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
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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.
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("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.
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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").
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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
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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
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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 Xxxx
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
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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]
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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/ Xxxxxxxx X. Xxxx
Name: [*** Redacted] Name: Xxxxxxxx X. Xxxx
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.
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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.
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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.
0000 Xxxxxx Xxxx.
Xxxxx 0000-0000
Xxxxxxxxx, XX 00000
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:
Xx. X. Xxxxxxx Parce
Chief Technical Officer
Nanosys, Inc.
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Phone: 650) 000-0000
Email: xxxxxx@xxxxxxxxxx.xxx
With a copy to:
Xx. Xxxxx Xxxxxxx
Vice President, Finance
Nanosys, Inc.
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Email: xxxxxxxx@xxxxxxxxxx.xxx
Mr. Xxxxxxx Xxxxxx, Esq.
Vice President, Intellectual Property
Nanosys, Inc.
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Phone: (000) 000-0000
Email: xxxxxxx@xxxxxxxxxx.xxx
*** Confidential treatment 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
xxxx 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 0000 Xxxxxx Xxxx., Xxxxx 0000, Xxxxxxxxx, XX 00000, 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/ Xxxxxxxx X. Xxxx
--------------------
By: Xxxxxxxx X. Xxxx
--------------------
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 xxxx 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 0000 Xxxxxx Xxxx., Xxxxx 0000, Xxxxxxxxx,
-00-
XX 00000, 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/ Xxxxxxxx X. Xxxx
--------------------
By: Xxxxxxxx X. Xxxx
--------------------
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: ______________________
______________________
