
                          attached as Appendix B ("Shares") upon execution of
                          this Agreement, provided, however, that HARVARD shall
                          be subject to and enter into (1) appropriate
                          agreements and related documents as required of other
                          stockholders of LICENSEE, including without limitation
                          a Common Stock Purchase Agreement, and (2) a Voting
                          Agreement by and among the LICENSEE, HARVARD and
                          certain other holders of common stock of LICENSEE
                          dated as of even date hereof.

                  (ii)     HARVARD'S ownership rights to Shares shall not be
                           affected should the license pursuant to this
                           Agreement be terminated by LICENSEE or HARVARD.

4.3(a)   LICENSEE shall pay to HARVARD during the term of this Agreement a
         royalty on NET SALES by LICENSEE according to the following schedule:

                  (i)      [*** Redacted]% of NET SALES by LICENSEE in [***
                           Redacted] applications;

                  (ii)     [*** Redacted]% of NET SALES by LICENSEE in [***
                           Redacted] applications; or

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               8



                  (iii)    [*** Redacted]% of NET SALES by LICENSEE in [***
                  Redacted] applications.

                  In the event, any NET SALES by LICENSEE reasonably falls
                  within more than one of categories (i) to (iii) above,
                  LICENSEE shall pay to HARVARD the lowest applicable royalty
                  set forth in such categories.

         (b)      For each LICENSED PRODUCT sold by LICENSEE, LICENSEE may
                  credit up to [*** Redacted] ([*** Redacted]) of royalties that
                  LICENSEE is paying to third parties (or HARVARD under
                  agreements not included within section 4.3(c)) on LICENSEE'S
                  sales of that LICENSED PRODUCT, provided that the royalty paid
                  to HARVARD shall not be reduced below [*** Redacted] percent
                  ([*** Redacted]%) of the NET SALES of that LICENSED PRODUCT
                  for which such third party royalties are being paid.

         (c)      In the event that sales of a LICENSED PRODUCT are subject to
                  the payment of royalties under one or more of the RELATED
                  LICENSE AGREEMENTS or any license agreements with HARVARD with
                  the same effective date as this Agreement, then the total
                  royalty payment due HARVARD under all such agreements
                  including this Agreement shall be at most the royalty payment
                  due under this Section 4.3 on such NET SALE, no matter how
                  many license agreements from HARVARD are involved, and
                  notwithstanding the terms of any such agreement. LICENSEE
                  shall notify HARVARD of the identity of each license agreement
                  that includes patent rights covering the product or process,
                  and HARVARD shall distribute the royalties evenly among such
                  agreements, including this Agreement.

         (d)      LICENSEE shall pay HARVARD [*** Redacted] percent ([***
                  Redacted]%) of SUBLICENSE INCOME received by LICENSEE for a
                  sublicense of PATENT RIGHTS. If compensation for such a
                  sublicense of PATENT RIGHTS is bundled with compensation
                  received for the sublicensing of the other HARVARD patents
                  rights or other HARVARD intellectual property licensed to
                  LICENSEE under the RELATED LICENSE AGREEMENTS or any
                  agreements with HARVARD having the same effective date as this
                  Agreement, then LICENSEE shall pay HARVARD at most the royalty
                  payment due under this Section 4.3(d) for such SUBLICENSE
                  INCOME no matter how many license agreements from HARVARD are
                  involved, and notwithstanding the terms of any such license
                  agreements. In such a case, LICENSEE shall notify HARVARD of
                  the identity of each license agreement involved and HARVARD
                  shall distribute the royalties equally among those license
                  agreements, including this Agreement.

         (e)      For provision of services under PATENT RIGHTS, LICENSEE shall
                  pay a royalty of [*** Redacted] percent ([*** Redacted]%) of
                  SERVICE INCOME received by LICENSEE from each and every third
                  party ("Third Party") to whom LICENSEE provides such services.
                  In the event any services from which SERVICE INCOME is derived
                  are subject to the payment of royalties under the RELATED
                  LICENSE AGREEMENTS or any agreement with HARVARD having the
                  same effective date as this Agreement, then the total royalty
                  due under all such agreements, including this Agreement, shall
                  be at most the royalty

         *** Confidential treatment requested pursuant to a request for
         confidential treatment filed with the Securities and Exchange
         Commission. Omitted portions have been filed separately with the
         Commission.

                                                                               9





                  payment due under this Section 4.3 on such services, no matter
                  how many license agreements from HARVARD are involved, and
                  notwithstanding the terms of any such license agreements. In
                  such event, LICENSEE shall notify HARVARD of the identity of
                  each license agreement involved and HARVARD shall distribute
                  the royalties equally among those license agreements,
                  including this Agreement.

         (f)      If the license pursuant to this Agreement is converted to a
                  non-exclusive one under Section 3.2(d) and if another
                  non-exclusive license to any of PATENT RIGHTS is granted or
                  otherwise exists for any field or territory, then the royalty
                  rate of this Agreement shall be adjusted so as not to exceed
                  the royalty rate payable by such other non-exclusive licensee
                  under such PATENT RIGHTS in such field or territory, provided
                  that LICENSEE agrees to amend this Agreement to include terms
                  requested by HARVARD that have been accepted by such other
                  non-exclusive licensee.

         (g)      On sales between LICENSEE and its AFFILIATES for resale, the
                  royalty shall be paid on the NET SALES of the AFFILIATE.

         (h)      In the event that more than one VALID CLAIM within PATENT
                  RIGHTS is applicable to any LICENSED PRODUCT subject to
                  royalties under this Section 4.3, then only one royalty shall
                  be paid to HARVARD in respect of such LICENSED PRODUCT. In no
                  event shall more than one royalty be due to HARVARD with
                  respect to any LICENSED PRODUCT unit; nor shall a royalty be
                  payable under this Section 4.3 with respect to sales of
                  LICENSED PRODUCTS for clinical trials or as samples nor the
                  use of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE for
                  such purposes, in each case whether or not in collaboration
                  with a third party.

4.4      No later than January 1 of each calendar year after the effective date
         of this Agreement, LICENSEE shall pay to HARVARD the following
         non-refundable license maintenance royalty and/or advance on royalties.
         Such payments may be credited against running royalties due for that
         calendar year and Royalty Reports shall reflect such a credit. Such
         payments shall not be credited against milestone payments (if any) nor
         against royalties due for any subsequent calendar year.

                  January 1, 2002           $[*** Redacted]
                  January 1, 2003           $[*** Redacted]
                  January 1, 2004           $[*** Redacted]
                  January 1, 2005           $[*** Redacted]
                  January 1, 2006           $[*** Redacted]
                  January 1, 2007           $[*** Redacted]
                  each year thereafter      $[*** Redacted]

4.5      Notwithstanding Section 4.4, the minimum royalty set forth in Section
         4.4 for the years 2002, 2003, and 2004 will be waived if LICENSEE'S
         spending on research and development (LICENSEE'S "R&D SPENDING")
         exceeds the amount set forth below for each category for such year
         (such amounts below, the "MINIMUM INVESTMENT").


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              10





                          CHEMICAL AND
                        BIOLOGICAL SENSOR    OPTOELECTRONICS    NANOELECTRONICS
                          APPLICATIONS         APPLICATIONS       APPLICATIONS
                        -----------------    ---------------    ---------------
                                                       
Year 2002:              $  [*** Redacted]     [*** Redacted]     [*** Redacted]
Year 2003:              $  [*** Redacted]     [*** Redacted]     [*** Redacted]
Year 2004:              $  [*** Redacted]     [*** Redacted]     [*** Redacted]
Year 2005               $  [*** Redacted]     [*** Redacted]     [*** Redacted]
Year 2006               $  [*** Redacted]     [*** Redacted]     [*** Redacted]
Each Year Thereafter    $  [*** Redacted]     [*** Redacted]     [*** Redacted]


         LICENSEE'S MINIMUM INVESTMENT may be allocated by LICENSEE in any way
         within the three categories set forth above among the different subject
         matter of the RELATED LICENSE AGREEMENTS.

                                    ARTICLE V
                                    REPORTING

5.1      Within six (6) months of the Effective Date, LICENSEE will provide to
         HARVARD a written research and development plan acceptable to
         LICENSEE'S investors under which LICENSEE intends to bring the subject
         matter of the licenses granted hereunder into commercial use upon
         execution of this Agreement. Such plan will include projections of
         sales and proposed marketing efforts. It is understood that LICENSEE
         may provide one research and development plan for all RELATED LICENSE
         AGREEMENTS.

5.2      No later than sixty (60) days after June 30 of each calendar year,
         LICENSEE shall provide to HARVARD a written annual Progress Report
         describing progress on the commercialization of PATENT RIGHTS during
         the most recent twelve (12) month period ending June 30, the amount of
         LICENSEE'S R&D SPENDING relating to the subject matter described or
         claimed in PATENT RIGHTS during such time, and plans for the
         forthcoming year. If multiple technologies are covered by the license
         granted hereunder, the Progress Report shall provide the information
         set forth above for each technology. If progress differs from that
         anticipated in the plan required under Section 5.1, LICENSEE shall
         explain the reasons for the difference and, if appropriate or
         necessary, provide a modified research and development plan for
         HARVARD'S review. It is understood that LICENSEE may provide one
         Progress Report covering all RELATED LICENSE AGREEMENTS.

5.3      LICENSEE shall report to HARVARD the date of its first NET SALE of a
         LICENSED PRODUCT (or the date of its first use of a LICENSED PROCESS
         from which SERVICE INCOME is derived) in each country within thirty
         (30) days of occurrence. It is understood that LICENSEE shall be
         obligated to report the date of first sale of LICENSED PRODUCTS (or the
         first commercial use of LICENSED PROCESSES) under this Section 5.3 only
         once for each country.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              11



5.4       (a) LICENSEE shall submit to HARVARD within sixty (60) days after
          each calendar half year ending June 30 and December 31, a Royalty
          Report setting forth, for the most recent half year that ended on June
          30 or December 31, at least the following information:

                  (i)      the number and identification of LICENSED PRODUCTS
                           sold by LICENSEE that constitute a NET SALE, in each
                           country;

                  (ii)     total amounts received for such LICENSED PRODUCTS;

                  (iii)    an accounting for all LICENSED PROCESSES used or
                           sold;

                  (iv)     deductions applicable to determine the NET SALES
                           thereof;

                  (v)      the amount of SUBLICENSE INCOME received by LICENSEE;

                  (vi)     the amount of SERVICE INCOME received by LICENSEE;
                           and

                  (vii)    the amount of royalty due for such reporting period,
                           or, if no royalties are due to HARVARD for such
                           reporting period, the statement that no royalties are
                           due.

                  Such report shall be certified as correct by an officer of
                  LICENSEE and shall include a listing of all deductions from
                  royalties. It is understood that LICENSEE may submit one
                  Royalty Report covering all RELATED LICENSE AGREEMENTS.
                  However, the Royalty Report shall, for each type of income,
                  provide a detailed listing of the RELATED LICENSE AGREEMENTS
                  that are involved.

         (b)      LICENSEE shall pay to HARVARD with each such Royalty Report
                  the amount of royalty due with respect to such half year. If
                  multiple technologies are covered by the license granted
                  hereunder, LICENSEE shall specify which PATENT RIGHTS are
                  utilized for each category of LICENSED PRODUCTS and/or
                  LICENSED PROCESSES for which royalties are separately reported
                  in the Royalty Report.

         (c)      All payments due hereunder shall be deemed received when funds
                  are credited to HARVARD'S bank account and shall be payable by
                  check or wire transfer in United States dollars. Conversion of
                  foreign currency to U.S. dollars shall be made at the
                  conversion rate existing in the United States (as reported in
                  the New York Times or the Wall Street Journal) on the last
                  working day of each royalty period. No transfer, exchange,
                  collection or other charges shall be deducted from such
                  payments. If legal restrictions block the removal of local
                  currency from any country where a LICENSED PRODUCT is sold,
                  the royalties payable under this Agreement on NET SALES,
                  SERVICE INCOME and SUBLICENSING INCOME earned in such currency
                  in such country shall continue to be reported and accrued, but
                  will not be paid until such currency may be removed from such
                  country.

                                       12



         (d)      All plans or reports received under Sections 5.1, 5.2, 5.3,
                  5.4 shall deemed Confidential Information of LICENSEE subject
                  to Section 11.1; provided, however, that HARVARD may disclose
                  such information as required by law under Section 11.1 (b),
                  and may include in its usual reports the annual amounts of
                  royalties paid.

         (e)      Late payments shall be subject to a charge of one and one-half
                  percent (1.5%) per month, or $250, whichever is greater.

5.5      In the event of acquisition, merger, change of corporate name, or
         change of make-up, organization, or identity, LICENSEE shall notify
         HARVARD in writing within thirty (30) days of such event.

5.6      If LICENSEE or any of its sublicensees does not qualify as a "small
         entity" as provided by the United States Patent and Trademark Office,
         LICENSEE must notify HARVARD immediately.

                                   ARTICLE VI
                                 RECORD KEEPING

6.1      LICENSEE shall keep accurate records (together with supporting
         documentation) of LICENSED PRODUCTS made, used or sold under this
         Agreement, sufficient to determine the amount of royalties due to
         HARVARD hereunder. Such records shall be retained for at least three
         (3) years following the end of the reporting period to which they
         relate. They shall be available during normal business hours for
         examination, upon HARVARD'S reasonable request, not more than once in
         any twelve (12) month period and upon at least twenty (20) days
         prior notice, by an independent accountant under a duty of
         confidentiality, selected by HARVARD and reasonably acceptable to
         LICENSEE, for the sole purpose of verifying reports and payments under
         Section 5.4. In conducting examinations pursuant to this Section,
         HARVARD'S accountant shall have access to records materially relevant
         to the calculation of royalties under Article IV.

6.2      HARVARD'S accountant shall only disclose to HARVARD whether the reports
         and payments of royalties hereunder are accurate, and the amount of the
         underreporting or underpayment of royalties by LICENSEE, if any.

6.3      Such examination by HARVARD'S accountant shall be at HARVARD'S expense,
         except that if such examination shows an underreporting or underpayment
         in excess of five percent (5%) for any twelve (12) month period, then
         LICENSEE shall pay the reasonable out-of-pocket cost of such
         examination as well as any additional sum that would have been payable
         to HARVARD had the LICENSEE reported correctly, plus interest on said
         sum at the rate of one and one-half percent (1.5%) per month.



                                                                              13



                                  ARTICLE VII
               DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE

7.1      Within 30 days of the closing of LICENSEE'S sale of Series A Preferred
         Stock to venture capital investors, but not later than 60 days after
         the Effective Date, LICENSEE shall reimburse HARVARD for all reasonable
         out-of-pocket expenses HARVARD has incurred for the preparation,
         filing, prosecution and maintenance of PATENT RIGHTS, including for
         counseling with regard to such preparation, filing, prosecution and
         maintenance. Such expenses total [*** Redacted] as of the most recent
         invoice paid by HARVARD. Thereafter, LICENSEE shall reimburse HARVARD
         for all such future expenses upon receipt of quarterly invoices from
         HARVARD. Late payment of these invoices shall be subject to interest
         charges of one and one-half percent (1.5%) per month.

         HARVARD shall be responsible for the preparation, filing, prosecution
         and maintenance of any and all patent applications and patents included
         in PATENT RIGHTS. HARVARD will instruct counsel to directly notify
         HARVARD and LICENSEE and provide them copies of any communications to
         and from the United States and foreign patent offices relating to said
         prosecution, and drafts of all communications to the various patent
         offices, and will instruct counsel to consider any comments on such
         drafts, so that LICENSEE will be informed and apprised of the
         continuing prosecution of patent applications in PATENT RIGHTS.
         LICENSEE shall have reasonable opportunity to participate in decision
         making on key decisions affecting filing, prosecution and maintenance
         of patents and patent applications in PATENT RIGHTS.

7.2      HARVARD and LICENSEE shall cooperate fully in the preparation, filing,
         prosecution and maintenance of PATENT RIGHTS and of all patents and
         patent applications licensed to LICENSEE hereunder, executing all
         papers and instruments or requiring members of HARVARD to execute such
         papers and instruments so as to enable HARVARD to apply for, to
         prosecute and to maintain patent applications and patents in HARVARD'S
         name in any country. Each party shall provide to the other
         prompt notice as to all matters which come to its attention and which
         may affect the preparation, filing, prosecution or maintenance of any
         such patent applications or patents. In particular, LICENSEE must
         immediately notify HARVARD if LICENSEE does not qualify as a "small
         entity" as provided by the United States Patent and Trademark Office.

7.3      LICENSEE may elect to surrender its rights to any patent or patent
         application within PATENT RIGHTS in any country upon sixty (60) days
         written notice to HARVARD. Such notice shall not relieve LICENSEE from
         responsibility to reimburse HARVARD for expenses under Section 7.1
         relating to the filing, prosecution or maintenance of such patent or
         patent application incurred prior to the receipt of the written notice
         by HARVARD (or a longer period if specified in LICENSEE'S notice).


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                              14



                                  ARTICLE VIII
                                  INFRINGEMENT

8.1      With respect to any PATENT RIGHTS that have not been rendered
         non-exclusive under Section 3.2(d), LICENSEE shall have the right to
         enforce in its own name and at its own expense any patents within such
         PATENT RIGHTS. HARVARD agrees to notify LICENSEE promptly of each
         infringement of such patents of which HARVARD is or becomes aware.

8.2      (a)      If LICENSEE elects to commence an action as described above,
                  HARVARD may, to the extent permitted by law, elect to join as
                  a party in that action. Regardless of whether HARVARD elects
                  to join as a party, HARVARD shall cooperate fully with
                  LICENSEE in connection with any such action, including making
                  available relevant personnel, information, records, papers,
                  samples, specimens and other similar materials for the
                  purposes of such action as reasonably requested by LICENSEE
                  through the Office of Technology and Trademark Licensing at
                  HARVARD.

         (b)      If HARVARD elects to join as a party pursuant to Subsection
                  (a), HARVARD shall jointly control the action with LICENSEE.

         (c)      LICENSEE shall reimburse HARVARD for any out-of-pocket costs
                  HARVARD reasonably incurs, including reasonable attorneys'
                  fees, as part of an action brought by LICENSEE under Section
                  8.1, whether or not HARVARD becomes a co-plaintiff.

8.3      If LICENSEE elects to commence an action as described above, LICENSEE
         may deduct from its royalty payments to HARVARD with respect to the
         patent(s) subject to suit an amount not exceeding fifty percent (50%)
         of LICENSEE'S expenses and costs of such action, including reasonable
         attorneys' fees and reimbursement of amounts under Section 8.2(c)
         above; provided, however, that such reduction shall not exceed fifty
         percent (50%) of the total royalty due to HARVARD with respect to the
         patent(s) subject to suit for each calendar year. If such fifty percent
         (50%) of LICENSEE'S expenses and costs exceeds the amount of royalties
         deducted by LICENSEE for any calendar year, LICENSEE may to that extent
         reduce the royalties due to HARVARD from LICENSEE in succeeding
         calendar years, but never by more than fifty percent (50%) of the total
         royalty due in any one year with respect to the patent(s) subject to
         suit.

8.4      Neither party may enter into a settlement, consent judgment or other
         voluntary final disposition of any suit under Section 8.1, 8.6, 8.7 and
         8.8 without the prior written consent of other party, which consent
         shall not be unreasonably withheld, if such settlement, consent
         judgment or other voluntary final disposition includes any admissions
         or statements about the validity or enforceability of PATENT RIGHTS.

8.5      Recoveries or reimbursements from actions commenced pursuant to this
         Article shall first be applied to reimburse LICENSEE and HARVARD for
         litigation costs not paid from royalties deducted by LICENSEE.


                                                                              15




         pursuant to Section 8.3. Any remaining recoveries or reimbursements
         shall be shared as follows: 80% to LICENSEE and 20% to HARVARD.

8.6      If LICENSEE elects not to exercise its right to enforce the PATENT
         RIGHTS against any infringement pursuant to this Article, HARVARD may
         do so at its own expense, controlling such action and retaining all
         recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in
         connection with any such action.

8.7      Without limiting the generality of Section 8.6, HARVARD may, at its
         election and by notice to LICENSEE, establish a time limit of ninety
         (90) days for LICENSEE to decide whether to enforce the PATENT RIGHTS
         against any infringement of which HARVARD is or becomes aware. If, by
         the end of such ninety (90) day period, LICENSEE has not commenced such
         an action or taken reasonable efforts to settle such infringement,
         HARVARD may enforce the PATENT RIGHTS against such an infringement at
         its own expense, controlling such action and retaining all recoveries
         therefrom. Notwithstanding sections 8.6 and 8.7, HARVARD shall not
         bring any action alleging the infringement of PATENT RIGHTS against any
         sublicensee of LICENSEE under PATENT RIGHTS, without the consent of
         LICENSEE.

8.8      If a declaratory judgment action is brought naming LICENSEE as a
         defendant and alleging invalidity of any of the PATENT RIGHTS, if both
         parties agree, HARVARD may take over the sole defense of the action at
         its own expense. LICENSEE shall cooperate fully with HARVARD in
         connection with any such action.

8.9      If LICENSEE or any sublicensee, distributor or other customer is sued
         by a third party charging infringement of patent rights that dominate a
         claim of PATENT RIGHTS, with respect to the manufacture, use,
         distribution or sale of LICENSED PRODUCT or practice or use of a
         LICENSED PROCESS, LICENSEE will promptly notify HARVARD. As between the
         parties to this Agreement, LICENSEE will be entitled to control the
         defense in any such action(s) and withhold up to one-half (1/2) of the
         amounts otherwise payable to HARVARD hereunder to pay for defense
         costs, attorneys fees and any liability incurred in such infringement
         suit(s). If Licensee is required to pay a royalty or other amount to a
         third party as a result of a final judgment or settlement, the amounts
         payable to HARVARD hereunder will be reduced as provided in Section 4.3
         above.

                                   ARTICLE IX
                            TERMINATION OF AGREEMENT

9.1      This Agreement, unless terminated as provided herein, shall remain in
         effect until the last patent or patent application in PATENT RIGHTS has
         expired or been abandoned.

9.2      HARVARD may terminate this Agreement as follows:

         (a)      If LICENSEE does not make a payment due hereunder and fails to
                  cure such nonpayment (including the payment of interest in
                  accordance with Section 5.4(e)) within forty-five (45) days
                  after the date of notice in writing of such non-payment by
                  HARVARD. If LICENSEE disputes the amount of such non-payment
                  in writing



                                                                              16


                  within such forty-five (45) day period, HARVARD shall not have
                  the right to terminate this Agreement until it has been
                  determined in an arbitration proceeding under Section 11.10
                  below that LICENSEE has failed to pay amounts owed hereunder,
                  and thereafter Licensee does not cure such failure within
                  sixty (60) days after such determination. This Section 9.2(a)
                  shall not, however, suspend any obligation of LICENSEE to
                  compensate HARVARD for any undisputed amounts, as provided for
                  under any term of this Agreement, during the pendency of the
                  foregoing arbitration and cure period.

         (b)      If LICENSEE defaults in its obligations under Sections 11.2(c)
                  and 11.2(d) to procure and maintain insurance, and fails to
                  cure such breach within sixty (60) days after notice in
                  writing of such breach by HARVARD.

         (c)      If LICENSEE shall make an assignment for the benefit of
                  creditors, or shall have a petition in bankruptcy filed for or
                  against it, provided that such bankruptcy petition is not
                  dismissed within sixty (60) days after its filing. Such
                  termination shall be effective immediately upon HARVARD giving
                  written notice to LICENSEE.

         (d)      If LICENSEE is convicted of a felony within the United States
                  relating to the manufacture, use, or sale of LICENSED
                  PRODUCTS.

         (e)      Except as provided in Subsections (a), (b), (c), (d) above, if
                  LICENSEE materially breaches any obligations under this
                  Agreement and the breach has not been cured within ninety (90)
                  days after the date of notice in writing of such breach by
                  HARVARD. If LICENSEE disputes in writing that it has
                  materially breached this Agreement within such ninety (90) day
                  period, HARVARD shall not have the right to terminate this
                  Agreement until it has been determined in an arbitration
                  proceeding under Section 11.10 below that LICENSEE has
                  materially breached this Agreement, and thereafter Licensee
                  does not cure such breach within sixty (60) days after such
                  determination. This Section 9.2(e) shall not, however, suspend
                  any obligation of LICENSEE to compensate HARVARD for any
                  undisputed amounts, as provided for under any term of this
                  Agreement, during the pendency of the foregoing arbitration
                  and cure period.

9.3      All sublicenses granted by LICENSEE under this Agreement in compliance
         with the terms and conditions hereof shall survive the termination of
         this Agreement upon the request of the party to whom such sublicense is
         granted, provided that such party agrees in writing that (i) it will
         pay all royalties or other amounts that otherwise would have been due
         thereafter under such sublicense directly to HARVARD rather than
         LICENSEE, and (ii) HARVARD shall not be held liable for the breach or
         the performance of any obligations stated in such sublicense unless
         such obligations have been expressly assumed in writing by HARVARD.

9.4      LICENSEE may terminate this Agreement by giving ninety (90) days
         advance written notice of termination to HARVARD. Upon termination,
         LICENSEE shall promptly


                                                                              17



         submit a Royalty Report to HARVARD for the final reporting period and
         any royalty payments incurred during such reporting period, and any
         unreimbursed patent expenses under Section 7 that have been invoiced by
         HARVARD, shall become immediately payable with such Royalty Report.

9.5      Articles I, VI, IX, X and XI (except for Section 11.7) of this
         Agreement shall survive termination. Article VIII shall survive with
         respect to any infringement of third parties and/or any lawsuits filed
         by or against LICENSEE, prior to the termination of this Agreement. In
         the event this Agreement is terminated for any reason, LICENSEE may,
         within six months after the effective date of such termination, sell or
         otherwise dispose of all LICENSED PRODUCTS that LICENSEE may have on
         hand on the effective date of such termination, and fulfill any
         contracts requiring the use of LICENSED PRODUCTS and/or LICENSED
         PROCESSES that LICENSEE may have entered into prior to the date of such
         termination, subject to LICENSEE'S payment of amounts due to HARVARD
         under Section 4.3 of this Agreement.

9.6      In the event that after termination of this Agreement, HARVARD licenses
         PATENT RIGHTS to another licensee, HARVARD shall use commercially
         reasonable efforts to require such other licensee to pay the costs of
         the preparation, filing, prosecution and maintenance of PATENT RIGHTS.
         HARVARD shall reimburse LICENSEE for any costs so paid by such other
         licensee to the extent LICENSEE paid for such costs under Section 7.1.

                                   ARTICLE X
                         REPRESENTATIONS AND WARRANTIES

10.1     Except for the rights, if any, of the Government of the United States,
         HARVARD represents and warrants that:

         (a)      HARVARD is the owner of the entire right, title and interest
                  in and to the PATENT RIGHTS as they exist on the Effective
                  Date;

         (b)      HARVARD has the right and authority to enter into this
                  Agreement and grant the rights and licenses set forth herein,
                  including without limitation under PATENT RIGHTS;

         (c)      HARVARD has not previously granted, and will not grant in the
                  future, any rights in the PATENT RIGHTS that are inconsistent
                  with the rights and licenses granted to LICENSEE herein;

         (d)      To the best knowledge of HARVARD without having made an
                  investigation, as of the Effective Date, practice of
                  inventions within the PATENT RIGHTS does not infringe any
                  patent rights, trade secrets or other proprietary rights of
                  any third party,

         (e)      To the best knowledge of HARVARD, as of the Effective Date,
                  HARVARD does not own any rights in any other patent or patent
                  application, the claims of which would


                                                                             18


                  dominate the claims of a patent or patent application within
                  the PATENT RIGHTS or any practice of PATENT RIGHTS. If HARVARD
                  owns, now or thereafter, any such rights in such patents or
                  patent applications on which Dr. Lieber is an inventor,
                  HARVARD will negotiate in good faith to the extent it has the
                  legal right to do so  with LICENSEE to grant LICENSEE rights
                  to the extent sufficient to practice PATENT RIGHTS.

         (f)      To the best knowledge of HARVARD, all prior and current
                  agreements between HARVARD and other sponsors of research
                  under which HARVARD has obligations relating to PATENT RIGHTS
                  are listed on Appendix C.

10.2     Except as set forth in this Agreement, HARVARD does not warrant the
         validity of the PATENT RIGHTS licensed hereunder and makes no
         representations whatsoever with regard to the scope of the licensed
         PATENT RIGHTS or that such PATENT RIGHTS may be exploited by LICENSEE,
         an AFFILIATE, or sublicensee without infringing other patents.

10.3     EXCEPT FOR THE WARRANTIES STATED IN THIS AGREEMENT, HARVARD EXPRESSLY
         DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO
         EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY
         PARTICULAR PURPOSE OF THE PATENT RIGHTS OR INFORMATION SUPPLIED BY
         HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS
         AGREEMENT.

                                   ARTICLE XI
                                    GENERAL

11.1     (a)      The parties may, from time to time, in connection with this
                  Agreement disclose to each other Confidential Information. Any
                  Confidential Information shall be in writing and marked
                  "confidential" and disclosed only to the Office of Technology
                  and Trademark Licensing. As used in the this Agreement,
                  "Confidential Information" of a party shall mean (i) any
                  information disclosed in writing by such party to the other
                  party, which is marked by such party with the legend
                  "CONFIDENTIAL" or other similar legend sufficient to identify
                  the information as its confidential information, (ii) any
                  information disclosed orally by such party to the other party
                  which is identified as confidential at the time of disclosure
                  and is confirmed as confidential in writing within thirty (30)
                  days after such time of disclosure, or (iii) any information
                  deemed Confidential Information under the terms of this
                  Agreement. With respect to categories (i) and (ii) above,
                  "Confidential Information" shall not include any information
                  that is: (1) already known to the receiving party at the time
                  of disclosure hereunder, or (2) now or hereafter becomes
                  publicly known other than through acts or omissions of the
                  receiving party, or (3) is disclosed to the receiving party by
                  a third party under no obligation of confidentiality to the
                  disclosing party or (4) is independently developed by the
                  receiving party without use of the Confidential Information of
                  the disclosing party.


                                                                              19



         (b)      Each party shall maintain in confidence, and shall not use for
                  any purpose or disclose to any third party, the Confidential
                  Information of the other party. Notwithstanding the foregoing,
                  the receiving party may use or disclose the Confidential
                  Information of the disclosing party (i) to the extent
                  necessary to exercise its rights or fulfill its obligations
                  and/or duties under this Agreement, and (ii) to comply with
                  applicable law or governmental regulations or court order,
                  provided that the receiving party will give reasonable advance
                  notice to the disclosing party, and will use its reasonable
                  efforts to minimize the disclosure of Confidential Information
                  and to secure confidential treatment of any Confidential
                  Information disclosed.

         (c)      The terms of this Agreement shall be deemed "Confidential
                  Information" of both parties. In addition to the permissible
                  disclosures set forth in subsection (b) above, LICENSEE may
                  disclose such terms in confidence to its financial and legal
                  advisors, consultants, potential or actual investors,
                  potential or actual merger or acquisition partners, and others
                  on a need-to-know basis.

11.2     (a)      LICENSEE shall indemnify, defend and hold harmless HARVARD and
                  its current or former and future directors, governing board
                  members, trustees, officers, faculty and employees
                  (collectively, the "INDEMNITEES"), from and against any
                  lawsuit or cause or action against the INDEMNITEES brought by
                  a third party (collectively, "Claims"), based upon, arising
                  out of, or otherwise relating to this Agreement, including
                  without limitation any cause of action relating to product
                  liability concerning any product, process, or service made,
                  used or sold pursuant to any right or license granted under
                  this Agreement, except to the extent such Claims arise out of
                  or otherwise relate to the gross negligence or intentional
                  misconduct of any INDEMNITEES; and further provided that (i)
                  LICENSEE receives prompt notice of any such Claims; (ii)
                  LICENSEE is given the exclusive right to control the defense
                  and settlement of such Claims; and (iii) LICENSEE shall not be
                  obligated to indemnify any INDEMNITEE in connection with any
                  settlement for any Claim unless LICENSEE consents in writing
                  to such settlement.

         (b)      LICENSEE shall, at its own expense, defend against any actions
                  brought or filed against any INDEMNITEE hereunder with respect
                  to the subject of indemnity contained herein, whether or not
                  such actions are rightfully brought.

         (c)      Beginning at the time any such product, process or service is
                  being commercially distributed or sold (other than for the
                  purpose of obtaining regulatory approvals) by LICENSEE or by a
                  SUBLICENSEE, AFFILIATE or agent of LICENSEE, LICENSEE shall,
                  at its sole cost and expense, procure and maintain commercial
                  general liability insurance in amounts not less than [***
                  Redacted] per incident and [*** Redacted] annual aggregate and
                  naming the Indemnitees as additional insureds. During clinical
                  trials of any such product, process or service, LICENSEE
                  shall, at its sole cost and expense, procure and maintain
                  commercial general liability insurance in such equal or lesser
                  amount as HARVARD shall require, naming the Indemnitees as
                  additional insureds. Such commercial general liability
                  insurance shall provide: (i) product liability coverage; and
                  (ii) broad form contractual liability coverage for LICENSEE'S
                  indemnification under this Agreement. If LICENSEE elects to
                  self-

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              20


                  insure all or part of the limits described above (including
                  deductibles or retentions which are in excess of [***
                  Redacted] annual aggregate) such self-insurance program must
                  be acceptable to HARVARD and the Risk Management Foundation of
                  the Harvard Medical Institutions, Inc. in their sole
                  discretion. The minimum amounts of insurance coverage required
                  shall not be construed to create a limit of LICENSEE's
                  liability with respect to its indemnification under this
                  Agreement.

         (d)      LICENSEE shall provide HARVARD with written evidence of such
                  insurance upon request of HARVARD. LICENSEE shall provide
                  HARVARD with written notice at least fifteen (15) days prior
                  to the cancellation, non-renewal or material change in such
                  insurance; if LICENSEE does not obtain replacement insurance
                  providing comparable coverage within such fifteen (15) day
                  period, HARVARD shall have the right to terminate this
                  Agreement in accordance with Section 9.2(b).

         (e)      LICENSEE shall maintain such commercial general liability
                  insurance beyond the expiration or termination of this
                  Agreement during: (i) the period that any product, process, or
                  service, relating to, or developed pursuant to, this Agreement
                  is being commercially distributed or sold by LICENSEE or by a
                  sublicensee, AFFILIATE or agent of LICENSEE; and (ii) a
                  reasonable period after the period referred to in Subsection
                  (e)(i) above which in no event shall be less than fifteen
                  (15) years.

11.3     Nothing in this Agreement shall be construed as conferring any right to
         use HARVARD's name or insignia, or any adaptation of them, or the name
         of any of HARVARD's inventors in any advertising, promotional or sales
         literature without the prior written approval of HARVARD, or the
         inventor in the case of the use of the name of an inventor.

11.4     Except as stated in this Section 11.4, without the prior written
         approval of HARVARD in each instance, neither this Agreement nor the
         rights granted hereunder shall be transferred or assigned in whole or
         in part by LICENSEE to any person whether voluntarily or involuntarily,
         by operation of law or otherwise. LICENSEE may transfer or assign this
         Agreement and all rights hereunder, upon notice to HARVARD but without
         its consent, to any entity that succeeds to all or substantially all of
         the business of LICENSEE to which this Agreements pertains, whether by
         merger, operation of law, purchase or sale of all or substantially all
         of LICENSEE's stock or assets or otherwise; provided that such assignee
         or transferee promptly agrees in writing to be bound by the terms and
         conditions of this Agreement. Subject to the foregoing, this Agreement
         shall be binding upon the respective successors, legal representatives
         and assignees of HARVARD and LICENSEE.

11.5     The interpretation and application of the provisions of this Agreement
         shall be governed by the laws of the Commonwealth of Massachusetts.

11.6     LICENSEE shall comply with all applicable laws and regulations. In
         particular, it is understood and acknowledged that the transfer of
         certain commodities and technical data is subject to United States laws
         and regulations controlling the export of such commodities and
         technical data, including all Export Administration Regulations of the
         United States Department of Commerce. These laws and regulations among
         other things, prohibit or

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              21



         require a license for the export of certain types of technical data to
         certain specified countries. LICENSEE hereby agrees and gives written
         assurance that it will comply with all United States laws and
         regulations controlling the export of commodities and technical data,
         that it will be solely responsible for any violation of such by
         LICENSEE or its AFFILIATES or sublicensees, and that it will defend and
         hold HARVARD harmless in the event of any legal action of any nature
         occasioned by such violation with respect to LICENSED PRODUCTS.

11.7     LICENSEE agrees: (i) to obtain all regulatory approvals required for
         the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES;
         and (ii) to mark LICENSED PRODUCTS with the numbers of the applicable
         patents within PATENT RIGHTS, to the extent required by law. LICENSEE
         also agrees to register or record this Agreement as is required by law
         or regulation in any country where the license is in effect, and
         HARVARD shall cooperate fully with LICENSEE in connection with any such
         registration or recordation.

11.8     Any notices to be given hereunder shall be sufficient if signed by the
         party (or party's attorney) giving same and either: (i) delivered in
         person; (ii) mailed certified mail return receipt requested; or (iii)
         faxed to other party if the sender has evidence of successful
         transmission and if the sender promptly sends the original by ordinary
         mail, in any event to the following addresses:

         If to LICENSEE:
           c/o CW Group East
           1041 Third Avenue
           New York, New York 10021
           Attn: Lawrence A. Bock
           Fax: 212/644-0354

         cc: Wilson, Sonsini, Goodrich & Rosati
             650 Page Mill Road
             Palo Alto, California 94304
             Attn: Michael J. O'Donnell, Esq.
             Fax: 650/493-6811

         If to HARVARD:
             Office for Technology and Trademark Licensing
             Harvard University
             Holyoke Center, Suite 727
             1350 Massachusetts Avenue
             Cambridge, MA 02138
             Fax: (617)495-9568

         By such notice either party may change their address for future
         notices.

                                                                              22



         Notices delivered in person shall be deemed given on the date
         delivered. Notices sent by fax shall be deemed given on the date faxed.
         Notices mailed shall be deemed given on the date postmarked on the
         envelope.

11.9     Should a court of competent jurisdiction later hold any provision of
         this Agreement to be invalid, illegal, or unenforceable, and such
         holding is not reversed on appeal, it shall be considered severed from
         this Agreement. All other provisions, rights and obligations shall
         continue without regard to the severed provision, provided that the
         remaining provisions of this Agreement are in accordance with the
         intention of the parties.

11.10    In the event of any controversy or claim arising out of or relating to
         any provision of this Agreement or the breach thereof, the parties
         shall try to settle such conflict amicably between themselves. Subject
         to the limitation stated in the final sentence of this Section, any
         such conflict which the parties are unable to resolve promptly shall be
         settled through arbitration conducted in accordance with the rules of
         the American Arbitration Association. The demand for arbitration shall
         be filed within a reasonable time after the controversy or claim has
         arisen, and in no event after the date upon which institution of legal
         proceedings based on such controversy or claim would be barred by the
         applicable statute of limitation. Such arbitration shall be held in
         Boston, Massachusetts. The award through arbitration shall be final and
         binding. Either party may enter any such award in a court having
         jurisdiction or may make application to such court for judicial
         acceptance of the award and an order of enforcement, as the case may
         be. Notwithstanding the foregoing, either party may, without recourse
         to arbitration, assert against the other party a third-party claim or
         cross-claim in any action brought by a third party, to which the
         subject matter of this Agreement may be relevant.

11.11    This Agreement constitutes the entire understanding between the parties
         and neither party shall be obligated by any condition or representation
         other than those expressly stated herein or as may be subsequently
         agreed to by the parties hereto in writing.

11.12    Nothing in this Agreement shall be deemed to require LICENSEE to
         exploit the PATENT RIGHTS, except to the extent expressly set forth in
         this Agreement, and nothing in this Agreement shall be deemed to
         prevent LICENSEE from commercializing products similar to or
         competitive with a LICENSED PRODUCT.

11.13    The relationship between HARVARD and LICENSEE established by this
         Agreement is that of independent contractors. Nothing in this Agreement
         shall be construed to create any other relationship between HARVARD and
         LICENSEE. Neither party shall have any right, power or authority to
         assume, create or incur any expense, liability or obligation, express
         or implied, on behalf of the other.

11.14    In the event either party hereto is prevented from or delayed in the
         performance of any of its obligations hereunder by reason of acts of
         God, war, strikes, riots, storms, fires or any other cause whatsoever
         beyond the reasonable control of the party, the party so prevented or
         delayed shall be excused from the performance of any such obligation to
         the extent and during the period of such prevention or delay.

                                                                              23



11.15    NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY
         FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES
         (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE
         SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH
         CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE,
         EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE
         POSSIBILITY OF LIKELIHOOD OF SAME.

11.16    This Agreement may be executed in counterparts, each of which shall be
         deemed an original, but both of which together shall constitute one and
         the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
         executed by their duly authorized representatives.

         PRESIDENT AND FELLOWS
         OF HARVARD COLLEGE                                  COMPANY

              /s/ Joyce Brinton                         /s/ Lawrence A. Bock
- ---------------------------------------------        ---------------------------
           Joyce Brinton, Director                           Signature
Office for Technology and Trademark Licensing

            10/2/01                                       Lawrence A. Bock
         ------------                                ---------------------------
             Date                                               Name

                                                          President and CEO
                                                     ---------------------------
                                                                Title

                                                              10/3/01
                                                         -------------------
                                                                 Date

                                                                              24



                                   APPENDIX A

The following comprise PATENT RIGHTS:

US Patent 5,897,945, issued 4/27/99, US Patent 6,036,774, issued 3/14/00 and
pending applications in Japan, France and the United Kingdom


                                                                              25



                                   APPENDIX B

NANOSYS, INC. CAPITALIZATION TABLE - CONFIDENTIAL

FOUNDERS' STOCK (Common Stock Capitalization Before Series A Preferred Stock
Financing)



                        % of Founders Stock    # of Shares of Common Stock        Amount Invested
                        -------------------    ---------------------------    --------------------
                                                                               
Charles Lieber #               11.0%                                            550,000    $   550
Hongkun Park #                  9.0%                                            450,000    $   450
Michael Evans +                 2.0%                                            100,000    $   100
CW Group *                     12.0%                                            600,000    $   600
Other advisors (tbd)            2  %                                            100,000    $   100
Reserve                        64.0%                                          3,200,000    $ 3,200
Total Common Shares           100.0%                                          5,000,000    $ 5,000


PROPOSED SERIES A PREFERRED
STOCK

                                                    
Investors as a group               5,000,000-6,666,667    $  1,500-2,000,000
Total Series A Preferred Shares    5,000,000-6,666,667    $  1,500-2,000,000



# Founders stock will vest monthly over a five year period

+ Evans shares will be fully vested

* Shares will be issued in the form of an option


                                                                              26



                                   APPENDIX C




CASE     LEAD INVENTOR     REPORT DATE            TITLE                    AGENCY              GRANT NUMBERS
- ----    ---------------    -----------    --------------------    ------------------------    ----------------
                                                                               
1243    Lieber, Charles      2/8/96       Metal Oxide Nanorods     NSF                        DMR-94-00396
1243    Lieber, Charles      2/8/96       Metal Oxide Nanorods     Office of Naval Research   N00014-94-1-0302

EX-10.5.1

                                                                 EXHIBIT 10.5.1



                  CO-EXCLUSIVE LICENSE AGREEMENT (CASE #1641)

                                    Between

                    President and Fellows of Harvard College

                                      And

                                 NanoSys, Inc.


               Effective as of October 4, 2001 ("Effective Date")
                             Re: Harvard Case #1641


      In consideration of the mutual promises and covenants set forth below,
      the parties hereto agree as follows:


                                   ARTICLE I
                                  DEFINITIONS

      As used in this Agreement, the following terms shall have the following
      meanings:

1.1   ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS solely for academic
      non-commercial research or other not-for-profit scholarly purposes, which
      use is undertaken at a non-profit or governmental institution. ACADEMIC
      RESEARCH PURPOSES does not include selling products covered by PATENT
      RIGHTS or using PATENT RIGHTS in researching, developing, producing or
      manufacturing products for sale, or performance of services for a fee or
      other financial consideration. It is understood that using the PATENT
      RIGHTS to conduct normal research activities at non-profit or
      governmental institution is within the defined term of ACADEMIC RESEARCH
      PURPOSES.

1.2   AFFILIATE: any entity which controls, is controlled by, or is under
      common control with a party. An entity shall be regarded as in control of
      another entity for purposes of this definition if it owns or controls at
      least fifty percent (50%) of the shares entitled to vote in the election
      of directors (or in the case of an entity that is not a corporation, for
      the election of the corresponding managing authority). Unless otherwise
      specified, the term LICENSEE includes AFFILIATES.

1.3   FIELD: All fields of use.

1.4   HARVARD: President and Fellows of Harvard College, a nonprofit
      Massachusetts educational corporation having offices at the Office for
      Technology and Trademark



     Licensing, Holyoke Center, Suite 727, 1350 Massachusetts Avenue, Cambridge,
     Massachusetts 02138.

1.5  LICENSED PROCESSES: methods, processes or procedures covered by at least
     one VALID CLAIM included within the PATENT RIGHTS.

1.6  LICENSED PRODUCTS: products covered by at least one VALID CLAIM included
     within the PATENT RIGHTS or products made in accordance with LICENSED
     PROCESSES.

1.7  LICENSEE: Nanosys, Inc., a corporation organized under the laws of Delaware
     having its principal offices at CW Group East, 1041 Third Avenue, New York,
     New York 10021.

1.8  NET SALES: the amounts actually received for sales, leases, or other
     dispositions of LICENSED PRODUCTS to non-AFFILIATE third parties, less:

     (a) customary [*** Redacted] actually allowed and taken;

     (b) amounts [*** Redacted] by reason of [*** Redacted];

     (c) to the extent separately stated on purchase orders, invoices, or other
         documents of sale: (i) [*** Redacted] levied on the production, sale,
         transportation, delivery, importation, exportation or use of LICENSED
         PRODUCTS; (ii) charges for [*** Redacted] provided by third parties,
         including any [*** Redacted] thereon.

     NET SALES also includes the fair market value of any non-cash consideration
     received for the sale, lease or other disposition of LICENSED PRODUCTS to
     non-AFFILIATE third parties; provided NET SALES shall not include any [***
     Redacted] payments in consideration for the [*** Redacted] to the
     intellectual property of LICENSEE or third parties, including the [***
     Redacted] hereunder, bona fide [*** Redacted] made in good faith and any
     payments for [*** Redacted].

     In the event that a LICENSED PRODUCT is sold or leased as a combination
     product containing the LICENSED PRODUCT and one or more other components,
     NET SALES shall be calculated by multiplying the gross amount invoiced for
     the sale of the combination product by the fraction [*** Redacted] where A
     is the [*** Redacted] price of the LICENSED PRODUCT sold separately by
     LICENSEE, and B is the [*** Redacted] of such other components of the
     combination products sold separately by LICENSEE during the relevant
     royalty payment period.  In the event a substantial number of such separate
     sales were not made during the relevant royalty period, then NET SALES
     shall be reasonably allocated by LICENSEE between such LICENSED PRODUCT and
     such other components of the combination based on their relative importance
     or value; provided that such LICENSED PRODUCT and such other components
     shall not be considered a "combination product" unless such LICENSED
     PRODUCT and such other components or offered for sale or marketed by
     LICENSEE separately as well as together.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               2




1.9  PATENT RIGHTS: PATENT RIGHTS shall include (i) the applications and patents
     as listed in Appendix A of this Agreement, (ii) any foreign counterparts to
     such patents and patent applications, (iii) the inventions described and
     claimed in the foregoing; (iv) any divisions, continuations, substitutions
     of the foregoing, and (v) specific claims of any continuations-in-part of
     the foregoing to the extent the specific claims are directed to subject
     matter described in the foregoing in a manner sufficient to support such
     specific claims under 35 U.S.C. and to the extent Licensable by HARVARD,
     (vi) all patents issuing on any of the foregoing, and (vii) registrations,
     renewals, reissues, reexaminations, extensions or patents of addition of
     any kind with respect to any of such patents. For purposes of this
     Agreement "Licensable" shall mean those claims of continuations-in- part
     filed after the Effective Date for which HARVARD has sole ownership (or has
     been granted the sole right to license by a co-owner) and where there are
     no obligations to grant licenses to a third party as the result of research
     support provided to one or more of the inventors.

1.10 SERVICE INCOME: the financial consideration actually received for the
     utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE which is
     contracted for by a non-AFFILIATE third party, less the deductions stated
     in Sections 1.8(a), (b) and (c); provided, however, that such amounts shall
     only be included in SERVICE INCOME if LICENSEE does not [*** Redacted] with
     respect to the PATENT RIGHTS licensed in this Agreement on the NET SALE of
     such LICENSED PRODUCTS or the NET SALE of LICENSED PRODUCTS made in
     accordance with such use of the LICENSED PROCESSES. SERVICE INCOME shall
     specifically exclude any [*** Redacted] payments in consideration for the
     [*** Redacted] of the LICENSEE of third parties, including the [***
     Redacted] made in good faith and any [*** Redacted]

     In the event that any service contemplated hereunder includes any services
     other than the utilization of [*** Redacted] or [*** Redacted] LICENSEE
     shall in good faith determine the portion of the payments received for such
     service that are intended as consideration for the utilization of [***
     Redacted] or [*** Redacted] by LICENSEE, and such portion shall be used to
     determine the SERVICE INCOME for such service. In such event, LICENSEE
     shall promptly deliver to HARVARD a written report detailing such
     calculation, together with a copy of the applicable provisions of the
     agreements related to such service.  All such reports and provisions of
     agreements shall be deemed Confidential Information of LICENSEE subject to
     Section 11.1. In the event that HARVARD disagrees with the determination
     made by LICENSEE of SERVICE INCOME for such service, HARVARD shall so
     notify LICENSEE in writing, and a representative of LICENSEE  and a
     representative of HARVARD shall meet in order to discuss and resolve such
     disagreement.  If such disagreement cannot be resolved within sixty (60)
     days, such disagreement shall be subject to resolution in accordance with
     paragraph 11.10.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                               3

1.11      SUBLICENSE INCOME: the amount paid to LICENSEE by a third party (other
          than an AFFILIATE of LICENSEE) for the granting of a sublicense under
          Section 3.1, including but not limited to (i) [*** Redacted], (ii)
          [*** Redacted], (iii) [*** Redacted] and (iv) the [*** Redacted] in
          case of any non-cash consideration for such sublicense, but
          specifically excluding any [*** Redacted] payments in consideration
          for the [*** Redacted], [*** Redacted] and any [*** Redacted]. It is
          understood and agreed that sublicense income received by LICENSEE
          shall be net of withholding taxes.

          If LICENSEE sublicenses [*** Redacted] to a third party and at the
          same time also grants such third party rights to [*** Redacted] or
          then all compensation received from the third party for such rights
          shall be combined and [*** Redacted] that would constitute SUBLICENSE
          INCOME  under Section 1.13 and shall promptly deliver to HARVARD a
          written report detailing such calculation, together with a copy of the
          applicable provisions of the agreements with the third party.  All
          such reports and provisions of agreements shall be deemed Confidential
          Information of LICENSEE subject to Section 11.1.  In the event that
          HARVARD disagrees with the determination made by LICENSEE of
          SUBLICENSE INCOME, HARVARD shall so notify LICENSEE in writing, and a
          representative of LICENSEE and a representative of HARVARD shall meet
          in order to discuss and resolve such disagreement.  If such
          disagreement cannot be resolved within sixty (60) days, such
          disagreement shall be subject to resolution in accordance with Section
          11.10.

1.12      TERRITORY: Worldwide.

1.13      VALID CLAIM: either (i) a claim of an issued patent that has not
          expired or been held unenforceable or invalid by an agency or a court
          of competent jurisdiction, and which has not been admitted to be
          invalid or unenforceable through reissue, disclaimer or otherwise;
          provided, however, that if the holding of such court or agency is
          later reversed by a court or agency with overriding authority, the
          claim shall be reinstated as a Valid Claim with respect to Net Sales
          made after the date of such reversal, or (ii) a claim of a pending
          patent application that has not been abandoned or finally rejected
          without the possibility of appeal or re-filing and that has been
          pending for less than five (5) years from its priority date, and is
          being actively prosecuted in good faith.

1.14      The terms "Public Law 96-517" and "Public Law 98-620" include all
          amendments to those statutes.

1.15      The terms "sold" and "sell" include, without limitation, leases and
          other dispositions and similar transactions.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                             -4-


1.16      RELATED LICENSE AGREEMENTS: Other patent license agreements between
          LICENSEE and HARVARD licensing patent rights known internally at
          HARVARD as Case #1852, #1765, #1923, #1924, #1678, #1641, #1489,
          #1382, #1243, #1137, #1816, #1685 and #1935 to LICENSEE.

1.17      R&D SPENDING, MINIMUM INVESTMENT: shall have the meanings as set forth
          in Section 4.5.

1.18      DEVELOPMENT PAYMENTS: DEVELOPMENT PAYMENTS shall mean (a) any
          payments, in consideration for, or to support, research and/or
          development efforts by LICENSEE and (b) any reimbursement of expenses
          including without limitation patent expenses.

                                   ARTICLE II
                                    RECITALS

2.1       HARVARD is owner (or HARVARD will be owner) by assignment from Charles
          Lieber, Thomas Rueckes, Ernesto Joselevich, and Kevin Kim of their
          entire right, title and interest in the PCT application
          (PCT/US00/18138) filed 7/2/00 (claiming priority to US Provisional
          Application 60/142,216, filed 7/1/99 in the foreign and US patent
          applications corresponding thereto, and in the inventions described
          and claimed therein.

2.2       HARVARD has the authority to issue licenses under PATENT RIGHTS.

2.3       HARVARD is committed to the policy that ideas or creative works
          produced at HARVARD should be used for the greatest possible public
          benefit, and believes that every reasonable incentive should be
          provided for the prompt introduction of such ideas into public use,
          all in a manner consistent with the public interest.

2.4       LICENSEE intends to use commercially reasonable efforts to develop the
          invention(s), and to bring to market at least one product falling
          within the definition of LICENSED PRODUCT or otherwise embodying the
          subject matter described or claimed in the patents rights licensed
          under such agreements.

2.5       LICENSEE is desirous of obtaining a co-exclusive license in the
          TERRITORY in order to practice the above-referenced invention covered
          by PATENT RIGHTS in the United States and in certain foreign
          countries, and to manufacture, use and sell in the commercial market
          the products made in accordance therewith, and HARVARD is desirous of
          granting such a license to LICENSEE in accordance with the terms of
          this Agreement.

                                  ARTICLE III
                                GRANT OF RIGHTS

3.1       HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
          terms and conditions hereof, a co-exclusive license (with Nantero,
          Inc. and except as set forth in Sections 3.2(a) and 3.2(b)) under
          PATENT RIGHTS in the TERRITORY and in the FIELD (i) to make and have
          made, to use and have used, to sell and have sold, to offer for


                                                                               5

        sale, import, export, or otherwise distribute the LICENSED PRODUCTS,
        (ii) to practice the LICENSED PROCESSES, and (iii) to otherwise fully
        exploit the PATENT RIGHTS, and (iv) to have the foregoing performed on
        behalf of LICENSEE by a third party, in each case for the life of the
        PATENT RIGHTS. The foregoing license under PATENT RIGHTS shall include
        the right to grant sublicenses only in accordance with Section
        3.2(b)(iii). LICENSEE shall promptly provide copies of any sublicenses
        of PATENT RIGHTS to HARVARD  for its review. Unless HARVARD has
        rendered the license under PATENT RIGHTS non-exclusive under Section
        4.3(d), HARVARD agrees that it will not grant licenses under PATENT
        RIGHTS to others, nor make, use, sell, offer for sale, import or
        otherwise exploit PATENT RIGHTS itself except to Nantero Inc. and as
        required by HARVARD's obligations in Section 3.2(a) or as permitted in
        Section 3.2(b)

3.2     The granting and exercise of this license is subject to the following
        conditions:

        (a)  HARVARD's "Statement of Policy in Regard to Inventions, Patents
             and Copyrights," dated August 10, 1998, Public Law 96-517 and
             Public Law 98-620, and HARVARD's obligations under prior or
             current agreements with other sponsors of research and, with
             regard to continuations-in-part contained in the PATENT RIGHTS,
             any future agreements with other sponsors of research related to
             such continuations-in-part. Any right granted in this Agreement
             greater than that permitted under Public Law 96-517, or Public Law
             98-620, shall be subject to modification to the extent required to
             conform to the provisions of those statutes.

        (b)  This co-exclusive license shall mean that LICENSEE shall have the
             exclusive rights to PATENT RIGHTS except as provided in 3.2(a) and
             as provided below.

             (i)   HARVARD reserves the right to make and use, and grant to
                   other non-profit or governmental institutions non-exclusive
                   licenses to make and use, in each case solely for ACADEMIC
                   RESEARCH PURPOSES the subject matter described and claimed in
                   PATENT RIGHTS. HARVARD shall promptly notify LICENSEE of any
                   rights granted to any third party (other than the U.S.
                   government) under Sections 3.2(a) and (b).

             (ii)  LICENSEE expressly recognizes that Nantero, Inc. ("NANTERO")
                   currently has the right to obtain a co-exclusive license
                   under PATENT RIGHTS. In the event that NANTERO's rights
                   should expire or terminate for any reason, HARVARD shall
                   immediately notify LICENSEE, and LICENSEE shall have the
                   right to convert its license to PATENT RIGHTS hereunder to an
                   exclusive (subject to Sections 3.2(a) and 3.2(b)(i)) and
                   fully sublicensable license upon the payment of [***
                   Redacted]($[*** Redacted]) to HARVARD.

             (iii) Neither LICENSEE nor NANTERO may grant sublicenses under
                   PATENT RIGHTS unless (x) such entity can demonstrate to
                   HARVARD that it has added significant value to the PATENT
                   RIGHTS to be sublicensed, and that its sublicense of PATENT
                   RIGHTS accompanies a substantial and essentially simultaneous
                   license of such added value in the form of LICENSEE-owned
                   intellectual property, or (y) such entity is granting an
                   authorized sublicense under other patent rights licensed
                   exclusively from HARVARD which are


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


          dominated by PATENT RIGHTS, and its sublicense of PATENT RIGHTS is
          therefore necessary to permit the sublicensee to practice such other
          HARVARD patent rights, or (z) such entity obtains the approval of
          HARVARD and the other co-exclusive licensee of PATENT RIGHTS.
          Notwithstanding the foregoing, the restrictions on sublicensing set
          forth in this Section 3.2(b)(iii) shall not apply to LICENSEE, and
          LICENSEE shall have the full unrestricted right to grant sublicenses,
          in the event LICENSEE's license to PATENT RIGHTS is converted to an
          exclusive license under Section 3.2(b)(ii).

(c)  LICENSEE shall use commercially reasonable efforts to effect introduction
     into the commercial market at least one product falling within the
     definition of LICENSED PRODUCT or otherwise embodying the subject matter
     described or claimed in PATENT RIGHTS, consistent with sound and reasonable
     business practice and judgment; thereafter, until the expiration of this
     Agreement, LICENSEE shall use commercially reasonable efforts to endeavor
     to keep any such product reasonably available to the public so long as it
     shall be a sound and reasonable commercial practice to do so.

(d)  At any time after five (5) years from the effective date of this Agreement,
     HARVARD may render the license non-exclusive if LICENSEE has not:

     (i)    used commercially reasonable efforts to put the licensed subject
            matter into commercial use in one or more of the countries hereby
            licensed, directly or through a sublicense; nor

     (ii)   used commercially reasonable efforts to keep products falling within
            the definition of LICENSED PRODUCT or otherwise embodying the
            subject matter described or claimed in PATENT RIGHTS reasonably
            available to the public so long as it shall be a sound and
            reasonable commercial practice to do so; nor

     (iii)  engaged in research, development, manufacturing, marketing or
            sublicensing activity that is commercially reasonably appropriate to
            achieving Section 3.2(d)(i) or 3.2(d)(ii).

     LICENSEE shall be deemed to have satisfied Section 3.2(d)(iii), and HARVARD
     shall not render the license of PATENT RIGHTS granted hereunder
     non-exclusive, if LICENSEE's R&D SPENDING exceeds the MINIMUM INVESTMENT
     for such year as set forth in Section 4.5.

(e)  In all sublicenses granted by LICENSEE hereunder, LICENSEE shall include a
     requirement that the sublicensee use commercially reasonable efforts to put
     the subject matter of the sublicense into commercial use, provided that
     such sublicensee is authorized to develop and sell to the public a new
     product covered by PATENT RIGHTS on its own behalf. LICENSEE shall further
     provide that such sublicenses are subject and subordinate to the terms and
     conditions of this Agreement, except for

                                                                               7

         the rate of royalty on NET SALES paid by such sublicensee to the
         LICENSEE. Copies of all sublicense agreements hereunder shall be
         provided promptly to HARVARD. All sublicense agreements of LICENSEE
         provided to HARVARD shall deemed Confidential Information of LICENSEE
         subject to Section 11.1.

     (f) At any time eight (8) years after the effective date of this Agreement,
         if LICENSEE is unable or unwilling to grant sublicenses, either as
         suggested by HARVARD or by a potential sublicensee or otherwise, then
         HARVARD may directly license such potential sublicensee, but only if:
         (i) LICENSEE is not currently pursuing development of LICENSED PRODUCTS
         for the same application as contemplated by the potential sublicensee,
         or LICENSEE commits to do so within a two-year period, (ii) the
         granting of such a license by HARVARD to the potential sublicensee will
         increase the availability of useful products to the public, (iii) the
         granting of such license by HARVARD will not materially adversely
         affect LICENSEE's then current business or reasonably foreseeable
         future business (e.g., such license is not intended for an application
         competitive with LICENSEE) and (iv) HARVARD notifies LICENSEE of its
         intention to grant such license and permits LICENSEE a reasonable
         period to negotiate a sublicense on its own.

     (g) To the extent required by law, until this license is rendered
         non-exclusive in the United States under Section 3.2 (d), LICENSEE
         shall cause any LICENSED PRODUCT produced for sale in the United States
         to be manufactured substantially in the United States.

3.3  All rights reserved to the United States Government and others under Public
     Law 96-517, and Public Law 98-620, shall remain and shall in no way be
     affected by this Agreement.

3.4  HARVARD shall promptly notify LICENSEE when any new patent or patent
     application arises from (i) research conducted in the laboratory of Dr.
     Lieber or Dr. Park, or (ii) improvements made by HARVARD under the
     direction of Dr. Lieber or Dr. Park on the subject matter described in
     PATENT RIGHTS. If LICENSEE so requests and the intellectual property is
     available for licensing, HARVARD will evaluate in good faith LICENSEE's
     proposal along with proposals received from any third parties. Any decision
     to grant a license to LICENSEE shall be subject to approval by HARVARD's
     Committee on Patents and Copyrights. In the event LICENSEE and HARVARD
     cannot agree on terms for a license to any new intellectual property which
     is dominated by PATENT RIGHTS, HARVARD shall not offer any third party
     terms more favorable than the terms offered to LICENSEE.

                                   ARTICLE IV
                                   ROYALTIES

4.1  LICENSEE shall pay to HARVARD a non-refundable license royalty fee in the
     sum of [*** Redacted] $[*** Redacted] upon execution of this Agreement.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               8


4.2  As consideration for the rights granted hereunder, LICENSEE shall pay to
     HARVARD a non-refundable fee in the form of stock of LICENSEE as follows:

          (i)   LICENSEE shall issue to HARVARD [*** Redacted] fully vested
                shares, at a price per share of $0.001 per share and an
                aggregate value of $[*** Redacted] of LICENSEE's common stock
                which represent [*** Redacted] percent ([*** Redacted]%) of the
                reserved shares for founders (total 3.2 million shares) shown
                on the capitalization table of LICENSEE attached as Appendix B
                ("Shares") upon execution of this Agreement, provided, however,
                that HARVARD shall be subject to and enter into (1) appropriate
                agreements and related documents as required of other
                stockholders of LICENSEE, including without limitation a Common
                Stock Purchase Agreement, and (2) a Voting Agreement by and
                among the LICENSEE, HARVARD and certain other holders of common
                stock of LICENSEE dated as of even date hereof.

          (ii)  HARVARD's ownership rights to Shares shall not be affected
                should the license pursuant to this Agreement be terminated by
                LICENSEE or HARVARD.

4.3 (a) LICENSEE shall pay to HARVARD during the term of this Agreement a
        royalty on NET SALES by LICENSEE according to the following schedule:

          (i)   [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted]
                applications;

          (ii)  [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted]
                applications; or

          (iii) [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted]
                applications.

    In the event, any NET SALES by LICENSEE reasonably falls within more than
    one of categories (i) to (iii) above, LICENSEE shall pay to HARVARD the
    lowest applicable royalty set forth in such categories.

    (b) For each LICENSED PRODUCT sold by LICENSEE, LICENSEE may credit up to
        [*** Redacted] of royalties that LICENSEE is paying to third parties (or
        HARVARD under agreements not included within section 4.3(c)) on
        LICENSEE's sales of that LICENSED PRODUCT, provided that the royalty
        paid to HARVARD shall not be reduced below [*** Redacted] percent
        ([*** Redacted]%) of the NET SALES of that LICENSED PRODUCT for which
        such third party royalties are being paid.

    (c) In the event that sales of a LICENSED PRODUCT are subject to the payment
        of royalties under one or more of the RELATED LICENSE AGREEMENTS or any
        license agreements with HARVARD with the same effective date as this
        Agreement, then the total royalty payment due HARVARD under all such
        agreements including this Agreement shall be at most the royalty payment
        due under this Section 4.3 on such

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               9

     NET SALE, no matter how many license agreements from HARVARD are involved,
     and notwithstanding the terms of any such agreement. LICENSEE shall notify
     HARVARD of the identity of each license agreement that includes patent
     rights covering the product or process, and HARVARD shall distribute the
     royalties evenly among such agreements, including this Agreement.

(d)  LICENSEE shall pay HARVARD [*** Redacted] percent ([*** Redacted]%) of
     SUBLICENSE INCOME received by LICENSEE for a sublicense of PATENT RIGHTS.
     If compensation for such a sublicense of PATENT RIGHTS is bundled with
     compensation received for the sublicensing of the other HARVARD patents
     rights or other HARVARD intellectual property, licensed to LICENSEE under
     the RELATED LICENSE AGREEMENTS or any agreements with HARVARD having the
     same effective date as this Agreement, then LICENSEE shall pay HARVARD at
     most the royalty payment due under this Section 4.3(d) for such SUBLICENSE
     INCOME no matter how many license agreements from HARVARD are involved, and
     notwithstanding the terms of any such license agreements. In such a case,
     LICENSEE shall notify HARVARD of the identity of each license agreement
     involved and HARVARD shall distribute the royalties equally among those
     license agreements, including this Agreement.

(e)  For provision of services under PATENT RIGHTS, LICENSEE shall pay a royalty
     of [*** Redacted] percent ([*** Redacted]%) of SERVICE INCOME received by
     LICENSEE from each and every third party ("Third Party") to whom LICENSEE
     provides such services. In the event any services from which SERVICE INCOME
     is derived are subject to the payment of royalties under the RELATED
     LICENSE AGREEMENTS or any agreement with HARVARD having the same effective
     date as this Agreement, then the total royalty due under all such
     agreements, including this Agreement, shall be at most the royalty payment
     due under this Section 4.3 on such services, no matter how many license
     agreements from HARVARD are involved, and notwithstanding the terms of any
     such license agreements. In such event, LICENSEE shall notify HARVARD of
     the identity of each license agreement involved and HARVARD shall
     distribute the royalties equally among those license agreements, including
     this Agreement.

(f)  If the license pursuant to this Agreement is converted to a non-exclusive
     one under Section 3.2(d) and if another non-exclusive license to any of
     PATENT RIGHTS is granted or otherwise exists for any field or territory,
     then the royalty rate of this Agreement shall be adjusted so as not to
     exceed the royalty rate payable by such other non-exclusive licensee under
     such PATENT RIGHTS in such field or territory, provided that LICENSEE
     agrees to amend this Agreement to include terms requested by HARVARD that
     have been accepted by such other non-exclusive licensee.

(g)  On sales between LICENSEE and its AFFILIATES for resale, the royalty shall
     be paid on the NET SALES of the AFFILIATE.

(h)  In the event that more than one VALID CLAIM within PATENT RIGHTS is
     applicable to any LICENSED PRODUCT subject to royalties under this Section
     4.3, then only one royalty shall be paid to HARVARD in respect of such
     LICENSED PRODUCT. In no

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              10

     event shall more than one royalty be due to HARVARD with respect to any
     LICENSED PRODUCT unit; nor shall a royalty be payable under this Section
     4.3 with respect to sales of LICENSED PRODUCTS for clinical trials or as
     samples nor the use of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE
     for such purposes, in each case whether or not in collaboration with a
     third party.

4.4  No later than January 1 of each calendar year after the effective date of
     this Agreement, LICENSEE shall pay to HARVARD the following non-refundable
     license maintenance royalty and/or advance on royalties. Such payments may
     be credited against running royalties due for that calendar year and
     Royalty Reports shall reflect such a credit. Such payments shall not be
     credited against milestone payments (if any) nor against royalties due for
     any subsequent calendar year.



                                     
          January 1, 2002               [*** Redacted]
          January 1, 2003               [*** Redacted]
          January 1, 2004               [*** Redacted]
          January 1, 2005               [*** Redacted]
          January 1, 2006               [*** Redacted]
          January 1, 2007               [*** Redacted]
          each year thereafter          [*** Redacted]


4.5  Notwithstanding Section 4.4, the minimum royalty set forth in Section 4.4
     for the years 2002, 2003, and 2004 will be waived if LICENSEE's spending
     on research and development (LICENSEE's "R&D SPENDING") exceeds the amount
     set forth below for each category for such year (such amounts below, the
     "MINIMUM INVESTMENT").



                              CHEMICAL AND
                            BIOLOGICAL SENSOR      OPTOELECTRONICS         NANOELECTRONICS
                               APPLICATIONS          APPLICATIONS            APPLICATIONS
                                                                  
     Year 2002:             [*** Redacted]         [*** Redacted]          [*** Redacted]
     Year 2003:             [*** Redacted]         [*** Redacted]          [*** Redacted]
     Year 2004:             [*** Redacted]         [*** Redacted]          [*** Redacted]
     Year 2005              [*** Redacted]         [*** Redacted]          [*** Redacted]
     Year 2006              [*** Redacted]         [*** Redacted]          [*** Redacted]
     Each Year Thereafter   [*** Redacted]         [*** Redacted]          [*** Redacted]


     LICENSEE's MINIMUM INVESTMENT may be allocated by LICENSEE in any way
     within the three categories set forth above among the different subject
     matter of the RELATED LICENSE AGREEMENTS.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              11


                                   ARTICLE V
                                   REPORTING

5.1  Within six (6) months of the Effective Date, LICENSEE will provide
     to HARVARD a written research and development plan acceptable to LICENSEE's
     investors under which LICENSEE intends to bring the subject matter of the
     licenses granted hereunder into commercial use upon execution of this
     Agreement. Such plan will include projections of sales and proposed
     marketing efforts. It is understood that LICENSEE may provide one research
     and development plan for all RELATED LICENSE AGREEMENTS.

5.2  No later than sixty (60) days after June 30 of each calendar year,
     LICENSEE shall provide to HARVARD a written annual Progress Report
     describing progress on the commercialization of PATENT RIGHTS during the
     most recent twelve (12) month period ending June 30, the amount of
     LICENSEE's R&D SPENDING relating to the subject matter described or claimed
     in PATENT RIGHTS during such time, and plans for the forthcoming year. If
     multiple technologies are covered by the license granted hereunder, the
     Progress Report shall provide the information set forth above for each
     technology. If progress differs from that anticipated in the plan required
     under Section 5.1, LICENSEE shall explain the reasons for the difference
     and, if appropriate or necessary, provide a modified research and
     development plan for HARVARD's review. It is understood that LICENSEE may
     provide one Progress Report covering all RELATED LICENSE AGREEMENTS.

5.3  LICENSEE shall report to HARVARD the date of its first NET SALE of a
     LICENSED PRODUCT (or the date of its first use of a LICENSED PROCESS from
     which SERVICE INCOME is derived) in each country within thirty (30) days
     of occurrence. It is understood that LICENSEE shall be obligated to report
     the date of first sale of LICENSED PRODUCTS (or the first commercial use of
     LICENSED PROCESSES) under this Section 5.3 only once for each country.

5.4  (a) LICENSEE shall submit to HARVARD within sixty (60) days after each
     calendar half year ending June 30 or December 31, a Royalty Report setting
     forth, for the most recent half year that ended on June 30 or December 31,
     at least the following information:

        (i)   the number and identification of LICENSED PRODUCTS sold by
              LICENSEE that constitute a NET SALE, in each country;

        (ii)  total amounts received for such LICENSED PRODUCTS;

        (iii) an accounting for all LICENSED PROCESSES used or sold;

        (iv)  deductions applicable to determine the NET SALES thereof;

        (v)   the amount of SUBLICENSE INCOME received by LICENSEE;


                                                                              12



          (vi)      the amount of SERVICE INCOME received by LICENSEE; and

          (vii)     the amount of royalty due for such reporting period, or, if
                    no royalties are due to HARVARD for such reporting period,
                    the statement that no royalties are due.

          Such report shall be certified as correct by an officer of LICENSEE
          and shall include a listing of all deductions from royalties. It is
          understood that LICENSEE may submit one Royalty Report covering all
          RELATED LICENSE AGREEMENTS. However, the Royalty Report shall, for
          each type of income, provide a detailed listing of the RELATED LICENSE
          AGREEMENTS that are involved.

     (b)  LICENSEE shall pay to HARVARD with each such Royalty Report the amount
          of royalty due with respect to such half year. If multiple
          technologies are covered by the license granted hereunder, LICENSEE
          shall specify which PATENT RIGHTS are utilized for each category of
          LICENSED PRODUCTS and/or LICENSED PROCESSES for which royalties are
          separately reported in the Royalty Report.

     (c)  All payments due hereunder shall be deemed received when funds are
          credited to HARVARD's bank account and shall be payable by check or
          wire transfer in United States dollars. Conversion of foreign currency
          to U.S. dollars shall be made at the conversion rate existing in the
          United States (as reported in the New York Times or the Wall Street
          Journal) on the last working day of each royalty period. No transfer,
          exchange, collection or other charges shall be deducted from such
          payments. If legal restrictions block the removal of local currency
          from any country where a LICENSED PRODUCT is sold, the royalties
          payable under this Agreement on NET SALES, SERVICE INCOME and
          SUBLICENSING INCOME earned in such currency in such country shall
          continue to be reported and accrued, but will not be paid until such
          currency may be removed from such country.

     (d)  All plans or reports received under Sections 5.1, 5.2, 5.3, 5.4 shall
          deemed Confidential Information of LICENSEE subject to Section 11.1;
          provided, however, that HARVARD may disclose such information as
          required by law under Section 11.1(b), and may include in its usual
          reports the annual amounts of royalties paid.

     (e)  Late payments shall be subject to a charge of one and one-half percent
          (1.5%) per month, or $250, whichever is greater.

5.5  In the event of acquisition, merger, change of corporate name, or change of
     make-up, organization, or identity, LICENSEE shall notify HARVARD in
     writing within thirty (30) days of such event.

5.6  If LICENSEE or any of its sublicensees does not qualify as a "small entity"
     as provided by the United States Patent and Trademark Office, LICENSEE must
     notify HARVARD immediately.




                                                                              13

                                   ARTICLE VI
                                 RECORD KEEPING

6.1  LICENSEE shall keep accurate records (together with supporting
     documentation) of LICENSED PRODUCTS made, used or sold under this
     Agreement, sufficient to determine the amount of royalties due to HARVARD
     hereunder. Such records shall be retained for at least three (3) years
     following the end of the reporting period to which they relate. They shall
     be available during normal business hours for examination, upon HARVARD's
     reasonable request, not more than once in any twelve (12) month period
     and upon at least twenty (20) days prior notice, by an independent
     accountant under a duty of confidentiality, selected by HARVARD and
     reasonably acceptable to LICENSEE, for the sole purpose of verifying
     reports and payments under Section 5.4. In conducting examinations pursuant
     to this Section, HARVARD's accountant shall have access to records
     materially relevant to the calculation of royalties under Article IV.

6.2  HARVARD's accountant shall only disclose to HARVARD whether the reports
     and payments of royalties hereunder are accurate, and the amount of the
     underreporting or underpayment of royalties by LICENSEE, if any.

6.3  Such examination of HARVARD's accountant shall be at HARVARD's expense,
     except that if such examination shows an underreporting or underpayment in
     excess of five percent (5%) for any twelve (12) month period, then LICENSEE
     shall pay the reasonable out-of-pocket cost of such examination as well as
     any additional sum that would have been payable to HARVARD had the LICENSEE
     reported correctly, plus interest on said sum at the rate of one and
     one-half percent (1.5%) per month.


                                  ARTICLE VII
               DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE

7.1  Within 30 days of the closing of LICENSEE's sale of Series A Preferred
     Stock to venture capital investors, but not later than 60 days after the
     Effective Date, LICENSEE shall reimburse HARVARD for [*** Redacted] percent
     ([*** Redacted]%) of all reasonable out-of-pocket expenses HARVARD has
     incurred for the preparation, filing, prosecution and maintenance of PATENT
     RIGHTS, including for counseling with regard to such preparation, filing,
     prosecution and maintenance. [*** Redacted] percent of such expenses total
     $[*** Redacted] as of the most recent invoice paid by HARVARD. Thereafter,
     LICENSEE shall reimburse HARVARD for [*** Redacted] percent ([***
     Redacted]%) of all such future expenses upon receipt of quarterly invoices
     from HARVARD. Should this license be converted to an exclusive one,
     LICENSEE shall then reimburse all such expenses. Late payment of these
     invoices shall be subject to interest charges of one and one-half percent
     (1.5%) per month.

     HARVARD shall be responsible for the preparation, filing, prosecution and
     maintenance of any and all patent applications and patents included in
     PATENT RIGHTS.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                              14


     HARVARD will instruct counsel to directly notify HARVARD and LICENSEE and
     provide them copies of any communications to and from the United States and
     foreign patent offices relating to said prosecution, and drafts of all
     communications to the various patent offices, and will instruct counsel to
     consider any comments on such drafts, so that LICENSEE will be informed and
     apprised of the continuing prosecution of patent applications in PATENT
     RIGHTS. LICENSEE (as well as NANTERO) shall have reasonable opportunity to
     participate in decision making on key decisions affecting filing,
     prosecution and maintenance of patents and patent applications in PATENT
     RIGHTS.

7.2  HARVARD and LICENSEE shall cooperate fully in the preparation, filing,
     prosecution and maintenance of PATENT RIGHTS and of all patents and patent
     applications licensed to LICENSEE hereunder, executing all papers and
     instruments or requiring members of HARVARD to execute such papers and
     instruments so as to enable HARVARD to apply for, to prosecute and to
     maintain patent applications and patents in HARVARD's name in any country.
     Each party shall provide to the other prompt notice as to all matters which
     come to its attention and which may affect the preparation, filing,
     prosecution or maintenance of any such patent applications or patents. In
     particular, LICENSEE must immediately notify HARVARD if LICENSEE does not
     qualify as a "small entity" as provided by the United States Patent and
     Trademark Office.

7.3  LICENSEE may elect to surrender its rights to any patent or patent
     application within PATENT RIGHTS in any country upon sixty (60) days
     written notice to HARVARD. Such notice shall not relieve LICENSEE from
     responsibility to reimburse HARVARD for expenses under Section 7.1 relating
     to the filing, prosecution or maintenance of such patent or patent
     application incurred prior to the receipt of the written notice by HARVARD
     (or a longer period if specified in LICENSEE'S notice).

                                  ARTICLE VIII
                                  INFRINGEMENT

8.1  With respect to any PATENT RIGHTS that have not been rendered non-exclusive
     under Section 4.3(d), LICENSEE shall have the right to enforce in its own
     name and at its own expense any patents within such PATENT RIGHTS. HARVARD
     agrees to notify LICENSEE promptly of each infringement of such patents of
     which HARVARD is or becomes aware.

8.2  LICENSEE acknowledges that the other co-exclusive licensee of PATENT RIGHTS
     shall have rights identical to LICENSEE to prosecute infringers and that
     both co-exclusive licensees shall be bound by the identical terms of this
     Section 8.2. In any prosecution instituted by LICENSEE, LICENSEE must
     notify the other co-exclusive licensee of the existence of such legal
     action and allow the other co-exclusive licensee to join as a plaintiff. In
     addition, in the event the other co-exclusive licensee instigates and
     infringement prosecution, LICENSEE hereby consents to being joined as a
     plaintiff in such suit solely for the purpose of procuring standing to
     bring the action and at the sole expenses of the instigating party. To the
     extent that LICENSEE desires to participate in

                                                                              15

     any strategic decisions affecting the prosecution of an action brought by
     the other co-exclusive licensee, LICENSEE acknowledges and it and the other
     co-exclusive licensee will necessarily have to reach a mutual agreement
     concerning litigation expenses and strategy. In no event shall HARVARD
     incur any liability or expense in connection with any action brought by
     LICENSEE or the other co-exclusive licensee, joint or otherwise. During any
     such litigation, HARVARD will agree to not license any defendant or accused
     infringer of the PATENT RIGHTS in the litigation, without LICENSEE's prior
     written consent.

8.3  (a) If LICENSEE elects to commence an action as described above, HARVARD
     may, to the extent permitted by law, elect to join as a party in that
     action. Regardless of whether HARVARD elects to join as a party, HARVARD
     shall cooperate fully with LICENSEE in connection with any such action,
     including making available relevant personnel, information, records,
     papers, samples, specimens and other similar materials for the purposes of
     such action as reasonably requested by LICENSEE through the Office of
     Technology and Trademark Licensing at HARVARD.

     (b) If HARVARD elects to join as a party pursuant to Subsection (a),
         HARVARD shall jointly control the action with LICENSEE.

     (c) LICENSEE shall reimburse HARVARD for any out-of-pocket costs HARVARD
         reasonably incurs, including reasonable attorneys' fees, as part of an
         action brought by LICENSEE under Section 8.1, whether or not HARVARD
         becomes a co-plaintiff.

8.4  If LICENSEE elects to commence an action as described above, LICENSEE may
     deduct from its royalty payments to HARVARD with respect to the patent(s)
     subject to suit an amount not exceeding  fifty percent (50%) of LICENSEE's
     expenses and costs of such action, including reasonable attorneys' fees and
     reimbursement of amounts under Section 8.3(c) above; provided, however,
     that such reduction shall not exceed fifty percent (50%) of the total
     royalty due to HARVARD with respect to the patent(s) subject to suit for
     each calendar year. If such fifty  percent (50%) of LICENSEE's expenses and
     costs exceeds the amount of royalties deducted by LICENSEE for any calendar
     year, LICENSEE may to that extent reduce the royalties due to HARVARD from
     LICENSEE in succeeding calendar years, but never by more than fifty percent
     (50%) of the total royalty  due in any one year with respect to the
     patent(s) subject to suit.

8.5  Neither LICENSEE nor the other co-exclusive licensee may enter into a
     settlement, consent judgment or other voluntary final disposition of any
     suit under Article 8 (except for Section 8.10) without the prior written
     consent of HARVARD, which consent shall not be unreasonably withheld.

8.6  Recoveries or reimbursements from actions commenced by LICENSEE pursuant to
     this Article shall first be applied to reimburse LICENSEE and HARVARD for
     litigation costs not paid from royalties and then to reimburse HARVARD for
     royalties deducted by Licensee pursuant to Section 8.4. Any remaining
     recoveries or reimbursements shall be shared as follows: 80% to LICENSEE
     and 20% to HARVARD. In the event both co-



                                                                              16





      exclusive licensees undertake the suit, the provisions of this Section
      will be modified to take into account each licensee's expenses and lost
      profits/revenues. Such modification shall be negotiated by the parties
      and the other co-exclusive licensee in good faith.

8.7   If LICENSEE elects not to exercise its right to enforce the PATENT RIGHTS
      against any infringement pursuant to this Article, HARVARD may do so at
      its own expense, controlling such action and retaining all recoveries
      therefrom. LICENSEE shall cooperate fully with HARVARD in connection with
      any such action.

8.8   Without limiting the generality of Section 8.7, HARVARD may, at its
      election and by notice to LICENSEE, establish a time limit of ninety (90)
      days for LICENSEE to decide whether to enforce the PATENT RIGHTS against
      any infringement of which HARVARD is or becomes aware. If, by the end of
      such ninety (90) day period, LICENSEE has not commenced such an action or
      taken reasonable efforts to settle such infringement, HARVARD may enforce
      the PATENT RIGHTS against such an infringement at its own expense,
      controlling such action and retaining all recoveries therefrom.
      Notwithstanding sections 8.7 and 8.8, HARVARD shall not bring any action
      alleging the infringement of PATENT RIGHTS against any sublicensee of
      LICENSEE under PATENT RIGHTS, without the consent of LICENSEE.

8.9   If a declaratory judgment action is brought naming LICENSEE as a
      defendant and alleging invalidity of any of the PATENT RIGHTS, if both
      parties agree, HARVARD may take over the sole defense of the action at
      its own expense. LICENSEE shall cooperate fully with HARVARD in
      connection with any such action.

8.10  If LICENSEE or any sublicensee, distributor or other customer is sued by a
      third party charging infringement of patent rights that dominate a claim
      of PATENT RIGHTS, with respect to the manufacture, use, distribution or
      sale of LICENSED PRODUCT or practice or use of a LICENSED PROCESS,
      LICENSEE will promptly notify HARVARD. As between the parties to this
      Agreement, LICENSEE will be entitled to control the defense in any such
      action(s) and withhold up to one-half (1/2) of the amount otherwise
      payable to HARVARD hereunder to pay for defense costs, attorneys fees and
      any liability incurred in such infringement suit(s). If Licensee is
      required to pay a royalty or other amount to a third party as a result of
      a final judgment or settlement, the amounts payable to HARVARD hereunder
      will be reduced as provided in Section 4.3 above.


                                   ARTICLE IX
                            TERMINATION OF AGREEMENT

9.1   This Agreement, unless terminated as provided herein, shall remain in
      effect until the last patent or patent application in PATENT RIGHTS has
      expired or been abandoned.

9.2   HARVARD may terminate this agreement as follows:

      (a)   If LICENSEE does not make a payment due hereunder and fails to cure
            such non-payment (including the payment of interest in accordance
            with Section 5.4(e)) within forty-five (45) days after date of
            notice in writing of such non-payment by



                                                                             17

         HARVARD. If LICENSEE disputes the amount of such non-payment in writing
         within such forty-five (45) day period, HARVARD shall not have the
         right to terminate this Agreement until it has been determined in an
         arbitration proceeding under Section 11.10 below that LICENSEE has
         failed to pay amounts owed hereunder, and thereafter Licensee does not
         cure such failure within sixty (60) days after such determination. This
         Section 9.2(a) shall not, however, suspend any obligation of LICENSEE
         to compensate HARVARD for any undisputed amounts, as provided for under
         any term of this Agreement, during the pendency of the foregoing
         arbitration and cure period.

     (b) If LICENSEE defaults in its obligations under Sections 11.2(c) and
         11.2(d) to procure and maintain insurance, and fails to cure such
         breach within sixty (60) days after notice in writing of such breach by
         HARVARD.

     (c) If LICENSEE shall make an assignment for the benefit of creditors, or
         shall have a petition in bankruptcy filed for or against it, provided
         that such bankruptcy petition is not dismissed within sixty (60) days
         after its filing. Such termination shall be effective immediately upon
         HARVARD giving written notice to LICENSEE.

     (d) If LICENSEE is convicted of a felony within the United States relating
         to the manufacture, use, or sale of LICENSED PRODUCTS.

     (e) Except as provided in Subsections (a), (b), (c), (d) above, if LICENSEE
         materially breaches any obligations under this Agreement and the breach
         has not been cured within ninety (90) days after the date of notice in
         writing of such breach by HARVARD. If LICENSEE disputes in writing that
         it has materially breached this Agreement within such ninety (90) day
         period, HARVARD shall not have the right to terminate this Agreement
         until it has been determined in an arbitration proceeding under Section
         11.10 below that LICENSEE has materially breached this Agreement, and
         thereafter Licensee does not cure such breach within sixty (60) days
         after such determination. This Section 9.2(e) shall not, however,
         suspend any obligation of LICENSEE to compensate HARVARD for any
         undisputed amounts, as provided for under any term of this Agreement,
         during the pendency of the foregoing arbitration and cure period.

9.3  All sublicenses granted by LICENSEE under this Agreement in compliance
     with the terms and conditions hereof shall survive the termination of this
     Agreement upon the request of the party to whom such sublicense is
     granted, provided that such party agrees in writing that (i) it will pay
     all royalties or other amounts that otherwise would have been due
     thereafter under such sublicense directly to HARVARD rather than LICENSEE,
     and (ii) HARVARD shall not be held liable for the breach or the
     performance of any obligations stated in such sublicense unless such
     obligations have been expressly assumed in writing by HARVARD.

                                                                              18



9.4  LICENSEE may terminate this Agreement by giving ninety (90) days advance
     written notice of termination to HARVARD. Upon termination, LICENSEE shall
     promptly submit a Royalty Report to HARVARD for the final reporting period
     and any royalty payments incurred during such reporting period, and any
     unreimbursed patent expenses under Section 7 that have been invoiced by
     HARVARD, shall become immediately payable with such Royalty Report.

9.5  Articles I, VI, IX, X and XI (except for Section 11.7) of this Agreement
     shall survive termination. Article VIII shall survive with respect to any
     infringement of third parties and/or any lawsuits filed by or against
     LICENSEE, prior to the termination of this Agreement. In the event this
     Agreement is terminated for any reason, LICENSEE may, within six months
     after the effective date of such termination, sell or otherwise dispose of
     all LICENSED PRODUCTS that LICENSEE may have on hand on the effective date
     of such termination, and fulfill any contracts requiring the use of
     LICENSED PRODUCTS and/or LICENSED PROCESSES that LICENSEE may have entered
     into prior to the date of such termination, subject to LICENSEE's payment
     of amounts due to HARVARD under Section 4.3 of this Agreement.

9.6  In the event that after termination of this Agreement, HARVARD licenses
     PATENT RIGHTS to another licensee, HARVARD shall use commercially
     reasonable efforts to require such other licensee to pay the costs of the
     preparation, filing, prosecution and maintenance of PATENT RIGHTS. HARVARD
     shall reimburse LICENSEE for any costs so paid by such other licensee to
     the extent LICENSEE paid for such costs under Section 7.1.


                                   ARTICLE X
                         REPRESENTATIONS AND WARRANTIES

10.1 Except for the rights, if any, of the Government of the United States,
     HARVARD represents and warrants that:

     (a)  HARVARD is the owner of the entire right, title and interest in and to
          the PATENT RIGHTS as they exist on the Effective Date;

     (b)  HARVARD has the right and authority to enter into this Agreement and
          grant the rights and licenses set forth herein, including without
          limitation under PATENT RIGHTS;

     (c)  HARVARD has not previously granted, and will not grant in the future,
          any rights in the PATENT RIGHTS that are inconsistent with the rights
          and licenses granted to LICENSEE herein;

     (d)  To the best knowledge of HARVARD without having made an investigation,
          as of the Effective Date, practice of inventions within the PATENT
          RIGHTS does not infringe any patent rights, trade secrets or other
          proprietary rights of any third party,

                                                                              19

          (e)  To the best knowledge of HARVARD, as of the Effective Date,
               HARVARD does not own any rights in any other patent application,
               the claims of which would dominate the claims of a patent or
               patent application within the PATENT RIGHTS, or any practice of
               PATENT RIGHTS. IF HARVARD owns, now or thereafter, any such
               rights in such patents or patent applications on which Dr. Lieber
               is an inventor, HARVARD will negotiate in good faith to the
               extent it has the legal right to do so with LICENSEE to grant
               LICENSEE rights to the extent sufficient to practice PATENT
               RIGHTS.

          (f)  To the best knowledge of HARVARD, all prior and current
               agreements between HARVARD and other sponsors of research under
               which HARVARD has obligations relating to PATENT RIGHTS are
               listed on Appendix C.

     10.2  Except as set forth in this Agreement, HARVARD does not warrant the
           validity of the PATENT RIGHTS licensed hereunder and makes no
           representations whatsoever with regard to the scope of the licensed
           PATENT RIGHTS or that such PATENT RIGHTS may be exploited by
           LICENSEE, an AFFILIATE, or sublicensee without infringing other
           patents.

     10.3  EXCEPT FOR THE WARRANTIES STATED IN THIS AGREEMENT, HARVARD
           EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND
           MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
           FOR ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS OR INFORMATION
           SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS
           CONTEMPLATED BY THIS AGREEMENT.


                                   ARTICLE XI
                                    GENERAL

     11.1 (a)  The parties may, from time to time, in connection with this
               Agreement disclose to each Confidential Information. Any
               Confidential Information shall be in writing and marked
               "confidential" and disclosed only to the Office of Technology and
               Trademark Licensing. As used in this Agreement, "Confidential
               Information" of a party shall mean (i) any information disclosed
               in writing by such party to the other party, which is marked by
               such party with the legend "CONFIDENTIAL" or other similar legend
               sufficient to identify the information as its confidential
               information, (ii) any information disclosed orally by such party
               to the other party which is identified as confidential at the
               time of disclosure and is confirmed as confidential in writing
               within thirty (30) days after such time of disclosure, or (iii)
               any information deemed "Confidential Information under the terms
               of this Agreement. With respect to categories (i) and (ii) above,
               "Confidential Information" shall not include any information that
               is: (1) already known to the receiving party at the time of
               disclosure hereunder, or (2) now or hereafter becomes publicly
               known other than through acts or omissions of the receiving
               party, or (3) is disclosed to the receiving party by a third
               party under no obligation of confidentiality


                                                                              20

          to the disclosing party or (4) is independently developed by the
          receiving party without use of the Confidential Information of the
          disclosing party.

     (b)  Each party shall maintain in confidence, and shall not use for any
          purpose or disclose to any third party, the Confidential Information
          of the other party. Notwithstanding the foregoing, the receiving party
          may use or disclose the Confidential Information of the disclosing
          party (i) to the extent necessary to exercise its rights or fulfill
          its obligations and/or duties under this Agreement, and (ii) to comply
          with applicable law or governmental regulations or court order,
          provided that the receiving party will give reasonable advance notice
          to the disclosing party, and will use its reasonable efforts to
          minimize the disclosure of Confidential Information and to secure
          confidential treatment of any Confidential Information disclosed.

     (c)  The terms of this Agreement shall be deemed "Confidential Information"
          of both parties. In addition to the permissible disclosures set forth
          in subsection (b) above, LICENSEE may disclose such terms in
          confidence to its financial and legal advisors, consultants, potential
          or actual investors, potential or actual merger or acquisition
          partners, and others on a need-to-know basis.

11.2 (a)  LICENSEE shall indemnify, defend and hold harmless HARVARD and its
          current or former and future directors, governing board members,
          trustees, officers, faculty and employees (collectively, the
          "INDEMNITEES"), from and against any lawsuit or cause or action
          against the INDEMNITEES brought by a third party (collectively,
          "Claims"), based upon, arising out of, or otherwise relating to this
          Agreement, including without limitation any cause of action relating
          to product liability concerning any product, process, or service made,
          used or sold pursuant to any right of license granted under this
          Agreement, except to the extent such Claims arise out of or otherwise
          relate to the gross negligence or intentional misconduct of any
          INDEMNITEES; and further provided that (i) LICENSEE receives prompt
          notice of any such Claims; (ii) LICENSEE is given the exclusive right
          to control the defense and settlement of such Claims; and (iii)
          LICENSEE shall not be obligated to indemnify any INDEMNITEE in
          connection with any settlement for any Claim unless LICENSEE consents
          in writing to such settlement.

     (b)  LICENSEE shall, at its own expense, defend against any actions brought
          or filed against any INDEMNITEE hereunder with respect to the subject
          of indemnity contained herein, whether or not such actions are
          rightfully brought.

     (c)  Beginning at the time any such product, process or service is being
          commercially distributed or sold (other than for the purpose of
          obtaining regulatory approvals) by LICENSEE or by a SUBLICENSEE,
          AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sold cost and
          expense, procure and maintain commercial general liability insurance
          in amounts not less than $[*** Redacted] per incident and $[***
          Redacted] annual aggregate and naming the Indemnitees as additional
          insureds. During clinical trials of any such product, process or
          service, LICENSEE shall, at its sole cost and expense, procure and
          maintain commercial general liability insurance in such equal or
          lesser amount as HARVARD shall require, naming the Indemnitees as



*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                              21



          additional insureds. Such commercial general liability insurance shall
          provide: (i) product liability coverage; and (ii) broad form
          contractual liability coverage for LICENSEE's indemnification under
          this Agreement. If LICENSEE elects to self-insure all or part of the
          limits described above (including deductibles or retentions which are
          in excess of $[*** Redacted] annual aggregate) such self-insurance
          program must be acceptable to HARVARD and the Risk Management
          Foundation of the Harvard Medical Institutions, Inc. in their sole
          discretion. The minimum amounts of insurance coverage required shall
          not be construed to create a limit of LICENSEE's liability with
          respect to its indemnification under this Agreement.

     (d)  LICENSEE shall provide HARVARD with written evidence of such
          insurance upon request of HARVARD. LICENSEE shall provide HARVARD with
          written notice at least fifteen (15) days prior to the cancellation,
          non-renewal or material change in such insurance; if LICENSEE does not
          obtain replacement insurance providing comparable coverage within such
          fifteen (15) day period, HARVARD shall have the right to terminate
          this Agreement in accordance with Section 9.2(c).

     (e)  LICENSEE shall maintain such commercial general liability insurance
          beyond the expiration or termination of this Agreement during: (i) the
          period that any product, process, or service, relating to, or
          developed pursuant to, this Agreement is being commercially
          distributed or sold by LICENSEE or by a sublicensee, AFFILIATE or
          agent of LICENSEE; and (ii) a reasonable period after the period
          referred to in Subsection (e)(i) above which in no event shall be less
          than fifteen (15) years.

11.3 Nothing in this Agreement shall be construed as conferring any right to use
     HARVARD's name or insignia, or any adaptation of them, or the name of any
     of HARVARD's inventors in any advertising, promotional or sales literature
     without the prior written approval of HARVARD, or the inventor in the case
     of the use of the name of an inventor.

11.4 Except as stated in this Section 11.4, without the prior written approval
     of HARVARD in each instance, neither this Agreement nor the rights granted
     hereunder shall be transferred or assigned in whole or in part by LICENSEE
     to any person whether voluntarily or involuntarily, by operation of law or
     otherwise. LICENSEE may transfer or assign this Agreement and all rights
     hereunder, upon notice to HARVARD but without its consent, to any entity
     that succeeds to all or substantially all of the business of LICENSEE to
     which this Agreement pertains, whether by merger, operation of law,
     purchase or sale of all or substantially all of LICENSEE's stock or assets
     or otherwise; provided that such assignee or transferee promptly agrees in
     writing to be bound by the terms and conditions of this Agreement. Subject
     to the foregoing, this Agreement shall be binding upon the respective
     successors, legal representatives and assignees of HARVARD and LICENSEE.

11.5 The interpretation and application of the provisions of this Agreement
     shall be governed by the laws of the Commonwealth of Massachusetts.

11.6 LICENSEE shall comply with all applicable laws and regulations. In
     particular, it is understood and acknowledged that the transfer of certain
     commodities and technical data



*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              22



     is subject to United States laws and regulations controlling the export of
     such commodities and technical data, including all Export Administration
     Regulations of the United States Department of Commerce. These laws and
     regulations among other things, prohibit or require a license for the
     export of certain types of technical data to certain specified countries.
     LICENSEE hereby agrees and gives written assurance that it will comply with
     all United States laws and regulations controlling the export of
     commodities and technical data, that it will be solely responsible for any
     violation of such by LICENSEE or its AFFILIATES or sublicensees, and that
     it will defend and hold HARVARD harmless in the event of any legal action
     of any nature occasioned by such violation with respect to LICENSED
     PRODUCTS.

11.7 LICENSEE agrees: (i) to obtain all regulatory approvals required for the
     manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES; and (ii)
     to mark LICENSED PRODUCTS with the numbers of the applicable patents within
     PATENT RIGHTS, to the extent required by law. LICENSEE also agrees to
     register or record this Agreement as is required by law or regulation in
     any country where the license is in effect, and HARVARD shall cooperate
     fully with LICENSEE in connection with any such registration or
     recordation.

11.8 Any notices to be given hereunder shall be sufficient if signed by the
     party (or party's attorney) giving same and either: (i) delivered in
     person; (ii) mailed certified mail return receipt requested; or (iii) faxed
     to other party if the sender has evidence of successful transmission and if
     the sender promptly sends the original by ordinary mail, in any event to
     the following addresses:

     If to LICENSEE:
        c/o CW Group East
        1041 Third Avenue
        New York, New York 10021
        Attn: Lawrence A. Bock
        Fax: 212/644-0354

     cc:   Wilson, Sonsini, Goodrich & Rosati
           650 Page Mill Road
           Palo Alto, California 94304
           Attn: Michael J. O'Donnell, Esq.
           Fax: 650/493-6811

     If to HARVARD:
           Office for Technology and Trademark Licensing
           Harvard University
           Holyoke Center, Suite 727
           1350 Massachusetts Avenue
           Cambridge, MA 02138
           Fax: (617)495-9568


                                                                              23

      By such notice either party may change their address for future notices.

      Notices delivered in person shall be deemed given on the date delivered.
      Notices sent by fax shall be deemed given on the date faxed. Notices
      mailed shall be deemed given on the date postmarked on the envelope.

11.9  Should a court of competent jurisdiction later hold any provision of this
      Agreement to be invalid, illegal, or unenforceable, and such holding is
      not reversed on appeal, it shall be considered severed from this
      Agreement. All other provisions, rights and obligations shall continue
      without regard to the severed provision, provided that the remaining
      provisions of this Agreement are in accordance with the intention of the
      parties.

11.10 In the event of any controversy or claim arising out of or relating to
      any provision of this Agreement or the breach thereof, the parties shall
      try to settle such conflict amicably between themselves. Subject to the
      limitation stated in the final sentence of this Section, any such
      conflict which the parties are unable to resolve promptly shall be
      settled through arbitration conducted in accordance with the rules of the
      American Arbitration Association. The demand for arbitration shall be
      filed within a reasonable time after the controversy or claim has arisen,
      and in no event after the date upon which institution of legal
      proceedings based on such controversy or claim would be barred by the
      applicable statute of limitation. Such arbitration shall be held in
      Boston, Massachusetts. The award through arbitration shall be final and
      binding. Either party may enter any such award in a court having
      jurisdiction or may make application to such court for judicial
      acceptance of the award and an order of enforcement, as the case may be.
      Notwithstanding the foregoing, either party may, without recourse to
      arbitration, assert against the other party a third-party claim or
      cross-claim in any action brought by a third party, to which the subject
      matter of this Agreement may be relevant.

11.11 This Agreement constitutes the entire understanding between the parties
      and neither party shall be obligated by any condition or representation
      other than those expressly stated herein or as may be subsequently agreed
      to by the parties hereto in writing.

11.12 Nothing in this Agreement shall be deemed to require LICENSEE to exploit
      the PATENT RIGHTS, except to the extent expressly set forth in this
      Agreement, and nothing in this Agreement shall be deemed to prevent
      LICENSEE from commercializing products similar to or competitive with a
      LICENSED PRODUCT.

11.13 The relationship between HARVARD and LICENSEE established by this
      Agreement is that of independent contractors. Nothing in this Agreement
      shall be construed to create any other relationship between HARVARD and
      LICENSEE. Neither party shall have any right, power or authority to
      assume, create or incur any expense, liability or obligation, express or
      implied, on behalf of the other.

11.14 In the event either party hereto is prevented from or delayed in the
      performance of any of its obligations hereunder by reason of acts of God,
      war, strikes, riots, storms, fires or any other cause whatsoever beyond
      the reasonable control of the party, the party so prevented

                                                                              24

       or delayed shall be excused from the performance of any such obligation
       to the extent and during the period of such prevention or delay.

11.15  NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY
       FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES
       (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME),
       ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS
       BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN
       AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OF
       LIKELIHOOD OF SAME.

11.16  This Agreement may be executed in counterparts, each of which shall be
       deemed an original, but both of which together shall constitute one and
       the same instrument.

       IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
       executed by their duly authorized representatives.




         PRESIDENT AND FELLOWS                                         COMPANY
          OF HARVARD COLLEGE

                                                 
           /s/ Joyce Brinton                                     /s/ Lawrence A. Bock
- ---------------------------------------------       ---------------------------------------------
         Joyce Brinton, Director                                       Signature
Office for Technology and Trademark Licensing

                                                                   Lawrence A. Bock
                                                    ---------------------------------------------
                                                                         Name


                  10/2/01                                          President and CEO
- ---------------------------------------------       ---------------------------------------------
                   Date                                                  Title

                                                                        10/3/01
                                                    ---------------------------------------------
                                                                          Date




                                                                              25



                                   APPENDIX A


The following comprise PATENT RIGHTS:

US Provisional Application. 60/142,216, filed 7/1/99 which has been converted to
a PCT application, PCT/USOO/18138, filed 7/2/00, designating the US, Australia,
Canada, Japan and the EPO. Harvard Case 1641














                                                                              26

                                   APPENDIX B

NANOSYS, INC. CAPITALIZATION TABLE - CONFIDENTIAL

FOUNDERS' STOCK (Common Stock Capitalization Before Series A Preferred Stock
Financing)



                             % of Founders Stock       # of Shares of Common Stock     Amount Invested
                                                                             

Charles Lieber                11.0%                             550,000                       $550
Hongkun Park #                 9.0%                             450,000                       $450
Michael Evans @                2.0%                             100,000                       $100
CW Group *                    12.0%                             600,000                       $600
Other advisor (tbd)             2%                              100,000                       $100
Reserve                       64.0%                           3,200,000                     $3,200

Total Common Shares          100.0%                           5,000,000                     $5,000



PROPOSED SERIES A PREFERRED
STOCK

Investors as a group                                5,000,000-6,666,667           $1,500-2,000,000
Total Series A Preferred Shares                     5,000,000-6,666,667           $1,500-2,000,000



#  Founders stock will vest monthly over a five year period
@  Evans shares will be fully vested
*  Shares will be issued in the form of an option




                                   APPENDIX C


CASE       LEAD INVENTOR    REPORT               TITLE                        AGENCY                GRANT NUMBERS
                             DATE
                                                                                  
1641       Charles Lieber   6/9/99       Molecular Wire, Arrays      Office of Naval Research    N 00014-99-1-0495
                                         and the Methods of the
                                         Manufacture

EX-10.5.2

                                                                  EXHIBIT 10.5.2

                         LICENSE AGREEMENT (CASE #1988)

                                     Between

                    President and Fellows of Harvard College

                                       And

                                  NanoSys, Inc.

               Effective as of February 1, 2002 ("Effective Date")
                             Re: Harvard Case #1988

         In consideration of the mutual promises and covenants set forth below,
         the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         As used in this Agreement, the following terms shall have the following
         meanings:

1.1      ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS solely for academic
         non-commercial research or other not-for-profit scholarly purposes,
         which use is undertaken at a non-profit or governmental institution.
         ACADEMIC RESEARCH PURPOSES does not include selling products covered by
         PATENT RIGHTS or using PATENT RIGHTS in researching, developing,
         producing or manufacturing products for sale, or performance of
         services for a fee of other financial consideration. It is understood
         that using the PATENT RIGHTS to conduct normal research activities at
         non-profit or governmental institution is within the defined term of
         ACADEMIC RESEARCH PURPOSES.

1.2      AFFILIATE: any entity which controls, is controlled by, or is under
         common control with a party. An entity shall be regarded as in control
         of another entity for purposes of this definition if it owns or
         controls at least fifty percent (50%) of the shares entitled to vote in
         the election of directors (or in the case of an entity that is not a
         corporation, for the election of the corresponding managing authority).
         Unless otherwise specified, the term LICENSEE includes AFFILIATES.

1.3      FIELD: All fields of use.

1.4      HARVARD: President and Fellows of Harvard College, a nonprofit
         Massachusetts educational corporation having offices at the Office for
         Technology and Trademark



         Licensing, Holyoke Center, Suite 727, 1350 Massachusetts Avenue,
         Cambridge, Massachusetts 02138.

1.5      LICENSED PROCESSES: methods, processes or procedures covered by at
         least one VALID CLAIM included within the PATENT RIGHTS.

1.6      LICENSED PRODUCTS: products covered by at least one VALID CLAIM
         included within the PATENT RIGHTS or products made in accordance with
         LICENSED PROCESSES.

1.7      LICENSEE: Nanosys, Inc., a corporation organized under the laws of
         Delaware having its principal offices at CW Group East, 1041 Third
         Avenue, New York, New York 10021.

1.8      NET SALES: the amounts actually received for sales, leases, or other
         dispositions of LICENSED PRODUCTS to non-AFFILIATE third parties, less:

         (a) customary [*** Redacted];

         (b) amounts [*** Redacted] by reason of [*** Redacted];

         (c) to the extent separately stated on purchase orders, invoices, or
             other documents of  sale: (i) [*** Redacted] levied on the
             production, sale, transportation, delivery, importation,
             exportation or use of LICENSED PRODUCTS; (ii) charges for [***
             Redacted] provided by third parties, including any [*** Redacted]
             thereon.

         NET SALES also includes the fair market value of any non-cash
         consideration received for the sale, lease or other disposition of
         LICENSED PRODUCTS to non-AFFILIATE third parties; provided NET SALES
         shall not include any [*** Redacted] payments in consideration for the
         [*** Redacted] to the intellectual property of LICENSEE or third
         parties, including the [*** Redacted] hereunder, bona fide [***
         Redacted] made in good faith and any payments for [*** Redacted].

         In the event that a LICENSED PRODUCT is sold or leased as a combination
         product containing the LICENSED PRODUCT and one or more other
         components, NET SALES shall be calculated by multiplying the gross
         amount invoiced for the sale of the combination product by the fraction
         [*** Redacted] where A is the [*** Redacted] price of the LICENSED
         PRODUCT sold separately by LICENSEE, and B is the [*** Redacted] of
         such other components of the combination products sold separately by
         LICENSEE during the relevant royalty payment period.  In the event a
         substantial number of such separate sales were not made during the
         relevant royalty period, then NET SALES shall be reasonably allocated
         by LICENSEE between such LICENSED PRODUCT and such other components of
         the combination based on their relative importance or value; provided
         that such LICENSED PRODUCT and such other components shall not be
         considered a "combination product" unless such LICENSED PRODUCT and
         such other components are offered for sale or marketed by LICENSEE
         separately as well as together.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted
portions have been filed separately with the Commission.

                                                                               2



1.9      PATENT RIGHTS: PATENT RIGHTS shall include (i) the applications and
         patents as listed in Appendix A of this Agreement, (ii) any foreign
         counterparts to such patents and patent applications, (iii) the
         inventions described and claimed in the foregoing, (iv) any divisions,
         continuations, substitutions of the foregoing, and (v) specific claims
         of any continuations-in-part of the foregoing to the extent the
         specific claims are directed to subject matter described in the
         foregoing in a manner sufficient to support such specific claims under
         35 U.S.C. and to the extent Licensable by HARVARD, (vi) all patents
         issuing on any of the foregoing, and (vii) registrations, renewals,
         reissues, reexaminations, extensions or patents of addition of any kind
         with respect to any of such patents. For purposes of this Agreement
         "Licensable" shall mean those claims of continuations-in-part filed
         after the Effective Date for which HARVARD has sole ownership (or has
         been granted the sole right to license by a co-owner) and where there
         are no obligations to grant licenses to a third party as the result of
         research support provided to one or more of the inventors.

1.10     SERVICE INCOME: the financial consideration actually received for the
         utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE
         which is contracted for by a non-AFFILIATE third party, less the
         deductions stated in Sections 1.8(a), (b) and (c); provided, however,
         that such amounts shall only be included in SERVICE INCOME if LICENSEE
         does not [*** Redacted] with respect to the PATENT RIGHTS licensed in
         this Agreement on the NET SALE of such LICENSED PRODUCTS or the NET
         SALE of LICENSED PRODUCTS made in accordance with such use of the
         LICENSED PROCESSES. SERVICE INCOME shall specifically exclude any [***
         Redacted] payments in consideration for the [*** Redacted] of the
         LICENSEE or third parties, including the [*** Redacted] hereunder, [***
         Redacted] made in good faith and any [*** Redacted].

         In the event that any service contemplated hereunder includes any
         services other than the utilization of [*** Redacted] or [*** Redacted]
         LICENSEE shall in good faith determine the portion of the payments
         received for such service that are intended as consideration for the
         utilization of [*** Redacted] or [*** Redacted] by LICENSEE, and such
         portion shall be used to determine the SERVICE INCOME for such service.
         In such event, LICENSEE shall promptly deliver to HARVARD a written
         report detailing such calculation, together with a copy of the
         applicable provisions of the agreements related to such service.  All
         such reports and provisions of agreements shall be deemed Confidential
         Information of LICENSEE subject to Section 11.1.  In the event that
         HARVARD disagrees with the determination made by LICENSEE of SERVICE
         INCOME for such service, HARVARD shall so notify LICENSEE in writing,
         and a representative of LICENSEE  and a representative of HARVARD shall
         meet in order to discuss and resolve such disagreement. If such
         disagreement cannot be resolved within sixty (60) days, such
         disagreement shall be subject to resolution in accordance with
         paragraph 11.10.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               3



1.11     SUBLICENSE INCOME: the amount paid to LICENSEE by a third party (other
         than an AFFILIATE of LICENSEE) for the granting of a sublicense under
         Section 3.1, including but not limited to (i) [*** Redacted], (ii) [***
         Redacted], (iii) [*** Redacted] and (vi) the [*** Redacted] in cash of
         any non-cash consideration for such sublicense, but specifically
         excluding any [*** Redacted] payments in consideration for the [***
         Redacted], [*** Redacted] and any [*** Redacted]. It is understood and
         agreed that sublicense income received by LICENSEE shall be net of
         withholding taxes.

         If LICENSEE sublicenses [*** Redacted] to a third party and at the same
         time also grants such third party rights to [*** Redacted] or [***
         Redacted], then all compensation received from the third party for such
         rights shall be combined and [*** Redacted] that would constitute
         SUBLICENSE INCOME under Section 1.11 and shall promptly deliver to
         HARVARD a written report detailing such calculation, together with a
         copy of the applicable provisions of the agreements with the third
         party. All such reports and provisions of agreements shall be deemed
         Confidential Information of LICENSEE subject to Section 11.1. In the
         event that HARVARD disagrees with the determination made by LICENSEE of
         SUBLICENSE INCOME, HARVARD shall so notify LICENSEE in writing, and a
         representative of LICENSEE and a representative of HARVARD shall meet
         in order to discuss and resolve such disagreement. If such disagreement
         cannot be resolved within sixty (60) days, such disagreement shall be
         subject to resolution in accordance with Section 11.10.

1.12     TERRITORY: Worldwide.

1.13     VALID CLAIM: either (i) a claim of an issued patent that has not
         expired or been held unenforceable or invalid by an agency or a court
         of competent jurisdiction, and which has not been admitted to be
         invalid or unenforceable through reissue, disclaimer or otherwise;
         provided, however, that if the holding of such court or agency is later
         reversed by a court or agency with overriding authority, the claim
         shall be reinstated as a Valid Claim with respect to Net Sales made
         after the date of such reversal, or (ii) a claim of a pending patent
         application that has not been abandoned or finally rejected without the
         possibility of appeal or re-filing and that has been pending for less
         than five (5) years from its priority date, and is being actively
         prosecuted in good faith.

1.14     The terms "Public Law 96-517" and "Public Law 98-620" include all
         amendments to those statutes.

1.15     The terms "sold" and "sell" include, without limitation, leases and
         other dispositions and similar transactions.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately, with the Commission.


                                                                               4



1.16     RELATED LICENSE AGREEMENTS: Other patent license agreements between
         LICENSEE and HARVARD licensing patent rights known internally at
         HARVARD as Case #1852, #1765, #1923, #1924, #1678, #1641, #1489,
         #1352, #1243, #1137, #1816, #1685, #1988, and #1935 to LICENSEE.

1.17     R&D SPENDING, MINIMUM INVESTMENT: shall have the meanings as set forth
         in Section 4.5.

1.18     DEVELOPMENT PAYMENTS: DEVELOPMENT PAYMENTS shall mean (a) any payments,
         in consideration for, or to support, research and/or development
         efforts by LICENSEE and (b) any reimbursement of expenses including
         without limitation patent expenses.

                                   ARTICLE II
                                    RECITALS

2.1      HARVARD is owner (or HARVARD will be owner) by assignment from
         Charles Lieber et al of his/their entire right, title and interest in a
         United States Provisional Patent Application [serial number N/A] filed
         November 9, 2001, entitled Transistors, Diodes, Logic Gates,
         Computational Devices and other Devices Assembled from Nanowire
         Building Blocks (Harvard Case #1988), in the U.S., and foreign patent
         applications corresponding thereto, and in the inventions described and
         claimed therein.

2.2      HARVARD has the authority to issue licenses under PATENT RIGHTS.

2.3      HARVARD is committed to the policy that ideas or creative works
         produced at HARVARD should be used for the greatest possible public
         benefit, and believes that every reasonable incentive should be
         provided for the prompt introduction of such ideas into public use, all
         in a manner consistent with the public interest.

2.4      LICENSEE intends to use commercially reasonable efforts to develop the
         invention(s), and to bring to market at least one product falling
         within the definition of LICENSED PRODUCT or otherwise embodying the
         subject matter described or claimed in the patents rights licensed
         under such agreements.

2.5      LICENSEE is desirous of obtaining on exclusive license in the TERRITORY
         in order to practice the above-referenced invention covered by PATENT
         RIGHTS in the United States and in certain foreign countries, and to
         manufacture, use and sell in the commercial market the products made in
         accordance therewith, and HARVARD is desirous of granting such a
         license to LICENSEE in accordance with the terms of this Agreement.

2.6      LICENSEE and HARVARD recognize that this invention is dominated by and
         is an improvement upon inventions already licensed to LICENSEE under
         RELATED LICENSE AGREEMENTS.


                                                                               5



                                   ARTICLE III
                                 GRANT OF RIGHTS

3.1      HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
         terms and conditions hereof, an exclusive (except as set forth in
         Sections 3.2(a) and 3.2(b)) license under PATENT RIGHTS in the
         TERRITORY and in the FIELD (i) to make and have made, to use and have
         used, to sell and have sold, to offer for sale, import, export, or
         otherwise distribute the LICENSED PRODUCTS, (ii) to practice the
         LICENSED PROCESSES, and (iii) to otherwise fully exploit the PATENT
         RIGHTS, and (iv) to have the foregoing performed on behalf of LICENSEE
         by a third party, in each case for the life of the PATENT RIGHTS. The
         foregoing license under PATENT RIGHTS shall include the full right to
         grant sublicenses, and LICENSEE shall promptly provide copies of any
         sublicenses of PATENT RIGHTS to HARVARD for its review. Unless HARVARD
         has rendered the license under PATENT RIGHTS non-exclusive under
         Section 3.2(d), HARVARD agrees that it will not grant licenses under
         PATENT RIGHTS to others, nor make, use, sell, offer for sale, import or
         otherwise exploit PATENT RIGHTS itself except as required by HARVARD's
         obligations in Section 3.2(a) or as permitted in Section 3.2(b).

3.2      The granting and exercise of this license is subject to the following
         conditions:

         (a)      HARVARD's "Statement of Policy in Regard to Inventions,
                  Patents and Copyrights," dated August 10, 1998, Public law
                  96-517 and Public Law 98-620, and HARVARD's obligations under
                  prior or current agreements with other sponsors of research
                  and, with regard to continuations-in-part contained in the
                  PATENT RIGHTS, any future agreements with other sponsors of
                  research related to such continuations-in-part. Any right
                  granted in this Agreement greater than that permitted under
                  Public Law 96-517, or Public Law 98-620, shall be subject to
                  modification to the extent required to conform to the
                  provisions of those statutes.

         (b)      HARVARD reserves the right to make and use, and grant to other
                  non-profit or governmental institutions non-exclusive licenses
                  to make and use, in each case solely for ACADEMIC RESEARCH
                  PURPOSES the subject matter described and claimed in PATENT
                  RIGHTS. HARVARD shall promptly notify LICENSEE of any rights
                  granted to any third party (other than the U.S. government)
                  under Sections 3.2(a) and (b).

         (c)      LICENSEE shall use commercially reasonable efforts to effect
                  introduction into the commercial market at least one product
                  falling within the definition of LICENSED PRODUCT or otherwise
                  embodying the subject matter described or claimed in PATENT
                  RIGHTS, consistent with sound and reasonable business practice
                  and judgment; thereafter, until the expiration of this
                  Agreement, LICENSEE shall use commercially reasonable efforts
                  to endeavor to keep any such product reasonably available to
                  the public so long as it shall be a sound and reasonable
                  commercial practice to do so.






                                                                               6


         (d)      At any time after five (5) years from the effective date
                  of this Agreement, HARVARD may render this license
                  non-exclusive if LICENSEE has not:

                  (i)           used commercially reasonable efforts to put the
                           licensed subject matter into commercial use in one or
                           more of the countries hereby licensed, directly or
                           through a sublicense; nor

                  (ii)          used commercially reasonable efforts to keep
                           products falling within the definition of LICENSED
                           PRODUCT or otherwise embodying the subject matter
                           described or claimed in PATENT RIGHTS reasonably
                           available to the public so long as it shall be a
                           sound and reasonable commercial practice to do so;
                           nor

                  (iii)         engaged in research, development, manufacturing,
                           marketing or sublicensing activity that is
                           commercially reasonably appropriate to achieving
                           Section 3.2(d)(i) or 3.2(d)(ii).

                  LICENSEE shall be deemed to have satisfied Section
                  3.2(d)(iii), and HARVARD shall not render the license of
                  PATENT RIGHTS granted hereunder non-exclusive, if LICENSEE's
                  R&D SPENDING exceeds the MINIMUM INVESTMENT for such year as
                  set forth in Section 4.5.

         (e)      In all sublicenses granted by LICENSEE hereunder, LICENSEE
                  shall include a requirement that the sublicensee use
                  commercially reasonable efforts to put the subject matter of
                  the sublicense into commercial use, provided that such
                  sublicensee is authorized to develop and sell to the public a
                  new product covered by PATENT RIGHTS on its own behalf.
                  LICENSEE shall further provide that such sublicenses are
                  subject and subordinate to the terms and conditions of this
                  Agreement, except for the rate of royalty on NET SALES paid by
                  such sublicensee to the LICENSEE. Copies of all sublicense
                  agreements hereunder shall be provided promptly to HARVARD.
                  All sublicense agreements of LICENSEE provided to HARVARD
                  shall deemed Confidential Information of LICENSEE subject to
                  Section 11.1.

         (f)      At any time eight (8) years after the effective date of
                  this Agreement, if LICENSEE is unable or unwilling to grant
                  sublicenses, either as suggested by HARVARD or by a potential
                  sublicensee or otherwise, then HARVARD may directly license
                  such potential sublicensee, but only if: (i) LICENSEE is not
                  currently pursuing development of LICENSED PRODUCTS for the
                  same application as contemplated by the potential sublicensee,
                  or LICENSEE commits to do so within a two-year period, (ii)
                  the granting of such a license by HARVARD to the potential
                  sublicensee will increase the availability of useful products
                  to the public, (iii) the granting of such license by HARVARD
                  will not materially adversely affect LICENSEE's then current
                  business or reasonably foreseeable future business (e.g., such
                  license is not intended for an application competitive with
                  LICENSEE) and (iv) HARVARD notifies LICENSEE of its intention
                  to grant such license and permits LICENSEE a reasonable period
                  to negotiate a sublicense on its own.


                                                                               7



         (g)            To the extent required by law, during the period of
                  exclusivity of this license in the United States, LICENSEE
                  shall cause any LICENSED PRODUCT produced under the direction
                  of Dr. Lieber or Dr. Park for sale in the United States to be
                  manufactured substantially in the United States.

3.3      All rights reserved to the United States Government and others under
         Public Law 96-517, and Public Law 98-620, shall remain and shall in no
         way be affected by this Agreement.

3.4      HARVARD shall promptly notify LICENSEE when any new patent or patent
         application arises from (i) research conducted in the laboratory of Dr.
         Lieber or Dr. Park, or (ii) improvements made by HARVARD under the
         direction of Dr. Lieber or Dr. Park on the subject matter described in
         PATENT RIGHTS. If LICENSEE so requests and the intellectual property is
         available for licensing, HARVARD will evaluate in good faith LICENSEE's
         proposal along with proposals received from any third parties. Any
         decision to grant a license to LICENSEE shall be subject to approval by
         HARVARD's Committee on Patents and Copyrights. In the event LICENSEE
         and HARVARD cannot agree on terms for a license to any new intellectual
         property which is dominated by PATENT RIGHTS, HARVARD shall not offer
         any third party terms more favorable than the terms offered to
         LICENSEE.

                                   ARTICLE IV
                                    ROYALTIES

4.1      LICENSEE shall pay to HARVARD a non-refundable license royalty fee in
         the sum of [*** Redacted] upon execution of this Agreement.

4.2      (a)      LICENSEE shall pay to HARVARD during the term of this
                  Agreement a royalty on NET SALES by LICENSEE according to the
                  following schedule:

                  (i)      [*** Redacted]% of NET SALES by LICENSEE in
                           [*** Redacted];

                  (ii)     [*** Redacted]% of NET SALES by LICENSEE in
                           [*** Redacted]; or

                  (iii)    [*** Redacted] of NET SALES by LICENSEE in
                           nanotechnology applications [*** Redacted]
                           applications and [*** Redacted] applications.

                  In the event, any NET SALES by LICENSEE reasonably falls
                  within more than one of categories (i) to (iii) above,
                  LICENSEE shall pay to HARVARD the lowest applicable royalty
                  set forth in such categories.

         (b)      For each LICENSED PRODUCT sold by LICENSEE, LICENSEE may
                  credit up to [*** Redacted] of royalties that LICENSEE is
                  paying to third parties (or HARVARD under agreements not
                  included within section 4.3(c)) on LICENSEE's sales of that
                  LICENSED PRODUCT, provided that the royalty paid to HARVARD
                  shall not be

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               8


                  reduced below [*** Redacted] percent ([*** Redacted]%) of the
                  NET SALES of that LICENSED PRODUCT for which such third party
                  royalties are being paid.

         (c)      In the event that sales of a LICENSED PRODUCT arc subject to
                  the payment of royalties under one or more of the RELATED
                  LICENSE AGREEMENTS or any license agreements with HARVARD with
                  the same effective date as this Agreement, then the total
                  royalty payment due HARVARD under all such agreements
                  including this Agreement shall be at most the royalty payment
                  due under this Section 4.3 on such NET SALE, no matter how
                  many license agreements from HARVARD are involved, and
                  notwithstanding the terms of any such agreement. LICENSEE
                  shall notify HARVARD of the identity of each license agreement
                  that includes patent rights covering the product or process,
                  and HARVARD shall distribute the royalties evenly among such
                  agreements, including this Agreement.

         (d)      LICENSEE shall pay HARVARD [*** Redacted] percent ([***
                  Redacted]%) of SUBLICENSE INCOME received by LICENSEE for a
                  sublicense of PATENT RIGHTS. If compensation for such a
                  sublicense of PATENT RIGHTS is bundled with compensation
                  received for the sublicensing of the other HARVARD patents
                  rights or other HARVARD intellectual property, licensed to
                  LICENSEE under the RELATED LICENSEE AGREEMENTS or any
                  agreements with HARVARD having the same effective date as this
                  Agreement, then LICENSEE shall pay HARVARD at most the royalty
                  payment due under this Section 4.3(d) for such SUBLICENSE
                  INCOME no matter how many license agreements from HARVARD are
                  involved, and notwithstanding the terms of any such license
                  agreements. In such a case, LICENSEE shall notify HARVARD of
                  the identity of each license agreement involved and HARVARD
                  shall distribute the royalties equally among those license
                  agreements, including this Agreement.

         (e)      For provision of services under PATENT RIGHTS, LICENSEE shall
                  pay a royalty of [*** Redacted] percent ([*** Redacted]%) of
                  SERVICE INCOME received by LICENSEE from each and every third
                  party ("Third Party") to whom LICENSEE provides such services.
                  In the event any services from which SERVICE INCOME is derived
                  are subject to the payment of royalties under the RELATED
                  LICENSE AGREEMENTS or any agreement with HARVARD having the
                  same effective date as this Agreement, then the total royalty
                  due under all such agreements, including this Agreement, shall
                  be at most the royalty payment due under this Section 4.3 on
                  such services, no matter how many license agreements from
                  HARVARD are involved, and notwithstanding the terms of any
                  such license agreements. In such event, LICENSEE shall notify
                  HARVARD of the identity of each license agreement involved and
                  HARVARD shall distribute the royalties equally among those
                  license agreements, including this Agreement.

         (f)      If the license pursuant to this Agreement is converted to a
                  non-exclusive one under Section 3.2(d) and if another
                  non-exclusive license to any of PATENT RIGHTS is granted or
                  otherwise exists for any field or territory, then the royalty
                  rate of this Agreement shall be adjusted so as not to exceed
                  the royalty rate payable by such other non-exclusive licensee
                  under such PATENT RIGHTS in such field or territory, provided


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                       9




                  that LICENSEE agrees to amend this Agreement to include terms
                  requested by HARVARD that have been accepted by such other
                  non-exclusive licensee.

         (g)      On sales between LICENSEE and its AFFILIATES for resale, the
                  royalty shall be paid on the NET SALES of the AFFILIATE.

         (h)      In the event that more than one VALID CLAIM within PATENT
                  RIGHTS is applicable to any LICENSED PRODUCT subject to
                  royalties under this Section 4.3, then only one royalty shall
                  be paid to HARVARD in respect of such LICENSED PRODUCT. In no
                  event shall more than one royalty be due to HARVARD with
                  respect to any LICENSED PRODUCT unit; nor shall a royalty be
                  payable under this Section 4.3 with respect to sales of
                  LICENSED PRODUCTS for clinical trials or as samples nor the
                  use of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE for
                  such purposes, in each case whether or not in collaboration
                  with a third party.

4.3      No later than January 1 of each calendar year after the effective date
         of this Agreement, LICENSEE shall pay to HARVARD the following
         non-refundable license maintenance royalty and/or advance on royalties.
         Such payments may be credited against running royalties due for that
         calendar year and Royalty Reports shall reflect such a credit. Such
         payments shall not be credited against milestone payments (if any) nor
         against royalties due for any subsequent calendar year.

                       
January 1, 2003           $[*** Redacted]
January 1, 2004           $[*** Redacted]
January 1, 2005           $[*** Redacted]
January 1, 2006           $[*** Redacted]
January 1, 2007           $[*** Redacted]
each year thereafter      $[*** Redacted]



4.5      Notwithstanding Section 4.4, the minimum royalty set forth in Section
         4.3 for the years 2003, and 2004 will be waived if LICENSEE's spending
         on research and development (LICENSEE's "R&D SPENDING") exceeds the
         amount set forth below for each category for such year (such amounts
         below, the "MINIMUM INVESTMENT").



                           CHEMICAL AND
                        BIOLOGICAL SENSOR    OPTOELECTRONICS     NANOELECTRONICS
                          APPLICATIONS        APPLICATIONS         APPLICATIONS
                                                        
Year 2002:                 $[*** Redacted]    [*** Redacted]      [*** Redacted]
Year 2003:                 $[*** Redacted]    [*** Redacted]      [*** Redacted]
Year 2004:                 $[*** Redacted]    [*** Redacted]      [*** Redacted]
Year 2005                  $[*** Redacted]    [*** Redacted]      [*** Redacted]
Year 2006                  $[*** Redacted]    [*** Redacted]      [*** Redacted]
Each Year Thereafter       $[*** Redacted]    [*** Redacted]      [*** Redacted]



*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



                                                                              10



         LICENSEE's MINIMUM INVESTMENT may be allocated by LICENSEE in any way
         within the three categories set forth above among the different subject
         matter of the RELATED LICENSE AGREEMENTS.

                                    ARTICLE V
                                    REPORTING

5.1      Within six(6) months of the Effective Date, LICENSEE will
         provide to HARVARD a written research and development plan acceptable
         to LICENSEE's investors under which LICENSEE intends to bring the
         subject matter of the licenses granted hereunder into commercial use
         upon execution of this Agreement. Such plan will include projections of
         sales and proposed marketing efforts. It is understood that LICENSEE
         may provide one research and development plan for all RELATED LICENSE
         AGREEMENTS.

5.2      No later than sixty(60) days after June 30 of each calendar year,
         LICENSEE shall provide to HARVARD a written annual Progress Report
         describing progress on the commercialization of PATENT RIGHTS during
         the most recent twelve(12) period ending June 30, the amount of
         LICENSEE's R&D SPENDING relating to the subject matter described or
         claimed in PATENT RIGHTS during such time, and plans for the
         forthcoming year. If multiple technologies are covered by the license
         granted hereunder, the Progress Report shall provide the information
         set forth above for each technology. If progress differs from that
         anticipated in the plan required under Section 5.1, LICENSEE shall
         explain the reasons for the difference and, if appropriate or
         necessary, provide a modified research and development plan for
         HARVARD's review. It is understood that LICENSEE may provide one
         Progress Report covering all RELATED LICENSE AGREEMENTS.

5.3      LICENSEE shall report to HARVARD the date of its first NET SALE of a
         LICENSED PRODUCT (or the date of its first use of a LICENSED PROCESS
         from which SERVICE INCOME is derived) in each country within thirty(30)
         days of occurrence. It is understood that LICENSEE shall be obligated
         to report the date of first sale of LICENSED PRODUCTS (or the first
         commercial use of LICENSED PROCESSES) under this Section 5.3 only once
         for each country.

5.4      (a) LICENSEE shall submit to HARVARD within sixty (60) days after
         each calendar half year ending June 30 and December 31, a Royalty
         Report setting forth, for the most recent half year that ended on June
         30 or December 31, at least the following information:

                  (i)      the number and identification of LICENSED PRODUCTS
                           sold by LICENSEE that constitute a NET SALE, in each
                           country;

                  (ii)     total amounts received for such LICENSED PRODUCTS;

                  (iii)    an accounting for all LICENSED PROCESSES used or
                           sold;

                  (iv)     deductions applicable to determine the NET SALES
                           thereof;




                                                                              11



                  (v)      the amount of SUBLICENSE INCOME received by LICENSEE;

                  (vi)     the amount of SERVICE INCOME received by LICENSEE;
                           and

                  (vii)    the amount of royalty due for such reporting period,
                           or, if no royalties are due to HARVARD for such
                           reporting period, the statement that no royalties are
                           due.

                  Such report shall be certified as correct by an officer of
                  LICENSEE and shall include a listing of all deductions from
                  royalties. It is understood that LICENSEE may submit one
                  Royalty Report covering all RELATED LICENSE AGREEMENTS.
                  However, the Royalty Report shall, for each type of income,
                  provide a detailed listing of the RELATED LICENSE AGREEMENTS
                  that are involved.

         (b)      LICENSEE shall pay to HARVARD with each such Royalty Report
                  the amount of royalty due with respect to such half year.
                  If multiple technologies are covered by the license granted
                  hereunder, LICENSEE shall specify which PATENT RIGHTS are
                  utilized for each category of LICENSED PRODUCTS and/or
                  LICENSED PROCESSES for which royalties are separately reported
                  in the Royalty Report.

         (c)            All payments due hereunder shall be deemed received
                  when funds are credited to HARVARD's bank account and shall be
                  payable by check or wire transfer in United States dollars.
                  Conversion of foreign currency to U.S. dollars shall be made
                  at the conversion rate existing in the United States (as
                  reported in the New York Times or the Wall Street Journal) on
                  the last working day of each royalty period. No transfer,
                  exchange, collection or other charges shall be deducted from
                  such payments. If legal restrictions block the removal of
                  local currency from any country where a LICENSED PRODUCT is
                  sold, the royalties payable under this Agreement on NET SALES,
                  SERVICE INCOME and SUBLICENSING INCOME earned in such currency
                  in such country shall continue to be reported and accrued, but
                  will not be paid until such currency may be removed from such
                  country.

         (d)      All plans or reports received under Sections 5.1, 5.2, 5.3,
                  5.4 shall deemed Confidential Information of LICENSEE subject
                  to Section 11.1; provided, however, that HARVARD may disclose
                  such information as required by law under Section 11.1 (b),
                  and may include in its usual reports the annual amounts of
                  royalties paid.

         (e)      Late payments shall be subject to a charge of one and one-half
                  percent (1.5%) per month, or $250, whichever is greater.

5.5      In the event of acquisition, merger, change of corporate name, or
         change of make-up, organization, or identity, LICENSEE shall notify
         HARVARD in writing within 30 days of such event.


                                                                              12



5.6      If LICENSEE or any of its sublicensees does not qualify as a "small
         entity" as provided by the United States Patent and Trademark Office,
         LICENSEE must notify HARVARD immediately.

                                   ARTICLE VI
                                 RECORD KEEPING

6.1      LICENSEE shall keep accurate records (together with supporting
         documentation) of LICENSED PRODUCTS made, used or sold under this
         Agreement, sufficient to determine the amount of royalties due to
         HARVARD hereunder. Such records shall be retained for at least three(3)
         years following the end of the reporting period to which they relate.
         They shall be available during normal business hours for examination,
         upon HARVARD's reasonable request, not more than once in any twelve(12)
         month period and upon at least twenty (20) days prior notice, by an
         independent accountant under a duty of confidentiality, selected by
         HARVARD and reasonably acceptable to LICENSEE, for the sole purpose of
         verifying reports and payments under Section 5.4. In conducting
         examinations pursuant to this Section, HARVARD's accountant shall have
         access to records materially relevant to the calculation of royalties
         under Article IV.

6.2      HARVARD's accountant shall only disclose to HARVARD whether the reports
         and payments of royalties hereunder are accurate, and the amount of the
         underreporting or underpayment of royalties by LICENSEE, if any.

6.3      Such examination by HARVARD's accountant shall be at HARVARD's expense,
         except that if such examination shows an underreporting or underpayment
         in excess of five percent (5%) for any twelve (12) month period, then
         LICENSEE shall pay the reasonable out-of-pocket cost of such
         examination as well as any additional sum that would have been payable
         to HARVARD had the LICENSEE reported correctly, plus interest on said
         sum at the rate of one and one-half percent (1.5%) per month.

                                   ARTICLE VII
               DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE

7.1      LICENSEE shall reimburse HARVARD for all reasonable out-of-pocket
         expenses HARVARD has incurred, or will incur during the term of this
         Agreement, for the preparation, filing, prosecution and maintenance of
         PATENT RIGHTS, including for counseling with regard to such
         preparation, filing, prosecution and maintenance upon receipt of
         quarterly invoices from HARVARD. Late payment of these invoices shall
         be subject to interest charges of one and one-half percent (1.5%) per
         month.

         HARVARD shall be responsible for the preparation, filing, prosecution
         and maintenance of any and all patent applications and patents included
         in PATENT RIGHTS. HARVARD will instruct counsel to directly notify
         HARVARD and LICENSEE and


                                                                              13



         provide them copies of any communications to and from the United States
         and foreign patent offices relating to said prosecution, and drafts of
         all communications to the various patent offices, and will instruct
         counsel to consider any comments on such drafts, so that LICENSEE will
         be informed and apprised of the continuing prosecution of patent
         applications in PATENT RIGHTS. LICENSEE shall have reasonable
         opportunity to participate in decision making on key decisions
         affecting filing, prosecution and maintenance of patents and patent
         applications in PATENT RIGHTS.

7.2      HARVARD and LICENSEE shall cooperate fully in the preparation, filing,
         prosecution and maintenance of PATENT RIGHTS and of all patents and
         patent applications licensed to LICENSEE hereunder, executing all
         papers and instruments or requiring members of HARVARD to execute such
         papers and instruments so as to enable HARVARD to apply for, to
         prosecute and to maintain patent applications and patents in HARVARD's
         name in any country. Each party shall provide to the other prompt
         notice as to all matters which come to its attention and which may
         affect the preparation, filing, prosecution or maintenance of any such
         patent applications or patents. In particular, LICENSEE must
         immediately notify HARVARD if LICENSEE does not qualify as a "small
         entity" as provided by the United States Patent and Trademark Office.

7.3      LICENSEE may elect to surrender its rights to any patent or patent
         application within PATENT RIGHTS in any country upon sixty (60) days
         written notice to HARVARD. Such notice shall not relieve LICENSEE from
         responsibility to reimburse HARVARD for expenses under Section 7.1
         relating to the filing, prosecution or maintenance of such patent or
         patent application incurred prior to the receipt of the written notice
         by HARVARD (or a longer period if specified in LICENSEE's notice).

                                  ARTICLE VIII
                                  INFRINGEMENT

8.1      With respect to any PATENT RIGHTS that have not been rendered
         non-exclusive under Section 3.2(d), LICENSEE shall have the right to
         enforce in its own name and at its own expense any patents within such
         PATENT RIGHTS. HARVARD agrees to notify LICENSEE promptly of each
         infringement of such patents of which HARVARD is or becomes aware.

8.2      (a)      If LICENSEE elects to commence an action as described
                  above, HARVARD may, to the extent permitted by law, elect to
                  join as a party in that action. Regardless of whether HARVARD
                  elects to join as a party, HARVARD shall cooperate fully with
                  LICENSEE in connection with any such action, including making
                  available relevant personnel, information, records, papers,
                  samples, specimens and other similar materials for the
                  purposes of such action as reasonably requested by LICENSEE
                  through the Office of Technology and Trademark Licensing at
                  HARVARD.

         (b)      If HARVARD elects to join as a party pursuant to Subsection
                  (a), HARVARD shall jointly control the action with LICENSEE.


                                                                              14



         (c)      LICENSEE shall reimburse HARVARD for any out-of-pocket costs
                  HARVARD reasonably incurs, including reasonable attorneys'
                  fees, as part of an action brought by LICENSEE under Section
                  8.1, whether or not HARVARD becomes a co-plaintiff.

8.3      If LICENSEE elects to commence an action as described above, LICENSEE
         may deduct from its royalty payments to HARVARD with respect to the
         patent(s) subject to suit an amount not exceeding fifty percent (50%)
         of LICENSEE's expenses and costs of such action, including reasonable
         attorneys' fees and reimbursement of amounts under Section 8.2(c)
         above; provided, however, that such reduction shall not exceed fifty
         percent (50%) of the total royalty due to HARVARD with respect to the
         patent(s) subject to suit for each calendar year. If such fifty percent
         (50%) of LICENSEE's expenses and costs exceeds the amount of royalties
         deducted by LICENSEE for any calendar year, LICENSEE may to that extent
         reduce the royalties due to HARVARD from LICENSEE in succeeding
         calendar years, but never by more than fifty percent (50%) of the total
         royalty due in any one year with respect to the patent(s) subject to
         suit.

8.4      Neither party may enter into a settlement, consent judgment or other
         voluntary final disposition of any suit under Section 8.1, 8.6, 8.7 and
         8.8 without the prior written consent of other party, which consent
         shall not be unreasonably withheld, if such settlement, consent
         judgment or other voluntary final disposition includes any admissions
         or statements about the validity or enforceability of PATENT RIGHTS.

8.5      Recoveries or reimbursements from actions commenced pursuant to this
         Article shall first be applied to reimburse LICENSEE and HARVARD for
         litigation costs not paid from royalties and then to reimburse HARVARD
         for royalties deducted by LICENSEE pursuant to Section 8.3. Any
         remaining recoveries or reimbursements shall be shared as follows: 80%
         to LICENSEE and 20% to HARVARD.

8.6      If LICENSEE elects not to exercise its right to enforce the PATENT
         RIGHTS against any infringement pursuant to this Article, HARVARD may
         do so at its own expense, controlling such action and retaining all
         recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in
         connection with any such action.

8.7      Without limiting the generality of Section 8.6, HARVARD may, at its
         election and by notice to LICENSEE, establish a time limit of
         ninety (90) days for LICENSEE to decide whether to enforce the PATENT
         RIGHTS against any infringement of which HARVARD is or becomes aware.
         If, by the end of such ninety(90) day period, LICENSEE has not
         commenced such an action or taken reasonable efforts to settle such
         infringement, HARVARD may enforce the PATENT RIGHTS against such an
         infringement at its own expense, controlling such action and retaining
         all recoveries therefrom. Notwithstanding sections 8.6 and 8.7, HARVARD
         shall not bring any action alleging the infringement of PATENT RIGHTS
         against any sublicensee of LICENSEE under PATENT RIGHTS, without the
         consent of LICENSEE.


                                                                              15



8.8      If a declaratory judgment action is brought naming LICENSEE as a
         defendant and alleging invalidity of any of the PATENT RIGHTS, if both
         parties agree, HARVARD may take over the sole defense of the action at
         its own expense. LICENSEE shall cooperate fully with HARVARD in
         connection with any such action.

8.9      If LICENSEE or any sublicensee, distributor or other customer is sued
         by a third party charging infringement of patent rights that dominate a
         claim of PATENT RIGHTS, with respect to the manufacture, use,
         distribution or sale of LICENSED PRODUCT or practice or use of a
         LICENSED PROCESS, LICENSEE will promptly notify HARVARD. As between
         the parties to this Agreement, LICENSEE will be entitled to control the
         defense in any such action(s) and withhold up to one-half (1/2) of the
         amounts otherwise payable to HARVARD hereunder to pay for defense
         costs, attorneys fees and any liability incurred in such infringement
         suit(s). If Licensee is required to pay a royalty or other amount to a
         third party as a result of a final judgment or settlement, the amounts
         payable to HARVARD hereunder will be reduced as provided in Section 4.3
         above.

                                   ARTICLE IX
                            TERMINATION OF AGREEMENT

9.1      This Agreement, unless terminated as provided herein, shall remain in
         effect until the last patent or patent application in PATENT RIGHTS has
         expired or been abandoned.

9.2      HARVARD may terminate this Agreement as follows;

         (a)      If LICENSEE does not make a payment due hereunder and fails to
                  cure such non-payment (including the payment of interest in
                  accordance with Section 5.4(e)) within forty five (45) days
                  after the date of notice in writing of such non-payment by
                  HARVARD. If LICENSEE disputes the amount of such non-payment
                  in writing within such forty five (45) day period, HARVARD
                  shall not have the right to terminate this Agreement until it
                  has been determined in an arbitration proceeding under Section
                  11.10 below that LICENSEE has failed to pay amounts owed
                  hereunder, and thereafter Licensee does not cure such failure
                  within sixty(60) days after such determination. This
                  Section 9.2(a) shall not, however, suspend any obligation of
                  LICENSEE to compensate HARVARD for any undisputed amounts, as
                  provided for under any term of this Agreement, during the
                  pendency of the foregoing arbitration and cure period.

         (b)      If LICENSEE defaults in its obligations under Sections 11.2(c)
                  and 11.2(d) to procure and maintain insurance, and fails to
                  cure such breach within sixty(60) days after notice in
                  writing of such breach by HARVARD.

         (c)      If LICENSEE shall make an assignment for the benefit of
                  creditors, or shall have a petition in bankruptcy filed for or
                  against it, provided that such bankruptcy petition is not
                  dismissed within sixty(60) days after its filing. Such
                  termination shall be effective immediately upon HARVARD giving
                  written notice to LICENSEE.


                                                                              16



         (d)      If LICENSEE is convicted of a felony within the United States
                  relating to the manufacture, use, or sale of LICENSED
                  PRODUCTS.

         (e)      Except as provided in Subsections (a), (b), (c), (d) above, if
                  LICENSEE materially breaches any obligations under this
                  Agreement and the breach has not been cured within ninety (90)
                  days after the date of notice in writing of such breach by
                  HARVARD. If LICENSEE disputes in writing that it has
                  materially breached this Agreement within such ninety (90)
                  day period, HARVARD shall not have the right to terminate this
                  Agreement until it has been determined in an arbitration
                  proceeding under Section 11.10 below that LICENSEE has
                  materially breached this Agreement, and thereafter Licensee
                  does not cure such breach within sixty (60) days after such
                  determination. This Section 9.2(c) shall not, however, suspend
                  any obligation of LICENSEE to compensate HARVARD for any
                  undisputed amounts, as provided for under any term of this
                  Agreement, during the pendency of the foregoing arbitration
                  and cure period.

9.3      All sublicenses granted by LICENSEE under this Agreement in compliance
         with the terms and conditions hereof shall survive the termination of
         this Agreement upon the request of the party to whom such sublicense is
         granted, provided that such party agrees in writing that (i) it will
         pay all royalties or other amounts that otherwise would have been due
         thereafter under such sublicense directly to HARVARD rather than
         LICENSEE, and (ii) HARVARD shall not be held liable for the breach or
         the performance of any obligations stated in such sublicense unless
         such obligations have been expressly assumed in writing by HARVARD.

9.4      LICENSEE may terminate this Agreement by giving ninety (90) days
         advance written notice of termination to HARVARD. Upon termination,
         LICENSEE shall promptly submit a Royalty Report to HARVARD for the
         final reporting period and any royalty payments incurred during such
         reporting period, and any unreimbursed patent expenses under Section 7
         that have been invoiced by HARVARD, shall become immediately payable
         with such Royalty Report.

9.5      Articles I, VI, IX, X and XI (except for Section 11.7) of this
         Agreement shall survive termination. Article VIII shall survive with
         respect to any infringement of third parties and/or any lawsuits filed
         by or against LICENSEE, prior to the termination of this Agreement. In
         the event this Agreement is terminated for any reason, LICENSEE may,
         within six months after the effective date of such termination, sell or
         otherwise dispose of all LICENSED PRODUCTS that LICENSEE may have on
         hand on the effective date of such termination, and fulfill any
         contracts requiring the use of LICENSED PRODUCTS and/or LICENSED
         PROCESSES that LICENSEE may have entered into prior to the date of such
         termination, subject to LICENSEE's payment of amounts due to HARVARD
         under Section 4.3 of this Agreement.

9.6      In the event that after termination of this Agreement, HARVARD licenses
         PATENT RIGHTS to another licensee, HARVARD shall use commercially
         reasonable efforts to


                                                                              17



         require such other licensee to pay the costs of the preparation,
         filing, prosecution and maintenance of PATENT RIGHTS. HARVARD shall
         reimburse LICENSEE for any costs so paid by such other licensee to the
         extent LICENSEE paid for such costs under Section 7.1.

                                    ARTICLE X
                         REPRESENTATIONS AND WARRANTIES

10.1     Except for the rights, if any, of the Government of the United States,
         HARVARD represents and warrants that:

         (a)      HARVARD is the owner of the entire right, title and interest
                  in and to the PATENT RIGHTS as they exist on the Effective
                  Date;

         (b)      HARVARD has the right and authority to enter into this
                  Agreement and grant the rights and licenses set forth herein,
                  including without limitation under PATENT RIGHTS;

         (c)      HARVARD has not previously granted, and will not grant in the
                  future, any rights in the PATENT RIGHTS that are inconsistent
                  with the rights and licenses granted to LICENSEE herein;

         (d)      To the best knowledge of HARVARD without having made an
                  investigation, as of the Effective Date, practice of
                  inventions within the PATENT RIGHTS does not infringe any
                  patent rights, trade secrets or other proprietary rights of
                  any third party.

         (e)      To the best knowledge of HARVARD, as of the Effective Date,
                  HARVARD does not own any rights in any other patent or patent
                  application, the claims of which would dominate the claims of
                  a patent or patent application within the PATENT RIGHTS or any
                  practice of PATENT RIGHTS. If HARVARD owns, now or thereafter,
                  any such rights in such patents or patent applications on
                  which Dr. Lieber is an inventor, HARVARD will negotiate in
                  good faith to the extent it has the legal right to do so with
                  LICENSEE to grant LICENSEE rights to the extent sufficient to
                  practice PATENT RIGHTS.

         (f)      To the best knowledge of HARVARD, all prior and current
                  agreements between HARVARD and other sponsors of research
                  under which HARVARD has obligations relating to PATENT RIGHTS
                  are listed on Appendix B.

10.2     Except as set forth in this Agreement, HARVARD does not warrant the
         validity of the PATENT RIGHTS licensed hereunder and makes no
         representations whatsoever with regard to the scope of the licensed
         PATENT RIGHTS or that such PATENT RIGHTS may be exploited by LICENSEE,
         an AFFILIATE, or sublicensee without infringing other patents.

                                                                              18




10.3     EXCEPT FOR THE WARRANTIES STATED IN THIS AGREEMENT, HARVARD EXPRESSLY
         DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO
         EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY
         PARTICULAR PURPOSE OF THE PATENT RIGHTS OR INFORMATION SUPPLIED BY
         HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS
         AGREEMENT.

                                   ARTICLE XI
                                     GENERAL

11.1     (a)      The parties may, from time to time, in connection with this
                  Agreement disclose to each other Confidential Information. Any
                  Confidential Information shall be in writing and marked
                  "confidential" and disclosed only to the Office of Technology
                  and Trademark Licensing. As used in the this Agreement,
                  "Confidential Information" of a party shall mean (i) any
                  information disclosed in writing by such party to the other
                  party, which is marked by such party with the legend
                  "CONFIDENTIAL" or other similar legend sufficient to identify
                  the information as its confidential information, (ii) any
                  information disclosed orally by such party to the other party
                  which is identified as confidential at the time of disclosure
                  and is confirmed as confidential in writing within thirty (30)
                  days after such time of disclosure, or (iii) any information
                  deemed Confidential Information under the terms of this
                  Agreement. With respect to categories (i) and (ii) above,
                  "Confidential Information" shall nor include any information
                  that is: (1) already known to the receiving party at the time
                  of disclosure hereunder, or (2) now or hereafter becomes
                  publicly known other than through acts or omissions of the
                  receiving party, or (3) is disclosed to the receiving party by
                  a third party under no obligation of confidentiality to the
                  disclosing party or (4) is independently developed by the
                  receiving party without use of the Confidential Information of
                  the disclosing party.

         (b)          Each party shall maintain in confidence, and shall not use
                  for any purpose or disclose to any third party, the
                  Confidential Information of the other party. Notwithstanding
                  the foregoing, the receiving party may use or disclose the
                  Confidential Information of the disclosing party (i) to the
                  extent necessary to exercise its rights or fulfill its
                  obligations and/or duties under this Agreement, and (ii) to
                  comply with applicable law or governmental regulations or
                  court order, provided that the receiving party will give
                  reasonable advance notice to the disclosing party, and will
                  use its reasonable efforts to minimize the disclosure of
                  Confidential Information and to secure confidential treatment
                  of any Confidential Information disclosed.

         (c)      The terms of this Agreement shall be deemed "Confidential
                  Information" of both parties. In addition to the permissible
                  disclosures set forth in subsection (b) above, LICENSEE may
                  disclose such terms in confidence to its financial and legal
                  advisors, consultants, potential or actual investors,
                  potential or actual merger or acquisition partners, and others
                  on a need-to-know basis.

11.2     (a)      LICENSEE shall indemnify, defend and hold harmless HARVARD
                  and its current or former and future directors, governing
                  board members, trustees, officers, faculty and

                                                                              19



                  employees (collectively, the "INDEMNITEES"), from and against
                  any lawsuit or cause or action against the INDEMNITEES brought
                  by a third party (collectively, "Claims"), based upon, arising
                  out of, or otherwise relating to this Agreement, including
                  without limitation any cause of action relating to product
                  liability concerning any product, process, or service made,
                  used or sold pursuant to any right or license granted under
                  this Agreement, except to the extent such Claims arise out of
                  or otherwise relate to the gross negligence or intentional
                  misconduct of any INDEMNITEES; and further provided that (i)
                  LICENSEE receives prompt notice of any such Claims; (ii)
                  LICENSEE is given the exclusive right to control the defense
                  and settlement of such Claims; and (iii) LICENSEE shall not be
                  obligated to indemnify any INDEMNITEE in connection with any
                  settlement for any Claim unless LICENSEE consents in writing
                  to such settlement.

         (b)      LICENSEE shall, at its own expense, defend against any actions
                  brought or filed against any INDEMNITEE hereunder with respect
                  to the subject of indemnity contained herein, whether or not
                  such actions are rightfully brought.

         (c)      Beginning at the time any such product, process or service is
                  being commercially distributed or sold (other than for the
                  purpose of obtaining regulatory approvals) by LICENSEE or by a
                  SUBLICENSEE, AFFILIATE or agent of LICENSEE, LICENSEE shall,
                  at its sole cost and expense, procure and maintain commercial
                  general liability insurance in amounts not less than [***
                  Redacted] per incident and [*** Redacted] annual aggregate and
                  naming the Indemnitees as additional insureds. During clinical
                  trials of any such product, process or service, LICENSEE
                  shall, at its sole cost and expense, procure and maintain
                  commercial general liability insurance in such equal or lesser
                  amount as HARVARD shall require, naming the Indemnitees as
                  additional insureds. Such commercial general liability
                  insurance shall provide: (i) product liability coverage; and
                  (ii) broad form contractual liability coverage for LICENSEE's
                  indemnification under this Agreement. If LICENSEE elects to
                  self-insure all or part of the limits described above
                  (including deductibles or retentions Which are in excess of
                  [*** Redacted] annual aggregate) such self-insurance program
                  must be acceptable to HARVARD and the Risk Management
                  Foundation of the Harvard Medical Institutions, Inc. in their
                  sole discretion. The minimum amounts of insurance coverage
                  required shall not be construed to create a limit of
                  LICENSEE's liability with respect to its indemnification under
                  this Agreement.

         (d)      LICENSEE shall provide HARVARD with written evidence of such
                  insurance upon request of HARVARD. LICENSEE shall provide
                  HARVARD with written notice at least fifteen (15) days prior
                  to the cancellation, non-renewal or material change in such
                  insurance; if LICENSEE does not obtain replacement insurance
                  providing comparable coverage within such fifteen (15) day
                  period, HARVARD shall have the right to terminate this
                  Agreement in accordance with Section 9.2(b).

         (e)      LICENSEE shall maintain such commercial general liability
                  insurance beyond the expiration or termination of this
                  Agreement during: (i) the period that any product, process, or
                  service, relating to, or developed pursuant to, this Agreement
                  is being


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                              20


                  commercially distributed or sold by LICENSEE or by a
                  sublicensee, AFFILIATE or agent of LICENSEE; and (ii) a
                  reasonable period after the period referred to in Subsection
                  (c)(i) above which in no event shall be less than
                  fifteen (15) years.

11.3     Nothing in this Agreement shall be construed as conferring any right to
         use Harvard's name or insignia, or any adaptation of them, or the name
         of any of HARVARD'S inventors in any advertising, promotional or sales
         literature without the prior written approval of HARVARD, or the
         inventor in the case of the use of the name of an inventor.

11.4     Except as stated in this Section 11.4, without the prior written
         approval of HARVARD in each instance, neither this Agreement nor the
         rights granted hereunder shall be transferred or assigned in whole or
         in part by LICENSEE to any person whether voluntarily or involuntarily,
         by operation of law or otherwise. LICENSEE may transfer or assign this
         Agreement and all rights hereunder, upon notice to HARVARD but without
         its consent, to any entity that succeeds to all or substantially all
         of the business of LICENSEE to which this Agreements pertains, whether
         by merger, operation of law, purchase or sale of all or substantially
         all of LICENSEE's stock or assets or otherwise; provided that such
         assignee or transferee promptly agrees in writing to be bound by the
         terms and conditions of this Agreement. Subject to the foregoing, this
         Agreement shall be binding upon the respective successors, legal
         representatives and assignees of HARVARD and LICENSEE.

11.5     The interpretation and application of the provisions of this Agreement
         shall be governed by the laws of the Commonwealth of Massachusetts.

11.6     LICENSEE shall comply with all applicable laws and regulations. In
         particular, it is understood and acknowledged that the transfer of
         certain commodities and technical data is subject to United States
         laws and regulations controlling the export of such commodities and
         technical data, including all Export Administration Regulations of the
         United States Department of Commerce. These laws and regulations among
         other things, prohibit or require a license for the export of certain
         types of technical data to certain specified countries. LICENSEE hereby
         agrees and gives written assurance that it will comply with all United
         States laws and regulations controlling the export of commodities and
         technical data, that it will be solely responsible for any violation of
         such by LICENSEE or its AFFILIATES or sublicensees, and that it will
         defend and hold HARVARD harmless in the event of any legal action of
         any nature occasioned by such violation with respect to LICENSED
         PRODUCTS.

11.7     LICENSEE agrees: (i) to obtain all regulatory approvals required for
         the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES;
         and (ii) to mark LICENSED PRODUCTS with the numbers of the applicable
         patents within PATENT RIGHTS, to the extent required by law. LICENSEE
         also agrees to register or record this Agreement as is required by law
         or regulation in any country where the license is in effect, and
         HARVARD shall cooperate fully with LICENSEE in connection with any such
         registration or recordation.

                                                                              21



11.8     Any notices to be given hereunder shall be sufficient if signed by the
         party (or party's attorney) giving same and either: (i) delivered in
         person; (ii) mailed certified mail return receipt requested; or (iii)
         faxed to other party if the sender has evidence of successful
         transmission and if the sender promptly sends the original by ordinary
         mail, in any event to the following addresses:

         If to LICENSEE:
             Nanosys Inc.
             200 Boston Ave Suite 4700
             Medford, MA 02l55
             Attn: Lawrence A. Bock
             Fax: 718-391-3803

         cc: Wilson, Sonsini, Goodrich & Rosati
             650 Page Mill Road
             Palo Alto, California 94304
             Attn: Michael J. O'Donnell, Esq.
             Fax: 650/493-6811

         If to HARVARD:
             Office for Technology and Trademark Licensing
             Harvard University
             Holyoke Center, Suite 727
             1350 Massachusetts Avenue
             Cambridge, MA 02138
             Fax: (617) 495-9568

         by such notice either party may change their address for future
         notices.

         Notices delivered in person shall be deemed given on the date
         delivered. Notices sent by fax shall be deemed given on the date faxed.
         Notices mailed shall be deemed given on the date postmarked on the
         envelope.

11.9     Should a court of competent jurisdiction later hold any provision of
         this Agreement to be invalid, illegal, or unenforceable, and such
         holding is not reversed on appeal, it shall be considered severed from
         this Agreement. All other provisions, rights and obligations shall
         continue without regard to the severed provision, provided that the
         remaining provisions of this Agreement are in accordance with the
         intention of the parties.

11.10    In the event of any controversy or claim arising out of or relating to
         any provision of this Agreement or the breach thereof, the parties
         shall try to settle such conflict amicably between themselves. Subject
         to the limitation stated in the final sentence of this Section, any
         such conflict which the parties are unable to resolve promptly shall be
         settled through arbitration conducted in accordance with the rules of
         the American Arbitration Association. The demand for arbitration shall
         be filed within a reasonable time after the controversy or claim has
         arisen, and in no event after the date upon which institution of


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              22



         legal proceeding based on such controversy or claim would be barred by
         the applicable statute of limitation. Such arbitration shall be held in
         Boston, Massachusetts. The award through arbitration shall be final and
         binding. Either party may enter any such award in a court having
         jurisdiction or may make application to such court for judicial
         acceptance of the award and an order of enforcement, as the case may
         be. Notwithstanding the foregoing, either party may, without recourse
         to arbitration, assert against the other party a third-party claim or
         cross-claim in any action brought by a third party, to which the
         subject matter of this Agreement may be relevant.

11.11    This Agreement constitutes the entire understanding between the parties
         and neither party shall be obligated by any condition or representation
         other than those expressly stated herein or as may be subsequently
         agreed to by the parties hereto in writing.

11.12    Nothing in this Agreement shall be deemed to require LICENSEE to
         exploit the PATENT RIGHTS, except to the extent expressly set forth in
         this Agreement, and nothing in this Agreement shall be deemed to
         prevent LICENSEE from commercializing products similar to or
         competitive with a LICENSED PRODUCT.

11.13    The relationship between HARVARD and LICENSEE established by this
         Agreement is that of independent contractors. Nothing in this Agreement
         shall be construed to create any other relationship between HARVARD and
         LICENSEE. Neither party shall have any right, power or authority to
         assume, create or incur any expense, liability or obligation, express
         or implied, on behalf of the other.

11.14    In the event either party hereto is prevented from or delayed in the
         performance of any of its obligations hereunder by reason of acts of
         God, war, strikes, riots, storms, fires or any other cause whatsoever
         beyond the reasonable control of the party, the party so prevented or
         delayed shall be excused from the performance of any such obligation to
         the extent and during the period of such prevention or delay.

11.15    NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY
         FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES
         (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE
         SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH
         CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE,
         EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE
         POSSIBILITY OF LIKELIHOOD OF SAME.

                                                                              23



11.16    This Agreement may be executed in counterparts, each of which shall be
         deemed an original, but both of which together shall constitute one and
         the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
         executed by their duly authorized representatives.

          PRESIDENT AND FELLOWS                              COMPANY

           OF HARVARD COLLEGE

           /s/ JOYCE BRINTON                           /s/ LAWRENCE BOCK
           -----------------                           -----------------
        Joyce Brinton, Director                            Signature
Office for Technology and Trademark Licensing
                                                         LAWRENCE BOCK
                                                       -----------------
                                                              Name

                                                           President
                                                       -----------------
               2/11/02                                       Title
             ------------
                Date                                        2/18/02
                                                       -----------------
                                                              Date

                                                                              24



                                   APPENDIX A

The following comprise PATENT RIGHTS:

US Provisional Application , filed November 9,
2001, "Transistors, Diodes, Logic Gates, Computational Devices and Other Devices
Assembled from Nanowire Building Boxes" by Lieber, et al.


                                                                              25



                                   APPENDIX B

Sponsorship for the research which led to PATENT RIGHTS was provided by the
following grants/contractor:

Sponsorship for the research which led to PATENT RIGHTS was provided by the
following grants/contractor

ONR - N0014-00-0476
ONR - N0014-01-0651 (DARPA)






                                                                              26

EX-10.5.3

                                                                  EXHIBIT 10.5.3

                           EXCLUSIVE LICENSE AGREEMENT

                                     Between

                    President and Fellows of Harvard College

                                       And

                                  NanoSys, Inc.

                             Re: Harvard Case #1935

         In consideration of the mutual promises and covenants set forth below,
         the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         As used in this Agreement, the following terms shall have the following
         meanings:

1.1      ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS solely for academic
         non-commercial research or other not-for-profit scholarly purposes,
         which use is undertaken at a non-profit or governmental institution.
         ACADEMIC RESEARCH PURPOSES does not include selling products covered by
         PATENT RIGHTS or using PATENT RIGHTS in researching, developing,
         producing or manufacturing products for sale, or performance of
         services for a fee or other financial consideration. It is understood
         that using the PATENT RIGHTS to conduct normal research activities at
         non-profit or governmental institution is within the defined term of
         ACADEMIC RESEARCH PURPOSES.

1.2      AFFILIATE: any entity which controls, is controlled by, or is under
         common control with a party. An entity shall be regarded as in control
         of another entity for purposes of this definition if it owns or
         controls at least fifty percent (50%) of the shares entitled to vote in
         the election of directors (or in the case of an entity that is not a
         corporation, for the election of the corresponding managing authority).
         Unless otherwise specified, the term LICENSEE includes AFFILIATES.

1.3      FIELD: All fields of use.

1.4      HARVARD: President and Fellows of Harvard College, a nonprofit
         Massachusetts educational corporation having offices at the Office for
         Technology and Trademark



         Licensing, Holyoke Center, Suite 727, 1350 Massachusetts Avenue,
         Cambridge, Massachusetts 02138.

1.5      LICENSED PROCESSES: methods, processes or procedures covered by at
         least one VALID CLAIM included within the PATENT RIGHTS.

1.6      LICENSED PRODUCTS: products covered by at least one VALID) CLAIM
         included within the PATENT RIGHTS or products made in accordance with
         LICENSED PROCESSES.

1.7      LICENSEE: Nanosys, Inc., a corporation organized under the laws of
         Delaware having its principal offices at 2625 Hanover Street, Palo
         Alto, CA 94304

1.8      NET SALES:  the amounts actually received for sales, leases, or other
         dispositions of LICENSED PRODUCTS to non-AFFILIATE third parties, less:

         (a) customary [*** Redacted],

         (b) amounts [*** Redacted] by reason of [*** Redacted],

         (c) to the extent separately stated on purchase orders, invoices, or
             other documents of  sale: (i) [*** Redacted] levied on the
             production, sale, transportation, delivery, importation,
             exportation, or use of LICENSED PRODUCTS; (ii) charges for [***
             Redacted] provided by third parties, including any [*** Redacted]
             thereon.

         NET SALES also includes the fair market value of any non-cash
         consideration received for the sale, lease or other disposition of
         LICENSED PRODUCTS to non-AFFILIATE third parties; provided NET SALES
         shall not include any [*** Redacted] payments in consideration for the
         [*** Redacted] to the intellectual property of LICENSEE or third
         parties, including the [*** Redacted] hereunder, bona fide [***
         Redacted] made in good faith and any payments for [*** Redacted].

         In the event that a LICENSED PRODUCT is sold or leased as a combination
         product containing the LICENSED PRODUCT and one or more other
         components, NET SALES shall be calculated by multiplying the gross
         amount invoiced for the sale of the combination product by the fraction
         [*** Redacted] where A is the [*** Redacted] price of the LICENSED
         PRODUCT sold separately by LICENSEE, and B is the [*** Redacted] of
         such other components of the combination products sold separately by
         LICENSEE during the relevant royalty payment period. In the event a
         substantial number of such separate sales were not made during the
         relevant royalty period, then NET SALES shall be reasonably allocated
         by LICENSEE between such LICENSED PRODUCT and such other components of
         the combination based on their relative importance or value; provided
         that such LICENSED PRODUCT and such other components shall not be
         considered a "combination product" unless such LICENSED PRODUCT and
         such other components are offered for sale or marketed by LICENSEE
         separately as well as together. If LICENSEE does so allocate, LICENSEE
         shall promptly deliver to HARVARD a written report providing a detailed
         explanation of how LICENSEE determined said relative importance or
         value. All such reports shall be deemed Confidential Information of
         LICENSEE subject to Section 11.1. In the event that HARVARD disagrees
         with the determination made by LICENSEE in writing, and a
         representative of LICENSEE and a representative of HARVARD shall meet
         in order to discuss and resolve such disagreement. If such disagreement
         cannot be resolved within sixty (60) days, such disagreement shall be
         subject to resolution in accordance with Section 11.10.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



                                                                               2




1.9      PATENT RIGHTS: PATENT RIGHTS shall include (i) the applications and
         patents as listed in Appendix A of this Agreement, (ii) any foreign
         counterparts to such patents and patent applications, (iii) the
         inventions described and claimed in the foregoing, (iv) any divisions-
         or continuations of the foregoing, and (v) specific claims of any
         continuations-in-part of the foregoing to the extent the specific
         claims are directed to subject matter described in the foregoing in a
         manner sufficient to support such specific claims under 35 U.S.C. and
         to the extent Licensable by HARVARD; claims in said
         continuations-in-part covering minor improvements over the claims of
         parent patent applications may, at HARVARD'S discretion, be included in
         PATENT RIGHTS by amendment of this Agreement for no increase in the
         royalties of Article IV, (vi) all patents issuing on any of the
         foregoing, and (vii) registrations, renewals, reissues, reexaminations,
         extensions or patents of addition of any kind with respect to any of
         such patents. For purposes of this Agreement "Licensable" shall mean
         those claims of continuations-in-part filed after the Effective Date
         for which HARVARD has sole ownership (or has been granted the sole
         right to license by a co-owner) and where there are no obligations to
         grant licenses to a third party as the result of research support
         provided to one or more of the inventors.

1.10     SERVICE INCOME: the financial consideration actually received for the
         utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE
         which is contracted for by a non-AFFILIATE third party, less the
         deductions stated in Sections 1.8(a), (b) and (c); provided, however,
         that such amounts shall only be included in SERVICE INCOME if LICENSEE
         does not [*** Redacted] with respect to the PATENT RIGHTS licensed in
         this Agreement on the NET SALE of such LICENSED PRODUCTS or the NET
         SALE of LICENSED PRODUCTS made in accordance with such use of the
         LICENSED PROCESSES. SERVICE INCOME shall specifically exclude any [***
         Redacted], payments in consideration for the [*** Redacted] of the
         LICENSEE or third parties, including the [*** Redacted] hereunder, [***
         Redacted] made in good faith and any [*** Redacted].

         In the event that any service contemplated hereunder includes any
         services other than the utilization of a [*** Redacted] or [***
         Redacted], LICENSEE shall in good faith determine the portion of the
         payments received for such service that are intended as consideration
         for the utilization of [*** Redacted] or [*** Redacted] by LICENSEE,
         and such portion shall be used to determine the SERVICE INCOME for such
         service. In such event, LICENSEE shall promptly deliver to HARVARD a
         written report detailing such calculation, together with a copy of the
         applicable provisions of the agreements related to such service.  All
         such reports and provisions of agreements shall be deemed Confidential
         Information of LICENSEE subject to Section 11.1.  In the event that
         HARVARD disagrees with the determination made by LICENSEE of SERVICE
         INCOME for such service, HARVARD shall so notify LICENSEE in writing,
         and a representative of LICENSEE  and a representative of HARVARD shall
         meet in order to discuss and resolve such disagreement. If such
         disagreement cannot be resolved within sixty (60) days, such
         disagreement shall be subject to resolution in accordance with
         paragraph 11.10.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                               3



1.11     SUBLICENSE INCOME:  the amount paid to LICENSEE by a third party (other
         than an AFFILIATE of LICENSEE) for the granting of a sublicense under
         Section 3.1, including but not limited to (i) [*** Redacted] (ii) [***
         Redacted] (iii) [*** Redacted] and (vi) the [*** Redacted] in cash of
         any non-cash consideration for such sublicense, but specifically
         excluding any [*** Redacted] payments in consideration for the [***
         Redacted], [*** Redacted] and any payments for products purchased or
         services performed. It is understood and agreed that sublicense income
         received by LICENSEE shall be net of withholding taxes.

         If LICENSEE sublicenses [*** Redacted] to a third party and at the same
         time also grants such third party rights to [*** Redacted] or
         LICENSEE's in-licensed non-HARVARD technologies, then all compensation
         received from the third party for such rights shall be combined and
         [*** Redacted] that would constitute SUBLICENSE INCOME under Section
         1.11 and shall promptly deliver to HARVARD a written report detailing
         such calculation, together with a copy of the applicable provisions of
         the agreements with the third party.  All such reports and provisions
         of agreements shall be deemed Confidential Information of LICENSEE
         subject to Section 11.1.  In the event that HARVARD disagrees with the
         determination made by LICENSEE of SUBLICENSE INCOME, HARVARD shall so
         notify LICENSEE in writing, and a representative of LICENSEE and a
         representative of HARVARD shall meet in order to discuss and resolve
         such disagreement. If such disagreement cannot be resolved within sixty
         (60) days, such disagreement shall be subject to resolution in
         accordance with Section 11.10.

1.12     TERRITORY: Worldwide.

1.13     VALID CLAIM: either (i) a claim of an issued patent that has not
         expired or been held unenforceable or invalid by an agency or a court
         of competent jurisdiction, and which has not been admitted to be
         invalid or unenforceable through reissue, disclaimer or otherwise;
         provided, however, that if the holding of such court or agency is later
         reversed by a court or agency with overriding authority, the claim
         shall be reinstated as a Valid Claim with respect to Net Sales made
         after the date of such reversal, or (ii) a claim of a pending patent
         application that has not been abandoned or finally rejected without the
         possibility of

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               4



         appeal or re-filing and that has been pending for less than seven (7)
         years from its priority date, and is being actively prosecuted in good
         faith.

1.14     The terms "Public Law 96-517" and "Public Law 98-620" include all
         amendments to those statutes.

1.15     The terms "sold" and "sell" include, without limitation, leases and
         other dispositions and similar transactions.

1.16     RELATED LICENSE AGREEMENTS: Other patent license agreements between
         LICENSEE and HARVARD licensing patent rights known internally at
         HARVARD as Case #1852, #1765, #1923, #1924, #1678, #1641, #1489, #1352,
         #1243, #1137, #1816, #1685, #1935, #2058.

1.17     DEVELOPMENT PAYMENTS: DEVELOPMENT PAYMENTS shall mean (a) any
         payments, in consideration for, or to support, research and/or
         development efforts by LICENSEE to develop inventions claimed in PATENT
         RIGHTS and (b) any reimbursement of LICENSEE'S patent expenses
         concerning PATENT RIGHTS.

                                   ARTICLE II
                                    RECITALS

2.1      HARVARD is owner (or HARVARD will be owner) by assignment from
         Hongkun Park, Jeffrey J. Urban, Qian Gu, Charles Lieber, and Wan S.
         Yun of their entire right, title and interest in the United States
         Provisional Application, 60/306,936, filed July 20, 2001, a PCT
         International Patent Application, filed July 22, 2002 and the foreign
         and US patent applications corresponding thereto, and in the inventions
         described and claimed therein.

2.2      HARVARD has the authority to issue licenses under PATENT RIGHTS.

2.3      HARVARD is committed to the policy that ideas or creative works
         produced at HARVARD should be used for the greatest possible public
         benefit, and believes that every reasonable incentive should be
         provided for the prompt introduction of such ideas into public use, all
         in a manner consistent with the public interest.

2.4      LICENSEE intends to use commercially reasonable efforts to develop the
         invention(s), and to bring to market at least one product falling
         within the definition of LICENSED PRODUCT or otherwise embodying the
         subject matter described or claimed in the patent rights licensed under
         such agreements.

2.5      LICENSEE is desirous of obtaining an exclusive license in the TERRITORY
         in order to practice the above-referenced invention covered by PATENT
         RIGHTS in the United States and in certain foreign countries, and to
         manufacture, use and sell in the commercial market the products made in
         accordance therewith, and HARVARD is desirous of granting such a
         license to LICENSEE in accordance with the terms of this Agreement.


                                                                               5



                                   ARTICLE III
                                 GRANT OF RIGHTS

3.1      HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
         terms and conditions hereof, an exclusive license (except as set forth
         in Sections 3.2(a) and 3.2(b)) under PATENT RIGHTS in the TERRITORY and
         in the FIELD (i) to make and have made, to use and have used, to sell
         and have sold, to offer for sale, import, export, or otherwise
         distribute the LICENSED PRODUCTS, (ii) to practice the LICENSED
         PROCESSES, and (iii) to otherwise fully exploit the PATENT RIGHTS, and
         (iv) to have the foregoing performed on behalf of LICENSEE by a third
         party, in each case for the life of the PATENT RIGHTS. The foregoing
         license under PATENT RIGHTS shall include the full right to grant
         sublicenses, and LICENSEE shall promptly provide copies of any
         sublicenses of PATENT RIGHTS to HARVARD for its review. Unless HARVARD
         has rendered the license under PATENT RIGHTS non-exclusive under
         Section 3.2(d), HARVARD agrees that it will not grant licenses under
         PATENT RIGHTS to others, nor make, use, sell, offer for sale, import or
         otherwise exploit PATENT RIGHTS itself except as required by HARVARD'S
         obligations in Section 3.2(a) or as permitted in Section 3.2(b).

3.2      The granting and exercise of this license is subject to the following
         conditions:

         (a)      HARVARD'S "Statement of Policy in Regard to Inventions,
                  Patents and Copyrights," dated August 10, 1998, Public Law
                  96-517 and Public Law 98-620, and HARVARD'S obligations under
                  prior or current agreements with other sponsors of research
                  and, with regard to continuations-in-part contained in the
                  PATENT RIGHTS, any future agreements with other sponsors of
                  research related to such continuations-in-part. Any right
                  granted in this Agreement greater than that permitted under
                  Public Law 96-517, or Public Law 98-620, shall be subject to
                  modification to the extent required to conform to the
                  provisions of those statutes.

         (b)      HARVARD reserves the right to make and use, and grant to other
                  non-profit or governmental institutions non-exclusive
                  licenses to make and use, in each case solely for ACADEMIC
                  RESEARCH PURPOSES the subject matter described and claimed in
                  PATENT RIGHTS. HARVARD shall promptly notify LICENSEE of any
                  rights granted to any third party (other than the U.S.
                  government) under Sections 3.2(a) and (b).

         (c)      LICENSEE shall use commercially reasonable efforts to effect
                  introduction into the commercial market at least one falling
                  within the definition of LICENSED PRODUCT or otherwise
                  embodying the subject matter described or claimed in PATENT
                  RIGHTS within six and one half (6.5) years of the effective
                  date of this Agreement; thereafter, until the expiration of
                  this Agreement, LICENSEE shall use commercially reasonable
                  efforts to endeavor to keep any such product reasonably
                  available to the public so long as it shall be a sound and
                  reasonable commercial practice to do so.


                                                                               6



         (d)      At any time after six and one half (6.5) years from the
                  effective date of this Agreement, HARVARD may render this
                  license non-exclusive if LICENSEE has not, either by itself or
                  through a sublicensee:

                           (i)      introduced into commercial use at least
                                    one product falling within the definition
                                    of LICENSED PRODUCT or made by a LICENSED
                                    PROCESS; and

                           (ii)     used commercially reasonable efforts to put
                                    the licensed subject matter into commercial
                                    use as broadly as commercially reasonable in
                                    one or more of the countries hereby
                                    licensed, directly or through a sublicense,
                                    as described in LICENSEE'S development plan
                                    required by Paragraph 5.1 (b); and

                           (iii)    used commercially reasonable efforts to keep
                                    products falling within the definition of
                                    LICENSED PRODUCT or otherwise embodying the
                                    subject matter described or claimed in
                                    PATENT RIGHTS reasonably available to the
                                    public so long as it shall be a sound and
                                    reasonable commercial practice to do so; and

                           (iv)     engaged in research, development,
                                    manufacturing, marketing or sublicensing
                                    activity that is commercially reasonably
                                    appropriate to achieving Section 3.2(d)(ii)
                                    or 3.2(d)(iii).

         (e)      In all sublicenses granted by LICENSEE hereunder, LICENSEE
                  shall include a requirement that the sublicensee use
                  commercially reasonable efforts to put the subject matter of
                  the sublicense into commercial use, provided that such
                  sublicensee is authorized to develop and sell to the public a
                  new product covered by PATENT RIGHTS on its own behalf.
                  LICENSEE shall further provide that such sublicenses are
                  subject and subordinate to the terms and conditions of this
                  Agreement, except for the rate of royalty on NET SALES paid by
                  such sublicensee to the LICENSEE. Copies of all sublicense
                  agreements hereunder shall be provided promptly to HARVARD.
                  Such copies of sublicense agreements may be provided to
                  HARVARD in redacted form, provided that such copies contain
                  all relevant terms necessary for HARVARD to monitor LICENSEE'S
                  compliance with the terms of this Agreement. Unredacted copies
                  of said sublicense agreements shall be made available for
                  review by HARVARD or its representatives at LICENSEE'S
                  Medford, MA facility, or whichever facility is closest to
                  HARVARD, within one week of HARVARD'S request. All sublicense
                  agreements of LICENSEE provided to HARVARD shall be deemed
                  Confidential Information of LICENSEE subject to Section 11.1.

         (f)      At any time four (4) years after the effective date of
                  this Agreement, if LICENSEE is unable or unwilling to grant
                  sublicenses, either as suggested by HARVARD or by a potential
                  sublicensee or otherwise, then HARVARD may directly license
                  such potential sublicensee, but only if: (i) LICENSEE is not
                  currently pursuing development of LICENSED PRODUCTS for the
                  same application or an application that is reasonably
                  competitive with the application as contemplated by the
                  potential


                                                                               7



                  sublicensee as demonstrated by annual progress reports from
                  LICENSEE required by Paragraph 5.2, or the research and
                  development plan required by Paragraph 5.1(b) of this
                  agreement or within a one-year period LICENSEE makes a
                  commitment to do so, said commitment being satisfied by a
                  written research and development plan, acceptable to HARVARD
                  and said acceptance given within the one-year period, said
                  acceptance not to be unreasonably denied, any applications
                  which LICENSEE fails to develop according to the research and
                  development plan, as potentially amended according to
                  Paragraph 5.2, immediately becomes subject to this Paragraph.
                  (ii) the granting of such a license by HARVARD to the
                  potential sublicensee will increase the availability of useful
                  products to the public, and (iii) HARVARD notifies LICENSEE of
                  its intention to grant such license and permits LICENSEE a
                  reasonable period to negotiate a sublicense on its own.

         (g)      To the extent required by law, until this license is rendered
                  non-exclusive in the United States under Section 3.2(d),
                  LICENSEE shall cause any LICENSED PRODUCT produced for sale in
                  the United States to be manufactured substantially in the
                  United States.

         (h)      HARVARD recognizes that LICENSEE's success in meeting the
                  obligations set forth in this paragraph may be enhanced by
                  consultation with the inventor(s) of the PATENT RIGHTS.
                  Accordingly, Harvard will use reasonable efforts to make such
                  inventors reasonably available to LICENSEE for such
                  consultation.

3.3      All rights reserved to the United States Government and others under
         Public Law 96-517, and Public Law 98-620, shall remain and shall in no
         way be affected by this Agreement.

3.4      HARVARD shall promptly notify LICENSEE when any new patent or patent
         application arises from (i) research conducted in the laboratory of
         Dr. Lieber or Dr. Park, or (ii) improvements made by HARVARD under the
         direction of Dr. Lieber or Dr. Park on the subject matter described in
         PATENT RIGHTS. If LICENSEE so requests and the intellectual property is
         available for licensing, HARVARD will evaluate in good faith LICENSEE's
         proposal along with proposals received from any third parties. Any
         decision to grant a license to LICENSEE shall be subject to approval by
         HARVARD's Committee on Patents and Copyrights. In the event LICENSEE
         and HARVARD cannot agree on terms for a license to any new intellectual
         property which is dominated by PATENT RIGHTS, HARVARD shall not offer
         any third party terms more favorable, in toto, than the terms offered
         to LICENSEE.

                                   ARTICLE IV
                                    ROYALTIES

4.1      LICENSEE shall owe to HARVARD a non-refundable license royalty fee in
         the sum of [*** Redacted] ($[*** Redacted]) dollars upon execution of
         this Agreement, which shall be payable as follows: [*** Redacted]
         ($[*** Redacted]) dollars payable within thirty days of this Agreement
         becoming effective, and another

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                               8



         [*** Redacted] ($[*** Redacted]) dollars at the first anniversary of
         this Agreement becoming effective..

4.2      As consideration for the rights granted hereunder, LICENSEE shall pay
         to HARVARD a non-refundable fee in the form of stock of LICENSEE as
         follows:

                           (i)      LICENSEE shall issue to HARVARD twenty
                                    thousand (20,000) fully vested shares, at a
                                    price per share of $0.12 per share and an
                                    aggregate value of $2,400.00 of LICENSEE's
                                    common stock upon execution of this
                                    Agreement, provided, however, that HARVARD
                                    shall be subject to and enter into (1)
                                    appropriate agreements and related documents
                                    as required of other stockholders of
                                    LICENSEE, including without limitation a
                                    Common Stock Purchase Agreement, and (2) a
                                    Voting Agreement by and among the LICENSEE,
                                    HARVARD and certain other holders of common
                                    stock of LICENSEE dated as of even date
                                    hereof.

                           (ii)     HARVARD's ownership rights to Shares shall
                                    not be affected should the license pursuant
                                    to this Agreement be terminated by LICENSEE
                                    or HARVARD.

4.3      (a)      LICENSEE shall pay to HARVARD during the term of this
                  Agreement a royalty on NET SALES by LICENSEE according to the
                  following schedule:

                           (i)      [*** Redacted]% of NET SALES by LICENSEE in
                                    [*** Redacted] applications;

                           (ii)     [*** Redacted]% of NET SALES by LICENSEE in
                                    [*** Redacted] applications; or

                           (iii)    [*** Redacted]% of NET SALES by LICENSEE in
                                    [*** Redacted] excluding [*** Redacted]
                                    applications and [*** Redacted]
                                    applications.

                  In the event, any NET SALES by LICENSEE reasonably falls
                  within more than one of categories (i) to (iii) above,
                  LICENSEE shall pay to HARVARD the lowest applicable royalty
                  set forth in such categories.

         (b)      For each LICENSED PRODUCT sold by LICENSEE, LICENSEE may
                  credit up to [*** Redacted] of royalties that LICENSEE is
                  paying to third parties (or HARVARD under agreements not
                  included within section 4.3(c)) on LICENSEE's sales of that
                  LICENSED PRODUCT, provided that the royalty paid to HARVARD
                  shall not be reduced below [*** Redacted] percent ([***
                  Redacted]%) of the NET SALES of that LICENSED PRODUCT for
                  which such third party royalties are being paid. LICENSEE may
                  only offset royalties owed under license agreements to third
                  parties where said license agreements provide for similar
                  offsets of comparable scale of third party royalties. Any such
                  offsets must be specifically and thoroughly reported in the
                  royalty reports required by Paragraph 5.4.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                               9




         (c)      In the event that sales of a LICENSED PRODUCT are subject to
                  the payment of royalties under one or more of the RELATED
                  LICENSE AGREEMENTS or any license agreements with HARVARD with
                  the same effective date as this Agreement, then the total
                  royalty payment due HARVARD under all such agreements
                  including this Agreement shall be at most the royalty payment
                  due under this Section 4.3 on such NET SALE, no matter how
                  many license agreements from HARVARD are involved, and
                  notwithstanding the terms of any such agreement. LICENSEE
                  shall notify HARVARD of the identity of each license agreement
                  that includes patent rights covering the product or process,
                  and HARVARD shall distribute the royalties evenly among such
                  agreements, including this Agreement.

         (d)      LICENSEE shall pay HARVARD [*** Redacted] percent ([***
                  Redacted]%) of SUBLICENSE INCOME received by LICENSEE for a
                  sublicense of PATENT RIGHTS. If compensation for such a
                  sublicense of PATENT RIGHTS is bundled with compensation
                  received for the sublicensing of the other HARVARD patents
                  rights or other HARVARD intellectual property licensed to
                  LICENSEE under the RELATED LICENSE AGREEMENTS or any
                  agreements with HARVARD having the same effective date as this
                  Agreement, then LICENSEE shall pay HARVARD at most the royalty
                  payment due under this Section 4.3(d) for such SUBLICENSE
                  INCOME no matter how many license agreements from HARVARD are
                  involved, and notwithstanding the terms of any such license
                  agreements. In such a case, LICENSEE shall notify HARVARD of
                  the identity of each license agreement involved and HARVARD
                  shall distribute the royalties equally among those license
                  agreements, including this Agreement.

         (e)      For provision of services under PATENT RIGHTS, LICENSEE shall
                  pay a royalty of [*** Redacted] percent ([*** Redacted]%) of
                  SERVICE INCOME received by LICENSEE from each and every third
                  party ("Third Party") to whom LICENSEE provides such services.
                  In the event any services from which SERVICE INCOME is derived
                  are subject to the payment of royalties under the RELATED
                  LICENSE AGREEMENTS or any agreement with HARVARD having the
                  same effective date as this Agreement, then the total royalty
                  due under all such agreements, including this Agreement, shall
                  be at most the royalty payment due under this Section 4.3 on
                  such services, no matter how many license agreements from
                  HARVARD are involved, and notwithstanding the terms of any
                  such license agreements. In such event, LICENSEE shall notify
                  HARVARD of the identity of each license agreement involved and
                  HARVARD shall distribute the royalties equally among those
                  license agreements, including this Agreement.

         (f)      If the license pursuant to this Agreement is converted to a
                  non-exclusive one under Section 3.2(d) and if another
                  non-exclusive license to any of PATENT RIGHTS is granted or
                  otherwise exists for any field or territory, then the royalty
                  rate of this Agreement shall be adjusted so as not to exceed
                  the royalty rate payable by such other non-exclusive licensee
                  under such PATENT RIGHTS in such field or territory, provided
                  that LICENSEE agrees to amend this Agreement to include terms
                  requested by HARVARD that have been accepted by such other
                  non-exclusive licensee.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              10



         (g)      On sales between LICENSEE and its AFFILIATES for resale, the
                  royalty shall be paid on the NET SALES of the AFFILIATE.

         (h)      In the event that more than one VALID CLAIM within PATENT
                  RIGHTS is applicable to any LICENSED PRODUCT subject to
                  royalties under this Section 4.3, then only one royalty shall
                  be paid to HARVARD in respect of such LICENSED PRODUCT. In no
                  event shall more than one royalty be due to HARVARD with
                  respect to any LICENSED PRODUCT unit; nor shall a royalty be
                  payable under this Section 4.3 with respect to sales of
                  LICENSED PRODUCTS for clinical trials nor the use of LICENSED
                  PRODUCTS or LICENSED PROCESSES by LICENSEE for such a purpose
                  whether or not in collaboration with a third party.

4.4      No later than January 1 of each calendar year after the effective date
         of this Agreement, LICENSEE shall pay to HARVARD the following
         non-refundable license maintenance royalty and/or advance on royalties.
         Such payments may be credited against running royalties due for that
         calendar year and Royalty Reports shall reflect such a credit. Such
         payments shall not be credited against milestone payments (if any) nor
         against royalties due for any subsequent calendar year.

                        
January 1, 2003            $[*** Redacted]
January 1, 2004            $[*** Redacted]
January 1, 2005            $[*** Redacted]
January 1, 2006            $[*** Redacted]
January 1, 2007            $[*** Redacted]
January 1, 2008            $[*** Redacted]
January 1, 2009            $[*** Redacted]
January 1, 2010            $[*** Redacted]
each year thereafter       $[*** Redacted]



                                    ARTICLE V
                                    REPORTING

5.1      a) In compliance of earlier RELATED LICENSE AGREEMENTS, LICENSEE has
         provided to HARVARD a written research and development plan acceptable
         to LICENSEE's investors under which LICENSEE intends to bring the
         subject matter of the earlier RELATED LICENSE AGREEMENTS (though not
         specifically of this Agreement) granted earlier into commercial use.
         Such plan included projections of sales and proposed marketing efforts.

         b) LICENSEE agrees to provide, no later than three (3) years after
         the effective date of this Agreement, a written research and
         development plan, requiring written approval by HARVARD, which shall
         not unreasonably be denied, under which LICENSEE intends to bring the
         subject matter of PATENT RIGHTS into commercial use. Such a plan shall

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                              11



         include a description of each LICENSED PRODUCT to be developed, a
         developmental timeline showing the technical, regulatory, business and
         marketing steps (benchmarks) needed to bring the LICENSED PRODUCT into
         commercial use and the resources in funds and personnel that LICENSEE
         will bring to bear for the successful accomplishment of each such step,
         and shall include projected sales and a proposed marketing effort

5.2      No later than sixty (60) days after June 30 of each calendar year,
         LICENSEE shall provide to HARVARD a written annual Progress
         Report describing progress on the commercialization of PATENT RIGHTS
         during the most recent twelve (12) month period ending June 30, the
         amount of LICENSEE's R&D spending relating to the subject matter
         described or claimed in PATENT RIGHTS during such time, and plans for
         the forthcoming year. If multiple technologies are covered by the
         license granted hereunder, the Progress Report shall provide the
         information set forth above for each technology. If progress differs
         from that anticipated in the plan required under Section 5.1(b),
         LICENSEE shall explain the reasons for the difference and, if
         appropriate or necessary, provide a modified research and development
         plan for HARVARD's review and approval, such approval not to be
         unreasonably denied. It is understood that LICENSEE may provide one
         Progress Report covering all RELATED LICENSE AGREEMENTS.

5.3      LICENSEE shall report to HARVARD the date of its first NET SALE of a
         LICENSED PRODUCT (or the date of its first use of a LICENSED PROCESS
         from which SERVICE INCOME is derived) in each country within [***
         Redacted] days of occurrence. It is understood that LICENSEE shall be
         obligated to report the date of first sale of LICENSED PRODUCTS (or the
         first commercial use of LICENSED PROCESSES) under this Section 5.3 only
         once for each country.

5.4      (a) LICENSEE shall submit to HARVARD within sixty (60) days after
         each calendar half year ending June 30 and December 31, a Royalty
         Report setting forth, for the most recent half year that ended on
         June 30 or December 31, at least the following information:

                  (i)      the number and identification of LICENSED PRODUCTS
                           sold by LICENSEE and its AFFILIATES that constitute a
                           NET SALE, in each country;

                  (ii)     total amounts received for such LICENSED PRODUCTS
                           sold by LICENSEE and its AFFILIATES;

                  (iii)    an accounting for all LICENSED PROCESSES used or sold
                           by LICENSEE and its AFFILIATES;

                  (iv)     deductions applicable to determine the NET SALES
                           thereof;

                  (v)      the amount of SUBLICENSE INCOME received by LICENSEE
                           from each sublicensee, and for each sublicensee the
                           categories of LICENSED PRODUCTS sold and gross sales
                           of each category;

                  (vi)     the amount of SERVICE INCOME received by LICENSEE;
                           and

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              12



                  (vii)    the amount of royalty due for such reporting period,
                           or, if no royalties are due to HARVARD for such
                           reporting period, the statement that no royalties are
                           due.

                  Such report shall be certified as correct by an officer of
                  LICENSEE and shall include a listing of all deductions from
                  royalties. It is understood that LICENSEE may submit one
                  Royalty Report covering all RELATED LICENSE AGREEMENTS.
                  However, the Royalty Report shall, for each type of income,
                  provide a detailed listing of the RELATED LICENSE AGREEMENTS
                  that are involved.

         (b)      LICENSEE shall pay to HARVARD with each such Royalty Report
                  the amount of royalty due with respect to such half year.
                  If multiple technologies are covered by the license granted
                  hereunder, LICENSEE shall specify which PATENT RIGHTS are
                  utilized for each category of LICENSED PRODUCTS and/or
                  LICENSED PROCESSES for which royalties are separately reported
                  in the Royalty Report.

         (c)      All payments due hereunder shall be deemed received when funds
                  are credited to HARVARD's bank account and shall be payable by
                  check or wire transfer in United States dollars. Conversion of
                  foreign currency to U.S. dollars shall be made at the
                  conversion rate existing in the United States (as reported in
                  the New York Times or the Wall Street Journal) on the last
                  working day of each royalty period. No transfer, exchange,
                  collection or other charges shall be deducted from such
                  payments. If legal restrictions block the removal of local
                  currency from any country where a LICENSED PRODUCT is sold,
                  the royalties payable under this Agreement on NET SALES,
                  SERVICE INCOME and SUBLICENSING INCOME earned in such currency
                  in such country shall continue to be reported and accrued, but
                  will not be paid until such currency may be removed from such
                  country.

         (d)      All plans or reports received under Sections 5.1, 5.2, 5.3,
                  5.4 shall be deemed Confidential Information of LICENSEE
                  subject to Section 11.1; provided, however, that HARVARD may
                  disclose such information as required by law under Section
                  11.1(b), and may include in its usual reports the annual
                  amounts of royalties paid.

         (e)      Late payments shall be subject to a charge of one and one-half
                  percent (1.5%) per month, or $250, whichever is greater.

5.5      In the event of acquisition, merger, change of corporate name, or
         change of make-up, organization, or identity, LICENSEE shall notify
         HARVARD in writing within thirty (30) days of such event.

5.6      If LICENSEE or any of its sublicensees does not qualify as a "small
         entity" as provided by the United States Patent and Trademark Office,
         LICENSEE must notify HARVARD immediately.


                                                                              13



                                   ARTICLE VI
                                 RECORD KEEPING

6.1      LICENSEE shall keep accurate records (together with supporting
         documentation) of LICENSED PRODUCTS made, used or sold under this
         Agreement, sufficient to determine the amount of royalties due to
         HARVARD hereunder. Such records shall be retained for at least three
         (3) years following the end of the reporting period to which they
         relate. They shall be available during normal business hours for
         examination, upon HARVARD's reasonable request, not more than once in
         any twelve (12) month period and upon at least twenty (20) days
         prior notice, by an independent accountant under a duty of
         confidentiality, selected by HARVARD and reasonably acceptable to
         LICENSEE, for the sole purpose of verifying reports and payments under
         Section 5.4. In conducting examinations pursuant to this Section,
         HARVARD's accountant shall have access to records materially relevant
         to the calculation of royalties under Article IV.

6.2      HARVARD's accountant shall only disclose to HARVARD whether the reports
         and payments of royalties hereunder are accurate, and the amount of the
         underreporting or underpayment of royalties by LICENSEE, if any.

6.3      Such examination by HARVARD's accountant shall be at HARVARD's expense,
         except that if such examination shows an underreporting or underpayment
         in excess of five percent (5%) for any twelve (12) month period, then
         LICENSEE shall pay the reasonable out-of-pocket cost of such
         examination as well as any additional sum that would have been
         payable to HARVARD had the LICENSEE reported correctly, plus interest
         on said sum at the rate of one and one-half percent (1.5%) per month.

                                   ARTICLE VII
               DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE

7.1      Upon execution of this Agreement, LICENSEE shall reimburse HARVARD for
         all reasonable expenses HARVARD has incurred for the preparation,
         filing, prosecution and maintenance of PATENT RIGHTS. Thereafter,
         LICENSEE shall reimburse HARVARD for all such future expenses within
         thirty (30) days of receipt of invoices from HARVARD. Late payment
         of these invoices shall be subject to interest charges of one and
         one-half percent (1.5%) per month. HARVARD shall, in its sole
         discretion, be responsible for the preparation, filing, prosecution and
         maintenance of any and all patent applications and patents included in
         PATENT RIGHTS. HARVARD shall consult with LICENSEE as to the
         preparation, filing, prosecution and maintenance of such patent
         applications and patents and shall furnish to LICENSEE copies of
         documents relevant to any such preparation, filing, prosecution or
         maintenance.

         HARVARD shall be responsible for the preparation, filing, prosecution
         and maintenance of any and all patent applications and patents included
         in PATENT RIGHTS. HARVARD will instruct counsel to directly notify
         HARVARD and LICENSEE and

                                                                              14



         provide them copies of any communications to and from the United States
         and foreign patent offices relating to said prosecution, and drafts of
         all communications to the various patent offices, and will instruct
         counsel to consider any comments on such drafts, so that LICENSEE will
         be informed and apprised of the continuing prosecution of patent
         applications in PATENT RIGHTS. LICENSEE shall have reasonable
         opportunity to participate in decision making on key decisions
         affecting filing, prosecution and maintenance of patents and patent
         applications in PATENT RIGHTS.

7.2      HARVARD and LICENSEE shall cooperate fully in the preparation, filing,
         prosecution and maintenance of PATENT RIGHTS and of all patents and
         patent applications licensed to LICENSEE hereunder, executing all
         papers and instruments or requiring members of HARVARD to execute such
         papers and instruments so as to enable HARVARD to apply for, to
         prosecute and to maintain patent applications and patents in HARVARD's
         name in any country. Each party shall provide to the other prompt
         notice as to all matters which come to its attention and which may
         affect the preparation, filing, prosecution or maintenance of any such
         patent applications or patents. In particular, LICENSEE must
         immediately notify HARVARD if LICENSEE does not qualify as a "small
         entity" as provided by the United States Patent and Trademark Office.

7.3      LICENSEE may elect to surrender its rights to any patent or patent
         application within PATENT RIGHTS in any country upon sixty (60)
         days written notice to HARVARD. Such notice shall not relieve LICENSEE
         from responsibility to reimburse HARVARD for expenses under Section 7.1
         relating to the filing, prosecution or maintenance of such patent or
         patent application incurred prior to the receipt of the written notice
         by HARVARD (or a longer period if specified in LICENSEE's notice).

                                  ARTICLE VIII
                                  INFRINGEMENT

8.1      With respect to any PATENT RIGHTS that have not been rendered
         non-exclusive under Section 3.2(d), LICENSEE shall have the right to
         enforce in its own name and at its own expense any patents within such
         PATENT RIGHTS. HARVARD agrees to notify LICENSEE promptly of each
         infringement of such patents of which HARVARD is or becomes aware.

8.2      (a)      If LICENSEE elects to commence an action as described
                  above, HARVARD may, to the extent permitted by law, elect to
                  join as a party in that action. Regardless of whether HARVARD
                  elects to join as a party, HARVARD shall cooperate fully with
                  LICENSEE in connection with any such action, including making
                  available relevant personnel, information, records, papers,
                  samples, specimens and other similar materials for the
                  purposes of such action as reasonably requested by LICENSEE
                  through the Office of Technology and Trademark Licensing at
                  HARVARD.

         (b)      If HARVARD elects to join as a party pursuant to Subsection
                  (a), HARVARD shall jointly control the action with LICENSEE.


                                                                              15




         (c)      LICENSEE shall reimburse HARVARD for any out-of-pocket costs
                  HARVARD reasonably incurs, including reasonable attorneys'
                  fees, as part of an action brought by LICENSEE under Section
                  8.1, whether or not HARVARD becomes a co-plaintiff.

8.3      If LICENSEE elects to commence an action as described above and desires
         that HARVARD be responsible for some of its expenses as described
         immediately below, LICENSEE shall explain its strategy to HARVARD in
         any detail requested by HARVARD. If HARVARD approves of said action in
         writing, LICENSEE may deduct from its royalty payments to HARVARD with
         respect to the patent(s) subject to suit an amount not exceeding fifty
         percent (50%) of LICENSEE's expenses and costs of such action,
         including reasonable attorneys' fees and reimbursement of amounts under
         Section 8.2(c) above; provided, however, that such reduction shall not
         exceed fifty percent (50%) of the total royalty due to HARVARD with
         respect to the patent(s) subject to suit for each calendar year. If
         such fifty percent (50%) of LICENSEE's expenses and costs exceeds the
         amount of royalties deducted by LICENSEE for any calendar year,
         LICENSEE may to that extent reduce the royalties due to HARVARD from
         LICENSEE in succeeding calendar years, but never by more than fifty
         percent (50%) of the total royalty due in any one year with
         respect to the patent(s) subject to suit.

8.4      Neither party may enter into a settlement, consent judgment or other
         voluntary final disposition of any suit under Section 8.1, 8.6, 8.7 and
         8.8 without the prior written consent of the other party, which consent
         shall not be unreasonably withheld.

8.5      Recoveries or reimbursements from actions commenced pursuant to this
         Article shall first be applied to reimburse LICENSEE and HARVARD for
         litigation costs not paid from royalties deducted by LICENSEE pursuant
         to Section 8.3. Any remaining recoveries or reimbursements shall be
         shared as follows: if HARVARD approved of said action(s) as described
         in Paragraph 8.3, 80% to LICENSEE and 20% to HARVARD, if HARVARD did
         not approve of said action(s) then any remaining royalties shall be
         treated as NET SALES and LICENSEE shall pay an earned royalty of [***
         Redacted]% to HARVARD.

8.6      If LICENSEE elects not to exercise its right to enforce the PATENT
         RIGHTS against any infringement pursuant to this Article, HARVARD may
         do so at its own expense, controlling such action and retaining all
         recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in
         connection with any such action.

8.7      Without limiting the generality of Section 8.6, HARVARD may, at its
         election and by notice to LICENSEE, establish a time limit of
         one-hundred and eighty (180) days for LICENSEE to decide whether to
         enforce the PATENT RIGHTS against any infringement of which HARVARD is
         or becomes aware. If, by the end of such one-hundred and eighty (180)
         day period, LICENSEE has not (a) commenced such an action; (b) taken
         reasonable efforts to settle such infringement; or (c) provided HARVARD
         with a written report that provides LICENSEE's plans to commence such
         action or settle such infringement in the future and the reasons for
         any proposed delay in commencing such action or settling such

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              16



         infringment, which report must be approved by HARVARD, which approval
         will not unreasonably be denied or delayed and which approval shall not
         be construed as giving approval for Paragraph 8.3 purposes, HARVARD may
         enforce the PATENT RIGHTS against such an infringement at its own
         expense, controlling such action and retaining all recoveries
         therefrom. Notwithstanding sections 8.6 and 8.7, HARVARD shall not
         bring any action alleging the infringement of PATENT RIGHTS against any
         sublicensee of LICENSEE under PATENT RIGHTS, without the consent of
         LICENSEE.

8.8      If a declaratory judgment action is brought naming LICENSEE as a
         defendant and alleging invalidity of any of the PATENT RIGHTS, if both
         parties agree, HARVARD may take over the sole defense of the action at
         its own expense. LICENSEE shall cooperate fully with HARVARD in
         connection with any such action.

                                   ARTICLE IX
                            TERMINATION OF AGREEMENT

9.1      The effective date of this Agreement shall be the date that both
         parties have signed the Agreement. This Agreement, unless terminated as
         provided herein, shall remain in effect until the last patent or patent
         application in PATENT RIGHTS has expired or been abandoned.

9.2      HARVARD may terminate this Agreement as follows:

         (a)      If LICENSEE does not make a payment due hereunder and fails to
                  cure such non-payment (including the payment of interest in
                  accordance with Section 5.4(e)) within forty-five (45) days
                  after the date of notice in writing of such non-payment by
                  HARVARD. If LICENSEE disputes the amount of such non-payment
                  in writing within such forty-five (45) day period, HARVARD
                  shall not have the right to terminate this Agreement until it
                  has been determined in an arbitration proceeding under Section
                  11.10 below that LICENSEE has failed to pay amounts owed
                  hereunder, in which case LICENSEE shall pay HARVARD'S expenses
                  for the arbitration, and thereafter Licensee does not cure
                  such failure within sixty (60) days after such determination.
                  This Section 9.2(a) shall not, however, suspend any obligation
                  of LICENSEE to compensate HARVARD for any undisputed amounts,
                  as provided for under any term of this Agreement, during the
                  pendency of the foregoing arbitration and cure period.

         (b)      If LICENSEE defaults in its obligations under Sections 11.2(c)
                  and 11.2(d) to procure and maintain insurance, and fails to
                  cure such breach within sixty (60) days after notice in
                  writing of such breach by HARVARD.

         (c)      If LICENSEE shall make an assignment for the benefit of
                  creditors, or shall have a petition in bankruptcy filed for or
                  against it, provided that such bankruptcy petition is


                                                                              17



                  not dismissed within sixty (60) days after its filing. Such
                  termination shall be effective immediately upon HARVARD giving
                  written notice to LICENSEE.

         (d)      If LICENSEE is convicted of a felony within the United States
                  relating to the manufacture, use, or sale of LICENSED
                  PRODUCTS.

         (e)      Except as provided in Subsections (a), (b), (c), (d) above, if
                  LICENSEE materially breaches any obligations under this
                  Agreement and the breach has not been cured within ninety (90)
                  days after the date of notice in writing of such
                  breach by HARVARD. If LICENSEE disputes in writing that it has
                  materially breached this Agreement within such ninety (90)
                  day period, HARVARD shall not have the right to terminate this
                  Agreement until it has been determined in an arbitration
                  proceeding under Section 11.10 below that LICENSEE has
                  materially breached this Agreement, in which case LICENSEE
                  shall pay HARVARD'S expenses for the arbitration, and
                  thereafter Licensee does not cure such breach within sixty
                  (60) days after such determination. This Section 9.2(e) shall
                  not, however, suspend any obligation of LICENSEE to compensate
                  HARVARD for any undisputed amounts, as provided for under any
                  term of this Agreement, during the pendency of the foregoing
                  arbitration and cure period.

9.3      All sublicenses granted by LICENSEE under this Agreement in compliance
         with the terms and conditions hereof shall survive the termination of
         this Agreement upon the request of the party to whom such sublicense is
         granted, provided that such party agrees in writing that (i) it will
         pay all royalties or other amounts that otherwise would have been due
         thereafter under such sublicense directly to HARVARD rather than
         LICENSEE, and (ii) HARVARD shall not be held liable for the breach or
         the performance of any obligations stated in such sublicense unless
         such obligations have been expressly assumed in writing by HARVARD.

9.4      LICENSEE may terminate this Agreement by giving ninety (90) days
         advance written notice of termination to HARVARD. Upon termination,
         LICENSEE shall promptly submit a Royalty Report to HARVARD for the
         final reporting period and any royalty payments incurred during such
         reporting period, and any unreimbursed patent expenses under Section 7
         that have been invoiced by HARVARD, shall become immediately payable
         with such Royalty Report.

9.5      Articles I, VI, IX, X and XI (except for Section 11.7) of this
         Agreement shall survive termination. Article VIII shall survive with
         respect to any infringement of third parties and/or any lawsuits filed
         by or against LICENSEE, prior to the termination of this Agreement. In
         the event this Agreement is terminated for any reason, LICENSEE may,
         within six months after the effective date of such termination,
         sell or otherwise dispose of all LICENSED PRODUCTS that LICENSEE may
         have on hand on the effective date of such termination, and fulfill any
         contracts requiring the use of LICENSED PRODUCTS and/or LICENSED
         PROCESSES that LICENSEE may have entered into prior to the date of such
         termination, subject to LICENSEE'S payment of amounts due to HARVARD
         under Section 4.3 of this Agreement.


                                                                              18




                                    ARTICLE X
                         REPRESENTATIONS AND WARRANTIES

10.1     Except for the rights, if any, of the Government of the United States,
         HARVARD represents and warrants that:

         (a)      HARVARD is the owner of the entire right, title and interest
                  in and to the PATENT RIGHTS as they exist on the Effective
                  Date;

         (b)      HARVARD has the right and authority to enter into this
                  Agreement and grant the rights and licenses set forth herein,
                  including without limitation under PATENT RIGHTS;

         (c)      HARVARD has not previously granted, and will not grant in the
                  future, any rights in the PATENT RIGHTS that are inconsistent
                  with the rights and licenses granted to LICENSEE herein;

         (d)      To the best knowledge of HARVARD without having made an
                  investigation, as of the Effective Date, practice of
                  inventions within the PATENT RIGHTS does not infringe any
                  patent rights, trade secrets or other proprietary rights of
                  any third party,

         (e)      To the best knowledge of HARVARD, as of the Effective Date,
                  HARVARD does not own any rights in any other patent or patent
                  application, the claims of which would dominate the claims of
                  a patent or patent application within the PATENT RIGHTS or any
                  practice of PATENT RIGHTS. If HARVARD owns, now or thereafter,
                  any such rights in such patents or patent applications on
                  which Dr. Lieber or Dr. Park is an inventor, HARVARD will
                  negotiate in good faith to the extent it has the legal right
                  to do so with LICENSEE to grant LICENSEE rights to the extent
                  sufficient to practice PATENT RIGHTS, and at commercially
                  reasonable royalties.

         (f)      To the best knowledge of HARVARD, all prior and current
                  agreements between HARVARD and other sponsors of research
                  under which HARVARD has obligations relating to PATENT RIGHTS
                  are listed on Appendix C.

10.2     Except as set forth in this Agreement, HARVARD does not warrant the
         validity of the PATENT RIGHTS licensed hereunder and makes no
         representations whatsoever with regard to the scope of the licensed
         PATENT RIGHTS or that such PATENT RIGHTS may be exploited by LICENSEE,
         an AFFILIATE, or sublicensee without infringing other patents.

10.3     EXCEPT FOR THE WARRANTIES STATED IN THIS AGREEMENT, HARVARD EXPRESSLY
         DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO
         EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY
         PARTICULAR PURPOSE OF THE PATENT RIGHTS OR


                                                                              19



         INFORMATION SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED
         PRODUCTS CONTEMPLATED BY THIS AGREEMENT.

                                   ARTICLE XI
                                     GENERAL

11.1     (a)      The parties may, from time to time, in connection with
                  this Agreement disclose to each other Confidential
                  Information. Any Confidential Information shall be in writing
                  and marked "confidential" and disclosed only to the Office of
                  Technology and Trademark Licensing. As used in this Agreement,
                  "Confidential Information" of a party shall mean (i) any
                  information disclosed in writing by such party to the other
                  party, which is marked by such party with the legend
                  "CONFIDENTIAL" or other similar legend sufficient to identify
                  the information as its confidential information, (ii) any
                  information disclosed orally by such party to the other party
                  which is identified as confidential at the time of disclosure
                  and is confirmed as confidential in writing within thirty (30)
                  days after such time of disclosure, or (iii) any information
                  deemed Confidential Information under the terms of this
                  Agreement. With respect to categories (i) and (ii) above,
                  "Confidential Information" shall not include any information
                  that is: (1) already known to the receiving party at the time
                  of disclosure hereunder, or (2) now or hereafter becomes
                  publicly known other than through acts or omissions of the
                  receiving party, or (3) is disclosed to the receiving party by
                  a third party under no obligation of confidentiality to the
                  disclosing party or (4) is independently developed by the
                  receiving party without use of the Confidential Information of
                  the disclosing party.

         (b)          Each party shall maintain in confidence, and shall not use
                  for any purpose or disclose to any third party, the
                  Confidential Information of the other party. Notwithstanding
                  the foregoing, the receiving party may use or disclose the
                  Confidential Information of the disclosing party (i) to the
                  extent necessary to exercise its rights or fulfill its
                  obligations and/or duties under this Agreement, and (ii) to
                  comply with applicable law or governmental regulations or
                  court order, provided that the receiving party will give
                  reasonable advance notice to the disclosing party, and will
                  use its reasonable efforts to minimize the disclosure of
                  Confidential Information and to secure confidential treatment
                  of any Confidential Information disclosed.

         (c)      The royalty terms of this Agreement shall be deemed
                  "Confidential Information" of both parties. In addition to the
                  permissible disclosures set forth in subsection (b) above,
                  LICENSEE may disclose such terms in confidence to its
                  financial and legal advisors, consultants, potential or actual
                  investors, potential or actual merger or acquisition partners,
                  and others on a need-to-know basis.

11.2     (a)      LICENSEE shall indemnify, defend and hold harmless HARVARD
                  and its current or former and future directors, governing
                  board members, trustees, officers, faculty and employees
                  (collectively, the "INDEMNITEES"), from and against any claim,
                  lawsuit, cause of action , liability, cost, expense, damage,
                  deficiency, loss or obligation of any kind or nature
                  (including, without limitation, reasonable attorney's fees and
                  other costs and expenses of litigation) (collectively,
                  "Claims"), based upon,

                                                                              20



                  arising out of, or otherwise relating to: LICENSEE'S or any
                  sublicensee's performance of (or failure to perform) any of
                  its obligations under this Agreement or any sublicense
                  agreement, or the practice by LICENSEE or any sublicensee of
                  any right or license granted under this Agreement or any
                  sublicense agreement, or any product, process, or service
                  made, used or sold pursuant to any right or license granted
                  under this Agreement or any sublicense agreement, including
                  without limitation any Claim relating to product liability
                  (whether based on negligence or other tort, warranty, strict
                  liability, or any other theory), except to the extent such
                  Claims are directly attributable to intentional misconduct of
                  any INDEMNITEES. It shall be a condition of the foregoing
                  obligation that (i) LICENSEE receives prompt notice of any
                  such Claims; (ii) LICENSEE is given the exclusive right to
                  control the defense and settlement of such Claims, provided
                  that LICENSEE shall not settle any such Claim without the
                  prior written consent of HARVARD, which consent shall not be
                  unreasonably withheld; and (iii) LICENSEE shall not be
                  obligated to indemnify any INDEMNITEE in connection with any
                  settlement for any Claim unless LICENSEE consents in writing
                  to such settlement.

         (b)      LICENSEE shall, at its own expense, defend against any actions
                  brought or filed against any INDEMNITEE hereunder with respect
                  to the subject of indemnity contained herein, whether or not
                  such actions are rightfully brought.

         (c)      Beginning at the time any such product, process or service is
                  being commercially distributed or sold (other than for the
                  purpose of obtaining regulatory approvals) by LICENSEE or by a
                  SUBLICENSEE, AFFILIATE or agent of LICENSEE, LICENSEE shall,
                  at its sole cost and expense, procure and maintain commercial
                  general liability insurance in amounts not less than $[***
                  Redacted] per incident and $[*** Redacted] annual aggregate
                  and naming the Indemnitees as additional insureds. During
                  clinical trials of any such product, process or service,
                  LICENSEE shall, at its sole cost and expense, procure and
                  maintain commercial general liability insurance in such equal
                  or lesser amount as HARVARD shall require, naming the
                  Indemnitees as additional insureds. Such commercial general
                  liability insurance shall provide: (i) product liability
                  coverage; and (ii) broad form contractual liability coverage
                  for LICENSEE'S indemnification under this Agreement. If
                  LICENSEE elects to self-insure all or part of the limits
                  described above (including deductibles or retentions which are
                  in excess of $[*** Redacted] annual aggregate) such
                  self-insurance program must be acceptable to HARVARD and the
                  Risk Management Foundation of the Harvard Medical
                  Institutions, Inc. in their sole discretion. The minimum
                  amounts of insurance coverage required shall not be construed
                  to create a limit of LICENSEE'S liability with respect to its
                  indemnification under this Agreement.

         (d)      LICENSEE shall provide HARVARD with written evidence of such
                  insurance upon request of HARVARD. LICENSEE shall provide
                  HARVARD with written notice at least fifteen (15) days prior
                  to the cancellation, non-renewal or material change in such
                  insurance; if LICENSEE does not obtain replacement insurance
                  providing comparable coverage within such fifteen (15) day
                  period, HARVARD shall have the right to terminate this
                  Agreement in accordance with Section 9.2(b).

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                              21


         (e)      LICENSEE shall maintain such commercial general liability
                  insurance beyond the expiration or termination of this
                  Agreement during: (i) the period that any product, process, or
                  service, relating to, or developed pursuant to, this Agreement
                  is being commercially distributed or sold by LICENSEE or by a
                  sublicensee, AFFILIATE or agent of LICENSEE; and (ii) a
                  reasonable period after the period referred to in Subsection
                  (e)(i) above which in no event shall be less than fifteen
                  (15) years.

11.3     Nothing in this Agreement shall be construed as conferring any right to
         use HARVARD's name or insignia, or any adaptation of them, or the name
         of any of HARVARD's inventors in any advertising, promotional or sales
         literature without the prior written approval of HARVARD, or the
         inventor in the case of the use of the name of an inventor.

11.4     Except as stated in this Section 11.4, without the prior written
         approval of HARVARD in each instance, neither this Agreement nor the
         rights granted hereunder shall be transferred or assigned in whole or
         in part by LICENSEE to any person whether voluntarily or involuntarily,
         by operation of law or otherwise. LICENSEE may transfer or assign this
         Agreement and all rights hereunder, upon notice to HARVARD but without
         its consent, to any entity that succeeds to all or substantially all of
         the business of LICENSEE to which this Agreements pertains, whether by
         merger, operation of law, purchase or sale of all or substantially all
         of LICENSEE'S stock or assets or otherwise; provided that such assignee
         or transferee promptly agrees in writing to be bound by the terms and
         conditions of this Agreement. Subject to the foregoing, this Agreement
         shall be binding upon the respective successors, legal representatives
         and assignees of HARVARD and LICENSEE.

11.5     The interpretation and application of the provisions of this Agreement
         shall be governed by the laws of the Commonwealth of Massachusetts.

11.6     LICENSEE shall comply with all applicable laws and regulations. In
         particular, it is understood and acknowledged that the transfer of
         certain commodities and technical data is subject to United States laws
         and regulations controlling the export of such commodities and
         technical data, including all Export Administration Regulations of the
         United States Department of Commerce. These laws and regulations among
         other things, prohibit or require a license for the export of certain
         types of technical data to certain specified countries. LICENSEE hereby
         agrees and gives written assurance that it will comply with all United
         States laws and regulations controlling the export of commodities and
         technical data, that it will be solely responsible for any violation of
         such by LICENSEE or its AFFILIATES or sublicensees, and that it will
         defend and hold HARVARD harmless in the event of any legal action of
         any nature occasioned by such violation with respect to LICENSED
         PRODUCTS.

11.7     LICENSEE agrees: (i) to obtain all regulatory approvals required for
         the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES;
         and (ii) to mark LICENSED PRODUCTS with the numbers of the applicable
         patents within PATENT RIGHTS, to the extent required by law. LICENSEE
         also agrees to register or record this Agreement as is required by law
         or regulation in any country where the license is in effect,


                                                                              22



         and HARVARD shall cooperate fully with LICENSEE in connection with any
         such registration or recordation.

11.8     Any notices to be given hereunder shall be sufficient if signed by the
         party (or party's attorney) giving same and either: (i) delivered in
         person; (ii) mailed certified mail return receipt requested; or (iii)
         faxed to other party if the sender has evidence of successful
         transmission and if the sender promptly sends the original by ordinary
         mail, in any event to the following addresses:

         If to LICENSEE:
           NanoSys, Inc.
           2625 Hanover Street
           Palo Alto, CA 94304
           Attn: Lawrence A. Bock
           Fax: 650-745-1273

         cc:  Wilson, Sonsini, Goodrich & Rosati
              650 Page Mill Road
              Palo Alto, California 94304
              Attn: Michael J. O'Donnell, Esq.
              Fax: 650/493-6811

         If to HARVARD:
              Office for Technology and Trademark Licensing
              Harvard University
              Holyoke Center, Suite 727
              1350 Massachusetts Avenue
              Cambridge, MA 02138
              Fax: (617) 495-9568

         By such notice either party may change their address for future
         notices.

         Notices delivered in person shall be deemed given on the date
         delivered. Notices sent by fax shall be deemed given on the date faxed.
         Notices mailed shall be deemed given on the date postmarked on the
         envelope.

11.9     Should a court of competent jurisdiction later hold any provision of
         this Agreement to be invalid, illegal, or unenforceable, and such
         holding is not reversed on appeal, it shall be considered severed from
         this Agreement. All other provisions, rights and obligations shall
         continue without regard to the severed provision, provided that the
         remaining provisions of this Agreement are in accordance with the
         intention of the parties.

11.10    In the event of any controversy or claim arising out of or relating to
         any provision of this Agreement or the breach thereof, the parties
         shall try to settle such conflict amicably between themselves. Subject
         to the limitation stated in the final sentence of this Section, any
         such conflict which the parties are unable to resolve promptly shall be
         settled through

                                                                              23



         arbitration conducted in accordance with the rules of the American
         Arbitration Association. The demand for arbitration shall be filed
         within a reasonable time after the controversy or claim has arisen, and
         in no event after the date upon which institution of legal proceedings
         based on such controversy or claim would be barred by the applicable
         statute of limitation. Such arbitration shall be held in Boston,
         Massachusetts. The award through arbitration shall be final and
         binding. Either party may enter any such award in a court having
         jurisdiction or may make application to such court for judicial
         acceptance of the award and an order of enforcement, as the case may
         be. Notwithstanding the foregoing, either party may, without recourse
         to arbitration, assert against the other party a third-party claim or
         cross-claim in any action brought by a third party, to which the
         subject matter of this Agreement may be relevant.

11.11    This Agreement constitutes the entire understanding between the parties
         and neither party shall be obligated by any condition or representation
         other than those expressly stated herein or as may be subsequently
         agreed to by the parties hereto in writing.

11.12    Nothing in this Agreement shall be deemed to prevent LICENSEE from
         commercializing products similar to or competitive with a LICENSED
         PRODUCT, so long as LICENSEE complies with its obligations under this
         Agreement.

11.13    The relationship between HARVARD and LICENSEE established by this
         Agreement is that of independent contractors. Nothing in this Agreement
         shall be construed to create any other relationship between HARVARD and
         LICENSEE. Neither party shall have any right, power or authority to
         assume, create or incur any expense, liability or obligation, express
         or implied, on behalf of the other.

11.14    In the event either party hereto is prevented from or delayed in the
         performance of any of its obligations hereunder by reason of acts of
         God, war, strikes, riots, storms, fires or any other cause whatsoever
         beyond the reasonable control of the party, the party so prevented or
         delayed shall be excused from the performance of any such obligation to
         the extent and during the period of such prevention or delay.

11.15    NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY
         FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES
         (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE
         SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH
         CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE,
         EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE
         POSSIBILITY OR LIKELIHOOD OF SAME. For the avoidance of doubt, the
         parties acknowledge that the foregoing limitation of liability is not
         intended to apply to any of the following damages of HARVARD (and
         accordingly such damages shall be recoverable by HARVARD to the same
         extent they would be in the absence of that limitation): (i) amounts
         owed to HARVARD pursuant to the terms of this Agreement; (ii) amounts
         covered by LICENSEE'S indemnity of Section 11.2; (iii) damages for
         infringement or violation of any patent, copyright, trademark, or other
         intellectual



                                                                              24



         property right of HARVARD; and (iv) damages arising from the willful
         misconduct of LICENSEE.

11.16    HARVARD'S AGGREGATE LIABILITY FOR ALL DAMAGES OF ANY KIND RELATING TO
         THIS AGREEMENT OR ITS SUBJECT MATTER (WHETHER SUCH DAMAGES ARE BASED ON
         CONTRACT, TORT, INCLUDING NEGLIGENCE, OR OTHERWISE) SHALL NOT EXCEED
         THE AMOUNT PAID BY LICENSEE TO HARVARD UNDER THIS AGREEMENT.

11.17    This Agreement may be executed in counterparts, each of which shall be
         deemed an original, but both of which together shall constitute one
         and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
         executed by their duly authorized representatives.

          PRESIDENT AND FELLOWS                          NANOSYS, INC

           OF HARVARD COLLEGE

           /s/ JOYCE BRINTON                           /s/ LAWRENCE A. BOCK
           -----------------                           --------------------
        Joyce Brinton, Director                            Signature
Office for Technology and Trademark Licensing
                                                         LAWRENCE A. BOCK
                                                         ----------------
                                                              Name

                                                         PRESIDENT & CEO
                9/23/02                                  ---------------
                -------                                      Title
                 Date
                                                            10/2/02
                                                            -------
                                                              Date
                                                                              25



                                   APPENDIX A

The following comprise PATENT RIGHTS:

US Provisional Application 60/306,936, filed 7/20/01, a PCT application
claiming priority to 60/306,936, filed 7/22/01, Harvard Case #1935.


                                                                              26



                                   APPENDIX B



CASE        LEAD INVENTOR      REPORT DATE             TITLE                         AGENCY              GRANT NUMBERS
- ----        -------------      -----------             -----                         ------              -------------
                                                                                         
1935        Lieber, Charles       12/07/01    Nanowire Based memory and     Office of Naval Research     N00014-01-1-0651
                                             Switching Elements

1935        Lieber, Charles       12/07/01    Nanowire Based memory and     Office of Naval Research     N00014-00-1-0476
                                             Switching Elements

[*** Redacted]



                                                                              27

EX-10.5.4

                                                                  EXHIBIT 10.5.4

                           EXCLUSIVE LICENSE AGREEMENT

                                     Between

                    President and Fellows of Harvard College

                                       And

                                  NanoSys, Inc

                             Re: Harvard Case #2058

         In consideration of the mutual promises and covenants set forth below,
         the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         As used in this Agreement, the following terms shall have the following
         meanings:

1.1      ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS solely for academic
         non-commercial research or other not-for-profit scholarly purposes,
         which use is undertaken at a non-profit or governmental institution.
         ACADEMIC RESEARCH PURPOSES does not include selling products covered by
         PATENT RIGHTS or using PATENT RIGHTS in researching, developing,
         producing or manufacturing products for sale, or performance of
         services for a fee or other financial consideration. It is understood
         that using the PATENT RIGHTS to conduct normal research activities at
         non-profit or governmental institution is within the defined term of
         ACADEMIC RESEARCH PURPOSES.

1.2      AFFILIATE: any entity which controls, is controlled by, or is under
         common control with a party. An entity shall be regarded as in control
         of another entity for purposes of this definition if it owns or
         controls at least fifty percent (50%) of the shares entitled to vote in
         the election of directors (or in the case of an entity that is not a
         corporation, for the election of the corresponding managing authority).
         Unless otherwise specified, the term LICENSEE includes AFFILIATES.

1.3      FIELD: All fields of use.

1.4      HARVARD: President and Fellows of Harvard College, a nonprofit
         Massachusetts educational corporation having offices at the Office for
         Technology and Trademark




         Licensing, Holyoke Center, Suite 727, 1350 Massachusetts Avenue,
         Cambridge, Massachusetts 02138.

1.5      LICENSED PROCESSES: methods, processes or procedures covered by at
         least one VALID CLAIM included within the PATENT RIGHTS.

1.6      LICENSED PRODUCTS: products covered by at least one VALID CLAIM
         included within the PATENT RIGHTS or products made in accordance with
         LICENSED PROCESSES.

1.7      LICENSEE: Nanosys, Inc., a corporation organized under the laws of
         Delaware having its principal offices at 2625 Hanover Street, Palo
         Alto, CA 94304

1.8      NET SALES: the amounts actually received for sales, leases, or other
         dispositions of LICENSED PRODUCTS to non-AFFILIATE third parties, less:

         (a) customary [*** Redacted];

         (b) amounts [*** Redacted] by reason of [*** Redacted];

         (c) to the extent separately as stated on purchase orders, invoices, or
             other documents of  sale: (i) [*** Redacted] levied on the
             production, sale, transportation, delivery, importation,
             exportation, or use of LICENSED PRODUCTS; (ii) charges for [***
             Redacted] provided by third parties, including any [*** Redacted]
             thereon.

         NET SALES also includes the fair market value of any non-cash
         consideration received for the sale, lease or other disposition of
         LICENSED PRODUCTS to non-AFFILIATE third parties; provided NET SALES
         shall not include any [*** Redacted], payments in consideration for the
         [*** Redacted] to the intellectual property of LICENSEE or third
         parties, including the [*** Redacted] hereunder, bona fide [***
         Redacted] made in good faith and any payments for [*** Redacted].

         In the event that a LICENSED PRODUCT is sold or leased as a combination
         product containing the LICENSED PRODUCT and one or more other
         components, NET SALES shall be calculated by multiplying the gross
         amount invoiced for the sale of the combination product by the fraction
         [*** Redacted] where A is the [*** Redacted] price of the LICENSED
         PRODUCT sold separately by LICENSEE, and B is the [*** Redacted] of
         such other components of the combination products sold separately by
         LICENSEE during the relevant royalty payment period.  In the event a
         substantial number of such separate sales were not made during the
         relevant royalty period, then NET SALES shall be reasonably allocated
         by LICENSEE between such LICENSED PRODUCT and such other components of
         the combination based on their relative importance or value; provided
         that such LICENSED PRODUCT and such other components shall not be
         considered a "combination product" unless such LICENSED PRODUCT is
         offered for sale or marketed by LICENSEE separately as well as
         together. If LICENSEE does so allocate, LICENSEE shall promptly deliver
         to HARVARD a written report providing a detailed explanation of how
         LICENSEE determined said relative importance or value. All such reports
         shall be deemed Confidential Information of LICENSEE subject to Section
         11.1. In the event that HARVARD disagrees with the determination made
         by LICENSEE of said allocation of importance or value, HARVARD shall so
         notify LICENSEE in writing, and a representative of LICENSEE and a
         representative of HARVARD shall meet in order to discuss and resolve
         such disagreement. If such disagreement cannot be resolved within sixty
         (60) days, such disagreement shall be subject to resolution in
         accordance with Section 11.10.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



                                                                               2



1.9      PATENT RIGHTS: PATENT RIGHTS shall include (i) the applications and
         patents as listed in Appendix A of this Agreement, (ii) any foreign
         counterparts to such patents and patent applications, (iii) the
         inventions described and claimed in the foregoing, (iv) any divisions-
         or continuations of the foregoing, (v) applications from which the
         patents and applications listed in Appendix A claim priority, and which
         have been abandoned, and (vi) specific claims of any
         continuations-in-part of the foregoing to the extent the specific
         claims are directed to subject matter described in the foregoing in a
         manner sufficient to support such specific claims under 35 U.S.C. and
         to the extent Licensable by HARVARD; claims in said
         continuations-in-part covering minor improvements over the claims of
         parent patent applications may, at HARVARD'S discretion, be included in
         PATENT RIGHTS by amendment of this Agreement for no increase in the
         royalties of Article IV, (vi) all patents issuing on any of the
         foregoing, and (vii) registrations, renewals, reissues, reexaminations,
         extensions or patents of addition of any kind with respect to any of
         such patents. For purposes of this Agreement "Licensable" shall mean
         those claims of continuations-in-part filed after the Effective Date
         for which HARVARD has sole ownership (or has been granted the sole
         right to license by a co-owner) and where there are no obligations to
         grant licenses to a third party as the result of research support
         provided to one or more of the inventors.

1.10     SERVICE INCOME: the financial consideration actually received for the
         utilization of LICENSED PRODUCTS or LICENSED PROCESSES by LICENSEE
         which is contracted for by a non-AFFILIATE third party, less the
         deductions stated in Sections 1.8(a), (b) and (c); provided, however,
         that such amounts shall only be included in SERVICE INCOME if LICENSEE
         does not [*** Redacted] with respect to the PATENT RIGHTS licensed in
         this Agreement on the NET SALE of such LICENSED PRODUCTS or the NET
         SALE of LICENSED PRODUCTS made in accordance with such use of the
         LICENSED PROCESSES. SERVICE INCOME shall specifically exclude any [***
         Redacted] payments in consideration for the [*** Redacted] of the
         LICENSEE or third parties, including the sublicensing of rights
         hereunder, [*** Redacted] made in good faith and any [*** Redacted].

         In the event that any service contemplated hereunder includes any
         services other than the utilization of a [*** Redacted] or [***
         Redacted] LICENSEE shall in good faith determine the portion of the
         payments received for such service that are intended as consideration
         for the utilization of LICENSED PRODUCTS or LICENSED PROCESSES by
         LICENSEE, and such portion shall be used to determine the SERVICE
         INCOME for such service. In such event, LICENSEE shall promptly deliver
         to HARVARD a written report detailing such calculation, together with a
         copy of the applicable provisions of the agreements related to such
         service.  All such reports and provisions of agreements shall be deemed
         Confidential Information of LICENSEE subject to Section 11.1.  In the
         event that HARVARD disagrees with the determination made by LICENSEE of
         SERVICE INCOME for such service, HARVARD shall so notify LICENSEE in
         writing, and a representative of LICENSEE  and a representative of
         HARVARD shall meet in order to discuss and resolve such disagreement.
         If such disagreement cannot be resolved within sixty (60) days, such
         disagreement shall be subject to resolution in accordance with
         Section 11.10.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                               3



1.11     SUBLICENSE INCOME: the amount paid to LICENSEE by a third party (other
         than an AFFILIATE of LICENSEE for the granting of a sublicense under
         section 3.1, including but not limited to (i) [*** Redacted] (ii) [***
         Redacted] (iii) [*** Redacted] and (vi) the [*** Redacted] in cash of
         any non-cash consideration for such sublicense, but specifically
         excluding any [*** Redacted] payments in consideration for the [***
         Redacted], [*** Redacted] and any payments for products purchased or
         services performed. It is understood and agreed that sublicense income
         received by LICENSEE shall be net of withholding taxes.

         If LICENSEE sublicenses [*** Redacted] to a third party and at the same
         time also grants such third party rights to [*** Redacted] or
         LICENSEE's in licensed non-HARVARD technologies, then all compensation
         received from the third party for such rights shall be combined and
         [*** Redacted] that would constitute SUBLICENSE INCOME  under Section
         1.11 and shall promptly deliver to HARVARD a written report detailing
         such calculation, together with a copy of the applicable provisions of
         the agreements with the third party.  All such reports and provisions
         of agreements shall be deemed Confidential Information of LICENSEE
         subject to Section 11.1.  In the event that HARVARD disagrees with the
         determination made by LICENSEE of SUBLICENSE INCOME, HARVARD shall so
         notify LICENSEE in writing, and a representative of LICENSEE and a
         representative of HARVARD shall meet in order to discuss and resolve
         such disagreement. If such disagreement cannot be resolved within sixty
         (60) days, such disagreement shall be subject to resolution in
         accordance with Section 11.10.


1.12     TERRITORY: Worldwide.

1.13     VALID CLAIM: either (i) a claim of an issued patent that has not
         expired or been held unenforceable or invalid by an agency or a court
         of competent jurisdiction, and which has not been admitted to be
         invalid or unenforceable through reissue, disclaimer or otherwise;
         provided, however, that if the holding of such court or agency is later
         reversed by a court or agency with overriding authority, the claim
         shall be reinstated as a Valid Claim with respect to Net Sales made
         after the date of such reversal, or (ii) a claim of a pending patent


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                               4




         application that has not been abandoned or finally rejected without the
         possibility of appeal or re-filing and that has been pending for less
         than seven (7) years from its priority date, and is being actively
         prosecuted in good faith.

1.14     The terms "Public Law 96-517" and "Public Law 98-620" include all
         amendments to those statutes.

1.15     The terms "sold" and "sell" include, without limitation, leases and
         other dispositions and similar transactions.

1.16     RELATED LICENSE AGREEMENTS: Other patent license agreements between
         LICENSEE and HARVARD licensing patent rights known internally at
         HARVARD as Case #1852, #1765, #1923, #1924, #1988, #1678, #1641, #1489,
         #1352, #1243, #1137, #1816, #1685, #1935, #2058 to LICENSEE.

1.17     DEVELOPMENT PAYMENTS: DEVELOPMENT PAYMENTS shall mean (a) any payments,
         in consideration for, or to support, research and/or development
         efforts by LICENSEE to develop inventions claimed in PATENT RIGHTS and
         (b) any reimbursement of LICENSEE'S patent expenses concerning PATENT
         RIGHTS.

                                   ARTICLE II
                                    RECITALS

2.1      HARVARD is owner (or HARVARD will be owner) by assignment from
         Charles Lieber, Mark S. Gudiksen, Lincoln J. Lauhon, Jianfeng Wang,
         Xiangfeng Duan, Yi Cui, Yu Huang, Hongkun Park, Qingqiao Wei, Wenjie
         Liang, Deli Wang, and Zhaohui Zhong of HARVARD and the University of
         Southhampton of their entire right, title and interest in the United
         States Patent Application Serial Number 10/152,490, filed May 21, 2002,
         and 10/196,337 filed July 16th, 2002, and corresponding International
         Patent Application Serial No. PCT/US 0216133, filed May 21, 2002, all
         entitled "Nanoscale Wires and Related Devices", and the foreign patent
         applications corresponding thereto, and in the inventions described and
         claimed therein. The University of Southhampton was an owner by
         assignment from David C. Smith, and has assigned its interest to
         HARVARD, a copy of said assignment is attached in Appendix C.

2.2      HARVARD has the authority to issue licenses under PATENT RIGHTS.

2.3      HARVARD is committed to the policy that ideas or creative works
         produced at HARVARD should be used for the greatest possible public
         benefit, and believes that every reasonable incentive should be
         provided for the prompt introduction of such ideas into public use, all
         in a manner consistent with the public interest.

2.4      LICENSEE intends to use commercially reasonable efforts to develop the
         invention(s), and to bring to market at least one product falling
         within the definition of LICENSED PRODUCT or otherwise embodying the
         subject matter described or claimed in the patent rights licensed under
         such agreements.




                                                                               5


2.5      LICENSEE is desirous of obtaining an exclusive license in the TERRITORY
         in order to practice the above-referenced invention covered by PATENT
         RIGHTS in the United States and in certain foreign countries, and to
         manufacture, use and sell in the commercial market the products made in
         accordance therewith, and HARVARD is desirous of granting such a
         license to LICENSEE in accordance with the terms of this Agreement.

                                   ARTICLE III
                                 GRANT OF RIGHTS

3.1      HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
         terms and conditions hereof, an exclusive license (except as set forth
         in Sections 3.2(a) and 3.2(b)) under PATENT RIGHTS in the TERRITORY and
         in the FIELD (i) to make and have made, to use and have used, to sell
         and have sold, to offer for sale, import, export, or otherwise
         distribute the LICENSED PRODUCTS, (ii) to practice the LICENSED
         PROCESSES, and (iii) to otherwise fully exploit the PATENT RIGHTS, and
         (iv) to have the foregoing performed on behalf of LICENSEE by a third
         party, in each case for the life of the PATENT RIGHTS. The foregoing
         license under PATENT RIGHTS shall include the full right to grant
         sublicenses, and LICENSEE shall promptly provide copies of any
         sublicenses of PATENT RIGHTS to HARVARD for its review. Unless HARVARD
         has rendered the license under PATENT RIGHTS non-exclusive under
         Section 3.2(c), and with the exception of rights already granted to
         Nantero, Inc., under HARVARD Case #1641, as provided in Section
         3.2(b)(ii), below, HARVARD agrees that it will not grant licenses under
         PATENT RIGHTS to others nor make, use, sell, offer for sale, import or
         otherwise exploit PATENT RIGHTS itself except as required by HARVARD'S
         obligations in Section 3.2(a) or as permitted in Sections 3.2(b)(i) and
         3.2(f).

3.2      The granting and exercise of this license is subject to the following
         conditions:

         (a)      HARVARD'S "Statement of Policy in Regard to Inventions,
                  Patents and Copyrights," dated August 10, 1998, Public Law
                  96-517 and Public Law 98-620, and HARVARD'S obligations under
                  prior or current agreements with other sponsors of research
                  and, with regard to continuations-in-part contained in the
                  PATENT RIGHTS, any future agreements with other sponsors of
                  research related to such continuations-in-part. Any right
                  granted in this Agreement greater than that permitted under
                  Public Law 96-517, or Public Law 98-620, shall be subject to
                  modification to the extent required to conform to the
                  provisions of those statutes.

         (b)      (i) HARVARD reserves the right to make and use, and grant to
                  other non-profit or governmental institutions non-exclusive
                  licenses to make and use, in each case solely for ACADEMIC
                  RESEARCH PURPOSES the subject matter described and claimed in
                  PATENT RIGHTS. HARVARD shall promptly notify LICENSEE of any
                  rights granted to any third party (other than the U.S.
                  government) under Sections 3.2(a) and (b).

         (c)      (ii) LICENSEE expressly recognizes that Nantero, Inc.
                  ("NANTERO") currently has a limited license under PATENT
                  RIGHTS, to the extent PATENT RIGHTS are included in NANTERO'S
                  co-exclusive license under the patent rights comprising





                                                                               6



                 HARVARD case #1641 (but not to practice any technology
                 of PATENT RIGHTS that is not within the technology of HARVARD
                 case #1641).

         (d)     LICENSEE shall use commercially reasonable efforts to effect
                 introduction into the commercial market at least one product
                 falling within the definition of LICENSED PRODUCT or otherwise
                 embodying the subject matter described or claimed in PATENT
                 RIGHTS within seven and one half (7.5) years of the effective
                 date of this Agreement; thereafter, until the expiration of
                 this Agreement, LICENSEE shall use commercially reasonable
                 efforts to endeavor to keep any such product reasonably
                 available to the public so long as it shall be a sound and
                 reasonable commercial practice to do so.

                 At any time after seven and one half (7.5) years from the
                 effective date of this Agreement, HARVARD may render this
                 license non-exclusive if LICENSEE has not, either by itself or
                 through a sublicensee:

                   (i)    introduced into commercial use at least one product
                          falling within the definition of LICENSED PRODUCT or
                          made by a LICENSED PROCESS; and

                   (ii)   used commercially reasonable efforts to put the
                          licensed subject matter into commercial use as broadly
                          as commercially reasonable in one or more of the
                          countries hereby licensed, directly or through a
                          sublicense, as described in LICENSEE'S development
                          plan required by Paragraph 5.1 (b);and

                   (iii)  used commercially reasonable efforts to keep products
                          falling within the definition of LICENSED PRODUCT or
                          otherwise embodying the subject matter described or
                          claimed in PATENT RIGHTS reasonably available to the
                          public so long as it shall be a sound and reasonable
                          commercial practice to do so; and

                   (iv)   engaged in research, development, manufacturing,
                          marketing or sublicensing activity that is
                          commercially reasonably appropriate to achieving
                          Section 3.2(d)(ii) or 3.2(d)(iii).

         (e)     In all sublicenses granted by LICENSEE hereunder, LICENSEE
                 shall include a requirement that the sublicensee use
                 commercially reasonable efforts to put the subject matter of
                 the sublicense into commercial use, provided that such
                 sublicensee is authorized to develop and sell to the public a
                 new product covered by PATENT RIGHTS on its own behalf.
                 LICENSEE shall further provide that such sublicenses are
                 subject and subordinate to the terms and conditions of this
                 Agreement, except for the rate of royalty on NET SALES paid by
                 such sublicensee to the LICENSEE. Copies of all sublicense
                 agreements hereunder shall be provided promptly to HARVARD.
                 Such copies of sublicense agreements may be provided to
                 HARVARD in redacted form, provided that such copies contain
                 all relevant terms necessary for HARVARD to monitor LICENSEE'S
                 compliance with the terms of this Agreement.





                                                                               7



                  Unredacted copies of said sublicense agreements shall be made
                  available for review by HARVARD or its representatives at
                  LICENSEE'S Medford, MA facility, or whichever facility is
                  closest to HARVARD, within one week, of HARVARD'S request. All
                  sublicense agreements of LICENSEE provided to HARVARD shall be
                  deemed Confidential Information of LICENSEE subject to Section
                  11.1.

         (f)      At any time five (5) years after the effective date of this
                  Agreement, if LICENSEE is unable or unwilling to grant
                  sublicenses, either as suggested by HARVARD or by a potential
                  sublicensee or otherwise, then HARVARD may directly license
                  such potential sublicensee, but only if: (i) LICENSEE is not
                  currently pursuing development of LICENSED PRODUCTS for the
                  same application, or an application that is reasonably
                  competitive with the application as contemplated by the
                  potential sublicensee, as demonstrated by annual progress
                  reports from LICENSEE required by Paragraph 5.2, or the
                  research and development plan required by Paragraph 5.1(b) of
                  this agreement or within a one-year period LICENSEE makes a
                  commitment to do so , said commitment being satisfied by a
                  written research and development plan, acceptable to HARVARD
                  and said acceptance given within the one-year period, said
                  acceptance not to be unreasonably denied. (if, in subsequent
                  reports by LICENSEE to HARVARD as required under Section 5.2,
                  LICENSEE fails to develop any applications according to the
                  research and development plan, as potentially amended
                  according to Section 5.2, such applications become subject to
                  this Paragraph); (ii) the granting of such a license by
                  HARVARD to the potential sublicensee will increase the
                  availability of useful products to the public, and (iii)
                  HARVARD notifies LICENSEE of its intention to grant such
                  license and permits LICENSEE a reasonable period to negotiate
                  a sublicense on its own, said reasonable period, unless
                  otherwise agreed to by the Parties, shall be no less than 6
                  months, nor greater than 12 months.

         (g)      To the extent required by law, until this license is rendered
                  non-exclusive in the United States under Section 3.2 (d),
                  LICENSEE shall cause any LICENSED PRODUCT produced for sale in
                  the United States to be manufactured substantially in the
                  United States.

         (h)      HARVARD recognizes that LICENSEE'S success in meeting the
                  obligations set forth in this paragraph may be enhanced by
                  consultation with the inventor(s) of the PATENT RIGHTS.
                  Accordingly, Harvard will use reasonable efforts to make such
                  inventors reasonably available to LICENSEE for such
                  consultation.

3.3      All rights reserved to the United States Government and others under
         Public Law 96-517, and Public Law 98-620, shall remain and shall in no
         way be affected by this Agreement.

3.4      HARVARD shall promptly notify LICENSEE when any new patent or patent
         application arises from (i) research conducted in the laboratory of Dr.
         Lieber or Dr. Park, or (ii) improvements made by HARVARD under the
         direction of Dr. Lieber or Dr. Park on the subject matter described in
         PATENT RIGHTS. If LICENSEE so requests and the intellectual property is
         available for licensing, HARVARD will evaluate in good faith LICENSEE'S
         proposal along with proposals received from any third parties. Any
         decision to grant a license to LICENSEE shall be subject to approval by
         HARVARD'S Committee





                                                                               8




         on Patents and Copyrights. In the event LICENSEE and HARVARD cannot
         agree on terms for a license to any new intellectual property which is
         dominated by PATENT RIGHTS, HARVARD shall not offer any third party
         terms more favorable, in toto, than the terms offered to LICENSEE.

                                   ARTICLE IV
                                    ROYALTIES

4.1      LICENSEE shall owe to HARVARD a non-refundable license royalty fee in
         the sum of [*** Redacted] ($[*** Redacted]) dollars upon execution of
         this Agreement, which shall be payable within thirty days of this
         Agreement becoming effective.

4.2      As consideration for the rights granted hereunder, LICENSEE shall pay
         to HARVARD a non-refundable fee in the form of stock of LICENSEE as
         follows:

                    (i)    LICENSEE shall issue to HARVARD and HARVARD shall
                           purchase ten thousand (10,000) fully vested shares,
                           at a price per share of $0.19 per share and an
                           aggregate value of $1,900.00 of LICENSEE'S common
                           stock upon execution of this Agreement, provided,
                           however, that HARVARD shall be subject to and enter
                           into (1) appropriate agreements and related documents
                           as required of other stockholders of LICENSEE,
                           including without limitation a Common Stock Purchase
                           Agreement, and (2) a Voting Agreement by and among
                           the LICENSEE, HARVARD and certain other holders of
                           common stock of LICENSEE dated as of even date
                           hereof.

                    (ii)   HARVARD'S ownership rights to Shares shall not be
                           affected should the license pursuant to this
                           Agreement be terminated by LICENSEE or HARVARD.

4.3      (a) LICENSEE shall pay to HARVARD during the term of this Agreement a
         royalty on NET SALES by LICENSEE according to the following schedule:

           (i)    [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted]
                  applications;

           (ii)   [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted]
                  applications; or

           (iii)  [*** Redacted]% of NET SALES by LICENSEE in [*** Redacted]
                  excluding [*** Redacted] applications and [*** Redacted]
                  applications.

         In the event, any NET SALES by LICENSEE reasonably falls within more
         than one of categories (i) to (iii) above, LICENSEE shall pay to
         HARVARD the lowest applicable royalty set forth in such categories.



*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                               9




         (b)      For each LICENSED PRODUCT sold by LICENSEE, LICENSEE may
                  credit up to [*** Redacted] of royalties that LICENSEE is
                  paying to third parties (or HARVARD under agreements not
                  included within section 4.3(c)) on LICENSEE'S sales of that
                  LICENSED PRODUCT, provided that the royalty paid to HARVARD
                  shall not be reduced below [*** Redacted] percent ([***
                  Redacted]%) of the NET SALES of that LICENSED PRODUCT for
                  which such third party royalties are being paid. LICENSEE may
                  only offset royalties owed under license agreements to third
                  parties where said license agreements provide for similar
                  offsets of comparable scale of third party royalties. Any such
                  offsets must be specifically and thoroughly reported in the
                  royalty reports required by Paragraph 5.4.

         (c)      In the event that sales of a LICENSED PRODUCT are subject to
                  the payment of royalties under one or more of the RELATED
                  LICENSE AGREEMENTS or any license agreements with HARVARD with
                  the same effective date as this Agreement, then the total
                  royalty payment due HARVARD under all such agreements
                  including this Agreement shall be at most the royalty payment
                  due under this Section 4.3 on such NET SALE, no matter how
                  many license agreements from HARVARD are involved, and
                  notwithstanding the terms of any such agreement. LICENSEE
                  shall notify HARVARD of the identity of each license agreement
                  that includes patent rights covering the product or process,
                  and HARVARD shall distribute the royalties evenly among such
                  agreements, including this Agreement.

         (d)      LICENSEE shall pay HARVARD [*** Redacted] percent ([***
                  Redacted]%) of SUBLICENSE INCOME received by LICENSEE for a
                  sublicense of PATENT RIGHTS. If compensation for such a
                  sublicense of PATENT RIGHTS is bundled with compensation
                  received for the sublicensing of the other HARVARD patents
                  rights or other HARVARD intellectual property licensed to
                  LICENSEE under the RELATED LICENSE AGREEMENTS or any
                  agreements with HARVARD having the same effective date as this
                  Agreement, then LICENSEE shall pay HARVARD at most the royalty
                  payment due under this Section 4.3(d) for such SUBLICENSE
                  INCOME no matter how many license agreements from HARVARD are
                  involved, and notwithstanding the terms of any such license
                  agreements. In such a case, LICENSEE shall notify HARVARD of
                  the identity of each license agreement involved and HARVARD
                  shall distribute the royalties equally among those license
                  agreements, including this Agreement.

         (e)      For provision of services under PATENT RIGHTS, LICENSEE shall
                  pay a royalty of [*** Redacted] percent ([*** Redacted]%) of
                  SERVICE INCOME received by LICENSEE from each and every third
                  party ("Third Party") to whom LICENSEE provides such services.
                  In the event any services from which SERVICE INCOME is derived
                  are subject to the payment of royalties under the RELATED
                  LICENSE AGREEMENTS or any agreement with HARVARD having the
                  same effective date as this Agreement, then the total royalty
                  due under all such agreements, including this Agreement, shall
                  be at most the royalty payment due under this Section 4.3 on
                  such services, no matter how many license agreements from
                  HARVARD are involved, and notwithstanding the terms of any
                  such license agreements. In such event, LICENSEE shall notify
                  HARVARD of the identity of each license agreement involved and
                  HARVARD shall distribute the royalties equally among those
                  license agreements, including this Agreement.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



                                                                              10



         (f)      If the license pursuant to this Agreement is converted to a
                  non-exclusive one under Section 3.2(d) and if another
                  non-exclusive license to any of PATENT RIGHTS is granted or
                  otherwise exists for any field or territory, then the royalty
                  rate of this Agreement shall be adjusted so as not to exceed
                  the royalty rate payable by such other non-exclusive licensee
                  under such PATENT RIGHTS in such field or territory, provided
                  that LICENSEE agrees to amend this Agreement to include terms
                  requested by HARVARD that have been accepted by such other
                  non-exclusive licensee.

         (g)      On sales between LICENSEE and its AFFILIATES for resale, the
                  royalty shall be paid on the NET SALES of the AFFILIATE.

         (h)      In the event that more than one VALID CLAIM within PATENT
                  RIGHTS is applicable to any LICENSED PRODUCT subject to
                  royalties under this Section 4.3, then only one royalty shall
                  be paid to HARVARD in respect of such LICENSED PRODUCT. In no
                  event shall more than one royalty be due to HARVARD with
                  respect to any LICENSED PRODUCT unit; nor shall a royalty be
                  payable under this Section 4.3 with respect to sales of
                  LICENSED PRODUCTS for clinical trials nor the use of LICENSED
                  PRODUCTS or LICENSED PROCESSES by LICENSEE for such a purpose
                  whether or not in collaboration with a third party.

         4.4      No later than January 1 of each calendar year after the
                  effective date of this Agreement, LICENSEE shall pay to
                  HARVARD the following non-refundable license maintenance
                  royalty and/or advance on royalties. Such payments may be
                  credited against running royalties due for that calendar year
                  and Royalty Reports shall reflect such a credit. Such payments
                  shall not be credited against milestone payments (if any) nor
                  against royalties due for any subsequent calendar year.

                           
January 1, 2004               $ [*** Redacted]
January 1, 2005               $ [*** Redacted]
January 1, 2006               $ [*** Redacted]
January 1, 2007               $ [*** Redacted]
January 1, 2008               $ [*** Redacted]
January 1, 2009               $ [*** Redacted]
January 1, 2010               $ [*** Redacted]
each January 1 thereafter     $ [*** Redacted]



                                    ARTICLE V
                                    REPORTING

5.1      a) In compliance of earlier RELATED LICENSE AGREEMENTS, LICENSEE has
         provided to HARVARD a written research and development plan acceptable
         to LICENSEE'S investors under which LICENSEE intends to bring the
         subject matter of the


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                              11



         earlier RELATED LICENSE AGREEMENTS (though not specifically of this
         Agreement) granted earlier into commercial use. Such plan included
         projections of sales and proposed marketing efforts.

         b) LICENSEE agrees to provide, no later than three (3) years after the
         effective date of this Agreement, a written research and development
         plan, under which LICENSEE intends to bring the subject matter of
         PATENT RIGHTS into commercial use. Such research and development plan
         shall be subject to the written approval or disapproval of HARVARD,
         which written approval shall not be unreasonably withheld. Failure to
         provide written disapproval within 60 days of receipt of such research
         and development plan shall constitute HARVARD'S approval in accordance
         with this section. Such a plan shall include a description of each
         LICENSED PRODUCT to be developed, a developmental timeline showing the
         technical, regulatory, business and marketing steps (benchmarks) needed
         to bring the LICENSED PRODUCT into commercial use and the resources in
         funds and personnel that LICENSEE will bring to bear for the successful
         accomplishment of each such step, and shall include projected sales and
         a proposed marketing effort

5.2      No later than sixty (60) days after June 30 of each calendar year,
         LICENSEE shall provide to HARVARD a written annual Progress Report
         describing progress on the commercialization of PATENT RIGHTS during
         the most recent twelve (12) period ending June 30, the amount of
         LICENSEE'S R&D spending relating to the subject matter described or
         claimed in PATENT RIGHTS during such time, and plans for the
         forthcoming year. If multiple technologies are covered by the license
         granted hereunder, the Progress Report shall provide the information
         set forth above for each technology. If progress differs from that
         anticipated in the plan required under Section 5.1(b), LICENSEE shall
         explain the reasons for the difference and, if appropriate or
         necessary, provide a modified research and development plan for
         HARVARD'S review and approval, such approval not to be unreasonably
         denied. It is understood that LICENSEE may provide one Progress Report
         covering all RELATED LICENSE AGREEMENTS.

5.3      LICENSEE shall report to HARVARD the date of its first NET SALE of a
         LICENSED PRODUCT (or the date of its first use of a LICENSED PROCESS
         from which SERVICE INCOME is derived) in each country within
         thirty (30) days of occurrence. It is understood that LICENSEE shall
         be obligated to report the date of first sale of LICENSED PRODUCTS (or
         the first commercial use of LICENSED PROCESSES) under this Section 5.3
         only once for each country.

5.4      (a) LICENSEE shall submit to HARVARD within sixty (60) days after
         each calendar half year ending June 30 and December 31, a Royalty
         Report setting forth, for the most recent half year that ended on June
         30 and December 31, at least the following information:

                  (i)      the number and identification of LICENSED PRODUCTS
                           sold by LICENSEE and its AFFILIATES that constitute a
                           NET SALE, in each country;




                                                                              12



                  (ii)     total amounts received for such LICENSED PRODUCTS
                           sold by LICENSEE and its AFFILIATES;

                  (iii)    an accounting for all LICENSED PROCESSES used or sold
                           by LICENSEE and its AFFILIATES;

                  (iv)     deductions applicable to determine the NET SALES
                           thereof;

                  (v)      the amount of SUBLICENSE INCOME received by LICENSEE
                           from each sublicensee, and for each sublicensee the
                           categories of LICENSED PRODUCTS sold and gross sales
                           of each category;

                  (vi)     the amount of SERVICE INCOME received by LICENSEE;
                           and

                  (vii)    the amount of royalty due for such reporting period,
                           or, if no royalties are due to HARVARD for such
                           reporting period, the statement that no royalties are
                           due.

                  Such report shall be certified as correct by an officer of
                  LICENSEE and shall include a listing of all deductions from
                  royalties. It is understood that LICENSEE may submit one
                  Royalty Report covering all RELATED LICENSE AGREEMENTS.
                  However, the Royalty Report shall, for each type of income,
                  provide a detailed listing of the RELATED LICENSE AGREEMENTS
                  that are involved.

         (b)      LICENSEE shall pay to HARVARD with each such Royalty Report
                  the amount of royalty due with respect to such half year.
                  If multiple technologies are covered by the license granted
                  hereunder, LICENSEE shall specify which PATENT RIGHTS are
                  utilized for each category of LICENSED PRODUCTS and/or
                  LICENSED PROCESSES for which royalties are separately reported
                  in the Royalty Report.

         (c)      All payments due hereunder shall be deemed received when funds
                  are credited to HARVARD'S bank account and shall be payable by
                  check or wire transfer in United States dollars. Conversion of
                  foreign currency to U.S. dollars shall be made at the
                  conversion rate existing in the United States (as reported in
                  the New York Times or the Wall Street Journal) on the last
                  working day of each royalty period. No transfer, exchange,
                  collection or other charges shall be deducted from such
                  payments. If legal restrictions block the removal of local
                  currency from any country where a LICENSED PRODUCT is sold,
                  the royalties payable under this Agreement on NET SALES,
                  SERVICE INCOME and SUBLICENSING INCOME earned in such currency
                  in such country shall continue to be reported and accrued,
                  but will not be paid until such currency may be removed from
                  such country.

         (d)      All plans or reports received under Sections 5.1, 5.2, 5.3,
                  5.4 shall be deemed Confidential Information of LICENSEE
                  subject to Section 11.1; provided, however, that HARVARD may
                  disclose such information as required by law under Section
                  1l.l(b), and may include in its usual reports the annual
                  amounts of royalties paid.





                                                                              13


         (e)      Late payments shall be subject to a charge of one and one-half
                  percent (1.5%) per month, or $250, whichever is greater.

5.5      In the event of acquisition, merger, change of corporate name, or
         change of make-up, organization, or identity, LICENSEE shall notify
         HARVARD in writing within [*** Redacted] days of such event.

5.6      If LICENSEE or any of its sublicensees does not qualify as a "small
         entity" as provided by the United States Patent and Trademark Office,
         LICENSEE must notify HARVARD immediately.

                                   ARTICLE VI
                                 RECORD KEEPING

6.1      LICENSEE shall keep accurate records (together with supporting
         documentation) of LICENSED PRODUCTS made, used or sold under this
         Agreement, sufficient to determine the amount of royalties due to
         HARVARD hereunder. Such records shall be retained for at least
         three (3) years following the end of the reporting period to which
         they relate. They shall be available during normal business hours for
         examination, upon HARVARD'S reasonable request, not more than once in
         any twelve (12) month period and upon at least twenty (20) days
         prior notice, by an independent accountant under a duty of
         confidentiality, selected by HARVARD and reasonably acceptable to
         LICENSEE, for the sole purpose of verifying reports and payments under
         Section 5.4. In conducting examinations pursuant to this Section,
         HARVARD'S accountant shall have access to records materially relevant
         to the calculation of royalties under Article IV.

6.2      HARVARD'S accountant shall only disclose to HARVARD whether the reports
         and payments of royalties hereunder are accurate, and the amount of the
         underreporting or underpayment of royalties by LICENSEE, if any.

6.3      Such examination by HARVARD'S accountant shall be at HARVARD'S expense,
         except that if such examination shows an underreporting or underpayment
         in excess of five percent (5%) for any twelve (12) month period, then
         LICENSEE shall pay the reasonable out-of-pocket cost of such
         examination as well as any additional sum that would have been payable
         to HARVARD had the LICENSEE reported correctly, plus interest on said
         sum at the rate of one and one-half percent (1.5%) per month.

                                   ARTICLE VII
               DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE

7.1      Upon execution of this Agreement, LICENSEE shall reimburse HARVARD for
         all reasonable expenses HARVARD has incurred for the preparation,
         filing, prosecution and


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                              14



         maintenance of PATENT RIGHTS. Thereafter, LICENSEE shall reimburse
         HARVARD for all such future expenses within [*** Redacted] days of
         receipt of invoices from HARVARD. Late payment of these invoices shall
         be subject to interest charges of one and one-half percent (1.5%) per
         month. HARVARD shall, in its sole discretion, be responsible for the
         preparation, filing, prosecution and maintenance of any and all patent
         applications and patents included in PATENT RIGHTS. HARVARD shall
         consult with LICENSEE as to the preparation, filing, prosecution and
         maintenance of such patent applications and patents and shall furnish
         to LICENSEE copies of documents relevant to any such preparation,
         filing, prosecution or maintenance.

         HARVARD shall be responsible for the preparation, filing, prosecution
         and maintenance of any and all patent applications and patents included
         in PATENT RIGHTS. HARVARD will instruct counsel to directly notify
         HARVARD and LICENSEE and provide them copies of any communications to
         and from the United States and foreign patent offices relating to said
         prosecution, and drafts of all communications to the various patent
         offices, and will instruct counsel to consider any comments on such
         drafts, so that LICENSEE will be informed and apprised of the
         continuing prosecution of patent applications in PATENT RIGHTS.
         LICENSEE shall have reasonable opportunity to participate in decision
         making on key decisions affecting filing, prosecution and maintenance
         of patents and patent applications in PATENT RIGHTS.

7.2      HARVARD and LICENSEE shall cooperate fully in the preparation, filing,
         prosecution and maintenance of PATENT RIGHTS and of all patents and
         patent applications licensed to LICENSEE hereunder, executing all
         papers and instruments or requiring members of HARVARD to execute such
         papers and instruments so as to enable HARVARD to apply for, to
         prosecute and to maintain patent applications and patents in HARVARD'S
         name in any country. Each party shall provide to the other
         prompt notice as to all matters which come to its attention and
         which may affect the preparation, filing, prosecution or maintenance of
         any such patent applications or patents. In particular, LICENSEE must
         immediately notify HARVARD if LICENSEE does not qualify as a "small
         entity" as provided by the United States Patent and Trademark Office.

7.3      LICENSEE may elect to surrender its rights to any patent or patent
         application within PATENT RIGHTS in any country upon sixty (60)
         days written notice to HARVARD. Such notice shall not relieve LICENSEE
         from responsibility to reimburse HARVARD for expenses under Section 7.1
         relating to the filing, prosecution or maintenance of such patent or
         patent application incurred prior to the receipt of the written notice
         by HARVARD (or a longer period if specified in LICENSEE'S notice).

                                  ARTICLE VIII
                                  INFRINGEMENT

8.1      With respect to any PATENT RIGHTS that have not been rendered
         non-exclusive under Section 3.2(d), LICENSEE shall have the right to
         enforce in its own name and at its own expense any patents within such
         PATENT RIGHTS. HARVARD agrees to notify


*** Confidential treatment requested pursuant to a request for confidential
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                                                                              15



         LICENSEE promptly of each infringement of such patents of which HARVARD
         is or becomes aware.

8.2      (a)      If LICENSEE elects to commence an action as described above,
                  HARVARD may, to the extent permitted by law, elect to join as
                  a party in that action. Regardless of whether HARVARD elects
                  to join as a party, HARVARD shall cooperate fully with
                  LICENSEE in connection with any such action, including making
                  available relevant personnel, information, records, papers,
                  samples, specimens and other similar materials for the
                  purposes of such action as reasonably requested by LICENSEE
                  through the Office of Technology and Trademark Licensing at
                  HARVARD.

         (b)      If HARVARD elects to join as a party pursuant to Subsection
                  (a), HARVARD shall jointly control the action with LICENSEE.

         (c)      LICENSEE shall reimburse HARVARD for any out-of-pocket costs
                  HARVARD reasonably incurs, including reasonable attorneys'
                  fees, as part of an action brought by LICENSEE under Section
                  8.1, whether or not HARVARD becomes a co-plaintiff.

8.3      If LICENSEE elects to commence an action as described above and desires
         that HARVARD be responsible for some of its expenses as described
         immediately below, LICENSEE shall explain its strategy to HARVARD in
         any detail requested by HARVARD. If HARVARD approves of said action in
         writing, LICENSEE may deduct from its royalty payments to HARVARD with
         respect to the patent(s) subject to suit an amount not exceeding fifty
         percent (50%) of LICENSEE'S expenses and costs of such action,
         including reasonable attorneys' fees and reimbursement of amounts under
         Section 8.2(c) above; provided, however, that such reduction shall not
         exceed fifty percent (50%) of the total royalty due to HARVARD with
         respect to the patent(s) subject to suit for each calendar year. If
         such fifty percent (50%) of LICENSEE's expenses and costs exceeds the
         amount of royalties deducted by LICENSEE for any calendar year,
         LICENSEE may to that extent reduce the royalties due to HARVARD from
         LICENSEE in succeeding calendar years, but never by more than fifty
         percent (50%) of the total royalty due in any one year with respect to
         the patent(s) subject to suit.

8.4      Neither party may enter into a settlement, consent judgment or other
         voluntary final disposition of any suit under Section 8.1, 8.6, 8.7 and
         8.8 without the prior written consent of the other party, which consent
         shall not be unreasonably withheld.

8.5      Recoveries or reimbursements from actions commenced pursuant to this
         Article shall first be applied to reimburse LICENSEE and HARVARD for
         litigation costs not paid from royalties deducted by LICENSEE pursuant
         to Section 8.3. Any remaining recoveries or reimbursements shall be
         shared as follows: if HARVARD approved of said action(s) as described
         in Paragraph 8.3, 80% to LICENSEE and 20% to HARVARD, if HARVARD did
         not approve of said action(s) then any remaining recoveries shall be
         treated as net sales and LICENSEE shall pay an earned royalty of [***
         Redacted]% to HARVARD.



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                                                                              16




8.6      If LICENSEE elects not to exercise its right to enforce the PATENT
         RIGHTS against any infringement pursuant to this Article, HARVARD may
         do so at its own expense, controlling such action and retaining all
         recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in
         connection with any such action.

8.7      Without limiting the generality of Section 8.6, HARVARD may, at its
         election and by notice to LICENSEE, establish a time limit of one-
         hundred and eighty days for LICENSEE to decide whether to enforce the
         PATENT RIGHTS against any infringement of which HARVARD is or becomes
         aware. If, by the end of such one-hundred and eighty day period,
         LICENSEE has not (a) commenced such an action; (b) taken reasonable
         efforts to settle such infringement; or (c) provided HARVARD with a
         written report that provides LICENSEE'S plans to commence such action
         or settle such infringement in the future and the reasons for any
         proposed delay in commensing such action or settling such infringment,
         which report must be approved by HARVARD, which approval will not
         unreasonably be denied or delayed and which approval shall not be
         construed as giving approval for Paragraph 8.3 purposes, HARVARD may
         enforce the PATENT RIGHTS against such an infringement at its own
         expense, controlling such action and retaining all recoveries
         therefrom. Notwithstanding sections 8.6 and 8.7, HARVARD shall not
         bring any action alleging the infringement of PATENT RIGHTS against any
         sublicensee of LICENSEE under PATENT RIGHTS, without the consent of
         LICENSEE.

8.8      If a declaratory judgment action is brought naming LICENSEE as a
         defendant and alleging invalidity of any of the PATENT RIGHTS, if both
         parties agree, HARVARD may take over the sole defense of the action at
         its own expense. LICENSEE shall cooperate fully with HARVARD in
         connection with any such action.

                                   ARTICLE IX
                            TERMINATION OF AGREEMENT

9.1      The effective date of this Agreement shall be the date that both
         parties have signed the Agreement. This Agreement, unless terminated as
         provided herein, shall remain in effect until the last patent or patent
         application in PATENT RIGHTS has expired or been abandoned.

9.2      HARVARD may terminate this Agreement as follows:

         (a)      If LICENSEE does not make a payment due hereunder and fails to
                  cure such nonpayment (including the payment of interest in
                  accordance with Section 5.4(e)) within forty-five days after
                  the date of notice in writing of such non-payment by HARVARD.
                  If LICENSEE disputes the amount of such non-payment in writing
                  within such forty-five day period, HARVARD shall not have the
                  right to terminate this Agreement until it has been determined
                  in an arbitration proceeding under Section 11.10 below that
                  LICENSEE has failed to pay amounts owed hereunder, in which
                  case LICENSEE shall pay HARVARD'S expenses for the




                                                                              17


                  arbitration, and thereafter Licensee does not cure such
                  failure within sixty (60) days after such determination. This
                  Section 9.2(a) shall not, however, suspend any obligation of
                  LICENSEE to compensate HARVARD for any undisputed amounts, as
                  provided for under any term of this Agreement, during the
                  pendency of the foregoing arbitration and cure period.

         (b)      If LICENSEE defaults in its obligations under Sections 11.2(c)
                  and 11.2(d) to procure and maintain insurance, and fails to
                  cure such breach within sixty (60) days after notice in
                  writing of such breach by HARVARD.

         (c)      If LICENSEE shall make an assignment for the benefit of
                  creditors, or shall have a petition in bankruptcy filed for or
                  against it, provided that such bankruptcy petition is not
                  dismissed within sixty (60) days after its filing. Such
                  termination shall be effective immediately upon HARVARD giving
                  written notice to LICENSEE.

         (d)      If LICENSEE is convicted of a felony within the United States
                  relating to the manufacture, use, or sale of LICENSED
                  PRODUCTS.

         (e)      Except as provided in Subsections (a), (b), (c), (d) above, if
                  LICENSEE materially breaches any obligations under this
                  Agreement and the breach has not been cured within ninety (90)
                  days after the date of notice in writing of such breach by
                  HARVARD. If LICENSEE disputes in writing that it has
                  materially breached this Agreement within such ninety (90) day
                  period, HARVARD shall not have the right to terminate this
                  Agreement until it has been determined in an arbitration
                  proceeding under Section 11.10 below that LICENSEE has
                  materially breached this Agreement, in which case LICENSEE
                  shall pay HARVARD'S expenses for the arbitration, and
                  thereafter Licensee does not cure such breach within sixty
                  (60) days after such determination. This Section 9.2(e) shall
                  not, however, suspend any obligation of LICENSEE to compensate
                  HARVARD for any undisputed amounts, as provided for under any
                  term of this Agreement, during the pendency of the foregoing
                  arbitration and cure period.

9.3      All sublicenses granted by LICENSEE under this Agreement in compliance
         with the terms and conditions hereof shall survive the termination of
         this Agreement upon the request of the party to whom such sublicense is
         granted, provided that such party agrees in writing that (i) it will
         pay all royalties or other amounts that otherwise would have been due
         thereafter under such sublicense directly to HARVARD rather than
         LICENSEE, and (ii) HARVARD shall not be held liable for the breach or
         the performance of any obligations stated in such sublicense unless
         such obligations have been expressly assumed in writing by HARVARD.

9.4      LICENSEE may terminate this Agreement by giving ninety (90) days
         advance written notice of termination to HARVARD. Upon termination,
         LICENSEE shall promptly submit a Royalty Report to HARVARD for the
         final reporting period and any royalty payments incurred during such
         reporting period, and any unreimbursed patent expenses





                                                                              18



         under Section 7 that have been invoiced by HARVARD, shall become
         immediately payable with such Royalty Report.

9.5      Articles I, VI, IX, X and XI (except for Section 11.7) of this
         Agreement shall survive termination. Article VIII shall survive with
         respect to any infringement of third parties and/or any lawsuits filed
         by or against LICENSEE, prior to the termination of this Agreement. In
         the event this Agreement is terminated for any reason, LICENSEE may,
         within six months after the effective date of such termination, sell
         or otherwise dispose of all LICENSED PRODUCTS that LICENSEE may have on
         hand on the effective date of such termination, and fulfill any
         contracts requiring the use of LICENSED PRODUCTS and/or LICENSED
         PROCESSES that LICENSEE may have entered into prior to the date of such
         termination, subject to LICENSEE'S payment of amounts due to HARVARD
         under Section 4.3 of this Agreement.

                                    ARTICLE X
                         REPRESENTATIONS AND WARRANTIES

10.1     Except for the rights, if any, of the Government of the United States,
         HARVARD represents and warrants that:

         (a)      HARVARD is the owner of the entire right, title and interest
                  in and to the PATENT RIGHTS as they exist on the Effective
                  Date;

         (b)      HARVARD has the right and authority to enter into this
                  Agreement and grant the rights and licenses set forth herein,
                  including without limitation under PATENT RIGHTS;

         (c)      HARVARD has not previously granted, and will not grant in the
                  future, any rights in the PATENT RIGHTS that are inconsistent
                  with the rights and licenses granted to LICENSEE herein;

         (d)      To the best knowledge of HARVARD without having made an
                  investigation, as of the Effective Date, practice of
                  inventions within the PATENT RIGHTS does not infringe any
                  patent rights, trade secrets or other proprietary rights of
                  any third party,

         (e)      To the best knowledge of HARVARD, as of the Effective Date,
                  HARVARD does not own any rights in any other patent or patent
                  application, the claims of which would dominate the claims of
                  a patent or patent application within the PATENT RIGHTS or any
                  practice of PATENT RIGHTS. If HARVARD owns, now or thereafter,
                  any such rights in such patents or patent applications on
                  which Dr. Lieber or Dr. Park is an inventor, HARVARD will
                  negotiate in good faith to the extent it has the legal right
                  to do so with LICENSEE to grant LICENSEE rights to the extent
                  sufficient to practice PATENT RIGHTS, and at commercially
                  reasonable royalties.

         (f)      To the best knowledge of HARVARD, all prior and current
                  agreements between HARVARD and other sponsors of research
                  under which HARVARD has obligations relating to PATENT RIGHTS
                  are listed on Appendix C.

                                                                              19



10.2     Except as set forth in this Agreement, HARVARD does not warrant the
         validity of the PATENT RIGHTS licensed hereunder and makes no
         representations whatsoever with regard to the scope of the licensed
         PATENT RIGHTS or that such PATENT RIGHTS may be exploited by LICENSEE,
         an AFFILIATE, or sublicensee without infringing other patents.

10.3     EXCEPT FOR THE WARRANTIES STATED IN THIS AGREEMENT, HARVARD EXPRESSLY
         DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO
         EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY
         PARTICULAR PURPOSE OF THE PATENT RIGHTS OR INFORMATION SUPPLIED BY
         HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS
         AGREEMENT.

                                   ARTICLE XI
                                     GENERAL

11.1     (a)      The parties may, from time to time, in connection with this
                  Agreement disclose to each other Confidential Information. Any
                  Confidential Information shall be in writing and marked
                  "confidential" and disclosed only to the Office of Technology
                  and Trademark Licensing. As used in this Agreement,
                  "Confidential Information" of a party shall mean (i) any
                  information disclosed in writing by such party to the other
                  party, which is marked by such party with the legend
                  "CONFIDENTIAL" or other similar legend sufficient to identify
                  the information as its confidential information, (ii) any
                  information disclosed orally by such party to the other party
                  which is identified as confidential at the time of disclosure
                  and is confirmed as confidential in writing within thirty (30)
                  days after such time of disclosure, or (iii) any information
                  deemed Confidential Information under the terms of this
                  Agreement. With respect to categories (i) and (ii) above,
                  "Confidential Information" shall not include any information
                  that is: (1) already known to the receiving party at the time
                  of disclosure hereunder, or (2) now or hereafter becomes
                  publicly known other than through acts or omissions of the
                  receiving party, or (3) is disclosed to the receiving party by
                  a third party under no obligation of confidentiality to the
                  disclosing party or (4) is independently developed by the
                  receiving party without use of the Confidential Information of
                  the disclosing party.

         (b)         Each party shall maintain in confidence, and shall not use
                  for any purpose or disclose to any third party, the
                  Confidential Information of the other party. Notwithstanding
                  the foregoing, the receiving party may use or disclose the
                  Confidential Information of the disclosing party (i) to the
                  extent necessary to exercise its rights or fulfill its
                  obligations and/or duties under this Agreement, and (ii) to
                  comply with applicable law or governmental regulations or
                  court order, provided that the receiving party will give
                  reasonable advance notice to the disclosing party, and will
                  use its reasonable efforts to minimize the disclosure of
                  Confidential Information and to secure confidential treatment
                  of any Confidential Information disclosed.

                                                                              20



         (c)      The royalty terms of this Agreement shall be deemed
                  "Confidential Information" of both parties. In addition to the
                  permissible disclosures set forth in subsection (b) above,
                  LICENSEE may disclose such terms in confidence to its
                  financial and legal advisors, consultants, potential or actual
                  investors, potential or actual merger or acquisition partners,
                  and others on a need-to-know basis.

11.2     (a)      LICENSEE shall indemnify, defend and hold harmless HARVARD and
                  its current or former and future directors, governing board
                  members, trustees, officers, faculty and employees
                  (collectively, the "INDEMNITEES"), from and against any claim,
                  lawsuit, cause of action , liability, cost, expense, damage,
                  deficiency, loss or obligation of any kind or nature
                  (including, without limitation, reasonable attorney's fees and
                  other costs and expenses of litigation) (collectively,
                  "Claims"), based upon, arising out of, or otherwise relating
                  to: LICENSEE'S or any sublicensee's performance of (or failure
                  to perform) any of its obligations under this Agreement or any
                  sublicense agreement, or the practice by LICENSEE or any
                  sublicensee of any right or license granted under this
                  Agreement or any sublicense agreement, or any product,
                  process, or service made, used or sold pursuant to any right
                  or license granted under this Agreement or any sublicense
                  agreement, including without limitation any Claim relating to
                  product liability (whether based on negligence or other tort,
                  warranty, strict liability, or any other theory), except to
                  the extent such Claims are directly attributable to
                  intentional misconduct of any INDEMNITEES. It shall be a
                  condition of the foregoing obligation that (i) LICENSEE
                  receives prompt notice of any such Claims; (ii) LICENSEE is
                  given the exclusive right to control the defense and
                  settlement of such Claims, provided that LICENSEE shall not
                  settle any such Claim without the prior written consent of
                  HARVARD, which consent shall not be unreasonably withheld; and
                  (iii) LICENSEE shall not be obligated to indemnify any
                  INDEMNITEE in connection with any settlement for any Claim
                  unless LICENSEE consents in writing to such settlement.

         (b)      LICENSEE shall, at its own expense, defend against any actions
                  brought or filed against any INDEMNITEE hereunder with respect
                  to the subject of indemnity contained herein, whether or not
                  such actions are rightfully brought.

         (c)      Beginning at the time any such product, process or service is
                  being commercially distributed or sold (other than for the
                  purpose of obtaining regulatory approvals) by LICENSEE or by a
                  SUBLICENSEE, AFFILIATE or agent of LICENSEE, LICENSEE shall,
                  at its sole cost and expense, procure and maintain commercial
                  general liability insurance in amounts not less than
                  $ [*** Redacted] per incident and $ [*** Redacted] annual
                  aggregate and naming the Indemnitees as additional insureds.
                  During clinical trials of any such product, process or
                  service, LICENSEE shall, at its sole cost and expense, procure
                  and maintain commercial general liability insurance in such
                  equal or lesser amount as HARVARD shall require, naming the
                  Indemnitees as additional insureds. Such commercial general
                  liability insurance shall provide: (i) product liability
                  coverage; and (ii) broad form contractual liability coverage
                  for LICENSEE'S indemnification under this Agreement. If
                  LICENSEE elects to self-insure all or part of the limits
                  described above (including deductibles or retentions



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                                                                              21



                  which are in excess of [*** Redacted] annual aggregate) such
                  self-insurance program must be acceptable to HARVARD and the
                  Risk Management Foundation of the Harvard Medical
                  Institutions, Inc. in their sole discretion. The minimum
                  amounts of insurance coverage required shall not be construed
                  to create a limit of LICENSEE'S liability with respect to its
                  indemnification under this Agreement.

         (d)      LICENSEE shall provide HARVARD with written evidence of such
                  insurance upon request of HARVARD. LICENSEE shall provide
                  HARVARD with written notice at least fifteen (15) days prior
                  to the cancellation, non-renewal or material change in such
                  insurance; if LICENSEE does not obtain replacement insurance
                  providing comparable coverage within such fifteen (15) day
                  period, HARVARD shall have the right to terminate this
                  Agreement in accordance with Section 9.2(b).

         (e)      LICENSEE shall maintain such commercial general liability
                  insurance beyond the expiration or termination of this
                  Agreement during: (i) the period that any product, process, or
                  service, relating to, or developed pursuant to, this Agreement
                  is being commercially distributed or sold by LICENSEE or by a
                  sublicensee, AFFILIATE or agent of LICENSEE; and (ii) a
                  reasonable period after the period referred to in Subsection
                  (e)(i) above which in no event shall be less than
                  fifteen (15) years.

11.3     Nothing in this Agreement shall be construed as conferring any right to
         use HARVARD's name or insignia, or any adaptation of them, or the name
         of any of HARVARD's inventors in any advertising, promotional or sales
         literature without the prior written approval of HARVARD, or the
         inventor in the case of the use of the name of an inventor.

11.4     Except as stated in this Section 11.4, without the prior written
         approval of HARVARD in each instance, neither this Agreement nor the
         rights granted hereunder shall be transferred or assigned in whole or
         in part by LICENSEE to any person whether voluntarily or involuntarily,
         by operation of law or otherwise. LICENSEE may transfer or assign this
         Agreement and all rights hereunder, upon notice to HARVARD but without
         its consent, to any entity that succeeds to all or substantially all of
         the business of LICENSEE to which this Agreements pertains, whether by
         merger, operation of law, purchase or sale of all or substantially all
         of LICENSEE's stock or assets or otherwise; provided that such assignee
         or transferee promptly agrees in writing to be bound by the terms and
         conditions of this Agreement. Subject to the foregoing, this Agreement
         shall be binding upon the respective successors, legal representatives
         and assignees of HARVARD and LICENSEE.

11.5     The interpretation and application of the provisions of this Agreement
         shall be governed by the laws of the Commonwealth of Massachusetts.

11.6     LICENSEE shall comply with all applicable laws and regulations. In
         particular, it is understood and acknowledged that the transfer of
         certain commodities and technical data is subject to United States laws
         and regulations controlling the export of such commodities and
         technical data, including all Export Administration Regulations of the
         United States Department of Commerce. These laws and regulations among
         other things, prohibit or require a license for the export of certain
         types of technical data to certain specified



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                                                                              22



         countries. LICENSEE hereby agrees and gives written assurance that it
         will comply with all United States laws and regulations controlling the
         export of commodities and technical data, that it will be solely
         responsible for any violation of such by LICENSEE or its AFFILIATES or
         sublicensees, and that it will defend and hold HARVARD harmless in the
         event of any legal action of any nature occasioned by such violation
         with respect to LICENSED PRODUCTS.

11.7     LICENSEE agrees: (i) to obtain all regulatory approvals required for
         the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES;
         and (ii) to mark LICENSED PRODUCTS with the numbers of the applicable
         patents within PATENT RIGHTS, to the extent required by law. LICENSEE
         also agrees to register or record this Agreement as is required by law
         or regulation in any country where the license is in effect, and
         HARVARD shall cooperate fully with LICENSEE in connection with any such
         registration or recordation.

11.8     Any notices to be given hereunder shall be sufficient if signed by the
         party (or party's attorney) giving same and either: (i) delivered in
         person; (ii) mailed certified mail return receipt requested; or (iii)
         faxed to other party if the sender has evidence of successful
         transmission and if the sender promptly sends the original by ordinary
         mail, in any event to the following addresses:

         If to LICENSEE:
           NanoSys, Inc.
           2625 Hanover Street
           Palo Alto, CA 94304
           Attn: Lawrence A. Bock
           Fax: 650-745-1273

         cc:      Wilson, Sonsini, Goodrich & Rosati
                  650 Page Mill Road
                  Palo Alto, California 94304
                  Attn: Michael J. O'Donnell, Esq.
                  Fax: 650/493-6811

         If to HARVARD:
                  Office for Technology and Trademark Licensing
                  Harvard University
                  Holyoke Center, Suite 727
                  1350 Massachusetts Avenue
                  Cambridge, MA 02138
                  Fax: (617) 495-9568

         By such notice either party may change their address for future
         notices.

                                                                              23



         Notices delivered in person shall be deemed given on the date
         delivered. Notices sent by fax shall be deemed given on the date faxed.
         Notices mailed shall be deemed given on the date postmarked on the
         envelope.

11.9     Should a court of competent jurisdiction later hold any provision of
         this Agreement to be invalid, illegal, or unenforceable, and such
         holding is not reversed on appeal, it shall be considered severed from
         this Agreement. All other provisions, rights and obligations shall
         continue without regard to the severed provision, provided that the
         remaining provisions of this Agreement are in accordance with the
         intention of the parties.

11.10    In the event of any controversy or claim arising out of or relating to
         any provision of this Agreement or the breach thereof, the parties
         shall try to settle such conflict amicably between themselves. Subject
         to the limitation stated in the final sentence of this Section, any
         such conflict which the parties are unable to resolve promptly shall be
         settled through arbitration conducted in accordance with the rules of
         the American Arbitration Association. The demand for arbitration shall
         be filed within a reasonable time after the controversy or claim has
         arisen, and in no event after the date upon which institution of legal
         proceedings based on such controversy or claim would be barred by the
         applicable statute of limitation. Such arbitration shall be held in
         Boston, Massachusetts. The award through arbitration shall be final and
         binding. Either party may enter any such award in a court having
         jurisdiction or may make application to such court for judicial
         acceptance of the award and an order of enforcement, as the case may
         be. Notwithstanding the foregoing, either party may, without recourse
         to arbitration, assert against the other party a third-party claim or
         cross-claim in any action brought by a third party, to which the
         subject matter of this Agreement may be relevant.

11.11    This Agreement constitutes the entire understanding between the parties
         and neither party shall be obligated by any condition or representation
         other than those expressly stated herein or as may be subsequently
         agreed to by the parties hereto in writing.

11.12    Nothing in this Agreement shall be deemed to prevent LICENSEE from
         commercializing products similar to or competitive with a LICENSED
         PRODUCT, so long as LICENSEE complies with its obligations under this
         Agreement.

11.13    The relationship between HARVARD and LICENSEE established by this
         Agreement is that of independent contractors. Nothing in this Agreement
         shall be construed to create any other relationship between HARVARD and
         LICENSEE. Neither party shall have any right, power or authority to
         assume, create or incur any expense, liability or obligation, express
         or implied, on behalf of the other.

11.14    In the event either party hereto is prevented from or delayed in the
         performance of any of its obligations hereunder by reason of acts of
         God, war, strikes, riots, storms, fires or any other cause whatsoever
         beyond the reasonable control of the party, the party so prevented or
         delayed shall be excused from the performance of any such obligation to
         the extent and during the period of such prevention or delay.


                                                                              24



11.15    NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY
         FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR INCIDENTAL DAMAGES
         (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE
         SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH
         CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE,
         EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE
         POSSIBILITY OR LIKELIHOOD OF SAME. For the avoidance of doubt, the
         parties acknowledge that the foregoing limitation of liability is not
         intended to apply to any of the following damages of HARVARD (and
         accordingly such damages shall be recoverable by HARVARD to the same
         extent they would be in the absence of that limitation): (i) amounts
         owed to HARVARD pursuant to the terms of this Agreement; (ii) amounts
         covered by LICENSEE's indemnity of Section 11.2; (iii) damages for
         infringement or violation of any patent, copyright, trademark, or other
         intellectual property right of HARVARD; and (iv) damages arising from
         the willful misconduct of LICENSEE.

11.16    HARVARD'S AGGREGATE LIABILITY FOR ALL DAMAGES OF ANY KIND RELATING TO
         THIS AGREEMENT OR ITS SUBJECT MATTER (WHETHER SUCH DAMAGES ARE BASED ON
         CONTRACT, TORT, INCLUDING NEGLIGENCE, OR OTHERWISE) SHALL NOT EXCEED
         THE AMOUNT PAID BY LICENSEE TO HARVARD UNDER THIS AGREEMENT.

11.17    This Agreement may be executed in counterparts, each of which shall be
         deemed an original, but both of which together shall constitute one and
         the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
         executed by their duly authorized representatives.

         PRESIDENT AND FELLOWS                                NANOSYS, INC

           OF HARVARD COLLEGE

          /s/  Joyce Brinton                             /s/ Calvin Chow
         ------------------------------------------      -----------------------
         Joyce Brinton, Director                               Signature
         Office for Technology and Trademark Licensing

                                                         Calvin Chow
                                                         -----------------------
                                                                  Name

                  4/15/03                                Chief Operating Officer
         ------------------------------                  -----------------------
                   Date                                          Title

                                                                4-25-03
                                                         -----------------------
                                                                  Date

                                                                              25



                                   APPENDIX A

The following comprise PATENT RIGHTS:

US Patent Applications 10/152,490, filed 5/20/02 and 10/196,337 filed 7/16/02, a
PCT application, PCT/US02/16133 filed 5/20/02 all entitled Nanoscale Wires and
Related Devices, Harvard Case #2058


                                                                              26



                                   APPENDIX B



CASE       LEAD INVENTOR                    TITLE                           AGENCY                    GRANT NUMBERS
- ---------------------------------------------------------------------------------------------------------------------
                                                                                         
2058      Lieber,Charles    Design and Hierarchical Assembly of       Office of Naval Research       N00014-01-1-0651
                            Nanotube-Based Moletronics
2058      Lieber,Charles    Nanostructured Functional and             Office of Naval Research       N00014-00-1-0476
                            Multifunctional Materials
2058      Lieber,Charles    Carbon Nanotube Molecular Electronics     Office of Naval Research       N00014-99-1-0495
2058      Lieber,Charles    Nanowire Thermoelectrics                  Office of Naval Research       N00014-98-1-0499
2058      Lieber,Charles    Organized Nanorod-Superconductor          Office of Naval Research       N00014-94-1-0302
                            Composites



                                                                              27


                                   APPENDIX C

            Exclusive License of Harvard Case 2058 to Nano Sys, Inc.

                                   ASSIGNMENT

         THIS ASSIGNMENT is made effective on 1st day of January, 2003 between:

         (1)      University of Southampton of University Road, Highfield,
Southampton 5017 IBJ, a legal body organised under the laws of England
(hereinafter the "Assignor") and

         (2)      PRESIDENT AND FELLOWS OF HARVARD COLLEGE, a nonprofit
Massachusetts educational corporation having offices at the Office for
Technology and Trademark Licensing, Holyoke Center, Suite 727,1350 Massachusetts
Avenue, Cambridge, Massachusetts 02138 (hereinafter the "Assignee").

         WHEREAS:

         (A)      The Assignor has ownership rights in the invention of U.S.
Patent Application serial number 10/152,490, and corresponding International
Patent Application Serial No. PCT/US02/16133, both entitled "Nanoscale Wires and
Related Devices", both filed May 21, 2002, which carry the internal Assignee
case number designation of 2058 and the internal Assignor case number
designation of 2519 (hereinafter "the Patent Applications"), by virtue of the
contract of employment of David C. Smith with the Assignor; and

         (B)      The Assignor wishes to assign its ownership rights in the
invention including the Patent Applications to the Assignee.

         NOW THIS ASSIGNMENT WITNESSETH:

         In consideration of the sum of one pound sterling and other good and
valuable consideration the receipt of which the Assignor hereby acknowledges the
Assignor


hereby assigns and conveys unto the Assignee absolutely the invention and the
Patent Applications thereto together with all right, title and interest in and
to said applications and in and to any continuations, divisionals,
continuation-in-part patent applications (to the extent a person under an
obligation to assign patent rights to the Assignee and David C. Smith are both
properly named inventors, based on U.S. patent law) and patents which issue on
said applications including patents of reissue or re-examination, worldwide,
together with all rights of action powers and benefits belonging or accrued to
the same including the right to claim priority under the Paris Convention.

         IN WITNESS WHEREOF the parties have executed and delivered these
presents in the United Kingdom:

EXECUTED by The University of Southampton.

in accordance with its charter of incorporation:

/s/ Dr. Peter Hooper                                    19, Dec. 2002
- --------------------                          ----------------------------------
Dr. Peter Hooper                                            Date
Deputy Director, Centre for Enterprise and Innovation

EXECUTED by the PRESIDENT AND FELLOWS OF HARVARD COLLEGE.
in accordance with the laws of its incorporation:

/s/ Joyce Brinton                                          1/6/03
- -----------------------                       ----------------------------------
Joyce Brinton                                               Date
Director of the Office for Technology and Trademark Licensing
Harvard University

EX-10.8

                                                                    EXHIBIT 10.8

                                LICENSE AGREEMENT

                                       FOR

                             NANOCRYSTAL TECHNOLOGY

                                    BETWEEN

                                 NANOSYS, INC.

                                       AND

                  THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

                                   THROUGH THE

                             ERNEST ORLANDO LAWRENCE
                          BERKELEY NATIONAL LABORATORY



                                TABLE OF CONTENTS

                                                                                 
1.    Background.............................................................        1
2.    Definitions............................................................        1
3.    License Grant..........................................................        3
4.    License Issue Fee......................................................        4
5.    Milestone Fee..........................................................        4
6.    Royalties and Payments.................................................        4
7.    Performance Requirements...............................................        6
8.    Progress and Royalty Reports...........................................        7
9.    Books and Records......................................................        8
10.   Life of the Agreement..................................................        8
11.   Termination by Berkeley Lab............................................        9
12.   Termination by Licensee................................................        9
13.   Disposition of Licensed Products upon Termination......................        9
14.   Use Of Names and Nondisclosure of Agreement............................        9
15.   Limited Warranty.......................................................       10
16.   Patenting and foreign rights...........................................       11
17.   Patent Infringement....................................................       12
18.   Waiver.................................................................       12
19.   Assignment.............................................................       13
20.   Indemnification........................................................       13
21.   Late Payments..........................................................       14
22.   Notices................................................................       14
23.   U.S. Manufacture.......................................................       15
24.   Patent Marking.........................................................       15
25.   Government Approval or Registration....................................       15
26.   Export Control Laws....................................................       15
27.   Force Majeure..........................................................       15
28.   Miscellaneous..........................................................       15

Exhibit 1 Licensed (Exclusive) Patents.......................................       17
Exhibit 2 Licensed (FOU Exclusive) Patents...................................       18





                              LICENSE AGREEMENT FOR
                             NANOCRYSTAL TECHNOLOGY

This license agreement (the "Agreement") is entered into by The Regents of the
University of California, Department of Energy contract-operators of the Ernest
Orlando Lawrence Berkeley National Laboratory, 1 Cyclotron Road, Berkeley, CA
94720, ("Berkeley Lab"), and Nanosys, Inc., a Delaware corporation ("Licensee")
having its principal place of business at 2625 Hanover St., Palo Alto, CA 94304.

                                  1. BACKGROUND

1.1.     Certain inventions, generally characterized as nanocrystals and related
         technology and covered by the Berkeley Lab cases listed herein, (the
         "Invention"), were made in the course of research at Berkeley Lab by
         Dr. Paul Alivisatos and colleagues under Berkeley Lab's contract with
         the United States Department of Energy ("DOE").

1.2.     As DOE sponsored development of the Invention, this Agreement and the
         resulting license are subject to overriding obligations to the federal
         government pursuant to the provisions of the applicable law or
         regulations.

1.3.     Berkeley Lab wants the Invention developed and used to the fullest
         extent so that the general public enjoys the benefits of the
         government-sponsored research.

1.4.     Licensee wants to obtain certain rights from Berkeley Lab for the
         commercial development, manufacture, use, and sale of the Invention.

1.5.     Licensee is a "small business concern" as defined at Section 2 of
         Public Law 85-536 (15 U.S.C. 632).

Therefore the parties agree as follows:

                                 2. DEFINITIONS

2.1.     "Effective Date" means November 9, 2002.

2.2.     "Field of Use" means all uses of the Licensed Patents, except the
         following, which are specifically excluded: the use of the Licensed
         Patents for [*** Redacted], [*** Redacted], [*** Redacted] and [***
         Redacted] for plant, animal, and human [*** Redacted] including,
         without limitation, [*** Redacted], [*** Redacted]. Licensee
         acknowledges that a third party has rights encompassing the exclusions
         to the Field of Use and in no event may a Field of Use under Licensed
         (FOU Exclusive) Patents be construed as covering the excluded fields.

2.3.     "Highly Inflationary Currency" means the currency of any economy with a
         cumulative inflation rate of 100% or more over the most recent three
         calendar years, as measured by consumer price indices published by the
         International Monetary Fund (International Financial Statistics),
         Washington, D.C.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



                                    1 of 19


2.4.     "Licensed (Exclusive) Patents" means Berkeley Lab's interest in any
         subject matter claimed in or covered by any of the patents or patent
         applications listed in Exhibit 1.

2.5.     "Licensed (FOU Exclusive) Patents" means Berkeley Lab's interest in any
         subject matter claimed in or covered by any of the patents or patent
         applications listed in Exhibit 2.

2.6.     "Licensed Patents" means Berkeley Lab's interest in any subject matter
         claimed in or covered by any of the patents or patent applications
         listed in Exhibits 1 or Exhibit 2, and any additional corresponding
         foreign patent application or patent for which Licensee has met the
         requirements of paragraph 16.4; any division, reexamination,
         continuation, continuation-in-part (excluding new matter contained and
         claimed in that continuation-in-part), or other application that is a
         successor to any of the foregoing applications; any patents issuing on
         any of the foregoing; and all renewals, reissues and extensions
         thereof.

2.7.     "Licensed Product" means any product, service or process that employs
         or is produced by the practice of any invention claimed in any of
         Licensed Patents or whose manufacture, use, practice, sale, offer for
         sale, or importation would constitute, but for the license Berkeley Lab
         grants to Licensee under this Agreement, an infringement of any Valid
         Claim in Licensed Patents.

2.8.     "Selling Price" for the purpose of computing royalties means the price
         at which Licensee or its sublicensee sells a Licensed Product in an
         arms-length transaction. When a Licensed Product is not sold, but is
         otherwise disposed of, the Selling Price of that Licensed Product for
         the purpose of computing royalties is the selling price at which
         products of similar kind and quality, sold in similar quantities, are
         [*** Redacted]. When such products are not [*** Redacted], the Selling
         Price of a Licensed Product otherwise transferred, for the purpose of
         computing royalties, is the [*** Redacted] at which products of similar
         kind and quality, sold in similar quantities, are then currently being
         offered for sale [*** Redacted]. When such products are not currently
         sold or offered for sale by Licensee or others, then the Selling Price,
         for the purpose of computing royalties, shall be negotiated by the
         parties in good faith based on the [*** Redacted].

2.9.     "Sublicensing Income" means amounts received by Licensee from a
         non-affiliate third party in consideration for the right to make,
         use, offer for sale, sell, or import Licensed Products, including
         without limitation amounts received by way of license issue fees,
         milestone payments, minimum annual royalties and royalties on the sale
         or distribution of such Licensed Products. Notwithstanding the
         foregoing, Sublicensing Income shall not include the following:

         2.9.1.   income received by Licensee as reimbursement for Licensee's
                  actual and reasonable [*** Redacted] as set forth in a written
                  [*** Redacted] agreement between Licensee and its sublicensee;
                  amounts received for services or products (provided, however,
                  that Licensee sales of Licensed Product to a sublicensee is
                  subject to the royalty provision of paragraph 6.1);

         2.9.2.   the fair market value of sales of [*** Redacted] sold by
                  Licensee to a sublicensee;

         2.9.3.   amounts in consideration for [*** Redacted] or other
                  [*** Redacted] other than that covered in the [*** Redacted];
                  or

         2.9.4    amounts in consideration for the sale of all or [*** Redacted]
                  or otherwise.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                    2 of 19



2.10.    "Valid Claim" means a claim within (a) an issued, unexpired patent that
         Berkeley Lab has not disclaimed or otherwise admitted to the relevant
         patent office or court to be invalid or otherwise unenforceable, and
         has not been held invalid by a court of competent jurisdiction from
         which no appeal has been or can be taken or (b) a patent application
         that has not been pending more than 5 years, provided that Berkeley Lab
         is pursuing such claim in a good faith belief in its patentability and
         enforceability upon issuance of a patent containing such claim.

                                3. LICENSE GRANT

3.1.     Subject to the limitations set forth in this Agreement, Berkeley Lab
         grants to Licensee nontransferable, royalty-bearing licenses, under
         Licensed Patents to make, have made, use, offer for sale, sell, and
         import Licensed Products as follows:

         3.1.1.   limited exclusive for Licensed (Exclusive) Patents; and

         3.1.2.   limited exclusive and solely within the Field of Use for
                  Licensed (FOU Exclusive) Patents.

3.2.     Any license under this Agreement is subject to the following: (a) DOE's
         royalty-free license for federal government purposes only, and (b)
         DOE's option to grant licenses either if reasonable steps to
         commercialize the Invention are not carried out or in order to meet
         federal regulations.

3.3.     Berkeley Lab also grants to Licensee the right to issue, royalty-
         bearing sublicenses only in the Field of Use to make, have made,
         use, offer for sale, sell, and import Licensed Products, so long as
         Licensee has current exclusive rights in the Field of Use for all
         Licensed Patents covered by the sublicense.

3.4.     Any sublicense Licensee grants must be consistent with all the rights
         and obligations due Berkeley Lab and the United States Government under
         this Agreement, including, without limitation, the license back to the
         United States Government.

3.5.     Licensee shall provide Berkeley Lab with a copy of each sublicense
         issued under this Agreement; collect payment of all royalties and
         payments due Berkeley Lab from sublicenses; and summarize and deliver
         all reports due Berkeley Lab from sublicenses under Article 8 (PROGRESS
         AND ROYALTY REPORTS). Sublicenses provided to Berkeley Lab under this
         section may be provided in redacted form, provided that such redacted
         sublicenses contain all terms necessary for Berkeley Lab to determine
         Licensee's compliance with the obligations of this Agreement; and
         provided further that upon request, Berkeley Lab's representatives can
         review the sublicenses in their entirety at Licensee's facility.

3.6.     If this Agreement terminates for any reason, Licensee will assign to
         Berkeley Lab, and Berkeley Lab will honor any sublicenses granted
         hereunder, to the extent that Berkeley Lab's duties under such
         sublicenses are no greater than those arising under this Agreement.

3.7.     Berkeley Lab expressly reserves the right to use the Invention and
         associated technology for educational and research purposes.

                                    3 of 19


                              4. LICENSE ISSUE FEE

4.1.     Licensee shall pay Berkeley Lab a license issue fee of [*** Redacted].
         This license issue fee accrues on the Effective Date, and Licensee
         shall pay [*** Redacted] of this fee within 30 days of the Effective
         Date and [*** Redacted] within twelve months of the Effective Date.

4.2.     This fee is [*** Redacted] and is [*** Redacted].

                              5. MILESTONE FEE

5.1.     Following an initial public offering or series of public offerings of
         Licensee securities which raises in the aggregate at least $5 million
         or sale of all or substantially all of the assets or equity of Licensee
         in a transaction(s) worth at least $5 million ("Offering"), Licensee
         shall pay to Berkeley Lab the equivalent of the price at the Offering
         of 60,000 shares of Licensee's common stock. Such payments shall be
         made in installments with one-third payable 9 months from the Offering,
         one-third payable 18 months from the Offering and one-third payable 26
         months from the Offering. Such payments shall include interest from the
         date of the Offering to the date such payment is made. Interest shall
         be compounded on the date such payment is made, and shall be charged
         at the prime lending rate as published in the Wall Street Journal on
         the date such payment is made. Licensee shall adjust the 60,000 shares
         to take into account any stock splits or reverse stock splits since the
         Effective Date.

                              6. ROYALTIES AND PAYMENTS

6.1.     Licensee shall pay to Berkeley Lab an earned royalty of [*** Redacted]%
         of the Selling Price of each Licensed Product. In no event shall
         more than one royalty apply to the sale of any given Licensed Product,
         regardless of the number of Licensed Patents embodied therein.

6.2.     Under this Agreement a Licensed Product is considered as sold when
         invoiced, or if not invoiced, when delivered to a third party. But when
         the last patent covering a Licensed Product expires or when the license
         terminates, any shipment made on or before the day of that expiration
         or termination that has not been billed out before is considered as
         sold (and therefore subject to royalty). Berkeley Lab shall credit
         royalties that Licensee pays on a Licensed Product that the customer
         does not accept.

6.3.     If a Licensed Product is sold as a combination product containing both
         the Licensed Product and one or more other components that Licensee
         customarily sells separately, Selling Price is calculated by
         multiplying the [*** Redacted] by the fraction [*** Redacted]
         where A is the [*** Redacted] of the Licensed Product sold separately
         by Licensee and B is the [*** Redacted] of the combination products
         sold separately by Licensee during the relevant royalty payment period.

6.4.     If Licensee obtains a license from a third party(s) to a patent that
         must otherwise be infringed by Licensee in order to make the Licensed
         Products (" Third Party Patent") then Licensee may reduce the
         [*** Redacted] royalty rate specified in paragraph 6.1 by an amount
         equal to [*** Redacted] of the royalty Licensee pays the licensor of
         such Third Party Patent, provided, however, in no case shall the
         royalty rate paid to Berkeley Lab for Licensed Products be less than
         [*** Redacted].

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                    4 of 19

6.5.     For each sublicense, Licensee shall pay Berkeley Lab [*** Redacted]%
         of Sublicensing Income. If Sublicensing Income arises under an
         agreement in which both a Licensed Patent and one or more other patent,
         patent application or copyrighted software program are licensed to a
         third party by the Licensee, then the Licensee shall in good faith
         allocate its total compensation under such agreement to either the
         Licensed Patents or the other patent, patent application or copyrighted
         software, and such portion allocated to the Licensed Patent(s) shall
         constitute the Sublicensing Income; provided, however, that Licensee
         shall (i) promptly notify Berkeley Lab of any such agreement for which
         it intends to apportion the income; (ii) provide Berkeley Lab with a
         copy of that agreement (if it has not already done so pursuant to
         paragraph 3.5) together with a written report explaining its
         apportionment for the Sublicensing Income; (iii) consider and respond
         in good faith to Berkeley Lab's comments on the apportionment; and (iv)
         pay Berkeley Lab no less than [*** Redacted]% of the total amounts
         received by Licensee from the third party in consideration for a
         sublicense for Licensed Patents.

6.6.     Licensee shall pay to Berkeley Lab by August 31 of each year the
         difference between the earned royalties for that calendar year Licensee
         has already paid to Berkeley Lab and the minimum annual royalty set
         forth in the following schedule. Berkeley Lab shall credit that minimum
         annual royalty paid against the earned royalty due and owing for the
         calendar year in which Licensee made the minimum payment.



Calendar Year                      Minimum Annual Royalty
- -------------                      ----------------------
                                
2002                                      $ [*** Redacted]
2003                                      $ [*** Redacted]
2004                                      $ [*** Redacted]
2005                                      $ [*** Redacted]
2006                                      $ [*** Redacted]
2007                                      $ [*** Redacted]
2008                                      $ [*** Redacted]
2009 and each year thereafter             $ [*** Redacted]


6.7.     Licensee shall send payment for royalties accruing to Berkeley Lab
         quarterly together with its royalty report under paragraph 8.3.

6.8.     Licensee shall make checks payable to "The Regents of the University of
         California (Berkeley Lab/L-02-1364)." Licensee shall pay Berkeley Lab
         only in United States dollars. If a Licensed Product is sold for
         currency other than United States dollars (not including Highly
         Inflationary Currency), Licensee shall first determine the earned
         royalties in the foreign currency of the country in which the
         Licensed Product was sold and then convert them into equivalent United
         States dollars at the closing exchange rate published by The Wall
         Street Journal on the last business day of the reporting period. If a
         Licensed Product is sold for a Highly Inflationary Currency, Licensee
         shall convert the sales subject to royalties into equivalent United
         States funds using the closing exchange rates in effect on the date of
         invoicing (or if no invoicing, of delivery) as published by The Wall
         Street Journal. Licensee shall quote the exchange rate in the
         Continental method (local currency per U.S. dollar).

6.9.     Licensee may not reduce royalties payable by any taxes, fees, other
         charges imposed on the remittance of royalty income. Licensee is also
         responsible for all bank transfer charges.

6.10.    If Licensee cannot promptly remit any royalties for sales in any
         country where a Licensed Product is sold because of legal restrictions,
         upon notice to Berkeley Lab, Licensee may deposit in United States
         funds royalties due Berkeley Lab to Berkely Lab's account in a bank or
         other depository in that country. If Licensee is not permitted to
         deposit those payments

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                    5 of 19


         in U.S. funds under the laws of that country, Licensee may deposit
         those payments in the local currency to Berkeley Lab's account in a
         bank or other depository in that country.

6.11.    If a court of competent jurisdiction and last resort holds invalid any
         patent or any of the patent claims within Licensed Patent in a final
         decision from which no appeal has or can be taken, Licensee's
         obligation to pay royalties based on that patent or claim will cease as
         of the date of that final decision. Licensee, however, shall pay any
         royalties that accrued before that decision or that are based on
         another patent or claim not involved in that decision.

6.12.    Licensee has no duty to pay Berkeley Lab royalties under this Agreement
         on a Licensed Product Licensee sells to the United States Government
         including any United States Government agency. Licensee shall reduce
         the amount charged for a Licensed Product sold to the United States
         Government by an amount equal to the royalty otherwise due Berkeley
         Lab.

                          7. PERFORMANCE REQUIREMENTS

7.1.     Licensee shall diligently proceed with the development, manufacture and
         sale of Licensed Products and shall diligently endeavor to market them
         within a reasonable time after the Effective Date in quantities
         sufficient to meet the market demand.

7.2.     Licensee shall make best efforts to obtain all necessary governmental
         approvals for the manufacture, use and sale of Licensed Products.

7.3.     Licensee is entitled to exercise prudent and reasonable business
         judgment in meeting its performance requirements under this Agreement.

7.4.     If Licensee is unable to perform any of the following, then Berkeley
         Lab may either terminate this Agreement or reduce a limited exclusive
         license to a nonexclusive license.

         7.4.1.   by 18 months from the Effective Date, develop a process for
                  the synthesis of nanodots and/or nanorods for prototype
                  development; such [*** Redacted] must be at research
                  quantities sufficient for prototype development of the
                  Licensed Product(s) specified in the Licensee's progress
                  reports submitted pursuant to paragraph 8.1, with [***
                  Redacted], yielding material with [*** Redacted] and [***
                  Redacted] of [*** Redacted];

         7.4.2.   by 18 months from the Effective Date, develop application
                  specific [*** Redacted] procedures for these materials,
                  including [*** Redacted] with [*** Redacted], [*** Redacted],
                  and [*** Redacted] and [*** Redacted];

         7.4.3.   by 24 months from the Effective Date, develop [*** Redacted],
                  which includes at least [*** Redacted], or equivalent, e.g.,
                  [*** Redacted], [*** Redacted] etc., of [*** Redacted]
                  containing [*** Redacted] and/or [*** Redacted] with [***
                  Redacted] and [*** Redacted] and [*** Redacted];

         7.4.4.   by 30 months from the Effective Date, perform and deliver to
                  Berkeley Lab a market assessment of major benefits of Licensed
                  Product materials versus existing commercial approaches;

         7.4.5.   by 30 months from the Effective Date, develop a [*** Redacted]
                  for either [*** Redacted] or [*** Redacted] of amounts of
                  nanorods and/or nanodots that are consistent with the Licensed
                  Products identified as initial products by the market
                  assessment provided under paragraph 7.4.4;


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                    6 of 19


         7.4.6.   by 36 months from the Effective Date, develop initial
                  prototypes demonstrating commercially useful functionality of
                  nanorods and/or nanodots in Licensed Products, for example,
                  [*** Redacted] and [*** Redacted] and related devices; for
                  [*** Redacted], prototype devices with [*** Redacted] with
                  [*** Redacted]; for [*** Redacted], [*** Redacted];

         7.4.7.   by 36 months from the Effective Date, develop and provide
                  to Berkeley Lab a technical and commercialization plan for
                  applications in [*** Redacted], for example, [*** Redacted]
                  and [*** Redacted];

         7.4.8.   by 48 months from the Effective Date, enter into a letter
                  of intent or other contract with an appropriate
                  commercialization partner for Licensed Products;

         7.4.9.   by 56 months from the Effective Date, make commercial
                  sales of Licensed Product; or

         7.4.10.  at any time during the exclusive period of this Agreement,
                  reasonably fill the market demand for Licensed Products
                  following commencement of commercial sales

7.5.     Prior to termination of this Agreement or reduction of a limited
         exclusive license to a nonexclusive license for failure to meet any of
         the performance requirements set forth in paragraphs 7.4.1-7.4.10, or
         as mutually agreed upon, Licensee and Berkeley Lab shall meet within
         30 days of Licensee's request to discuss Licensee's past and planned
         efforts to meet such performance requirements. That meeting shall take
         place at Berkeley Lab or other mutually agreed location, and shall only
         be required if Licensee makes that request within 21 days of Berkeley
         Lab's notice of termination or reduction to nonexclusive license. To
         the extent that Licensee demonstrates it has made reasonable efforts to
         meet such performance requirements, and by mutual written consent, the
         parties shall amend or extend the requirements of paragraphs 7.4.1
         -7.4.10 at the written request of Licensee in response to legitimate
         business or technical reasons.

                         8. PROGRESS AND ROYALTY REPORTS

8.1.     Beginning May 31, 2003 and semiannually thereafter, Licensee shall
         submit to Berkley Lab a progress report covering Licensee's activities
         related to the development and testing of all Licensed Products and the
         obtaining of the governmental approvals necessary for marketing.
         Licensee shall make these progress reports until commercial sales of
         the Licensed Product start.

8.2.     The progress reports Licensee submits under paragraph 8.1 must include,
         but not be limited to, the following topics:

         8.2.1.   summary of work completed related to the requirements of
                  paragraph 7.4;

         8.2.2.   key scientific discoveries;

         8.2.3.   summary of work in progress;

         8.2.4.   current schedule of anticipated milestones; and

         8.2.5.   market plans for introduction of Licensed Products; and

         8.2.6.   number of full-time equivalent employees or agents (FTEs)
                  working on the development of Licensed Products and overall
                  number of FTEs employed by Licensee.

8.3.     Upon the earlier of four years after the Effective Date or after
         the first commercial sale of a Licensed Product anywhere in the world,
         Licensee shall make quarterly royalty reports to Berkeley Lab on
         or before February 28, May 31, August 31 and November 30 of each year.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                    7 of 19

         Each royalty report must cover the most recently completed
         calendar quarter and must show for all sales (or other transfer in
         accordance with paragraph 2.8):

         8.3.1.   the Selling Price of each type of Licensed Product sold by
                  Licensee;

         8.3.2.   the number of each type of Licensed Product sold;

         8.3.3.   the royalties, in U.S. dollars, payable under this
                  Agreement on those sales;

         8.3.4.   the exchange rates used in calculating the royalty due;

         8.3.5.   the royalties on government sales that otherwise would have
                  been due under paragraph 6.12; and

         8.3.5.   for each sublicense, if any:

                  (1)      the sublicensee;

                  (2)      the information set forth in paragraphs 8.3.1 to
                           8.3.5 for that sublicensee's sales or other
                           disposition of Licensed Product.

8.4.     If no sales of Licensed Products have been made during any required
         reporting period, Licensee shall make a statement to this effect.

                              9. BOOKS AND RECORDS

9.1.     Licensee shall keep books and records accurately showing all Licensed
         Products manufactured, used, sold, imported or otherwise disposed of
         under the terms of this Agreement. Licensee shall preserve those books
         and records for at least five years, from the date of the royalty
         payment to which they pertain and shall open them to inspection by
         representatives or agents of Berkeley Lab at reasonable times.

9.2.     Berkeley Lab shall bear the fees and expenses of Berkeley Lab's
         representatives performing the examination of the books and records.
         But if the representatives discover an error in underpaying royalties
         to Berkeley Lab of more than 5% of the total royalties due for any
         year, then Licensee shall bear the fees and expenses of these
         representatives and the difference between the earned royalties and the
         reported royalties (which shall be subject to the provisions of Article
         21 (LATE PAYMENTS)).

                            10. LIFE OF THE AGREEMENT

10.1.    Unless otherwise terminated by operation of law or by acts of the
         parties in accordance with the terms of this Agreement, this Agreement
         is in force from the Effective Date and expires concurrently with the
         last-to-expire issued Licensed Patent.

10.2.    Any termination of this Agreement shall not affect the rights and
         obligations set forth in the following Articles:

         Article 9         Books and Records

         Article 13        Disposition of Licensed Products on Hand upon
                           Termination

         Article 14        Use of Names and Trademarks and Confidentiality

         Article 15        Limited Warranty

         Article 20        Indemnification

         Article 26        Export Control Laws


                                     8 of 19


10.3.    Termination does not affect in any manner any rights of Berkeley Lab
         arising under this Agreement before the termination.

                         11. TERMINATION BY BERKELEY LAB

11.1.    Subject to paragraph 7.5, if Licensee violates or fails to perform any
         material term of this Agreement, then Berkeley Lab may give written
         notice of such default ("Default Notice") to Licensee. If Licensee
         fails to cure that default and provide Berkeley Lab with reasonable
         evidence of the cure within 60 days of the Default Notice, Berkeley Lab
         may terminate this Agreement and the licenses granted by a second
         written notice ("Termination Notice") to Licensee. If Berkeley Lab
         sends a Termination Notice to Licensee, this Agreement automatically
         terminates on the effective date of the Termination Notice.

                           12. TERMINATION BY LICENSEE

12.1.    Licensee at any time may terminate this Agreement in whole or as to any
         portion of Licensed Patents by giving written notice to Berkeley Lab.
         Licensee's termination notice must indicate whether Licensee has any
         inventory of Licensed Products. Licensee's termination of this
         Agreement will be effective 90 days after its notice.

              13. DISPOSITION OF LICENSED PRODUCTS UPON TERMINATION

13.1.    Within 45 days of termination of this Agreement for any reason,
         Licensee shall provide Berkeley Lab with a written inventory of all
         Licensed Products in process of manufacture or in stock. Licensee shall
         dispose of those Licensed Products within 20 days of termination. The
         sale of any Licensed Product within the 20 days is subject to the terms
         of this Agreement.

                      14. USE OF NAMES AND CONFIDENTIALITY

14.1.    In accordance with California Education Code Section 92000, Licensee
         shall not use in advertising, publicity or other promotional activities
         any name, trade name, trademark, or other designation of the University
         of California, nor shall Licensee so use "Ernest Orlando Lawrence
         Berkeley National Laboratory" or "Department of Energy" (including any
         contraction, abbreviation, or simulation of any of the foregoing)
         without Berkeley Lab's prior written consent.

14.2.    Neither party may disclose the terms of this Agreement to a third party
         without express written permission of the other party, except when
         required under either the California Public Records Act or other
         applicable law or court order. Notwithstanding the foregoing,
         disclosures of the terms of this Agreement are permitted as follows:

         14.2.1.  as necessary for Licensee to secure financing through private
                  markets, engage in corporate partnership discussions, or
                  comply with applicable accounting requirements, or securities
                  laws or regulations, Licensee may disclose the terms of this
                  Agreement under a written confidentiality agreement with terms
                  as protective as those of this Article 14;

         14.2.2.  as necessary for Licensee to publicly disclose terms of this
                  Agreement in conjunction with a public financing or to comply
                  with applicable securities laws or regula-

                                    9 of 19


                  tions, after Licensee has provided Berkeley Lab with notice of
                  such disclosure with sufficient opportunity to seek redaction
                  of certain terms of the Agreement; and

         14.2.3.  Berkeley Lab may disclose the existence of this Agreement and
                  the extent of the grant in Article 3 (License Grant), but
                  shall not otherwise disclose the terms of this Agreement,
                  except to the DOE.

14.3     All information provided to Berkeley Lab by Licensee under this
         agreement, including but not limited to information listed in Section
         7.4 of this Agreement, e.g., sublicense agreements, technical reports,
         development plans, marketing evaluations and reports, and royalty
         reports, is deemed to be Confidential Information.

         14.3.1   Berkeley Lab will maintain the confidentiality of the
                  Confidential Information and will not disclose the
                  Confidential Information to any third party, and will not use
                  the Confidential Information for any purpose other than as
                  necessary to administer this Agreement.

         14.3.2   The obligations of Berkeley Lab with respect to Confidential
                  Information will not apply to information disclosed under this
                  agreement to the extent such information:

         (a)      is generally known to the public at the time of disclosure or
                  becomes generally known through no wrongful act on the part of
                  Berkeley Lab;

         (b)      is in Berkeley Lab's possession at the time of disclosure
                  other than as a result of prior disclosure by Licensee or a
                  breach of any legal obligation by Berkeley Lab or a third
                  party;

         (c)      becomes known to Berkeley Lab through disclosure by sources
                  other than Licensee having no duty of confidentiality to
                  Licensee, whether direct or indirect, with respect to such
                  information and having the legal right to disclose such
                  information;

         (d)      is independently developed by Berkeley Lab without reference
                  to or reliance upon the information as can be documented by
                  written records; or

         (e)      is required to be disclosed by Berkeley Lab to comply with
                  applicable laws or governmental regulations, provided that the
                  Berkeley Lab provides prior written notice of such disclosure
                  to the Licensee and takes reasonable and lawful actions to
                  avoid and/or minimize the extent of such disclosure.

         14.3.3   The provisions of this Article 14 relating to confidentiality
                  shall be in force and effect until at least 5 years following
                  the termination of this Agreement.

                              15. LIMITED WARRANTY

15.1.    Berkeley Lab warrants to Licensee that it has the lawful right to grant
         this license.

15.2.    This license and the associated Invention are provided WITHOUT WARRANTY
         OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
         WARRANTY, EXPRESS OR IMPLIED. BERKELEY LAB MAKES NO REPRESENTATION
         OR WARRANTY THAT LICENSED PRODUCTS WILL NOT INFRINGE ANY PATENT OR
         OTHER PROPRIETARY RIGHT.

15.3.    IN NO EVENT WILL BERKELEY LAB BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR
         CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE
         USE OF THE INVENTION OR LICENSED PRODUCTS.

15.4.    Nothing in this Agreement may be construed as:


                                    10 of 19



         15.4.1.  a warranty or representation by Berkeley Lab as to the
                  validity of Licensed Patents or scope of any of Berkeley Lab's
                  rights in Licensed Patents;

         15.4.2.  a warranty or representation that anything made, used, sold or
                  otherwise disposed of under any license granted in this
                  Agreement is or will be free from infringement of any patents
                  other than Licensed Patents;

         15.4.3.  an obligation to bring or prosecute actions or suits against
                  third parties for patent infringement, except as specifically
                  provided for in Article 17 (Patent Infringement); or

         15.4.4.  a grant by implication, estoppel or otherwise of any license
                  or rights under any patents of Berkeley Lab other than
                  Licensed Patents, regardless of whether such patents are
                  dominant or subordinate to Licensed Patents;

         15.4.5.  an obligation to furnish any know-how not provided in Licensed
                  Patents.

                        16. PATENTING AND FOREIGN RIGHTS

16.1.    Berkeley Lab shall prepare, file, prosecute and maintain patent
         applications and patents relating to inventions included in the
         Licensed Patents using patent counsel of its choice, and shall consult
         and cooperate with Licensee in connection therewith. Berkeley Lab shall
         copy Licensee promptly on all U.S.P.T.O. and foreign patent office
         actions, final drafts of proposed submissions and copies of actual
         submissions, to the extent reasonably practicable, so that Licensee
         shall be informed of the continuing prosecution, and have an
         opportunity to review and comment on such office actions and draft
         submissions. Notwithstanding the foregoing, Berkeley Lab may take any
         action useful or necessary to obtain and preserve its patent rights in
         Licensed Patents. Berkeley Lab shall use all reasonable efforts to
         amend any patent application to include claims and/or legal arguments
         reasonably requested by Licensee to protect the Licensed Products
         Licensee contemplates selling. Licensee shall keep confidential
         documents from patent offices and patent related filings and
         associated drafts.

16.2.    licensee agrees to reimburse Berkeley Lab for Berkeley Lab's
         out-of-pocket patent preparation, filing, prosecution and maintenance
         costs as follows:

         16.2.1.  100% of all such costs for Licensed (Exclusive) Patents; and

         16.2.2.  50% of all such costs for Licensed (FOU Exclusive) Patents.

16.3.    Berkeley Lab shall provide Licensee with documentation of patenting
         costs incurred when invoicing Licensee for those costs. Licensee shall
         pay Berkeley Lab within 30 days of receiving the invoice. Licensee
         shall also pay Berkeley Lab for reimbursement of such patent costs
         incurred prior to the Effective Date within 30 days of invoicing; such
         costs are estimated to be approximately [*** Redacted]. Licensee's
         obligation to reimburse patent costs continues for so long as this
         Agreement remains in effect, provided, however, that Licensee may
         terminate its obligations under this Agreement with respect to any
         given patent application or patent upon three months written notice to
         Berkeley Lab. Berkeley Lab shall use reasonable efforts to curtail
         patent costs when such a notice is received from Licensee. After such
         notice or when this Agreement terminates, Berkeley Lab may continue
         prosecution and/or maintenance of those application(s) or patent(s) at
         its sole discretion and expense; provided, however, that Licensee will
         have no further license or other right to them.

16.4.    Licensee may request that Berkeley Lab seek patent protection on the
         Licensed Patents in foreign countries if available. Berkeley Lab has no
         obligation to take action to file foreign patent applications unless
         Licensee provides written notice to Berkeley Lab at least six weeks
         before any applicable bar and that notice states which countries,
         regions or Patent

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                    11 of 19



         Cooperation Treaty filing Licensee desires. If Licensee timely provides
         such notice, then Berkeley Lab shall timely make such foreign filings.
         The absence of the required notice from Licensee to Berkeley Lab acts
         as an election not to secure foreign rights.

16.5.    Berkeley Lab may file patent applications at its own expense in any
         country in which Licensee has not elected to secure patent rights.
         Those applications and resultant patents shall not be subject to this
         Agreement.

16.6.    Licensee shall promptly notify Berkeley Lab of any change in its status
         as a small business concern and of the first sublicense granted to an
         entity that does not qualify as a small business concern. A "small
         business concern" as used in this paragraph is as defined by the U.S.
         Patent and Trademark Office; currently, that is a company whose number
         of employees, including affiliates, does not exceed 500 persons (13
         C.F.R. 121.802).

                             17. PATENT INFRINGEMENT

17.1.    If Licensee learns of the substantial infringement of any of Licensed
         Patents, Licensee shall so inform Berkeley Lab in writing and shall
         provide Berkeley Lab with reasonable evidence of the infringement.
         During the period and in a jurisdiction where Licensee has exclusive
         rights under this Agreement, neither party may notify a third party of
         the infringement of any of Licensed Patents without first obtaining
         written consent of the other party, which consent shall not be
         unreasonably denied. Both parties shall use their best efforts in
         cooperation with each other to terminate such infringement without
         litigation.

17.2.    Licensee may request that Berkeley Lab take legal action against the
         infringement of Licensed (Exclusive) Patents or Licensed (FOU
         Exclusive) Patents in the Field of Use in which Licensee has current
         exclusive rights under this Agreement. Licensee shall make that request
         in writing and include reasonable evidence of the infringement and
         damages to Licensee. If the infringing activity has not been abated
         within 90 days of that request, Berkeley Lab may elect to: (a)
         commence suit on its own account; or (b) refuse to participate in the
         suit. Berkeley Lab shall give written notice of its election to
         Licensee by the end of the 90 days after receiving notice of the
         request from Licensee. Licensee may thereafter bring suit for patent
         infringement only if Berkeley Lab elects not to commence suit and if
         the infringement occurred during the period and in a jurisdiction where
         Licensee has exclusive rights under this Agreement. If, however,
         Licensee elects to bring suit in accordance with this paragraph,
         Berkeley Lab may thereafter join such suit at its own expense.

17.3.    Such legal action as is decided upon must be at the expense of the
         party on account of whom suit is brought and all consequent recoveries
         belong to that party. But if Berkeley Lab and Licensee jointly bring
         legal action and fully participate in it, the parties must jointly
         share both the expense and all recoveries in proportion to the share of
         expense each party pays.

17.4.    Each party shall cooperate with the other in litigation proceedings
         instituted under this Agreement but at the expense of the party on
         account of whom suit is brought. The party bringing the suit will
         control that litigation, except that Berkeley Lab may elect to be
         represented by counsel of its choice in any suit brought by Licensee.

                                   18. WAIVER

18.1.    The waiver of any breach of any term of this Agreement does not waive
         any other breach of that or any other term.


                                    12 of 19



                                 19. ASSIGNMENT

19.1.    This Agreement is binding upon and shall inure to the benefit of
         Berkeley Lab, its successors and assigns. Upon written notice to
         Berkeley Lab, Licensee may assign this Agreement to a Licensee wholly
         owned subsidiary, or in conjunction with a sale of all or substantially
         all of the assets of Licensee. Any other attempt by Licensee to assign
         this Agreement is void unless Licensee obtains the prior written
         consent of Berkeley Lab; Berkeley Lab shall not unreasonably withhold
         that consent.

                               20. INDEMNIFICATION

20.1.    Licensee agrees to indemnify, hold harmless and defend Berkeley Lab and
         the U.S. Government and their officers, employees, and agents; the
         sponsors of the research that led to the Invention; and the inventors
         of the patents and patent applications in Licensed Patents and their
         employers against any and all claims, suits, losses, damage, costs,
         fees, and expenses resulting from or arising out of exercise of this
         license or any sublicense, except to the extent indemnification of
         Berkeley Lab is due to the gross negligence of Berkeley Lab. Licensee
         shall pay all costs incurred by Berkeley Lab in enforcing this
         indemnification, including reasonable attorney fees. The indemnity set
         forth herein shall apply only if Licensee shall have been given an
         opportunity, to the maximum extent afforded by applicable laws, rules,
         or regulations, to participate in and control its defense. No
         settlement for which Licensee would be responsible shall be made
         without Licensee's consent unless required by final decree of a court
         of competent jurisdiction.

20.2.    Licensee, at its sole expense, shall insure its activities in
         connection with the work under this Agreement and obtain and keep in
         force Comprehensive or Commercial Form General Liability Insurance
         (contractual liability and products liability included) with limits as
         follows:

         20.2.1.  Each Occurrence                           $[*** Redacted]

         20.2.2.  Products/Completed Operations Aggregate   $[*** Redacted]

         20.2.3.  Personal and Advertising Injury           $[*** Redacted]

         20.2.4.  General Aggregate (commercial form only)  $[*** Redacted]

20.3.    The coverages and limits referred to in this Article 20 do not in any
         way limit the liability of Licensee. Licensee shall furnish Berkeley
         Lab with certificates of insurance, including renewals, evidencing
         compliance with all requirements at least 30 days prior to the first
         commercial sale, use, practice or distribution of a Licensed Product.

         20.3.1.  If such insurance is written on a claims-made form, coverage
                  shall provide for a retroactive date of placement on or
                  before the Effective Date.

         20.3.2.  Licensee shall maintain the general liability insurance
                  specified during: (a) the period that the Licensed
                  Product is being commercially distributed or sold by Licensee
                  or by a sublicensee or agent of Licensee, and (b) a reasonable
                  period thereafter, but in no event less than five years.

20.4.    The insurance coverage of paragraph 20.2 must:

         20.4.1.  Provide for 30-day advance written notice to Berkeley
                  Lab of cancellation or of any modification.

         20.4.2.  Indicate that DOE, "The Regents of the University of
                  California" and its officers, employees, students, agents, are
                  endorsed as additional insureds.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                    13 of 19


         20.4.3.  Include a provision that the coverages are primary and do not
                  participate with, nor are excess over, any valid and
                  collectible insurance or program of self-insurance carried or
                  maintained by Berkeley Lab.

                               21. LATE PAYMENTS

21.1     If Licensee does not make a payment to Berkeley Lab when due, Licensee
         shall pay to Berkeley Lab such reasonable administrative fees and
         interest as Berkeley Lab generally charges third parties on overdue
         accounts.

                                   22. NOTICES

22.1.    Any payment, notice or other communication this Agreement requires or
         permits either party to give must be in writing to the appropriate
         address given below, or to such other address as one party designates
         by written notice to the other party. The parties deem payment, notice
         or other communication to have been properly given and to be effective
         (a) on the date of delivery if delivered in person; (b) on the fourth
         day after mailing if mailed by first-class mail, postage paid; (c) on
         the second day after delivery to an overnight courier service such as
         Federal Express, if sent by such a service; or (d) upon confirmed
         transmission by telecopier. The parties' addresses are as follows:

                  For Berkeley Lab:

                  Lawrence Berkeley National Laboratory
                  Technology Transfer Department
                  Mailstop 90-1070
                  One Cyclotron Road
                  Berkeley, California 94720
                  Attention: Licensing Manager
                  Fax:   510/486-6457
                  Telephone: 510/486-6467
                  e-mail: viwolinsky@lbl.gov

                  For Licensee:

                  Nanosys, Inc.
                  2625 Hanover St.
                  Palo Alto, Ca 94304
                  Attention: Larry Bock, CEO
                  Fax: 650/ 846-2501
                  Telephone: 650/ 846-2500
                  e-mail: lbock@nanosysinc.com

                  With a copy to:

                  Michael O' Donnell, Esq.
                  Wilson, Sonsini, Goodrich and Rosati
                  650 Page Mill Road
                  Palo Alto, CA 94304

                                    14 of 19



                              23. U.S. MANUFACTURE

23.1.    Licensee shall have Licensed Products produced for sale in the United
         States manufactured substantially in the United States so long as
         Licensee has current exclusive rights in the Field of Use.

                               24. PATENT MARKING

24.1.    Licensee shall mark all Licensed Products made, used or sold under this
         Agreement, or their containers, in accordance with the applicable
         patent marking laws and to the extent reasonably practicable.

                     25. GOVERNMENT APPROVAL OR REGISTRATION

25.1.    If the law of any nation requires that any governmental agency either
         approve or register this Agreement or any associated transaction,
         Licensee shall assume all legal obligation to do so. Licensee shall
         notify Berkeley Lab if it becomes aware that this Agreement is subject
         to a U.S. or foreign government reporting or approval requirement.
         Licensee shall make all necessary filings and pay all costs, including
         fees, penalties, and all other costs associated with such reporting or
         approval process.

                             26. EXPORT CONTROL LAWS

26.1.    Licensee shall observe all applicable United States and foreign laws
         and regulations with respect to the transfer of Licensed Products and
         related technical data, including, without limitation, the
         International Traffic in Arms Regulations (ITAR) and the Export
         Administration Regulations.

                                27. FORCE MAJEURE

27.1.    If a party's performance required under this Agreement is rendered
         impossible or unfeasible due to any catastrophes or other major events
         beyond its reasonable control, including, without limitation, the
         following, the parties are excused from performance: war, riot, and
         insurrection; laws, proclamations, edicts, ordinances or regulations;
         strikes, lockouts or other serious labor disputes; and floods, fires,
         explosions, or other natural disasters. When such events abate, the
         parties' respective obligations under this Agreement must resume.

                                28. MISCELLANEOUS

28.1.    The headings of the several sections are inserted for convenience of
         reference only and are not intended to be a part of or to affect the
         meaning or interpretation of this Agreement.

28.2.    This Agreement is not binding upon the parties until it is signed below
         on behalf of each party.

28.3.    No amendment or modification hereof shall be valid or binding upon the
         parties unless made in writing and signed on behalf of each party.


                                    15 of 19




28.4.    This Agreement embodies the entire and final understanding of the
         parties on this subject. It supersedes any previous representations,
         agreements, or understandings, whether oral or written.

28.5.    If a court of competent jurisdiction holds any provision of this
         Agreement invalid, illegal or unenforceable in any respect, this
         Agreement must be construed as if that invalid or illegal or
         unenforceable provision is severed from the Agreement, provided,
         however, that the parties shall negotiate in good faith substitute
         enforceable provisions that most nearly effect the parties' intent in
         entering into this Agreement.

28.6.    This Agreement must be interpreted under California law, without giving
         effect to any choice of law rules that would result in the application
         of laws of any jurisdiction other than California.

Berkeley Lab and Licensee execute this Agreement in duplicate originals through
their duly authorized respective officers in one or more counterparts, that
taken together, are but one instrument.

THE REGENTS OF THE UNIVERSITY OF                NANOSYS, INC.
CALIFORNIA, THROUGH THE ERNEST
ORLANDO LAWRENCE BERKELEY NATIONAL
LABORATORY

By /s/ Piermaria Oddone                         By  /s/ Lawrence Bock
   ---------------------------------               -----------------------------
             (Signature)                                  (Signature)

By Piermaria Oddone                             By Lawrence Bock
                                                        (Please Print)

Title Deputy Laboratory Director                Title President

Date 10/11/02                                   Date 10/15/02

         Approved as to form

         /s/ Glenn R. Woods
         ---------------------------
         GLENN R. WOODS
         LAWRENCE BERKELEY NATIONAL LABORATORY

                                    16 of 19



                                    EXHIBIT 1

                          LICENSED (EXCLUSIVE) PATENTS



BERKELEY LAB
CASE NUMBER                         PATENT APPLICATION/ PATENT
               
IB-1576           US Patent Application Serial Number 09/702,219, filed
                  10/30/00, entitled, A non-hydrolytic single-precursor approach
                  to surfactant-capped nanocrystals of transition metal oxides
                  by A. Paul Alivisatos and Joerg Rocken-berger

IB-1576A          US Patent Application Serial Number 09/721,126, filed
                  11/22/00, entitled A Process for Making Surfactant Capped
                  Nanocrystals, by A. Paul Alivisatos and Joerg Rockenberger

IB-1402           [*** Redacted]


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                    17 of 19


                                    EXHIBIT 2

                        LICENSED (FOU EXCLUSIVE) PATENTS



BERKELEY LAB
CASE NUMBER                         PATENT APPLICATION/ PATENT
               
IB-1330JP         Japanese Patent Application Number 11-80598, filed 3/24/99,
                  entitled, Semiconductor nanocrystal probes for biological
                  applications and process for making and using such probes, by
                  Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos

IB-1330A-EPO      European Patent Organization Application number 00915944.3,
                  filed 2/28/00, entitled Semiconductor nanocrystal probes for
                  biological applications and process for making and using such
                  probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul
                  Alivisatos

IB-1330A-CA       Canadian Patent Application Number pending, filed 8/10/01,
                  entitled Semiconductor nanocrystal probes for biological
                  applications and process for making and using such probes, by
                  Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos

IB-1330A-JP       Japanese Patent Application Number pending, entitled
                  Semiconductor nanocrystal probes for biological applications
                  and process for making and using such probes, by Shimon Weiss,
                  Marcel Bruchez, Jr., and A. Paul Alivisatos

IB-1330B          US Patent Application Serial Number 09/349,833 filed 7/8/1999,
                  entitled Semiconductor nanocrystal probes for biological
                  applications and process for making and using such probes, by
                  Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos

IB-1330C          US Patent Application Serial Number 09/781,621, filed
                  2/12/2001, entitled Semiconductor nanocrystal probes for
                  biological applications and process for making and using such
                  probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul
                  Alivisatos

IB-1330D          US Patent Application Serial Number 09/865,130, filed
                  5/24/2001, entitled Semiconductor nanocrystal probes for
                  biological applications and process for making and using such
                  probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul
                  Alivisatos

IB-1330E          US Patent Application Serial Number pending,, filed 5/24/2002,
                  entitled Organo luminescent semiconductor nanocrystal probes
                  for biological applications and process for making and using
                  such probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul
                  Alivisatos

IB-1330F          US Patent Application Serial Number pending,, filed 5/24/2002,
                  entitled Semiconductor nanocrystal probes for biological
                  applications and process for making and using such probes, by
                  Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos






                                    18 of 19




               

IB-1783P*         US provisional patent application, serial number 60/346,253,
                  filed 10/24/01, entitled, Quantum Rod Liquid Crystals and
                  Process of Making, by A. Paul Alivisatos and Liang-shi Li

IB-1773P*         U.S. provisional patent application, serial number 60/335,435,
                  filed 11/30/01, entitled Synthesis of Branched 3-Dimensional
                  Inorganic Nanocrystals and Inorganic Dendrimers, by A. Paul
                  Alivisatos, Erik Scher, and Liberato Manna

IB-1527A          US Patent Number 6,225,198, issued May 1, 2001, entitled
                  Process for Forming Shaped Group II-VI Semiconductor
                  Nanocrystals, and Product Formed Using Process, by A. Paul
                  Alivisatos, Xiaogang Peng, and Liberato Manna

IB-1527B          US Patent Number 6,306,736, issued October 23, 2001, entitled
                  Process for Forming Shaped Group III-V Semiconductor
                  Nanocrystals, and Product Formed Using Process, by A. Paul
                  Alivisatos, Xiaogang Peng, and Liberato Manna.

IB-1330           US Patent Number 5,990,479, issued November 23, 1999, entitled
                  Organoluminescent semiconductor nanocrystal probes for
                  biological applications and process for making and using such
                  probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul
                  Alivisatos

IB-1330A          US Patent Number 6,207,392, issued March 27, 2001, entitled
                  Semiconductor nanocrystal probes for biological applications
                  and process for making and using such probes by Shimon
                  Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos

CIB-1030          US Patent Number 5,537,000, issued July 16, 1996, entitled
                  Electroluminescent Devices Formed Using Semiconductor
                  Nanocrystals as an Electron Transport Media and Method of
                  Making Such Electroluminescent Devices, by A. Paul Alivisatos
                  and Vicki L. Colvin

IB-866A           US Patent Number 5,751,018, issued May 12, 1998, entitled
                  Semiconductor Nanocrystals Covalently Bound to Solid Inorganic
                  Surfaces Using Self-Assembled Monolayers, by A. Paul
                  Alivisatos and Vicki L. Colvin

IB-865            US Patent Number 5,262,357, issued November 16, 1993, entitled
                  Low Temperature Thin Films Formed Via Nanocrystal Precursors,
                  by A. Paul Alivisatos and Avery N. Goldstein

IB-864A           US Patent Number 5,505,928, issued April 9,1996, entitled
                  Preparation Of III-V Semiconductor Nanocrystals, by A. Paul
                  Alivisatos and Michael A. Olshavsky



- ---------------
* If Berkeley Lab within 6 months from the Effective Date has not licensed to
any third party the exclusions to the Field of Use for these Berkeley Lab case
numbers IB-1773 and IB-1783 or provided written notice to Licensee that Berkeley
Lab is in the process of doing so, then such cases shall automatically become
Licensed (Exclusive) Patents.


                                    19 of 19

EX-10.8.1

                                                                  EXHIBIT 10.8.1

                        AMENDMENT A TO LICENSE AGREEMENT

This amendment agreement (the "Amendment A") is entered into by the parties to
the existing license agreement effective November 9, 2002 (the "Prior
Agreement") between The Regents of the University of California, Department of
Energy contract-operators of the Ernest Orlando Lawrence Berkeley National
Laboratory, 1 Cyclotron Road, Berkeley, CA 94720, ("Berkeley Lab"), and Nanosys,
Inc., a Delaware corporation ("Licensee") having its principal place of business
at 2625 Hanover St., Palo Alto, CA 94304.

For good and valuable consideration, receipt and sufficiency of which is hereby
acknowledged, the Berkeley Lab and Licensee agree as follows:

I.       BACKGROUND

The Berkeley Lab and Licensee are parties to the Prior Agreement (Berkeley Lab
reference L-03-1364) relating generally to certain inventions characterized as
nanocrystals and related technology.

The Berkeley Lab and Licensee would like to amend the Prior Agreement by way of
this Amendment A to include license rights to certain new inventions made in the
course of research at Berkeley Lab by Dr. Paul Alivasatos and colleagues under
Berkeley Lab's contract with the United States Department of Energy ("DOE"),
relating generally to [*** Redacted] applications of [*** Redacted] and related
technology.

II.      AMENDMENT FEE

Licensee shall pay to the Berkeley Lab an Amendment Fee in the amount of [***
Redacted], which accrues upon execution of this Amendment, with [*** Redacted]
being payable within 30 days of the execution of this Amendment, and the
remaining [*** Redacted] being payable within 12 months of the execution
date of this Amendment.

III.     AMENDMENTS TO THE PRIOR AGREEMENT

A.       Paragraph 5.1 of the Prior Agreement is hereby deleted in its entirety
         and replaced with the following amended paragraph 5.1:

         5.1      Following an initial public offering or series of public
                  offerings of Licensee securities which raises in the aggregate
                  at least $5 million or sale of all or substantially all of the
                  assets or equity of Licensee in a


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                  transaction(s) worth at least $5 million ("Offering"),
                  Licensee shall pay to Berkeley Lab the equivalent of the price
                  at the Offering of 70,000 shares of Licensee's common stock.
                  Such payments shall be made in installments with one-third
                  payable 9 months from the Offering, one-third payable 18
                  months from the Offering and one-third payable 26 months from
                  the Offering. Such payments shall include interest from the
                  date of the Offering to the date such payment is made.
                  Interest shall be compounded on the date such payment is made,
                  and shall be charged at the prime lending rate as published in
                  the Wall Street Journal on the date such payment is made.
                  Licensee shall adjust the 70,000 shares to take into account
                  any stock splits or reverse stock splits since the Effective
                  Date.

B.       Paragraph 7.4 of the Prior Agreement is hereby amended to insert after
paragraph 7.4.l0. the following additional paragraphs:

         7.4.11   by 24 months from the Effective Date, have expended at
                  least [*** Redacted] in the aggregate for direct costs in
                  research and development for technology directly related to
                  [*** Redacted] applications that use Licensed Patents;

         7.4.12   by 24 months from the Effective Date, provide Berkeley Lab
                  with a commercialization plan for [*** Redacted] devices based
                  upon the Licensed Patents;

         7.4.13   by 48 months from the Effective Date, produce in Licensee's
                  facility, a working prototype [*** Redacted] device with at
                  least [*** Redacted];

         7.4.14   by 60 months from the Effective Date, make commercial sales of
                  Licensed Products that are [*** Redacted] devices

C.       Paragraph 9.1 of the Prior Agreement is hereby deleted in its entirety
         and replaced with the following amended paragraph 9.1:

         9.1      Licensee shall keep books and records accurately showing all
                  work performed in satisfaction of Article 7 and all Licensed
                  Products manufactured, used, sold or imported under the terms
                  of this Agreement, including without limitation books and
                  records related to licenses for Third Party Patents under
                  paragraph 6.4. Licensee shall preserve those

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                       2


                  books and records for at least [*** Redacted] years from the
                  date of the work performed or the royalty payment to which
                  they pertain and shall open them to inspection by
                  representatives or agents of Berkeley Lab at reasonable times.
                  Licensee shall render all assistance reasonably requested by
                  Berkeley Lab for the purposes of carrying out such inspections
                  and examination of Licensee's royalty payments and performance
                  under Article 7.

D.       Exhibit 1 and Exhibit 2 of the Prior Agreement are hereby deleted in
         their entirety and replaced with the attached amended Exhibit 1 and
         Exhibit 2.

IV.      NO OTHER AMENDMENTS

Unless expressly amended herein or by subsequent amendments agreed to by the
parties in a signed written amendment, all other terms of the Prior Agreement,
including but not limited to terms related to interpretation and enforcement of
the Prior Agreement, shall remain in full force and effect as originally agreed
to in the Prior Agreement, and shall apply equally to the terms of this
Amendment A.

Berkeley Lab and Licensee execute this Agreement in duplicate originals through
their duly authorized respective officers in one or more counterparts, that
taken together, are but one instrument.

THE RECENTS OF THE UNIVERSITY            NANOSYS, INC.
OF CALIFORNIA, THROUGH THE
ERNEST ORLANDO LAWRENCE
BERKELEY NATIONAL LABORATORY

By /s/ Piermaria Oddone                  By  /s/ Lawrence Bock
   -------------------------------           --------------------------
        (Signature)                                (Signature)

By   Piermaria Oddone                    By      Lawrence Bock

Title  Deputy Laboratory Director        Title    President

Date  3/18/03                            Date    3/20/03

      Approved as to form
      /s/ Glenn R. Woods
      ---------------------
      GLENN R. WOODS
      LAWRENCE BERKELEY NATIONAL LABORATORY

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                        3


                                    EXHIBIT 1

                          LICENSED (EXCLUSIVE) PATENTS

BERKELEY LAB
CASE NUMBER                      PATENT APPLICATION/PATENT

IB-1810           The following Provisional U.S. Patent Applications by A. Paul
                  Alivisatos, Wendy U. Huynh, and Janke J. Dittmer:

                  (1) 60/365,401, filed March 18, 2002, entitled Solar Cells,
                  Photovoltaic Devices and Photodectectors Based on Inorganic
                  Nanorods and Other 3D Objects Based on Nanorods;

                  (2) 60/381,660, filed May 17, 2002, entitled, Hybrid
                  Nanorod-Polymer Solar Cells;

                  (3) 60/381,667, filed May 17, 2002, entitled, Hybrid
                  Nanorod-Polymer Solar Cells

IB-1783           US Patent Application Serial Number 10/280,135, filed
                  10/23/02, entitled, Semiconductor Liquid Crystal Composition
                  and Methods for Making Same, by A. Paul Alivisatos and
                  Liang-shi Li

IB-1783PCT        Patent Application filed under Chapter I of the Patent
                  Cooperation Treaty, Serial Number PCT/US02/33970, filed
                  10/23/02, entitled, Quantum Rod Liquid Crystals, by A. Paul
                  Alivisatos and Liang-shi Li

IB-1576           US Patent Application Serial Number 09/702,219, filed
                  10/30/00, entitled, Process for Making Surfactant-capped
                  Nanocrystals, by A. Paul Alivisatos and Joerg Rockenberger

IB-1576A          US Patent Application Serial Number 09/721,126, filed
                  11/22/00, entitled, A Process for Making Surfactant Capped
                  Nanocrystals and Products Produced by the Process, by A. Paul
                  Alivisatos and Joerg Rockenberger

IB-1402           [*** Redacted]

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



                                    EXHIBIT 2

                        LICENSED (FOU EXCLUSIVE) PATENTS

BERKELEY LAB                         PATENT APPLICATION/PATENT
CASE NUMBER

IB-1773           U.S. patent application, Serial Number 10/301,510, filed
                  11/22/02, entitled Shaped Nanocrystal Particles and Methods
                  for Making the Same, by A. Paul Alivisatos, Erik Scher, and
                  Liberato Manna

IB-1773PCT        Patent Application filed under Chapter I of the Patent
                  Cooperation Treaty, Serial Number pending, filed 11/22/02,
                  entitled, Shaped Nanocrystal Particles and Methods for Making
                  the Same, by A. Paul Alivisatos, Erik Scher, and Liberato
                  Manna

IB-1527A          US Patent Number 6,225,198, issued May 1, 2001, entitled
                  Process for Forming Shaped Group II-VI Semiconductor
                  Nanocrystals, and Product Formed Using Process, by A. Paul
                  Alivisatos, Xiaogang Peng, and Liberato Manna

IB-1527B          US Patent Number 6,306,736, issued October 23, 2001, entitled
                  Process for Forming Shaped Group III-V Semiconductor
                  Nanocrystals, and Product Formed Using Process, by A. Paul
                  Alivisatos, Xiaogang Peng, and Liberato Manna

IB-1330           US Patent Number 5,990,479, issued November 23, 1999, entitled
                  Organoluminescent Semiconductor Nanocrystal Probes for
                  Biological Applications and Process for Making and Using Such
                  Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul
                  Alivisatos

IB-1330JP         Japanese Patent Application Number 11-80598, filed 3/24/99,
                  entitled, Semiconductor Nanocrystal Probes for Biological
                  Applications and Process for Making and Using Such Probes, by
                  Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos

IB-1330A          US Patent Number 6,207,392, issued March 27, 2001, entitled
                  Semiconductor Nanocrystal Probes for Biological Applications
                  and Process for Making and Using Such Probes, by Shimon Weiss,
                  Marcel Bruchez, Jr., and A. Paul Alivisatos

IB-1330A-EPO      European Patent Organization Application number 00915944.3,
                  filed 2/28/00, entitled Semiconductor Nanocrystal Probes for
                  Biological Applications and Process for Making and Using Such
                  Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul
                  Alivisatos

IB-1330A-CA       Canadian Patent Application Number 2366303, filed 8/10/01,
                  entitled Semiconductor Nanocrystal Probes for Biological
                  Applications and Process for Making and Using Such Probes, by
                  Shimon Weiss, Marcel Bruchez, Jr., and A. Paul Alivisatos

IB-1330A-JP       Japanese Patent Application Number 2000-605212, entitled
                  Semiconductor Nanocrystal Probes for Biological Applications
                  and Process for Making and Using Such Probes, by Shimon Weiss,
                  Marcel Bruchez, Jr., and A. Paul Alivisatos

IB-1330B          US Patent Number 6,423,551 issued July 23, 2002, entitled
                  Organo luminescent Semiconductor Nanocrystal Probes for
                  Biological Applications and Process for Making and Using Such
                  Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul
                  Alivisatos

IB-1330C          US Patent Application Serial Number 09/781,621, filed
                  2/12/2001, entitled Semiconductor Nanocrystal Probes for
                  Biological Applications and Process for Making and Using Such
                  Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul
                  Alivisatos

B-1330D           US Patent Application Serial Number 09/865,130, filed
                  5/24/2001, entitled Organo luminescent Semiconductor
                  Nanocrystal Probes for Biological Applications and Process for
                  Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez,
                  Jr., and A. Paul Alivisatos

IB-1330E          US Patent Application Serial Number 10/155,918, filed
                  5/24/2002, entitled Organo luminescent Semiconductor
                  Nanocrystal Probes for Biological Applications and Process for
                  Making and Using Such Probes, by Shimon Weiss, Marcel Bruchez,
                  Jr., and A. Paul Alivisatos

IB-I330F          US Patent Application Seri al Number 10/155,759, filed
                  5/24/2002, entitled Semiconductor Nanocrystal Probes for
                  Biological Applications and Process for Making and Using Such
                  Probes, by Shimon Weiss, Marcel Bruchez, Jr., and A. Paul
                  Alivisatos

CIB-1030          US Patent Number 5,537,000, issued July 16, 1996, entitled
                  Electroluminescent Devices Formed Using Semiconductor
                  Nanocrystals as an Electron Transport Media and Method of
                  Making Such Electroluminescent Devices, by A. Paul Alivisatos
                  and Vicki L. Colvin

IB-866A           US Patent Number 5,751,018, issued May 12, 1998, entitled
                  Semiconductor Nanocrystals Covalently Bound to Solid Inorganic
                  Surfaces Using Self-Assembled Monolayers, by A. Paul
                  Alivisatos and Vicki L. Colvin

IB-865            US Patent Number 5,262,357, issued November 16, 1993, entitled
                  Low Temperature Thin Films Formed Via Nanocrystal Precursors,
                  by A. Paul Alivisatos and Avery N. Goldstein

IB-864A           US Patent Number 5,505,928, issued April 9, 1996, entitled
                  Preparation Of III-V Semiconductor Nanocrystals, by A. Paul
                  Alivisatos and Michael A. Olshavsky

EX-10.9

                                                                    EXHIBIT 10.9

                              DEVELOPMENT AGREEMENT

         This DEVELOPMENT AGREEMENT ("Agreement") dated and effective as of
November 18, 2002 ("Effective Date"), is entered into between Nanosys, Inc.
("Nanosys"), a Delaware corporation having offices at 2625 Hanover St., Palo
Alto, CA 94304, and Matsushita Electric Works, Ltd. ("MEW"), a Japanese
corporation having offices at 1048, Kadoma, Osaka 571-8686, Japan.

                                   WITNESSETH:

         WHEREAS, Nanosys possesses certain proprietary technology, know how and
experience relating to the design, prototype development, development and
manufacture of nanotechnology enabled systems in the field of solar cells;

         WHEREAS, MEW possesses certain proprietary technology, know how and
experience relating to the development, manufacture and commercialization of
Building Materials (as defined below) in Asia;

         WHEREAS, both parties desire to collaborate to investigate developing
OPVs for use in Building Materials in Asia, as set forth herein;

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereby agree as follows:

                            ARTICLE 1 -- DEFINITIONS

         For purposes of the Agreement, the terms defined in this Article I
shall have the respective meanings set forth below:

1.1      "Asia" shall mean the countries of: China (including Hong Kong and
         Macau), Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan and
         Thailand.

1.2      "Background Technology" shall mean each party's technology, know-how,
         information and intellectual property rights disclosed, embodied or
         incorporated in the items provided by one party to the other party
         hereunder, which had existed prior to the Effective Date or were
         conceived, developed or otherwise made during the term of this
         Agreement outside of the Development Project and independent of the
         other party's Background Technology.

1.3      "Building Materials" shall mean materials primarily directed for use in
         the construction or fabrication of commercial, residential or other
         buildings or similar outdoor structures. Notwithstanding the foregoing,
         Building Materials shall exclude without limitation materials primarily
         directed for use in consumer products, portable and/or mobile power
         sources or structures, commercial power generation or supply, or for
         extraterrestrial applications.

1.4      "Development Goals" shall mean the development goals for each party
         under Development Project as set forth in Appendix A attached hereto.

1.5      "Development Period" shall mean the period commencing upon Nanosys'
         receipt of the Two Million United States Dollars (U.S. $2,000,000)
         payment set forth in Section 3.1, and unless terminated earlier upon
         termination of this Agreement pursuant to Article 6 or extended by the
         mutual written agreement of the parties, expiring fifteen (15) months
         after the Effective Date.

Nanosys/MEW Confidential



                                                                          Page 1


1.6      "Development Project" shall mean the activities undertaken by each
         party during the Development Period that it reasonably determines, in
         consultation with the other party, are necessary and/or appropriate for
         achieving its Development Goals.

1.7      "FTE" shall mean a full-time employee, or in the case of less than a
         full-time dedicated person, a full-time equivalent person-year, based
         upon the total of one thousand eight hundred thirty two (1,832) hours
         per year.

1.8      "OPV" shall mean any photovoltaic device which incorporates
         Nanostructures or Nanocomposites as part of an active component. It is
         understood that OPVs shall include the primary encapsulation around
         such photovoltaic device.

1.9      "Phase I Technology" shall mean all materials, technology, know-how and
         information conceived, developed or otherwise made by either party
         during the term of this Agreement (i) in the course of performing the
         Development Project, or (ii) using the confidential or proprietary
         Background Technology of the other party. It Is understood that Phase I
         Technology shall include all patent, copyright, trade secret,
         confidential information and other intellectual property or proprietary
         rights therein and thereto.

1.10     "Nanocomposite" shall mean any material comprising a [*** Redacted] and
         a [*** Redacted] or composition, said [*** Redacted] acting as a matrix
         in which the Nanostructure is embedded or otherwise [*** Redacted].
         Nanocomposites can be [*** Redacted] or [*** Redacted] and include
         without limitation mixtures of [*** Redacted] and [*** Redacted] or
         [*** Redacted] and/or [*** Redacted] or [*** Redacted]. Appendix B
         attached hereto illustrates the Nanocomposite of one potential OPV.


1.11     "Nanostructure" shall mean any material, structure or composition with
         any single dimension less than [*** Redacted]. Nanostructures include,
         but are not limited to semiconductors, metals, semimetals and
         insulators, and include, but are not limited to [*** Redacted], [***
         Redacted], [*** Redacted] and [*** Redacted].

1.12     "Nanotechnology" shall mean all materials, technology, know-how and
         information relating to, or useful for the exploitation of
         Nanostructures, Nanocomposites or properties thereof, or standalone
         functional devices incorporating or based on such Nanostructures,
         Nanocomposites or properties thereof, or components of such devices,
         including without limitation the properties, design and architecture
         (including without limitation [*** Redacted]), development (including
         without limitation methods and tools tor modeling and prototyping),
         manufacturing, synthesis, packaging, applications and commercialization
         thereof and interfaces therewith (including without limitation [***
         Redacted], electrical and/or optical and/or magnetic contacts and
         integration components, methodologies). Nanotechnology shall exclude
         technology for integrating OPVs into surrounding Building Materials.
         For the avoidance of doubt, in no event shall Nanotechnology include
         inventions conceived after the end of the Development Period.

1.13     "Option Period" shall mean a period commencing upon the conclusion of
         the Election Period, and ending nine (9) months thereafter, unless
         terminated earlier by MEW upon written notice.

                        ARTICLE 2 -- DEVELOPMENT PROJECT

2.1      Conduct Of the Development Project. Subject to the terms and conditions
         of this Agreement, Nanosys and MEW each shall use commercially
         reasonable efforts to conduct its activities under the Development
         Project. Nanosys and MEW each shall conduct its activities under the
         Development Project in good scientific manner and in compliance in all
         material respects with requirements of any applicable laws and
         regulations. It is understood that consistent with the

Nanosys/MEW Confidential

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                          Page 2


         requirements of this Agreement, each party shall determine in its sole
         discretion the manner and means by which it performs its activities
         under the Development Project.

2.2      Contemplated Allocation of Responsibilities and Level of Efforts. It is
         contemplated that Nanosys' activities under the Development Project
         will be primarily directed to the development of OPVs, which will
         ultimately meet the specifications of the Development Goals for such
         use in Building Materials and MEW's activities under the Development
         Project will be primarily directed to developing technology and
         manufacturing strategies for incorporating into Building Materials the
         OPVs developed by Nanosys hereunder, and performing market research
         relating thereto. Details in this connection shall be described in
         Appendix A attached hereto. During the Development Period, Nanosys will
         dedicate, the equivalent of [*** Redacted] FTEs on activities under the
         Development Project, and at least another [*** Redacted] FTEs on
         programs outside of the Development Project relating to core
         nanotechnologies which would be available to the development of OPVs
         under the Development Project if applicable. It is presently
         contemplated that MEW will expend Two Million United States Dollars
         (U.S. $2,000,000) on performing its activities under the Development
         Project.

2.3      Communications; Coordination. Nanosys and MEW each shall keep the other
         generally informed from time to time during the Development Period of
         any results from the Development Project. Without limiting the
         generality of the foregoing the parties shall hold during the
         Development Period a technical meeting every month, and a managerial
         meeting every three (3) months. Unless otherwise agreed such meeting
         shall be held at Nanosys' facilities. Each party shall appoint a
         "Project Manager," who shall oversee such party's efforts on the
         Development Project and any meetings, exchanges, visits and
         collaboration between the parties hereunder. The initial Project
         Manager for Nanosys is [*** Redacted]; the initial Project Manager for
         MEW is [*** Redacted]. The parties may from time to time change the
         identity of its Project Manager upon written notice. At any time upon
         the request of MEW, but in no event more frequent than once per
         calendar quarter, Nanosys will prepare a written report summarking the
         work done to-date and the results meeting the specifications of the
         Development Goals.

2.4      Visiting and Collaborating Personnel. During the Development Period,
         each party shall make its personnel available to visit with and
         collaborate with the other party's personnel in carrying out the
         Development Project, for the benefit of the collaboration upon a
         mutually agreeable schedule. Such activities may Include prototyping,
         testing and evaluation of devices developed under the Development
         Project, but shall not include any synthesis of Nanostructures or
         associated [*** Redacted] interface [*** Redacted]. In the event one
         party's personnel is performing or observing the performance of the
         Development Project at the other party's facilities, such visiting
         personnel shall agree to be bound by all reasonable orders, rules and
         regulations pertaining to the hosting party's facilities while at such
         facilities, including reasonable confidentiality obligations, In case
         of any direct conflict between the terms of the Agreement and such
         facilities' orders, rules, and regulations, the terms of this Agreement
         shall prevail.

2.5      Records. Nanosys and MEW each shall maintain records in English, in
         sufficient detail and in good scientific manner, which shall reflect
         work done and results achieved in the performance of the Development
         Project. Each party shall provide the other party with written
         disclosure describing each invention developed during the Development
         Project in which such other party has an ownership interest hereunder,
         upon the receipt of an invention disclosure from its personnel.

2.6      Formal Review Meeting. On or about nine (9) months after the Effective
         Date, the parties shall hold a meeting in person at Nanosys' facilities
         to formally review the results of the Development Project as of the
         date of such meeting. At such meeting each party shall have at least
         one representative who is at the director level or higher, and the
         parties shall make a joint formal presentation describing the outcomes
         and results of its activities to date. Additionally if MEW has not
         previously exercised its option pursuant to Section 3.2 below, at such
         meeting the parties

Nanosys/MEW Confidential

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                          Page 3

        shall discuss MEW's desire to exercise such option, provided such early
        discussion shall not shorten MEW's Election Period as defined in Section
        3.2 below. It is understood that the meeting described in this Section
        2.6 shall be in lieu of any meeting to be held pursuant to Section 2.3
        above for such month.

2.7     Final Report. Promptly upon expiration of the Development Period, each
        party shall provide the other party with a final report describing the
        results of its activities under the Development Project, including the
        extent to which it has met its Development Goals (each, the "Final
        Report").

2.8     Testing of Deliverables. Promptly upon the conclusion of the
        Development Period, Nanosys shall make available to MEW for testing a
        reasonable number of sample units of the OPVs created by Nanosys meeting
        or most closely meeting the Development Goals(or components if a
        complete OPV has not been created). Such testing shall take place at
        Nanosys' facilities, or may be conducted jointly by the parties at MEW's
        facilities.

                        ARTICLE 3 -- PAYMENTS/EXCLUSIVITY

3.1     Payments. In consideration of Nanosys' performance of its activities
        under the Development Project, MEW shall pay Nanosys Two Million United
        States Dollars (U.S. $2,000,000) within fifteen (15) days of execution
        of this Agreement. It is contemplated that such amount shall be in
        consideration for the efforts undertaken and be partial reimbursement
        for the costs and expenses incurred by Nanosys in performing its
        activities hereunder. As additional consideration, within thirty (30)
        days of the conclusion of the Development Period, provided that Nanosys
        has met its Development Goals or MEW provides or has provided Nanosys
        with an Exercise Notice pursuant to Section 3.2 or MEW elects in its
        discretion to make such payment, MEW shall pay Nanosys an additional
        Five Hundred Thousand United States Dollars (U.S. $500,000). MEW shall
        make all payments hereunder by check or wire transfer in immediately
        available funds to an account designated by Nanosys. All amounts payable
        hereunder shall be paid in United States Dollars, and shall be net of
        any sales, use, withholding or other taxes. Except as set forth in this
        Section 3.1, each party shall be responsible for and bear its own costs
        for carrying out its activities under the Development Project.

3.2     Option to Negotiate Additional Development. At any time after the
        commencement of the Development Period and prior to a lapse of thirty
        (30) days after Nanosys provides its Final Report under Section 2.7 (the
        "Election Period"), MEW may provide Nanosys with written notice (the
        "Exercise Notice"), stating that MEW desires to negotiate the terms and
        conditions under which the parties would continue the development of
        OPVs for use in Building Materials ("Phase II") and would commercialize
        such OPVs and Building Materials in Asia, including Nanosys supplying
        certain components thereof ("Phase III") (collectively, the Phase II/III
        Projects"). Promptly after Nanosys' receipt of the Exercise Notice as
        set forth above, the parties shall meet to negotiate in good faith the
        terms and conditions of the Phase II and/or Phase III Projects for a
        period of sixty (60) days (the "Negotiation Period"). The Negotiation
        Period shall be extended to the extent mutually agreed between the
        parties. Such terms and conditions may include: (i) Nanosys having a
        nonexclusive, worldwide license under subject matter developed by MEW
        relating to Nanotechnology under mutually agreeable terms and
        conditions, and (ii) other customary and reasonable terms and conditions
        standard for development, supply and commercialization arrangements of
        the type contemplated above. If the parties have not mutually agreed on
        the terms and conditions for the Phase II/III Projects for any reason by
        the expiration of the Negotiation Period, neither party shall have any
        further obligation to the other party under this Section 3.2 thereafter.
        It is understood that Phase II/III Projects may include additional Asian
        countries as mutually agreed between the parties.

3.3     Exclusivity. During the period ("Exclusive Period") beginning upon the
        commencement of the Development Period and ending (i) upon the
        expiration of the Negotiation Period, if MEW provides the Exercise
        Notice in accordance with Section 3.2, or (ii) upon expiration of the
        Election Period, if MEW fails to provide the Exercise Notice in
        accordance with Section 3.2, each party

Nanosys/MEW Confidential



                                                                          Page 4

         agrees not to enter into any written agreement with any third party
         with respect to the development, commercialization or other
         exploitation of OPVs containing inorganic Nanostructures for use in
         Building Materials in Asia. Each party remains free to enter into
         collaborations with third parties relating to OPVs containing
         Nanostructures other than inorganic Nanostuctures.

3.4      Other Opportunities. Nanosys and MEW may discuss the possibility of and
         terms and conditions for the parties collaborating together with
         respect to the development and commercialization in Asia of the OPVs
         developed hereunder, other than for use in Building Materials.

3.5      Option to License Phase I Technology. Provided that MEW has made the
         Five Hundred Thousand Dollars ($500,000) payment to Nanosys pursuant to
         Section 3.1, if thereafter during the Option Period Nanosys enters into
         a written agreement ("Third Party Agreement") with a third party
         ("Third Party") with respect to the Field (as defined below) granting
         such Third Party license rights which includes a material portion of
         Phase I Technology, Nanosys shall notify MEW and disclose the scope of
         such license rights in the Field and the terms and conditions agreed to
         by such Third Party for such license rights ("Notice of Third Party
         Agreement"). Upon written request of MEW received by Nanosys within
         thirty (30) days after the Notice of Third Party Agreement, Nanosys
         shall enter into a written agreement with MEW ("Written License)
         granting to MEW the same license rights in the Field as set forth in
         such Notice of Third Party License, on the same terms and conditions as
         agreed to by the respective Third Party. The license rights offered to
         MEW in the Notice of Third Party Agreement shall include all
         intellectual property rights that Nanosys grants to the Third Party
         that relate directly to the Field; provided however, that the Written
         License is not required to grant MEW any rights with respect to any
         intellectual property (i) which has been funded by or in conjunction
         with such Third Party to the Third Party Agreement or created during
         the course of such Third Party Agreement, or (ii) for any use outside
         the Field. During the Option Period, MEW agrees not to enter into any
         written agreement with any third party with respect to the Field. As
         used herein, the "Field" shall mean commercialization in Asia of OPVs
         containing inorganic Nanostructures specifically for use in Building
         Materials. Each party remains free to enter into collaborations with
         third parties relating to OPVs containing inorganic Nanostructures
         other than inorganic Nanostuctures.

                ARTICLE 4- CONFIDENTIALITY/HANDLING OF MATERIALS

4.1      Confidential Information. Except as provided herein, each party shall
         maintain in confidence, and shall not use for any purpose or disclose
         to any third party, information that is disclosed by the other party in
         writing and marked "Confidential," or that is disclosed orally and
         identified as or should reasonably be considered confidential, or that
         is obtained through inspection of tangible items marked or located in a
         area designated as confidential (collectively, "Confidential
         Information"). Confidential Information shall not include any
         information that the receiving party can demonstrate was: (i) already
         known to the receiving party at the time of disclosure hereunder, or
         (ii) now or hereafter becomes publicly known other than through acts or
         omissions of the receiving party, or (iii) is rightfully disclosed
         without restriction to the receiving party by a third party or (iv)
         independently developed by the receiving party without use of or
         reference to the Confidential Information of the disclosing party. The
         obligations of this Section 4 shall survive for five (5) years after
         any termination or expiration of this Agreement.

4.2      Permitted Usage. Notwithstanding the provisions of Section 4.1 above,
         the receiving party may use or disclose Confidential Information of the
         disclosing party solely to the extent necessary to exercise the rights
         granted to it or perform its obligations hereunder (provided it uses
         commercially reasonable efforts to protect such information
         commensurate with the efforts used to protect its own information of a
         similar nature) or in prosecuting or defending litigation, filing for
         patent rights with respect to Phase I Technology, complying with
         applicable governmental regulations and/or submitting information to
         tax or other governmental authorities; provided that if the receiving
         party is required by law to make any public disclosures of Confidential
         Information of the disclosing party, to the extent it may legally do
         so, it will give reasonable advance notice to

Nanosys/MEW Confidential




                                                                          Page 5


         the disclosing party of such disclosure and will use its reasonable
         efforts to secure confidential treatment of Confidential Information
         prior to its disclosure (whether through protective orders or
         otherwise).

4.3      Materials. Each party may in the course of performance of the
         Development Project transfer Materials that are necessary for the other
         party's performance of its duties under the Development Project. As
         used herein, a party's "Materials" shall refer to such materials and
         any other proprietary materials, compositions or software, provided by
         such party to the other party hereunder. Notwithstanding, Nanosys'
         Materials shall include any and all OPVs, Nanostructures,
         Nanocomposites and components or parts thereof created during the
         course of the Development Project. Each party shall retain all of its
         right, title and interest in and to its Materials.

         a.       Use. A party shall use the other party's Materials for the
                  sole purpose of conducting the Development Project, and not
                  for any other study or purpose without the prior written
                  consent of providing party. Each party shall only allow its
                  employees who are working on activities under the Development
                  Project, who have agreed to be bound by obligations of
                  confidentiality and non-use restrictions as materially
                  protective as this Agreement, to have access to the other
                  party's Materials.

         b.       Restrictions. Each party agrees to retain control over the
                  Materials of the other party and not to transfer such
                  Materials to any third party without the prior written consent
                  of the other party. Except as expressly provided, neither
                  party shall reverse engineer, disassemble or decompile any of
                  the Materials of the other party.

         c.       Markings. Each party agrees not to remove any markings on any
                  Materials of the other party.

         d.       Unknown Characteristics. Each party acknowledges that the
                  Materials are experimental in nature and may have unknown
                  characteristics and therefore agrees to use prudence and
                  reasonable care in the use, handling, storage, transportation
                  and disposition and containment of the Materials.

         e.       Limitations. Notwithstanding the foregoing, nothing in this
                  Article 4 shall be construed (1) to impose any obligations on
                  MEW with respect to MEW's Materials, and on Nanosys with
                  respect to Nanosys' Materials, (ii) as a grant by either party
                  to the other party of any license or other rights in or to the
                  Materials, (iii) to require either party to transfer any
                  Materials to the other party.

                       ARTICLE 5 -- INTELLECTUAL PROPERTY

5.1      Phase I Technology. Nanosys shall solely own all Phase I Technology
         created by either party constituting Nanotechnology. MEW hereby
         irrevocably assigns, and agrees to assign, to Nanosys Phase I
         Technology created by MEW constituting Nanotechnology, and agrees to
         assist Nanosys, upon Nanosys' reasonable request, to secure or perfect
         any or all such rights without MEW assuming any financial obligation.
         Except as set forth in this Article 5, the ownership of any Phase I
         Technology shall be determined by inventorship under the intellectual
         property laws of the country where the technology is created. It is
         understood that neither party shall have any obligation to account to
         the other party for profits, or to obtain any approval of the other
         party to license or exploit any jointly owned Phase I Technology, by
         reason of their joint ownership thereof, and each party hereby waives
         any right it may have under the laws of any country to require such
         accounting or approval. During the term of this Agreement and one (1)
         year thereafter, Nanosys shall inform MEW reasonably promptly following
         the filing of any patent applications regarding Phase I Technology. In
         the event that Nanosys files a patent application for Phase I
         Technology in the United State, Nanosys shall file a counterpart
         application for the same technology in each country in Asia in a timely
         fashion in accordance with international conventions or treaties at

Nanosys/MEW Confidential


                                                                          Page 6



         Nanosys' expense, but only provided that the Option Period has not
         expired or the parties proceed with a Phase II/III Project.

                            ARTICLE 6 -- TERMINATION

6.1      Expiration. Unless terminated earlier or extended by the mutual written
         agreement of the parties, this Agreement shall expire upon the later of
         (i) the expiration of the Development Period, or (ii) the expiration of
         the Exclusive Period (as defined in Section 3.3).

6.2      Termination. Either party may terminate this Agreement upon written
         notice in the event of material breach of this Agreement by the other
         party, which breach is not cured within thirty (30) days days after
         written notice specifying such breach and the notifying party's
         intention to terminate.

6.3      Obligations Surviving Expiration or Termination. Expiration or earlier
         termination of this Agreement shall not relieve the parties of any
         obligation accruing prior to such expiration or termination, and the
         provisions of Articles and Sections 2.5, 2.7, 3.1, 4, 5, 6 and 7 shall
         survive any expiration or termination of this Agreement. Upon
         termination or expiration of this Agreement (or earlier request of the
         other party), each party shall promptly return any and all Confidential
         Information and Materials of the other party. Section 3.5 shall survive
         the termination or expiration of this Agreement with respect to
         Nanosys' obligations, except in the case of termination due to MEW's
         breach. Section 3.5 shall survive the termination or expiration of this
         Agreement with respect to MEW's obligations, except in the case of
         termination due to Nanosys' breach.

                       ARTICLE 7 -- ADDITIONAL PROVISIONS

7.1      Notices. Any consent, notice, or report required or permitted to be
         given or made under this Agreement by one party to the other party
         shall be in writing, delivered personally or by facsimile (receipt
         confirmed), first class mall postage prepaid, or internationally
         recognized courier or delivery service, and addressed to.the other
         party at its address indicated below, or to other such address as the
         addressee shall have last furnished in writing to the addressor. Except
         as otherwise provided in the Agreement, such consent, notice, or report
         shall be effective upon receipt by the addressee.

         If to Nanosys:                  If to MEW:

         Attn: Calvin Y.H. Chow          Attn: Junji Adachi
         Nanosys, Inc.                   Matsushita Electric Works, Ltd.
         2625 Hanover Street,            Advanced Technology Research Laboratory
         Palo Alto, CA 94304             1048, Kadoma, Osaka 571-8686
         United States of America        Japan

7.2      Governing Law. This Agreement shall be governed by and construed in
         accordance with the laws of the State of New York, United States of
         America, without regard to the conflicts of law principles thereof. The
         parties disclaim any application of the U.N. Convention on Contracts
         for the International Sale of Goods to this Agreement.

7.3      Arbitration. Any dispute or claim arising out of or in connection with
         this Agreement or the performance, breach or termination thereof, shall
         be finally settled by binding arbitration in Santa Clara County,
         California. U.S.A., in accordance with the rules then obtaining of the
         International Chamber of Commerce by three (3) arbitrators appointed in
         accordance with said rules, unless the parties have agreed on one (1)
         arbitrator. The decision and/or award rendered by the arbitrator(s)
         shall be written, final and non-appealable and may be entered in any
         court of competent jurisdiction. The arbitral proceedings and all
         pleadings and evidence shall be in the English language. Any evidence
         originally in a language other than English shall be submitted

Nanosys/MEW Confidential





                                                                          Page 7



         with an English translation accompanied by an original or true copy
         thereof. The costs of any arbitration, including administrative fees
         and fees of the arbitrator(s), shall be shared equally by the parties,
         unless otherwise determined by the arbitrator(s). Each party shall bear
         the cost of its own attorneys' and expert fees. The parties agree that,
         any provision of applicable law notwithstanding, they will not request,
         and the arbitrator shall have no authority to award, punitive or
         exemplary damages against any party.

7.4      Independent Contractors. The relationship of MEW and Nanosys
         established by this Agreement is that of independent contractors. This
         Agreement shall not constitute, create, or otherwise imply a joint
         venture, pooling arrangement, partnership, or formal business
         organization of any kind. The parties agree that the obligations and
         duties of each party arising under this Agreement regardless of whether
         shared, identical, or otherwise similar, are separate and distinct from
         the obligations and duties of the other party. Actions or failures to
         act by one party shall not confer joint and several liability to the
         other party.

7.5      Language. This Agreement is in the English language only, which
         language shall be controlling in all respects, and all versions hereof
         in any other language shall not be binding on the parties hereto. All
         communications and notices to be made or given pursuant to this
         Agreement shall be in the English language.

7.6      U.S. Export Laws and Regulations. Each party hereby acknowledges that
         the rights and obligations of this Agreement are subject to the laws
         and regulations of the United States relating to the export of products
         and technical information. Each party shall comply with all such laws
         and regulations.

7.7      Force Majeure. Except with respect to payment of amounts due hereunder,
         neither party shall be held liable or responsible to the other party
         nor be deemed to have defaulted under or breached this Agreement for
         failure or delay in fulfilling or performing any term of the Agreement
         to the extent, and for so long as, such failure or delay is caused by
         or results from causes beyond the reasonable control of the affected
         party including but not limited to fires, earthquakes, floods,
         embargoes, wars, acts of war (whether war is declared or not),
         insurrections, riots, civil commotions, strikes, lockouts or other
         labor disturbances, acts of God or acts, omissions, or delays in acting
         by any governmental authority or other person. The term of the
         Development Period shall be extended by the number of days of any delay
         or interruption.

7.8      Representations and Warranties. Each party represents, warrants and
         covenants to the other party that (i) it has the power and authority to
         execute and deliver this Agreement and to perform its obligations
         hereunder, and (ii) the execution, delivery and performance of this
         Agreement by such party has been duly authorized by all requisite
         corporate action, and this Agreement constitutes such party's legal,
         valid and binding obligation enforceable against it in accordance with
         its term, (iii) to the knowledge of such party, it is the owner or
         licensee of all its Background Technology relied upon in its
         performance of this Agreement, (iv) to the knowledge of such party, its
         performance of this Agreement will not Infringe the intellectual
         property rights of any third party, and (v) such party shall not use
         any government funds for performance of the Development Project which
         would preclude or impair the ability to grant the other party
         commercialization rights to the Phase I Technology as contemplated
         under Section 3.2.

7.9      Disclaimer. Neither party makes any representation or warranty or
         guaranty that the Development Project will be successful, in whole or
         part, or that the parties will successfully meet their Development
         Goals or develop any OPV (or any other products or intellectual
         property) under the Development Project. EXCEPT AS SET FORTH HEREIN,
         MEW AND NANOSYS EXPRESSLY DISCLAIM ANY AND ALL WARRANTIES OR
         CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO
         THE CONFIDENTIAL INFORMATION, MATERIALS, PHASE I TECHNOLOGY AND ANY
         OTHER MATERIALS, TECHNOLOGY OR INFORMATION PROVIDED HEREUNDER,
         INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS
         FOR A PARTICULAR PURPOSE, VALIDITY,

Nanosys/MEWConfidential

                                                                          Page 8


         USEFULNESS OR RELIABILITY OF ANY SUCH INFORMATION AND TECHNOLOGY,
         PATENTED OR UNPATENTED, OR NON-INFRINGEMENT OF THE INTELLECTUAL
         PROPERTY RIGHTS OF THIRD PARTIES.

7.10     Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE
         OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE DAMAGES
         INCURRED BY SUCH PARTY ARISING UNDER OR AS A RESULT OF THIS AGREEMENT
         (OR THE PERFORMANCE, BREACH OR TERMINATION HEREOF) INCLUDING, BUT NOT
         LIMITED TO, THE LOSS OF PROSPECTIVE PROFITS OR ANTICIPATED SALES, OR ON
         ACCOUNT OF EXPENSES, INVESTMENTS, OR COMMITMENTS IN CONNECTION WITH THE
         BUSINESS OR GOODWILL OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE
         OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME.

7.11     Assignment. Except as set forth in this Section 7.11, neither party
         shall assign Its rights or obligations under this Agreement, in whole
         or in part, by operation of law or otherwise, without the prior written
         consent of the nonassigning party. Either party may assign this
         Agreement, and all of its rights hereunder, to a person or entity that
         acquires all or substantially all of the business or assets of that
         party (or that portion thereof to which this Agreement pertains) in
         each case whether by merger, acquisition, operation of law or
         otherwise, provided that such assignee agrees in writing to be bound by
         the terms and conditions of this Agreement. Any purported assignment in
         violation of this provision shall be null and void. Subject to the
         foregoing, this Assignment shall bind and inure to the benefit of each
         party's permitted successors or assigns.

7.12     Entire Agreement. This Agreement, including Appendix A and Appendix B
         attached hereto, embodies the entire understanding between the parties
         and supersedes any prior understandings and agreements between and
         among them respecting the subject matter hereof. There are no
         representations, agreements, arrangements or understandings, oral or
         written, between the parties hereto relating to the subject matter of
         the Agreement which are not fully expressed herein. No change,
         modification, extension, termination, or waiver of the Agreement, or
         any of the provisions herein contained, shall be valid unless made in
         writing and signed by duly authorized representatives of the parties
         hereto.

7.13     Counterparts. This Agreement may be executed in counterparts, each of
         which shall be deemed an original, but both of which together shall
         constitute one and the same instrument.

IN WITNESS WHEREOF, the parties through their duly authorized representatives
have executed the Agreement as of the date first set forth above.

NANOSYS, INC.                              MATSUSHITA ELECTRIC WORKS, LTD.

By   /s/ Calvin Chow                        By  /s/ Hiroshi Kikuchi
     ---------------------                      -----------------------------
Name   CALVIN CHOW                          Name Hiroshi Kikuchi
Title  CHIEF OPERATING OFFICER              Title Senior Managing Director

Nanosys/MEWConfidential

                                                                          Page 9


                                   APPENDIX A

                               Development Goals

Nanosys

A proof of concept of an OPV meeting the following specifications:

         -Device Size: [*** Redacted].

         -Raw Device [*** Redacted]: At least [*** Redacted] and [*** Redacted]
         and not including [*** Redacted].

         -Device Material: [*** Redacted], or other [*** Redacted] materials

MEW

1. Developing technology and strategies for manufacturing OPVs for use in
   Building Materials.

2. Performing market research relating to OPVs for use in Building Materials in
   Asia.

Nanosys Confidential

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                   APPENDIX B

DEFINITIONS OF WORDS IN THE DEVELOPMENT PROJECT

[*** Redacted]





*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

EX-10.9.1

                                                                  EXHIBIT 10.9.1

                    FIRST AMENDMENT TO DEVELOPMENT AGREEMENT

Nanosys Inc. ("Nanosys"), and Matsushita Electric Works, Ltd. ("MEW") are
parties to a certain Development Agreement ("the Agreement") dated and effective
as of November 18th, 2002 ("the Effective Date"). This First Amendment to the
Agreement is entered into and effective as of February 8, 2004 ("the First
Amendment Date").

WHEREAS, MEW and Nanosys wish to extend the Development Period of the Agreement;

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereby agree to amend the Agreement as
follows:

A.       Section 1.5 of the Agreement is hereby deleted and replaced with the
         following:

         1.5      "Development Period" shall mean the period commencing upon
                  Nanosys' receipt of the Two Million United States Dollars
                  ($2,000,000) payment set forth in Section 3.1, and unless'
                  terminated earlier upon termination of this Agreement pursuant
                  to Article 6 or extended by mutual written agreement of the
                  parties, expiring twenty one (21) months after the Effective
                  Date.

B.       In Section 3.1 of the Agreement, the third sentence which states in
         its entirety

         "As additional consideration, within thirty (30) days of the conclusion
         of the Development Period, provided that Nanosys has met its
         Development Goals or MEW provides or has provided Nanosys with an
         Exercise Notice pursuant to Section 3.2 or MEW elects in its discretion
         to make such payment, MEW shall pay Nanosys an additional Five Hundred
         Thousand United States Dollars (U.S. $500,000)."

is hereby deleted.

C.       In Section 3.5 of the Agreement, the opening clause that states in its
         entirety:

         "Option to License Phase I Technology. Provided that MEW has made the
         Five Hundred Thousand Dollars ($500,000) payment to Nanosys pursuant to
         Section 3.1,"

is hereby deleted and replaced with the following:

         "Option to License Phase I Technology. Provided that MEW has provided
         Nanosys with the Exercise Notice pursuant to Section 3.2,"

D.       In consideration of the foregoing amendments, MEW shall pay to Nanosys
the amount of Five Hundred Thousand United States Dollars ($500,000) ("Amendment
Fee") within thirty (30) days of the First Amendment Date. Such payment shall be
made in accordance with the terms respecting payment as set forth in the Article
3 of the Agreement.


E.       Unless expressly amended herein or by subsequent amendments agreed to
by the parties in a signed written amendment, all other terms of the Agreement,
including but not limited to terms related to interpretation and enforcement of
the Agreement, shall remain in full force and effect as originally agreed to in
the Agreement, and shall apply equally to the terms of this First Amendment. The
parties hereby expressly reaffirm their obligations under the Agreement,
including their obligation to prepare and provide a Final Report upon expiration
of the Development Period (as amended), and the parties acknowledge that any
delay in the delivery of such Final Report will result in a corresponding
extension of the time periods measured by reference to the Final Report,
including the Election Period.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                   Page 1 of 2


IN WITNESS WHEREOF, the parties through their duly authorized representatives
have executed this First Amendment as of the date last set forth below

NANOSYS, INC.                             MATSUSHITA ELECTRIC WORKS, LTD.

By:  /s/ Calvin Chow                       By:  /s/ Hiroshi Kikuchi
     ----------------------------               --------------------------------
Name: Calvin Chow                          Name: Hiroshi Kikuchi
Title: Chief Executive Officer             Title: Executive Vice President
Date: 2-17-04                              Date: February 17, 2004

                                   Page 2 of 2

EX-10.10

                                                                   EXHIBIT 10.10

                      MASSACHUSETTS INSTITUTE OF TECHNOLOGY

                       EXCLUSIVE PATENT LICENSE AGREEMENT

                                      WITH

                                  NANOSYS, INC.



                                       TABLE OF CONTENTS

                                                                               
RECITALS ....................................................................      1
1. Definitions ..............................................................      2
2. Grant of Rights ..........................................................      6
3. COMPANY Diligence Obligations ............................................      7
4. Royalties and Payment Terms ..............................................      9
5. Reports and Records ......................................................     13
6. Patent Prosecution .......................................................     15
7. Infringement .............................................................     16
8. Indemnification and Insurance ............................................     17
9. No Representations or Warranties ........................................     19
10. Assignment ..............................................................     19
11. General Compliance with Laws ............................................     20
12. Termination .............................................................     21
13. Dispute Resolution ......................................................     22
14. Miscellaneous ...........................................................     23
APPENDIX A ..................................................................     28
APPENDIX B ..................................................................     29
EXHIBIT A ...................................................................     31
EXHIBIT B ...................................................................     32
EXHIBIT C ...................................................................     33



                                       ii


                      MASSACHUSETTS INSTITUTE OF TECHNOLOGY
                       EXCLUSIVE PATENT LICENSE AGREEMENT

         This Agreement, effective as of the date set forth above the signatures
of the parties below (the "EFFECTIVE DATE"), is between the Massachusetts
Institute of Technology ("M.I.T."), a Massachusetts corporation, with a
principal office at 77 Massachusetts Avenue, Cambridge, MA 02139-4307 and
Nanosys, Inc. ("COMPANY"), a Delaware corporation, with a principal place of
business at 2625 Hanover Street, Palo Alto, CA 94304.

                                    RECITALS

         WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS (as later defined
herein) and has the right to grant licenses under said PATENT RIGHTS;

         WHEREAS, Moungi Bawendi, an inventor of the PATENT RIGHITS and current
employee of M.I.T., has or will shortly acquire equity in COMPANY, the Conflict
Avoidance Statement of Moungi Bawendi is attached as Exhibit A hereto;

         WHEREAS, Moungi Bawendi, an inventor of the PATENT RIGHTS, has or will
shortly acquire equity in COMPANY not resulting from this Agreement, the
Inventor/Author Acknowledgment of No Equity Distribution in M.I.T.'s
institutional equity share is attached as Exhibit B hereto;

         WHEREAS, M.I.T.'s Vice President for Research has approved that Moungi
Bawendi, an inventor of the PATENT RIGHTS, now holds or shall shortly acquire
equity in COMPANY and that M.I.T. is accepting equity as partial consideration
for the rights and licenses granted under this Agreement;

         WHEREAS, M.I.T. desires to have the PATENT RIGHTS developed and
commercialized to benefit the public and is willing to grant a license
thereunder;

         WHEREAS, COMPANY has represented to M.I.T., to induce M.I.T. to enter
into this Agreement, that COMPANY shall commit itself to a thorough, vigorous
and diligent program of exploiting the PATENT RIGHTS so that public utilization
shall result therefrom; and



         WHEREAS, COMPANY desires to obtain a license under the PATENT RIGHTS
upon the terms and conditions hereinafter set forth.

         NOW, THEREFORE, M.I.T. and COMPANY hereby agree as fellows:

                                 1. DEFINITIONS.

         1.1 "AFFILIATE" shall mean any legal entity (such as a corporation,
partnership, or limited liability company) that is controlled by COMPANY. For
the purposes of this definition, the term "control" means (i) beneficial
ownership of at least fifty percent (50%) of the voting securities of a
corporation or other business organization with voting securities or (ii) a
fifty percent (50%) or greater interest in the net assets or profits of a
partnership or other business organization without voting securities.

         1.2 "COMBINATION PRODUCT" shall mean a LICENSED PRODUCT sold in
combination with one or more other components which are themselves not LICENSED
PRODUCTS and where such other components could reasonably be deemed to be
separate product(s).

         1.3 "FIELDS" shall mean FIELD A and FIELD B.

         1.4 "FIELD A" shall mean all fields.

         1.5 "FIELD B" shall mean all fields excluding the field of
biological assay system and the field of combinatorial chemistry.

         1.6 "LICENSED PRODUCT" shall mean any product or part thereof that:

                  (a)absent the license granted hereunder, would infringe one or
more claims of the PATENT RIGHTS; or

                  (b) is manufactured by using a LICENSED PROCESS or that, when
used, practices a LICENSED PROCESS.

         1.7 "LICENSED PROCESS" shall mean any process that, absent the license
granted hereunder, would infringe one or more claims of the PATENT RIGHTS or
which uses a LICENSED PRODUCT.

                                       2

'
         1.8 "NET SALES" shall mean the gross amount [*** Redacted] by COMPANY
and its AFFILIATES and SUBLICENSEES for LICENSED PRODUCTS and LICENSED
PROCESSES, less the following:

                  (a) customary [*** Redacted] to the extent actually allowed
and taken;

                  (b) amounts [*** Redacted] by reason of [*** Redacted];

                  (c) an allowance for [*** Redacted] having occurred during the
REPORTING PERIOD, said allowance being no greater than [*** Redacted];

                  (d) to the extent separately stated on purchase orders,
invoices, or other documents of sale, any [*** Redacted] levied on the
production, sale, [*** Redacted], or use of a LICENSED PRODUCT or LICENSED
PROCESS which is paid by or on behalf of COMPANY; and

                  (e) [*** Redacted] costs prepaid or allowed and costs of [***
Redacted] in [*** Redacted].

                  No deductions shall be made for commissions paid to
individuals whether they are with independent sales agencies or regularly
employed by COMPANY or an AFFILIATE and on the payroll, or for cost of
collections. NET SALES shall occur on the date of [*** Redacted] for a LICENSED
PRODUCT or LICENSED PROCESS. If a LICENSED PRODUCT or a LICENSED PROCESS is
distributed [*** Redacted] charged by COMPANY or AFFILIATE, or distributed for
non-cash consideration (whether or not at a discount), NET SALES shall be
calculated based on [*** Redacted] of the LICENSED PRODUCT or LICENSED PROCESS
charged to an independent third party during the same REPORTING PERIOD or, in
the absence of such sales, on the fair market value of the LICENSED PRODUCT or
LICENSED PROCESS.

                  In the case of COMBINATION PRODUCTS, NET SALES shall mean the
gross amount billed or invoiced for the COMBINATION PRODUCT less the deductions
set forth above, multiplied by a proration factor that is determined as follows:

                           (i) If all components of the COMBINATION PRODUCT were
         sold separately during the same or immediately preceding ROYALTY
         PERIOD, the proration factor shall be determined by the formula [***
         Redacted] where A is the [*** Redacted] price of all LICENSED PRODUCT
         components during such period when sold separately from the other
         essential functional components, and B is the [*** Redacted] of the
         other essential functional components during such period when sold
         separately from the LICENSED PRODUCT components; or

                           (ii) If all components of the COMBINATION PRODUCT
were not sold separately during the same or immediately preceding ROYALTY
PERIOD, the proration factor shall be determined by the formula [*** Redacted]
where C is the [*** Redacted] of


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                       3


the LICENSED PRODUCT components during the prior ROYALTY PERIOD and D is the
[*** Redacted] during the prior ROYALTY PERIOD, with such costs being determined
in accordance with generally accepted accounting principles.

         1.9 "PATENT RIGHTS" shall mean PATENT RIGHTS A and PATENT RIGHTS B.

         1.10 "PATENT RIGHTS A" shall mean:

                  (a)      the United States and international patents listed on
Appendix A:

                  (b)      the United States and international patent
applications and/or provisional applications listed on Appendix A and the
resulting patents;

                  (c)      any patent applications resulting from the
provisional applications listed on Appendix A, and any divisionals,
continuations, continuation-in-part applications, and continued prosecution
applications (and their relevant international equivalents) of the patent
applications listed on Appendix A and of such patent applications that result
from the provisional applications listed on Appendix A, to the extent the claims
are directed to subject matter in or supported by the patent applications listed
on Appendix A, and the resulting patents;

                  (d)      any patents resulting from reissues, reexaminations,
or extensions (and their relevant international equivalents) of the patents
described in (a), (b), and (c) above; and

                  (e)      international (non-United States) patent applications
 and provisional applications filed after the EFFECTIVE DATE and the relevant
international equivalents to divisionals, continuations, continuation-in-part
applications and continued prosecution applications of the patent applications
to the extent the claims are directed to subject matter in or supported by the
patents or patent applications referred to in (a), (b), (c), and (d) above, and
the resulting patents.

         1.11 "PATENT RIGHTS B" shall mean:

                  (a)      the United States and international patents listed on
Appendix B;

                  (b)      the United States and international patent
applications and/or provisional applications listed on Appendix B and the
resulting patents;

                  (c)      any patent applications resulting from the
provisional applications listed on Appendix B, and any divisional,
continuations, continuation-in-part applications, and continued prosecution
applications (and their relevant international equivalents) of the patent
applications listed on Appendix B and of such patent applications that result
from the provisional applications listed on Appendix B, to the extent the claims
are directed to subject matter in or supported by the patent applications listed
on Appendix B, and the resulting patents;


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                       4


                  (d)      any patents resulting from reissues, reexaminations,
or extensions (and their relevant international equivalents) of the patents
described in (a), (b), and (c) above; and

                  (e)      international (non-United States) patent applications
and provisional applications filed after the EFFECTIVE DATE and the relevant
International equivalents to divisisntinuations, continuation-in-part
applications and continued prosecution applications of the patent applications
to the extent the claims are directed to subject matter in or supported by the
patents or patent applications referred to in (a), (b), (c), and (d) above, and
the resulting parents.

         1.12 "REPORTING PERIOD" shall begin on the first day of each calendar
quarter and end on the last day of such calendar quarter.

         1.13 "SUBLICENSE INCOME" shall mean any payments that COMPANY receives
from a SUBLICENSEE, including any sublicense entered into in settlement of any
claim of infringement in consideration of the sublicense of the rights granted
COMPANY under Section 2.1, including without limitation license fees, milestone
payments, license maintenance fees, royalties on NET SALES, and other payments,
but specifically excluding, payment or reimbursement for research and
development actually performed; costs incurred by or for COMPANY associated with
materials, equipment or clinical testing used in performance of research and
development; patent expenses; fair market value amounts received for COMPANY'S
equity; and amounts in consideration of any other rights or  licenses under any
intellectual property owned by or licensed to the COMPANY other then the patent
rights.

         1.14 "SUBLICENSEE" shall mean any non-AFFILIATE sublicensee of the
rights granted COMPANY under Section 2.1.

         1.15 "TERM" shall mean the term of this Agreement, which shall
commence on the EFFECTIVE DATE and shall remain in effect until the expiration,
abandonment, or written express disclaimer of the validity or enforceability by
M.I.T, of all issued patents and filed patent applications within the PATENT
RIGHTS, unless earlier terminated in accordance with the provisions of this
Agreement.

         1.16 "TERRITORY" shall mean worldwide.

                                       5



                               2. GRANT OF RIGHTS.

         2.1 License Grants.

                  (a)      Subject to the terms of this Agreement, M.I.T. hereby
grants to COMPANY and its AFFILIATES for the TERM a royalty-bearing license
under the PATENT RIGHTS A to develop, make, have made, use, sell, offer to sell,
lease, or import LICENSED PRODUCTS in FIELD A in the TERRITORY and to develop
and perform LICENSED PROCESSES in FIELD A in the TERRITORY for the TERM.

                  (b)      Subject to the terms of this Agreement, M.I.T. hereby
grants to COMPANY and its AFFILIATES for the TERM a royalty-bearing license
under the PATENT RIGHTS B to develop, make, have made, use, sell, offer to sell,
lease, or import LICENSED PRODUCTS in FIELD B in the TERRITORY and to develop
and perform LICENSED PROCESSES in FIELD B in the TERRITORY for the TERM.

         2.2 Exclusivity.

                  (a)      In order to establish exclusivity for COMPANY for
PATENT RIGHTS A, M.I.T. agrees that it shall not grant any other license to
develop, make, have made, use, sell, offer to sell, lease or import LICENSED
PRODUCTS in FIELD A in the TERRITORY or to perform LICENSED PROCESSES in FIELD A
in the TERRITORY for the TERM.

                  (b)      In order to establish exclusivity for COMPANY for
PATENT RIGHTS B in FIELD B, M.I.T. agrees that it shall not grant any other
license to develop, make, have made, use, sell, offer to sell, lease or import
LICENSED PRODUCTS or to perform LICENSED PROCESSES in FIELD B in the TERRITORY
for the TERM, subject to a pre-existing nonexclusive license to Quantum Dot
Corporation dated November 18, 1998 which grants rights to Quantum Dot
Corporation in the field of "applications of semiconductor nanoparticles for the
purpose of the sale, lease, transfer of LICENSED PRODUCTS or LICENSED PROCESSES
to not-for-profit entities for research and development purposes only."

                  (c)      M.I.T. hereby warrants that, to the best of its
knowledge without due inquiry, it has the right to grant the licenses and
establish exclusivity as set forth in Sections 2.1 and 2.2, subject to Article
9 of this Agreement.

         2.3 Sublicenses. COMPANY shall have the right to grant sublicenses of
its rights under Section 2.1. COMPANY shall incorporate terms and conditions
into its sublicenses agreements sufficient to enable COMPANY to comply with this
Agreement. COMPANY shall promptly furnish M.I.T. with a fully, signed photocopy
of any sublicense agreement. Sublicense

                                       6



agreements provided to M.I.T. under this section may be provided in redacted
form, provided that such redacted sublicense agreements contain all terms
necessary for M.I.T. to determine COMPANY'S compliance with the obligations of
this Agreement; and provided further that upon request, M.I.T's representatives
can review the sublicenses in their entirety at COMPANY'S facility. Upon
termination of this Agreement for any reason, any SUBLICENSEE not then in
default shall maintain their license under the then existing terms and
conditions, provided that such terms and conditions are at least as favorable to
M.I.T. as the terms of this Agreement, and provided that such SUBLICENSEE assume
all unsatisfied and unwaived, past, current, and future obligations of COMPANY
under this Agreement.

         2.4 U.S. Manufacturing. COMPANY agrees that any LICENSED PRODUCTS used
or sold in the United States will be manufactured substantially in the United
States, to the extent required by law.

         2.5 Retained Rights.

                  (a)      M.I.T. M.I.T. retains the right to practice under the
PATENT RIGHTS for research, teaching, and educational purposes.

                  (b)      Federal Government. COMPANY acknowledges that the
U.S. federal government retains a royalty-free, non-exclusive, non-transferable
license to practice any government-funded invention claimed in any PATENT RIGHTS
as set forth in 35 U.S.C. Sections 201-211, and the regulations promulgated
thereunder, as amended, or any successor statutes or regulations.

         2.6 No Additional Rights. Nothing in this Agreement shall be construed
to confer any rights upon COMPANY by implication, estoppel, or otherwise as to
any technology or patent rights of M.I.T. or any other entity other than the
PATENT RIGHTS, regardless of whether such technology or patent rights shall be
dominant or subordinate to any PATENT RIGHTS.

                        3. COMPANY DILIGENCE OBLIGATIONS.

         3.1 Diligence Requirements. COMPANY shall use diligent efforts, or
shall cause its AFFILIATES and SUBLICENSEES to use diligent efforts, to develop
LICENSED PRODUCTS or LICENSED PROCESSES and to introduce LICENSED PRODUCTS or
LICENSED PROCESSES into the commercial market; thereafter, COMPANY or its
AFFILIATES or SUBLICENSEES shall make LICENSED PRODUCTS or LICENSED PROCESSES
reasonably

                                       7


available to the public. Specifically, COMPANY or AFFILIATE or SUBLICENSEE
shall fulfill the following obligations:

                  (a)      Within seven (7) months after the EFFECTIVE DATE,
COMPANY shall furnish M.I.T. with a written research and development plan
describing the major tasks to be achieved in order to bring to market a LICENSED
PRODUCT or a LICENSED PROCESS, specifying the number of staff and other
resources to be devoted to such commercialization effort.

                  (b)      Within sixty (60) days after the end of each
calendar year, COMPANY shall furnish M.I.T. with a written report (consistent
with Section 5.1 (a)) on the progress of its efforts during the immediately
preceding calendar year to develop and commercialize LICENSED PRODUCTS or
LICENSED PROCESSES. The report shall also contain a discussion of intended
efforts and sales projections for the year in which the report is submitted.

                  (c)      COMPANY shall develop a working model on or before
the date two (2) years from the EFFECTIVE DATE, and permit an in-plant
inspection by M.I.T. on or before the date twelve (12) months from the
EFFECTIVE DATE, and thereafter permit in-plant inspections by M.I.T. at regular
intervals with at least twelve (12) months between each such inspection.

                  (d)      COMPANY, its AFFILIATES or SUBLICENSEES, shall fund
research toward the development of LICENSED PRODUCTS and/or LICENSED PROCESSES
in each calendar year (pro-rated for partial years) beginning in 2003, and as
provided below, and ending with the first commercial sale of a LICENSED PRODUCT
or a first commercial performance of a LICENSED PROCESS. Such funding shall
include funding of research and/or development of technology reasonably
necessary for commercial or technical viability of the LICENSED PRODUCTS.



Year                           Funding
                         
2003                        $  1,000,000
2004                        $  1,500,000
2005 and thereafter         $  2,000,000


                  (e)      COMPANY shall make a first commercial sale of a
LICENSED PRODUCT and/or a first commercial performance of a LICENSED PROCESS on
or before January 2, 2007.

                                       8


                  (f)      COMPANY shall make annual NET SALES according to the
following schedule:

                                  
2009                                 $1,000,000;
2010                                 $1,500,000;
2011 and each year
through and including 2014           $2,250,000;
2015, and each year thereafter       $5,000,000.



         In the event that M.I.T. determines that COMPANY (or an AFFILIATE or
SUBLICENSEE) has failed to fulfill any of its obligations under this Section
3.1, then M.I.T. may treat such failure as a material breach in accordance
with Section 12.3(b). To the extent that COMPANY has made commercially
reasonable efforts to meet its obligations, then M.I.T. may, in its discretion,
amend or extend the schedule of such obligations.

                         4. ROYALTIES AND PAYMENT TERMS.

         4.1 Consideration for Grant of Rights. In consideration for the rights
granted herein, COMPANY agrees to the following:

                  (a)      License Issue Fee and Patent Cost Reimbursement.
COMPANY shall pay to M.I.T. within thirty (30) days of the EFFECTIVE DATE a
license issue fee of [*** Redacted], and, in accordance with Section 6.3, shall
reimburse M.I.T. for its actual expenses incurred as of the EFFECTIVE DATE in
connection with obtaining the PATENT RIGHTS, less any expenses that have already
been reimbursed by another party or for which another party is obligated to
reimburse M.I.T. These payments are nonrefundable.

                  (b)      License Maintenance Fees. COMPANY shall pay to M.I.T.
the following license maintenance fees on the dates set forth below:

                                   
June 1, 2004                          [*** Redacted]
June 1, 2005                          [*** Redacted]
June 1, 2006                          [*** Redacted]
June 1, 2007                          [*** Redacted]
June 1, 2008 and every
       June 1 thereafter              [*** Redacted]



*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                       9


                           This annual license maintenance fee is nonrefundable,
however, the license maintenance fee may be credited to running royalties
subsequently due on NET SALES earned during the same calendar year, if any.
License maintenance fees paid in excess of running royalties due in such
calendar year shall not be creditable to amounts due for future years.

                  (c)      Running Royalties. COMPANY shall pay to M.I.T. a
running royalty of [*** Redacted] of NET SALES by COMPANY and AFFILIATES.
Running royalties shall be payable for each REPORTING PERIOD and shall be due to
M.I.T. within sixty (60) days of the end of each REPORTING PERIOD.

                  (d)      Sharing of SUBLICENSE INCOME. COMPANY shall pay

M.I.T. a total of [*** Redacted] of all SUBLICENSE INCOME received by COMPANY.
Such amount shall be payable for each REPORTING PERIOD and shall be due to
M.I.T. within sixty (60) days of the end of each REPORTING PERIOD. This [***
Redacted] may be reduced by one percentage point per each [*** Redacted] of
research directed by COMPANY specifically toward the development of LICENSED
PRODUCTS and/or LICENSED PROCESSES, with the percentage of shared SUBLICENSE
INCOME to be no less than [*** Redacted] of SUBLICENSE INCOME or [*** Redacted]
of NET SALES by SUBLICENSEE, whichever is greater.

                  (e)      No Multiple Royalties. If the manufacture, use,
lease, or sale of any LICENSED PRODUCT or the performance of any LICENSED
PROCESS is covered by more than one of the PATENT RIGHTS, multiple royalties
shall not be due.

                  (f)      Equity.

                           (i)      Initial Grant. Within thirty (30) days of
the EFFECTIVE DATE, COMPANY shall sell and issue a total of Fifty Thousand
(50,000) shares of Common Stock of COMPANY, $.001 par value per share, (the
"Shares") to M.I.T. at a price of $0.12 per share for a total of $6,000.00.
M.I.T. shall have the right to assign and transfer such shares to such persons
as M.I.T. shall direct ("M.I.T. Holder"), and each M.I.T. Holder shall receive
such a number of shares as M.I.T. shall direct provided that such M.I.T. Holder
is an accredited investor as defined by Rule 50l(a) of Regulation D under the
Securities Act of 1933, or provides COMPANY with an executed Investor
Representation Statement in substantially the form attached hereto as Exhibit C.
Upon issuance of shares hereunder, M.I.T. will, at COMPANY'S direction, execute
a shareholder agreement, co-sale agreement and voting agreement in a mutually
agreeable form.

                           (ii)     Participation in Future Private Equity
Offerings. M.I.T. (specifically not including M.I.T. Holders) shall have the
right of first offer to purchase an


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                       10


amount of securities of COMPANY of any class or kind which COMPANY proposes to
sell in a non-registered private placement ("Preemptive Securities") sufficient
to maintain M.I.T.'s proportionate beneficial ownership interest in COMPANY (on
an as-converted, fully diluted basis) (M.I.T's "Pro Rata Portion" as defined
below). Notwithstanding the foregoing, Preemptive Securities will not include
and, M.I.T. will not have a right of first offer as provided in this Agreement
to purchase (i) securities issued upon the closing of a public offering of
COMPANY's common stock resulting in gross proceeds to COMPANY of at least $10
million (a "Qualified Public Offering"), (ii) securities issued upon conversion
of Preferred Stock or other warrants or other convertible or exercisable
securities of COMPANY outstanding as of the date hereof, (iii) securities issued
in connection with any stock split or stock dividend of COMPANY,
recapitalizations or the like, (iv) Common Stock issued to employees, officers,
or directors of, or contractors, consultants or advisors to, COMPANY pursuant to
stock purchase or stock option plans, stock bonuses or awards, contracts or
other arrangements approved by COMPANY's Board of Directors, (v) shares of
capital stock issued to a financial institution which has loaned funds to
COMPANY, the terms of which are approved by COMPANY's Board of Directors, (vi)
shares of capital stock issued to equipment or real property lessors, the terms
of which are approved by COMPANY's Board of Directors, (vii) shares of capital
stock issued in connection with the acquisition of technology or licenses, the
terms of which are approved by COMPANY's Board of Directors, or (viii)
securities issued to non-financial corporations in connection with a license,
distribution, development, foundry or similar "corporate partner" agreement, the
terms of which are approved by COMPANY's Board of Directors. If COMPANY wishes
to make any such sale of Preemptive Securities, it shall give M.I.T. prior
written notice ("Prior Written Notice") of the proposed sale. The notice shall
set forth (i) COMPANY's bona fide intention to offer Preemptive Securities and
(ii) the material terms and conditions of the proposed sale (including the
number of shares to be offered and the price, if any, for which COMPANY proposes
to offer such share), and the date by which the Acceptance Notice (as defined
below) is due, and shall constitute an offer to sell Preemptive Securities to
M.I.T. on such terms and conditions. M.I.T. may accept such offer by delivering
a written notice of acceptance (an "Acceptance Notice") to COMPANY within
fifteen (15) days after receipt of the Prior Written Notice. Notwithstanding the
foregoing, COMPANY shall provide M.I.T. with up to thirty (30) days after
M.I.T.'s receipt of the Prior Written Notice before M.I.T.'s required delivery
of the Acceptance Notice, if such additional time will not unduly delay or
jeopardize the closing of the COMPANY's proposed sale of such Preemptive
Securities. M.I.T. in exercising their rights of first offer shall be entitled
at their option to participate in the purchase of Preemptive Securities on a pro
rata basis to the extent necessary to maintain M.I.T.'s proportionate beneficial
ownership interest in COMPANY (M.I.T.'s "Pro Rata Portion") (for purposes of
determining M.I.T.'s Pro Rata Portion with respect to any issuance of Preemptive
Securities, other security holders shall be

                                       11


treated as owning that number of shares of Common Stock into which any
outstanding Preferred Stock may be converted, while the total COMPANY interest
will be calculated on an as-converted to Common Stock basis, assuming full
conversion and exercise of all outstanding convertible or exercisable
securities). If M.I.T. elects to exercise its right of first offer and does not
complete the purchase of such Preemptive Securities within ten (10] days after
delivery of its Acceptance Notice to COMPANY, COMPANY may complete the sale of
Preemptive Securities on the terms and conditions specified in COMPANY's notice
within the one hundred and twenty (120) day period following the expiration of
such ten (10) day period. If COMPANY does not enter into an agreement for the
sale of Preemptive Securities to M.I.T. pursuant to a delivered Acceptance
Notice within such ten (10) day period, or if COMPANY does not otherwise
consummate an agreement for the sale of Preemptive Securities within such one
hundred and twenty (120) day period, the right provided hereunder shall be
deemed to be revived and all future shares of Preemptive Securities shall not be
offered unless first re-offered to M.I.T. in accordance with this Agreement.

                           (iii)    Waiver and Expiration of Right of First
Offer. The right of first offer granted under this Agreement shall terminate
upon the closing of a firm commitment for a Qualified Public Offering. The right
of first offer granted to M.I.T. under this Agreement may not be waived (either
generally or in a particular instance, either retroactively or prospectively,
and either for a specified period of time or indefinitely) by written consent
from a majority of COMPANY'S Preferred Stock having a right of first offer to
purchase COMPANY securities, unless M.I.T. also consents in writing to such
waiver of the right granted to M.I.T. hereunder, which consent shall not be
unreasonably withheld.

         4.2 Payments.

                  (a)      Method of Payment. All payments under this Agreement
should be made payable to "Massachusetts Institute of Technology" and sent to
the address identified in Section 14.1. Each payment should reference this
Agreement and identify the obligation under this Agreement that the payment
satisfies.

                  (b)      Payments in U.S. Dollars. All payments due under
this Agreement shall be drawn on a United States bank and shall be payable in
United States dollars. Conversion of foreign currency to U.S. dollars shall be
made at the conversion rate existing in the United States (as reported in the
Wall Street Journal) on the last working day of the calendar quarter of the
applicable REPORTING PERIOD. Such payments shall be without deduction of
exchange, collection, or other charges, and, specifically, without deduction of
withholding or similar taxes or other government imposed fees or taxes, except
as permitted in the definition of NET SALES.

                                       12

                  (c)      Late Payments. Any payments by COMPANY that are not
paid on or before the date such payments are due under this Agreement shall bear
interest, to the extent permitted by law, at two percentage points above the
Prime Rate of interest as reported in the Wall Street Journal on the date
payment is due.

                             5. REPORTS AND RECORDS.

         5.1 Frequency of Reports-

                  (a)      Before First Commercial Sale. Prior to the first
commercial sale of any LICENSED PRODUCT or first commercial performance of any
LICENSED PROCESS, COMPANY shall deliver reports to M.I.T. annually, within
sixty (60) days of the end of each calendar year, containing information
concerning the immediately preceding calendar year, as further described in
Section 5.2.

                  (b)      Upon First Commercial Sale of a LICENSED PRODUCT or
Commercial Performance of a LICENSED PROCESS. COMPANY shall report to M.I.T. the
date of first commercial sale of a LICENSED PRODUCT and the date of first
commercial performance of a LICENSED PROCESS within sixty (60) days of
occurrence in each country.

                  (c)      After First Commercial Sale. After the first
commercial sale of a LICENSED PRODUCT or first commercial performance of a
LICENSED PROCESS, COMPANY shall deliver reports to M.I.T. within sixty (60) days
of the end of each REPORTING PERIOD, containing information concerning the
immediately preceding REPORTING PERIOD, as further described in Section 5.2.

         5.2 Content of Reports and Payments. Each report delivered by COMPANY
to M.I.T. shall contain at least the following information for the immediately
preceding REPORTING PERIOD:

                  (a) the number of LICENSED PRODUCTS sold, leased or
distributed by COMPANY, its AFFILIATES and SUBLICENSEES to independent third
parties in each country, and, if applicable, the number of LICENSED PRODUCTS
used by COMPANY, its AFFILIATES and SUBLICENSEES in the provision of services in
each country;

                                       13


                  (b) a description of LICENSED PROCESSES performed by COMPANY
its AFFILIATES and SUBLICENSEES in each country as may be pertinent to a royalty
accounting hereunder;

                  (c) the gross price charged by COMPANY, its AFFILIATES and
SUBLICENSEES for each LICENSED PRODUCT and, if applicable, the gross price
charged for each LICENSED PRODUCT used to provide services in each country; and
the gross price charged for each LICENSED PROCESS performed by COMPANY, its
AFFILIATES and SUBLICENSEES in each country;

                  (d) calculation of NET SALES for the applicable REPORTING
PERIOD in each country, including a listing of applicable deductions;

                  (e) total royalty payable on NET SALES in U.S. dollars,
together with the exchange rates used for conversion;

                  (f) the amount of SUBLICENSE INCOME received by COMPANY from
each SUBLICENSEE and the amount due to M.I.T. from such SUBLICENSE INCOME,
including an itemized breakdown of the sources of income comprising the
SUBLICENSE INCOME; and

                  (g) the number of sublicenses entered into for the PATENT
RIGHTS, LICENSED PRODUCTS and/or LICENSED PROCESSES.

                  (h) the dollar amount funded by COMPANY, AFFILIATES and
SUBLICENSEES toward research and development pursuant to Section 4.1 (d) of this
Agreement.

         If no amounts are due to M.I.T. for any REPORTING PERIOD, the report
shall so state.

         5.3 Financial Statements. On or before the ninetieth (90th) day
following the close of COMPANY'S fiscal year, COMPANY shall provide M.I.T. with
COMPANY'S financial statements for the preceding fiscal year including, at a
minimum, a balance sheet and an income statement, certified by COMPANY's
treasurer, chief financial officer, or vice president of finance, or by an
independent auditor. All financial statements provided by COMPANY shall be
treated as confidential in accordance with the requirements of Section 14.1.

                                       14

 5.4 Records. COMPANY shall maintain, and shall cause its AFFILIATES and
SUBLICENSEES to maintain, complete and accurate records relating to the rights
and obligations under this Agreement and any amounts payable to M.I.T. in
relation to this Agreement, which records shall contain sufficient information
to permit M.I.T. to confirm the accuracy of any reports delivered to M.I.T. and
compliance in other respects with this Agreement. The relevant party shall
retain such records for at least five (5) years following the end of the
calendar year to which they pertain, during which time M.I.T., or M.I.T.'s
appointed agents, shall have the right, at M.I.T.'s expense, to inspect such
records during normal business hours to verify any reports and payments made or
compliance in other respects under this Agreement. In the event that any audit
performed under this Section reveals an underpayment in excess of five percent
(5%), COMPANY shall bear the full cost of such audit and shall remit any amounts
due to M.I.T. within thirty (30) days of receiving notice thereof from M.I.T.

                             6. PATENT PROSECUTION.

         6.1 Responsibility for PATENT RIGHTS. M.I.T. shall prepare, file,
prosecute, and maintain all of the PATENT RIGHTS. COMPANY shall have reasonable
opportunities to advise M.I.T. and shall cooperate with M.I.T. in such filing,
prosecution and maintenance. While both Parties accept the current counsel for
the preparation, maintenance and prosecution of PATENT RIGHTS (PATENT COUNSEL),
M.I.T. and COMPANY shall each have the right to notify the other Party of a
desire to designate new or different PATENT COUNSEL. In the event of such
notification, M.I.T. and COMPANY shall meet and mutually agree upon new or
different PATENT COUNSEL. In the event the parties fail to agree, M.I.T., shall
choose a new PATENT COUNSEL.

         6.2 International (non-United States) Filings. Appendix A and Appendix
B include a list of countries in which patent applications corresponding to the
United States patent applications have been filed, prosecuted, and maintained.
Each Appendix may be amended by mutual agreement of COMPANY and M.I.T. to add
additional countries in which foreign applications shall be filed after the
EFFECTIVE DATE. Notwithstanding the foregoing, failure to amend the Appendices
to reflect international or foreign filings that are otherwise subject to this
Agreement shall not limit the PATENT RIGHTS hereunder.

         6.3 Payment of Expenses. Payment of all fees and costs, including
attorneys fees, relating to the filing, prosecution and maintenance of the
PATENT RIGHTS not reimbursed by other licensees shall be the responsibility of
COMPANY, whether such amount were incurred before or after the EFFECTIVE DATE.
As of M.I.T. has incurred

                                       15

approximately [*** Redacted] for such patent-related fees and costs in FIELD A.
As of August 23, 2002, COMPANY'S portion of patent related fees and costs in
FIELD B equals approximately $0.00. COMPANY shall reimburse all amounts
due pursuant to this Section within thirty (30) days of invoicing, which
invoicing shall include reasonable documentation of amounts due, including
copies of relevant portions of invoices to M.I.T.; late payments shall accrue
interest pursuant to Section 4.2(c). In all instances, M.I.T. shall pay the fees
prescribed for large entities to the United States Patent and Trademark Office.

                                7. INFRINGEMENT.

         7.1 Notification of Infringement. Each party agrees to provide written
notice to the other party promptly after becoming aware of any infringement of
the PATENT RIGHTS.

         7.2 Right to Prosecute Infringements.

                  (a)      COMPANY Right to Prosecute. So long as COMPANY
remains the exclusive licensee of the PATENT RIGHTS in the relevant FIELD in the
TERRITORY, COMPANY, to the extent permitted by law, shall have the right, under
its own control and at its own expense, to prosecute any third party
infringement of the PATENT RIGHTS in such FIELD in the TERRITORY, subject to
Sections 7.4 and 7.5. If required by law, M.I.T. shall permit any action under
this Section to be brought in its name, including being joined as a
party-plaintiff, provided that COMPANY shall hold M.I.T. harmless from, and
indemnify M.I.T. against, any costs, expenses, or liability that M.I.T. incurs
in connection with such action.

                           Prior to commencing any such action, COMPANY shall
consult with M.I.T. and shall consider the views of M.I.T. regarding the
advisability of the proposed action and its effect on the public interest.
COMPANY shall not enter into any settlement, consent judgment, or other
voluntary final disposition of any infringement action under this Section
without the prior written consent of M.I.T. which consent shall not be
unreasonably withheld.

                  (b)      M.I.T. Right to Prosecute. In the event that COMPANY
is unsuccessful in persuading the alleged infringer to desist or fails to have
initiated an infringement action within a reasonable time after COMPANY first
becomes aware of the basis for such action, M.I.T. shall have the right, at its
sole discretion, to prosecute such infringement under its sole control and at
its sole expense, and any recovery obtained shall belong to M.I.T.

         7.3 Declaratory Judgment Actions. In the event that a declaratory
judgment action is brought against M.I.T. or COMPANY by a third party alleging
invalidity, unenforceability, or


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                       16


non-infringement of the PATENT RIGHTS, M.I.T., at its option, shall have the
right within twenty (20) after commencement of such action to take over the sole
defense of the action at its own expense. If M.I.T. does not exercise this
right, COMPANY may take over the sole defense of the action at COMPANY's sole
expense, subject to Sections 7.4 and 7.5.

         7.4 Offsets. COMPANY may offset a total of [*** Redacted] of any
expenses incurred under Sections 7.2 and 7.3 against any payments due to M.I.T.
under Article 4, provided that in no event shall such payments under Article 4,
when aggregated with any other offsets and credits allowed under this Agreement,
be reduced by more than [*** Redacted] in any REPORTING PERIOD.

         7.5 Recovery. Any recovery obtained in an action brought by COMPANY
under Sections 7.2 or 7.3 shall be distributed as follows: (i) each party shall
be reimbursed for any expenses incurred in the action (including the amount of
any royalty or other payments withheld from M.I.T. as described in Section 7.4),
(ii) as to ordinary damages, COMPANY shall receive an amount equal to its lost
profits or a reasonable royalty on the infringing sales, or whichever measure
of damages the court shall have applied, and COMPANY shall pay to M.I.T. based
upon such amount a reasonable approximation of the royalties and other amounts
that COMPANY would have paid to M.I.T. if Company had sold the infringing
products, processes and services rather than the infringer, and (iii) as to
special or punitive damages, the COMPANY shall pay M.I.T. 20% of any such award.

         7.6 Cooperation. Each party agrees to cooperate in any action under
this Article which is controlled by the other party, provided that the
controlling party reimburses the cooperating party promptly for any costs and
expenses incurred by the cooperating party in connection with providing such
assistance.

                        8. INDEMNIFICATION AND INSURANCE

         8.1 Indemnification.

                  (a)      Indemnity. Except in the case of a final
determination of M.I.T.'s gross negligence, COMPANY shall indemnify, defend, and
hold harmless M.I.T. and its trustees, officers, faculty, students, employees,
and agents and their respective successors, heirs and assigns (the
"Indemnitees"), against any liability, damage, loss, or expense (including
reasonable attorneys fees and expenses) incurred by or imposed upon any of the
Indemnitees in connection with any claims, suits, actions, demands or judgments
arising out of any theory of liability


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                       17


(including without limitation actions in the form of tort, warranty, or strict
liability and regardless of whether such action has any factual basis)
concerning any product, process, or service that is made, used, sold, imported,
or performed pursuant to any right or license granted to COMPANY or AFFILIATES
under this Agreement.

                  (b)      Procedures. The Indemnitees agree to provide COMPANY
with prompt written notice of any claim, suit, action, demand, or judgment for
which indemnification is sought under this Agreement. COMPANY agrees, at its own
expense, to provide attorneys reasonably acceptable to M.I.T. to defend against
any such claim. The Indemnitees shall cooperate fully with COMPANY in such
defense and will permit COMPANY to conduct and control such defense and the
disposition of such claim, suit, or action (including all decisions relative to
litigation, appeal, and settlement); provided, however, that any Indemnitee
shall have the right to retain its own counsel, at the expense of COMPANY, if
representation of such Indemnitee by the counsel retained by COMPANY would be
inappropriate because of actual or potential differences in the interests of
such Indemnitee and any other party represented by such counsel. COMPANY agrees
to keep M.I.T. informed of the progress in the defense and disposition of such
claim and to consult with M.I.T. with regard to any proposed settlement.

         8.2 Insurance. Prior to the first commercial sale of a LICENSED PRODUCT
or LICENSED PROCESS, and thereafter, COMPANY shall obtain and carry in full
force and effect commercial general liability insurance, including product
liability and errors and omissions insurance which shall protect COMPANY and
Indemnitees with respect to events covered by Section 8.1 (a) above. Such
insurance (i) shall be issued by an insurer licensed to practice in the
Commonwealth of Massachusetts or an insurer pre-approved by M.I.T., such
approval not to be unreasonably withheld, (ii) shall list M.I.T. as an
additional insured thereunder, (iii) shall be endorsed to include product
liability coverage, and (iv) shall require thirty (30) days written notice to be
given to M.I.T. prior to any cancellation or material change thereof. The limits
of such insurance shall not be less than [*** Redacted] per occurrence with an
aggregate of [*** Redacted] for bodily injury including death; [*** Redacted]
per occurrence with an aggregate of [*** Redacted] for property damage; and [***
Redacted] per occurrence with an aggregate of [*** Redacted] for errors and
omissions. In the alternative, COMPANY may self-insure subject to prior approval
of M.I.T. COMPANY shall provide M.I.T. with Certificates of Insurance evidencing
compliance with this Section. COMPANY shall continue to maintain such insurance
or self-insurance after the expiration or termination of this Agreement during
any period in which COMPANY or any AFFILIATE or SUBLICENSEE continues (i) to
make, use, or sell a product that was a LICENSED PRODUCT under this Agreement or
(ii) to


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                       18


perform a service that was a LICENSED PROCESS under this Agreement, and
thereafter for a period of [*** Redacted] years.

                       9. NO REPRESENTATIONS OR WARRANTIES

         EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT,
M.I.T. MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING THE PATENT
RIGHTS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY OF
PATENT RIGHTS CLAIMS, WHETHER ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. Specifically, and not to limit the
foregoing, M.I.T. makes no warranty or representation (i) regarding the validity
or scope of the PATENT RIGHTS, and (ii) that the exploitation of the PATENT
RIGHTS or any LICENSED PRODUCT or LICENSED PROCESS will not infringe any patents
or other intellectual property rights of M.I.T. or of a third party.

         In no event shall M.I.T.'s liability for breaching any representation
or warranty set forth herein exceed the cash amount actually received by M.I.T.
from COMPANY under Article 4.

         IN NO EVENT SHALL M.I.T., ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES
AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND,
INCLUDING ECONOMIC DAMAGES OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF
WHETHER M.I.T. SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT
SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

                                 10. ASSIGNMENT.

         This Agreement is personal to COMPANY and no rights or obligations may
be assigned by COMPANY without the prior written consent of M.I.T., except in
conjunction with a sale of all or substantially all of the assets of the
COMPANY, provided that the Assignee agree in writing to accept all obligations
of the COMPANY under this Agreement.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                       19

                        11. GENERAL COMPLIANCE WITH LAWS

         11.1 Compliance with Laws. COMPANY shall use reasonable commercial
efforts to comply with all commercially material local, state, federal, and
international laws and regulations relating to the development, manufacture,
use, and sale of LICENSED PRODUCT and LICENSED PROCESSES.

         11.2 Export Control. COMPANY and its AFFILIATES and SUBLICENSEES shall
comply with all United States laws and regulations controlling the export of
certain commodities and technical data, including without limitation all Export
Administration Regulations of the United States Department of Commerce. Among
other things, these laws and regulations prohibit or require a license for the
export of certain types of commodities and technical data to specified
countries. COMPANY hereby gives written assurance that it will comply with, and
will cause its AFFILIATES and SUBLICENSEES to comply with, all United States
export control laws and regulations, that it bears sole responsibility for any
violation of such laws and regulations by itself or its AFFILIATES or
SUBLICENSEES, and that it will indemnify, defend, and hold M.I.T. harmless (in
accordance with Section 8.1) for the consequences of any such violation.

         11.3 Non-Use of M.I.T. Name. COMPANY and its AFFILIATES and
SUBLICENSEES shall not use the name of "Massachusetts Institute of Technology,"
"Lincoln Laboratory" or any variation, adaptation, or abbreviation thereof, or
of any of its trustees, officers, faculty, students, employees, or agents, or
any trademark owned by M.I.T., or any terms of this Agreement in any promotional
material or other public announcement or disclosure without the prior written
consent of M.I.T. The foregoing notwithstanding, without the consent of M.I.T.,
COMPANY may state that it is licensed by M.I.T. under one or more of the patents
and/or patent applications comprising the PATENT RIGHTS.

         11.4 Marking of LICENSED PRODUCTS. To the extent commercially feasible
and consistent with prevailing business practices, COMPANY shall mark, and shall
cause its AFFILIATES and SUBLICENSEES to mark, all LICENSED PRODUCTS that are
manufactured or sold under this Agreement with the number of each issued patent
under the PATENT RIGHTS that applies to such LICENSED PRODUCT.

                                       20


                                 12. TERMINATION

         12.1 Voluntary Termination by COMPANY. COMPANY shall have the right to
terminate this Agreement, for any reason, (i) upon at least three (3) months
prior written notice to M.I.T., such notice to state the date at least three (3)
months in the future upon which termination is to be effective, and (ii) upon
payment of all amounts due to M.I.T. through such termination effective date.

         12.2 Cessation of Business. If COMPANY ceases to carry on its business
related to this Agreement as indicated by, inter alia, the COMPANY's failure to
meet its diligence obligations as set forth in Article 3 of this Agreement, as
originally executed, M.I.T. shall have the right to terminate this Agreement
immediately upon written notice to COMPANY. Notwithstanding the foregoing, it
is agreed that COMPANY'S failure to meet the diligence obligations set forth in
Article 3 of this Agreement alone, either as originally executed or as amended
from time to time, shall not be a cessation of business related to this
Agreement, as contemplated by this section.

         12.3 Termination for Default.

                  (a)      Nonpayment. In the event COMPANY fails to pay any
amounts due and payable to M.I.T. hereunder, and fails to make such payments
within sixty (60) days after receiving written notice of such failure, M.I.T.
may terminate this Agreement immediately upon written notice to COMPANY.

                  (b)      Material Breach. In the event COMPANY commits a
material breach of its obligations under this Agreement, except for breach as
described in Section 12.3(a), and fails to cure that breach within
sixty (60) after receiving written notice thereof, M.I.T. may terminate this
Agreement immediately upon written notice to COMPANY. If COMPANY objects to the
basis for such termination in writing within twenty (20) days of such written
notice, then any such termination shall be stayed pending final resolution as
provided under Section 13 of this Agreement.

         12.4 Effect of Termination.

                  (a)      Survival. The following provisions shall survive the
expiration or termination of this Agreement: Articles 1, 8, 9, 13 and 14, and
Sections 4.1 (f), 5.2 (obligation to provide final report and payment), 5.4,
11.1, 11.2, 12.4 and 14.1 (Confidentiality).

                                       21


                  (b)      Inventory. Upon the early termination of this
Agreement. COMPANY and its AFFILIATES and SUBLICENSEES may complete and sell any
work-in-progress and inventory of LICENSED PRODUCTS that exist as of the
effective date of termination, provided that (j) COMPANY pays M.I.T. the
applicable running royalty or other amounts due on such sales of LICENSED
PRODUCTS in accordance with the terms and conditions of this Agreement, and (ii)
COMPANY and its AFFILIATES and SUBLICENSEES shall complete and sell all
work-in-progress and inventory of LICENSED PRODUCTS within six (6) months after
the effective date of termination.

                  (c)      Pre-termination Obligations. In no event shall
termination of this Agreement release COMPANY, AFFILIATES, or SUBLICENSEES from
the obligation to pay any amounts that became due on or before the effective
date of termination.

                             13. DISPUTE RESOLUTION.

         13.1 Mandatory Procedures. The parties agree that any dispute arising
out of or relating to this Agreement shall be resolved solely by means of the
procedures set forth in this Article, and that such procedures constitute
legally binding obligations that are an essential provision of this Agreement.
If either party fails to observe the procedures of this Article, as may be
modified by their written agreement, the other party may bring an action for
specific performance of these procedures in any court of competent jurisdiction.

         13.2 Equitable Remedies. Although the procedures specified in his
Article are the sole and exclusive procedures for the resolution of disputes
arising out of or relating to this Agreement, either party may seek a
preliminary injunction or other provisional equitable relief if, in its
reasonable judgment, such action is necessary to avoid irreparable harm to
itself or to preserve its rights under this Agreement.

         13.3 Dispute Resolution Procedures.

                  (a)      Mediation. In the event any dispute arising out of or
relating to this Agreement remains unresolved within sixty (60) days from the
date the affected party informed the other party of such dispute, either party
may initiate mediation upon written notice to the other party ("Notice Date"),
whereupon both parties shall be obligated to engage in a mediation proceeding
under the then current Center for Public Resources ("CPR") Model Procedure for
Mediation of Business Disputes (http://www.cpradr.org), except that specific
provisions of this Article shall override inconsistent provisions of the CPR
Model Procedure, The mediator will be

                                       22

selected from the CPR Panels of Neutrals. If the parties cannot agree upon the
selection of a mediator within fifteen (15) business days after the Notice
Date, then upon the request of either party, the CPR shall appoint the mediator.
The parties shall attempt to resolve the dispute through mediation until the
first of the following occurs: (i) the parties reach a written settlement; (ii)
the mediator notifies the parties in writing that they have reached an impasse;
(iii) the parties agree in writing that they have reached an impasse; or (iv)
the parties have not reached a settlement within sixty (60) days after the
Notice Date.

                  (b)      Trial Without Jury. If the parties fail to resolve
the dispute through mediation, or if neither party ejects to initiate mediation,
each party shall have the right to pursue any other remedies legally available
to resolve the dispute, provided, however, that the parties expressly waive any
right to a jury trial in any legal proceeding under this Article.

         13.4 Performance to Continue. Each party shall continue to perform its
undisputed obligations under this Agreement pending final resolution of any
dispute arising out of or relating to this Agreement; provided, however, that a
party may suspend performance of its undisputed obligations during any period in
which the other party fails or refuses to perform its undisputed obligations.
Nothing in this Article is intended to relieve COMPANY from its obligation to
make undisputed payments pursuant to Articles 4 and 6 of this Agreement, not to
permit M.I.T. to bring suit against COMPANY, its AFFILIATES and/or SUBLICENSEES
for infringement of any of the PATENT RIGHTS, pending final resolution.

         13.5 Statute of Limitations. The parties agree that all applicable
statutes of limitation and time-based defenses (such as estoppel and laches)
shall be tolled while the procedures set forth in Sections 13.3(a) are pending.
The parties shall cooperate in taking any actions necessary to achieve this
result.

                               14. MISCELLANEOUS.

         14.1 Confidentiality. All information provided to M.I.T. by COMPANY
under this agreement, including but not limited to relevant portions of
sublicense agreements, technical reports, development plans, marketing
evaluations and reports, information obtained from plant inspections, and
royalty reports, shall be deemed to be Confidential Information if such
information is marked "Confidential."

                  (a)      M.I.T. will maintain the confidentiality of the
Confidential Information and will not disclose the Confidential Information to
any third party, and will not use the Confidential Information for any purpose
other than as necessary to administer this Agreement.

                                       23


In maintaining the confidentiality of the Confidential Information, M.I.T. will
use the same degree of care it uses in protecting its own information of like
import, and in no event, less than reasonable care.

                  (b)      The obligations of M.I.T. with respect to
Confidential Information will not apply to information disclosed under this
agreement to the extent such information:

                           (i)      is generally known to the public at the time
                           of disclosure or becomes generally known through no
                           wrongful act on the part of M.I.T;

                           (ii)     is in M.I.T.'s possession at the time of
                           disclosure other than as a result of prior disclosure
                           by COMPANY or a breach of any legal obligation by
                           M.I.T. or a third party;

                           (iii)    becomes known to M.I.T. through disclosure
                           by sources other than COMPANY having no duty of
                           confidentiality to COMPANY, whether direct or
                           indirect, with respect to such information and having
                           the legal right to disclose such information;

                           (iv)     is independently developed by M.I.T. without
                           reference to or reliance upon the Confidential
                           Information; or

                           (v)      is required to be disclosed by M.I.T. to
                           comply with applicable laws or governmental
                           regulations, provided that the M.I.T. provides prior
                           written notice of such disclosure to the COMPANY and
                           takes reasonable and lawful actions to avoid and/or
                           minimize the extent of such disclosure.

                  (c)      The provisions of this section relating to
Confidentiality of research and development reports provided pursuant to Article
3 and Sections 5.1 and 5.2 shall be in force and effect until 5 years following
the termination of this Agreement. The provisions of this section relating to
other disclosures of Confidential Information shall be in force and effect for
three years, as to each specific disclosure, from the date of each such
disclosure.

         14.2 Notice. Any notices required or permitted under this Agreement
shall be in writing, shall specifically refer to this Agreement, and shall be
sent by hand, recognized national overnight courier, confirmed facsimile
transmission, confirmed electronic mail, or registered or certified mail,
postage prepaid, return receipt requested, to the following addresses or
facsimile numbers of the parties:

                                       24


          If to M.I.T., all matters relating to the license:

                        Technology Licensing Office, Room NE25-230
                        Massachusetts Institute of Technology
                        77 Massachusetts Avenue
                        Cambridge, MA 02139-4307
                        Attention: Director
                        Tel: 617-253-6966
                        Fax: 617-258-6790

         If to M.I.T., relating to any equity action after the initial issuance
         of shares:

                        Massachusetts Institute of Technology
                        Treasurer's Office
                        238 Main Street
                        Cambridge, MA 02142
                        Attention: Phillips B. Moore
                        Tel: 617-253-5422
                        Fax: 617-258-6676

         If to COMPANY:       Nanosys, Inc.
                              2625 Hanover Street
                              Palo Alto, CA 94304
                              Attention: Vice President, Intellectual Property
                              Tel: (650) 846-2500
                              Fax: (650) 846-2501

                  All notices under this Agreement shall be deemed effective
upon receipt. A party may change its contact information immediately upon
written notice to the other party in the manner provided in this Section.

         14.3 Governing Law. This Agreement and all disputes arising out of or
related to this Agreement, of the performance, enforcement, breach or
termination hereof, and any remedies relating thereto, shall be construed,
governed, interpreted and applied in accordance with the laws of the
Commonwealth of Massachusetts, U.S.A., without regard to conflict of laws
principles, except that questions affecting the construction and effect of any
patent shall be determined by the law of the country in which the patent shall
have been granted.

         14.4 Force Majeure. Neither party will be responsible for delays
resulting from causes beyond the reasonable control of such party, including
without limitation fire, explosion, flood, war, strike, or not, provided that
the nonperforming party uses commercially reasonable efforts to avoid or remove
such causes of nonperformance and continues performance under this Agreement
with reasonable dispatch whenever such causes are removed.

                                       25


         14.5 Amendment and Waiver. This Agreement may be amended, supplemented,
or otherwise modified only by means of a written instrument signed by both
parties. Any waiver of any rights or failure to act in a specific instance shall
relate only to such instance and shall not be construed as an agreement to waive
any rights or fail to act in any other instance, whether or not similar.

         14.6 Severability. In the event that any provision of this Agreement
shall be held invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect any other provision of this Agreement, and the
parties shall negotiate in good faith to modify the Agreement to preserve (to
the extent possible) their original intent. If the parties fail to reach a
modified agreement within thirty(30) days after the relevant provision is held
invalid or unenforceable, then the dispute shall be resolved in accordance with
the procedures set forth in Article 13. While the dispute is pending resolution,
this Agreement shall be construed as if such provision we re deleted by
agreement of the parties.

         14.7 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective permitted successors and
assigns.

         14.8 Headings. All headings are for convenience only and shall not
affect the meaning of any provision of this Agreement.

         14.9 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter and supersedes all prior
agreements or understandings between the parties relating to its subject matter.

                                       26


         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.

THE EFFECTIVE DATE OF THIS AGREEMENT IS Sept 5, 2002.

MASSACHUSETTS INSTITUTE OF
TECHNOLOGY                                 NANOSYS, INC.

By: /s/ Lita L. Nelsen                      By: /s/  Lawrence A. Bock
    ---------------------------------          ---------------------------------
Name: LITA L. NELSEN, DIRECTOR             Name: LAWRENCE BOCK
      TECHNOLOGY LICENSING OFFICE          Title: President
Title:

MASSACHUSETTS INSTITUTE OF
TECHNOLOGY

By: /s/ Alice P. Gast
    ----------------------------------
Name: Alice P. Gast, Ph.D.
Title: Robert T. Haslam Professor,
       Vice President for Research, and
       Associate Provost

                                       27


                                   APPENDIX A
                     List of Patent Applications and Patents

I.       United States Patents and Applications

M.I.T. Case No. 8726, "Creating Photon Atoms" by Moungi Bawendi, Mihai Ibanescu,
John Joannopoulos, and Vikram Sundar.

M.I.T. Case No. 8748, "Quantum Dot Laser" by Moungi Bawendi, John Haavisto,
Farhad Hakimi and John Tumminelli
Issued Patent No. 5/260,957

M.I.T. Case No. 8763, "Quantum Dot Optical Amplifiers and Lasers" by Moungi
Bawendi, Jennifer Hollingsworth, Victor Klimov, Catherine Leatherdale and
Alexandre Mikhailovski
Pending Application No. 09/805,435, entering national phase in EP, CA, JP and
the US

M.I.T. Case No. 8801, "Synthesis and Applications of Magnetic Cobalt Nanorods
and Nanowires" by Moungi Bawendi, Dmitri Dinega, Sungjee Kim and Edwin Thomas

M.I.T. Case No. 9132, "Amine Brightening of CdSe Quantum Dots Overcoated With
ZnS", by Moungi Bawendi and Wing-Keung Woo

M.I.T. Case No. 9228, "Method for Encapsulating Nanocrystal Quantum Dots Into
Polymer Microspheres" by Moungi Bawendi, Neal Devaraj, Klavs Jensen and Jinwook
Lee

M.I.T. Case No. 9470, "Nanocrystal/Titania Composite Matrices for Optical
Applications" by Moungi Bawendi, Hans Eisler and Vikram Sundar
Pending Application No. 60/322,466

M.I.T. Case No. 9495, "Distributed Feedback Nanocrystal Laser" by Moungi
Bawendi, Hans Eisler, Victor Klimov, Henry Smith, Vikram Sundar, and Michael
Walsh
Pending Application No. 60/331,454

M.I.T. Case No. 9529, "Efficient QDLEDs Utilizing Organic Host Materials" by
Moungi Bawendi, Vladimir Bulovic, Seth Coe and Wing-Keung Woo
Pending Application Filed 3/29/02

II.      International (non-U.S.) Patents and Applications

M.I.T. Case No. 8763
Pending PCT Application No. US01/08001

                                       28


                                   APPENDIX B
                     List of Patent Applications and Patents

I.       United States Patents and Applications

M.I.T. Case No. 7699, "Quantum Dot White and Colored Light Emiting Diodes" by
Moungi Bawendi, Jason Heine, Klavs Jensen, Jeffrey Miller and Ronald Moon
Pending Application No. 09/167,795
Pending Application No. 09/350,956, CIP of 09/167,795

M.I.T. Case No. 7771, "Highly Luminescent, Color-Selective Quantum Dots" by
Moungi Bawendi, Bashir Dabbousi, Klavs Jensen, Frederic Mikulec and Xavier
Rodriguez-Viejo
Issued Patent No. 6/322,901
Issued Patent No. 6/207,229

M.I.T. Case No. 7772, "Luminescent Tags for Use With Biological Substrates" by
Moungi Bawendi, Frederic Mikulec and Vikram Sundar
Issued Patent No. 6/326,144
Pending Application No. 09/397436, CIP of 6/326,144
Pending Application No. 09/832,959, DIV of 6/326,144

M.I.T. Case No. 8096, "Inventory Control" by Moungi Bawendi and Klavs Jensen
Pending Application No. 09/160,458
Pending Application No. 09/397,432, CIP of 09/160/458

M.I.T. Case No. 8097, "Water Soluble Quantum Dots" by Moungi Bawendi, Jin-Kyu
Lee and Frederic Mikulec
Issued Patent No. 6/251,303
Issued Patent No. 6/319,426, CIP of 6/251,303

M.I.T. Case No. 8173, "11-Mercaptoundecanoic Acid as a Water Solubizing Capping
Ligand for Luminescent (CdSe) ZNS Quantum Dots" by Moungi Bawendi, Jin-Kyu Lee
and Frederic Mikulec
Pending Application No. 09/156,457

M.I.T. Case No. 8529, "Highly Fluorescent CdTe Nanocrystals" by Moungi Bawendi,
Sungjee Kim and Frederic Mikulec
Pending Application No. 09/625,861

M.I.T. Case No. 8733, "A Comprehensive Procedure for Coating Surfaces, Such as
Semiconductor Quantum Dots, With Recombinant Proteins to Create
Bioconjugates..." by George Anderson, Moungi Bawendi, Hedi Mattoussi, J. Matthew
Mauro and Vikram Sundar
Pending Application No. 09/811,824

                                       29


M.I.T. Case No. 8846, "Synthesis of CdSe Nanocrystals from Cadmium-2,
4-Pentanedionate" by Moungi Bawendi and Nathan Stott
Pending Application No. 09/732,013
Pending  Application Filed 12/06/01

II.      International (non-U.S.) Patents and Applications

M.I.T. Case No. 7699
Pending Europe Application No. 99915206.9
Pending Japan Application No. US99/07219

M.I.T. Case No. 7771
Pending Europe Application No. 98957785.3
Pending Canada Application No. 2309967
Pending Japan Application No. US98/23984

M.I.T. Case No. 7772
Pending Great Britain Application No. 9922072.5
Pending Europe Application No. 99307393.1
Pending Japan Application No. 2000-571252
Pending Canada Application No. 2344478

M.I.T. Case No. 8096
Pending Europe Application No. 99954615.3
Pending Canada Application No. 2344145
Pending Japan Application No. 2000-574022

M.I.T. Case No. 8097
Pending Europe Application No. 99948273.0
Pending Canada Application No. 2344479
Pending Japan Application No. 2000-571265

M.I.T. Case No. 8529
Pending PCT Application No. US00/20357
Pending Japan Application No. 2001-512953

M.I.T. Case No. 8733
Pending PCT Application No. US01/08788

M.I.T. Case No. 8846
Pending PCT Application No. US01/45815

                                       30


                                    EXHIBIT A

                          CONFLICT AVOIDANCE STATEMENT

                           Name: Moungi Bawendi

                           Dept. or Lab.: Chemistry

                           Company: Nanosys

                           Address: _________________________________
                           __________________________________________

                           Licensed Technology: _____________________
                           __________________________________________
                           __________________________________________

Because of the M.I.T. license granted to the above company and my equity*
position and continuing relationship with this company, I acknowledge the
potential for a possible conflict of interest between the performance of
research at M.I.T. and my contractual or other obligations to this company.
Therefore, I will not:

         1)       use students at M.I.T. for research and development projects
                  for the company;

         2)       restrict or delay access to information from my M.I.T.
                  research;

         3)       take direct or indirect research support from the company in
                  order to support my activities at M.I.T.; or

         4)       employ students at the company, except in accordance with
                  Section 4.5.2, "Faculty and Students," in the Policies and
                  Procedures Guide.

In addition, in order to avoid the appearance of a conflict, I will attempt to
differentiate clearly between the intellectual directions of my M.I.T. research
and my contributions to the company. To that end, I will expressly inform my
department head/laboratory director annually of the general nature of my
activities on behalf of the company.

                                                  Signed: Moungi Bawendi
                                                          ----------------------
                                                  Date: 8/12/02

Approved by: /s/ Stephen J. Lippard
Name (print): STEPHEN J. LIPPARD
(Dept. Head or Lab Dir)

                                       31


                                    EXHIBIT B

                         INVENTOR/AUTHOR ACKNOWLEDGMENT
                            OF NO EQUITY DISTRIBUTION
                              FORM VERSION 8/22/01

         In partial reliance on the undersigned's execution of this
Acknowledgment, M.I.T. has entered into the license agreement to which this
Acknowledgment is attached (the "LICENSE") in which COMPANY received certain
licenses to the technology listed below, on some or all of which the undersigned
is a listed inventor or author. The undersigned, independently of the LICENSE,
has received or will soon acquire equity in Nanosys ("COMPANY"), and, in
accordance with M.I.T.'s licensing policies contained in M.I.T.'s Guide to the
Ownership, Distribution and Commercial Development of M.I.T. Technology as that
policy may be amended from time to time (specifically Section 4.2.5 as of this
Form Version date), the undersigned, on his/her own behalf and on behalf of
his/her heirs and assigns, acknowledges and agrees that he/she has no right to
receive any share of equity income received by M.I.T. in consideration for the
LICENSE.

         Technology Licensed as of the EFFECTIVE DATE of the LICENSE:
         _______________________________________________________________________
         _______________________________________________________________________
         _______________________________________________________________________
         _______________________________________________________________________

Witness: /s/(ILLEGIBLE)                       Signed: /s/ Moungi Bawendi
         -------------------------                    --------------------------
                                              Print Name: Moungi Bawendi
                                              Date: 8/12/02

                                       32


                                    EXHIBIT C

                        INVESTOR REPRESENTATION STATEMENT

                                   (attached)

                                       33


                        INVESTOR REPRESENTATION STATEMENT
                              _______________, 2002

         In connection with the purchase of _______________shares of Common
Stock (the "SHARES")of Nanosys, Inc. (the "COMPANY"), the undersigned M.I.T.
Holder, as defined in the [AGREEMENT] dated as_______, does hereby represent to
the Company as follows:

         (a)      Preexisting Relationship with Company; Business and Financial
Experience; Accredited Investor. I either (i) have a preexisting business
and/or personal relationship with the Company and/or its officers, directors or
controlling persons, or (ii) by reason of my business or financial experience or
the business or financial experience of my professional advisors who are
unaffiliated with the Company and who are not compensated by the Company, have
the capacity to protect my own interests in connection with the receipt of the
Shares.

         (b)      Investment Intent; Blue Sky. I am acquiring the Shares for
investment for my own account, not as a nominee or agent, and not with a view
to, or for resale in connection with, any distribution thereof. I understand
that the issuance of the Shares has not been, and will not be, registered under
the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends upon, among
other things, the bona fide nature of my investment intent and the accuracy of
my representations as expressed herein. My address set forth below represents my
true and correct state of domicile, upon which the Company may rely for the
purpose of complying with applicable "Blue Sky" laws.

         (c)      Rule 144. I acknowledge that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from such registration is available. I am aware of the provisions
of Rule 144 promulgated under the Securities Act which permit limited resale of
shares received in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than one year after a party has purchased
and paid for the security to be sold, the sale being effected through a
"broker's transaction" or in a transaction directly with a "market maker" and
the number of shares being sold during any three-month period not exceeding
specified limitations.

         (d)      No Public Market. I understand that no public market now
exists for any of the securities issued by the Company and that the Company has
made no assurances that a public market will ever exist for the Company's
securities.

         (e)      Restrictions on Transfer; Restrictive Legends. I understand
that the transfer of the Shares is restricted by applicable state and Federal
securities laws, and that the certificates representing the Shares will be
imprinted with legends restricting transfer except in compliance therewith.

         (f)      Access to Data. I have had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management. I have also had an opportunity to ask questions of officers of the
Company. I understand that such discussions, as well as any written information
issued by the Company, are intended to describe certain aspects of the Company's
business and prospects but are not a thorough or exhaustive description.



         (g)      Tax Liability. I have reviewed with my own tax advisors the
tax consequences of the transactions contemplated by this Agreement. I will rely
solely on such advisors and not on any statements or representations of the
Company or any of the Company's agents with respect to such tax consequences. I
understand that I, and not the Company, shall be responsible for my own tax
liability that may arise as a result of my receipt of the Shares.

         (h)      Limited Operating History. I acknowledge that the Company was
incorporated on July 12, 2001 as a new business and has a limited operating
history.

         (i)      Risks. I am aware that the Securities are highly speculative
and that there can be no assurance as to what return, if any, there may be. I am
aware that the Company may issue additional securities in the future which could
result in the dilution of my ownership interest in the Company.

         (j)      Additional Undertaking. I hereby agree to take whatever
additional action and execute whatever additional documents the Company may in
its judgment deem necessary or advisable in order to carry out or effect one or
more of the obligations or restrictions imposed on either myself or the Shares
pursuant to the express provisions described herein.

M.I.T. HOLDER

_______________________________
SIGNATURE

_______________________________
PRINT NAME

ADDRESS:

_______________________________
_______________________________
_______________________________

                                      -2-

EX-10.10.1

                                                                 EXHIBIT 10.10.1

                                December 13, 2002

Matthew Murphy
Nanosys Incorporated
2625 Hanover Street
Palo Alto, CA 94304

Re: Exclusive Patent License Agreement - Amendment One

Dear Matthew:

This Amendment adds the following M.I.T. Cases to the indicated Appendices of
the M.I.T. - Nanosys Inc. Exclusive Patent License Agreement effective September
5, 2002 (Agreement):

     (1) Add to Appendix A:

     M.I.T. Case No. 8800, "Quantum Dots As Luminescent Temperature Probes, "by
     Alfred A. Barney, Moungi G. Bawendi, Daniel C. Nocera, Christina M.
     Rudzinski, Vikram C. Sundar and Glen W. Walker.

     (2) Add to Appendix B:

     M.I.T. Case No. 8366, "Polarization Label For Measuring The 3-Dimensional
     Orientation of Sub-Diffraction Limited Objects, "by Moungi G. Bawendi and
     Stephen Empedocles.

Except as specifically modified or amended hereby, the Agreement shall remain in
full force and effect and, as modified or amended, is hereby ratified, confirmed
and approved. No provision of this Amendment may be modified or amended except
expressly in a writing signed by both parties nor shall any terms be waived
except expressly in a writing signed by the party charged therewith. This
Amendment shall be governed in accordance with the laws of the Commonwealth of
Massachusetts.



The Effective Date of this Amendment is Dec 13, 2002
                                        ________________.

Please indicate your acceptance of this First Amendment by countersigning this
letter and returning it to M.I.T.

Massachusetts Institute of Technology       Nanosys Incorporated

By: /s/ Lita Nelson                         By: /s/ Matthew Murphy
    _________________________________           ________________________________

Name: Lita Nelson                           Name: Matthew Murphy
     _________________________________           _______________________________

Title: Director,                            Title: Vice President, I.P.
       Technology Licensing Office                ______________________________
      _______________________________

Date: 12/31/02                              Date: 12/19/02
     _________________________________           _______________________________

EX-10.10.2

                                                                 EXHIBIT 10.10.2

                                 March 10, 2003

Matthew Murphy
Nanosys Incorporated
2625 Hanover Street
Palo Alto, CA 94304

Re: Exclusive Patent License Agreement - Amendment Two

Dear Matthew:

This Amendment removes the following M.I.T. Case from Appendix A of the M.I.T. -
Nanosys Inc. Exclusive License Agreement effective September 5, 2002
(Agreement):

        M.I.T. Case No. 9132, "Amime Brightening of CdSe Quantum Dots Overcoated
        with ZnS," by Moungi G. Bawendi and Wing-Keung Woo

Except as specifically modified or amended hereby, the Agreement shall remain in
full force and effect and, as modified or amended, is hereby ratified,
confirmed, and approved. No provision of this Amendment may be modified or
amended except expressly in a writing signed by both parties nor shall any terms
be waived except expressly in a writing signed by the party charged therewith.
This Amendment shall be governed in accordance with the laws of the Commonwealth
of Massachusetts.

The Effective Date of this Amendment is March 12, 2003.

Please indicate your acceptance of this Second Amendment by countersigning this
letter and returning it to M.I.T.

Massachusetts Institute of Technology       Nanosys Incorporated

By: /s/ John H. Turner, Jr.                 By: /s/ Matthew Murphy
    ---------------------------------           --------------------------------
Name: John H. Turner, Jr.                   Name: Matthew Murphy
      -------------------------------             ------------------------------
Title: Associate Director                   Title: V.P. Intellectual Property
       Technology Licensing Office                 -----------------------------
       ------------------------------
Date: 10 March 2003                         Date: 3/12/03
      -------------------------------             ------------------------------

EX-10.11

                                                                   EXHIBIT 10.11

                PATENT LICENSE AGREEMENT BETWEEN THE TRUSTEES OF
          COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK AND NANOSYS, INC.

         This Agreement is entered into this 20th day of May, 2003 (the
"Effective Date") by and between Nanosys, Inc. ("Licensee"), a Delaware
Corporation having its principal place of business at 2625 Hanover Street, Palo
Alto, California, 94304, and The Trustees of Columbia University in the City of
New York, ("Licensor"). Licensee and Licensor are hereafter referred to herein
individually as "Party" and collectively as "Parties."

         WHEREAS, Licensor is the owner by assignment of the right title and
interest to certain U.S. and foreign patents and/or patent applications related
to nanocrystal based photoelectric devices;

         WHEREAS, Licensor desires to have the technology described and claimed
in such certain patents and applications developed for commercial and other
useful applications; and

         WHEREAS, Licensee desires to obtain exclusive rights to practice the
inventions described and claimed in such certain U.S. and foreign patents and
applications, and to develop and commercialize nanocrystal based photoelectric
devices;

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged by the Parties, the Parties agree as follows:

         1.0      DEFINITIONS

         1.1      "Affiliate" means any entity which controls or is controlled
by a party to this Agreement. An entity shall be regarded as in control of
another entity for purposes of this Agreement if it owns or controls at least
fifty percent (50%) of the shares entitled to vote in the election of directors
of such entity (or in the case of an entity that is not a corporation, for the
election of a corresponding managing authority).

         1.2      "Combination Product" means a product sold by Licensee, where
a Licensed Product is sold, in combination with another product that can
reasonably be deemed to be a separate product, and which is not itself a
Licensed Product.

         1.3      "Licensed Patents" means U.S. Patent No. 6,239,355, entitled
"Solid-State Photoelectric Device", all reissues (including the Reissue Patent),
reexaminations, or other related U.S. patent filings directed to the same
subject matter, and any foreign counterparts that claim priority to U.S. Patent
No. 6,239,355 or other related U.S. filings directed to the same subject matter.



         1.4      "Licensed Process" means any process, procedure or method, the
practicing of which in a given country, practices any Valid Claim of the
Licensed Patents existing in such country.

         1.5      "Licensed Product" means any device, apparatus, composition of
matter, or article of manufacture the existence, production or use of which in a
given country practices any Valid Claim of the Licensed Patents existing in such
country.

         1.6      "Licensee" means Nanosys and its Affiliates.

         1.7      "Net Sales" means amounts, and/or all other consideration
(including any debt or equity securities or instruments), received by Licensee
for the sale of Licensed Products in any country in which Patent Rights are
granted or being prosecuted in good faith, less (i) customary trade, quantity,
or cash discounts to the extent actually allowed and taken; (ii) amounts repaid
or credited by reason of rejection or return; (iii) an allowance for actual bad
debt having occurred during the reporting period, said allowance being no
greater than [*** Redacted]%; (iv) to the extent separately stated on purchase
orders, invoices, or other documents of sale, any taxes or other governmental
charges levied on the production, sale, transportation, delivery, or use of a
Licensed Product or Licensed Process which is paid by or on behalf of Licensee;
and (v) outbound transportation costs prepaid or allowed and costs of insurance
in transit.

         In the case of Combination Products Net Sales shall be determined by
either(1) the formula [*** Redacted] where A is the [*** Redacted] of the
Licensed Product components of the Combination Product during such period when
sold individually, and B is the [*** Redacted] price of the separate product
component(s) of the Combination Product when sold individually; or, if all
components of the Combination Product were not sold individually during the same
or immediately preceding reporting period then (2) the formula [*** Redacted]
where C is the [*** Redacted] of the Licensed Product components during the
prior reporting period and D is the [*** Redacted] during the prior reporting
period, with such costs being determined in accordance with generally accepted
accounting principles.

         1.8      "Reissue Patent" a reissue of U.S. Patent No. 6,293,355
entitled "Solid State Photoelectric Device," under 35 U.S.C. Section 251 by the
United States Patent and Trademark Office, in which at least the broadest
reissue claim has [*** Redacted].

         1.9      "Sublicense Revenue" means all amounts and/or all other
consideration (including any debt and/or equity securities or instruments)
received by Licensee from its Sublicensee's in consideration for the granting of
a sublicense to the Licensed Patents. In the case where the Licensed Patents are
sublicensed by Licensee, Sublicense Revenue specifically excludes payments made
to Licensee by its Sublicensees for bona fide research


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



                                                                           - 2 -



and/or development funding, or those specified payments made in consideration
for the licensing or sublicensing of Licensee's own intellectual property or
third party intellectual property for which Licensee has rights to sublicenses
(but not including any intellectual property rights granted to Licensee
hereunder).

         1.10     "Valid Claim" means any issued claim of the Licensed Patents
that has not expired, or been finally held as invalid or unenforceable by a
court or administrative body of competent jurisdiction, as well as any pending
claim of the Licensed Patents that is being prosecuted in good faith, and that
has not been finally and conclusively rejected.

         2.0      LICENSE GRANT

         2.1      Except as expressly provided in sections 2.2, 2.3 and 2.4
Licensor hereby grants to Licensee an exclusive worldwide license, with a right
to grant sublicenses, in all fields under the Licensed Patents, to make, have
made, use, sell, offer for sale and import Licensed Products and to use Licensed
Processes.

         2.2      Notwithstanding the foregoing, Licensor shall retain a right
to practice the Licensed Patents solely for noncommercial, academic research
purposes.

         2.3      Licensor grants to Licensee the right to grant sublicenses to
third parties, provided that: (i) the Sublicensee agrees to abide by all the
terms and provisions of this Agreement; (ii) the Licensee remains fully liable
for the performance of its and its Sublicensee's obligations hereunder; (iii)
each such sublicense is royalty-bearing at [*** Redacted], or provides or is
supported by equivalent consideration; (iv) the Licensee notifies Licensor of
any grant of a sublicense and provides to Licensor, upon request, a copy of any
sublicense agreement; and (v) no such sublicense or attempt to obtain a
sublicensee shall relieve the Licensee of its obligations under section 6 hereof
to exercise its own best efforts, directly or through a sublicense, to discover,
develop and market Licensed Product, nor relieve Licensee of its obligations to
pay Licensor any and all license fees, royalties and other payments due under
this Agreement.

         2.4      All rights and licenses granted by Licensor to Licensee under
this Agreement are subject to: (i) any limitations imposed by the terms of any
government grant, government contract or government cooperative agreement
applicable to the technology that is the subject of this Agreement, and/or (ii)
applicable requirements of 35 U.S.C. Sections 200 et seq., as amended, and
implementing regulations and policies. Without limitation of the foregoing, the
Licensee agrees that, to the extent required under 35 U.S.C. Section 204, any
Licensed Product used, sold, distributed, rented or leased by the Licensee, an
Affiliate or a Sublicensee in the United States will be manufactured
substantially in the United States.

         3.0      LICENSE FEE

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



                                                                           - 3 -



         3.1      Within thirty (30) days of the effective date of this
Agreement, Licensee shall pay to Licensor a non-refundable License Issue Fee in
the amount of $6,900,000.

         3.2      Licensee also hereby grants to Licensor an option (the
"Initial Option") to purchase 10,000 shares of Licensee's common stock at the
price of $0.19 per share (the "Exercise Price"), which is the current fair
market value of the common stock. The Initial Option shall become exercisable
upon the Effective Date of this Agreement.

         3.3      Licensee also hereby grants to Licensor a contingent option
(the "Contingent Option"; the Contingent Option and the Initial Option are
sometimes hereinafter referred to singly as an "Option" and collectively as the
"Options") to purchase an additional 15,000 shares of Licensee's common stock at
the Exercise Price. The Contingent Option shall become exercisable upon the
earliest of: (i) the issuance of a Reissue Patent based upon the Patent Rights;
or (ii) Licensee's written notification to Licensee prior to May 29, 2003 that
it does not wish to seek a Reissue Patent; or (iii) the business day immediately
prior to the consummation of a merger, consolidation, other business combination
or other transaction constituting an acquisition of the securities, assets or
business of Licensee (or, if earlier, on the business day immediately prior to
any applicable record date with respect thereto) as a result of which the shares
of the class for which the Contingent Option is exercisable immediately prior to
such event are to be changed or converted into or exchanged for any securities
of another entity or other property (including cash) (an "Acquisition
Transaction").

         3.4      Either Option may be exercised for a period of six months
following the date that it first becomes exercisable in accordance with Section
3.2 or 3.3 (other than pursuant to clause (iii) of Section 3.3), as the case may
be (the "Exercise Period"), by (i) Licensor's payment of an amount equal to the
aggregate Exercise Price for the shares subject to such Option (A) by check
payable to the order of the Licensee or by wire transfer to an account of
Licensee, (B) at Licensor's election by offsetting against such payment, any
Milestone Fee due pursuant to Section 4.0 or (C) in accordance with Section
3.6(d); and (ii) Licensor's furnishing to Licensee (in the manner provided for
the giving of notice hereunder) a counterpart, executed on behalf of Licensor,
of each of (1) the Common Stock Purchase Agreement (substantially in the form of
the agreement attached hereto as Appendix A) (the "Purchase Agreement"); and (2)
in the case of the Initial Option only, a Voting Agreement by and among Licensee
and Licensor and certain other holders of common stock as of the Effective Date
(substantially in the form of the agreement attached hereto as Appendix B) (the
"Voting Agreement"); provided, however, that in the event of any exercise of an
Option pursuant to Section 3.6(d), the Purchase Agreement shall be executed by
the parties within 30 days following the consummation of an Acquisition
Transaction.

         3.5      Upon the exercise of either Option, Licensor shall be deemed
to be the holder of record of the shares subject to such Option, notwithstanding
that the transfer books of Licensee shall then be closed or certificates
representing such shares shall not then have

                                                                           - 4 -



been actually delivered to Licensor. Subject to the proviso contained in the
last sentence of Section 3.4, as soon as practicable (and in any event within 10
days) after each such exercise of an Option, Licensee shall issue and deliver to
Licensor (in the manner provided for the giving of notice hereunder) a
certificate or certificates representing the shares issuable upon such exercise,
registered in the name of Licensor, together with a counterpart, executed on
behalf of each of the signatories thereto (other than Licensor) of each of the
Purchase Agreement and, in the case of the Initial Option only, the Voting
Agreement.

         3.6      The Exercise Price and the number of shares issuable upon
exercise of each of the Options, shall be subject to adjustment, as follows:

                  (a)      In the event that Licensee shall, at any time after
the date hereof, declare a dividend or distribution on the outstanding shares of
the class issuable upon exercise of an Option, payable in such shares, or
subdivide or combine such shares or issue any such shares by reclassification of
such shares (including any such reclassification in connection with a
consolidation or merger in which Licensee is the continuing corporation), then,
in each case, the Exercise Price per share in effect at the time of the record
date for the determination of stockholders entitled to receive such dividend or
distribution or upon the effective date of such subdivision, combination, or
reclassification shall be adjusted so that it shall equal the price determined
by multiplying such Exercise Price by a fraction, the numerator of which shall
be the number of shares of such class outstanding immediately prior to such
action, and the denominator of which shall be the number of shares of such class
outstanding after giving effect to such action. The number of shares issuable
upon exercise of each of the Options shall simultaneously be adjusted by
multiplying the number of shares theretofore issuable upon exercise of each such
Option by the Exercise Price in effect on the date hereof and dividing the
product so obtained by the Exercise Price, as adjusted.

                  (b)      In the event of any transaction, including, without
limitation, any conversion of Licensee or a recapitalization or reorganization
of the class of shares issuable upon exercise of an Option, in which the
previously outstanding shares of such class shall be changed or converted into
or exchanged for different securities of Licensee, or if any dividend or
distribution shall be declared in respect of the class of shares issuable upon
exercise of an Option or any combination of any of the foregoing (but excluding
any Acquisition Transaction and any transaction covered by Section 3.6(a)) (each
such transaction being herein referred to as a "Non-Acquisition Transaction" and
the date of consummation of the Non-Acquisition Transaction being herein
referred to as the "Consummation Date"), then, lawful and adequate provision
shall be made so that Licensor, upon the exercise of either or both of the
Options at any time on or after the Consummation Date, shall be entitled to
receive, in lieu of the shares issuable upon such exercise prior to the
Consummation Date, the amount of securities or other property to which Licensor
would actually have been entitled as a stockholder upon the consummation of the
Non-Acquisition

                                                                           - 5 -



Transaction if Licensor had exercised such Option immediately prior thereto (or,
if earlier, immediately prior to any applicable record date with respect
thereto) and (if applicable) had carried out the terms for the receipt of
securities and/or property in connection with such Non-Acquisition Transaction.
In each such case, appropriate adjustment shall be made in the application of
the provisions herein set forth herein with respect to the Exercise Price and
the number of shares or other securities or property issuable upon the exercise
of an Option.

                  (c)      The provisions of this Section 3.6 shall similarly
apply to successive events of the type described in subsection (a) or (b) above.

                  (d)      On the business day immediately prior to the
consummation of an Acquisition Transaction, (or, if earlier, on the business day
immediately prior to any applicable record date with respect thereto), Licensor
shall be deemed to have exercised the Contingent Option and shall receive the
amount of securities other property to which it was entitled as a stockholder
holding the class of shares for which the Contingent Option was exercisable upon
such date and as if it had carried out the terms for the receipt of such
securities and/or property in connection with such Acquisition Transaction. Upon
exercise of the Contingent Option in accordance with this Section 6(d), Licensor
shall be deemed to have paid the aggregate Exercise Price for such exercise to
Licensee by offsetting against such payment Licensee's obligation to pay the
milestone fee due pursuant to Section 4.0; provided, that if such milestone fee
has been paid prior to such date, Licensor shall be indebted to Licensee in the
amount of such Exercise Price, shall receive the securities and other property
in accordance with the preceding sentence and shall pay such Exercise Price to
Licensee within 30 days following the consummation of any Non-Acquisition
Transaction.

         3.7      Promptly after any adjustment in accordance with Section 3.6,
Licensee shall give written notice thereof to the Licensor setting forth in
reasonable detail the adjustment, the method of calculation thereof and the
facts upon which such adjustment and calculation are based.

         4.0      MILESTONE FEE

         Upon the issuance of a Reissue Patent, Licensee shall pay to Licensor a
Milestone Fee in the amount of [*** Redacted]. Such Milestone Fee shall be
payable within thirty(30) days of Licensee's written notification to Licensee of
such Reissue Patent. Prior to May 29, 2003, if Licensee notifies Licensor that
it does not wish to cause Licensor to seek a Reissue Patent, then such
notification shall trigger the milestone fee, requiring Licensee to pay to
Licensor the Milestone Fee. In addition, [*** Redacted] of such Milestone Fee
shall be payable to Licensor (if not previously paid) in the event that the
Contingent Option is exercised pursuant to Section 3.6(d) of this Agreement, and
any such payment shall reduce any Milestone Fee payable to Licensor under the
preceding sentence of this Section 4.0; provided, however, in no event shall
Licensee make any such payment to Licensor if the


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                           - 6 -



Licensee has previously paid Licensor the Milestone Fee in full asset forth in
said preceding sentence.

         Notwithstanding the foregoing, Licensor shall have the sole discretion
and right regarding the decision as to whether to submit U.S. Patent Office No.
6,239,355 for reissuance pursuant to 37 C.F.R. Section 1.178.

         5.0      ROYALTIES

         5.1      Licensee shall pay to Licensor a running royalty of
[*** Redacted]% of Net Sales by Licensee. In the event that Licensee's making,
use, sale, offer for sale or importation of Licensed Products requires Licensee
to pay any amount to secure any necessary third party intellectual property
rights to engage in such activity in view of such third party's intellectual
property, including without limitation payment of royalties to such third
parties, costs associated with establishing that such rights are not necessary
or that such third party intellectual property is invalid or unenforceable, then
Licensee shall be entitled to credit such amounts against royalties due
hereunder up to [*** Redacted]% of the royalties due for any reporting period,
but in no event shall the royalty rate paid to Licensor be less than
[*** Redacted]% of Net Sales by Licensee.

         5.2      Licensee shall pay to Licensor a royalty of [*** Redacted]% of
Sublicense Revenue (hereafter termed a "Sublicense Royalty") where the Patent
Rights are sublicensed to a third party ("Sublicensee") in conjunction with the
granting of substantial intellectual property rights other than under the
Licensed Patents, which other intellectual property rights are licensable by
Licensee, including but not limited to patents, copyrights, trade marks, trade
secrets and know-how. In the event that no other substantial intellectual
property rights are included in a sublicense of the Patent Rights ("a Naked
Sublicense"), then the Sublicense Royalty payable by Licensee to Licensor shall
be [*** Redacted]% of Sublicense Revenues.

         5.3      Royalty payments shall be made quarterly in accordance with
and concurrent with the royalty reporting obligations set forth in sections 7.2
and 7.3, below.

         6.0      DILIGENCE

         6.1      Licensee shall use commercially reasonable efforts, or shall
cause its Affiliates and/or Sublicensees to use commercially reasonable efforts
to develop Licensed Products or Licensed Processes and to introduce Licensed
Products or Licensed Processes into the commercial market. Specifically,
Licensee, its Affiliates or Sublicensees shall:

                  6.1.1    apply funding to development of nanocomposite
photovoltaic devices at least the following levels:


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



                                                                           - 7 -



                     
2003:                   $ [*** Redacted]
2004:                   $ [*** Redacted]
2005:                   $ [*** Redacted]
2006 and after:         $ [*** Redacted]; and



                  6.1.2    make a first commercial sale of a Licensed Product by
         [*** Redacted].

         6.2      In the event that Licensor determines that Licensee has failed
to meet its obligations under section 6.1(a) of this Agreement, then Licensor
shall notify Licensee of such determination and provide Licensee 60 days to
refute such determination. In the event Licensee is unable to refute such
determination, then Licensor may request an updated funding plan from Licensee,
which funding plan shall include one and one half times the amounts set forth
herein, to be funded in the years following such determination. Failure by
Licensee to meet such updated funding plan may be treated by Licensor as a
material breach of this Agreement.

         6.3      In the event that Licensee fails to make a first commercial
sale by the date provided in Section 6.1(b), Licensee shall be obligated to pay
to Licensor a minimum royalty in the amount specified below, for each year
subsequent to 2007, until such time as Licensee makes a first commercial sale.


Year                      Minimum Royalty
                       
2008                      [*** Redacted]
2009                      [*** Redacted]
2010 and thereafter       [*** Redacted]


Minimum royalty payments shall be due within 30 days of the last day of the
calendar year in which they are due.

         7.0      REPORTING

         7.1      Prior to the first commercial sale of a Licensed Product, and
within 30 days after the end of each calendar year, Licensee shall provide
Licensor with a written report of progress in the development and
commercialization of Licensed Products or Licensed Processes, in accordance with
the obligations set forth in Section 6.1, above.

         7.2      Within 60 days of the end of each calendar quarter following
the first commercial sale of a Licensed Product, Licensee shall provide Licensor
with a royalty report that provides, in reasonable detail: (i) the selling price
of each type of Licensed Product sold by Licensee; (ii) the number of each type
of Licensed Product sold; (iii) the royalties, in U.S. dollars, payable under
this Agreement on those sales

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                           - 8 -


         7.3      Within 60 days of the end of each calendar
quarter following the granting of any sublicenses hereunder, Licensee
shall provide Licensor with a Sublicense Royalty report (such Sublicense Royalty
report may be combined with the royalty report identified in Section 7.2) which
provides, in reasonable detail: (i) the identity of any such Sublicensee; (ii)
amount of Sublicense Revenue received from each such Sublicensee; and (iii) the
amount of Sublicense Royalty due to Licensor under this Agreement.

         8.0      RECORD KEEPING

         Licensee shall keep books and records accurately showing all Licensed
Products manufactured, used, sold, imported or otherwise disposed of under the
terms of this Agreement. Licensee shall preserve those books and records for at
least five years from the date of the royalty payment to which they
pertain and shall open them to inspection by representatives or agents of
Licensor at reasonable times at Licensee's facilities. In the event that such
inspection shows that Licensee has underpaid royalties by five percent (5%) or
more with respect to any calendar quarter, the Licensee shall pay, within ten
days after demand by Licensor, the costs and expenses of such review. If such
underpayment is in excess of $5,000.00 for any calendar quarter, or an aggregate
of $10,000 during the inspection period, Licensee shall also reimburse Licensor
for the costs of such inspection. In the event of a licensing inspection,
Licensee is required to provide auditors with detailed information including
detailed sales, inventory, manufacturing, purchasing, transfer records, customer
lists, access to invoices, purchase orders, sales orders, shipping
documentation, cost information, pricing policies, etc.

         9.0      PATENT FILING AND MAINTENANCE

         9.1      Licensee shall pay to Licensor all of Licensors actual past
and future out of pocket expenses for the preparation, filing and maintenance of
the Licensed Patents. As of the Effective Date of this Agreement, such past out
of pocket expenses were approximately $24,872.26. All payments by Licensee
for Licensor's actual out of pocket expenses in accordance with this section
shall be due within thirty(30) days of Licensee's receipt of an invoice
reasonably detailing such expenses.

         9.2      Licensor shall bear responsibility for filing, maintenance and
prosecution of the Licensed Patents. Notwithstanding the foregoing, in
consideration of Licensee's payment of prosecution and maintenance costs,
Licensee shall have the right to review and comment upon all material
communications to and/or from any patent offices, which Licensor shall use
reasonable efforts, subject to its reasonable discretion, to incorporate
Licensee's comments into any such communications.

         9.3      In the event that Licensee notifies Licensor that it does not
wish to support the filing, continued prosecution or maintenance of Licensed
Patents in any individual country, then Licensee's obligations to reimburse
costs for such filing, prosecution or maintenance

                                                                           - 9 -



shall terminate upon such notification. In the event that Licensor chooses to
continue such filing, prosecution and/or maintenance in such country, then any
patent issuing thereon shall not be included in Licensed Patents.
Notwithstanding the foregoing, Columbia shall have the sole discretion and right
regarding the decision as to whether to submit U.S. Patent Office No. 6,239,355
for reissuance pursuant to 37 C.F.R. Section 1.178.

         10.0     INFRINGEMENT

         10.1     Licensor will protect its Patents from infringement and
prosecute infringers at its own expense when in its sole judgment such action
maybe reasonably necessary, proper, and justified.

         10.2     If Licensee shall have supplied Licensor with written evidence
demonstrating prima facie infringement of a claim of the Patent Rights by a
third party selling products in competition with the Licensee or any of its
Affiliates or Sublicensees, Licensee may by notice request that Licensor take
steps to assert the Patent Rights against such third party. Unless Licensor
shall within three(3) months of receipt of such notice either (i) cause such
infringement to terminate or (ii) initiate legal proceedings against the
infringer, Licensee, upon written notice to Licensor, may initiate legal
proceedings against the infringer at the Licensee's expense. Any settlement of a
legal proceeding to enforce any Patent Rights against an alleged infringer shall
be subject to Licensor's prior written approval.

         10.3     Any recovery by a party that initiates and/or bears the
of legal proceedings to enforce any Patent Rights against an alleged infringer
shall first be used to reimburse such party for its reasonable costs and legal
fees incurred to conduct such proceedings. The balance shall be divided 75% to
the party that initiates legal proceedings and 25% to the other party.

         10.4     In the event one party shall initiate or carry on legal
proceedings to enforce any Patent Rights against an alleged infringer, the other
party shall use its best efforts to reasonably cooperate fully with and shall
supply all assistance (including legally joining the action) reasonably
requested by the party initiating or carrying on such proceedings. The party
that institutes any proceeding to protect or enforce Patent Rights shall have
sole control of that proceeding and shall be responsible for the reasonable
expenses incurred by said other party in providing such assistance and
cooperation as is requested pursuant to this paragraph.

         11.0     TERMINATION OF AGREEMENT

         11.1     Unless terminated earlier in accordance with this Section
11.0, this Agreement shall expire on a country-by-country basis in each country
where the Patent Rights exist, upon the expiration of the last to expire patent
in such country, or in the event




                                                                          - 10 -



the patent in such country is held to be invalid and/or unenforceable (by a
court or government body of competent jurisdiction) or admitted to be invalid
and/or unenforceable.

         11.2     Licensee may terminate this license upon sixty(60) days
written notice to Licensor, and shall pay to Licensor any and all royalties and
costs that have accrued under Sections 5, 6 and 9 of this Agreement, up to the
date of actual termination.

         11.3     Subject to the dispute resolution provisions provided in
Section 15.2, in the event Licensee fails to pay any amounts due and payable to
Licensor hereunder, and fails to make such payments within sixty(60) days after
receiving written notice of such failure, Licensor may terminate this Agreement
immediately upon written notice to Licensee.

         11.4     Subject to the dispute resolution provisions provided in
Section 15.2, in the event Licensee commits a material breach of this Agreement,
and fails to cure that breach within sixty (60) days after receiving written
notice thereof, Licensor may terminate this Agreement immediately upon written
notice to Licensee.

         11.5     Upon early termination of this Agreement for any reason,
Licensee shall provide Licensor with a written inventory of Licensed Products
still owned by Licensee. Licensee shall be permitted to dispose of such
inventory by sale, within 180 days following such early termination.
Notwithstanding the termination of this Agreement, any disposal by sale of such
inventory shall be subject to the terms of this Agreement relating, inter alia,
to royalties and reporting.

         11.6     Upon any termination of this Agreement pursuant to Section
11.2, 11.3 or 11.4, any Sublicensees of Licensee under this Agreement shall
become a direct licensee of Licensor, provided as a condition precedent, that
Licensors obligations to any such Sublicensees are no greater than Licensor's
obligations to Licensee under this Agreement. Licensee shall provide written
notice of such to each Sublicensee with a copy of such notice provided to
Licensor.

         12.0     REPRESENTATIONS AND WARRANTIES

         12.1     Licensor represents and warrants that it has the right to
enter into this Agreement.

         12.2     EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS
AGREEMENT, LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND,
INCLUDING BUT NOT LIMITED TO THE PATENT RIGHTS, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NONINFRINGEMENT, VALIDITY OF PATENT RIGHTS CLAIMS, WHETHER ISSUED OR
PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE. Specifically, and not to limit the

                                                                          - 11 -



foregoing, Licensor makes no warranty or representation (i) regarding the
validity or scope of the Licensed Patents, and (ii) that the exploitation of the
Licensed Patents or any Licensed Product or Licensed Process will not infringe
any patents or other intellectual property of any third party.

         12.3     IN NO EVENT SHALL LICENSOR, ITS TRUSTEES, DIRECTORS, OFFICERS,
EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF
ANY KIND, INCLUDING ECONOMIC DAMAGES OR INJURY TO PERSON OR PROPERTY AND LOST
PROFITS, RESULTING FROM LICENSEE'S PRACTICE OF THE LICENSED PATENTS.

         12.4     IN NO EVENT SHALL LICENSER'S LIABILITY TO THE LICENSEE EXCEED
THE PAYMENTS MADE TO LICENSOR BY LICENSEE UNDER THIS AGREEMENT.

         12.5     The parties hereto acknowledge that the limitations and
exclusions of liability and disclaimers of warranty set forth in this Agreement
form an essential basis of the bargain between the parties.

         13.0     INDEMNIFICATION AND INSURANCE

         13.1     The Licensee will indemnify, defend and hold Licensor harmless
from and against any and all actions, suits, claims, demands, prosecutions,
liabilities, costs, expenses, damages, deficiencies, losses or obligations
(including attorneys fees) based on or arising out of this Agreement, including,
without limitation, (i) the discovery, development, manufacture, packaging, use,
sale, rental or lease of Licensed Products, even if altered for use for a
purpose not intended, (ii) the use of Licensed Patents, by the Licensee, its
Affiliates, its Sublicensees or its (or their) customers, (iii) any
representation made or warranty given by the Licensee, its Affiliates or
Sublicensees with respect to Licensed Products or Licensed Patents, (iv) any
infringement claims relating to Licensed Products or Licensed Patents, and (v)
any asserted violation of the Export Laws (as defined in Section 15.5 hereof) by
the Licensee, its Affiliates or Sublicensees. The Licensee will reimburse
Licensor for the cost of enforcing this provision.

         13.2     The Licensee shall maintain, during the term of this
Agreement, commercial general liability insurance (including product liability
and contractual liability insurance) with reputable and financially secure
insurance carriers acceptable to Licensor to cover the activities of the
Licensee, its Affiliates and its Sublicensees, for minimum limits of
[*** Redacted] combined single limit for bodily injury and property damage per
occurrence and in the aggregate; provided further that before administration of
any Licensed Product to any humans, for clinical, research, or any other use,
Licensee, its Affiliates and its Sublicensees will increase such minimum limits
to no less than [*** Redacted]. Such insurance shall include Licensor, its
trustees, faculty, officers, employees and agents as additional insureds. The
Licensee shall furnish a certificate of insurance evidencing such coverage, with
thirty days

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                          - 12 -



written notice to Licensor of cancellation or material change in coverage. The
minimum amounts of insurance coverage required herein shall not be construed as
creating any limitation on the Licensee's indemnity obligation under Section
12(a) of this Agreement.

         13.3     The Licensee's insurance shall be primary coverage; any
insurance Licensor may purchase shall be excess and noncontributory. The
Licensee's insurance shall be written to cover claims incurred, discovered,
manifested, or made during or after the expiration of this Agreement.

         14.0     NOTICES

         Any payment, notice or other communication this Agreement requires or
permits either party to give must be in writing to the appropriate address given
below, or to such other address as one party designates by written notice to the
other party. The parties deem payment, notice or other communication to have
been properly given and to be effective (a) on the date of delivery if delivered
in person; (b) on the fourth day after mailing if mailed by first-class mail,
postage paid; (c) on the second day after delivery to an overnight courier
service such as Federal Express, if sent by such a service; or (d) upon
confirmed transmission by telecopier. The parties' addresses are as follows:
For Licensor:

Executive Director
Science & Technology Ventures
Columbia Innovation Enterprises
Columbia University
Engineering Terrace, Suite 363
500 West 120th Street, Mail Code 2206
New York, New York 10027

with a copy to:

Office of General Counsel
Columbia University
412 Low Memorial Library
535 West 116th Street
New York, New York 10027

For Licensee:

Nanosys, Inc.
2625 Hanover St.
Palo Alto, Ca 94304
Attention: Vice President, Intellectual Property

                                                                          - 13 -



Fax: 650/ 846-2501
Telephone: 650/ 331-2100

         15.0     PATENT MARKING

         Licensee shall include appropriate patent marking on all Licensed
Products made, sold, or otherwise disposed of by Licensee, which patent marking
shall be in accordance with appropriate patent marking laws of the country in
which such products are made, sold or otherwise disposed of. Licensee shall
cause its Affiliates and/or Sublicensees to similarly mark any Licensed Products
made, sold or otherwise disposed of by such Affiliates or Sublicensees.

         16.0     GENERAL

         16.1     Confidentiality. All information provided to Licensor by
Licensee under this agreement, including but not limited to progress and royalty
reports, and other financial, business and/or technical information, is deemed
to be Confidential Information.

                  16.1.1   Licensor will maintain the confidentiality of the
         Confidential Information and will not disclose the Confidential
         Information to any third party, and will not use the Confidential
         Information for any purpose other than as necessary to administer this
         Agreement.

                  16.1.2   The obligations of Licensor with respect to
         Confidential Information will not apply to information disclosed under
         this agreement to the extent such information:

                           (a) is generally known to the public at the time of
                           disclosure or becomes generally known through no
                           wrongful act on the part of Licensor;

                           (b) is in Licensor's possession at the time of
                           disclosure other than as a result of prior disclosure
                           by Licensee or a breach of any legal obligation by
                           Licensor or a third party;

                           (c) becomes known to Licensor through disclosure by
                           sources other than Licensee having no duty of
                           confidentiality to Licensee, whether direct or
                           indirect, with respect to such information and having
                           the legal right to disclose such information;

                           (d) is independently developed by Licensor without
                           reference to or reliance upon the information as can
                           be documented by written records; or

                                                                          - 14 -



                           (e) is required to be disclosed by Licensor to comply
                           with applicable laws or governmental regulations,
                           provided that the Licensor provides prior written
                           notice of such disclosure to the Licensee and takes
                           reasonable and lawful actions to avoid and/or
                           minimize the extent of such disclosure.

                  16.1.3   The provisions of this Article 16 relating to
         confidentiality shall be in force and effect until at least 5 years
         following the termination of this Agreement.

         16.2     Dispute Resolution. Any dispute arising between the Parties
shall be first addressed by a meeting between the Parties to discuss, and in
good faith, attempt to negotiate a settlement of such dispute. Pending the
outcome of such discussions, which discussions shall not exceed 180 days unless
mutually agreed to by the Parties, and attempts at settlement of such dispute,
the Parties shall continue to perform in accordance with all provisions of this
Agreement to the extent such terms are not in dispute, including but not limited
to the maintenance of Licensee's rights to practice the Licensed Patents, and
obligations to pay royalties under this Agreement.

         16.3     Assignment. This Agreement and all rights and obligations
hereunder may not be assigned by either party without the written consent of the
other party, except in conjunction with a sale of all or substantially all of
one Party's assets.

         16.4     Waiver. The failure of either Party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that Party thereafter of the right to insist upon strict
adherence to that term or any other term of this Agreement. All waivers must be
in writing and signed by an authorized representative of the Party against which
such waiver is being sought.

         16.5     Compliance with Laws and Government Regulations.

                  16.5.1   Licensee shall observe all applicable United States
and foreign laws and regulations with respect to the research, development,
manufacture, marketing and transfer of Licensed Products and related technical
data, including, without limitation, the International Traffic in Arms
Regulations (ITAR) and the Export Administration("Export Laws"). To this end,
the Licensee shall cooperate with Licensor as reasonably necessary to permit
Licensor to comply with the Export Laws. The Licensee hereby represents and
covenants that the Licensee: (a) is neither a national of nor controlled by a
national of any country to which the United States prohibits the export or
re-export of goods, services, or technology; (b) is not a person specifically
designated as ineligible to export from the United States or deal in U.S.-origin
goods, services, or technologies; (c) will not export or re-export, directly or
indirectly, any goods, services, or technology, to any country or person
(including juridical persons) to which the United States prohibits the export of
goods, technology, or services; and (d) in the event that a U.S. government
license or authorization is required for an export or re-export of goods,
services, or technology (including technical information

                                                                          - 15 -



acquired from Licensor under this Agreement and/or any products created by using
such technical information or any part thereof), the Licensee shall obtain any
necessary U.S. government license or other authorization prior to undertaking
the export or re-export.

                  16.5.2   Notwithstanding any provision in this Agreement,
Licensor disclaims any obligation or liability arising under the license
provisions of this Agreement if the Licensee is charged in a governmental action
for not complying with or fails to comply with governmental regulations in the
course of taking steps to bring any Product to a point of practical application.
The Licensee shall comply upon reasonable notice from Licensor with all
governmental requests directed to either Licensor or the Licensee and provide
all information and assistance necessary to comply with the governmental
requests.

         16.6     Governing Law. This Agreement and all disputes arising out of
or related to this Agreement, or the performance, enforcement, breach or
termination hereof, and any remedies relating thereto, shall be construed,
governed, interpreted and applied in accordance with the laws of the State of
New York, U.S.A., without regard to conflict of laws principles, except that
questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent shall have been
granted.

         16.7     Force Majeure. Neither party will be responsible for delays
resulting from causes beyond the reasonable control of such party, including
without limitation fire, explosion, flood, war, strike, or riot, provided that
the nonperforming party uses commercially reasonable efforts to avoid or remove
such causes of nonperformance and continues performance under this Agreement
with reasonable dispatch whenever such causes are removed.

         16.8     Amendment. This Agreement may be amended, supplemented, or
otherwise modified only by means of a written instrument signed by both parties.

         16.9     Severability. In the event that any provision of this
Agreement shall be held invalid or unenforceable for any reason, such invalidity
or unenforceability shall not affect any other provision of this Agreement, and
the parties shall negotiate in good faith to modify the Agreement to preserve
(to the extent possible) their original intent. If the parties fail to reach a
modified agreement within thirty (30) days after the relevant provision is held
invalid or unenforceable, then the dispute shall be resolved in accordance with
the procedures set forth in Article 13. While the dispute is pending resolution,
this Agreement shall be construed as if such provision were deleted by agreement
of the parties.

         16.10    Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective permitted successors and
assigns.

         16.11    Headings. All headings are for convenience only and shall not
affect the meaning of any provision of this Agreement.

                                                                          - 16 -



         16.12    Non-use of Licensor's Name. Licensee will not use the name,
insignia, or symbols of Licensor, its faculties or departments, or any variation
or combination thereof, or the name of any trustee, faculty member, other
employee, or student of Licensor for any purpose without Licensor's prior
written consent. Notwithstanding the foregoing, Licensee may use Licensor's name
in a factual context only referring to the existence of this Agreement, and the
Licensed Patents in conjunction with Licensee's disclosure obligations in any
private or public equity financing, or in seeking corporate collaborations for
the development and commercialization of the Licensed Patents, but for no
promotional, publicity or endorsement purposes whatsoever.

         16.13    Entire Agreement. This Agreement, which may be executed in one
or more counterparts, constitutes the entire agreement between the parties with
respect to its subject matter and supersedes all prior agreements or
understandings between the parties relating to its subject matter.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.

         THE TRUSTEES OF COLUMBIA                   NANOSYS, INC.
         UNIVERSITY IN THE CITY OF NEW YORK

         By: /s/ Michael J. Cleare, PhD.            By: /s/ J.W. Parce
             ----------------------------------         ------------------------
         Name: Michael J. Cleare, PhD.              Name: J.W. Parce
         Title: Executive Director                  Title: CTO
                Science and Technology Ventures

                                                                          - 17 -



                                   APPENDIX A

                                  NANOSYS, INC.

                         COMMON STOCK PURCHASE AGREEMENT

         THIS AGREEMENT is made as of __________ (the "Effective Date") between
Nanosys, Inc., a Delaware corporation (the "Company"), and
______________________ ("Purchaser").

         WHEREAS in order to provide Purchaser an opportunity to acquire an
equity interest in the Company, the Company is willing to sell to Purchaser and
Purchaser desires to purchase shares of Common Stock according to the terms and
conditions hereof.

         THEREFORE, the parties agree as follows:

         1. PURCHASE AND SALE OF STOCK. Subject to the terms and conditions of
this Agreement, the Company hereby agrees to issue to Purchaser _________shares
of the Company's Common Stock (the "Stock") valued at a price of $0.19 per
share, for an aggregate value of $_____, as part of the consideration to be paid
by the Company pursuant to the License Agreement between the Company and the
Purchaser dated as of the date here with (the "License Agreement"). Upon
execution of this Agreement, the Company shall issue a duly executed certificate
evidencing the Stock in the name of the Purchaser.

         2. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.

                  a)       LEGENDS. The share certificate evidencing the Stock
issued hereunder shall be endorsed with the following legend (in addition to any
legends required under applicable state securities laws):

                  "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
                  FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
                  THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION
                  MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
                  RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE
                  CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED.

                  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
                  CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN AN AGREEMENT
                  BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES.
                  THESE TRANSFER RESTRICTIONS ARE BINDING UPON ALL TRANSFEREES
                  OF THE SHARES. THE SHARES REPRESENTED BY




                  THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED FOR A PERIOD
                  OF 180 DAYS FOLLOWING THE EFFECTIVE DATE OF A REGISTRATION
                  STATEMENT FILED BY THE COMPANY FOR ITS INITIAL PUBLIC
                  OFFERING."

                  b)       STOP-TRANSFER NOTICES. Purchaser agrees that, in
order to ensure compliance with the restrictions referred to herein, the Company
may issue appropriate "stop transfer" instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.

         3. PURCHASER'S REPRESENTATIONS AND COVENANTS. In connection with the
purchase of the Stock, Purchaser hereby represents and warrants to the Company
as follows:

                  a)       INVESTMENT INTENT; CAPACITY TO PROTECT INTERESTS.
Purchaser is purchasing the Stock solely for Purchaser's own account for
investment and not with a view to or for sale in connection with any
distribution of the Stock or any portion thereof and not with any present
intention of selling, offering to sell or otherwise disposing of or distributing
the Stock or any portion thereof. Purchaser also represents that the entire
legal and beneficial interest of the Stock is being purchased, and will be held,
for Purchaser's account only, and neither in whole or in part for any other
person. Purchaser either (i) has a pre-existing business or personal
relationship with the Company or at least one of its officers, directors or
controlling persons, or (ii) by reason of Purchaser's business or financial
experience (or the business or financial experience of Purchaser's professional
advisors who are unaffiliated with and who are not compensated by the Company or
any affiliate or selling agent of the Company, directly or indirectly), can be
reasonably assumed to have the capacity to evaluate the merits and risks of an
investment in the Company and to protect Purchaser's own interests in connection
with this transaction.

                  b)       ADDRESS. Purchaser's place of business address is
located at the address indicated beneath the signature of Purchaser's authorized
representative, below.

                  c)       INFORMATION CONCERNING COMPANY. Purchaser has
discussed the Company and its plans, operations and financial condition with the
Company's officers and has received all such information as Purchaser has deemed
necessary and appropriate to enable Purchaser to evaluate the financial risk
inherent in making an investment in the Stock. Purchaser has received
satisfactory and complete information concerning the business and financial
condition of the Company in response to all inquiries in respect thereof.

                  d)       ECONOMIC RISK. Purchaser realizes that the purchase
of the Stock will be a highly speculative investment and involves a high degree
of risk. Purchaser is able, without impairing Purchaser's financial condition,
to hold the Stock for an indefinite period of time and to suffer a complete loss
on Purchaser's investment.

                  e)       RESTRICTED SECURITIES. Purchaser understands and
acknowledges that:

                           i)       The Stock has not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance upon a
specific exemption therefrom, which exemption depends upon, among other things,
the bona fide nature of Purchaser's



investment intent as expressed herein. In this connection, Purchaser understands
that, in the view of the Securities and Exchange Commission ("SEC"), the
statutory basis for such exemption may be unavailable if Purchaser's
representation was predicated solely upon a present intention to hold the Stock
for the minimum capital gains period specified under tax statutes, for a
deferred sale, for or until an increase or decrease in the market price of the
Stock, or for a period of one year or any other fixed period in the future.

                           ii)      The Stock must be held indefinitely unless
it is subsequently registered under the Securities Act or unless an exemption
from such registration is otherwise available. Purchaser further acknowledges
and understands that the Company is under no obligation to register the Stock.
In addition, Purchaser understands that the certificate evidencing the Stock
will be imprinted with a legend which prohibits the transfer of the Stock unless
it is registered or such registration is not required in the opinion of counsel
satisfactory to the Company.

                  f)       FURTHER LIMITATIONS ON DISPOSITION. Without in any
way limiting Purchaser's representations set forth above, Purchaser further
agrees that Purchaser shall in no event make any disposition of all or any
portion of the Stock unless and until:

                           i)       Either:

                                    (A)      There is then in effect a
Registration Statement under the Securities Act covering such proposed
disposition, and such disposition is made in accordance with said Registration
Statement; or

                                    (B)      (1) Purchaser shall have notified
the Company of the proposed disposition and shall have furnished the Company
with a detailed statement of the circumstances surrounding the proposed
disposition; (2) Purchaser shall have furnished the Company with an opinion of
Purchaser's counsel to the effect that such disposition will not require
registration of such shares under the Securities Act; and (3) such opinion of
Purchaser's counsel shall have been concurred in by counsel for the Company, and
the Company shall have advised Purchaser of such concurrence; and,

                           ii)      Purchaser shall have complied with the
Standoff Agreement set forth in Section 5 hereof, and

                                    The proposed transferee executes an
agreement with the Company to be bound by the restrictions on transfer contained
herein, and in specific the Standoff Agreement contained in Section 5 hereof.

                  g)       VALUATION OF COMMON STOCK. Purchaser understands that
the Stock has been valued by the Company's Board of Directors and that the
Company believes this valuation represents a fair attempt at reaching an
accurate appraisal of its worth. Purchaser understands, however, that the
Company can give no assurances that such price is in fact the fair market value
of the Stock, and that it is possible that, with the benefit of hindsight, the
Internal Revenue Service would successfully assert that the value of the Stock
on the date of purchase is substantially greater than so determined. If the
Internal Revenue Service were to succeed in a tax determination that the Stock
had a value greater than that upon which this transaction is based, the
additional value would constitute ordinary income to Purchaser as of the date of
its receipt. The



additional taxes (and interest) due would be payable by Purchaser. There is no
provision for the Company to reimburse Purchaser for that tax liability, and
Purchaser assumes all responsibility therefor.

                  h)       ACCREDITED INVESTOR. The Purchaser is an accredited
investor as defined in Rule 501 (a) of Regulation D promulgated under the
Securities Act.

         4.       COMPANY'S REPRESENTATIONS AND COVENANTS. Company hereby
represents and warrants to the Purchaser as follows:

                  a)       ORGANIZATION, GOOD STANDING AND QUALIFICATION. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to carry on its business, to execute and deliver this Agreement,
to issue and sell the Stock, and to carry out the provisions of this Agreement.

                  b)       AUTHORIZATION. All corporate action on the part of
the Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the performance of all
obligations of the Company hereunder and the authorization, issuance and
delivery of the Stock has been taken, and this Agreement, when executed and
delivered by the Company, shall constitute valid and legally binding obligations
of the Company, enforceable against the Company in accordance with its terms
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and other laws of general application
affecting enforcement of creditors' rights generally, and as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies.

                  c)       VALID ISSUANCE OF SECURITIES. The Stock that is being
issued to the Purchaser hereunder, when issued, sold and delivered in accordance
with the terms hereof for the consideration expressed herein, will be duly and
validly issued, fully paid and nonassessable and free of restrictions on
transfer other than restrictions on transfer under this Agreement and applicable
state and federal securities laws. Based in part upon the representations of the
Purchasers in this Agreement and subject to the provisions of subsection (d)
below, the Stock will be issued in compliance with all applicable federal and
state securities laws.

                  d)       GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for applicable state securities laws.

         5.       STANDOFF AGREEMENT. Purchaser agrees, in connection with an
initial public offering of the Company's equity securities, upon request of the
Company or the underwriters managing such offering, (i) not to sell, make any
short sale of, loan, grant any option for the purchase of or otherwise dispose
of any shares of Stock (other than those included in the registration, if any)
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 such underwriters, and (ii) to execute any agreement regarding (i)
above as may be requested by the Company or underwriters at the time of the
public offering; provided, that the officers and directors of the Company who
own stock of the Company also agree to such restrictions.



         6.       MISCELLANEOUS

                  a)       GOVERNING LAW. This Agreement shall be governed and
construed by the laws of the Commonwealth of Massachusetts.

                  b)       NOTICES. Any notice required or permitted hereunder
shall be given in writing and shall be deemed effectively given upon personal
delivery (including by express courier) or upon deposit in the United States
Post Office, by First Class mail with postage and fees prepaid, addressed to
Purchaser and to the Company at the addresses provided below or at such other
address as such party may designate by ten (10) days' advance written notice to
the other party.

                  For Purchaser:
                           Executive Director
                           Science and Technology Ventures
                           Columbia Innovation Enterprises
                           Columbia University
                           Engineering Terrace, Suite 363
                           500 West 120th Street, Mail Code 2206
                           New York, New York 10027

                  For Company:
                           Nanosys, Inc.
                           2625 Hanover Street
                           Palo Alto, California 94304
                           Attn: President and CEO

                  c)       ASSIGNMENT. The Company may assign its rights and
delegate its duties under this Agreement. This Agreement shall inure to the
benefit of the successors and assigns of the Company and, subject to the
restrictions on transfer herein set forth, be binding upon Purchaser, his/her
heirs, executors, administrators, successors and assigns. The rights of
Purchaser under this Agreement may be assigned only with the prior written
consent of the Company.

                  d)       WAIVER. Either party's failure to enforce any
provision or provisions of this Agreement shall not in any way be construed as a
waiver of any such provision or provisions, nor prevent that party thereafter
from enforcing each and every other provision of this Agreement. The rights
granted both parties herein are cumulative and shall not constitute a waiver of
either party's right to assert all other legal remedies available to it under
the circumstances.

                  e)       ENTIRE AGREEMENT. This Agreement and the License
Agreement represent the entire agreement between the parties with respect to the
purchase of Common Stock by Purchaser, may be modified or amended only in
writing signed by both parties, and satisfy all of the Company's obligations to
Purchaser with regard to the issuance or sale of securities.



                  f)       COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original and all of which
together shall constitute one instrument.

                  IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

THE COMPANY:                                        PURCHASER:

NANOSYS, INC.
a Delaware corporation

By: __________________________                      By: ________________________

Name: ________________________                      Name: ______________________

Title: _______________________                      Title: _____________________

Address: _____________________                      Address: ___________________

______________________________                      ____________________________


                                   APPENDIX B

                                  NANOSYS, INC.

                                VOTING AGREEMENT

         This Voting Agreement (the "Agreement") is made as of the ___ day of
________, by and among Nanosys, Inc. (the "Company"), _________________
("________") and the holders of the Company's Common Stock listed on Exhibit A
attached hereto (the "Investors").

                                    RECITALS

         WHEREAS, the Company and _______ have entered into a certain License
Agreement, each dated as of even date hereof (the "License Agreement") which
calls for the execution and delivery of this Agreement by Company and _______
for the purpose of setting forth the terms and conditions pursuant to which
_______ will vote shares of the Company's securities now or in the future held
by _______ (the "Shares");

         NOW THEREFORE, in consideration of the mutual promises and covenants
set forth herein and in the License Agreements, the Company, _________ and the
Investors each desire to facilitate the arrangements set forth in this
Agreement, and the sale and the transactions and obligations set forth in the
License Agreement, by agreeing to the terms and conditions set forth below:

                                    AGREEMENT

         The parties agree as follows:

         1.       VOTING OF THE SHARES. The Shares shall be voted (including in
any stockholder action by written consent) in a manner determined by the Board
of Directors in the Board of Directors' sole discretion.

         2.       ADDITIONAL REPRESENTATIONS AND COVENANTS.

                  2.1      NO REVOCATION. The voting agreements contained herein
are coupled with an interest and may not be revoked during the term of this
Agreement.

                  2.2      LEGENDS. Each certificate representing shares of the
Company's capital stock held by ________ or any assignee of ________ shall bear
the following legend:

                  "THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT
                  BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE
                  COMPANY (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY),
                  AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON
                  ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE



                  TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID VOTING
                  AGREEMENT."

                  2.3      TRANSFER OF SHARES. If ________ transfers any of the
Shares in accordance with the provisions of the applicable Common Stock Purchase
Agreement by and among the Company and ________ (each a "Stock Purchase
Agreement"), each transferee must, as a condition precedent to the validity of
such transfer under the Common Stock Purchase Agreement, acknowledge in writing
to the Company that such transferee is bound by the provisions of this
Agreement.

         3.       TERMINATION.

                  3.1      TERMINATION EVENTS. This Agreement shall terminate
upon the earlier of:

                           (a)      A firm commitment underwritten public
offering by the Company of shares of its Common Stock pursuant to a registration
statement on Form S-1 under the Securities Act of 1933, as amended; or

                           (b)      The sale, conveyance, disposal, or
encumbrance of all or substantially all of the Company's property or business or
the Company's merger into or consolidation with any other corporation (other
than a wholly-owned subsidiary corporation) or if the Company effects any other
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of, provided that this
Section 3.1 (b) shall not apply to a merger effected exclusively for the purpose
of changing the domicile of the Company or to a preferred stock financing of the
Company in which a majority of the preferred stock issued by the Company is
purchased by venture capital investors.

                  3.2      REMOVAL OF LEGEND. At any time after the termination
of this Agreement in accordance with Section 3.1, any holder of a stock
certificate legended pursuant to Section 2.2 may surrender such certificate to
the Company for removal of the legend, and the Company will duly reissue a new
certificate without the legend.

         4.       MISCELLANEOUS.

                  4.1      SUCCESSORS AND ASSIGNS. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

                  4.2      AMENDMENTS AND WAIVERS. Any term hereof may be
amended or waived only with the written consent of the Company, ________ and the
Investors holding a majority of the shares of Common Stock held by such
Investors. Any amendment or waiver effected in accordance with this Section 4.2
shall be binding upon the Company, ________, the Investors and each of their
respective successors and assigns.



                  4.3      NOTICES. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient on the date of
delivery, when delivered personally or by overnight courier or sent by telegram
or fax, or seventy-two (72) hours after being deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such patty's address or fax number as set forth on the
signature page, or as subsequently modified by written notice.

                  4.4      SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, the parties agree
to renegotiate such provision in good faith. In the event that the parties
cannot reach a mutually agreeable and enforceable replacement for such
provision, then (a) such provision shall be excluded from this Agreement, (b)
the balance of the Agreement shall be interpreted as if such provision were so
excluded and (c) the balance of the Agreement shall. be enforceable in
accordance with its terms.

                  4.5      GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the Commonwealth of Massachusetts, without giving effect to principles of
conflicts of law.

                  4.6      COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

                  4.7      TITLES AND SUBTITLES. The titles and subtitles used
in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                            [Signature Page Follows]



         The parties hereto have executed this ________ Voting Agreement as of
the date first written above.

                                               COMPANY:

                                               Nanosys, Inc.

                                               By:______________________________

                                               Title: Lawence A. Bock, President

                                                      Address:__________________
                                                              __________________

                            ________ VOTING AGREEMENT



                                                  _____________:

                                                  By:___________________________

                                                  Title:________________________

                                                  Address:______________________
                                                          ______________________
                                                          ______________________


                                                  Fax Number:___________________

                            ________ VOTING AGREEMENT



                                                  INVESTORS:

                                                  ______________________________


                            ________ VOTING AGREEMENT

EX-10.12

                                                                   EXHIBIT 10.12

        SAIC/ NANOSYS MASTER MARKETING AND BUSINESS DEVELOPMENT AGREEMENT

This Master Marketing Agreement ("Agreement"), is entered into as of the later
of the dates set forth at the end of this Agreement (the "Effective Date"), by
and between Nanosys, Incorporated, a corporation duly organized under the laws
of the State of Delaware and having its principal place of business at 2625
Hanover Street, Palo Alto, California ("Nanosys"), and Science Applications
International Corporation, a corporation duly organized under the laws of the
State of Delaware and having its principal place of business at 10260 Campus
Point Drive, San Diego, California 92121, through its Advanced Systems Group
("SAIC"). Nanosys and SAIC may hereinafter be referred to individually as a
"Party" or collectively as the "Parties".

WHEREAS, SAIC is recognized as a leader in the information technology and
systems integration field with technologies and expertise that includes, but is
not limited to, systems design and engineering, database architecture, software
development, and large project management;

WHEREAS, Nanosys is recognized as a leader in the development of nanotechnology
materials and nanotechnology enabled modules, systems and processes;

WHEREAS, the Parties, from time to time, have collaborated in order to bid for
and to perform under contracts and grants awarded by various agencies of the
United States government; and

WHEREAS, Nanosys and SAIC mutually desire to establish a preferred marketing
relationship with each other in order to identify and pursue additional
contracts and awards with the United States government ("Opportunities")
relating to nanoscience and nanotechnology as a team, to further both their
businesses;

NOW THEREFORE, in consideration of the mutual terms and conditions set forth
herein, the Parties hereby agree as follows:

1.       Scope of the Agreement. This Agreement is a master agreement that
         commits the Parties to work together for their mutual benefit to
         identify and advise each other as to specific Opportunities to market
         and advertise their respective services and products in accordance with
         the following terms, and as provided by Attachment A. SAIC will perform
         activities in the following areas: systems integration; joint prototype
         development; and marketing. Nanosys will perform activities in the
         following areas: nanotechnology materials and nanotechnology-enabled
         module development; joint prototype development; and marketing support.
         Each Opportunity that is to be jointly pursued by the Parties shall be
         defined and described in written, mutually agreed-upon exhibits
         attached hereto (each a "Marketing Exhibit"). Each Marketing Exhibit
         shall specify the particular Opportunity, the complementary products
         and/or services to be marketed, the prospective customer base, and the
         scope of effort required of each Party. Each Marketing Exhibit shall,
         when executed, become an addendum to this Agreement. The first
         Marketing Exhibit shall be titled "Marketing Exhibit No. 1," and
         additional Marketing Exhibits shall be numbered sequentially.

         (a)      The obligations of the Parties under this Agreement are
                  non-exclusive. `Either Party may, at any time and for any
                  reason, enter into similar arrangements with any other entity
                  with respect to the same or similar areas or Opportunities set
                  forth in the Marketing Exhibits or for any other business
                  purposes. However, notwithstanding the foregoing, for any
                  given Opportunity for which: (1) the Parties have
                  complementary technology and/or intellectual property for
                  addressing such Opportunity; (2) a Party chooses not to pursue
                  such Opportunity on its own, or with a partner entity or
                  organization that is already a Strategic Commercial Partner of
                  such Party at the time the Party chooses to pursue such
                  opportunity; (3) a Party does not already have a proposal
                  submitted for such Opportunity; (4) a Party has not had such
                  Opportunity presented to such Party by a third party; and (5)
                  resources for pursuing such Opportunity are supported
                  Resources pursuant to Section 2 of this Agreement; then each
                  Party agrees to offer to the other Party the first opportunity
                  to enter into a Marketing

                                  Page 1 of 14
                                    7/7/2003

                  Exhibit for such Opportunities contemplated to be pursued by
                  such Party. In the event that a Party desires to pursue an
                  Opportunity on its own, it shall notify the other Party to
                  allow the other Party an opportunity to present information
                  supporting the JOINT pursuit of such Opportunity by the
                  Parties hereto. The Party being offered the first opportunity
                  to enter into a Marketing Exhibit or to present information
                  supporting the joint pursuit of an Opportunity, shall
                  communicate any acceptance of such offer to the other Party
                  within a reasonable time, which time is not to exceed ten(10)
                  business days, unless otherwise agreed to by the Parties in
                  writing. If the offer of first opportunity or to present
                  information for joint pursuit is rejected, or not accepted
                  within such reasonable time, either Party is then free to
                  pursue the Opportunity on its own or with any other person or
                  entity. Further, commencing upon the execution of a Marketing
                  Exhibit and continuing during the effectiveness of any
                  definitive agreement relating thereto, the Parties agree that
                  they shall not participate in any effort to prepare or submit
                  a separate proposal relating to the specific technology,
                  application and customer of the Opportunity identified in the
                  Marketing Exhibit. Strategic Commercial Partner shall mean a
                  partner entity or organization with which the Party has a
                  fully executed commercial development agreement.

         (b)      Except as set forth in this Agreement or a Marketing Exhibit
                  executed hereunder, each Party will bear all costs, risks and
                  liabilities incurred by it arising out of its obligations and
                  efforts under this Agreement and any such Marketing Exhibit.
                  Unless otherwise specified in this Agreement or a Marketing
                  Exhibit, neither Party shall have any right to any
                  reimbursement, payment or compensation of any kind from the
                  other Party for activities pursuant to this Agreement or a
                  Marketing Exhibit.

         (c)      This Agreement, including all Marketing Exhibits, sets forth
                  the provisions and conditions pursuant to which the Parties
                  may identify and advise each other of a mutually beneficial
                  Opportunity.

         (d)      Each Party shall designate one or more duly authorized
                  representatives to interact with the other for purposes of
                  this Agreement. Initially, [*** Redacted] and [*** Redacted]
                  shall be the representatives of Nanosys and [*** Redacted] and
                  [*** Redacted] shall be the representatives of SAIC. Each
                  Party's representative(s) may select and submit to the other
                  for its consideration such Opportunities that the Party
                  believes may be of mutual interest and the representatives
                  shall jointly determine whether to pursue such Opportunity
                  together. If the Parties determine to pursue an Opportunity
                  jointly, the representatives shall determine jointly the
                  appropriate marketing strategy; including planning for
                  directing the timing and use of the Resources described in
                  Section 2 which efforts shall be reflected in a Marketing
                  Exhibit hereto. At least one representative of each Party
                  shall meet and confer periodically with at least one
                  representative of the other as necessary, either in person or
                  by telephone, to discuss prospective Opportunities and
                  performance with respect to existing Marketing Exhibits
                  (including, but not limited to the Parties obligations under
                  Section 2 below). The Parties agree that the representatives
                  shall meet at agreed-upon intervals but not less than once in
                  any calendar quarter. Subject to the provisions of section
                  1(a) above relating to the Parties' actions commencing upon
                  execution of a Marketing Exhibit and continuing during the
                  effectiveness of any definitive agreement relating thereto, if
                  either Party's representative determines that it is not in
                  that Party's best interest to initiate or continue an
                  Opportunity jointly, either Party is free to pursue such
                  Opportunity, using its sole efforts or in conjunction with any
                  other person or entity.

         (e)      In those circumstances where the Parties' marketing efforts
                  identify a specific Opportunity, and the Parties decide to
                  pursue the Opportunity jointly as set forth in a Marketing
                  Exhibit, then the Parties agree to enter into good faith
                  negotiations to execute an appropriate definitive agreement
                  for the particular Opportunity. Generally, it is anticipated
                  that Nanosys would primarily apply its nanoscience and
                  nanotechnology development expertise and be the


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                  Page 2 of 14
                                    7/7/2003


                  preferred provider of any nanotechnology-based modules to the
                  Opportunity, and SAIC would primarily apply its system
                  integration expertise to the Opportunity. Each such definitive
                  agreement shall contain terms and conditions that are
                  customary for a teaming agreement, including, but not limited
                  to, allocating responsibility for preparation of proposals and
                  determining the structure of the proposal effort. Each such
                  definitive agreement shall set forth additional mutually
                  agreed-upon terms and conditions with respect to the rights
                  and obligations of the Parties with regard to that specific
                  Opportunity.

2.       Mutual Commitment to Fund the Initiative.

         (a)      The Parties agree that, in order to initially support the
                  marketing activities associated with the Opportunities
                  anticipated to be identified in Marketing Exhibits, the work
                  of approximately [*** Redacted] full time employee equivalents
                  ("FTEs", the FTEs and associated costs are collectively
                  referred to as the "Resources") will be necessary to
                  specifically support the marketing activities associated with
                  the Opportunities. The effort of each individual supporting an
                  Opportunity will be dedicated at a percentage agreed upon by
                  the representatives of each party authorized by this
                  Agreement. The Resources needed will include technical and
                  marketing resources. The Parties agree that Nanosys shall be
                  responsible for providing Resources equivalent to [***
                  Redacted] FTEs and SAIC shall be responsible for providing
                  Resources equivalent to [*** Redacted] FTEs.

         (b)      SAIC agrees, during the Initial Term, as defined in Section
                  3(a), to fund the cost of the Resources of both Parties set
                  forth in Section 2(a). Such costs are expected to be burdened
                  actual expenses, not including any fees or profit, and are
                  invoiced monthly in accordance with 2f, below. The funding
                  support will be subject to quarterly reviews, as stated in
                  1(d) above. The maximum Resources funded by SAIC under this
                  section during the Initial Term of this Agreement, and that
                  have not been reimbursed under section 2(c)(iii), are not to
                  exceed $2.2 M, (It is currently estimated that $1.6 M will be
                  allocated to Nanosys and $0.6 M to SAIC), unless otherwise
                  agreed to by the Parties. Resources reimbursed under section
                  2(c)(iii) may, during the Initial Term, be reused to fund
                  additional Resources if mutually agreed by the Parties. Unless
                  specifically agreed upon by the Parties in writing, the work
                  performed by the representatives of the Parties in carrying
                  out their periodic review responsibilities under Section 1(d),
                  shall not be included in the amounts funded by SAIC. Among the
                  tasks to be performed by the Parties' FTEs are support for
                  preparation of proposals for contracts and awards,
                  demonstrations, and marketing presentations.

         (c)      In consideration of SAIC's agreement to fund the Resources
                  (including SAIC Resources) described in paragraph (b) above,
                  the Parties agree that all United States government contract
                  revenue, including the subcontract(s) from one Party to the
                  other Party, ("Contracts") arising out of or resulting from
                  work performed under this Agreement shall be allocated in
                  accordance with the following priority schedule, with funds
                  received under any Contract first being applied to the highest
                  priority category until all costs thereunder are reimbursed,
                  before applying any remaining funds to the next level of
                  priority, etc.:

                           i.       First priority: Reimbursement of reasonable
                                    costs, not including any fee or profit,
                                    incurred in performance of the Contract.

                           ii.      Second priority: Reimbursement of costs, on
                                    a pro-rata basis between Nanosys and SAIC,
                                    not including any fee or profit, incurred
                                    under this Agreement that are incurred in
                                    the performance of the Contract but not
                                    billable to the Contract, and

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                  Page 3 of 14
                                    7/7/2003


                           iii.     Third priority: Reimbursement of costs
                                    incurred by SAIC in funding the initial Term
                                    of the Agreement under Section 2(b) above.
                                    Such reimbursement will be accomplished
                                    through allocation of fees earned from such
                                    Contracts not allocated under either of the
                                    first or second priorities, above, where
                                    100% of such funds will be applied to the
                                    reimbursement until satisfied and the
                                    balance will be allocated between the
                                    parties at a to-be negotiated rate dependent
                                    upon the relative contributions and
                                    responsibilities of the parties for a given
                                    Contract.

                  Unless otherwise agreed by the Parties in writing, Nanosys
                  shall reimburse SAIC net 30 days after receipt of payment
                  from its prime customer under the applicable Contract.

         (d)      With the exception of income taxes imposed on the Parties,
                  each Party agrees to pay all sales, use, value added, personal
                  property or other taxes of any type that are imposed by any
                  governmental authority on the payments due by such Party to
                  the other Party under this Section 2. Any payment or part of a
                  payment due under this Agreement that is not paid when due
                  shall bear interest at the rate of 1.5% per month, or at the
                  highest rate allowed by law, whichever is less, from its due
                  date until paid.

         (e)      Each Party shall have the right, at its sole expense, to
                  inspect the books and records of the other Party for the
                  purpose of verifying the amounts funded by SAIC and that
                  Nanosys has complied with the payment obligations of this
                  Section 2. Such inspections may be made not more than
                  semi-annually, on not less than fifteen (15) days prior
                  written notice to the other Party, during regular business
                  hours.

         (f)      To fund the Nanosys Resources, SAIC ASG will implement a
                  purchase order with Nanosys which will be incrementally
                  funded, against which Nanosys will submit monthly
                  invoices in accordance with the terms of the purchase order.
                  Invoices will be paid net 30 days. A proper invoice may be
                  in Nanosys standard commercial format but must include, at a
                  minimum, detailed costs for the period covered by the invoice
                  and accumulated costs. Detailed costs are defined as hours by
                  individual labor categories, fully burdened labor and other
                  fully burdened expenses such as are described in general in 2a
                  above and not including any fee or profit.

         To provide participation insight to Nanosys, SAIC ASG will prepare
         financial statements on an SAIC "financial-period" basis , to be made
         available to Nanosys, by the [*** Redacted] after the close of the
         [*** Redacted] for which the financial statement is
         prepared.. Financial statements will identify current and cumulative
         total costs for Labor and ODC's as defined in paragraphs 2(a) and 2(b)
         above.

3.       Term and Termination.

         (a)      This Agreement shall have an initial term of twenty-four (24)
                  months commencing on the Effective Date (the "Initial Term").
                  Following the Initial Term, this Agreement may be extended
                  only by the written, signed, mutual agreement of both Parties
                  for an additional period of twelve (12) months (each, a
                  "Renewal Term"), which such written mutual commitment shall be
                  executed at least ninety (90) days prior to the end of the
                  Term immediately preceding such Renewal Term. For purposes of
                  this Agreement, the Initial Term and any Renewal Terms shall
                  be known as the Term.

         (b)      Either Party may terminate this Agreement as of the last day
                  of each calender quarter including and after the first
                  anniversary of the Effective Date, provided that such
                  termination must be communicated to the other party in writing
                  at least ninety (90) days prior to such termination date.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                  Page 4 of 14
                                    7/7/2003


         (c)      Upon the termination or expiration of this Agreement, each
                  Party will destroy or return to the other Party all drawings,
                  specifications, manuals and other printed or reproduced
                  material (including information stored on machine readable
                  media) provided by the disclosing Party to the receiving Party
                  and shall use commercially reasonable efforts to destroy all
                  backup copies of such information made by the receiving Party
                  or its employees, wherever located. The obligations of this
                  section do not apply to any materials and/or information of
                  the disclosing Party that is necessary for the perfection
                  and/or enforcement of any rights to Intellectual Property
                  developed under this Agreement that is owned in whole or in
                  part by the receiving Party. Any Confidential Information
                  retained by the receiving Party hereunder shall remain subject
                  to the provisions of the Non-Disclosure Agreement attached a
                  Exhibit A.

         (d)      The Parties acknowledge that termination or expiration of this
                  Agreement shall terminate each Marketing Exhibit executed
                  hereunder, unless the Parties expressly agree to the contrary
                  in writing. However, any definitive agreements entered into
                  between the Parties as a result of their efforts hereunder
                  shall not be terminated upon the termination or expiration of
                  this Agreement and shall survive according to their terms.
                  Additionally, the obligations of paragraph 2(c) shall survive
                  any termination.

4.       Intellectual Property.

         (a)      The Parties shall each retain ownership of and all right,
                  title and interest in and to their respective pre-existing
                  Intellectual Property (as that term is defined in Article 4(c)
                  below), and no license or right to use therein, whether
                  express or implied, is granted by this Agreement or as a
                  result of the work performed by either Party hereunder or in
                  pursuit hereof. To the extent the Parties wish to grant to the
                  other rights or interests in pre-existing Intellectual
                  Property, separate license agreements on mutually acceptable
                  terms will be executed.

         (b)      For all Intellectual Property developed under this Agreement
                  by the Parties (hereinafter referred to as "Collaboration
                  Intellectual Property"), all Nanotechnology Related
                  Collaboration Intellectual Property shall be solely owned by
                  Nanosys, regardless of inventorship. For purposes of this
                  Agreement, "Nanotechnology Related Collaboration Intellectual
                  Property" is Intellectual Property in [*** Redacted]
                  nanomaterials having at least [*** Redacted] of
                  [*** Redacted], including [*** Redacted] of such materials,
                  composites including such materials, nano to macro world
                  interface technology for such materials, and the fabrication
                  and processing of such materials. All non-Nanotechnology
                  Related Collaboration Intellectual Property such as systems,
                  use, and applications shall be owned according to U.S. laws of
                  intellectual property inventorship and ownership with
                  Collaboration Intellectual Property that is solely conceived
                  by the employees, agents or contractors of one Party being
                  solely owned by that Party with all rights appurtenant
                  thereto, and with non-Nanotechnology related Collaboration
                  Intellectual Property that is jointly conceived by the
                  employees, agents or contractors of both Parties being jointly
                  owned, with all joint rights appurtenant thereto and without
                  obligation to obtain consent or account to the other Party to
                  exploit, license or transfer jointly owned Intellectual
                  Property.

         (c)      As used herein the term "Intellectual Property" shall mean
                  patents, copyrights, trade marks, trade names, inventions
                  (whether or not patentable), works of authorship, trade
                  secrets, techniques, know-how, ideas, concepts, algorithms and
                  all other forms of intellectual property rights. As used
                  herein the term "pre-existing Intellectual Property" means any
                  Intellectual Property previously conceived, developed or
                  reduced to tangible medium as demonstrated by written
                  documentation.

5.       Warranty Disclaimer and Limitation of Liability. Neither Party makes
         any warranties whatsoever to the other Party, express or implied, with
         regard to the products or services of that Party or any matter relating
         to this Agreement and any Marketing Exhibits, and each Party
         specifically disclaims all such

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                  Page 5 of 14
                                    7/7/2003


         warranties and conditions, including any warranty of title,
         merchantability, and fitness for a particular purpose. In no event
         shall either Party be liable to the other for any punitive, exemplary,
         special, indirect, incidental or consequential damages (including, but
         not limited to, lost profits, lost revenues, lost business
         opportunities, loss of use or equipment down time, and loss of or
         corruption to data) arising out of or relating to this Agreement or any
         Marketing Exhibit, regardless of the legal theory under which such
         damages are sought, and even if the Parties have been advised of the
         possibility of such damages or loss. The liability of either Party to
         the other for any claims, liabilities, actions or damages arising out
         of or relating to this Agreement or any Marketing Exhibit, howsoever
         caused and regardless of the legal theory asserted, including breach of
         contract or warranty, tort, strict liability, statutory liability or
         otherwise, shall not, in the aggregate, exceed the amount of
         out-of-pocket costs incurred by the other Party in connection with the
         specific Marketing Exhibit or opportunity under which such claim arose.

6.       Confidentiality. In the performance of this Agreement and any Marketing
         Exhibits executed hereunder, certain information may be exchanged
         between the Parties that is proprietary and confidential in nature.
         This proprietary and confidential information is exchanged solely for
         the purposes set forth in this Agreement and any such Marketing
         Agreement. This proprietary and confidential information shall remain
         the property of the disclosing Party and shall be subject to the terms
         and conditions of the Non-Disclosure Agreement attached hereto as
         Exhibit A. Prior to any transfer of materials under this Agreement, the
         Parties agree that they will execute a Materials Transfer Agreement
         that will be separately agreed to by the Parties.

7.       Export Control. The Parties to this Agreement shall comply with all
         applicable United States export and foreign import laws, rules, and
         regulations in the performance of the Parties' responsibilities and
         obligations under this Agreement. Without limiting the generality of
         the foregoing, the Parties shall not disclose any U.S.-origin products,
         know-how, technical data, documentation, or other products or materials
         furnished to it pursuant to this Agreement, to any person or in any
         manner which would constitute a violation of the export control
         regulations of the United States then in effect.

8.       Disputes. Any controversy, claim or dispute ("Dispute") arising out of
         or relating to this Agreement shall be resolved by binding arbitration
         in accordance with the Commercial Arbitration Rules of the American
         Arbitration Association then in effect. Before commencing any such
         arbitration, the Parties agree to enter into negotiations to resolve
         the Dispute. If the Parties are unable to resolve the Dispute by good
         faith negotiation within Sixty (60) days of entering into such
         negotiations, then either Party may refer the matter to arbitration.
         The arbitration shall take place in the County of San Diego, State of
         California. The arbitrator(s) shall be bound to follow the provisions
         of this Agreement in resolving the dispute, and may not award any
         damages which are excluded by this Agreement. The decision of the
         arbitrator(s) shall be final and binding on the Parties, and any award
         of the arbitrator(s) may be entered or enforced in any court of
         competent jurisdiction. Any request for arbitration of a claim by
         either Party against the other relating to this Agreement must be filed
         no later than one (1) year after the date on which this Agreement
         expires or terminates, or such claim shall be time barred.

9.       Notices. All notices, certificates, acknowledgments or other written
         communications (hereinafter referred to as "Notices") required to be
         given under this Agreement shall be in writing and shall be deemed to
         have been given and properly delivered if duly mailed by certified or
         registered mail to the other Party at its address as follows, or to
         such other address as either Party may, by written notice, designate to
         the other. Additionally, Notices sent by any other means (i.e.,
         facsimile, overnight delivery, courier, and the like) are acceptable
         subject to written confirmation of both the transmission and receipt of
         the Notice.

                                  Page 6 of 14
                                    7/7/2003




Larry Bock                                    Janet V. LaFever
President and CEO                             Vice President for Administration
Nanosys, Incorporated                         Science Applications
2625 Hanover Street                           International Corporation
Palo Alto, CA 94304                           1710 SAIC Drive, M/S 2-3-1
Telephone (650) 331-2105                      McLean, VA 22102
Fax       (650) 331-2101                      Telephone 703-676-4031
e-mail    lbock@nanosysinc.com                Fax       (703)-676-2298
                                              e-mail    Janet.v.lafever@saic.com

10.      Assignment. This Agreement may not be assigned, novated or otherwise
         transferred by operation of law or otherwise by either Party without
         the prior written consent of the other Party, which consent shall not
         be unreasonably withheld. Any change of control of a Party shall be
         deemed an assignment of this Agreement that does not require the prior
         written consent of the other Party. For purposes of this Agreement,
         "change of control" means any merger, consolidation, sale of all or
         substantially all of the assets or sale of a substantial block of
         stock, of a Party. Any such assignment, novation or transfer by one
         Party not in accordance with this provision shall be a material breach
         of this Agreement and shall be grounds for immediate termination
         thereof by the non-breaching Party, in addition to any other remedies
         that may be available at law or in equity to the non-breaching Party.

11.      Waiver or Modification. This Agreement may be modified, or part(s)
         hereof waived, only by an instrument in writing specifically
         referencing this Agreement and signed by an authorized representative
         of the Party against whom enforcement of the purported modification or
         waiver is sought.

12.      Relationship of Parties. The Parties are acting as independent
         contractors in all respects with regard to this Agreement. Nothing
         contained in this Agreement shall be deemed or construed to create a
         partnership, joint venture, agency, or otherwise as participants in a
         joint or common undertaking. Nothing in this Agreement shall be deemed
         to give either Party any power to direct or control any activities of
         the other, including marketing activities, or any power to bind or
         obligate the other. No employee of one Party shall be deemed an
         employee of the other.

13.      Publicity. Neither Party may issue a press release or make any
         disclosure to any other person or entity regarding the existence of or
         the subject matter of this Agreement without the prior written consent
         of the other Party, which consent shall not be unreasonably withheld.
         Notwithstanding the foregoing, either Party may reasonably disclose the
         terms of this Agreement to the extent necessary to comply with any laws
         or government regulations, provided that the Party that is required to
         disclose the Agreement gives the other Party notice of such required
         disclosure and takes reasonable steps to minimize the extent of such
         disclosure.

14.      Applicable Law. This Agreement shall be governed by and construed under
         the laws of the State of California, without regard to its laws
         relating to conflict or choice of laws.

15.      Entire Agreement. This Agreement, including any and all Exhibits
         attached hereto, which are hereby incorporated by reference,
         constitutes the entire agreement and understanding between the Parties
         and supersedes and replaces any and all prior or contemporaneous
         proposals, agreements, understandings, commitments or representations
         of any kind, whether written or oral, relating to the subject matter
         hereof.

16.      Multiple Copies or Counterparts. This Agreement may be executed in one
         or more counterparts, each of which shall be deemed an original, but
         all of which together shall constitute one and the

                                  Page 7 of 14
                                    7/7/2003




         same instrument. This Agreement shall not be effective until the
         execution and delivery between each of the parties of at least one (1)
         set of the counterparts.

17.      Headings. The headings and titles of the various sections of this
         Agreement are intended solely for convenience of reference and are not
         intended to define, limit, explain, expand, modify or place any
         construction on any of the provisions of this Agreement.

IN WITNESS WHEREOF, the Parties represent and warrant that this Agreement is
executed by duly authorized representatives of each Party as set forth on the
date indicated below.

                                        SCIENCE APPLICATIONS
NANOSYS, INCORPORATED                   INTERNATIONAL CORPORATION

/s/     Larry Bock                      /s/   [*** Redacted]
________________________________        ________________________________________

        Larry Bock                            [*** Redacted]
________________________________        ________________________________________
Name                                    Name
        President and CEO                     [*** Redacted]
________________________________        ________________________________________
Title                                   Title

                                              9 July 03
________________________________        ________________________________________
Date                                    Date


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                  Page 8 of 14
                                    7/7/2003



                                  ATTACHMENT A

                             AREAS OF RESPONSIBILITY

1.       SAIC is anticipated to perform activities in the area of systems
         integration.

2.       Nanosys is anticipated to perform activities in the areas of
         nanotechnology and module development.

3.       SAIC and Nanosys are anticipated to jointly perform activities in the
         areas of prototype development and marketing support.

4.       Nanosys agrees to make its facilities, equipment, materials, etc.,
         available at no additional cost above Nanosys' fully burdened FTE rate,
         as reasonably needed to support the joint prototype development and
         marketing support activities.

5.       SAIC agrees to make its procurement and contract preparation and
         administration infrastructure, and its facilities, equipment materials,
         etc., available at no additional cost above SAIC's fully burdened FTE
         rate, as reasonably needed to support the joint prototype development
         and marketing support activities.

6.       The Advanced Systems Group will promote its relationship with Nanosys
         within SAIC and act as a liaison to encourage and facilitate the
         development of additional Marketing Exhibits among Nanosys and other
         organizations within SAIC. Nanosys will reasonably support such
         additional efforts.

                                  Page 9 of 14
                                    7/7/2003


                             MARKETING EXHIBIT NO. 1

                                 Page 10 of 14
                                    7/7/2003


                                    EXHIBIT A

                            NON-DISCLOSURE AGREEMENT

                                 Page 11 of 14
                                    7/7/2003


NOTE: Each Party has a hardcopy of the signed NDA.

     SAIC STANDARD NON-DISCLOSURE (CONFIDENTIALITY) AGREEMENT (PAGE 1 OF 3)

                            NON-DISCLOSURE AGREEMENT
                             PROPRIETARY INFORMATION

This is an Agreement, effective 4 June 2003 between Science Applications
International Corporation, a Delaware Corporation (hereinafter referred to as
"SAIC") and Nanosys Inc., a Delaware Corporation (hereinafter referred to as
"Nanosys"). It is recognized that it may be necessary or desirable to exchange
information between SAIC and Nanosys regarding inorganic semiconductor
nanomaterials and their applications for the purpose of using the information to
discuss potential marketing areas and for marketing the opportunities identified
under the SAIC/Nanosys Master Marketing Agreement. With respect to the
information exchanged between the parties subsequent to this date, the parties
agree as follows:

(1) "Proprietary Information" shall include, but not be limited to, performance,
sales, financial, contractual and special marketing information, ideas,
technical data and concepts originated by the disclosing party, not previously
published or otherwise disclosed to the general public, not previously available
without restriction to the receiving party or others, nor normally furnished to
others without compensation, and which the disclosing party desires to protect
against unrestricted disclosure or competitive use, and which is furnished
pursuant to this Non-Disclosure Agreement and appropriately identified as being
proprietary when furnished.

(2) In order for proprietary information disclosed by one party to the other to
be protected in accordance with this Non-Disclosure Agreement, it must be: (a)
in writing; (b) clearly identified as proprietary information at the time of its
disclosure by each page thereof being marked with an appropriate legend
indicating that the information is deemed proprietary by the disclosing party;
and (c) delivered by letter of transmittal to the individual designated in
Paragraph 3 below, or his designee. Where the proprietary information has not
been or cannot be reduced to written form at the time of disclosure and such
disclosure is made orally and with prior assertion of proprietary rights
therein, such orally disclosed proprietary information shall only be protected
in accordance with this Non-Disclosure Agreement provided that complete written
summaries of all proprietary aspects of any such oral disclosures shall have
been delivered to the individual identified in Paragraph 3 below, within 20
calendar days of said oral disclosures. Neither party shall identify information
as proprietary which is not in good faith believed to be confidential,
privileged, a trade secret, or otherwise entitled to such markings or
proprietary claims.

(3) In order for either party's proprietary information to be protected as
described herein, it must be submitted in written form as set forth in Paragraph
2 above to the individuals identified below:

SCIENCE APPLICATIONS                           NANOSYS INC.
INTERNATIONAL CORPORATION

                                                      
Name:            Martin Fritts, Ph.D.           Name:           Stephen Empedocles, Ph.D.
Title:           Senior Scientist               Title:          Director of Business Development
Address          2111 Eisenhower Avenue         Address:        Corporate Headquarters
                 Suite 303                                      2625 Hanover Street
                 Alexandria, VA 22314                           Palo Alto, CA 94304
Telephone No:    703-842-2606                   Telephone No:   650-776-8530
FAX No:          703-842-2618                   FAX No:         650-745-1273



*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                 Page 12 of 14
                                    7/7/2003


     SAIC STANDARD NON-DISCLOSURE (CONFIDENTIALITY) AGREEMENT (PAGE 2 OF 3)

(4) Each party covenants and agrees that it will, notwithstanding that this
Non-Disclosure Agreement may have terminated or expired, keep in confidence, and
prevent the disclosure to any person or persons outside its organization or to
any unauthorized person or persons, any and all information which is received
from the other under this Non-Disclosure Agreement and has been protected in
accordance with paragraphs 2 and 3 hereof; provided however, that a receiving
party shall not be liable for disclosure of any such information if the same:

         A.       Was in the public domain at the time it was disclosed, or
                  ____________

         B.       Becomes part of the public domain without breach of this
                  Agreement, or

         C.       Is disclosed with the written approval of the other party, or

         D.       Is disclosed after three years from receipt of the
                  information, or

         E.       Was independently developed by the receiving party, or

         F.       Is or was disclosed by the disclosing party to a third party
                  without restriction, or

         G.       Is disclosed pursuant to the provisions of a court order.

         As between the parties hereto, the provisions of this Paragraph 4 shall
supersede the provisions of any inconsistent legend that may be affixed to said
data by the disclosing party, and the inconsistent provisions of any such legend
shall be without any force or effect.

         Any protected information provided by one party to the other shall be
used only in furtherance of the purposes described in this Agreement, and shall
be, upon request at any time, returned to the disclosing party. If either party
loses or makes unauthorized disclosure of the other party's protected
information, it shall notify such other party immediately and take all steps
reasonable and necessary to retrieve the lost or improperly disclosed
information.

(5) The standard of care for protecting Proprietary Information imposed on the
party receiving such information, will be that degree of care the receiving
party uses to prevent disclosure, publication or dissemination of its own
proprietary information.

(6) Neither party shall be liable for the inadvertent or accidental disclosure
of Proprietary Information if such disclosure occurs despite the exercise of the
same degree of care as such party normally takes to preserve its own such data
or information.

(7) In providing any information hereunder, each disclosing party makes no
representations, either express or implied, as to the information's adequacy,
sufficiency, or freedom from defect of any kind, including freedom from any
patent infringement that may result from the use of such information, nor shall
either party incur any liability or obligation whatsoever by reason of such
information, except as provided under Paragraph 4, hereof.

(8) Notwithstanding the termination or expiration of any Teaming Agreement
executed in conjunction with this Agreement, the obligations of the parties with
respect to proprietary information shall continue to be governed by this
Non-Disclosure Agreement.

                                 Page 13 of 14
                                    7/7/2003


     SAIC STANDARD NON-DISCLOSURE (CONFIDENTIALITY) AGREEMENT (PAGE 3 OF 3)

(9) This Non-Disclosure Agreement contains the entire agreement relative to the
protection of information to be exchanged hereunder, and supersedes all prior or
contemporaneous oral or written understandings or agreements regarding this
issue. This Non-Disclosure Agreement shall not be modified or amended, except in
a written instrument executed by the parties.

(10) Nothing contained in this Non-Disclosure Agreement shall, by express grant,
implication, estoppel or otherwise, create in either party any right, title,
interest, or license in or to the inventions, patents, technical data, computer
software, or software documentation of the other party.

(11) Nothing contained in this Non-Disclosure Agreement shall grant to either
party the right to make commitments of any kind for or on behalf of any other
party without the prior written consent of that other party.

(12) The effective date of this Non-Disclosure Agreement shall be the date
stipulated at the beginning of this Agreement.

(13) This Non-Disclosure Agreement shall be governed and construed in accordance
with the laws of the State of California.

SCIENCE APPLICATIONS                                               NANOSYS INC.
INTERNATIONAL CORPORATION

                                                                                  
Signature: _____________________________

Name:                                                              Name:
                        Janet V. LaFever

Title:                  Deputy Group Director of Contracts         Title:

Address:                1710 SAIC Drive, M/S 2-3-1                 Address:                2625 Hanover Street
                        McLean, VA 22102                                                   Palo Alto, CA 94304

Telephone No:           (703) 676-4031                             Telephone No:

FAX No:                 (703) 676-2298                             FAX No.



*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                  Page 14 of 14
                                    7/7/2003

EX-10.13

                                                                   EXHIBIT 10.13

CONTRACT NUMBER: Nanosys DA-01

                              DEVELOPMENT AGREEMENT

This Agreement (the "Agreement"), dated as of September 4, 2003 (the "Effective
Date"), is between In-Q-Tel, Inc., a Delaware corporation ("In-Q-Tel") and
Nanosys, Inc., a Delaware corporation ("Developer").

1.   SERVICES, DELIVERABLES, AND SCHEDULE

     Developer shall perform the services ("Services") and provide the
     deliverables ("Deliverables") specified in the Statement of Work (attached
     as Exhibit 1), in accordance with the schedule set forth in the Statement
     of Work. Exhibit 1 is hereby incorporated into the Agreement.

2.   PAYMENTS

     a.   Generally. This is a Firm Fixed Price Agreement (including all third
          party licenses required to deliver the Deliverables). Developer shall
          receive payments in the amounts and at the times specified in the
          Statement of Work, and shall submit invoices as provided in Exhibit 2
          (Invoice Procedure). Exhibit 2 is hereby incorporated into the
          Agreement.

     b.   Expenses. The payments listed in Exhibit 1 include all out-of-pocket
          costs and expenses incurred by Developer in connection with this
          Agreement, provided, however, that In-Q-Tel shall reimburse Developer
          for such reasonable and customary actual out-of-pocket costs and
          expenses related to travel required in the performance of this
          Agreement as are authorized by In-Q-Tel in advance of Developer
          incurring such costs or expenses. To be reimbursed for costs and
          expenses, Developer shall submit invoices therefor as provided in
          Exhibit 2 and attach receipts for costs and expenses of twenty-five
          dollars ($25.00) or more.

     c.   Payment Adjustments for Changes in Firm Fixed Price Work. (1)
          Developer's payments shall be adjusted to reflect the cost impact of
          any agreed-upon changes in the scope of work; and (2) any such changes
          in the scope of work and any associated payment adjustment shall be
          set forth in a written modification to the Agreement signed by both
          parties. If Developer believes that it has been requested by any
          In-Q-Tel representative to perform work that exceeds the Agreement's
          existing scope, it shall immediately bring this to In-Q-Tel's
          attention through a written notice delivered to the In-Q-Tel
          representatives designated to receive notices in Exhibit 5 to the
          Agreement. To the extent that such work exceeds the Agreement's
          existing scope, then Developer may, at Developer's election, perform
          such work if requested to do so in writing by one of the In-Q-Tel
          representatives listed in Exhibit 5, and if Developer elects to
          perform any work subsequently determined to be out of scope, its
          payments shall be adjusted to reflect the cost impact of that work.
          Exhibit 5 is hereby incorporated into the Agreement.

3.   PERSONNEL

     a.   At no time shall In-Q-Tel be deemed to be the employer of Developer's
          employees or employees of its contractors.

     b.   Developer shall provide In-Q-Tel with advance written notice of the
          names, citizenship, date and place of birth, and addresses of any
          foreign nationals (including persons with dual citizenship) employed
          or contracted by Developer and assigned by Developer to perform any
          service with respect to the Statement of Work.

4.   SECURITY REQUIREMENTS


                                      -1-
In-Q-Tel Proprietary



CONTRACT NUMBER: Nanosys DA-01

     If at any time Developer's solution is to be installed or hosted on a
     Central Intelligence Agency ("CIA") system, the CIA must have adequate
     assurance that Developer's solution does not contain vulnerabilities such
     as viruses, Trojan horses, trap doors, or other similar malicious
     instruction or techniques. To provide this assurance, Developer must: (1)
     permit a CIA employee or representative access to source code that is [***
     Redacted] (subject to a nondisclosure agreement, acceptable to Developer,
     that prohibits disclosure of the source code and limits the use of the
     source code to testing for vulnerabilities); or (2) adopt to any
     alternative approach that is specifically approved by the CIA. Any proposal
     for such an alternative approach may be negotiated directly with the CIA
     and shall be submitted in writing by the date specified by CIA.

5.   INTELLECTUAL PROPERTY

     a.   Ownership. As between In-Q-Tel and Developer, all patent, copyright,
          trade secret and other proprietary rights with respect to any designs,
          specifications, documentation, computer software, reports, training
          materials, inventions, discoveries and other items ("Intellectual
          Property") created or conceived ("Developed") by or on behalf of
          Developer during the performance of the Agreement shall be owned by
          Developer, and any Intellectual Property Developed by or on behalf of
          In-Q-Tel (other than work Developed for In-Q-Tel by Developer pursuant
          to the Agreement) in the performance of the Agreement shall be owned
          by In-Q-Tel. For purposes of this clause, Intellectual Property
          Developed "by or on behalf of Developer" means Intellectual Property
          Developed by Developer or its contractors or consultants.

          In-Q-Tel acknowledges that Developer owns, will own, has licensed, or
          will license Intellectual Property that was not or will not be
          Developed under this Agreement (such Intellectual Property is referred
          to collectively as "Developer Background IP").

          To the extent that any Subject Invention is created or conceived by or
          on behalf of Developer during the performance of this Agreement
          requiring that Developer elect to take title to such Subject
          Invention, as set forth in Exhibit 3, then upon notification by
          Developer that it wishes to elect to take title to such Subject
          Invention, In-Q-Tel shall notify the CIA pursuant to the
          In-Q-Tel's agreements with the CIA of Developer's election to
          take title to such Subject Invention.

     b.   In-Q-Tel License Rights. Developer hereby grants to In-Q-Tel a
          worldwide, perpetual, royalty-free, nonexclusive, nontransferable
          (except to a successor entity) license under Developer Intellectual
          Property and Developer Background IP solely to (i) use, perform and
          display the Deliverables (defined below), for (a) In-Q-Tel's internal
          noncommercial purposes, and (b) testing, demonstration and evaluation
          purposes. Except as expressly provided herein, and notwithstanding the
          Government Patent Rights and Government Data Rights set forth in
          Exhibits 3 and 4 with respect to Developer Intellectual Property, no
          other rights or licenses are granted to In-Q-Tel with respect to any
          Developer Intellectual Property or Developer Background IP. The
          inclusion of any third party software or intellectual property in the
          Deliverables shall be subject to In-Q-Tel's prior approval and
          Developer shall secure the license rights set forth in Sections 5(b)
          and 5(d) with respect to such software and intellectual property, with
          no inconsistent terms and conditions except as approved by In-Q-Tel.

     c.   "Deliverables". For the purpose of this Section 5, the term
          "Deliverables" means all deliverables specified in the Statement of
          Work, including, but not limited to, computer programs, computer
          databases, documentation and other recorded information, in each case
          that are delivered to In-Q-Tel and the CIA pursuant to the
          Agreement.

     d.   U.S. Government Rights. Exhibit 3 ("Government Patent Rights") and
          Exhibit 4


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                      -2-

In-Q-Tel Proprietary


CONTRACT NUMBER: Nanosys DA-01

          ("Government Data Rights") are hereby incorporated into this
          Agreement. Developer grants the United States Government the rights
          and licenses specified in Exhibit 3 and Exhibit 4.

     e.   Marking of Deliverables. Developer shall prominently place the
          following notice on all Deliverables: "Use, reproduction, or
          disclosure is subject to restrictions set forth in Contract Number
          [*** Redacted] and Contract Number Nanosys DA-01.

     f.   Subcontracting. Developer shall obtain from its contractors all
          Deliverables, Intellectual Property and rights necessary to fulfill
          Developer's obligations to the Government and In-Q-Tel under the
          Agreement.

     g.   Precedence of Intellectual Property Clause. Nothing elsewhere in the
          Agreement shall be construed to modify or limit either party's rights
          (or the rights of the CIA or the Government) under this
          Section 5 of the Agreement.

6.   PROPRIETARY INFORMATION

     a.   The term "Proprietary Information" means information disclosed by one
          party to the other party relating to a party's research, development,
          trade secrets or business affairs that the party treats as
          confidential and that: (1) is marked "Proprietary Information" if
          disclosed in writing (including electronically); or (2) is identified
          as "Proprietary Information" prior to oral disclosure and reduced to
          writing, marked as "Proprietary Information," and delivered to the
          other party within thirty (30) days of the oral disclosure. The term
          "Receiving Party" means a party that receives Proprietary Information
          of the other party (the "Disclosing Party").

     b.   (i) Developer shall not use In-Q-Tel's Proprietary Information for any
          purpose, other than as expressly authorized by this Agreement and
          shall limit disclosure of In-Q-Tel's Proprietary Information to those
          of its employees, contractors, and consultants with a need to know (as
          determined by Developer) such Proprietary Information, subject to a
          nondisclosure obligation comparable in scope to this Section 6.

          (ii) In-Q-Tel shall not use Developer's Proprietary Information for
          any purpose, other than as expressly authorized by this Agreement and
          shall limit disclosure of Developer's Proprietary Information to those
          of its employees, contractors, and consultants with a need to know (as
          determined by In-Q-Tel) such Proprietary Information subject to, for
          In-Q-Tel's contractors and consultants, a nondisclosure obligation in
          In-Q-Tel's standard form. In-Q-Tel may also disclose Developer's
          Proprietary Information to the CIA and its contractors or consultants
          who have a need to know (as determined by In-Q-Tel) such Proprietary
          Information. In-Q-Tel and the CIA may disclose Developer's Proprietary
          Information to the National Imagery and Mapping Agency ("NIMA").

     c.   Each party shall protect the other party's Proprietary Information by
          using the same degree of care (but no less than a reasonable degree of
          care) that it uses to protect its own Proprietary Information. The
          obligations imposed by this section shall expire five (5) years after
          the Agreement's completion or termination, and shall not apply to any
          Proprietary Information that: (1) is or becomes publicly known through
          no fault of the Receiving Party; (2) is developed independently by the
          Receiving Party prior to the date of disclosure; or (3) is rightfully
          obtained by the Receiving Party from a third party entitled to
          disclose the information without confidentiality restrictions. A
          Receiving Party also may disclose Proprietary Information to the
          extent required by a court or other governmental authority, provided
          that the Receiving Party promptly notifies the Disclosing Party of the
          disclosure requirement and cooperates with the Disclosing Party (at
          the latter's expense and at its request) to resist or limit the
          disclosure.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                      -3-

In-Q-Tel Proprietary


CONTRACT NUMBER: Nanosys DA-01

     d.   Except as may be required by law (including without limitation,
          federal or state securities laws), Developer shall respect the
          confidentiality of, and shall not disclose, disseminate or publish the
          terms of the Agreement. In any case where Developer proposes to
          disclose the terms of the Agreement because disclosure is required by
          law, Developer shall provide In-Q-Tel with prior notice of the
          proposed disclosure and, in consultation with In-Q-Tel, shall
          undertake efforts to maintain the confidential nature of the
          Agreement, or appropriately redact portions thereof (and cooperate
          with In-Q-Tel in In-Q-Tel's actions to prevent disclosure).

     e.   Either party's breach of this clause would cause the other party
          irreparable injury for which it would not have an adequate remedy at
          law. The non-breaching party shall be entitled to seek injunctive
          relief in a court of competent jurisdiction in addition to other legal
          or equitable remedies.

7.   WARRANTIES

     a.   Each party represents and warrants that it has the authority to enter
          into the Agreement.

     b.   Developer represents and warrants that to the best of Developer's
          actual knowledge as of the Effective Date, neither the Services nor
          the Deliverables will infringe any patent, copyright, trade secret or
          other proprietary right of any third party or otherwise conflict with
          the rights of any third party.

     c.   Developer represents and warrants that to the best of Developer's
          actual knowledge as of the Effective Date Developer has the right to
          incorporate Third Party IP licensed by the Developer into the
          Deliverables and to grant to In-Q-Tel and the CIA the rights
          contained in Sections 6.b. and 6.c. hereof, respectively, to such
          Third Party IP incorporated in Deliverables. Developer also represents
          and warrants that neither In-Q-Tel nor the CIA requires further
          licenses to such Third Party IP incorporated in Deliverables.

     d.   THE EXPRESS WARRANTIES IN THE AGREEMENT SHALL BE IN LIEU OF ALL OTHER
          WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
          MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

8.   INDEMNITY

     a.   Subject to the conditions in Section 8(b) below, Developer shall
          defend, indemnify and hold harmless In-Q-Tel and its directors,
          officers, agents and employees from and against all third-party
          claims, liabilities, suits, losses, damages and expenses, including
          costs and reasonable attorney's fees (collectively, "Claims"),
          relating to or resulting from: (1) In-Q-Tel's or the CIA's use or
          possession of the Deliverables as set forth and authorized herein or
          in the attached Statement of Work, or Services actually or allegedly
          infringing any patent, copyright, trade secret or other proprietary
          right of any third party, or otherwise conflicting with the rights of
          any third party, including, but not limited to, a breach of the
          warranty in Sections 7.b and 7.c.; (2) acts and omissions of
          Developer's employees, contractors, or consultants (collectively,
          "Agents") or the presence of such Agents at In-Q-Tel's facilities
          (except Claims resulting solely from In-Q-Tel's gross negligence or
          willful misconduct), including Claims resulting from injuries to such
          Agents or injuries, property damage, or loss of data caused by such
          Agents; (3) Developer's failure to comply with applicable laws and
          regulations or to obtain necessary licenses, permits or approvals; and
          (4) Developer's failure to perform obligations arising from its
          relationships with its Agents, including any Claims by its Agents and
          Claims by a taxing authority, (collectively, "Developer Claims").



                                      -4-

In-Q-Tel Proprietary

CONTRACT NUMBER: Nanosys DA-01

     b.   Indemnified parties shall have the right to reasonably participate in
          any litigation within the scope of this indemnity insofar as it
          concerns Claims against them, including the right to select and retain
          counsel to represent them at indemnifying party's expense. All
          indemnified parties shall cooperate with the indemnifying party to the
          extent reasonably necessary in the defense of any Claim within the
          scope of this indemnity and the Indemnifying party shall be promptly
          notified and shall have the control of the defense and settlement of
          any Claim for which indemnification is desired, provided that any
          settlement shall require the indemnified party's prior written
          consent.

9.   LIMITATION OF LIABILITY

     EXCEPT IN CONNECTION WITH A CLAIM FOR INDEMNIFICATION PURSUANT TO THE
     AGREEMENT'S INDEMNITY CLAUSE, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
     ANY INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES. IN NO
     EVENT SHALL IN-Q-TEL BE LIABLE TO DEVELOPER FOR ANY CLAIMS ARISING FROM THE
     ACTS OR OMISSIONS OF IN-Q-TEL'S CONTRACTORS AND CONSULTANTS, THE CIA AND
     THE CIA'S CONTRACTORS AND CONSULTANTS.

10.  MONITORING THE PROGRESS OF WORK; COOPERATION

     Monitoring Progress. In-Q-Tel and the CIA shall have access to Developer's
     premises and personnel, at reasonable times and with reasonable notice, as
     set forth in the Statement of Work attached hereto as Exhibit 1, for the
     purpose of monitoring the progress of work under the Agreement. Developer
     shall cooperate with In-Q-Tel and the CIA, as set forth in the Statement of
     Work attached hereto as Exhibit 1, to ensure that In-Q-Tel and the CIA are
     fully apprised of the status of work and the progress made and problems
     encountered by Developer.

11.  TERMINATION

     a.   Termination for Default By Either Party. Either party may terminate
          the Agreement for default based on a material breach by the other
          party that is not cured within fourteen (14) days after written notice
          from the other party. The party terminating for default shall notify
          the other party in writing of the default termination, specifying the
          reasons for the termination.

     b.   Termination by In-Q-Tel. In-Q-Tel, at its discretion may, without
          liability and upon written notice to Developer, terminate this
          Agreement in the event of a sale of all or substantially all of the
          business assets of Developer in a merger or acquisition, which
          business assets relate to the subject matter of this Agreement.

     c.   Post-Termination Procedures. Promptly after any termination, Developer
          shall: (1) stop all work being performed on behalf of In-Q-Tel under
          this Agreement, except any activities reasonably necessary (as
          reasonably determined by In-Q-Tel) for an orderly termination; and (2)
          furnish to In-Q-Tel all completed or uncompleted work requested by
          In-Q-Tel that if completed would have been delivered to In-Q-Tel or
          incorporated in a Deliverable (including property required to be
          transferred to In-Q-Tel under Section 13). Promptly upon Developer's
          compliance with item (2) above, In-Q-Tel shall pay to Developer any
          amounts due for performance of all work performed under this Agreement
          prior to such determination, but not with respect to work covered by
          Deliverables that have been rejected by In-Q-Tel under the Acceptance
          provision of the Statement of Work. Nothing in this section shall
          prohibit Developer from engaging in any research and development
          activities whether directed to technology related to that contemplated
          by this Agreement or otherwise.

12.  PUBLICITY AND DISCLOSURE


                                      -5-

In-Q-Tel Proprietary

CONTRACT NUMBER: Nanosys DA-01

         a.       Developer shall not, without In-Q-Tel's prior written
                  approval: (1) publicize the existence or terms of the
                  Agreement or any other aspect of the parties' relationship; or
                  (2) use In-Q-Tel's name in press releases or promotional
                  materials. Developer agrees not to make any public statement
                  on the possible uses of the Deliverables by In-Q-Tel or the
                  Government (including any agency thereof) without the prior
                  written consent of In-Q-Tel.

         b.       If a news organization or other third party contacts Developer
                  concerning In-Q-Tel, the CIA , or NIMA, Developer shall make
                  no comment, but shall instead refer the third party to
                  In-Q-Tel and promptly notify In-Q-Tel of the third party
                  contact.

         c.       The parties agree to develop mutually agreeable press releases
                  or other information about their relationship. The parties may
                  use the information in such press releases and other
                  information (and make presentations conveying substantially
                  the same substance as such approved information) without
                  requiring further consent of the parties. Nothing in the
                  Agreement, however, shall limit or restrict In-Q-Tel's ability
                  to brief or inform its constituents, including but not limited
                  to, the United States Congress, the CIA and NIMA, on its
                  activities, whether related to the Agreement or otherwise.

         d.       Developer shall provide to In-Q-Tel such non-confidential
                  marketing materials regarding Developer and Developer's
                  technology and products developed under this Agreement when
                  and as In-Q-Tel may reasonably request , including as may be
                  specified in the Statement of Work ("Marketing Materials").
                  Developer hereby grants to In-Q-Tel the a worldwide,
                  perpetual, royalty-free, nonexclusive, nontransferable (except
                  to a successor entity) license to use, reproduce, distribute,
                  modify, perform and display the Marketing Materials to promote
                  Developer's technology and deliverables to potential customers
                  within the Government.

13.      PROPERTY

         "Property" means any tangible personal property acquired for the
         performance of the Agreement. Developer shall obtain In-Q-Tel's written
         approval prior to acquiring any item of property with an acquisition
         value exceeding fifty thousand dollars ($50,000). Title to such items
         of property (as well as items of property with an acquisition value
         below fifty thousand dollars ($50,000)) shall vest in Developer upon
         acquisition. Upon completion or termination of the Agreement, Developer
         shall transfer title to and physical custody of unconsumed items of
         property with an acquisition value exceeding fifty thousand dollars
         ($50,000) to In-Q-Tel unless the parties agree otherwise in writing.
         Developer shall not deny the benefit of property to any person in
         violation of 42 U.S.C. Section 2000d.

14.      NOTIFICATION OF EXPORT LICENSE APPLICATIONS

         Developer shall provide In-Q-Tel with written notification and a copy
         of any export license application pertaining to technology developed
         directly under the Agreement as soon as possible but no later than the
         date of Developer's filing of such application. Developer shall comply
         with the requirements imposed by the Export Administration Act of 1979,
         50 U.S.C. Sections 2401 et seq.; the International Emergency Economic
         Powers Act, 50 U.S.C. Sections 1701 et seq.; the Arms Export Control
         Act, 22 U.S.C. Sections 2778 et seq.; and regulations and Executive
         Orders promulgated thereunder.

15.      AUDIT PROVISION

         If any work is to be performed (1) on a cost-reimbursement, incentive,
         time-and-materials, labor-hour, or price-redeterminable type or any
         combination of these; or (2) for which cost or pricing data are
         required, and the fees for such work exceed, on an aggregate basis,
         fifty thousand dollars ($50,000), the following provision shall apply:
         Developer shall maintain adequate records



In-Q-Tel Proprietary                  -6-

CONTRACT NUMBER: Nanosys DA-01

         to account for all In-Q-Tel funding under the Statement of Work and to
         account for any Developer resources utilized to fulfill the
         requirements under the Statement of Work. Developer's financial records
         are subject to examination or audit on behalf of In-Q-Tel or the CIA
         for a period not to exceed three (3) years after the completion of the
         Agreement's performance or the termination of the Agreement. In-Q-Tel
         or the CIA or designees thereof shall have access and the right to
         examine any non-privileged and pertinent books, documents, papers and
         records of Developer involving transactions related to the Statement of
         Work, and any IRS-required reports prepared by Developer. Developer
         shall advise In-Q-Tel or CIA of any documents withheld as privileged,
         and shall provide relevant information substantiating a claim of
         privilege at In-Q-Tel's or the CIA's request.

16.      GENERAL TERMS AND CONDITIONS

         a.       Governing Law; Contract Interpretation. The Agreement shall be
                  interpreted and enforced under the laws of the Commonwealth of
                  Virginia, without regard to its conflict of law principles.
                  The Agreement shall be construed without regard to the party
                  or parties responsible for its preparation and shall be deemed
                  to have been prepared jointly by the parties. All headings in
                  the Agreement are included solely for convenient reference,
                  and shall not affect its interpretation. The following
                  sections or sub-sections of the Agreement shall remain in
                  effect after its termination or completion: 4, 5, 6, 7, 8, 9,
                  11.c, 12, 13, 14, 15, 16.a and 16.e. If any provision of the
                  Agreement is determined by a court to be unenforceable as
                  drafted, that provision shall be construed in a manner
                  designed to effectuate its purpose to the greatest extent
                  possible under applicable law, and the enforceability of other
                  provisions shall not be affected.

         b.       Notices. All notices sent under the Agreement shall be in
                  writing and: (1) hand delivered; (2) transmitted by fax or
                  electronic mail, with a copy sent concurrently by certified
                  mail, return receipt requested; or (3) delivered by prepaid
                  overnight courier. Notices shall be sent to the
                  representatives of the parties identified in Exhibit 5.

         c.       Relationship of the Parties. Nothing in the Agreement shall be
                  construed as creating a partnership, joint venture or agency
                  relationship between the parties, or as authorizing either
                  party to act as agent for the other or to enter into contracts
                  on behalf of the other.

         d.       Compliance with Laws. Developer shall comply with all laws
                  applicable to the performance of the Agreement, including the
                  Anti-Kickback Act (41 U.S.C. Sections 51-58) and the Byrd
                  Amendment (31 U.S.C. Section 1352).

         e.       Unauthorized Use of Name, Seal, and Initials.

                  Developer and its contractors may not, except with the written
                  permission of the CIA, use the words Central Intelligence
                  Agency the initials CIA the seal of the CIA, or any colorable
                  imitation of such words, initials or seal in connection with
                  any merchandise, retail product, impersonation, solicitation
                  or commercial activity in a manner reasonably calculated to
                  convey the impression that such use is approved, endorsed or
                  authorized by the CIA.

                  Developer and its contractors may not, except with the written
                  permission of NIMA, use the words "Natural Imagery and Mapping
                  Agency", the initials "NIMA," the seal of NIMA or any
                  colorable imitation of such words, initials or seal in
                  connection with any merchandise, retail product,
                  impersonation, solicitation or commercial activity in a manner
                  reasonably calculated to convey the impression that such use
                  is approved, endorsed or authorized by NIMA.

         f.       Academic Institutions. Developer shall notify any academic
                  institution that it proposes to



In-Q-Tel Proprietary                  -7-

CONTRACT NUMBER: Nanosys DA-01

                  use as a subcontractor that the work will be funded by
                  the CIA.

         g.       Reservation of Rights. Except as specifically provided in the
                  Agreement, the Agreement does not offer or grant to either
                  party any rights or licenses under any present or future
                  Intellectual Property of the other party, and neither party
                  shall copy, distribute or disclose Intellectual Property of
                  the other party without the other party's consent, remove,
                  alter or obfuscate any copyright or other proprietary rights
                  notices placed on or embedded in the other party's
                  Intellectual Property, or fail to reproduce such notices on
                  any copies it is authorized to make.

         h.       Assignment and Delegation. Neither party may assign any of its
                  rights or delegate any of its duties under the Agreement to
                  any third party without the prior written consent of the
                  other, which shall not be withheld unreasonably; provided that
                  the foregoing does not impose any restrictions on the
                  assignment or other disposition of Intellectual Property
                  rights beyond those specified in the Agreement's Intellectual
                  Property clause. The parties agree that consent for the
                  foregoing provision shall be deemed to have been granted if
                  the party to whom consent has been requested does not respond
                  with a written approval or rejection of consent within
                  forty-five (45) days after receipt of a written request. A
                  "delegation" by Developer shall include subcontracting.
                  Notwithstanding the foregoing, in the event of a sale of all
                  or substantially all of the business assets of Developer in a
                  merger or acquisition, which business assets relate to the
                  subject matter of this Agreement, the rights and duties of
                  Developer shall be assigned and delegated pursuant to such
                  transaction unless In-Q-Tel elects to terminate this
                  Agreement.

         i.       Agreement Modifications. The Agreement may be modified or
                  amended only by a written agreement signed by both parties.

         j.       Entire Agreement. The Agreement, inclusive of all exhibits,
                  constitutes the entire agreement between the parties
                  concerning its subject matter and supersedes any prior
                  agreements between the parties concerning the subject matter
                  of the Agreement.

                            [SIGNATURE PAGE FOLLOWS]



In-Q-Tel Proprietary                  -8-


CONTRACT NUMBER: Nanosys DA-01

The parties have caused this Development Agreement to be executed by their
respective duly authorized officers as of the Effective Date.

IN-Q-TEL, INC.                               NANOSYS, INC.

By: [*** Redacted]                           By: /s/ Lawrence A. Bock

Name: [*** Redacted]                         Name: Lawrence A. Bock

Title: President and                         Title: President and CEO
       Chief Operating Officer

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

In-Q-Tel Proprietary                  -9-





CONTRACT NUMBER: Nanosys DA-01

                                    EXHIBIT 1
                                STATEMENT OF WORK

1.       INTRODUCTION

Nanosys, Inc. ("Nanosys" or "Developer") possesses nanowire technology which may
result in improved device characteristics when applied to [*** Redacted]; these
characteristics include [*** Redacted] and [*** Redacted] compared to existing
devices. In addition, present [*** Redacted] processing steps used in device
manufacturing may be eliminated when using nanowires, enabling the use of
[*** Redacted] such as [*** Redacted]. This in turn simplifies device packaging,
potentially eliminating components and subsequently lowering cost. All of these
improved device characteristics would be desirable to In-Q-Tel and the CIA.

Nanosys has already produced and brought to operation [*** Redacted] using
nanowire technology. However, these [*** Redacted] have been [*** Redacted]
devices, and the technology has not yet been extended to [*** Redacted]
applications such as [*** Redacted] that utilize [*** Redacted]. [*** Redacted]
applications introduce new complexities for materials and interfaces, where
[*** Redacted] must be tailored to accomplish acceptable time [*** Redacted] for
proper device operation. The bulk of the work described in this document is
expected to result in the extension of nanowire [*** Redacted] technology to
[*** Redacted] applications.

Specifically, nanowire technology will be utilized to develop [*** Redacted],
which when combined with an appropriate [*** Redacted]. In its most basic form,
[*** Redacted] is created from [*** Redacted]; the output of [*** Redacted].
Approximately designed, this configuration results in [*** Redacted] that can be
tailored to [*** Redacted]. Alternatively, [*** Redacted] can use [*** Redacted]
to determine [*** Redacted]. [*** Redacted].

There are several engineering phases inherent to the development of a device
product. Generally speaking the process begins with a Feasibility Phase, which
is designed to determine if the concepts upon which the device is based are
possible. The next step is the Breadboard Phase, which is a laboratory based
system that is aimed at showing feasibility of all of the key technical unknowns
for a particular product, but with no regard to form factor. The third stage
results in the development of a prototype, which ideally reflects the
configuration of the desired final product. Under this Statement of Work,
Nanosys will complete the Feasibility Phase and Breadboard Phase for a nanowire
component to an rf transmitter: an oscillator with an operational frequency that
falls between 200 and 800MHz, inclusive. The Feasibility Phase will be targeted
to culminate in the demonstration of a baseline device that will serve as a
fiducial upon which Breadboard Phase performance optimization can be compared.

2.       DELIVERABLES AND SERVICES

This project is divided into two phases: a six-month Feasibility Phase followed
by a twelve-month Breadboard Phase. The Feasibility Phase must be satisfactorily
completed and a Notice to Proceed obtained from In-Q-Tel before proceeding to
the Breadboard Phase.

Nanosys covenants and agrees that over the entire course of the program (both
Feasibility and Breadboard Phases), it will spend at least $3 Million on the
research and development of nanowire [*** Redacted] outside of this program, but
which technology may be applied to this program.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

In-Q-Tel Proprietary                  -10-


CONTRACT NUMBER: Nanosys DA-01

The following deliverables and services are common to both phases of the
program:

- -        Kickoff Meetings

         Nanosys shall participate in kickoff meetings with representatives of
         In-Q-Tel and the CIA at a location designated by In-Q-Tel. The parties
         will review the development program for the current phase and will
         confirm logistical arrangements for execution of the effort. The
         parties will also have an opportunity to clarify any ambiguity in the
         technical description of the effort.

- -        Progress Reports

         Nanosys shall provide progress reports (of a quality and
         comprehensiveness that would be contained in a Government funded
         research report) with approximately every six months that include:

                  detailed description of work performed since the previous
                  reporting period

                  -        detailed description of Services performed,

                  -        engineering support hours expended during the
                           progress period,

                  -        description of technical issues pertinent to the
                           deliverables,

                  -        disclosure of any potential risk to timely delivery
                           of the deliverables, and

                  -        identification of any "subject inventions" as
                           contemplated by Exhibit 3 ("subject inventions").

- -        Interim Progress Reports

         Nanosys shall provide Interim Progress Reports approximately
         monthly that include:

                  -        progress towards Deliverables and plans for the next
                           period,

                  -        description of Services performed,

                  -        engineering support hours expended during the
                           progress period,

                  -        description of technical issues pertinent to the
                           deliverables,

                  -        disclosure of any potential risk to timely delivery
                           of the deliverables, and

                  -        identification of any "subject inventions".

                  The description of Services performed and progress towards
                  Deliverables in an Interim Progress Report may be in summary
                  form, e.g. not required to exceed two pages.

- -        Technical Exchanges

         Nanosys shall conduct meetings with In-Q-Tel and/or the CIA
         approximately every 6 months, or as otherwise agreed to by the
         Parties, during the term of the Development Agreement to provide
         updates on any technologies that may be of interest to the CIA.

I. FEASIBILITY PHASE

Subject to the qualifications below, the goal of the Feasibility Phase is for
Nanosys to [*** Redacted]. This device would not be required to [*** Redacted]
but will serve as a basis platform for modeling and optimizing device
performance during the Breadboard Phase. In-Q-Tel personnel and/or the CIA may
perform informal site visits, e.g., not requiring any formal agenda or
presentation, from time to time as necessary and reasonable to view technical
progress, provided that reasonable advance notice, e.g., five days, is provided
for any such visits, and that such visits reasonably take into account Nanosys'
allocation of resources and schedules.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


In-Q-Tel Proprietary                  -11-


CONTRACT NUMBER: Nanosys DA-01

A.       FEASIBILITY PHASE DELIVERABLES

- -        Baseline [*** Redacted] Demonstration

         [*** Redacted]. The demonstration shall take place at Nanosys'
         facilities. [*** Redacted]. In-Q-Tel understands that although Nanosys
         is obligated to deliver the deliverables specified for the Feasibility
         Phase and use its commercially reasonable efforts to have an [***
         Redacted] result, this Statement of Work is for a research program, and
         that a commercially reasonable effort by Nanosys does not guarantee
         that [*** Redacted] will result from the Feasibility Phase. For
         purposes of this Agreement, Nanosys' commercially reasonable effort
         under the Feasibility and Breadboard Phases of this Statement of Work,
         shall include the devotion of at least [*** Redacted] ([*** Redacted]
         in the Feasibility Phase and [*** Redacted] in the Breadboard Phase;
         provided, however that the [*** Redacted] for the Breadboard Phase will
         be increased by the [*** Redacted] (or portion thereof), if any, not
         expended in the Feasibility Phase) to development and optimization of
         the oscillator contemplated by this Statement of Work, over both
         phases of the program. For purposes of this Agreement, "[*** Redacted]"
         means [*** Redacted]. In-Q-Tel further understands that the purpose of
         the Deliverable for the Feasibility Phase is to demonstrate that a
         functional [*** Redacted] has been achieved on which to measure the
         initial baseline performance of this technology, and the platform will
         be used to identify [*** Redacted] improvements during the development
         of the breadboard device.

- -        Summary Research Report

         Nanosys shall supply to In-Q-Tel a detailed report describing the
         findings and results of the development program. The report shall
         include the following items:

                  -        a summary abstract of the work performed during the
                           Feasibility Phase,

                  -        a description of the technical development work
                           performed during the course of the feasibility phase
                           of the program,

                  -        conclusions to the work performed during the course
                           of the program,

                  -        engineering support hours expended during the
                           Feasibility Phase, and

                  -        identification of any "subject inventions" conceived
                           under the Feasibility Phase of the program.

                  The Summary Research Report shall also include a description
                  and the results of the following:

                  -        work performed under the program to develop [***
                           Redacted] (where [*** Redacted] is
                           understood to be [*** Redacted]),

                  -        the evaluation of [*** Redacted] under the program
                           for [*** Redacted] and

                  -        work performed under the program to develop [***
                           Redacted].

- -        Design Document

         Nanosys shall supply to In-Q-Tel a detailed design and manufacturing
         document that provides the following:

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


In-Q-Tel Proprietary                  -12-


CONTRACT NUMBER: Nanosys DA-01

                  -        a detailed description of the specifications of the
                           Feasibility Phase [*** Redacted] including both
                           design and performance, and

                  -        a description of the processes employed to produce
                           the Feasibility Phase [*** Redacted]. The
                           description shall be at the level of detail
                           consistent with a "Materials and Methods" section of
                           a scientific publication.

- -        Breadboard Phase Technical Development Plan

         Nanosys shall provide to In-Q-Tel a Breadboard Phase Technical
         Development Plan that details the proposed breadboard technical
         development and optimization work to be conducted by Nanosys during a
         twelve month Breadboard Phase program.

- -        Staffing Plan

         Nanosys shall provide to In-Q-Tel a Staffing Plan that details the
         following:

                  -        staffing resources reasonably expected to be required
                           to execute the Breadboard Phase Technical Development
                           Plan,

                  -        a schedule for implementing the required staffing,
                           and

                  -        a description of how the needed resources will be
                           obtained.

II. BREADBOARD PHASE

The Breadboard Phase of the program shall not commence unless and until In-Q-Tel
has delivered a Notice to Proceed to Nanosys. Upon the completion of the
Feasibility Phase, In-Q-Tel will assess the results of the Feasibility Phase and
the applicability of the program to its and the CIA's needs and interests.
This assessment will be independent of acceptance of Deliverables but In-Q-Tel
may use information contained in the Deliverables in furtherance of its
assessment activity. In-Q-Tel may, at its option and sole discretion, terminate
this Agreement and not proceed to the Breadboard Phase if it determines that is
appropriate. In-Q-Tel shall notify Nanosys in writing of such termination, but
need not specify any reasons for termination. Such termination shall not
constitute a "default" as contemplated by Section 11.a of the Development
Agreement and the post-termination language in Section 11.c of the Development
Agreement shall apply to any such termination.

If In-Q-Tel determines to proceed to the Breadboard Phase, In-Q-Tel shall
deliver a Notice to Proceed to Nanosys and the Breadboard Phase shall commence
promptly. Upon commencement of the Breadboard Phase, [*** Redacted] that was
constructed and brought to operation during the Feasibility Phase will be used
as a baseline platform for [*** Redacted] and Nanosys shall continue to use its
commercially reasonable efforts, as set forth above, toward [*** Redacted] as
contemplated by this Statement of Work. Optimization efforts shall focus on [***
Redacted]. The final breadboard device resulting from the Breadboard Phase is
targeted to [*** Redacted]

A.       BREADBOARD PHASE DELIVERABLES

Projected tasks for the Breadboard Phase are as follows. In-Q-Tel personnel (and
optionally the CIA) may perform informal site visits from time to time as
necessary and reasonable, to view technical progress, provided that reasonable
advance notice, e.g., five days, is provided for any such visits, and provided
that such visits take account of Nanosys' resources and schedules.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


In-Q-Tel Proprietary                  -13-




CONTRACT NUMBER: Nanosys DA-01

- -        Marketing Materials

         Nanosys shall provide product marketing presentations and technical
         materials related to the technology developed under the Development
         Agreement to enable In-Q-Tel to present and promote Nanosys'
         technology, organizational capability and associated products to
         Government customers. Such materials shall include items such as
         Technical Presentations, Demonstration Materials, Product Technical
         Data Sheets and Press Releases that are available at the time of
         request.

- -        Oscillator

         Nanosys shall deliver to In-Q-Tel and optionally the CIA the current
         state of [*** Redacted]. [*** Redacted] shall be targeted to have [***
         Redacted], to the extent such [*** Redacted] with such capability is
         produced in accordance with this Agreement. For the purposes of this
         section, delivery of the [*** Redacted] shall constitute: (1) a [***
         Redacted] for In-Q-Tel and, optionally, the CIA at Nanosys' facilities,
         and (2) [*** Redacted] to In-Q-Tel, and optionally the CIA, and (3) to
         the extent that Nanosys has not already devoted 7.5 Person Years toward
         the work program, sufficient on-site technical support to enable
         In-Q-Tel, and optionally the CIA to be able to operate [*** Redacted]
         in the absence of Nanosys personnel. The level of on-site technical
         support will not be required to exceed 40 man-hours. Nanosys may, at
         its sole discretion, elect to continue support beyond the 7.5 Person
         Years already devoted to the program. Alternatively, further support,
         if deemed necessary by In-Q-Tel, may be arranged under a separate
         agreement. The [*** Redacted] shall incorporate [*** Redacted] and
         processes that are optimized during the course of the Breadboard Phase.
         The key technologies used for the [*** Redacted] will be targeted to be
         compatible with known, commercially proven, [*** Redacted] with a
         target of allowing a product to [*** Redacted] having a [*** Redacted].
         The delivered [*** Redacted] may utilize [*** Redacted] upon which [***
         Redacted], or may include a [*** Redacted]. In any event, provision
         shall be made to accommodate [*** Redacted]. The specific [***
         Redacted] design will be determined separately from this program; the
         breadboard device shall [*** Redacted], using [*** Redacted] of
         Nanosys' choice. In-Q-Tel understands that this Statement of Work is
         for a research program, and that the state of optimization will be in
         accordance with the state of technical understanding as of the end of
         the contract period.

- -        Summary Research Report

         Nanosys shall supply to In-Q-Tel a detailed report describing the
         findings and results of the development program. The report shall
         include the following items:

                  -        a summary abstract of the work performed during the
                           Breadboard Phase,

                  -        a description of the technical development work
                           performed during the course of the Breadboard Phase
                           of the program,

                  -        conclusions to the work performed during the course
                           of the program,

                  -        engineering support hours expended during the
                           Breadboard Phase, and

                  -        identification of any "subject inventions" conceived
                           under the Breadboard Phase of the program.

         The Summary Research Report shall also include a description and
         results of the following:

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


In-Q-Tel Proprietary                  -14-




CONTRACT NUMBER: Nanosys DA-01

                  -        Work performed under the program to evaluate the
                           effects of different materials on device performance
                           leading to the selection of an optimal material for
                           an oscillator operating at a frequency falling
                           between 200 and 800 MHz, inclusive,

                  -        Work performed under the program to improve nanowire
                           deposition processes, and

                  -        Work performed under the program to improve source,
                           gate, and drain electrode contact metallization.

- -        Design Document

         Nanosys shall supply to In-Q-Tel a detailed set of design documents
         that provides the following:

                  -        A detailed description of materials and improvements
                           for the Breadboard Phase oscillator including both
                           design and performance, and

                  -        a description of the processes employed to produce
                           the Breadboard Phase. The description
                           shall be at the level of detail consistent with a
                           "Materials and Methods" section of a scientific
                           publication.

3.       DELIVERY AND PAYMENT SCHEDULE

A. DELIVERY DATES. Nanosys shall deliver to In-Q-Tel and/or, at the direction of
In-Q-Tel, the CIA, the Deliverables in accordance with the dates specified in
the table below.

B. PAYMENT DATES. Subject to the rights to terminate the Development Agreement
and not proceed from the Feasibility Phase to the Breadboard Phase, the total
fee for the Deliverables and Services for both Phases of the program to be
provided under this Agreement is [*** Redacted]. The total fee for the
Feasibility Phase of the program is [*** Redacted] ("Feasibility Phase Payment")
and the total fee for the Breadboard Phase of the program is [*** Redacted]
("Breadboard Phase Payment").

In-Q-Tel shall pay the entire [*** Redacted] Feasibility Phase Payment for the
Feasibility Phase of the program within ten (10) business days of the Effective
Date. In-Q-Tel expressly acknowledges and agrees that the Feasibility Phase
Payment is in consideration of Nanosys' delivering the Deliverables for the
Feasibility Phase and that such payment shall have been earned in its entirety
by Nanosys at the end of the Feasibility Phase regardless of whether [***
Redacted], provided that the other Deliverables specified for the Feasibility
Phase have been delivered and the commercially reasonable effort required by
Section 1.A of this Statement of Work shall have been given.

Upon delivery of a Notice to Proceed by In-Q-Tel, payment of the remaining [***
Redacted] by In-Q-Tel to Nanosys shall be made in accordance with the dates
specified in the table below. Payments made by In-Q-Tel hereunder shall be in
accordance with and subject to Section 2 of the Development Agreement.

                              DELIVERABLES SCHEDULE



                                                                          PAYMENT UPON IN-Q-TEL'S
DELIVERABLE/SERVICE             DELIVERY DATE                             ACCEPTANCE OF DELIVERABLE
- -------------------             -------------                             -------------------------
                                                                    
FEASIBILITY PHASE

No deliverable                  within 10 days of the Effective Date      [*** Redacted]



*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

In-Q-Tel Proprietary                  -15-




CONTRACT NUMBER: Nanosys DA-01

                                                                                 
Kickoff meeting                         within 15 days of the Effective Date            No payment

Interim Progress Reports                1, 2, 3, 4 and 5 Months from the                No payment
                                        Effective Date

[*** Redacted] Technical Exchange
    meeting                             6 months from the Effective Date                No payment

[*** Redacted];                         6 months from the Effective Date                No payment
Summary Research Report; Design
Document; Breadboard Phase
Technical Development Plan;
Staffing Plan;

BREADBOARD PHASE

No deliverable                          within 10 days of Notice to Proceed             [*** Redacted]
                                        by In-Q-Tel

Kickoff meeting                         within 15 days of Notice to Proceed             No payment

Interim Progress Reports                1, 2, 3, 4 and 5 months from Notice             No payment
                                        to Proceed

12 Month Progress Report                6 months from Notice to Proceed                 [*** Redacted]

12 Month Technical Exchange
   meeting                              6 months from Notice to Proceed                 No payment

Interim Progress Reports                7, 8, 9, 10 and 11 months from                  No payment
                                        Notice to Proceed

Final Technical Exchange meeting        12 months from Notice to Proceed                No payment

[*** Redacted]; Summary                 12 months from Notice to Proceed
Research Report; Design Documents                                                       [*** Redacted]



4.       ACCEPTANCE PROCESS

All Deliverables are subject to review and acceptance by In-Q-Tel. Each
Deliverable shall be deemed to have been accepted by In-Q-Tel thirty (30) days
after In-Q-Tel's receipt of such Deliverable, unless In-Q-Tel provides Nanosys
with written notice (containing reasonable detail) of the defects in the
Deliverable regarding such Deliverable's failure to conform with the
specifications and requirements set forth in this Statement of Work (including,
without limitation, Section 5 of this SOW (Quality Assurance Statement)).

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

In-Q-Tel Proprietary                  -16-




CONTRACT NUMBER: Nanosys DA-01

Nanosys shall have ten (10) business days following In-Q-Tel's notice of
rejection in which to correct such defects in the Deliverable and to deliver a
corrected Deliverable to In-Q-Tel for its review and acceptance as set forth
above. In the event that in-Q-Tel does not accept such corrected Deliverable,
In-Q-Tel may, in its sole discretion and in addition to any other available
remedies: (a) extend the correction period and repeat the acceptance process set
forth herein; (b) deem Nanosys' failure to provide an acceptable Deliverable to
be a default, and immediately terminate this Agreement for cause pursuant to
Section 11.a of the Development Agreement, provided however, that In-Q-Tel need
not provide Nanosys the cure period specified in Section 11.a. In the event that
In-Q-Tel does not accept a Deliverable which acceptance is a condition of a
payment in accordance with the schedule set forth herein, Nanosys shall not be
obligated to continue any work toward subsequent Deliverables under this
Agreement until such time as the Deliverable has been accepted and payment is
made, or as otherwise agreed to by the parties.

5.       QUALITY ASSURANCE STATEMENT

Nanosys will assure that the quality of the Deliverables and the Services
provided hereunder are consistent with the requirements outlined in this
Statement of Work, are of professional quality, and are reflective of the level
of effort (as measured in Person Years) required hereunder. All labor hours
credited to the work program throughout the period covered by the Statement of
Work shall be contributed from professional scientific or engineering staff
possessing educational credentials or relevant years of experience commensurate
with a highly skilled research group performing nanotechnology development
research (i.e. representative of the current professional scientific or
engineering staff at Nanosys). Nanosys agrees to provide In-Q-Tel with resumes
of participating Nanosys personnel upon request.

                                [END OF EXHIBIT]



In-Q-Tel Proprietary                  -17-



CONTRACT NUMBER: Nanosys DA-01

                                    EXHIBIT 2
                                INVOICE PROCEDURE

Developer's invoices may be submitted upon satisfactory completion of the
relevant milestone in the Statement of Work, and shall be paid within
[*** Redacted] of In-Q-Tel's receipt of a proper invoice. For invoices items
associated with delivery of Deliverable(s), the terms "satisfactory completion
of the relevant milestone" shall include In-Q-Tel acceptance of such
Deliverable(s) pursuant to Section 4 of the Statement of Work ("Acceptance
Process").

Developer shall send invoices to:

                  Accounts Payable
                  In-Q-Tel, Inc.
                  1000 Wilson Blvd.
                  Suite 2900-3910
                  Arlington, VA  22209

Each invoice must contain the following information:

           (i)      Invoice number and invoice date;

           (ii)     Name and address of Developer and address for sending
                    payment;

           (iii)    Agreement or purchase order number;

           (iv)     Contact person for questions; and

           (v)      Certification signed by Contracting Officer as follows:

                  "The services or goods being invoiced have been performed or
                  delivered as required and conform in all respects with the
                  Agreement's terms. The amount claimed for the services or
                  goods being invoiced agrees with the established prices in the
                  Agreement. Appropriate technical and financial representatives
                  have authorized and reviewed, as necessary, this invoice for
                  compliance with the Agreement. Any exceptions are as noted as
                  below."

                                [END OF EXHIBIT]

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

In-Q-Tel Proprietary                  -18-




CONTRACT NUMBER: Nanosys DA-01
                                    EXHIBIT 3

                            GOVERNMENT PATENT RIGHTS

1.       DEFINITIONS

         The following terms shall have the meanings specified below. Any term
         not defined below shall have the meaning set forth in the Agreement.

         "Government Purpose" means any activity in which the Government is a
         party, including cooperative agreements with international or
         multi-national defense organizations or sales or transfers by the
         Government to foreign governments or international organizations.
         Government Purposes include competitive procurement, but do not include
         the rights to practice a Subject Invention for commercial purposes or
         authorize others to do so.

         "Invention" means any invention or discovery that is or may be
         patentable or otherwise protectable under Title 35 of the U.S. Code.

         "Made," when used in relation to any Invention, means the conception or
         first actual reduction to practice of such Invention.

         "Practical Application" means to manufacture a composition or product,
         to practice a process or method, or to operate a machine or system;
         and, in each case, under such conditions as to establish that the
         Invention is capable of being utilized and that its benefits are, to
         the extent permitted by law or Government regulations, available to the
         public on reasonable terms.

         "Subject Invention" means any Invention conceived or first actually
         reduced to practice by or on behalf of Developer in the performance of
         work under the Agreement.

2.       ALLOCATION OF PRINCIPAL RIGHTS

         Developer may retain the entire right, title, and interest throughout
         the world to each Subject Invention subject to the provisions of this
         exhibit and 35 U.S.C. Section 203. With respect to any Subject
         Invention in which Developer retains title, the Government shall have a
         nonexclusive, nontransferable, irrevocable, paid-up license to practice
         or have practiced for or on behalf of the Government the Subject
         Invention throughout the world for Government Purposes.

3.       INVENTION DISCLOSURE, ELECTION OF TITLE, AND FILING OF PATENT
         APPLICATIONS

         3.1      Developer shall disclose each Subject Invention to In-Q-Tel in
                  writing within [*** Redacted] months after the inventor
                  discloses it in writing to Developer's personnel responsible
                  for patent matters. The disclosure shall identify the
                  Agreement and the identity of the inventor(s), and shall be
                  sufficiently complete in technical detail to convey a clear
                  understanding of the Invention to the extent known at the time
                  of the disclosure.

         3.2      Developer will elect in writing whether or not to retain title
                  to any Subject Invention by notifying In-Q-Tel within the
                  shorter of the following periods: (1) [*** Redacted] months of
                  disclosure to In-Q-Tel; or (2) in any case where publication,
                  sale, or public use has initiated the one (1) year statutory
                  period wherein valid patent protection can still be obtained
                  in the United States, [*** Redacted] calendar days prior to
                  the end of the statutory period. When it elects to retain
                  title to a Subject Invention, Developer shall file its initial
                  patent application prior to the end of any statutory period
                  wherein valid patent protection can be obtained in the United
                  States, and shall thereafter file corresponding patent
                  applications in other countries in which it wishes to retain
                  title within reasonable times.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


In-Q-Tel Proprietary                  -19-



CONTRACT NUMBER: Nanosys DA-01

4.       CONDITIONS WHEN THE GOVERNMENT MAY OBTAIN TITLE

         Upon In-Q-Tel's written request, Developer shall convey title to any
         Subject Invention to the Government under any of the following
         conditions:

         (a)      If Developer elects not to retain title, or if Developer fails
                  to disclose or elect title to the Subject Invention within the
                  times specified in Section 3 of this exhibit and In-Q-Tel
                  requests conveyance of title within ninety (90) days after it
                  has advised the CIA of such a failure.

         (b)      In those countries in which Developer fails to file patent
                  applications within the times specified in Section 3 of this
                  exhibit; however, if Developer has filed a patent application
                  in a country after the times specified in Section 3 but before
                  In-Q-Tel requests conveyance of title, Developer shall
                  continue to retain title in that country.

         (c)      In any country in which Developer decides not to continue the
                  prosecution of any application for, to pay the maintenance
                  fees on, or defend in reexamination or opposition proceedings
                  on, a patent on a Subject Invention.

5.       MINIMUM RIGHTS TO DEVELOPER AND PROTECTION OF DEVELOPER'S RIGHT TO FILE

         Developer shall retain a nonexclusive, royalty-free license to practice
         or have practiced throughout the world each Subject Invention to which
         the Government obtains title. Developer's license extends to the
         domestic subsidiaries and affiliates, if any, of Developer within the
         corporate structure of which it is a part and includes the right to
         grant sublicenses of the same scope. Any transfer of the license
         requires CIA approval (except a transfer to the successor of that part
         of the business to which the Subject Invention pertains).

6.       ACTION TO PROTECT THE GOVERNMENT'S INTEREST

         6.1      Developer agrees to execute or to have executed and promptly
                  deliver to In-Q-Tel for delivery to the CIA all instruments
                  necessary: (1) to establish or confirm the Government's rights
                  in those Subject Inventions to which Developer elects to
                  retain title; and (2) to convey title to the Government when
                  requested under Section 4 of this exhibit and to enable the
                  Government to obtain patent protection in that Subject
                  Invention.

         6.2      Developer shall: (1) require its technical employees to
                  execute written agreements obligating them to disclose Subject
                  Inventions, promptly and in writing, to Developer personnel
                  responsible for administering patents; and (2) instruct
                  employees, through suitable educational programs, on the
                  importance of reporting inventions in sufficient time to
                  permit the filing of patent applications prior to United
                  States or foreign statutory bars.

         6.3      Developer shall notify In-Q-Tel of any decisions not to
                  continue the prosecution of a patent application, pay
                  maintenance fees, or defend in a reexamination or opposition
                  proceedings on a patent, in any country, not less than [***
                  Redacted] before the expiration of the response period
                  required by the relevant patent office.

         6.4      Developer shall include, within the specification of any
                  United States patent application and any patent issuing
                  thereon covering a Subject Invention, the following statement:
                  "This invention was made with Government support under
                  Contract No. [*** Redacted] awarded by the Central
                  Intelligence Agency. The Government has certain rights in the
                  invention."

7.       SUBCONTRACTING

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

In-Q-Tel Proprietary                  -20-



CONTRACT NUMBER: Nanosys DA-01

         Developer shall include in its agreements with subcontractors and
         employees provisions sufficient to obtain for the Government the rights
         granted to the Government in this exhibit.

8.       REPORTING ON UTILIZATION OF SUBJECT INVENTIONS

         At In-Q-Tel's request, Developer shall submit annual reports, in a
         mutually agreeable form, on the utilization of a Subject Invention or
         on efforts at obtaining such utilization that are being made by
         Developer or its licensees or assignees. Developer shall also submit
         any additional reports CIA may request in connection with any march-in
         proceedings under Section 10 of this exhibit. As required by 35 U.S.C.
         Section 202(c)(5), CIA shall not disclose such information to persons
         outside the Government without Developer's permission.

9.       PREFERENCE FOR UNITED STATES INDUSTRY

         Neither Developer nor any assignee shall grant any person the exclusive
         right to use or sell any Subject Invention in the United States or
         Canada unless such person agrees that any product embodying the Subject
         Invention or produced through the use of the Subject Invention shall be
         manufactured substantially in the United States or Canada. The CIA may
         waive this requirement in individual cases if Developer shows that
         reasonable but unsuccessful efforts have been made to grant licenses on
         similar terms to potential licensees that would be likely to
         manufacture substantially in the United States or that domestic
         manufacture is not commercially feasible.

10.      MARCH-IN RIGHTS

         When Developer holds title to a Subject Invention, the CIA has the
         right, in accordance with the procedures in 37 CFR 401.6 and any
         supplemental CIA regulations, to require Developer or its assignee or
         exclusive licensee to grant a nonexclusive license to a responsible
         applicant or applicants upon reasonable terms (and to grant such a
         license itself if Developer or its assignee or exclusive licensee
         refuse to do so) upon determining that such action is necessary: (1)
         because Developer or its assignee has not taken, or is not expected to
         take within a reasonable time, effective steps to achieve Practical
         Application of the Subject Invention within such field of use; (2) to
         alleviate health or safety needs that are not reasonably satisfied by
         Developer, its assignee or their licensees; (3) to meet requirements
         for public use specified by federal regulations that are not reasonably
         satisfied by Developer, its assignee or their licensees; or (4) because
         of a violation of Section 9 of this exhibit.

11.      SPECIAL PROVISIONS APPLICABLE TO NONPROFIT ORGANIZATIONS

         If Developer is a nonprofit organization, Developer agrees to comply
         with the requirements set forth in section 52.227-11(k) of the Federal
         Acquisition Regulation (48 CFR 52.227-11(k)).

                                [END OF EXHIBIT]



In-Q-Tel Proprietary                  -21-



CONTRACT NUMBER: Nanosys DA-01

                                    EXHIBIT 4
                             GOVERNMENT DATA RIGHTS

1.       DEFINITIONS

         The following terms shall have the meanings specified below. Any term
         not defined below shall have the meaning set forth in this Agreement.

         "Computer Software" means computer programs, computer databases, and
         documentation thereof.

         "Data" means recorded information, regardless of form or the media on
         which it may be recorded, which represents Technical Data or Computer
         Software.

         "Form, Fit, and Function Data" means Data relating to items,
         components, or processes that are sufficient to enable physical and
         functional interchangeability as well as Data identifying source, size,
         configuration, mating, and attachment characteristics, functional
         characteristics, and performance requirements, except the source code,
         algorithm, process, formulae, and flow charts for Computer Software.

         "Government Purpose" means any activity in which the Government is a
         party, including cooperative agreements with international or
         multi-national defense organizations or sales or transfers by the
         Government to foreign governments or international organizations.
         Government Purposes include competitive procurement, but do not include
         the rights to use, modify, reproduce, release, perform, display or
         disclose Data for commercial purposes or to authorize others to do so.

         "Government Purpose License Rights" means the rights: (1) to use,
         modify, reproduce, release, perform, display or disclose Data within
         the Government without restriction; and (2) to release or disclose Data
         outside the Government and authorize persons to whom release or
         disclosure has been made to use, modify, reproduce, release, perform,
         display, or disclose the Data for Government Purposes only.

         "Limited rights" means the rights of the Government in Limited Rights
         Data as set forth in the Limited Rights Notice at Section 7.2 of this
         Exhibit 4.

         "Limited Rights Data" means Data (other than Computer Software)
         developed at private expense that embody trade secrets or are
         commercial or financial and confidential or privileged.

         "Restricted Computer Software" means Computer Software developed at
         private expense and that is a trade secret; is commercial or financial
         and is confidential or privileged; or is published copyrighted Computer
         Software, including minor modifications of such Computer Software.

         "Restricted Rights" means the rights of the Government in Restricted
         Computer Software (including minor modifications of such Computer
         Software), as set forth in a Restricted Rights Notice at Section 7.3 of
         this Exhibit 4.

         "Technical Data" means Data (other than Computer Software) that are of
         a scientific or technical nature.

2.       ALLOCATION OF RIGHTS

         2.1. The Government shall have Government Purpose License Rights in:




In-Q-Tel Proprietary                  -22-


CONTRACT NUMBER: Nanosys DA-01

                  (i)      Data first produced by Developer in the performance
                           of this Agreement;

                  (ii)     Form, Fit, and Function Data delivered by Developer
                           to In-Q-Tel under this Agreement, if In-Q-Tel
                           delivers such Data to the Government;

                  (iii)    Data delivered by Developer to In-Q-Tel under this
                           Agreement (except for Restricted Computer Software)
                           that constitute manuals or instructional and training
                           material for installation, operation, or routine
                           maintenance and repair of items, components, or
                           processes delivered or furnished for use under this
                           Agreement, if In-Q-Tel delivers such Data to the
                           Government; and

                  (iv)     All other Data delivered by Developer to In-Q-Tel
                           under this Agreement (unless provided otherwise for
                           Limited Rights Data or Restricted Computer Software
                           pursuant to Section 7 of this Exhibit 4) if such Data
                           is delivered by In-Q-Tel to the Government.

         2.2.     Developer shall retain its ownership of Data, and specifically
                  shall have the rights referenced in Sections 3.1, 4, 5, 6, and
                  7 of this Exhibit 4.

3.       COPYRIGHT

         3.1      Developer may establish claim to copyright subsisting in any
                  Data first produced by Developer in the performance of this
                  Agreement. When claim to copyright is made, Developer shall
                  affix to the Data the applicable copyright notice of 17 U.S.C.
                  401 or 402 and acknowledgment of Government sponsorship
                  (including contract No. [*** Redacted] between the Government
                  and In-Q-Tel) when such Data are delivered to In-Q-Tel or are
                  published or deposited for registration as a published work in
                  the U.S. Copyright Office. Developer hereby grants to the
                  Government the license rights specifically granted in Sections
                  2.1 and 7 of this Exhibit 4.

         3.2      Developer shall not, without prior written permission of
                  In-Q-Tel, incorporate in Data delivered under this Agreement
                  any Data not first produced in the performance of this
                  Agreement that contains the copyright notice of 17 U.S.C. 401
                  or 402, unless Developer identifies such Data to In-Q-Tel and
                  grants to the Government, or acquires on its behalf, a license
                  of the same scope as set forth in Section 3.1 of this Exhibit
                  4.

         3.3      Pursuant to its contract with In-Q-Tel, the Government has
                  agreed not to remove any copyright notices placed on Data
                  pursuant to this Section 3, and to include such notices on all
                  reproductions of the Data.

4.       RELEASE, PUBLICATION AND USE OF DATA

         4.1      Developer shall have the right to use, reproduce, modify,
                  release, perform, display, distribute, and disclose any Data
                  first produced by Developer, or specifically used by
                  Developer, in the performance of this Agreement consistent
                  with the Federal export control and national security laws and
                  regulations.

         4.2.     If Developer receives or is given access to Data that contain
                  restrictive markings, it shall treat the Data in accordance
                  with such markings unless otherwise specifically authorized in
                  writing by In-Q-Tel.

5.       UNAUTHORIZED MARKING OF DATA

         If any Data delivered by Developer to In-Q-Tel bear any restrictive
         markings not authorized by this Exhibit 4, In-Q-Tel or the Government
         may at any time either return the Data to Developer or

In-Q-Tel Proprietary                  -23-

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


CONTRACT NUMBER: Nanosys DA-01

         cancel or ignore the markings.

6.       OMITTED OR INCORRECT MARKINGS

         6.1.     Data delivered by Developer to In-Q-Tel without any of the
                  restrictive notices authorized by Sections 3 or 7 of this
                  Exhibit 4 shall be deemed to have been furnished with
                  Government Purpose License Rights in such Data. However, if
                  the Data has not been disclosed without restriction outside
                  In-Q-Tel and the Government, Developer may request permission
                  to have notices placed on qualifying Data, and the Government
                  may agree to do so if Developer:

                  (i)      Identifies the Data to which the omitted notice is to
                           be applied;

                  (ii)     Demonstrates that the omission of the notice was
                           inadvertent;

                  (iii)    Establishes that the use of the proposed notice is
                           authorized; and

                  (iv)     Acknowledges that neither In-Q-Tel nor the Government
                           has any liability with respect to the disclosure,
                           use, or reproduction of any such Data made prior to
                           the addition of the notice or resulting from the
                           omission of the notice.

         6.2.     The Government may permit correction of incorrect notices if
                  Developer identifies the Data on which correction of the
                  notice is to be made and demonstrates that the correct notice
                  is authorized.

7.       PROTECTION OF LIMITED RIGHTS DATA AND RESTRICTED COMPUTER SOFTWARE

         7.1.     When Data other than that listed in Paragraphs 2. 1 (i)-(iii)
                  of this Exhibit 4 are specified to be delivered under this
                  Agreement and qualify as either Limited Rights Data or
                  Restricted Computer Software, if Developer desires to continue
                  protection of such Data, Developer may instruct In-Q-Tel to
                  withhold such Data from the Government. As a condition to this
                  withholding, Developer shall identify to In-Q-Tel the Data
                  being withheld and furnish Form, Fit, and Function Data to
                  In-Q-Tel for delivery to the Government in lieu thereof.
                  Limited Rights Data that are formatted as a computer database
                  for delivery to the Government shall be treated as Limited
                  Rights Data and not Restricted Computer Software.

         7.2.     This Agreement may identify and specify the delivery of
                  Limited Rights Data to the Government or the Government may
                  require the delivery of such Data by written request. If
                  delivery of such Data is so required, Developer may affix the
                  following "Limited Rights Notice" to the Data and the
                  Government will thereafter treat the Data, subject to the
                  provisions of Sections 5 and 6 of this Exhibit 4, in
                  accordance with such Notice:

                              LIMITED RIGHTS NOTICE

                           These data are submitted with limited rights under
                           Government contract No. [*** Redacted] (and
                           Agreement No. [*** Redacted]). These data may

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


In-Q-Tel Proprietary                  -24-



CONTRACT NUMBER: Nanosys DA-01

                     be reproduced and used by the Government with the express
                     limitation that they will not, without written permission
                     of the Developer, be used for purposes of manufacture or
                     distribution of commercial products nor disclosed outside
                     the Government.

This Notice shall be marked on any reproduction of these data, in whole or in
part.

                                 (End of notice)

7.3      This Agreement may identify and specify the delivery of Restricted
         Computer Software to the Government or the Government may require the
         delivery of such Computer Software by written request. If delivery of
         such Computer Software is so required, Developer may affix the
         following "Restricted Rights Notice" to the Computer Software and the
         Government will thereafter treat the Computer Software, subject to
         Sections 5 and 6 of this Exhibit 4, in accordance with the Notice:

                            RESTRICTED RIGHTS NOTICE

                     (This computer software is submitted with restricted rights
                     under Government Contract No. [*** Redacted] (and Agreement
                     No. [*** Redacted]). It may not be used, reproduced, or
                     disclosed by the Government except as provided in paragraph
                     (b) of this Notice.

                     (b) This computer software may be:

                     (1) Used or copied for use in or with the computer or
                     computers for which it was acquired, including use at any
                     Government installation to which such computer or computers
                     may be transferred;

                     (2) Used or copied for use in a backup computer if any
                     computer for which it was acquired is inoperative;

                     (3) Reproduced for safekeeping (archives) or backup
                     purposes;

                     (4) Modified, adapted, or combined with other computer
                     software, provided that the modified, combined, or adapted
                     portions of the derivative software incorporating
                     restricted computer software are made subject to the same
                     restricted rights;

                     (5) Disclosed to and reproduced for use by support service
                     contractors in accordance with subparagraphs (b) (1)
                     through (4) of this Notice, provided the Government makes
                     such disclosure or reproduction subject to these restricted
                     rights; and

                     (6) Used or copied for use in or transferred to a
                     replacement computer.

                     (c) This Notice shall be marked on any reproduction of this
                     computer software, in whole or in part.

                                 (End of notice)

Where it is impractical to include the Restricted Rights Notice on Restricted
Computer Software, the following short-form Notice may be used in lieu thereof.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

In-Q-Tel Proprietary                  -25-


CONTRACT NUMBER: Nanosys DA-01

                       RESTRICTED RIGHTS NOTICE SHORT FORM

                     Use, reproduction, or disclosure is subject to restrictions
                     set forth in Contract No. [*** Redacted] and Agreement No.
                     [*** Redacted].

                                 (End of notice)

8.       SUBCONTRACTING

         Developer has the responsibility to obtain from its subcontractors all
         Data and rights necessary to fulfill Developer's obligations to the
         Government under this Agreement. If a subcontractor refuses to grant
         the Government such rights, Developer shall promptly notify In-Q-Tel
         and not proceed with subcontract award without further authorization.

9.       RELATIONSHIP TO PATENTS

         Nothing contained in this Exhibit 4 shall imply a license to the
         Government under any patent.

10.      COMMERCIAL ITEMS

         Notwithstanding anything else contained in this Exhibit 4, when a
         "commercial item" (as defined in FAR ss. 2.101) is acquired under this
         Agreement, the Government shall acquire only the Technical Data and the
         rights in Technical Data and Computer Software customarily provided to
         the public with the commercial item.

                                [END OF EXHIBIT]

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

In-Q-Tel Proprietary                  -26-


                                    EXHIBIT 5

                REPRESENTATIVES OF THE PARTIES TO RECEIVE NOTICES

IN-Q-TEL'S REPRESENTATIVES:
                                     [*** Redacted]

                                     With a copy to:

                                     [*** Redacted]

                                     [*** Redacted]

DEVELOPER'S REPRESENTATIVES:

                                     Dr. J. Wallace Parce
                                     Chief Technical Officer
                                     Nanosys, Inc.
                                     2625 Hanover Street
                                     Palo Alto, CA 94304
                                     Phone: 650) 331-2131
                                     Email: wparce@nanosysinc.com

                                     With a copy to:
                                     Ms. Karen Vergura
                                     Vice President, Finance
                                     Nanosys, Inc.
                                     2625 Hanover Street
                                     Palo Alto, CA 94304
                                     Email: kvergura@nanosysinc.com

                                     Mr. Matthew Murphy, Esq.
                                     Vice President, Intellectual Property
                                     Nanosys, Inc.
                                     2625 Hanover Street
                                     Palo Alto, CA 94304
                                     Phone: (650) 331-2109
                                     Email: mmurphy@nanosysinc.com

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                [END OF EXHIBIT]

                                      -28-



THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE
TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH
SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT.

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO A
VOTING AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE
COMPANY (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY), AND BY ACCEPTING ANY
INTEREST IN THIS WARRANT OR SUCH SHARES THE PERSON ACCEPTING ANY SUCH INTEREST
SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID
VOTING AGREEMENT.

                             STOCK PURCHASE WARRANT
                To Purchase Shares of Series C Preferred Stock of
                                  Nanosys, Inc.

         THIS CERTIFIES that, for value received, In-Q-Tel, Inc., a Delaware
corporation (the "Investor"), is entitled, upon the terms and subject to the
conditions hereinafter set forth, at any time on or after the Payment Date, as
defined below, and on or prior to September 4, 2008 (the "Termination Date"),
but not thereafter, to subscribe for and purchase, from Nanosys, Inc., a
Delaware corporation (the "Company"), up to a total of 542,314 shares of Series
C Preferred Stock (the "Shares"), with the exact number of shares for which this
Warrant is exercisable determined as set forth below, at an exercise price (the
"Exercise Price") of $0.001 per Share.

         1. Title to Warrant. Prior to the expiration hereof and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, in accordance with the terms of this Warrant
upon delivery of this Warrant by the holder hereof together with the Assignment
Form annexed hereto as Attachment C properly endorsed to the office or agency of
the Company, referred to in Sections 2 and 3 hereof.

         2. Exercise of Warrant.

                  (a) This Warrant shall be exercisable after the date of actual
receipt by the Company of an aggregate of $2,000,000 of payments from In-Q-Tel,
Inc. (the "Payment Date") pursuant to the Development Agreement, dated as of
even date hereof by and among the Company and the In-Q-Tel, Inc. (the "DA"), for
the number of Shares determined as follows (the number of Shares as to which
this warrant is exercisable pursuant to the terms of this Section 2 hereinafter
referred to as "Vested Shares"):

                           (i) This Warrant shall be exercisable after the
Payment Date for the number of Shares equal to (i) 542,314 multiplied by (ii) a
fraction, (A) the numerator of which is the



amount, up to $3,000,000, actually paid to the Company (or its assigns) from
time to time pursuant to the DA minus (x) the total dollar amount of all
equipment or other assets (based on the acquisition price to the Company) as to
which title is transferred by the Company to In-Q-Tel, Inc. pursuant to Section
13 of the DA and (y) all cash or cash equivalents transferred by the Company to
In-Q-Tel, Inc. pursuant to a request by In-Q-Tel, Inc. or pursuant to any other
action through which In-Q-Tel, Inc. seeks refund or payment of such funds, and
(B) the denominator of which is $3,000,000.

                  (b) The right to purchase Vested Shares represented by this
Warrant is exercisable by the registered holder hereof, as to all of the Vested
Shares as of the date of such exercise, at any time before the close of business
on the Termination Date by the delivery of this Warrant and the Notice of
Exercise form annexed hereto as Attachment B duly executed to the office of the
Company in Palo Alto, California (or such other office or agency of the Company
as it may designate by notice in writing to the registered holder hereof at the
address of such holder appearing on the books of the Company), and upon payment
of the Exercise Price for the Vested Shares thereby purchased (by cash or by
check or bank draft payable to the order of the Company or by cancellation of
indebtedness of the Company to the holder hereof, if any, at the time of
exercise in an amount equal to the purchase price of the Shares thereby
purchased); whereupon the holder of this Warrant shall be entitled to receive a
certificate for the number of shares of Preferred Stock so purchased. The
Company agrees that if at the time of the surrender of this Warrant and purchase
the holder hereof shall be entitled to exercise this Warrant, the shares so
purchased shall be and be deemed to be issued to such holder as the record owner
of such shares at the close of business on the date on which this Warrant shall
have been exercised as aforesaid. If this Warrant is exercised, or converted
pursuant to Section 3 below, for a number of Vested Shares that are less than
the total number of Shares, promptly after surrender of the Warrant upon such
exercise or conversion, the Company will execute and deliver a new warrant
evidencing the right of the Holder to the balance of the Shares purchasable
hereunder upon the same terms and conditions set forth herein, provided that the
issuance of such new warrant shall not accelerate, or be deemed or construed to
accelerate, the vesting of any Shares as set forth in Section 2(a) above, and
the terms of such new warrant shall be modified to the extent necessary to
prevent the acceleration of vesting of any Shares under the terms of this
Warrant.

         3. Right to Convert Warrant. The registered holder hereof shall have
the right to convert this Warrant, by the delivery of this Warrant and the
Notice of Conversion form annexed hereto as Attachment B duly executed to the
office of the Company in Palo Alto, California (or such other office or agency
of the Company as it may designate by notice in writing to the registered holder
hereof at the address of such holder appearing on the books of the Company), as
to all Shares that are Vested Shares at the time of such conversion, at any time
before the close of business on the Termination Date, into the shares of Series
C Preferred Stock as provided for in this Section 3. Upon exercise of this
conversion right, the holder hereof shall be entitled to receive that number of
Vested Shares equal to the quotient obtained by dividing [(A - B)(X)] by (A),
where:

                  (A) = the Fair Market Value (as defined below) of one (1)
                        Share on the date of conversion of this Warrant.


                                                                             -2-


                           (B) = the Exercise Price for one (1) Share under this
Warrant.

                           (X) = the number of Vested Shares issuable upon
exercise of this Warrant.

         "Fair Market Value" of a Share shall mean:

                  (a) if the conversion right is being exercised upon the
occurrence of the Company's initial public offering, the initial public offering
price per share (before deducting underwriting commissions and discounts and
offering expenses) multiplied by the number of shares of Common Stock issuable
upon conversion of one (1) Share issuable upon exercise of this Warrant; and

                  (b) in all other cases, the fair value as determined in good
faith by the Company's Board of Directors.

         Upon conversion of this Warrant, the registered holder hereof shall be
entitled to receive a certificate for the number of Vested Shares determined as
aforesaid.

         4. Issuance of Stock; No Fractional Shares or Scrip. Certificates for
the stock purchased hereunder or issuable upon conversion hereof shall be
delivered to the holder hereof promptly after the date on which this Warrant
shall have been exercised or converted as aforesaid. The Company covenants that
all Shares which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be fully
paid and nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue). The Company agrees that, if at the time of
the surrender of this Warrant and exercise of the rights represented hereby, the
holder hereof shall be entitled to exercise such rights, the Shares so issued
shall be and be deemed to be issued to such holder as the record owner of such
Shares as of the close of business on the date on which this Warrant shall have
been exercised or converted as aforesaid. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise or conversion
of this Warrant, and any fractional share amounts shall be rounded down to the
nearest whole share issuable upon exercise of this Warrant.

         5. Charges, Taxes and Expenses. Issuance of certificates for the Shares
upon the exercise or conversion of this Warrant shall be made without charge to
the holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant; provided, however, that in the event certificates for
Shares are to be issued in a name other than the name of the holder of this
Warrant, this Warrant when surrendered for exercise or conversion shall be
accompanied by the Assignment Form attached hereto duly executed by the holder
hereof; and provided further, that upon any transfer involved in the issuance or
delivery of any certificates for the Shares, the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse it for any
transfer tax incidental thereto.

                                                                             -3-



         6. No Rights as Shareholders. This Warrant does not entitle the holder
hereof to any voting rights or other rights as a shareholder of the Company
prior to the exercise or conversion hereof.

         7. Exchange and Registry of Warrant. This Warrant is exchangeable, upon
the surrender hereof by the registered holder at the above-mentioned office or
agency of the Company, for a new Warrant of like tenor and dated as of such
exchange.

         The Company shall maintain at the above-mentioned office or agency a
registry showing the name and address of the registered holder of this Warrant.
This Warrant may be surrendered for exchange, transfer or exercise, in
accordance with its terms, at such office or agency of the Company, and the
Company shall be entitled to rely in all respects, prior to written notice to
the contrary, upon such registry.

         8. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dated as of such cancellation,
in lieu of this Warrant.

         9. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding day
not a legal holiday.

         10. Acquisition, Initial Public Offering and Dilution.

                  (a) Merger, Sale of Assets, etc.

                           (i)      "Acquisition." For the purpose of this
Warrant, "Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets of the Company (including a sale of all or
substantially all of the intellectual property of the Company), or any
reorganization, consolidation, acquisition or merger of the Company where the
holders of the Company's securities before the transaction own less than 50% of
the outstanding voting securities of the surviving entity after the transaction.

                           (ii)     If at any time after the date hereof the
Company proposes to consummate an Acquisition in which the shareholders of the
Company shall receive cash or publicly traded securities in exchange for their
shares of stock in the Company pursuant to such transaction, then the Company
shall give the holder of this Warrant written notice (the "Merger Notice") of
such impending transaction not later than fifteen (15) days prior to the
shareholders' meeting called to approve such transaction, or fifteen (15) days
prior to the closing of such transaction, whichever is earlier, and shall also
notify the holder of this Warrant of the final approval of such transaction. The
first of such notices shall describe the material terms and conditions of the
impending transaction, and the Company shall thereafter give the holder of this
Warrant prompt notice of any material

                                                                             -4-



changes. If this Warrant has not been exercised or converted by the closing of
such transaction then this Warrant shall terminate and shall no longer be
exercisable pursuant to the terms of Sections 2 or 3 hereof.

                           (iii)    If this Warrant is not terminated in an
Acquisition pursuant to the provisions of Section 10(a)(ii), (a "Non-Terminating
Acquisition") then, as a condition of such Non-Terminating Acquisition, lawful
and adequate provisions shall be made by the Company whereby the Investor shall
thereafter have the right to purchase and receive (in lieu of the shares of the
Preferred Stock or Common Stock, as applicable, of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented by this Warrant) such shares of stock, securities or other assets or
property as may be issued or payable with respect to or in exchange for a number
of outstanding shares of such Preferred Stock or Common Stock, as applicable,
equal to the number of shares of such stock immediately theretofore purchasable
and receivable upon the exercise of the rights represented by this Warrant. In
the event of any Non-Terminating Acquisition, appropriate provision shall be
made by the Company with respect to the rights and interests of the Investor
that the provisions hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of shares purchasable and
receivable upon the exercise of this Warrant) shall thereafter be applicable, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof.

                  (b) Initial Public Offering. If at any time after the date
hereof the Company proposes to consummate the initial public offering ("IPO") of
its Common Stock in a bona fide firm commitment underwriting pursuant to a
registration statement on Form S-1 (or successor form) under the Securities Act
of 1933, as amended, (the "Securities Act"), then the Company shall give the
Investor written notice of such impending transaction not later than thirty (30)
days prior to the closing of the IPO. Such notice shall describe the material
terms and conditions of the IPO, and the Company shall thereafter give the
holder of this Warrant prompt notice of any material changes. If this Warrant
has not been exercised or converted by the closing of the IPO it shall terminate
and shall no longer be exercisable or convertible pursuant to the terms of
Section 2 or 3 hereof.

                  (c) Reclassification, etc. If the Company at any time shall,
by subdivision, combination or reclassification of securities or otherwise,
change any of the securities to which purchase rights under this Warrant exist
into the same or a different number of securities of any class or classes, this
Warrant shall thereafter be to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
immediately prior to such subdivision, combination, reclassification or other
change. If the Shares issuable upon the exercise of this Warrant are subdivided
or combined into a greater or smaller number of the Shares, the purchase price
under this Warrant shall be proportionately reduced in case of subdivision of
shares or proportionately increased in the case of combination of shares, in
both cases by the ratio which the total number of Shares to be outstanding
immediately after such event bears to the total number of Shares outstanding
immediately prior to such event.

                                                                             -5-



                  (d) Cash Distributions. No adjustment on account of dividends
on the Shares issuable upon the exercise of this Warrant will be made to the
purchase price under this Warrant.

                  (e) Authorized Shares. The Company covenants that, during the
period the Warrant is outstanding, it will reserve from its authorized and
unissued Preferred Stock and Common Stock a sufficient number of shares to
provide for the issuance of the Shares upon the exercise or conversion of this
Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
the Shares upon the exercise of the purchase rights under this Warrant.

                  (f) Conversion Price Adjustments. The rate at which the Shares
are convertible into shares of Common Stock of the Company is subject to
adjustment as set forth in the Company's Certificate of Incorporation, as
amended from time to time. Any adjustment to the conversion rate of the Shares
issuable upon the exercise of this Warrant effected prior to any exercise or
conversion of this Warrant shall apply to any Shares thereafter issued pursuant
to the terms hereof.

                  (g) Option to Accelerate Vesting of Shares. Prior to the
termination of this Warrant pursuant to the provisions of Section 10(a) or 10(b)
hereunder, In-Q-Tel, Inc. shall have the right to pay to the Company any amounts
that remain unpaid to the Company under the DA and thereby accelerate the
vesting of the Shares in accordance with the formula set forth in Section 2(a)
above, provided that, no acceleration of vesting of the Shares under this
warrant shall be effective unless the payments by In-Q-Tel, Inc. to the Company
are irrevocable under the terms of the DA and not subject to refund to In-Q-Tel,
Inc.

         11. Restrictions on Transferability of Securities.

                  (a) Restrictions on Transferability. This Warrant, the Shares
issuable upon exercise of this Warrant, and the shares of Common Stock issuable
upon conversion of the Shares (collectively the "Securities") shall not be sold,
assigned, transferred or pledged except upon the conditions specified in this
Section 11, which conditions are intended to ensure compliance with the
provisions of the Securities Act. Each holder of any of the Securities will
cause any proposed purchaser, assignee, transferee, or pledgee of the Securities
held by such holder to agree in writing to take and hold such Securities subject
to the provisions and upon the conditions specified in this Warrant as if such
purchaser, assignee, transferee or pledgee were the Investor hereunder.

                  (b) Restrictive Legend. Each certificate representing the
Securities and any other securities issued in respect of the Securities upon any
stock split, stock dividend, recapitalization, merger, consolidation or similar
event, shall (unless otherwise permitted by the provisions of Section 11(c)
below) be stamped or otherwise imprinted with legends in the following form (in
addition to any legend required under applicable state securities laws):

                           (i)      33 Act Legend.

                                                                             -6-



         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
         INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
         SUCH REGISTRATION UNLESS THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR
         SIMILAR RULE OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
         REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
         EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
         SAID ACT.

                           (ii)     Lock-Up Legend.

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR
         OTHERWISE TRANSFERRED FOR A PERIOD NOT TO EXCEED 180 DAYS FOLLOWING THE
         EFFECTIVE DATE OF A REGISTRATION STATEMENT FILED BY THE COMPANY FOR ITS
         INITIAL PUBLIC OFFERING.

         The Investor and each holder of Securities and each subsequent
transferee, assignee, transferee or pledgee (hereinafter collectively, including
the Investor, referred to as a "Holder") consents to the Company making a
notation on its records and giving instructions to any transfer agent of the
Securities in order to implement the restrictions on transfer established in
Sections 11 and 15.

                  (c) Notice of Proposed Transfers. Each Holder of a certificate
representing the Securities, by acceptance thereof, agrees to comply in all
respects with the provisions of Sections 11 and 15. Prior to any proposed sale,
assignment, transfer or pledge of any Securities (other than (i) a transfer not
involving a change in beneficial ownership, (ii) in transactions involving the
distribution without consideration of Securities by a Holder to any of its
partners, or retired partners, or to the estate of any of its partners or
retired partners, (iii) a transfer to an affiliated fund, partnership or
company, which is not a competitor of the Company, subject to compliance with
applicable securities laws or (iv) transfers in compliance with Rule 144, so
long as the Company is furnished with satisfactory evidence of compliance with
such Rule), unless there is in effect a registration statement under the
Securities Act covering the proposed transfer, the Holder thereof shall give
prior written notice to the Company of such Holder's intention to effect such
transfer, sale, assignment or pledge. Each such notice shall describe the manner
and circumstances of the proposed transfer, sale, assignment or pledge in
sufficient detail, and shall be accompanied, at such Holder's expense, by either
(i) an opinion of counsel (who shall, and whose opinion shall be, addressed to
the Company and reasonably satisfactory to the Company) to the effect that the
proposed transfer of the Securities may be effected without registration under
the Securities Act or (ii) a "no action" letter from the Securities and Exchange
Commission (the "Commission") to the effect that the transfer of such securities
without registration will not result in a recommendation by the staff of the
Commission that action be taken with respect thereto, whereupon the Holder of
such Securities shall be entitled to transfer such Securities in accordance with
the terms of the notice delivered by such Holder to the Company. Each
certificate evidencing the Securities transferred as above provided shall bear
(except if such transfer is made pursuant to Rule 144, in which case the legend
set forth in Section

                                                                             -7-



11(b)(i) shall not be required) the restrictive legends set forth in Section
11(b) above, except that each such certificate shall not bear the legend set
forth in Section 11(b)(i) if in the opinion of counsel for such Holder and in
the opinion of counsel for the Company such legend is not required in order to
establish compliance with any provision of the Securities Act.

                  (d) Removal of Restrictions on Transfer of Securities. The
legend referred to in Section 11(b)(i) hereof stamped on a certificate
evidencing the Securities and the stock transfer instructions and record
notations with respect to the Securities shall be removed, and the Company shall
issue a certificate without such legend to the Holder of the Securities, if the
Securities are registered under the Securities Act, or if such Holder provides
the Company with an opinion of counsel (which may be counsel for the Company)
reasonably satisfactory to the Company to the effect that a public sale or
transfer of such security may be made without registration under the Securities
Act or such Holder provides the Company with reasonable assurances, which may,
at the option of the Company, include an opinion of counsel (which may be
counsel for the Company) reasonably satisfactory to the Company, that such
security can be sold pursuant to paragraph (k) of Rule 144 (or any successor
provision) under the Securities Act. After the expiration of the Lock-Up Period
(as defined in Section 15 below), and upon request of the Holder, the legend
referred to in Section 11(b)(ii) hereof stamped on a certificate evidencing the
Securities and the stock transfer instructions and record notations with respect
to the Securities shall be removed, and the Company shall issue a certificate
without such legend to the Holder of the Securities.

         12. Investment Representations of the Investor. With respect to the
acquisition of any of the Securities, the Investor hereby represents and
warrants to the Company as follows:

                  (a) Experience. The Investor has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests. The Investor is an "accredited investor" within the meaning of
Regulation D promulgated under the Securities Act.

                  (b) Investment. The Investor is acquiring the Securities for
investment for its own account, not as a nominee or agent, and not with the view
to, or for resale in connection with, any distribution thereof. The Investor
understands that the Securities have not been, and will not be, registered under
the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
the Investor's representations as expressed herein.

                  (c) Rule 144. The Investor acknowledges that the Securities
must be held indefinitely unless subsequently registered under the Securities
Act, or unless an exemption from such registration is available. The Investor is
aware of the provisions of Rules 144 and 144A promulgated under the Securities
Act that permit limited resale of securities purchased in a private placement
subject to satisfaction of certain conditions.

                                                                             -8-



                  (d) No Public Market. The Investor understands that no public
market now exists for any of the securities issued by the Company and that the
Company has made no assurances that a public market will ever exist for the
Securities.

                  (e) Access to Data. The Investor has had an opportunity to
discuss the Company's business, management and financial affairs with the
Company's management and has also had an opportunity to ask questions of the
Company's officers, which questions were answered to the Investor's
satisfaction.

         13. Representations of the Company.

                  (a) Series C Stock Purchase Agreement Representations. The
Company hereby represents that the representations and warranties of the Company
set forth in Section 3 of the Series C Preferred Stock Purchase Agreement, dated
as of April 10, 2003 (the "SPA"), were true and correct in all material respects
as of April 10, 2003.

                  (b) Representations and Warranties as of the September 4,
2003. The Company represents and warrants as of September 4, 2003 as follows:

                           (i)      Corporate Power. The Company has all
requisite corporate power and authority to: (A) execute and deliver this
Warrant; (B) to issue the Shares hereunder; (C) to issue the shares of the
Common Stock of the Company issuable upon conversion of the Shares; and (D) to
carry out and perform its obligations under the terms of this Warrant.

                           (ii)     Capitalization. As of September 4, 2003,
the entire authorized capital stock of the Company consists of: (A) 53,500,000
shares of Common Stock, of which 6,194,500 shares are issued and outstanding and
no shares are held as treasury shares, and (B) 40,250,000 shares of Preferred
Stock, 5,500,000 of which are designated Series A Preferred Stock of which
5,499,998 are issued and outstanding, 13,000,000 of which are designated Series
B Preferred of which 12,500,003 are issued and outstanding, and 21,750,000 of
which are designated Series C Preferred Stock 19,948,022 of which are issued and
outstanding. As of September 4, 2003, and other than options to purchase Common
Stock outstanding under the Option Plan, as defined below, and warrants for
Series C Preferred Stock issued to the Investor or its affiliates, the Company
has outstanding (A) warrants to purchase 116,250 shares of Series B Preferred
Stock, and (B) options to purchase 17,000 shares of Common Stock.

                                    (1) The outstanding shares of Common Stock
and Preferred Stock have been duly authorized and validly issued in compliance
with applicable laws, and are fully paid and nonassessable.

                                    (2) The Company has reserved

                                             a) the Shares of Series C Preferred
Stock for issuance upon the exercise or conversion of this Warrant;

                                                                             -9-



                                             b) the shares of Common Stock (as
may be adjusted in accordance with the provisions of the Company's Third Amended
and Restated Certificate of Incorporation) for issuance upon the conversion of
the Shares; and

                                             c) 6,037,000 shares of Common Stock
authorized for issuance to employees, consultants and directors pursuant to its
2001 Stock Plan (the "Option Plan").

                           (iii)    Litigation. There are no actions, suits,
proceedings or investigations pending against (A) the Company, (B) its
directors, officers, and key employees in their official capacity as directors,
officers and employees of the Company, or (C) its properties (nor has the
Company received notice of any threat thereof) before any court or governmental
agency, nor, to the Company's knowledge, does there exist any basis therefor. To
its knowledge, the Company is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality.

                           (iv)     Intellectual Property.

                                    (1) To the Company's knowledge, other than
software and technology licenses that are generally commercially available, the
Company owns or possesses adequate licenses or other rights to use all patents,
patent applications, trademarks, trademark applications, service marks, service
mark applications, trade names, copyrights, manufacturing processes, formulae,
trade secrets, customer lists and know-how (collectively, "Intellectual
Property") necessary to the business of the Company as presently conducted, the
lack of which could reasonably be expected to have a material adverse effect on
the Company's financial condition, results of operations, assets, liabilities,
business or prospects, and no claim is pending or, to the Company's knowledge,
threatened to the effect that the operations of the Company infringe upon or
conflict with the asserted rights of any other person under any Intellectual
Property, and, to the Company's knowledge, there is no reasonable basis for any
such claim (whether or not pending or threatened). No claim is pending or, to
the Company's knowledge, threatened to the effect that any such Intellectual
Property owned or licensed by the Company, or which the Company otherwise has
the right to use, is invalid or unenforceable by the Company, and, to the
Company's knowledge, there is no reasonable basis for any such claim (whether or
not pending or threatened). To the Company's knowledge, all Intellectual
Property developed by and belonging to the Company that has not been patented
has been kept confidential. The Company has not granted or assigned to any other
person or entity any right to provide the services or proposed services of the
Company. There are no agreements, understandings, instruments, contracts,
judgments, orders or decrees to which the Company is a party or by which it is
bound which involve indemnification by the Company with respect to infringements
of Intellectual Property.

                                    (2) To the knowledge of the Company, no
third party may assert any valid claim against the Company or any Designated
Person (as defined below) with respect to (A) the continued employment by or
association with the Company of any of the present officers or employees of, or
consultants to, the Company (collectively, the "Designated Persons"), or (B) the
use or disclosure by the Company or any Designated Person of any information
which the Company or any Designated Person would be prohibited from using or
disclosing under any prior agreements

                                                                            -10-



or arrangements or under any laws, including, without limitation, laws
applicable to unfair competition, trade secrets or proprietary information. The
Company does not believe it is or will be necessary to use any inventions of any
Designated Person made prior to his or her employment or engagement by the
Company.

                           (v)      Financial Statements. The Company has
previously delivered to In-Q-Tel, Inc. audited financial statements (including
balance sheet, income statement and statement of cash flows) as of December 31,
2002 for the fiscal year then ended, and its unaudited financial statements
(including balance sheet, income statement and statement of cash flows) as of
June 30, 2003 and for the six-month period then ended (collectively, the
"Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated, except that the unaudited Financial
Statements may not contain all footnotes required by generally accepted
accounting principles. The Financial Statements fairly present the financial
condition and operating results of the Company as of the dates, and for the
periods, indicated therein, subject to normal year-end audit adjustments.

                           (vi)     Material Contracts. All of the contracts and
obligations set forth in Section 3.9 of the Schedule of Exceptions to the SPA
(the "Material Contracts") are valid, binding and in full force and effect
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies and to general principles of
equity. The Company is not in default or arrears under and, to the knowledge of
the Company, no other party to any Material Contract is in default or arrears
under, any term of any Material Contract

         14. Notices. If at any time prior to the exercise or conversion of this
Warrant in full the Company takes a record of the holders of the Company's stock
for the purpose of determining the holders thereof who are entitled to receive
any dividend or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, the Company will give to the holder of
this Warrant, at least thirty (30) days prior to the date specified therein,
written notice specifying the date on which any such record is to be taken for
the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right.

         15. Lock-Up Agreement. Each Holder hereby agrees that, upon request of
the Company or the managing underwriter of a public offering of any securities
of the Company, such Holder shall not sell, make any short sale of, loan, grant
any option for the purchase of, or otherwise dispose of all or any portion of
the Securities without the prior written consent of the Company or the managing
underwriter, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days from the date upon which the registration statement
relating to such public offering is declared or ordered effective by the
Securities and Exchange Commission) as may be requested by the Company or the
underwriters, as the case may be (the "Lock-Up Period").

         16. Miscellaneous.

                                                                            -11-



                  (a) Issue Date. The provisions of this Warrant shall be
construed and shall be given effect in all respect as if it had been issued and
delivered by the Company on the date hereof. This Warrant shall be binding upon
any successors or assigns of the Company. This Warrant shall be governed in all
respects by the laws of the State of California.

                  (b) Waivers and Amendments. With the written consent of the
Company and the Investor, the obligations of the Company and the right of the
Investor may be waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of time or
indefinitely), and with the same consent the Company and the Investor may enter
into a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Warrant.

                  (c) Notices. All notices and other communications required or
permitted to be given under this Warrant shall be in writing and shall be deemed
effectively given upon personal delivery, delivery by nationally recognized
courier or upon deposit with the United States Post Office (by first class mail,
postage prepaid) addressed as follows: (i) if to the Company, at the address of
its principal office in the State of California, or at such other address as the
Company shall have furnished Investor in writing, and (ii) if to the Investor,
to 1000 Wilson Blvd., Suite 2900, Arlington, VA 22209, Attn: General Counsel, or
such other address as the Investor shall have furnished the Company in writing.

                  (d) Survival. The provisions of Sections 11 and 15 hereof
shall survive the exercise or conversion of this Warrant and shall remain in
effect until such time as the Investor or any Holder no longer holds Securities.

                  (e) Binding Effect on Successors. This Warrant shall be
binding upon any corporation succeeding the Company by merger, consolidation or
acquisition of all or substantially all of the Company's assets. All of the
covenants and agreements of the Company shall inure to the benefit of successors
and assigns of the holder hereof.

                                                                            -12-



         IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers thereunto duly authorized.

Dated: September 4, 2003

                                    NANOSYS, INC.

                                    Name:  /s/ Lawrence A. Bock
                                           --------------------
                                    By:    Lawrence A. Bock
                                           --------------------
                                    Title: President and Chief Executive Officer
                                           -------------------------------------

Agreed and Accepted:
In-Q-Tel, Inc.

Name:  [*** Redacted]
       --------------
By:    [*** Redacted]
       --------------
Title: President and COO of In-Q-Tel, Inc., Manager
       --------------------------------------------


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                  ATTACHMENT A
                               NOTICE OF EXERCISE

To:      Nanosys, Inc.

         (1)      The undersigned hereby elects to purchase ________________
shares of the Vested Shares of Series C Preferred Stock of Nanosys, Inc.
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the purchase price in full for such Vested Shares, together with all applicable
transfer taxes, if any.

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

                                     (Name)

                                    (Address)

         (3)      The undersigned represents that the aforesaid shares of Series
C Preferred Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares.

                                                 _______________________________
      (Date)                                     (Signature)



                                  ATTACHMENT B
                              NOTICE OF CONVERSION

To:      Nanosys, Inc.

         (1)      The undersigned hereby elects to convert _______________
shares of the Vested Shares of the attached Warrant into such number of shares
of Series C Preferred Stock of Nanosys, Inc. as is determined pursuant to
Sections 2 and 3 of such Warrant, which conversion shall be effected pursuant to
the terms of the attached Warrant.

         (2)      Please issue a certificate or certificates representing said
shares of Nanosys, Inc. Series C Preferred Stock in the name of the undersigned
or in such other name as is specified below:

                                     (Name)

                                    (Address)

         (3)      The undersigned represents that the aforesaid shares of
Nanosys, Inc. Series C Preferred Stock are being acquired for the account of the
undersigned for investment and not with a view to, or for resale in connection
with, the distribution thereof and that the undersigned has no present intention
of distributing or reselling such shares.

                                                 ______________________________
      (Date)                                     (Signature)

                                                                             -2-


                                  ATTACHMENT C
                                 ASSIGNMENT FORM

       (To assign the foregoing warrant, execute this form and supply the
        required information. Do not use this form to purchase shares.)

         FOR VALUE RECEIVED, ____% of the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

________________________________________________________________________________
                                 (Please Print)

whose address is________________________________________________________________
                                 (Please Print)

                                                       Dated: ____________, 20__

                      Transferring Holder's Signature: _________________________

                        Transferring Holder's Address: _________________________
                                                       _________________________

Signed in the presence of:

___________________________


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

         In connection with the transfer of the Warrant (or a portion thereof)
to the undersigned, the undersigned hereby agrees to be bound by and comply with
all of the provisions and obligations applicable to the Investor contained in
the Warrant and to execute any further documentation necessary to carry out the
intent of the foregoing agreement to be bound.

                           Transferee Holder's Signature: ______________________

                      Transferee Holder's Name (printed): ______________________

                             Transferee Holder's Address: ______________________

                                                          ______________________



THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SECURITIES
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE
TRANSFER IS IN ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH
SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT.

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO A
VOTING AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE
COMPANY (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY), AND BY ACCEPTING ANY
INTEREST IN THIS WARRANT OR SUCH SHARES THE PERSON ACCEPTING ANY SUCH INTEREST
SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID
VOTING AGREEMENT.

                             STOCK PURCHASE WARRANT
                To Purchase Shares of Series C Preferred Stock of
                                  Nanosys, Inc.

         THIS CERTIFIES that, for value received, In-Q-Tel Employee Fund (the
"Investor"), is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or after the Payment Date, as defined
below, and on or prior to September 4, 2008 (the "Termination Date"), but not
thereafter, to subscribe for and purchase, from Nanosys, Inc., a Delaware
corporation (the "Company"), up to a total of 180,771 shares of Series C
Preferred Stock (the "Shares"), with the exact number of shares for which this
Warrant is exercisable determined as set forth below, at an exercise price (the
"Exercise Price") of $0.001 per Share.

         1. Title to Warrant. Prior to the expiration hereof and subject to
         compliance with applicable laws, this Warrant and all rights hereunder
         are transferable, in whole or in part, in accordance with the terms of
         this Warrant upon delivery of this Warrant by the holder hereof
         together with the Assignment Form annexed hereto as Attachment C
         properly endorsed to the office or agency of the Company, referred to
         in Sections 2 and 3 hereof.

         2. Exercise of Warrant.

(a) This Warrant shall be exercisable after the date of actual receipt by the
Company of an aggregate of [*** Redacted] of payments from In-Q-Tel, Inc. (the
"Payment Date") pursuant to the Development Agreement, dated as of even date
hereof by and among the Company and the In-Q-Tel, Inc. (the "DA"), for the
number of Shares determined as follows (the number of Shares as to which this
warrant is exercisable pursuant to the terms of this Section 2 hereinafter
referred to as "Vested Shares"):

                           (i)      This Warrant shall be exercisable after the
Payment Date for the number of Shares equal to (i) 180,771 multiplied by (ii) a
fraction, (A) the numerator of which is the

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


amount, up to [*** Redacted], actually paid to the Company (or its assigns) from
time to time pursuant to the DA minus (x) the total dollar amount of all
equipment or other assets (based on the acquisition price to the Company) as to
which title is transferred by the Company to In-Q-Tel, Inc. pursuant to Section
13 of the DA and (y) all cash or cash equivalents transferred by the Company to
In-Q-Tel, Inc. pursuant to a request by In-Q-Tel, Inc. or pursuant to any other
action through which In-Q-Tel, Inc. seeks refund or payment of such funds, and
(B) the denominator of which is [*** Redacted].

                  (b) The right to purchase Vested Shares represented by this
Warrant is exercisable by the registered holder hereof, as to all of the Vested
Shares as of the date of such exercise, at any time before the close of business
on the Termination Date by the delivery of this Warrant and the Notice of
Exercise form annexed hereto as Attachment B duly executed to the office of the
Company in Palo Alto, California (or such other office or agency of the Company
as it may designate by notice in writing to the registered holder hereof at the
address of such holder appearing on the books of the Company), and upon payment
of the Exercise Price for the Vested Shares thereby purchased (by cash or by
check or bank draft payable to the order of the Company or by cancellation of
indebtedness of the Company to the holder hereof, if any, at the time of
exercise in an amount equal to the purchase price of the Shares thereby
purchased); whereupon the holder of this Warrant shall be entitled to receive a
certificate for the number of shares of Preferred Stock so purchased. The
Company agrees that if at the time of the surrender of this Warrant and purchase
the holder hereof shall be entitled to exercise this Warrant, the shares so
purchased shall be and be deemed to be issued to such holder as the record owner
of such shares at the close of business on the date on which this Warrant shall
have been exercised as aforesaid. If this Warrant is exercised, or converted
pursuant to Section 3 below, for a number of Vested Shares that are less than
the total number of Shares, promptly after surrender of the Warrant upon such
exercise or conversion, the Company will execute and deliver a new warrant
evidencing the right of the Holder to the balance of the Shares purchasable
hereunder upon the same terms and conditions set forth herein, provided that the
issuance of such new warrant shall not accelerate, or be deemed or construed to
accelerate, the vesting of any Shares as set forth in Section 2(a) above, and
the terms of such new warrant shall be modified to the extent necessary to
prevent the acceleration of vesting of any Shares under the terms of this
Warrant.

         3. Right to Convert Warrant. The registered holder hereof shall have
the right to convert this Warrant, by the delivery of this Warrant and the
Notice of Conversion form annexed hereto as Attachment B duly executed to the
office of the Company in Palo Alto, California (or such other office or agency
of the Company as it may designate by notice in writing to the registered holder
hereof at the address of such holder appearing on the books of the Company), as
to all Shares that are Vested Shares at the time of such conversion, at any time
before the close of business on the Termination Date, into the shares of Series
C Preferred Stock as provided for in this Section 3. Upon exercise of this
conversion right, the holder hereof shall be entitled to receive that number of
Vested Shares equal to the quotient obtained by dividing [(A - B)(X)] by (A),
where:

                           (A) =  the Fair Market Value (as defined below) of
                                  one (1) Share on the date of conversion of
                                  this Warrant.

                           (B) =  the Exercise Price for one (1) Share under
                                  this Warrant.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             -2-


                           (X) = the number of Vested Shares issuable upon
                                 exercise of this Warrant.

         "Fair Market Value" of a Share shall mean:

                  (a) if the conversion right is being exercised upon the
occurrence of the Company's initial public offering, the initial public offering
price per share (before deducting underwriting commissions and discounts and
offering expenses) multiplied by the number of shares of Common Stock issuable
upon conversion of one (1) Share issuable upon exercise of this Warrant; and

                  (b) in all other cases, the fair value as determined in good
faith by the Company's Board of Directors.

         Upon conversion of this Warrant, the registered holder hereof shall be
entitled to receive a certificate for the number of Vested Shares determined as
aforesaid.

         4. Issuance of Stock; No Fractional Shares or Scrip. Certificates for
the stock purchased hereunder or issuable upon conversion hereof shall be
delivered to the holder hereof promptly after the date on which this Warrant
shall have been exercised or converted as aforesaid. The Company covenants that
all Shares which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be fully
paid and nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue). The Company agrees that, if at the time of
the surrender of this Warrant and exercise of the rights represented hereby, the
holder hereof shall be entitled to exercise such rights, the Shares so issued
shall be and be deemed to be issued to such holder as the record owner of such
Shares as of the close of business on the date on which this Warrant shall have
been exercised or converted as aforesaid. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise or conversion
of this Warrant, and any fractional share amounts shall be rounded down to the
nearest whole share issuable upon exercise of this Warrant.

         5. Charges, Taxes and Expenses. Issuance of certificates for the Shares
upon the exercise or conversion of this Warrant shall be made without charge to
the holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant; provided, however, that in the event certificates for
Shares are to be issued in a name other than the name of the holder of this
Warrant, this Warrant when surrendered for exercise or conversion shall be
accompanied by the Assignment Form attached hereto duly executed by the holder
hereof; and provided further, that upon any transfer involved in the issuance or
delivery of any certificates for the Shares, the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse it for any
transfer tax incidental thereto.

         6. No Rights as Shareholders. This Warrant does not entitle the holder
hereof to any voting rights or other rights as a shareholder of the Company
prior to the exercise or conversion hereof.

                                                                             -3-


         7. Exchange and Registry of Warrant. This Warrant is exchangeable, upon
the surrender hereof by the registered holder at the above-mentioned office or
agency of the Company, for a new Warrant of like tenor and dated as of such
exchange.

         The Company shall maintain at the above-mentioned office or agency a
registry showing the name and address of the registered holder of this Warrant.
This Warrant may be surrendered for exchange, transfer or exercise, in
accordance with its terms, at such office or agency of the Company, and the
Company shall be entitled to rely in all respects, prior to written notice to
the contrary, upon such registry.

         8. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dated as of such cancellation,
in lieu of this Warrant.

         9. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding day
not a legal holiday.

         10. Acquisition, Initial Public Offering and Dilution.

                  (a) Merger, Sale of Assets, etc.

                           (i)      "Acquisition." For the purpose of this
Warrant, "Acquisition" means any sale, license, or other disposition of all or
substantially all of the assets of the Company (including a sale of all or
substantially all of the intellectual property of the Company), or any
reorganization, consolidation, acquisition or merger of the Company where the
holders of the Company's securities before the transaction own less than 50% of
the outstanding voting securities of the surviving entity after the transaction.

                           (ii)     If at any time after the date hereof the
Company proposes to consummate an Acquisition in which the shareholders of the
Company shall receive cash or publicly traded securities in exchange for their
shares of stock in the Company pursuant to such transaction, then the Company
shall give the holder of this Warrant written notice (the "Merger Notice") of
such impending transaction not later than fifteen (15) days prior to the
shareholders' meeting called to approve such transaction, or fifteen (15) days
prior to the closing of such transaction, whichever is earlier, and shall also
notify the holder of this Warrant of the final approval of such transaction. The
first of such notices shall describe the material terms and conditions of the
impending transaction, and the Company shall thereafter give the holder of this
Warrant prompt notice of any material changes. If this Warrant has not been
exercised or converted by the closing of such transaction then this Warrant
shall terminate and shall no longer be exercisable pursuant to the terms of
Sections 2 or 3 hereof.

                                                                             -4-


                           (iii)    If this Warrant is not terminated in an
Acquisition pursuant to the provisions of Section 10(a)(ii), (a "Non-Terminating
Acquisition") then, as a condition of such Non-Terminating Acquisition, lawful
and adequate provisions shall be made by the Company whereby the Investor shall
thereafter have the right to purchase and receive (in lieu of the shares of the
Preferred Stock or Common Stock, as applicable, of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented by this Warrant) such shares of stock, securities or other assets or
property as may be issued or payable with respect to or in exchange for a number
of outstanding shares of such Preferred Stock or Common Stock, as applicable,
equal to the number of shares of such stock immediately theretofore purchasable
and receivable upon the exercise of the rights represented by this Warrant. In
the event of any Non-Terminating Acquisition, appropriate provision shall be
made by the Company with respect to the rights and interests of the Investor
that the provisions hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of shares purchasable and
receivable upon the exercise of this Warrant) shall thereafter be applicable, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise hereof.

                  (b) Initial Public Offering. If at any time after the date
hereof the Company proposes to consummate the initial public offering ("IPO") of
its Common Stock in a bona fide firm commitment underwriting pursuant to a
registration statement on Form S-1 (or successor form) under the Securities Act
of 1933, as amended, (the "Securities Act"), then the Company shall give the
Investor written notice of such impending transaction not later than thirty (30)
days prior to the closing of the IPO. Such notice shall describe the material
terms and conditions of the IPO, and the Company shall thereafter give the
holder of this Warrant prompt notice of any material changes. If this Warrant
has not been exercised or converted by the closing of the IPO it shall terminate
and shall no longer be exercisable or convertible pursuant to the terms of
Section 2 or 3 hereof.

                  (c) Reclassification, etc. If the Company at any time shall,
by subdivision, combination or reclassification of securities or otherwise,
change any of the securities to which purchase rights under this Warrant exist
into the same or a different number of securities of any class or classes, this
Warrant shall thereafter be to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
immediately prior to such subdivision, combination, reclassification or other
change. If the Shares issuable upon the exercise of this Warrant are subdivided
or combined into a greater or smaller number of the Shares, the purchase price
under this Warrant shall be proportionately reduced in case of subdivision of
shares or proportionately increased in the case of combination of shares, in
both cases by the ratio which the total number of Shares to be outstanding
immediately after such event bears to the total number of Shares outstanding
immediately prior to such event.

                  (d) Cash Distributions. No adjustment on account of dividends
on the Shares issuable upon the exercise of this Warrant will be made to the
purchase price under this Warrant.

                  (e) Authorized Shares. The Company covenants that, during the
period the Warrant is outstanding, it will reserve from its authorized and
unissued Preferred Stock and Common Stock a sufficient number of shares to
provide for the issuance of the Shares upon the exercise or conversion of this
Warrant. The Company further covenants that its issuance of this Warrant shall
constitute

                                                                             -5-


full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Shares upon
the exercise of the purchase rights under this Warrant.

                  (f) Conversion Price Adjustments. The rate at which the Shares
are convertible into shares of Common Stock of the Company is subject to
adjustment as set forth in the Company's Certificate of Incorporation, as
amended from time to time. Any adjustment to the conversion rate of the Shares
issuable upon the exercise of this Warrant effected prior to any exercise or
conversion of this Warrant shall apply to any Shares thereafter issued pursuant
to the terms hereof.

                  (g) Option to Accelerate Vesting of Shares. Prior to the
termination of this Warrant pursuant to the provisions of Section 10(a) or 10(b)
hereunder, In-Q-Tel, Inc. shall have the right to pay to the Company any amounts
that remain unpaid to the Company under the DA and thereby accelerate the
vesting of the Shares in accordance with the formula set forth in Section 2(a)
above, provided that, no acceleration of vesting of the Shares under this
warrant shall be effective unless the payments by In-Q-Tel, Inc. to the Company
are irrevocable under the terms of the DA and not subject to refund to In-Q-Tel,
Inc.

         11. Restrictions on Transferability of Securities.

                  (a) Restrictions on Transferability. This Warrant, the Shares
issuable upon exercise of this Warrant, and the shares of Common Stock issuable
upon conversion of the Shares (collectively the "Securities") shall not be sold,
assigned, transferred or pledged except upon the conditions specified in this
Section 11, which conditions are intended to ensure compliance with the
provisions of the Securities Act. Each holder of any of the Securities will
cause any proposed purchaser, assignee, transferee, or pledgee of the Securities
held by such holder to agree in writing to take and hold such Securities subject
to the provisions and upon the conditions specified in this Warrant as if such
purchaser, assignee, transferee or pledgee were the Investor hereunder.

                  (b) Restrictive Legend. Each certificate representing the
Securities and any other securities issued in respect of the Securities upon any
stock split, stock dividend, recapitalization, merger, consolidation or similar
event, shall (unless otherwise permitted by the provisions of Section 11(c)
below) be stamped or otherwise imprinted with legends in the following form (in
addition to any legend required under applicable state securities laws):

                           (i)      33 Act Legend.

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
         INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
         SUCH REGISTRATION UNLESS THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR
         SIMILAR RULE OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
         REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS
         EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
         SAID ACT.

                                                                             -6-


                           (ii)     Lock-Up Legend.

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR
         OTHERWISE TRANSFERRED FOR A PERIOD NOT TO EXCEED 180 DAYS FOLLOWING THE
         EFFECTIVE DATE OF A REGISTRATION STATEMENT FILED BY THE COMPANY FOR ITS
         INITIAL PUBLIC OFFERING.

         The Investor and each holder of Securities and each subsequent
transferee, assignee, transferee or pledgee (hereinafter collectively, including
the Investor, referred to as a "Holder") consents to the Company making a
notation on its records and giving instructions to any transfer agent of the
Securities in order to implement the restrictions on transfer established in
Sections 11 and 15.

                  (c) Notice of Proposed Transfers. Each Holder of a certificate
representing the Securities, by acceptance thereof, agrees to comply in all
respects with the provisions of Sections 11 and 15. Prior to any proposed sale,
assignment, transfer or pledge of any Securities (other than (i) a transfer not
involving a change in beneficial ownership, (ii) in transactions involving the
distribution without consideration of Securities by a Holder to any of its
partners, or retired partners, or to the estate of any of its partners or
retired partners, (iii) a transfer to an affiliated fund, partnership or
company, which is not a competitor of the Company, subject to compliance with
applicable securities laws or (iv) transfers in compliance with Rule 144, so
long as the Company is furnished with satisfactory evidence of compliance with
such Rule), unless there is in effect a registration statement under the
Securities Act covering the proposed transfer, the Holder thereof shall give
prior written notice to the Company of such Holder's intention to effect such
transfer, sale, assignment or pledge. Each such notice shall describe the manner
and circumstances of the proposed transfer, sale, assignment or pledge in
sufficient detail, and shall be accompanied, at such Holder's expense, by either
(i) an opinion of counsel (who shall, and whose opinion shall be, addressed to
the Company and reasonably satisfactory to the Company) to the effect that the
proposed transfer of the Securities may be effected without registration under
the Securities Act or (ii) a "no action" letter from the Securities and Exchange
Commission (the "Commission") to the effect that the transfer of such securities
without registration will not result in a recommendation by the staff of the
Commission that action be taken with respect thereto, whereupon the Holder of
such Securities shall be entitled to transfer such Securities in accordance with
the terms of the notice delivered by such Holder to the Company. Each
certificate evidencing the Securities transferred as above provided shall bear
(except if such transfer is made pursuant to Rule 144, in which case the legend
set forth in Section 11(b)(i) shall not be required) the restrictive legends set
forth in Section 11(b) above, except that each such certificate shall not bear
the legend set forth in Section 11(b)(i) if in the opinion of counsel for such
Holder and in the opinion of counsel for the Company such legend is not required
in order to establish compliance with any provision of the Securities Act.

                  (d) Removal of Restrictions on Transfer of Securities. The
legend referred to in Section 11(b)(i) hereof stamped on a certificate
evidencing the Securities and the stock transfer instructions and record
notations with respect to the Securities shall be removed, and the Company shall
issue a certificate without such legend to the Holder of the Securities, if the
Securities are registered under the Securities Act, or if such Holder provides
the Company with an opinion of counsel (which may be counsel for the Company)
reasonably satisfactory to the Company to the

                                                                             -7-



effect that a public sale or transfer of such security may be made without
registration under the Securities Act or such Holder provides the Company with
reasonable assurances, which may, at the option of the Company, include an
opinion of counsel (which may be counsel for the Company) reasonably
satisfactory to the Company, that such security can be sold pursuant to
paragraph (k) of Rule 144 (or any successor provision) under the Securities Act.
After the expiration of the Lock-Up Period (as defined in Section 15 below), and
upon request of the Holder, the legend referred to in Section 11(b)(ii) hereof
stamped on a certificate evidencing the Securities and the stock transfer
instructions and record notations with respect to the Securities shall be
removed, and the Company shall issue a certificate without such legend to the
Holder of the Securities.

         12. Investment Representations of the Investor. With respect to the
acquisition of any of the Securities, the Investor hereby represents and
warrants to the Company as follows:

                  (a) Experience. The Investor has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests.

                  (b) Investment. The Investor is acquiring the Securities for
investment for its own account, not as a nominee or agent, and not with the view
to, or for resale in connection with, any distribution thereof. The Investor
understands that the Securities have not been, and will not be, registered under
the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
the Investor's representations as expressed herein.

                  (c) Rule 144. The Investor acknowledges that the Securities
must be held indefinitely unless subsequently registered under the Securities
Act, or unless an exemption from such registration is available. The Investor is
aware of the provisions of Rules 144 and 144A promulgated under the Securities
Act that permit limited resale of securities purchased in a private placement
subject to satisfaction of certain conditions.

                  (d) No Public Market. The Investor understands that no public
market now exists for any of the securities issued by the Company and that the
Company has made no assurances that a public market will ever exist for the
Securities.

                  (e) Access to Data. The Investor has had an opportunity to
discuss the Company's business, management and financial affairs with the
Company's management and has also had an opportunity to ask questions of the
Company's officers, which questions were answered to the Investor's
satisfaction.

         13. Representations of the Company.

                  (a) Series C Stock Purchase Agreement Representations. The
Company hereby represents that the representations and warranties of the Company
set forth in Section 3 of the Series C Preferred Stock Purchase Agreement, dated
as of April 10, 2003 (the "SPA"), were true and correct in all material respects
as of April 10, 2003.

                                                                             -8-



                  (b) Representations and Warranties as of the September 4,
2003. The Company represents and warrants as of September 4, 2003 as follows:

                           (i)      Corporate Power. The Company has all
requisite corporate power and authority to: (A) execute and deliver this
Warrant; (B) to issue the Shares hereunder; (C) to issue the shares of the
Common Stock of the Company issuable upon conversion of the Shares; and (D) to
carry out and perform its obligations under the terms of this Warrant.

                           (ii)     Capitalization. As of September 4, 2003,
the entire authorized capital stock of the Company consists of: (A) 53,500,000
shares of Common Stock, of which 6,194,500 shares are issued and outstanding and
no shares are held as treasury shares, and (B) 40,250,000 shares of Preferred
Stock, 5,500,000 of which are designated Series A Preferred Stock of which
5,499,998 are issued and outstanding, 13,000,000 of which are designated Series
B Preferred of which 12,500,003 are issued and outstanding, and 21,750,000 of
which are designated Series C Preferred Stock 19,948,022 of which are issued and
outstanding. As of September 4, 2003, and other than options to purchase Common
Stock outstanding under the Option Plan, as defined below, and warrants for
Series C Preferred Stock issued to the Investor or its affiliates, the Company
has outstanding (A) warrants to purchase 116,250 shares of Series B Preferred
Stock, and (B) options to purchase 17,000 shares of Common Stock.

                                    (1) The outstanding shares of Common Stock
and Preferred Stock have been duly authorized and validly issued in compliance
with applicable laws, and are fully paid and nonassessable.

                                    (2) The Company has reserved

                                             a) the Shares of Series C Preferred
Stock for issuance upon the exercise or conversion of this Warrant;

                                             b) the shares of Common Stock (as
may be adjusted in accordance with the provisions of the Company's Third Amended
and Restated Certificate of Incorporation) for issuance upon the conversion of
the Shares; and

                                             c) 6,037,000 shares of Common Stock
authorized for issuance to employees, consultants and directors pursuant to its
2001 Stock Plan (the "Option Plan").

                           (iii)    Litigation(c) . There are no actions, suits,
proceedings or investigations pending against (A) the Company, (B) its
directors, officers, and key employees in their official capacity as directors,
officers and employees of the Company, or (C) its properties (nor has the
Company received notice of any threat thereof) before any court or governmental
agency, nor, to the Company's knowledge, does there exist any basis therefor. To
its knowledge, the Company is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality.

                           (iv)     Intellectual Property.

                                                                             -9-



                                    (1) To the Company's knowledge,
other than software and technology licenses that are generally commercially
available, the Company owns or possesses adequate licenses or other rights to
use all patents, patent applications, trademarks, trademark applications,
service marks, service mark applications, trade names, copyrights, manufacturing
processes, formulae, trade secrets, customer lists and know-how (collectively,
"Intellectual Property") necessary to the business of the Company as presently
conducted, the lack of which could reasonably be expected to have a material
adverse effect on the Company's financial condition, results of operations,
assets, liabilities, business or prospects, and no claim is pending or, to the
Company's knowledge, threatened to the effect that the operations of the Company
infringe upon or conflict with the asserted rights of any other person under any
Intellectual Property, and, to the Company's knowledge, there is no reasonable
basis for any such claim (whether or not pending or threatened). No claim is
pending or, to the Company's knowledge, threatened to the effect that any such
Intellectual Property owned or licensed by the Company, or which the Company
otherwise has the right to use, is invalid or unenforceable by the Company, and,
to the Company's knowledge, there is no reasonable basis for any such claim
(whether or not pending or threatened). To the Company's knowledge, all
Intellectual Property developed by and belonging to the Company that has not
been patented has been kept confidential. The Company has not granted or
assigned to any other person or entity any right to provide the services or
proposed services of the Company. There are no agreements, understandings,
instruments, contracts, judgments, orders or decrees to which the Company is a
party or by which it is bound which involve indemnification by the Company with
respect to infringements of Intellectual Property.

                                    (2) To the knowledge of the Company, no
third party may assert any valid claim against the Company or any Designated
Person (as defined below) with respect to (A) the continued employment by or
association with the Company of any of the present officers or employees of, or
consultants to, the Company (collectively, the "Designated Persons"), or (B) the
use or disclosure by the Company or any Designated Person of any information
which the Company or any Designated Person would be prohibited from using or
disclosing under any prior agreements or arrangements or under any laws,
including, without limitation, laws applicable to unfair competition, trade
secrets or proprietary information. The Company does not believe it is or will
be necessary to use any inventions of any Designated Person made prior to his or
her employment or engagement by the Company.

                           (v)      Financial Statements. The Company has
previously delivered to In-Q-Tel, Inc. audited financial statements (including
balance sheet, income statement and statement of cash flows) as of December 31,
2002 for the fiscal year then ended, and its unaudited financial statements
(including balance sheet, income statement and statement of cash flows) as of
June 30, 2003 and for the six-month period then ended (collectively, the
"Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated, except that the unaudited Financial
Statements may not contain all footnotes required by generally accepted
accounting principles. The Financial Statements fairly present the financial
condition and operating results of the Company as of the dates, and for the
periods, indicated therein, subject to normal year-end audit adjustments.

                                                                            -10-



                           (vi)     Material Contracts. All of the contracts and
obligations set forth in Section 3.9 of the Schedule of Exceptions to the SPA
(the "Material Contracts") are valid, binding and in full force and effect
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies and to general principles of
equity. The Company is not in default or arrears under and, to the knowledge of
the Company, no other party to any Material Contract is in default or arrears
under, any term of any Material Contract

         14. Notices. If at any time prior to the exercise or conversion of this
Warrant in full the Company takes a record of the holders of the Company's stock
for the purpose of determining the holders thereof who are entitled to receive
any dividend or other distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, the Company will give to the holder of
this Warrant, at least thirty (30) days prior to the date specified therein,
written notice specifying the date on which any such record is to be taken for
the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right.

         15. Lock-Up Agreement. Each Holder hereby agrees that, upon request of
the Company or the managing underwriter of a public offering of any securities
of the Company, such Holder shall not sell, make any short sale of, loan, grant
any option for the purchase of, or otherwise dispose of all or any portion of
the Securities without the prior written consent of the Company or the managing
underwriter, as the case may be, for such period of time (not to exceed one
hundred eighty (180) days from the date upon which the registration statement
relating to such public offering is declared or ordered effective by the
Securities and Exchange Commission) as may be requested by the Company or the
underwriters, as the case may be (the "Lock-Up Period").

         16. Miscellaneous.

                  (a) Issue Date. The provisions of this Warrant shall be
construed and shall be given effect in all respect as if it had been issued and
delivered by the Company on the date hereof. This Warrant shall be binding upon
any successors or assigns of the Company. This Warrant shall be governed in all
respects by the laws of the State of California.

                  (b) Waivers and Amendments. With the written consent of the
Company and the Investor, the obligations of the Company and the right of the
Investor may be waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of time or
indefinitely), and with the same consent the Company and the Investor may enter
into a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Warrant.

                  (c) Notices. All notices and other communications required or
permitted to be given under this Warrant shall be in writing and shall be deemed
effectively given upon personal delivery, delivery by nationally recognized
courier or upon deposit with the United States Post Office (by first class mail,
postage prepaid) addressed as follows: (i) if to the Company, at the address of
its principal office in the State of California, or at such other address as the
Company shall have furnished Investor in writing, and (ii) if to the Investor,
to 1000 Wilson Blvd., Suite 2900, Arlington,

                                                                            -11-



VA 22209, Attn: General Counsel, or such other address as the Investor shall
have furnished the Company in writing.

                  (d) Survival. The provisions of Sections 11 and 15 hereof
shall survive the exercise or conversion of this Warrant and shall remain in
effect until such time as the Investor or any Holder no longer holds Securities.

                  (e) Binding Effect on Successors. This Warrant shall be
binding upon any corporation succeeding the Company by merger, consolidation or
acquisition of all or substantially all of the Company's assets. All of the
covenants and agreements of the Company shall inure to the benefit of successors
and assigns of the holder hereof.

                                                                            -12-



         IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers thereunto duly authorized.

Dated: September 4, 2003

                                    NANOSYS, INC.

                                    Name:  /s/ Lawrence A. Bock
                                           --------------------
                                    By:    Lawrence A. Bock
                                           --------------------
                                    Title: President and Chief Executive Officer
                                           -------------------------------------

Agreed and Accepted:
In-Q-Tel Employee Fund

Name:  [*** Redacted]
       --------------
By:    [*** Redacted]
       --------------
Title: President and Chief Operating Officer
       -------------------------------------



*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                  ATTACHMENT A
                               NOTICE OF EXERCISE

To:      Nanosys, Inc.

         (1)      The undersigned hereby elects to purchase ________________
shares of the Vested Shares of Series C Preferred Stock of Nanosys, Inc.
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the purchase price in full for such Vested Shares, together with all applicable
transfer taxes, if any.

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

                                     (Name)

                                   (Address)

         (3)      The undersigned represents that the aforesaid shares of Series
C Preferred Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares.

                                     ___________________________________________
(Date)                               (Signature)



                                  ATTACHMENT B
                              NOTICE OF CONVERSION

To:      Nanosys, Inc.

         (1)      The undersigned hereby elects to convert _______________
shares of the Vested Shares of the attached Warrant into such number of shares
of Series C Preferred Stock of Nanosys, Inc. as is determined pursuant to
Sections 2 and 3 of such Warrant, which conversion shall be effected pursuant to
the terms of the attached Warrant.

         (2)      Please issue a certificate or certificates representing said
shares of Nanosys, Inc. Series C Preferred Stock in the name of the undersigned
or in such other name as is specified below:

                                     (Name)

                                   (Address)

         (3)      The undersigned represents that the aforesaid shares of
Nanosys, Inc. Series C Preferred Stock are being acquired for the account of the
undersigned for investment and not with a view to, or for resale in connection
with, the distribution thereof and that the undersigned has no present intention
of distributing or reselling such shares.

                                    ____________________________________________
(Date)                              (Signature)



                                  ATTACHMENT C
                                 ASSIGNMENT FORM

  (To assign the foregoing warrant, execute this form and supply the required
             information. Do not use this form to purchase shares.)

         FOR VALUE RECEIVED, ____% of the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

________________________________________________________________________________
                                 (Please Print)

whose address is _______________________________________________________________
                                 (Please Print)

                                                       Dated: ____________, 20__

                             Transferring Holder's Signature: __________________

                               Transferring Holder's Address: __________________

                                                              __________________

Signed in the presence of:

______________________


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

         In connection with the transfer of the Warrant (or a portion thereof)
to the undersigned, the undersigned hereby agrees to be bound by and comply with
all of the provisions and obligations applicable to the Investor contained in
the Warrant and to execute any further documentation necessary to carry out the
intent of the foregoing agreement to be bound.

                           Transferee Holder's Signature: ______________________

                      Transferee Holder's Name (printed): ______________________

                             Transferee Holder's Address: ______________________

                                                          ______________________

EX-10.14

                                                                   EXHIBIT 10.14

                        COOPERATIVE DEVELOPMENT AGREEMENT

         This Cooperative Development Agreement (the "Agreement") is entered
into as of December 15, 2003 (the "Effective Date") by and between Nanosys Inc.
("Nanosys"), a Delaware corporation with a place of business at 2625 Hanover
Street, Palo Alto, California 94304 and Intel Corporation ("Intel"), a Delaware
corporation with a place of business at 2200 Mission College Boulevard, Santa
Clara, California 95052.

                                    RECITALS

Whereas:

         A.       Intel has expertise with respect to memory devices and the
development, design, and manufacture thereof, and Nanosys has expertise with
respect to the design and synthesis of nanomaterials and the development of
nanotechnology-enabled systems.

         B.       Intel and Nanosys desire to enter into an agreement to
cooperate to investigate the feasibility of using [*** Redacted] in memory
devices.

                                    AGREEMENT

NOW, THEREFORE, the parties agree as follows:

         1.       DEFINITIONS. In this Agreement, the following words and
expressions shall have the following meanings:

                  1.1 "Background IP" of a party means any and all intellectual
property rights that such party either (i) owned, controlled, or had rights with
respect to prior to the Effective Date; or (ii) develops, or acquires ownership,
control, or rights with respect to, during the term of this Agreement but which
is not Collaboration IP.

                  1.2 "CNDA" means the parties' October 11, 2002 Corporate
Non-Disclosure Agreement #5085138.

                  1.3 "Collaboration" means the research and development work
set forth in Exhibit A hereto.

                  1.4 "Collaboration Commencement Date" means the date of
commencement of the Collaboration under Section 2.1 below.

                  1.5 "Collaboration IP" shall mean (i) all Intellectual
Property rights in Collaboration Technology, which Intellectual Property rights
were created by the parties' Listed Representatives (solely or jointly) in the
course of working on the Collaboration and (ii) all Intellectual Property of
either party conceived or created by or for either party ("Party") prior to the
termination or

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


expiration of the Collaboration based on the other party's Confidential
Information disclosed to such Party in connection with the Collaboration.

                  1.6 "Collaboration Right" means any patent, patent right (or
similar right under foreign law), utility model, copyright or mask work right
issued or registered as a result of a Filing.

                  1.7 "Collaboration Technology" means (i) any and all
Technology that either party's Listed Representatives conceive (solely or
jointly) in the course of working on the Collaboration, and (ii) any and all
Technology conceived (solely or jointly) prior to the termination or expiration
of the Collaboration by or for either party ("Party") based on Confidential
Information of the other party disclosed to such Party in connection with the
Collaboration, but, in each case, excluding Technology resulting from
University/Government Activities.

                  1.8 "Confidential Information" is defined in the CNDA, as set
forth in Section 6 below.

                  1.9 "Conventional Processes" means standard semiconductor
manufacturing processes (where "standard" semiconductor manufacturing processes
may include Intel proprietary semiconductor manufacturing processes) and
reasonable incremental improvements (e.g. standard  processes)
thereof, including those resulting in one or more features of [*** Redacted] of
[*** Redacted], and the resultant devices fabricated using such standard
semiconductor manufacturing processes (but excluding such resultant devices
incorporating Deposited Nanomaterials).

                  1.10 "Deposited Nanomaterials" means shape or size controlled
[*** Redacted], such as [*** Redacted], and [*** Redacted], having at least one
cross sectional dimension of less than 500 nanometers and such that the size
related properties of the nanomaterials are advantageous to their function, that
are subsequently [*** Redacted] as such nanomaterials [*** Redacted]

                  1.11 "Exclusivity Date" means the earlier of (i) the
Collaboration Commencement Date or (ii)  March 31, 2004.

                  1.12 "Exclusivity Period" means the period from the Effective
Date until the earlier of (i) March 31, 2006, (ii) the Exclusivity Expiration
(as defined in Section 3.3 below), or (iii) any termination of this Agreement.

                  1.13 "Field of Interest" means memory devices based on
[*** Redacted] used primarily as [*** Redacted] (e.g. this would not include
[*** Redacted] devices, [*** Redacted], or [*** Redacted]).

                  1.14 "Filing" means any application for or registration of a
patent, patent right (or similar right under foreign law), utility model,
copyright or mask work right with respect to Collaboration Technology.

                  1.15 "Intel's Exclusive Field" means (i) compositions,
devices, articles and methods involving or involved in memory and logic devices,
but only if such compositions, devices,

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                             -2-



articles or methods are outside of Nanosys' Exclusive Field, and in each case
excluding Conventional Processes, and (ii) all Conventional Processes other than
Conventional Processes used in conjunction with Deposited Nanomaterials. For the
avoidance of doubt, (i) Conventional Processes used in conjunction with
Deposited Nanomaterials are not in Intel's Exclusive Field nor in Nanosys'
Exclusive Field and (ii) devices incorporating Deposited Nanomaterials are in
Nanosys' Exclusive Field.

                  1.16 "Intellectual Property" shall mean patents (and similar
rights under foreign law, and applications therefor), trade secrets, copyrights
and mask works.

                  1.17 "Listed Representatives" of a party means, at any time,
that party's employees, agents, and contractors then working on the
Collaboration on behalf of that party, as such individuals are identified by
that party by written notice to the other party. A party's notice of Listed
Representatives shall be in effect until a subsequent such notice by that party
modifying the list. Each party shall at all times in good faith maintain an
accurate list of Listed Representatives. At commencement, Intel's Listed
Representatives shall include [*** Redacted], and Nanosys' Listed
Representatives shall include [*** Redacted].

                  1.18 "Nanosys' Exclusive Field" means compositions, devices,
articles and methods involving or involved in Deposited Nanomaterials, but
excluding Conventional Processes.

                  1.19 "Nanosys Facility" means and includes Nanosys' operations
at 2625 Hanover Street in Palo Alto, CA, any ancillary engineering facilities
owned or controlled by Nanosys, and any successor facilities owned or controlled
by Nanosys during the term of this Agreement..

                  1.20 "Nanosys IP" shall mean Nanosys' Intellectual Property
Rights including Background IP and Collaboration IP.

                  1.21 "Technology" means any and all developments, ideas,
designs, inventions, information, know-how, and technology.

                  1.22 "University/Government Activities" means any and all
research, development, and other activities performed either (i) with any
university (or other educational institution) funding or any government or
government agency (U.S. or otherwise) funding, (ii) in collaboration with any
university (or other educational institution) or with any government or
government agency (U.S. or otherwise), or (iii) with a primary purpose of
obtaining government funding.

         2.       COLLABORATION WORK.

                  2.1 Each party shall use its commercially reasonable efforts
to perform its Collaboration obligations as set forth in Exhibit A. It is
understood and agreed that the Collaboration is in the nature of research, that
successful completion of the research is not assured, and that, so long as a
party uses its commercially reasonable efforts as set forth in the preceding
sentence, that party will not be in default for any failure to achieve any
particular result or to complete any particular deliverable. The parties shall
commence the Collaboration December 15, 2003, provided that on one or more
written notices to Nanosys received by Nanosys at least fifteen

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             -3-


[*** Redacted] prior to the date when the Collaboration is then scheduled to
commence (provided that if this Agreement is signed by Intel after November 30,
2003, Intel shall be entitled to provide the initial such notice on the date of
such signature, but only if such signature date is on or before December 10,
2003), Intel shall be entitled to delay commencement of the Collaboration to any
date on or before March 31, 2004. Delays resulting in commencement of the
Collaboration after December 31, 2003 shall be subject to the payments in
Section 3.2 below. It is understood and agreed that commencement of the
Collaboration may not be delayed past March 31, 2004.

                  2.2 Nanosys agrees to allocate to the Collaboration at least
[*** Redacted] full-time equivalent individuals during the first quarter of the
Collaboration, at least [*** Redacted] full-time equivalent individuals during
the second quarter of the Collaboration, at least [*** Redacted] full-time
equivalent individuals during the third quarter of the Collaboration, and at
least "X" full-time equivalent individuals (FTEs) during the fourth quarter of
the Collaboration, where "X" is a number between [*** Redacted] and
[*** Redacted], inclusive, chosen by Intel by written notice to Nanosys at least
[*** Redacted] days prior to the beginning of such fourth quarter. If Intel
fails to provide such notice, "X" will be deemed to equal [*** Redacted].

                  2.3 It is the parties' mutual intent that most of the work and
deliverable creation under this Agreement to investigate [*** Redacted] memory
feasibility shall occur at the Nanosys Facility. Nanosys shall host Intel's
Listed Representatives on a mutually agreed upon basis, such agreement not to be
unreasonably withheld, on site at the Nanosys Facility to work on this project
and get deeply involved in complementary collaborative activities (e.g., device
integration and characterization, but not the synthesis of Deposited
Nanomaterials). Information on the design and modeling of Deposited
Nanomaterials, as well as [*** Redacted], [*** Redacted], and [*** Redacted]
related to Deposited Nanomaterials, shall be provided to Intel's Listed
Representatives, but in each case only as reasonably required for device
integration and characterization for the purpose of the Collaboration, including
but not limited to, making an informed decision about the complexity of
integrating Deposited Nanomaterials with Conventional Processes. Nanosys' Listed
Representatives may also be invited to work at Intel's facilities, for
circumstances including but not limited to, using a metrology tool that may not
be available at the Nanosys Facility. The parties shall adhere to the following
guidelines in connection with Listed Representatives working at the site of the
other party: (a) all employees of one party visiting the other party's facility
shall comply with the rules and regulations applicable at that facility as
communicated to such employees, and each party retains the right to reasonably
refuse admittance for violation of these rules; (b) the hosting party shall
maintain reasonable firewall procedures so that employees of a visiting party
are not exposed to the confidential information of a third party; (c) each party
shall maintain reasonable firewall procedures so that third parties at a party's
site are not exposed to the confidential information of the other party or
non-public information about the status of this Collaboration; and (d) in the
case of Nanosys only, cubicle space, secure Internet access, and badge access
shall be made available for use by Intel's Listed Representatives when such a
person or persons are working on site at the Nanosys Facility.

                  2.4 Except as set forth in Section 5, any and all materials
supplied by one party to the other party shall be used by the recipient only to
perform its Collaboration obligations.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             -4-



                  2.5 Except as set forth in Section 3 below, each party shall
bear its own costs and expenses in carrying out the Collaboration.

                  2.6 Except for University/Government Activities, each party
agrees to work exclusively with the other party in the Field of Interest during
the Exclusivity Period.

                  2.7 The following persons ("Collaboration Managers") shall be
appointed to direct the conduct of the parties with respect to the
Collaboration:

                       (a)  For Intel:          Eric Hannah
                                                Sector Director, Intel Research
                                                Intel Corporation
                                                2200 Mission College Blvd.
                                                Mail Stop RN6-661
                                                Santa Clara, CA 95052
                                                Phone:  408-765-4441
                                                Fax:    408-765-6271
                                                E-mail: eric.hannah@intel.com

                       (b)  For Nanosys:        Calvin Y.H. Chow
                                                Chief Executive Officer
                                                Nanosys Inc.
                                                2625 Hanover Street
                                                Palo Alto, CA 94304
                                                Phone: (650) 331-2102
                                                Fax: (650) 331-2101
                                                E-mail: cchow@nanosysinc.com

The Collaboration Managers shall have the authority to approve in writing
changes to Exhibit A, including, as applicable, specifications, scope of work,
and milestones. The Collaboration Managers shall have no other authority to
amend this Agreement. Each party may change its Collaboration Manager on written
notice to the other party, provided that the replacement Collaboration Manager
is at a similar level of authority at the party making the replacement, or as
otherwise agreed by the parties.

                  2.8 If either party desires to propose changes to the
Collaboration, it shall notify the other party in writing of such proposal and
the reasons for such proposal. The other party will give each such proposal its
prompt attention. If Intel and Nanosys agree to any such change, the change
shall be evidenced by a written confirmation signed by the Collaboration
Managers of both parties. Such a written confirmation shall amend the terms of
Exhibit A.

                  2.9 If the Collaboration is completed successfully (i.e.,
neither party has terminated this Agreement under Section 10, and the parties
agree that the subject technology is promising and warrants pursuing further),
then it is the parties' intent that, at Intel's request, the parties will
negotiate, in good faith, during the Exclusivity Period to enter into a
follow-on development agreement (the "Development Agreement") to further develop
and commercialize the technology

                                                                             -5-



which is the subject of this Agreement If Intel requests such a negotiation,
then, for the duration of the Exclusivity Period, Nanosys agrees that Nanosys
will not enter into any discussions regarding the subject of the Collaboration
with any third party. The parties further intend that any such Development
Agreement would reflect that, if the development and commercialization of this
technology are successful, and Intel has a good-faith intent to use the
Collaboration Materials in anticipation of a high-volume manufacturing ramp,
then:

                           (a)      It is the parties' mutual intent that the
parties would negotiate in good faith a supply agreement that reasonably assures
the supply of Deposited Nanomaterials and any related Nanosys enabling
technology or rights to Intel (for use in the Field of Interest, the
"Collaboration Materials"). Upon Intel's request to commence such negotiations,
the parties would negotiate diligently and in good faith to reach agreement.
Further, if at the expiration of the Development Agreement the parties have not
reached agreement, notwithstanding their diligent and good faith efforts, then
Nanosys would not enter into any supply agreement, within six (6) months after
the expiration of the Development Agreement, to supply Collaboration Materials
to any third party, in the Field of Interest, on terms which are more favorable
to that third party than the terms last offered by Nanosys to Intel during this
negotiation. In the first instance, the parties would use reasonable efforts to
qualify Nanosys as a supplier to Intel of the Collaboration Materials. Nanosys
acknowledges that, in order to be selected as an Intel qualified supplier,
Nanosys must demonstrate supply capability (in areas including, but not limited
to, cost, quality, and availability). Nanosys further acknowledges that the
supply agreement would include a "most favored customer" provision which
guarantees that, at any time, Nanosys' price to Intel for Collaboration
Materials is no higher than the price charged by Nanosys to any third party for
Collaboration Materials, in the Field of Interest, on similar terms and
conditions. Further, if the parties enter into a supply agreement, the supply
agreement will include provisions to help ensure a reliable supply of
Collaboration Materials to Intel, which may include (i) safety stock and (ii) if
Nanosys is unable to reasonably provide Intel with the Collaboration Materials,
then upon notice from Intel, Nanosys' would take prompt action to arrange for
such supply, which may include designating a subcontractor, subject to Intel's
consent of such subcontractor (which shall not be unreasonably withheld), to
manufacture such quantity of Collaboration Materials that cannot be obtained
from Nanosys, providing such subcontractor agrees to pay Nanosys a reasonable
royalty and agrees to reasonable confidentiality, intellectual property
protection, and commercial provisions. Nanosys agrees to fully reasonably
cooperate with Intel and the chosen subcontractor in the transfer of technology
and sufficient collaborative engineering resources necessary to allow the
subcontractor to produce Collaboration Materials for Intel's intended use as
soon as practicable after Intel's request. Nanosys reserves the right to seek
any and all legal recourse against the subcontractor if confidentiality or other
provisions of the agreement between Nanosys and the subcontractor are violated.

                           (b)      It is the parties' mutual intent that, if
the parties have not entered into a supply agreement as set forth in Section
2.9(a), notwithstanding their diligent and good faith efforts, then upon Intel's
request within [*** Redacted] after the expiration of the Development
Agreement, Nanosys would designate a contract manufacturer, subject to Intel's
consent of such contract manufacturer (which would not be unreasonably
withheld), to manufacture Collaboration Materials, licensing such contract
manufacturer to applicable Nanosys intellectual property on reasonable and
non-discriminatory terms, provided that such contract manufacturer agrees to pay
Nanosys a reasonable royalty and agrees to reasonable confidentiality,
intellectual property

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             -6-


protection, and commercial provisions. Nanosys shall fully and reasonably
cooperate with Intel and the chosen contract manufacturer in the transfer of
technology and sufficient collaborative engineering resources necessary to allow
the contract manufacturer to produce Collaboration Materials for Intel's
intended use as soon as practicable after Intel's request. Nanosys reserves the
right to seek all legal recourse against the contract manufacturer if
confidentiality or other provisions of the license between Nanosys and the
contract manufacturer are violated. If Nanosys fails to enter into a license
with a contract manufacturer as contemplated in this Section 2.9(b) within
[*** Redacted] after Intel's request to Nanosys, then Nanosys would be deemed
not to be entering the business of high-volume supply of Collaboration
Materials.

                           (c)      The parties further intend that if Nanosys
chooses not to enter into the business of supply of Collaboration Materials, and
Nanosys does not license the necessary enabling technology to a third party
manufacturer as provided in Section 2.9(b) above, then Nanosys would provide to
Intel a royalty-bearing, capped fee, worldwide, perpetual, non-exclusive license
under Nanosys IP, to have made Collaboration Materials and to make, have made,
use, sell, offer to sell and import, products using or incorporating
Collaboration Materials.

         3.       PAYMENTS TO NANOSYS.

                  3.1 Intel shall pay to Nanosys the following payments at the
following times:



           TIME OF PAYMENT                                  AMOUNT OF PAYMENT
- ----------------------------------------                ------------------------
                                                     
Collaboration Commencement Date                             $   [*** Redacted].

Three (3) months after the Collaboration                    $   [*** Redacted].
Commencement Date

Six (6) months after the Collaboration                      $   [*** Redacted].
Commencement Date

Nine (9) months after the Collaboration                     $  [*** Redacted]*.
Commencement Date


* $[*** Redacted] per FTE, according to the number of FTEs chosen by Intel,
pursuant to Section 2.2 above, for the fourth quarter of the Collaboration.

For the avoidance of doubt, the latter two payments (of $[*** Redacted] and
([*** Redacted])) will not be due if Intel terminates this Agreement under
Section 10.2 below.

                  3.2 For each month (or portion thereof) that Intel delays the
Collaboration Commencement Date, pursuant to Section 2.1 above, to a date after
December 31,2003, Intel shall pay to Nanosys [*** Redacted] dollars
($[*** Redacted]) (prorated on a day for day basis for partial months). Such
payment shall be due and payable within thirty (30) days after Intel's notice of
delay. (By way of example only, if upon execution of this Agreement Intel
notified Nanosys of a Collaboration Commencement Date delay to January 15,
2004, Intel would pay Nanosys $[*** Redacted] within thirty (30) days after such
notice date. If on December 15,2003 Intel then notified Nanosys of a further
delay

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             -7-



in the Collaboration Commencement Date, until March 10, 2004, Intel would
pay to Nanosys an additional $[*** Redacted] by January 14, 2004 (i.e., in
this example, a total of $[*** Redacted]).)

                  3.3 As of the Effective Date, the "Exclusivity Expiration"
shall be fifteen (15) months after the Exclusivity Date.

                           (i)      Intel shall be entitled to extend the
Exclusivity Expiration by three (3) months, to twenty-one (21) months after the
Exclusivity Date, by written notice to Nanosys no later than seventeen (17)
months after the Exclusivity Date, and payment to Nanosys of [*** Redacted]
dollars ($[*** Redacted]). This payment shall be due and payable no later than
eighteen (18) months after the Exclusivity Date.

                           (ii)     If Intel has extended the Exclusivity
Expiration pursuant to paragraph (i) hereinabove, then Intel shall be entitled
to further extend the Exclusivity Expiration by an additional [*** Redacted], to
[*** Redacted] after the Exclusivity Date, by written notice to Nanosys no later
than [*** Redacted] after the Exclusivity Date, and payment to Nanosys of [***
Redacted] dollars ($[*** Redacted]). This payment will be due and payable no
later than [*** Redacted] after the Exclusivity Date.

                           (iii)    If Intel has extended the Exclusivity
Expiration pursuant to paragraph (ii) hereinabove, then Intel shall be entitled
to further extend the Exclusivity Expiration by an additional [*** Redacted], to
[*** Redacted] after the Exclusivity Date, by written notice to Nanosys no later
than [*** Redacted] after the Exclusivity Date, and payment to Nanosys of [***
Redacted] dollars ($[*** Redacted]). This payment will be due and payable no
later than [*** Redacted] after the Exclusivity Date.

[*** Redacted] paid by Intel pursuant to this Section 3.3 may, at Intel's
option, be credited to [*** Redacted] of Intel to Nanosys under [*** Redacted]
by the parties, in the Field of Interest, entered into prior to termination of
the Exclusivity Period.

         4.       OWNERSHIP.

                  4.1 Each party shall retain its ownership of its Background
IP. No rights are granted pursuant to this Agreement with respect to any
Background IP.

                  4.2 Subject to the licenses set forth in Section 5 below,
Nanosys shall own all Collaboration IP. Subject to the licenses set forth in
Section 5 below, Intel irrevocably hereby agrees to, and hereby does, transfer,
convey and assign to Nanosys all of Intel's right, title, and interest in the
Collaboration IP, including without limitation all Intellectual Property rights
with respect thereto. Intel agrees to execute such documents, render such
assistance, and take such other action as Nanosys may reasonably request to
apply for, register, perfect, confirm, and protect Nanosys' rights in the
Collaboration IP. Subject to Sections 5, 6, and 7 below, ownership of
Collaboration Technology shall vest in Nanosys the exclusive right to determine
whether and how the Collaboration IP is to be protected and exercised throughout
the world.

         5.       LICENSES.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             -8-



                  5.1 Subject to the terms and conditions of this Agreement,
Nanosys agrees to grant, and hereby grants, to Intel a worldwide, nonexclusive
(except as set forth in Section 5.1(i) hereinbelow), nontransferable (except as
set forth in Section 11.7 below), royalty free license, only under Collaboration
IP, to design, develop, make, have made, use, import, offer to sell, and sell or
distribute any product or item and to practice any method or process, provided
that:

                           (i)      this license shall be exclusive (including
as to Nanosys) for use of the Collaboration IP in Intel's Exclusive Field, and

                           (ii)     no license is granted by Nanosys for use of
any Collaboration IP in Nanosys' Exclusive Field.

                  5.2 Intel shall have the right to grant sublicenses (and
authorize the granting of further sublicenses) under the license granted to it
in Section 5.1 above.

                  5.3 No party shall be obligated to provide any Technology or
deliverable in connection with the licenses granted in this Section 5; all
deliverables under this Agreement are specified exclusively in Exhibit A.

                  5.4 Notwithstanding this Section 5 or Section 2.4, nothing in
this Agreement shall be construed as preventing Intel or Nanosys employees from
using [*** Redacted] of the Confidential Information of the other party,
provided that such use of [*** Redacted] shall not grant to Intel or Nanosys any
implied license to any of the other party's [*** Redacted]. [*** Redacted] means
information in [*** Redacted] which is [*** Redacted]. An [*** Redacted] if the
[*** Redacted] the information for the purpose of [*** Redacted].

                  5.5 For purposes of this Section 5.5, the following
definitions apply:

         "Applicable Intel Patents" means those claims of Intel patents which
claim inventions conceived by Intel during the 24 months following the
termination or expiration of the Collaboration, which inventions were based on
Nanosys' Confidential Information.

         "Applicable Nanosys Patents" means those claims of Nanosys patents
which claim inventions conceived by Nanosys during the 24 months following
the termination or expiration of the Collaboration, which inventions were based
on Intel's Confidential Information.

         "Applicable Intel Sublicensable Patents" means those claims of Intel
patents which claim inventions conceived by Intel during the 12 months
following the termination or expiration of the Collaboration, which inventions
were based on Nanosys' Confidential Information.

         "Applicable Nanosys Sublicensable Patents" those claims of Nanosys
patents which claim inventions conceived by Nanosys during the 12 months
following the termination or expiration of the Collaboration, which inventions
were based on Intel's Confidential Information.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



                                                                             -9-



                           (a)      Subject to the terms and conditions of this
Agreement, Nanosys agrees to grant, and hereby grants, to Intel a worldwide,
nonexclusive, nontransferable (except as set forth in Section 11.7 below),
[*** Redacted] license, only under the Applicable Nanosys Patents, to design,
develop, make, have made, use, import, offer to sell, and sell or distribute any
product or item and to practice any method or process, provided that this
license shall be limited to use within Intel's Exclusive Field and the Field of
Interest. Intel shall have the right to grant sublicenses (and authorize the
granting of further sublicenses) under the license granted to it in this Section
5.5(a), as provided in Section 5.5(b) below.

                           (b)      Under the licenses granted under Section
5.5(a) above, but only under Applicable Nanosys Sublicensable Patents, and only
outside of the Field of Interest, Intel shall have the right to grant
sublicenses (and authorize the granting of further sublicenses).

                           (c)      Subject to the terms and conditions of this
Agreement, Intel agrees to grant, and hereby grants, to Nanosys a worldwide,
nonexclusive, nontransferable (except as set forth in Section 11.7 below),
[*** Redacted] license, only under the Applicable Intel Patents, to design,
develop, make, have made, use, import, offer to sell, and sell or distribute any
product or item and to practice any method or process, provided that this
license shall be limited to use within Nanosys' Exclusive Field and the Field of
Interest. Nanosys shall have the right to grant sublicenses (and authorize the
granting of further sublicenses) under the license granted to it in this Section
5.5(c), as provided in Section 5.5(d) below.

                           (d)      Under the licenses granted under Section
5.5(c) above, but only under Applicable Intel Sublicensable Patents, and only
outside of the Field of Interest, Nanosys shall have the right to grant
sublicenses (and authorize the granting of further sublicenses).

         6.       CONFIDENTIAL INFORMATION.

                  6.1 The CNDA shall apply to this Agreement, provided that, for
purposes of this Agreement:

                           (i)      "Confidential Information" shall also
include information disclosed as a result of access to the other party's
premises or property, which information relates to any information in tangible
form subject to clause (i) of Section 1 of the CNDA, whether such disclosure or
access occurs prior to, concurrent with, or following the disclosure of such
information in tangible form.

                           (ii)     In Section 2 of the CNDA, "a need to know"
means a need to know for the purposes of this Agreement.

                           (iii)    The third sentence of Section 6 of the CNDA
shall not apply to this Agreement; rather, the Termination and Survival sections
of this Agreement shall govern the disposition of Confidential Information.

                           (iv)     If the CNDA is terminated, the terms and
conditions of the CNDA shall continue to apply to disclosures in connection with
this Agreement.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                            -10-



                  (v) In addition, each party shall be entitled to disclose the
other party's Confidential Information to the extent such disclosure is required
by the order or requirement of a court, administrative agency, or other
governmental body; provided, that the party required to make the disclosure
shall provide at least fifteen (15) days (or such lesser period as may apply if
the party required to make the disclosure received fewer than fifteen (15) days
notice of the disclosure obligation), advance written notice thereof to enable
the other party to seek a protective order or otherwise prevent such disclosure.

         7.       INTELLECTUAL PROPERTY PROTECTION.

                  7.1 Nanosys IP. Nanosys shall have the sole right at its
expense to prepare, file and prosecute Filings related to any Collaboration
Technology, subject to Section 7.2 below.

                  7.2 Protection of Collaboration Technology. The parties shall
confer on (i) protection of Collaboration Technology (other than Collaboration
Technology developed solely by Nanosys) through Filings and/or through
maintenance of the Collaboration IP as a trade secret, and (ii) preparation,
filing, prosecution and maintenance of Filings and Collaboration Rights related
to Collaboration Technology (other than Collaboration Technology developed
solely by Nanosys). Nanosys shall be responsible for all Filing(s) in all
jurisdictions for Collaboration IP. Provided however, if only Intel wants to
protect a Collaboration development through a Filing on that development, then
Intel shall be entitled to do so, at its sole expense, and in such a case shall
be deemed sole owner of the affected Collaboration Right and Filing. In such
event, Intel shall be deemed to have granted to Nanosys a nonexclusive (except
as set forth hereinbelow), irrevocable, perpetual, fully paid, royalty free
license, with right to sublicense (and authorize the granting of further
sublicenses), only under such Collaboration Right, without restriction,
including to practice any process or method, and to design, develop, make, use,
have made, offer to sell, and sell or distribute any product or item, provided
that (A ) this license shall be exclusive (including as to Intel) for use of the
Collaboration Right in Nanosys' Exclusive Field and (B) no license is granted by
Intel for use of the Collaboration Right in Intel's Exclusive Field.

                  7.3 Infringement Prosecution.

                           (i)      Nanosys shall have the sole right to
prosecute claims of infringement or misappropriation of Collaboration IP, where
such infringement or misappropriation is primarily in Nanosys' Exclusive Field.
In each such case, Intel shall, at Nanosys' expense, take all actions reasonably
requested by Nanosys in such prosecution, subject to indemnification by Nanosys
of Intel for any liability to third parties resulting from such participation.

                           (ii)     Intel shall have the sole right to prosecute
claims of infringement or misappropriation of Collaboration IP where such
infringement or misappropriation is primarily in Intel's Exclusive Field. In
each such case, Nanosys shall, at Intel's expense, take all actions reasonably
requested by Intel in such prosecution (which may include participation as a
named plaintiff, subject to indemnification by Intel of Nanosys for any
liability to third parties resulting from such participation as a plaintiff).



                                                                            -11-


                  7.4 Further Assurances. At any time or from time to time on
and after the date of this Agreement, each party shall at the request of the
other party (i) execute, and deliver or cause to be delivered, all such
consents, documents or further instruments of license, assignment, and transfer,
and (ii) take or cause to be taken all such other actions, in each case at the
other party's expense and as the other party may reasonably deem necessary or
desirable in order for the other party to obtain the full benefits of Section
4.2 and this Section 7 and the activities contemplated thereby.

         8.       WARRANTY DISCLAIMER.

         NEITHER NANOSYS NOR INTEL MAKES ANY WARRANTY OF ANY KIND, WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. WITHOUT
LIMITING THE FOREGOING, ALL DELIVERABLES AND OTHER ITEMS ARE PROVIDED BY EACH
PARTY "AS IS," AND ALL LICENSES GRANTED BY EACH PARTY ARE GRANTED "AS IS."

         9.       LIMITATION OF LIABILITY.

         NEITHER PARTY SHALL HAVE ANY LIABILITY FOR COSTS OF SUBSTITUTE PRODUCTS
OR SERVICES, OR FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR INDIRECT
DAMAGES OR LIABILITIES, INCLUDING WITHOUT LIMITATION SUCH DAMAGES OR LIABILITIES
FOR LOSS OF REVENUE, LOSS OF BUSINESS, FRUSTRATION OF ECONOMIC OR BUSINESS
EXPECTATIONS, LOSS OF PROFITS, OR COST OF CAPITAL, REGARDLESS OF THE FORM OF THE
ACTION, WHETHER IN CONTRACT OR OTHERWISE, EVEN IF ANY REPRESENTATIVE OF A PARTY
HERETO HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL
EITHER PARTY'S LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNTS PAID OR PAYABLE
BY INTEL TO NANOSYS UNDER THIS AGREEMENT, provided that, as to Intel, this shall
be in addition to Intel's obligation to pay such amounts. These limitations,
however, shall not apply to either party's liability, if any, (i) for
contribution or indemnity with respect to liability to third parties for
personal injury, death, or damage to tangible property, (ii) exceeding the scope
of the licenses in Section 5 (Licenses), (iii) breach of Section 6 (Confidential
Information), or (iv) infringement of the other party's intellectual property
rights.

         10.      TERM AND TERMINATION.

                  10.1 Term. This Agreement shall commence as of the Effective
Date and shall continue until the expiration of the Exclusivity Period, unless
earlier terminated as set forth herein.

                  10.2 Q2 Checkpoint. Intel shall be entitled to terminate this
Agreement, for its convenience, on notice to Nanosys at any time within ten (10)
days after completion of the "Q2 Formal Review Meeting" milestone in Exhibit A.

                  10.3 Termination Due to Bankruptcy, etc. In the event a party:
(i) becomes insolvent; (ii) voluntarily files or has filed against it a petition
under applicable bankruptcy or insolvency laws which such party fails to have
released within thirty (30) days after filing;



                                                                            -12-



(iii) proposes any dissolution, composition or financial reorganization with
credit ors or if a receiver, trustee, custodian or similar agent is appointed or
takes possession with respect to all or substantially all property or business
of such party; or (iv) such party makes a general assignment for the benefit of
creditors; then the other party may terminate this Agreement by notice to the
non-terminating party.

                  10.4 Termination Due to Breach. Either party shall have the
right to terminate this Agreement if the other party is in material breach of
any material term or condition of this Agreement and fails to remedy such breach
within thirty (30) days after receipt of written notice of such breach given by
the non-breaching party. To terminate this Agreement, the nonbreaching party
must provide further written notice of such termination to the breaching party
prior to a cure of the breach.

                  10.5 Survival. Neither the termination nor expiration of this
Agreement shall relieve either party from its obligations to pay the other any
sums accrued hereunder. Upon the termination or expiration of this Agreement,
(i) Intel shall promptly return to Nanosys all Nanosys Confidential Information
and (ii) Nanosys shall promptly return to Intel all Intel Confidential
Information. The parties agree that their respective rights, obligations and
duties under Sections 1, 2.9, 4 (Ownership), 5 (Licenses), 6 (Confidential
Information), 7 (Intellectual Property Protection), 8 (Warranty Disclaimer), 9
(Limitation of Liability), 10.5 (Survival), and 11 (Miscellaneous) shall survive
any termination or expiration of this Agreement.

         11.      MISCELLANEOUS.

                  11.1 Announcement. On or after the Effective Date, Nanosys
shall be entitled to issue a press release pertaining to this Agreement, upon
written consent from Intel to the content of the press release.

                  11.2 Notices. All notices, requests, demands and other
communications given or made in accordance with the provisions of this Agreement
shall be in writing and shall be deemed to have been given (i) three days after
mailing when mailed (by registered or certified mail, postage paid, only), (ii)
on the date sent when made by facsimile transmission with confirmation of
receipt (with hard copy to follow by registered or certified mail, postage paid,
only), and (iii) on the date received when delivered in person or by courier,
provided that notices and communications with respect to administrative and
project matters (e.g., changes in meeting times and dates, program
specifications, and specific program development activities) (but not legal
matters or matters pertaining to or establishing rights under this Agreement),
may be provided by e-mail and will be deemed given when sent. All notices shall
be provided to the address set forth below or such other place as such party may
from time to time designate in writing. Each party may alter its address set
forth below by notice in writing to the other party, and such notice shall be
considered to have been given three (3) days after the sending thereof:

               If to Nanosys:         Nanosys Inc.
                                      2625 Hanover Street
                                      Palo Alto, California 94304
                                      Fax:(650)331-2101

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                            -13-



                                      Attn: Calvin Y.H. Chow
                                      E-mail: cchow@nanosysinc.com

               with a copy, for matters pertaining to intellectual property, to:

                                      Nanosys Inc.
                                      2625 Hanover Street
                                      Palo Alto, California 94304
                                      Fax: (650) 331-2101
                                      Attn: Matt Murphy
                                      E-mail: mmurphy@nanosysinc.com

               If to Intel:           Intel Corporation
                                      2200 Mission College Blvd.
                                      Santa Clara, CA 95052
                                      ATTN: General Counsel

                  11.3 Amendment; Waiver. This Agreement may be amended,
modified or supplemented only by a writing that is signed by duly authorized
representatives of both parties and that specifically identifies the provision
or provisions of this Agreement being amended, modified or supplemented. No term
or provision hereof will be considered waived by either party, and no breach
excused by either party, unless such waiver or consent is in writing signed on
behalf of the party against whom the waiver is asserted. Without limiting the
foregoing, no consent by either party to, or waiver of, a breach by either
party, whether express or implied, will constitute a consent to, waiver of, or
excuse of any other, different, or subsequent breach by either party.

                  11.4 Severability. If any provision hereof should be held
invalid, illegal or unenforceable in any jurisdiction, the parties shall
negotiate in good faith a valid, legal and enforceable substitute provision that
most nearly reflects the original intent of the parties and all other provisions
hereof shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible. Such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of such provision in
any other jurisdiction.

                  11.5 Governing Law. This Agreement shall be governed by and
construed under the laws of the United States and the State of California, not
including its conflict of law provisions.

                  11.6 Force Majeure. Except for the payment of sums accrued,
neither party will be liable for any failure or delay in performance under this
Agreement due to fire, explosion, earthquake, storm, flood or other weather,
unavailability of necessary utilities or raw materials, war, insurrection, riot,
act of God or the public enemy, law, act, order, proclamation, decree,
regulation, ordinance, or instructions of government or other public
authorities, or any other event beyond the reasonable control of the party whose
performance is to be excused. If, however, a party's performance is prevented
for sixty (60) days, then the other party shall be entitled to terminate this
Agreement on written notice to the party suffering the force majeure at any time
prior to resumption of performance by the party suffering the force majeure.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                            -14-



                  11.7 Assignment. Neither party may transfer or assign this
Agreement, whether by operation of law or otherwise, without the prior written
consent of the other party and any attempt to do so without such consent will be
void. This Agreement will bind and inure to the benefit of the parties and their
respective permitted successors and permitted assigns. Notwithstanding anything
in this Agreement, however, either party may assign this Agreement without the
other party's prior written consent to a successor to all or substantially all
of its assets pertaining to the Collaboration (e.g., the surviving entity in a
merger or consolidation in which it participates or to a purchaser of all or
substantially all of its assets pertaining to the Collaboration), so long as
such surviving entity or purchaser shall assume (expressly in writing or by
operation of law) the performance of all of the terms of this Agreement.

                  11.8 No Third Party Beneficiaries. No person or entity other
than Intel and Nanosys will have any rights or obligations pursuant to this
Agreement.

                  11.9 Relationship of the Parties. The parties to this
Agreement are independent contractors. There is no relationship of agency,
partnership, joint venture, employment, or franchise between the parties and
this Agreement is negotiated at arm' s length with both sides represented by
counsel of their choice. Neither party has the authority to bind the other or to
incur any obligation on its behalf. Any such act will create a separate
liability in the party so acting to any and all third parties affected thereby.

                  11.10 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument. If this Agreement is
executed in counterparts, no signatory hereto shall be bound until both the
parties named below have duly executed or caused to be duly executed a
counterpart of this Agreement.

                  11.11 Confidentiality of Agreement. Subject to Section 6.1(v)
and Section 11.1, each party agrees that the existence of and the terms and
conditions of this Agreement shall be treated as confidential, provided,
however, that each party may disclose the terms and conditions of this
Agreement: (i) as required by any court or other governmental body; (ii) as
otherwise required by law; (iii) to legal counsel of the parties; (iv) in
connection with the requirements of a public offering or securities filing; (v)
in confidence, to accountants, banks, and financing sources and their advisors;
(vi) in confidence, in connection with the enforcement of this Agreement or
rights under this Agreement; or (vii) in confidence, in connection with a merger
or acquisition or proposed merger or acquisition, or the like.

                  11.12 Authority. Each party represents and warrants to the
other party at the Effective Date (i) that it has the legal right, power, and
authority to enter into this Agreement and to fully perform its obligations
under this Agreement, and (ii) that the performance of such obligations will not
conflict with any agreements, contracts or other arrangements to which it is a
party or by which it is bound.

                  11.13 Entire Agreement. This Agreement, including all Exhibits
to this Agreement, together with the CNDA (as set forth in Section 6 above),
constitutes the entire agreement between the parties relating to this subject
matter and supersedes all prior or simultaneous representations,


                                                                            -15-



discussions, negotiations, letters of intent, and agreements, whether written or
oral, with respect to the subject matter hereof.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the dates set forth below effective as of the Effective Date.

NANOSYS INC.                              INTEL CORPORATION

By: /s/ CALVIN CHOW                       By: /s/ PATRICK P GELSINGER
    -----------------------------             -----------------------------
Print Name: CALVIN CHOW                   Print Name: PATRICK P GELSINGER
Title: CEO                                Title: Sr VP / CTO

                                                        LEGAL  OK
                                                        ----------
                                                        p  12/8/03


                                                                            -16-



                                    EXHIBIT A

                  Collaboration Statement of Work (SOW) Summary

         Construction of [*** Redacted] devices (similar to the concept figure
below) to evaluate key technical areas required for a [*** Redacted] memory unit
and to project the performance limits of the technology.

                                 [*** Redacted]

         Device will have an [*** Redacted] and will be utilized to evaluate:

         -        [*** Redacted] and [*** Redacted].

         -        [*** Redacted] characteristics (e.g. [*** Redacted], etc.)

         -        [*** Redacted] - including [*** Redacted] characteristics.

         -        Effects of [*** Redacted], and [*** Redacted] modifications.

         -        Variations of [*** Redacted].

         -        [*** Redacted] (e.g. [*** Redacted])

         -        Variations of processing means.

         and to construct a model for [*** Redacted] of a [*** Redacted] or [***
Redacted] device.

In Q1 and Q2, the project would focus on modeling and generating/testing
[*** Redacted] in order to reconcile the validity of the model. Q3 and Q4 would
focus on a [*** Redacted] to better select [*** Redacted]. The [*** Redacted]
work would be done on [*** Redacted] devices in a [*** Redacted]. A more
detailed plan of activities will be generated by the Collaboration team upon
Commencement of the Collaboration.

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


The parties will hold a Q2 Formal Review Meeting no later than two weeks
after the end of Q2.


                                                                             -2-

EX-10.15

                                                                   EXHIBIT 10.15

                        COOPERATIVE DEVELOPMENT AGREEMENT

     This Cooperative Development Agreement (the "Agreement") is entered into as
of January 22, 2004 (the "Effective Date") by and between Nanosys Inc.
("Nanosys"), a California corporation with a place of business at 2625 Hanover
Street, Palo Alto, California 94304 and E.I. du Pont de Nemours and Company
("DuPont"), a Delaware corporation with a place of business at 1007 Market
Street, Wilmington, DE 19898.

                                    RECITALS

     Whereas:

     A. DuPont has expertise with respect to [*** Redacted] using DuPont's
[*** Redacted] and the development, design, and manufacture thereof, and Nanosys
has expertise with respect to the design and synthesis of nanomaterials and the
development of nanotechnology-enabled systems.

     B. DuPont and Nanosys desire to enter into an agreement to cooperate to
investigate the commercial feasibility of combining Nanosys' [*** Redacted]
nanomaterials technology with DuPont's [*** Redacted] technology for
high-performance [*** Redacted] applications

                                    AGREEMENT

     NOW, THEREFORE, the parties agree as follows:

     1. DEFINITIONS. In this Agreement, the following words and expressions
shall have the following meanings:

          1.1 "Collaboration" means the research and development work set forth
in Exhibit A hereto.

          1.2 "Statement of Work ("SOW")" means Exhibit A hereto.

          1.3 "Collaboration Commencement Date" means the date of commencement
of the Collaboration under Section 2.1 below.

          1.4 "Technology" means any and all developments, ideas, designs,
inventions, information, know-how, and technology.

          1.5 "Collaboration Technology" of a party ("Party") means (i) any and
all Technology that such Party's employees or contractors conceive or develop
(solely or jointly) in the course of working specifically on the Collaboration,
and (ii) any and all Technology conceived or developed (solely or jointly) by or
for such Party based on Confidential Information of the other party disclosed to
such Party in connection with, or generated under, the Collaboration.


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

         1.6 "Nanosys Collaboration IP" shall mean (i) Nanosys' intellectual
property rights in Collaboration Technology of Nanosys, which intellectual
property rights were created by Nanosys' employees or contractors (solely or
jointly) in the course of specifically working on the Collaboration and (ii) all
intellectual property of Nanosys created by or for Nanosys based on DuPont
Confidential Information disclosed to Nanosys in connection with, or DuPont
Confidential Information generated under, the Collaboration.

         1.7 "DuPont Collaboration IP" shall mean (i) DuPont's intellectual
property rights in Collaboration Technology of DuPont, which intellectual
property rights were created by DuPont's employees or contractors (solely or
jointly) in the course of specifically working on the Collaboration and (ii) all
intellectual property of DuPont created by or for DuPont based on Nanosys
Confidential Information disclosed to DuPont in connection with, or Nanosys
Confidential Information generated under, the Collaboration.

         1.8 "Background IP" of a party means any and all intellectual property
rights that such party either (i) owned, controlled, or had rights with respect
to prior to the Effective Date; or (ii) develops, or acquires ownership,
control, or rights with respect to, during the term of this Agreement but which
is not that party's Collaboration IP.

         1.9 "Nanosys [*** Redacted] Nanomaterials Technology" means (i)
[*** Redacted] semiconductors formed as [*** Redacted] (such as [*** Redacted],
[*** Redacted], [*** Redacted], and [*** Redacted] etc.), having at least
[*** Redacted] that are subsequently [*** Redacted] as such nanomaterials
[*** Redacted]; (ii) any [*** Redacted], [*** Redacted], or [*** Redacted]
incorporating such [*** Redacted]; and (iii) all applications and products
incorporating [*** Redacted] that rely on such materials.

         1.10 "DuPont [*** Redacted] Technology" means (i) any method for
fabricating [*** Redacted], where such [*** Redacted] is enabled by
[*** Redacted]; (ii) any [*** Redacted] used in such methods; and (iii) all
applications and products incorporating [*** Redacted] that rely on such
methods.

         1.11 "Conventional Materials" means traditional semiconducting polymers
and semiconducting organic materials such as pentacene; carbon nanotubes; and
traditional, continuous inorganic semiconductor [*** Redacted] such as [***
Redacted] and [*** Redacted], including those having at least one cross
sectional dimension of [*** Redacted].

         1.12 "Nanosys' Exclusive Field" means compositions, devices, articles,
and methods involving or involved in Nanosys [*** Redacted] Nanomaterials
Technology, but excluding Conventional Materials, except including
[*** Redacted] when used in an architecture such that [*** Redacted] (e.g.
substantially similar to replacing the nanowives in the applications described
in Nanosys' Nature Paper (Duan et al, Nature, 425, p 274, 2003) with
[*** Redacted]).



*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


                                                                             -2-

          1.13 "DuPont's Exclusive Field" means compositions (including without
limitation Conventional Materials), devices, articles, and methods involving or
involved in Dupont [*** Redacted] Technology, but excluding Conventional
Materials used in conjunction with Nanosys [*** Redacted] Nanomaterials
Technology, and excluding [*** Redacted] when used in an architecture such that
[*** Redacted] (e.g. substantially similar to replacing the nanowives in the
applications described in Nanosys' Nature Paper (Duan et al, Nature, 425, p 274,
2003) with [*** Redacted]). For the avoidance of doubt, Conventional Processes
used in conjunction with Nanosys [*** Redacted] Nanomaterials Technology are not
in DuPont's Exclusive Field nor in Nanosys' Exclusive Field.

          1.14 "Overlap Field" means the fields which fall within both Nanosys'
Exclusive Field and DuPont's Exclusive Field.

          1.15 "Confidential Information" is defined in Section 6 below.

          1.16 "Joint Developments" is defined in Section 4.4 below.

          1.17 "Filing" means any application for or registration of a patent,
patent right (or similar right under foreign law), utility model, copyright or
mask work right with respect to Collaboration Technology.

          1.18 "Collaboration Right" means any patent, patent right (or similar
right under foreign law), utility model, copyright or mask work right issued or
registered as a result of a Filing.

     2. COLLABORATION WORK.

          2.1 Each party shall use its commercially reasonable efforts to
perform its Collaboration obligations as set forth in Exhibit A. It is
understood and agreed that the Collaboration is in the nature of research, that
successful completion of the research is not assured, and that, so long as a
party uses its commercially reasonable efforts as set forth in the preceding
sentence, that party will not be in default for any failure to achieve any
particular result or to complete any particular deliverable. The parties shall
commence the Collaboration January 22, 2004.

          2.2 Nanosys agrees to allocate to the Collaboration the number of
full-time equivalent individuals (FTEs) specified in the SOW.

          2.3 Where appropriate and agreed in each case, and in accordance with
the SOW, either party's employees may work with the other party at the other
party's facility. All employees of one party visiting the other party's facility
shall comply with the rules and regulations applicable at that facility, as
communicated to such employees.

          2.4 Any and all materials supplied by one party to the other party
shall be used by the recipient only to perform its Collaboration obligations.

***  Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             -3-


          2.5 Except as set forth in Section 3 below, each party shall bear its
own costs and expenses in carrying out the Collaboration.

          2.6 The following persons ("Collaboration Managers") shall be
appointed to direct the conduct of the parties with respect to the
Collaboration:

                                (a) For DuPont:

                                    Dr. Kurt L. Adams
                                    Research Manager, DuPont CR&D
                                    Experimental Station, E328/225
                                    Rt. 41 Between Rt. 202 & 52
                                    Wilmington, DE 19880-0356
                                    Phone: 302-695-7878
                                    fax: 302-695-7742
                                    E-mail: Kurt.L.Adams@usa.dupont.com

                                (b) For Nanosys:

                                    Stephen Empedocles
                                    Director, Business Development
                                    Nanosys Inc.
                                    2625 Hanover Street
                                    Palo Alto, CA 94304
                                    Phone: (650) 331-2103
                                    fax: (650) 331-2101
                                    E-mail: sempedocles@nanosysinc.com

The Collaboration Managers shall have the authority to approve in writing
changes to Exhibit A, including, as applicable, specifications, scope of work,
and milestones. The Collaboration Managers shall have no other authority to
amend this Agreement. Each party may change its Collaboration Manager on written
notice to the other party, provided that the replacement Collaboration Manager
is at a similar level of authority at the party making the replacement, or as
otherwise agreed to by the parties.

          2.7 If either party desires to propose changes to the Collaboration,
it shall notify the other party in writing of such proposal and the reasons for
such proposal. The other party will give each such proposal its prompt
attention. If DuPont and Nanosys agree to any such change, the change shall be
evidenced by a written confirmation signed by the Collaboration Managers of both
parties. Such a written confirmation shall amend Exhibit A.

                                                                             -4-


     3. PAYMENTS TO NANOSYS.

          3.1 DuPont shall pay to Nanosys the following payments at the
following times:



                      Time of Payment                                                        Amount of Payment
                      ---------------                                                        -----------------
                                                                                          
Collaboration Commencement Date

Three (3) months after the Collaboration Commencement Date                                   $ [*** Redacted]

Six (6) months after the Collaboration Commencement Date                                     $ [*** Redacted]

Nine (9) months after the Collaboration Commencement Date                                    $ [*** Redacted]


* These amounts (for the latter three (3) quarters) are nonbinding estimates of
the effort that may be required from Nanosys in these quarters, based on
experience in similar investigations. These estimates may be revised on a
quarterly basis based on the learnings from the previous quarter. All amounts
are and will be based on a rate of [*** Redacted] per FTE-quarter.

For the avoidance of doubt, the latter [***  Redacted] payments will not be due
if this Agreement terminates under Section 10.2 below.

     4. OWNERSHIP.

          4.1 Each party shall retain its ownership of its Background IP. No
rights are granted pursuant to this Agreement with respect to any Background IP.

          4.2 Whether Collaboration Technology is jointly or solely made shall
be determined according to United States patent law or, as to original works of
authorship, according to United States copyright law. Except as to patent
ownership, all other questions concerning the construction or effect of patent
applications and patents shall be decided in accordance with the laws of the
country in which the particular patent application concerned has been filed or
granted.

          4.3 Each of Nanosys and DuPont shall own the Collaboration Technology
solely made by its respective employees, agents, and contractors. Subject to
Sections 4.5, 5, 6, and 7 below, sole ownership of Collaboration Technology
shall vest in the owning party the exclusive right to determine whether and how
the Collaboration Technology and the associated intellectual property rights are
to be protected and exercised throughout the world.

          4.4 Nanosys and DuPont shall jointly own jointly made Collaboration
Technology ("Joint Developments"), with no duty to account, and, subject to
Sections 4.5, 5, 5, 6, and 7 below, each party shall have the right to use and
exploit such Joint Developments without consent of the

***  Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portion
have been filed separately with the Commission.

                                                                             -5-


other party. Each party waives any rights under applicable law that it may have
to require consent or an accounting. Subject to Sections 4.5, 5, 6, and 7 below,
joint ownership of Collaboration Technology and the associated intellectual
property rights shall vest in the parties the joint right to determine whether
and how the Collaboration Technology and the associated intellectual property
rights are to be protected and exercised throughout the world.

          4.5 Each party agrees that it will not use any of its solely owned or
jointly owned Collaboration Technology (or any associated solely owned or
jointly owned Collaboration IP) in the Overlap Field, except as may be agreed by
the parties in writing. If either party desires to use any such Collaboration
Technology and/or Collaboration IP in the Overlap Field, it may provide written
notice to the other party, in appropriate detail, of the proposed scope of such
use. Within ninety (90) days after such notice, the other party shall, by
written notice to the original notifying party, respond either (i) granting
permission for such use, or (ii) offering to negotiate the terms and conditions
of such use, it being understood that neither party shall be obligated to enter
into any particular agreement or arrangement, nor shall either party be
obligated to enter into any agreement or arrangement that is inconsistent with
its then current obligations to third parties. Any failure to so respond within
this ninety (90) day period shall be irrevocably deemed permission for the
originally notifying party to use such Collaboration Technology and/or
Collaboration IP as proposed in the original party's notice. With respect to
Collaboration IP for which permission is so granted, to the extent such
Collaboration IP is solely owned by the party granting such permission, such
party shall be deemed to have granted to the other party a worldwide,
nontransferable (except as set forth in Section 11.7 below), royalty free
license, only under such Collaboration IP, to design, develop, make, have made,
use, import, offer to sell, and sell or distribute any product or item and to
practice any method or process, in each case limited to the scope of use
specified in the licensee's notice provided as set forth hereinabove.

     5. LICENSES.

          5.1 Subject to the terms and conditions of this Agreement, Nanosys
agrees to grant, and hereby grants, to DuPont a worldwide, nonexclusive (except
as set forth in Section 5.1(i) hereinbelow), nontransferable (except as set
forth in Section 11.7 below), royalty free license, only under the Nanosys
Collaboration IP, to design, develop, make, have made, use, import, offer to
sell, and sell or distribute any product or item and to practice any method or
process, provided that:

                    (i) this license shall be exclusive (including as to
Nanosys) for use of the Nanosys Collaboration IP in DuPont's Exclusive Field,
subject to Section 5.1(ii) below, and

                    (ii) no license is granted by Nanosys for use of any Nanosys
Collaboration IP in Nanosys' Exclusive Field (it being understood that Nanosys'
Exclusive Field includes, without limitation, the Overlap Field).

          5.2 Subject to the terms and conditions of this Agreement, DuPont
agrees to grant, and hereby grants, to Nanosys a worldwide, nonexclusive (except
as set forth in Section 5.2(i) hereinbelow), nontransferable (except as set
forth in Section 11.7 below), royalty free license, only under the DuPont
Collaboration IP, to design, develop, make, have made, use, import, offer to
sell, and sell or distribute any product or item and to practice any method or
process, provided that:

                                                                             -6-


                    (i) this license shall be exclusive (including as to DuPont)
for use of the DuPont Collaboration IP in Nanosys' Exclusive Field, subject to
Section 5.2(ii) below, and

                    (ii) no license is granted by DuPont for use of any DuPont
Collaboration IP in DuPont's Exclusive Field (it being understood that DuPont's
Exclusive Field includes, without limitation, the Overlap Field).

          5.3 Each party shall have the right to grant sublicenses (and
authorize the granting of further sublicenses) under the license granted to it
in Section 5.1 or 5.2 above, as applicable.

          5.4 No party shall be obligated to provide any Technology or
deliverable in connection with the licenses granted in this Section 5; all
deliverables under this Agreement are specified exclusively in Exhibit A.

     6. CONFIDENTIAL INFORMATION.

          6.1 The term "Confidential Information" shall mean any information or
materials disclosed by one party to the other, pursuant to this Agreement, which
is in written, graphic, machine readable or other tangible form and is marked
"Confidential", "Proprietary" or in some other manner to indicate its
confidential nature. Confidential Information may also include oral information
disclosed by one party to the other, provided that such information is
designated as confidential at the time of disclosure and reduced to a written
summary by the disclosing party, within thirty (30) days after its oral
disclosure or disclosure resulting from such access, which written summary is
marked in a manner to indicate its confidential nature and delivered to the
receiving party. Confidential Information shall also include any information
disclosed as a result of access to the other party's premises or property.

          6.2 Each party shall treat as confidential all Confidential
Information of the other party, shall not use such Confidential Information
except for the Collaboration, shall implement reasonable procedures to prohibit
the disclosure, unauthorized duplication, misuse or removal of the other party's
Confidential Information, and shall not disclose such Confidential Information
to any third party except as reasonable and necessary to exercise its rights and
perform its obligations pursuant to this Agreement, and under substantially
similar restrictions as those set forth in this section. Without limiting the
foregoing, each party shall use at least the same procedures and degree of care
which it uses to prevent the disclosure or misuse of its own confidential
information of like importance to prevent the disclosure or misuse of
Confidential Information disclosed to it by the other party under this
Agreement, but in no event less than reasonable care.

          6.3 Notwithstanding the above, neither party shall have liability to
the other with regard to any Confidential Information of the other which:

                    (i) was generally known and available at the time it was
disclosed or becomes generally known and available through no fault of the
receiving party;

                    (ii) was known to the receiving party, without restriction,
at the time of disclosure as shown by the files of the receiving party in
existence at the time of disclosure;

                                                                             -7-


                    (iii) is disclosed with the prior written approval of the
disclosing party;

                    (iv) was independently developed by the receiving party
without any use of the Confidential Information and by employees or other agents
of the receiving party who have not been exposed to the Confidential
Information, provided that the receiving party can demonstrate such independent
development by documented evidence prepared contemporaneously with such
independent development; or

                    (v) becomes known to the receiving party, without
restriction, from a source other than the disclosing party without breach of
this Agreement by the receiving party and otherwise not in violation of the
disclosing party's rights.

In addition, each party shall be entitled to disclose the other party's
Confidential Information to the extent such disclosure is required by the order
or requirement of a court, administrative agency, or other governmental body;
provided, that the party required to make the disclosure shall provide prompt,
advance notice thereof to enable the other party to seek a protective order or
otherwise prevent such disclosure.

     7. INTELLECTUAL PROPERTY PROTECTION.

          7.1 Nanosys and DuPont Collaboration Technology. Nanosys shall have
the sole right at its expense to prepare, file and prosecute Filings related to
any Collaboration Technology solely owned by Nanosys and to maintain
Collaboration Rights issued thereon. DuPont shall have the sole right at its
expense to prepare, file and prosecute Filings related to any Collaboration
Technology solely owned by DuPont and to maintain Collaboration Rights issued
thereon.

          7.2 Joint Developments. The parties shall confer on (i) protection of
Joint Developments through Filings on the Joint Development and/or through
maintenance of the Joint Development as a trade secret, and (ii) preparation,
filing, prosecution and maintenance of Filings and Collaboration Rights related
to Joint Developments. The parties shall agree by whom Filings will be done in a
country for a particular Joint Development. If only one party wants to protect a
Joint Development through a Filing on that Joint Development, then that party
shall be entitled to do so, at its sole expense and in its own name. If both
parties share the expense of such Filing, then the Filing shall be made on
behalf of both parties and shall name each party as joint and equal owner in
such country of the Joint Development and of the resulting Collaboration Right.
If one party does not share the expense of such Filing, then the Filing shall be
made on behalf of the party which makes the Filing and shall name such party as
the sole owner in such country of the Collaboration Right pertaining to such
Joint Development, and the party which makes the Filing shall be deemed to have
granted the other party a nonexclusive (except as set forth hereinbelow),
irrevocable, perpetual, fully paid, royalty free license, with right to
sublicense (and authorize the granting of further sublicenses), only under such
Collaboration Right, without restriction, including to practice any process or
method, and to design, develop, make, use, have made, offer to sell, and sell or
distribute any product or item, provided that (A) in the case of such license
from Nanosys to DuPont (I) this license shall be exclusive (including as to
Nanosys) for use of the Collaboration Right in DuPont's Exclusive Field, subject
to clause (A)(II) hereinbelow, and (II) no license is granted by

                                                                             -8-


Nanosys for use of the Collaboration Right in Nanosys' Exclusive Field (it being
understood that Nanosys' Exclusive Field includes, without limitation, the
Overlap Field); and (B) in the case of such a license from DuPont to Nanosys (I)
this license shall be exclusive (including as to DuPont) for use of the
Collaboration Right in Nanosys' Exclusive Field, subject to clause (B)(II)
hereinbelow, and (II) no license is granted by DuPont for use of the
Collaboration Right in DuPont's Exclusive Field (it being understood that
DuPont's Exclusive Field includes, without limitation, the Overlap Field). If
either party does not pay its one-half share of maintenance expenses with
respect to a Collaboration Right, then sole ownership of that Collaboration
Right shall be transferred and assigned to the other party, subject to a license
to the non-owning party as set forth hereinabove.

          7.3 Infringement Prosecution.

               (a) (i) Nanosys shall have the sole right to prosecute claims of
infringement or misappropriation of Collaboration Rights (whether owned by
Nanosys, owned by DuPont, or jointly owned by Nanosys and DuPont) or
misappropriation of any trade secret with respect to Collaboration Technology
(whether of Nanosys, of DuPont, or jointly of Nanosys and DuPont), where such
infringement or misappropriation is primarily in Nanosys' Exclusive Field. In
each such case, DuPont shall, at Nanosys' expense, take all actions reasonably
requested by Nanosys in such prosecution (which may include participation as a
named plaintiff, subject to indemnification by Nanosys of DuPont for any
liability to third parties resulting from such participation as a plaintiff).

                    (ii) DuPont shall have the sole right to prosecute claims of
infringement or misappropriation of Collaboration Rights (whether owned by
Nanosys, owned by DuPont, or jointly owned by Nanosys and DuPont) or
misappropriation of any trade secret with respect to Collaboration Technology
(whether of Nanosys, of DuPont, or jointly of Nanosys and DuPont), where such
infringement or misappropriation is primarily in DuPont's Exclusive Field. In
each such case, Nanosys shall, at DuPont's expense, take all actions reasonably
requested by DuPont in such prosecution (which may include participation as a
named plaintiff, subject to indemnification by DuPont of Nanosys for any
liability to third parties resulting from such participation as a plaintiff).

                    (iii) For the avoidance of doubt, the determination of
whether any infringement or misappropriation is primarily in Nanosys Exclusive
Field or Dupont's Exclusive field shall be determined by good-faith discussions
between the parties, when such infringement or misappropriation occurs in the
Overlap Field. Regardless of this determination, either party shall have the
right to prosecute claims of infringement or misappropriation of Collaboration
Rights (whether owned by Nanosys, owned by DuPont, or jointly owned by Nanosys
and DuPont) or misappropriation of any trade secret with respect to
Collaboration Technology (whether of Nanosys, of DuPont, or jointly of Nanosys
and DuPont), where such infringement or misappropriation is in the Overlap
Field, if the other party chooses not to pursue such prosecution. In each such
case, the obligations of Nanosys and DuPont to support a prosecution initiated
by the other party shall be as set forth in paragraphs (i) and (ii) of this
Section 7.3(a).

               (b) Except as set forth in Section 7.3(a) above, each party shall
have the sole right to prosecute claims of infringement of any Collaboration
Right owned solely by such party

                                                                             -9-


or infringement or misappropriation of any trade secret with respect to
Collaboration Technology owned solely by such party.

               (c) Except as set forth in Section 7.3(a) above, if either party
(the "Notifying Party") wishes to commence an action against a third party for
actual or potential infringement or misappropriation ("Infringement") of any
jointly owned Joint Development or related jointly owned Collaboration Right,
then such party shall promptly so notify the other party (the "Other Party") in
writing of such Infringement (the "Infringement Notice"), and the following
shall apply:

                    (i) The Notifying Party shall have the sole right to
prosecute such Infringement for a period of ninety (90) days after the date
of the Infringement Notice, provided that the Other Party may, by written notice
within thirty (30) days after the Infringement Notice, elect to participate
in the Infringement action and agree to pay one-half of the costs of such
prosecution. In such event, the parties shall jointly control and cooperate in
prosecution of such Infringement action and shall share equally in any monetary
award resulting from such prosecution.

                    (ii) If the Other Party elects to participate and share
costs as set forth in Section 73(c)(i), but the Notifying Party does not take
reasonable actions to prosecute the Infringement action before the end of such
ninety (90) day period, or notifies the Other Party that it does not intend
to prosecute such Infringement, then (A) the Other Party shall have the sole
right for sixty (60) days at its expense to prosecute such Infringement and
retain any monetary award resulting therefrom, and (B) the Notifying Party
shall, at the Other Party's expense, take all actions reasonably requested by
the Other Party in such prosecution (which may include participation as a named
plaintiff, subject to indemnification by the Other Party of the Notifying Party
for any liability to third parties resulting from such participation as a
plaintiff). If the Other Party does not take reasonable actions to prosecute
such Infringement action before the end of such sixty (60) day period, or
notifies the Notifying Party that it does not intend to prosecute such
Infringement, then Section 7.3(c) shall become applicable again.

                    (iii) If the Other Party does not elect to participate and
share expenses as set forth in Section 7.3(c)(i):

                         (A) If the Notifying Party takes reasonable actions to
prosecute the Infringement action during the ninety (90) days after the date of
the Infringement Notice, then (I) the Notifying Party shall have the sole right
to prosecute such Infringement and retain any monetary award resulting
therefrom, and (II) the Other Party shall, at the Notifying Party's expense,
take all actions reasonably requested by the Notifying Party in such prosecution
(which may include participation as a named plaintiff, subject to
indemnification by the Notifying Party of the Other Party for any liability to
third parties resulting from such participation as a plaintiff).

                         (B) If the Notifying Party does not take reasonable

actions to prosecute the Infringement action before the end of such
ninety (90) day period, or notifies the Other Party that it does not intend
to prosecute such Infringement, then Section 7.3(c) shall become applicable
again.

                                                                            -10-


                    (iv) If a party prosecutes an Infringement and the other
party does not bear one-half the costs of such prosecution as set forth above,
then the prosecuting party shall retain the entire amount of any monetary award
resulting from such prosecution.

               (d) If a party prosecuting an Infringement action with respect to
any jointly owned Joint Development or jointly owned Collaboration Right on its
own abandons the Infringement action, then Section 7.3(c) above shall again
apply with respect to that Infringement.

          7.4 Further Assurances. At any time or from time to time on and after
the date of this Agreement, each party shall at the request of the other party
(i) execute, and deliver or cause to be delivered, all such consents, documents
or further instruments of license, and (ii) take or cause to be taken all such
other actions, in each case as the other party may reasonably deem necessary or
desirable in order for the other party to obtain the full benefits of this
Section 7 and the activities contemplated hereby.

     8. WARRANTY DISCLAIMER.

     NEITHER NANOSYS NOR DUPONT MAKES ANY WARRANTY OF ANY KIND, WHETHER EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. WITHOUT LIMITING THE
FOREGOING, ALL DELIVERABLES AND OTHER ITEMS ARE PROVIDED BY EACH PARTY "AS IS,"
AND ALL LICENSES GRANTED BY EACH PARTY ARE GRANTED "AS IS."

     9. LIMITATION OF LIABILITY.

     NEITHER PARTY SHALL HAVE ANY LIABILITY FOR COSTS OF SUBSTITUTE PRODUCTS OR
SERVICES, OR FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR INDIRECT
DAMAGES OR LIABILITIES, INCLUDING WITHOUT LIMITATION SUCH DAMAGES OR LIABILITIES
FOR LOSS OF REVENUE, LOSS OF BUSINESS, FRUSTRATION OF ECONOMIC OR BUSINESS
EXPECTATIONS, LOSS OF PROFITS, OR COST OF CAPITAL, REGARDLESS OF THE FORM OF THE
ACTION, WHETHER IN CONTRACT OR OTHERWISE, EVEN IF ANY REPRESENTATIVE OF A PARTY
HERETO HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL
EITHER PARTY'S LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNTS PAID OR PAYABLE
BY DUPONT TO NANOSYS UNDER THIS AGREEMENT, provided that, as to DuPont, this
shall be in addition to DuPont's obligation to pay such amounts. These
limitations, however, shall not apply to either party's liability, if any, (i)
for contribution or indemnity with respect to liability to third parties for
personal injury, death, or damage to tangible property, (ii) exceeding the scope
of the licenses in Section 5 (Licenses), (iii) breach of Section 6 (Confidential
Information), or (iv) infringement of the other party's intellectual property
rights.



                                                                            -11-



     10. TERM AND TERMINATION.

          10.1 Term. This Agreement shall commence as of the Effective Date and,
subject to Section 10.2 below, shall continue until January 22, 2005 unless
earlier terminated as set forth herein.

          10.2 Q1 Checkpoint. This Agreement shall terminate three (3) months
after the Collaboration Commencement Date, unless the parties have agreed, in a
writing referencing this Section 10.2, to continue the Collaboration under this
Agreement.

          10.3 Termination Due to Bankruptcy, etc. In the event a party: (i)
becomes insolvent; (ii) voluntarily files or has filed against it a petition
under applicable bankruptcy or insolvency laws which such party fails to have
released within thirty (30) days after filing; (iii) proposes any dissolution,
composition or financial reorganization with creditors or if a receiver,
trustee, custodian or similar agent is appointed or takes possession with
respect to all or substantially all property or business of such party; or (iv)
such party makes a general assignment for the benefit of creditors; then the
other party may terminate this Agreement by notice to the non-terminating party.

          10.4 Termination Due to Breach. Either party shall have the right to
terminate this Agreement if the other party is in material breach of any
material term or condition of this Agreement and fails to remedy such breach
within thirty (30) days after receipt of written notice of such breach given by
the non-breaching party. To terminate this Agreement, the nonbreaching party
must provide further written notice of such termination to the breaching party
prior to a cure of the breach.

          10.5 Survival. Neither the termination nor expiration of this
Agreement shall relieve either party from its obligations to pay the other any
sums accrued hereunder. Upon the termination or expiration of this Agreement,
(i) DuPont shall promptly return, or certify the destruction of, to Nanosys all
Nanosys Confidential Information, except for such Nanosys Confidential
Information as may be reasonable and necessary for DuPont to exercise its
surviving rights and licenses under this Agreement, and (ii) Nanosys shall
promptly return, or certify the destruction of, to DuPont all DuPont
Confidential Information, except for such DuPont Confidential Information as may
be reasonable and necessary for Nanosys to exercise its surviving rights and
licenses under this Agreement. The parties agree that their respective rights,
obligations and duties under Sections 4 (Ownership), 5 (Licenses), 6
(Confidential Information), 7 (Intellectual Property Protection), 8 (Warranty
Disclaimer), 9 (Limitation of Liability), 10.5 (Survival), and 11
(Miscellaneous) shall survive any termination or expiration of this Agreement.

     11. MISCELLANEOUS.

          11.1 Publicity. Any press release or other public announcement with
respect to this Agreement shall be subject to the mutual agreement of the
parties, which agreement shall not be unreasonably withheld.


                                                                            -12-


          11.2 Notices. All notices, requests, demands and other communications
given or made in accordance with the provisions of this Agreement shall be in
writing and shall be deemed to have been given (i) three days after mailing when
mailed (by registered or certified mail, postage paid, only), (ii) on the date
sent when made by facsimile transmission with confirmation of receipt (with hard
copy to follow by registered or certified mail, postage paid, only), and (iii)
on the date received when delivered in person or by courier, provided that
notices and communications with respect to administrative and project matters
(e.g., changes in meeting times and dates, program specifications, and specific
program development activities) (but not legal matters or matters pertaining to
or establishing rights under this Agreement), may be provided by e-mail and will
be deemed given when sent. All notices shall be provided to the address set
forth below or such other place as such party may from time to time designate in
writing. Each party may alter its address set forth below by notice in writing
to the other party, and such notice shall be considered to have been given three
(3) days after the sending thereof

                      If to Nanosys: Nanosys Inc.
                                     2625 Hanover Street
                                     Palo Alto, California 94304
                                     Fax: (650) 331-2101
                                     Attn: Calvin Y.H. Chow
                                     E-mail: cchow@nanosysinc.com

     with a copy, for matters pertaining to intellectual property, to:

                                     Nanosys Inc.
                                     2625 Hanover Street
                                     Palo Alto, California 94304
                                     Fax: (650) 331-2101
                                     Attn: Matt Murphy
                                     E-mail: mmurphy@nanosysinc.com

                       If to DuPont: Planning Manager, DuPont CR&D
                                     Experimental Station, E328/409
                                     Rt. 41 Between Rt. 202 & 52
                                     Wilmington, DE 19880-0356
                                     Phone: 302 695-4571
                                     Fax: 302-695-4571
                                     E-mail:
                                     Krishna.C.Doraiswamy@usa.dupont.com



                                                                            -13-


     with a copy, for matters pertaining to intellectual property, to:

                                   Barbara C. Sugell, Esg.
                                   DuPont Legal
                                   Barley Mill Plaza 25-1218
                                   Wilmington, DE 19880-0025
                                   Fax: 302-992-5374
                                   E-mail: Krishna.C.Doraiswamy@usa.dupont.com

          11.3 Amendment; Waiver. This Agreement may be amended, modified or
supplemented only by a writing that is signed by duly authorized representatives
of both parties and that specifically identifies the provision or provisions of
this Agreement being amended, modified or supplemented. No term or provision
hereof will be considered waived by either party, and no breach excused by
either party, unless such waiver or consent is in writing signed on behalf of
the party against whom the waiver is asserted. Without limiting the foregoing,
no consent by either party to, or waiver of, a breach by either party, whether
express or implied, will constitute a consent to, waiver of, or excuse of any
other, different, or subsequent breach by either party.

          11.4 Severability. If any provision hereof should be held invalid,
illegal or unenforceable in any jurisdiction, the parties shall negotiate in
good faith a valid, legal and enforceable substitute provision that most nearly
reflects the original intent of the parties and all other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible. Such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of such provision in
any other jurisdiction.

          11.5 Governing Law. This Agreement shall be governed by and construed
under the laws of the United States and the State of California, not including
its conflict of law provisions.

          11.6 Force Majeure. Except for the payment of money, neither party
will be liable for any failure or delay in performance under this Agreement due
to fire, explosion, earthquake, storm, flood or other weather, unavailability of
necessary utilities or raw materials, war, insurrection, riot, act of God or the
public enemy, law, act, order, proclamation, decree, regulation, ordinance, or
instructions of government or other public authorities, or any other event
beyond the reasonable control of the party whose performance is to be excused.
If, however, a party's performance is prevented for sixty (60) days, then
the other party shall be entitled to terminate this Agreement on written notice
to the party suffering the force majeure at any time prior to resumption of
performance by the party suffering the force majeure.

          11.7 Assignment. Neither party may transfer or assign this Agreement,
whether by operation of law or otherwise, without the prior written consent of
the other party and any attempt to do so without such consent will be void. This
Agreement will bind and inure to the benefit of the parties and their respective
permitted successors and permitted assigns. Notwithstanding anything in this
Agreement, however, either party may assign this Agreement without the other
party's prior written consent to a successor to all or substantially all of its
assets pertaining to the Collaboration

                                                                            -14-


(e.g., the surviving entity in a merger or consolidation in which it
participates or to a purchaser of all or substantially all of its assets
pertaining to the Collaboration), so long as such surviving entity or purchaser
shall assume (expressly in writing or by operation of law) the performance of
all of the terms of this Agreement.

          11.8 No Third Party Beneficiaries. No person or entity other than
DuPont and Nanosys will have any rights or obligations pursuant to this
Agreement.

          11.9 Relationship of the Parties. The parties to this Agreement are
independent contractors. There is no relationship of agency, partnership, joint
venture, employment, or franchise between the parties and this Agreement is
negotiated at arm's length with both sides represented by counsel of their
choice. Neither party has the authority to bind the other or to incur any
obligation on its behalf. Any such act will create a separate liability in the
party so acting to any and all third parties affected thereby.

          11.10 Counterparts. This Agreement maybe executed in two counterparts,
each of which shall be deemed an original, but both of which together shall
constitute one and the same instrument. If this Agreement is executed in
counterparts, no signatory hereto shall be bound until both the parties named
below have duly executed or caused to be duly executed a counterpart of this
Agreement.

          11.11 Confidentiality of Agreement: Each party agrees that the terms
and conditions, but not the existence or general nature, of this Agreement shall
be treated as confidential, provided, however, that each party may disclose the
terms and conditions of this Agreement: (i) as required by any court or other
governmental body; (ii) as otherwise required by law; (iii) to legal counsel of
the parties; (iv) in connection with the requirements of a public offering or
securities filing; (v) in confidence, to accountants, banks, and financing
sources and their advisors; (vi) in confidence, in connection with the
enforcement of this Agreement or rights under this Agreement; or (vii) in
confidence, in connection with a merger or acquisition or proposed merger or
acquisition, or the like.

          11.12 Authority. Each party represents and warrants to the other party
at the Effective Date (i) that it has the legal right, power, and authority to
enter into this Agreement and to fully perform its obligations under this
Agreement, and (ii) that the performance of such obligations will not conflict
with any agreements, contracts or other arrangements to which it is a party or
by which it is bound.

          11.13 Entire Agreement. This Agreement, including all Exhibits to this
Agreement, constitutes the entire agreement between the parties relating to this
subject matter and supersedes all prior or simultaneous representations,
discussions, negotiations, letters of intent, term sheets, and agreements,
whether written or oral, with respect to the subject matter hereof (including,
without limitation, any prior non-disclosure agreement entered into by Nanosys
and DuPont).

                                                                            -15-


     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
dates set forth below effective as of the Effective Date.

NANOSYS INC.                             E.I. DU PONT DE NEMOURS AND COMPANY

By: /s/ Calvin Chow                      By: James C. Romine

Print Name: Calvin Chow                  Print Name: James C. Romine

Title:  Chief Executive Officer          Title: Science Director

Date: 1-20-04                            Date: Jan. 20, 2004



                                                                            -16-


                                    EXHIBIT A

                      Collaboration Statement of Work (SOW)

FIRST QUARTER ACTIVITIES:

TASK O: PRELIMINARY WORK

Milestone:  Set-up for Tasks 1 and 2.



        SUBTASK                                   DESCRIPTION                                     DELIVERABLES
        -------                                   -----------                                     ------------
                                                                                          

Order [*** Redacted] etc [Nanosys]    -     Order [*** Redacted]                                Materials required for task 2

                                      -     Order required [*** Redacted]
                                            tools to [*** Redacted] in
                                            the [*** Redacted] of [*** Redacted].

[*** Redacted] [Nanosys]              Fabricate [*** Redacted] to                               Capability of [*** Redacted]
                                      [*** Redacted] from                                       samples. [*** Redacted]
                                      [*** Redacted] to [*** Redacted].

Examine [*** Redacted]  [DuPont]      -     Measure [*** Redacted] of [*** Redacted]            [*** Redacted]
                                            conductors.

                                      -     Establish [*** Redacted] for [*** Redacted] of
                                            the [*** Redacted]

Prepare [*** Redacted]  [DuPont]       Prepare [*** Redacted] and [*** Redacted] Nanosys         [*** Redacted] on [*** Redacted] of
                                                                                                 [*** Redacted]


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.


TASK 1: TRANSISTOR PERFORMANCE TARGETS

Milestone: Specify near-term and long-term performance targets for
[*** Redacted].



            SUBTASK                              DESCRIPTION                                             DELIVERABLES
            -------                              -----------                                             ------------
                                                                                     
Define [*** Redacted] performance   Near-term and long-term specifications,                DuPont provides written requirements for
targets [DuPont]                    including:                                             near-term ([*** Redacted]) and long-term
                                                                                           ([*** Redacted]) performance
                                    -    [*** Redacted]

                                    -    [*** Redacted]

                                    -    [*** Redacted]

                                    -    [*** Redacted]

                                    -    [*** Redacted]

                                    -    [*** Redacted]


TASK 2: ASSESS [*** Redacted] for [*** Redacted] for [*** Redacted] to the
[*** Redacted]

Milestone: Determine appropriate [*** Redacted] for [*** Redacted] to the
[*** Redacted], or determine that [*** Redacted] is not a suitable for use with
[*** Redacted].



         SUBTASK                                              DESCRIPTION                                  DELIVERABLES
         -------                                              -----------                                  ------------
                                                                                                     
Prepare [*** Redacted]              -     Use [*** Redacted]                                                   None
[Nanosys]
                                    -     Use [*** Redacted] to [*** Redacted] in
                                          the [*** Redacted] of [*** Redacted]


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                      -2-



           SUBTASK                              DESCRIPTION                           DELIVERABLES
           -------                              -----------                           ------------
                                                                    
Determine [*** Redacted]            -    Allow for [*** Redacted]         Evaluation of [*** Redacted]
[Nanosys]                                on the [*** Redacted]            and [*** Redacted]
                                                                          and [*** Redacted].

                                    -    [*** Redacted]

                                    -    Measure [*** Redacted]
                                         the [*** Redacted]


                                    -    [*** Redacted] in [*** Redacted]


TASK 3: [*** Redacted] SYNTHESIS, [*** Redacted] AND SUPPLY

Milestone: Supply [*** Redacted] for [*** Redacted] testing in Task 4, and
electrical testing in Tasks 5 and 6.



           SUBTASK                              DESCRIPTION                             DELIVERABLES
           -------                              -----------                             ------------
                                                                    
Fabricate [*** Redacted] for        -    Standard [*** Redacted]          [*** Redacted] for use in Task 4
[*** Redacted] testing (no                                                Task 4
[*** Redacted] specification)
[Nanosys]
                                    -   [*** Redacted] and [*** Redacted]
                                        [*** Redacted] evaluated to
                                        [*** Redacted] onto [*** Redacted]

Fabricate [*** Redacted] with       -  [*** Redacted]                     -    [*** Redacted] for Task 5
[*** Redacted] selected based on
results of Task 2 [Nanosys]         -    [*** Redacted] selected based    -    [*** Redacted] for Task 6
                                         on Task 2

                                    -    [*** Redacted] optimization
                                         based on results of Task 5


                                                                             -3-

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



TASK 4: DETERMINE WHETHER [*** Redacted] and [*** Redacted] are compatible

Milestone: Determine whether [*** Redacted] can be [*** Redacted] by one or more
     [*** Redacted] methods.

Remarks: We have identified [*** Redacted] potential routes for incorporating
     the [*** Redacted] into the [*** Redacted]: [*** Redacted], [*** Redacted],
     and [*** Redacted]. All [*** Redacted] routes will be explored in parallel.
     In order to expedite testing, the [*** Redacted] used in these experiments
     will be whatever is on hand in sufficient quantity, since no [*** Redacted]
     tests are envisioned.



           SUBTASK                                DESCRIPTION                    DELIVERABLES
           -------                                -----------                    ------------
                                                                    
Prepare [*** Redacted] [DuPont]     -    [*** Redacted] will be prepared:         [*** Redacted] for [*** Redacted]
                                         [*** Redacted], [*** Redacted],
                                         and [*** Redacted].

                                    -    There will be at least [*** Redacted]
                                         [*** Redacted] of each type, and
                                         at least [*** Redacted], so the total
                                         number of [*** Redacted] will be
                                         in the [*** Redacted] range.

                                    -    The [*** Redacted] will be
                                         [*** Redacted] wide and approximately
                                         [*** Redacted].

[*** Redacted]                      -    To effectively assess                      None.
[Nanosys]                                [*** Redacted], they should have
                                         [*** Redacted] commensurate with
                                         [*** Redacted]

[*** Redacted]                      -    For the maximum of information
[*** Redacted] [Nanosys]                                with the minimum of
effort, each [*** Redacted] should have [*** Redacted].


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.



                                                                             -4-







           SUBTASK                                DESCRIPTION                    DELIVERABLES
           -------                                -----------                    ------------
                                                                    
                                    -    Selecting the [*** Redacted]
                                         will require a judgment call.
                                         It should be at least
                                         [*** Redacted], but probably not
                                         [*** Redacted]

[*** Redacted] [DuPont]             -    [*** Redacted]                      None
                                         will be [*** Redacted] to
                                         look for [*** Redacted]

                                    -    [*** Redacted]
                                         will be [*** Redacted]

                                    -    [*** Redacted]
                                         will be [*** Redacted]

Analysis of [*** Redacted]          -    A combination of [*** Redacted]     [*** Redacted] and a detailed
[DuPont]                                 and [*** Redacted] will be          report on what worked, what
                                         used to assess the results of       failed, and how it failed.
                                         these [*** Redacted].

Determine whether we have           -    Joint assessment of results.        Go/no go decision on [*** Redacted]
a viable path for [*** Redacted]
                                    -    Joint determination of
                                         possible paths forward


*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             -5-


TASK 5: BUILD [*** Redacted]

Milestone: Verify that chosen [*** Redacted] in simple test structures made
from [*** Redacted] materials.



           SUBTASK                              DESCRIPTION                            DELIVERABLES
           -------                              -----------                            ------------
                                                                    
Build [*** Redacted] structures     Build up [*** Redacted]               [*** Redacted] test
[DuPont]                            test structures.                      structures

[*** Redacted]                      Depending on the outcome of our       [*** Redacted] test structures
test structures or [*** Redacted]   our [*** Redacted], either:           or
[Nanosys]

                                    -    [*** Redacted] will be           [*** Redacted]
                                         [*** Redacted] or:

                                    -    [*** Redacted] will be
                                         [*** Redacted] and
                                         [*** Redacted] the test structures.

Finish [*** Redacted] test          Depending on the outcome of our       [*** Redacted]
structures [DuPont]                 [*** Redacted], either:

                                    -    [*** Redacted] are
                                         [*** Redacted] test
                                         structure, or:

                                    -    [*** Redacted] and
                                         [*** Redacted] will be
                                         [*** Redacted] the test structures.

Verify [*** Redacted]               [*** Redacted]                        [*** Redacted]
[DuPont and Nanoys]


TASK 6: [*** Redacted]

Milestone: Functioning [*** Redacted] that meet the [*** Redacted]
performance targets.

[*** Redacted]

At the end of this task, [*** Redacted]

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             -6-



TASK 7: DEVELOP A PLAN FOR ACHIEVING THE [*** Redacted] PERFORMANCE TARGETS
WITHIN THE [*** Redacted]

                             Figure 1. Gantt chart.



                              
[*** Redacted]



*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             -7-



NANOSYS PROJECT TEAM MAKEUP:

     -    [*** Redacted] Engineer (95% effort)

     -    [*** Redacted] Engineer (95% effort)

     -    [*** Redacted] Engineer (95% effort)

     -    [*** Redacted] ([*** Redacted] for 25%)
          ([*** Redacted] effort)

          Total effort during first quarter: 3.10 FTEs

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                                                             -8-

EX-10.15.1

                                                                 EXHIBIT 10.15.1


[NANOSYS LOGO]                2625 Hanover Street, Palo Alto, CA 84204
                              850 331 2100, 850 331 2101 fax. www.nanosysinc.com


                AMENDMENT A TO COOPERATIVE DEVELOPMENT AGREEMENT

     This Amendment ("Amendment A") to the Cooperative Development Agreement
dated January 22, 2004 (the "Agreement"), is entered into this 21st Day of
April, 2004, (the "Amendment A Date") by and between Nanosys, Inc. ("Nanosys"),
a Delaware Corporation with a place of business at 2625 Hanover Street, Palo
Alto, California 94304 and E.I. duPont de Nemours and Company ("DuPont"), a
Delaware Corporation with a place of business at 1007 Market Street,
Wilmington, Delaware, the parties to the Agreement.

                                    RECITALS

Whereas:


     A.  Nanosys and DuPont entered into the Agreement on the Effective Date to
cooperate to investigate the commercial feasibility of combining Nanosys'
[*** Redacted] nanomaterials technology with DuPont's [*** Redacted].

     B.  Nanosys and DuPont acknowledge that actual cooperative work began under
the Agreement on February 17th, 2004.

     C.  Nanosys and DuPont wish to amend the Agreement so that the
Collaboration Commencement Date is reflective of the date that actual
collaborative work began.

                                   AGREEMENT

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

A.  In Section 2.1 of the Agreement, the last sentence stating in its entirety:

           "The parties shall commence the Collaboration January 22, 2004"

    is hereby deleted in its entirety and replaced with the following sentence:

           "The Parties shall commence the Collaboration on February 17th, 2004"

B.  Unless expressly amended herein or by subsequent amendments agreed to by the
parties in a signed written amendment, all other terms of the Agreement,
including but not limited to terms related to definition, interpretation and
enforcement of the Agreement, shall remain in full force and effect as
originally agreed to in the Agreement, and shall apply equally to the terms of
this Amendment A.

IN WITNESS WHEREOF, the parties through their duly authorized representatives
have executed this First Amendment as of the date last set forth below.

NANOSYS, INC.                       E.I. DU PONT DE NEMOURS and
                                    COMPANY.

By: /s/  Calvin Chow                By:  /s/ James C. Romine
  ---------------------------           ---------------------------

Name: Calvin Chow                   Name: James C. Romine
  ---------------------------             -------------------------

Title: Chief Executive Officer      Title: Science Director
  ----------------------------            -------------------------

Date: 4/20/04                       Date:  4/20/04
  ----------------------------           --------------------------

*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.