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                                                                 EXHIBIT 10.12.1
                              SUBCONTRACT AGREEMENT
                           FIXED PRICE LEVEL OF EFFORT

SUBCONTRACTOR:                  SUBCONTRACT #: 4400093943
NANOSYS INC.                    MODIFICATION #: BASIC
ADDRESS:                        SUBPROJECT #: 01-1339-34-5717-901
2625 HANOVER STREET             DPAS RATING:N/A
PALO ALTO, CA 94304             TYPE: FIXED PRICE, LEVEL OF EFFORT
                                VALUE: $8,216,827

                                  INTRODUCTION

This Subcontract Agreement, effective JULY 9, 2004 is made between SCIENCE
APPLICATIONS INTERNATIONAL CORPORATION (hereinafter known as "Buyer"), a
Delaware corporation with principal offices in San Diego, California, and
NANOSYS INC. (hereinafter known as "Seller"), a Delaware CORPORATION, with
principal offices in Palo Alto, CA. The effort to be performed by Seller under
this Subcontract will be part of Buyer's Prime Contract # [*** Redacted] that
has been issued by [*** Redacted]. The work, defined in Attachment I (Statement
of Work and Schedule) will be performed on a Fixed-Price/Level - of-Effort
(FP/LOE) basis, in accordance with Schedule A (Specific Terms and Conditions),
and any referenced documents listed in 17.0 ORDER OF PRECEDENCE section of this
agreement.

                                   SCHEDULE A
                          SPECIFIC TERMS AND CONDITIONS

1.0 PRICE

The total firm fixed price for the work to be performed under this Subcontract
is as follows:

<TABLE>
<CAPTION>
   CLIN            PERIOD        PROPOSED AMOUNT   PERIOD OF PERFORMANCE
----------   -----------------   ---------------   ---------------------
<S>          <C>                 <C>               <C>
1            BASE-YEAR 1            $1,493,215        7/9/04-6/24/05
2            OPTION 1 - YEAR 2      $1,567,474        6/25/05-6/24/06
3            OPTION 2-YEAR 3        $1,642,610        6/25/06-6/24/07
4            OPTION 3- YEAR 4       $1,721,508        6/25/07-6/24/08
5            OPTION 4-YEAR 5        $1,791,480        6/25/08-6/24/09
             TOTAL                  $8,216,287
</TABLE>

This Subcontract is INCREMENTALLY funded in the amount of $746,600.00 including
profit, through 12/24/04. This Subcontract shall be fully funded for the
remaining amount of CLIN 1, and any option years set forth in CLIN 2 through
CLIN 5, as set forth above, upon funding of such amounts by the Customer under
Buyer's Prime Contract.

1.1 [*** Redacted].216-01 LEVEL OF EFFORT

      (a)   The subcontractor shall apply best efforts toward accomplishing the
            contract work effort. The level-of-effort required under this
            subcontract shall consist of a labor expenditure not less than 96
            percent and not more than 104 percent of the total labor hours
            specified for each LOE CLIN of this subcontract.

      (b)   The subcontractor shall promptly notify the buyer in writing when
            there is an indication that premature exhaustion of the total labor
            hours will occur.

      (c)   It is understood and agreed that the monthly labor hour expenditure
            rate may fluctuate in pursuit of the technical objective. However,
            such fluctuations will be controlled to avoid exhaustion of total
            labor hours before the expiration of the term of the subcontract.

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

                                                                    Page 1 of 10

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      (d)   It is further agreed that the subcontractor may submit written
            requests to accelerate the labor hour expenditure rate to exhaust
            the total authorized labor hours prior to the expiration date of
            this subcontract. If approved by the Buyer, the accelerated
            performance shall be without increase in fee or profit, as
            applicable, and the transaction shall be formalized by a
            modification to this subcontract.

      (e)   Upon subcontract completion, the seller shall submit to the Buyer a
            certified statement of the labor hours actually expended in the
            performance of this subcontract. If task orders or delivery orders
            are issued under this subcontract, the subcontractor must submit a
            separate certification of utilization of hours to the final payment
            voucher indicating the total number of hours expended.

      (f)   For fixed-price subcontracts, the fixed price for performance is
            predicated upon the seller furnishing at least the minimum and not
            more than the maximum effort specified. In the event the minimum
            effort is not provided as specified, the seller may either require
            the contractor to continue to perform work under the contract until
            the minimum level of effort has been provided or negotiated an
            equitable downward adjustment in contract price.

Breakdown of the level of effort are as follows:

<TABLE>
<CAPTION>
CLIN        PERIOD       TOTAL LOE  MINIMUM (96%)  MAXIMUM (104%)
----  -----------------  ---------  -------------  --------------
<S>   <C>                <C>        <C>            <C>
  1   BASE-YEAR 1           4792         4600           4984
  2   OPTION 1 - YEAR 2     4906         4710           5102
  3   OPTION 2-YEAR 3       4742         4552           4932
  4   OPTION 3- YEAR 4      5206         4998           5414
  5   OPTION 4-YEAR 5       5076         4873           5279
      TOTAL                24722        23733          25711
</TABLE>

1.2 PERFORMANCE

The effort required by this subcontract shall be delivered in accordance with
the Statement of Work contained in this agreement. The dates specified for
performance is of the essence of this contract. The date specified for
performance is the required start date at Buyer's plant, unless otherwise
specifically noted herein. All items furnished under this subcontract shall be
delivered FOB Destination, unless specified otherwise in writing by the Buyer's
contractual representative. Delivery shall not be deemed complete until the
goods have been actually received and accepted by Buyer, notwithstanding
delivery to any carrier, or until orders for services have been performed,
received, and accepted by Buyer.

1.3 INSPECTION

All goods supplied and services performed pursuant hereto shall be subject to
inspection and test by buyer and its agents and by its customers at all times
and places, during the period of performance, and in any event before
acceptance. In the event that goods supplied are not performed in accordance
with the specifications and instructions of Buyer, Buyer may require prompt
correction thereof, or as to services, require that the services be rendered
again at Seller's expense. If such defects exist and if Seller is unable or
refuses to replace the goods or render the services again promptly, Buyer is
entitled to repayment of such portion of the contract price as is equitable
under the circumstances.

1.4 INVOICES

Invoices shall be prepared in duplicate and contain the following information;
subcontract number, subproject number, item number, description of articles,
sizes, quantities, unit prices and extended totals. Invoices shall clearly
reference a unique invoice number on each invoice, and the date of the invoice.
Invoices shall include the" the "Amount/Hours of this Invoice," and the "Total
Amount/Hours Billed to Date". Invoices shall be submitted to:

      Science Applications International Corporation
      Attention: [*** Redacted]
      1710 SAIC Drive, [*** Redacted] McLean, VA 2210

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

                                                                    Page 2 of 10

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The Seller may request payment twice per month for all labor hours expended by
the Seller to accomplish the work specified in this subcontract. In no instance
shall the total number of labor hours for which payment has been requested for a
particular CLIN exceed the total amount set forth in the subcontract for that
CLIN. The Seller shall advise the Buyer in writing ninety days in advance of
reaching the 85% of the hours specified in any CLIN has been expended.

To support final payment for work performed, the Seller shall attach a
certification to the final payment indicating the total number of labor hours
expended for each CLIN during the period of contract performance.

If the Seller provides fewer than the number of hours set forth in Article 1.1
in performance of the work called for therein, the total subcontract price shall
be equitably decreased prior to payment. Failure of the parties to agree upon
the amount of decrease shall be resolved under the Disputes clause.

1.5 PAYMENT

      (a)   Payment terms will be NET 30 Days and paid within Thirty 30 Days
            after receipt of a proper invoice or acceptance of work delivered or
            services rendered by the Buyer, which ever occurs later, unless
            otherwise specified in this subcontract. Payment shall be made upon
            acceptance of any portion of the work delivered or rendered for
            which a price is separately stated in the contract. Payment shall
            not constitute final acceptance. Buyer may offset against any
            payment hereunder any amount owed to Buyer by Seller.

1.6 WARRANTY

Seller represents and warrants (1) that the price charged for the goods and/or
services purchased pursuant hereto shall be no higher than Seller's current
price to any other customer for the same quality and quantity of such goods or
services; (2) that all goods and services delivered pursuant hereto will be new,
unless otherwise specified, and free from defects in material and workmanship;
(3) that all goods and services will conform to applicable specifications,
drawings, and standards of quality and performance, and that all items will be
free from defects in design and suitable for their intended purpose; (4) that
the goods covered by this order are fit and safe for consumer use, if so
intended. All representations and warranties of Seller together with its service
warranties and guarantees, if any, shall run to Buyer and Buyer's customers. The
foregoing warranties shall survive any delivery, inspection, acceptance, or
payment by Buyer. Not withstanding any of the foregoing, nothing in this
agreement obligates either party to provide any goods or services that exceed
the specifications set forth in the statement of work and the applicable terms
and conditions.

2.0 TECHNICAL AND CONTRACTUAL REPRESENTATIVES

The following authorized representatives are hereby designated for this
Subcontract:

SELLER:                               BUYER:
         TECHNICAL: Wally Parce               TECHNICAL: [*** Redacted]
       CONTRACTUAL: Karen Vergura           CONTRACTUAL: [*** Redacted]

2.1 CONTACTS

Contacts with Buyer that affect the subcontract prices, schedule, statement of
work, and subcontract terms and conditions shall be made with the authorized
contractual representative. Except as expressly provided elsewhere herein, no
changes to this Subcontract shall be binding upon either party unless
incorporated in a written modification to the Subcontract and signed by both
parties contractual representative.

2.2 CHANGES

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***Confidential treatment 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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Buyer may, by written notice to Seller at any time before complete delivery is
made under this subcontract, make changes within the general scope of this
subcontract in any one of the following: (a) drawings, designs, or
specifications; (b) quantity; (c) delivery; (d) method of shipment or routing;
and (e) make changes in the amount of Buyer furnished property. If any such
change causes a material increase or decrease in the cost of, or the time
required for the performance of any part of the work under this subcontract, the
Buyer shall make an equitable adjustment in the subcontract price or delivery
schedule, or both, and shall modify the subcontract. As a condition precedent to
any equitable adjustment, the Seller must notify Buyer in writing of any request
for adjustment within twenty (20) days from the date Seller receives notice from
Buyer of a change, or from the date of any act of Buyer that Seller considers to
constitute a change. Failure to agree to any adjustment shall be a dispute under
the Disputes clause of this subcontract. However, Seller shall proceed with the
work as changed without interruption and without awaiting settlement of any such
claim.

3.0 DISCLOSURE

Neither party shall disclose information concerning work under this Subcontract
to any third party, unless such disclosure is necessary for the performance of
that which is supported by this subcontract effort. No news releases, public
announcement, denial or confirmation of any part of the subject matter of this
Subcontract or any phase of any program hereunder shall be made by one party
without prior written consent of the other party, which consent shall not be
unreasonably withheld. The restrictions of this paragraph shall continue in
effect upon completion or termination of this Subcontract for such period of
time as may be mutually agreed upon in writing by the parties. In the absence of
a written established period, no disclosure is authorized. Failure to comply
with the provisions of this Clause may be cause for termination of this
subcontract.

4.0 KEY PERSONNEL

(a)   For purposes of this clause, Buyer and Seller define "Key Personnel" as
      those individuals who are mutually recognized as essential to the
      successful completion and execution of this Subcontract.

(b)   Personnel designated as "Key Personnel" shall be assigned to the extent
      necessary for the timely completion of the task to which assigned. Any
      substitution or reassignment involving Seller's "Key Personnel" assigned
      to this work shall be made only with persons of equal abilities and
      qualifications and is subject to prior approval of Buyer, in writing.

(c)   Buyer reserves the right to direct the removal of any individual assigned
      to this Subcontract. Such request shall not be unreasonably denied.

(d)   Seller's Key Personnel are: WALLY PARCE, [*** Redacted], [*** Redacted]

5.0 ASSIGNMENTS AND SUBCONTRACTS

This Subcontract is not assignable and shall not be assigned by Seller without
the prior written consent of Buyer. Further, Seller agrees to obtain Buyer's
approval before subcontracting this order or any substantial portion thereof;
provided, however, that this limitation shall not apply to the purchase of
standard commercial supplies or raw materials.

6.0 INSURANCE

Without prejudice to Seller's liability to indemnify Buyer as stated in the
INDEMNIFICATION provision of this Agreement, Seller shall procure, at its
expense, and maintain for the duration of the Agreement, the insurance policies
described below with financially responsible insurance companies, reasonably
acceptable to Buyer, with policy limits not less than those indicated below.
Notwithstanding any provision contained herein, the Seller, and its employees,
agents, representatives, consultants and lower-tier subcontractors and
suppliers, are not insured by Buyer, and are not covered under any policy of
insurance that Buyer has obtained or has in place.

SPECIAL PROVISIONS APPLICABLE TO SELLER'S INSURANCE COVERAGE:

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

                                                                    Page 4 of 10

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1.    Additional Insured - Seller shall have all policies, except Workers'
      Compensation and Employer's Liability, endorsed to name Buyer as an
      Additional Insured with respect to the work to be performed by the Seller.

2.    Waiver of Subrogation - Seller shall have all policies endorsed to waive
      the insurer's rights of subrogation in favor of Buyer.

3.    Deductibles - Subject to the reasonable review and approval of Buyer, the
      Seller may arrange deductibles or self-insured retention's as part of the
      required insurance coverage's. However, it is expressly agreed that all
      deductibles or self-insured retention's are the sole responsibility of the
      Seller.

4.    Adequacy of Insurance Limits - The insurance coverage limits stated below
      are minimum coverage requirements, not limits of liability, and shall not
      be construed in any way as Buyer's acceptance of responsibility of the
      Seller.

5.    Certificates of Insurance - Prior to commencement of any work under this
      Agreement, the Seller shall furnish Buyer with Certificates of Insurance,
      in a format acceptable to Buyer, evidencing the insurance coverage
      required in this Agreement and containing the following information:

      a.    Identify Buyer as an "Additional Insured" with respect to all
            policies except Workers' Compensation and employers' liability.

      b.    State that all policies have been endorsed to waive subrogation in
            favor of Buyer.

      c.    State that the underwriters agree to provide Buyer with at least 30
            days prior written notice of any cancellation or material change in
            the coverage.

6.    Work Within 50' of a Railroad - Exclusion deleted. (If applicable due to
      performance of work within 50 feet of a railway)

6.1 COVERAGE

A.    Workers' Compensation - Insurance for statutory obligations imposed by law
      including, where applicable, coverage under United States Longshoremen's
      and Harbor Workers' Act and Jones Act. (if applicable, Defense Base Act
      for those employees working on a U.S. Military installation outside of the
      United States).

B.    Employers Liability - Insurance with limits of $[*** Redacted] for bodily
      injury by accident and $[*** Redacted] for bodily injury by disease,
      including, if applicable, maritime coverage endorsement.

C.   Commercial General Liability - (Standard ISO occurrence form) - including
     products and completed operations coverage, full fire legal liability and
     contractual liability, with a per occurrence limit of $[*** Redacted].

D.   Business Auto Liability - Coverage for bodily injury and property damage
     liability for all owned, hired or non-owned vehicles, with an each accident
     limit of $[*** Redacted].

7.0    INDEMNIFICATION

(a)   Each party (the Indemnifying Party) agrees to indemnify, defend and save
      harmless the other party (the Indemnified Party) from and against any and
      all liability for injury to persons or damage to or loss of property to
      the extent caused by the negligent act or omission of the Indemnifying
      Party, its lower-tier subcontractors, agents or employees, including any
      and all expense and cost, legal or otherwise, incurred by the Indemnified
      party in the defense of any claim, demand or action arising out of the
      work performed under this Agreement; provided, however, that the
      Indemnifying Party shall not be liable for injury to persons or damage to
      or less of property caused by the sole negligence of the Indemnified
      Party, its subcontractors, agents or employees.

(b)   The Indemnified Party shall promptly notify the Indemnifying Party of any
      claim, demand or action which is covered by this indemnification provision
      and shall authorize representatives of the Indemnifying Party, at its sole
      cost and expense, to settle or defend any such claim, demand or action and
      to represent the Indemnified Party in, or to take charge of, any
      litigation in connection therewith.

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

                                                                    Page 5 of 10

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8.0 INFRINGEMENT INDEMNITY

In lieu of any warranty by or Seller against infringement, statutory or
otherwise, it is agreed that Seller shall defend, at its expense, any suit
against Buyer or its customers to the extent it is based on a claim that
possession and use of a deliverable, or use of a service, is a direct
infringement of a copyright, trademark, or, a United States patent, and will pay
all damages awarded by a court of competent jurisdiction attributable to such
claim, provided that Buyer (i) provides prompt notice of the claim to Seller;
(ii) gives Seller sole control of the defense and settlement of the claim; (iii)
provides to Seller all reasonably available information, assistance, and
authority to defend; and (iv) has not compromised or settled such proceeding
without Seller's prior written consent. Seller's indemnity obligation under this
paragraph shall not extend to any claims arising out of (i) services which are
performed in accordance with specifications designated by Buyer; (ii) any
modification of a deliverable by Buyer without Seller's prior written approval;
(iii) use of a deliverable in a manner for which it was not designed; or (iv)
combination of a deliverable with hardware or software not provided by Seller in
a manner not intended for its use. In the event of any such claim, or if Seller
has a reasonable basis for believing that such a claim may be alleged, Seller
may, at its option, (i) modify the deliverable so that it is no longer
infringing but functionally equivalent; (ii) replace the deliverable with a
non-infringing but functionally equivalent replacement; (iii) obtain for Buyer
the rights necessary to use such deliverable at Seller's expense; or (iv) if
none of the foregoing is commercially practicable, terminate this Agreement and
refund the fees paid by Buyer for such infringing deliverable. Such termination
shall not affect Seller's other indemnity obligations under this Agreement.

B. Notwithstanding the foregoing paragraph, when this order is performed under
the Authorization and Consent of the U.S. Government to infringe U.S. Patents,
Seller's liability for infringement of such Patents in such performance shall be
limited to the extent of the obligation of Buyer to indemnify the U.S.
Government.

C. Buyer will defend, at its expense, any legal proceeding brought against
Seller to the extent it is based on a claim that possession and use of any
Buyer-provided information, as provided by Buyer and used by Seller as intended
by Buyer, is a direct infringement of a copyright, trademark, or, to Buyer's
knowledge, a United States patent, and will pay all damages awarded by a court
of competent jurisdiction attributable to such claim, provided that Seller (i)
provides prompt notice of the claim to Buyer; (ii) gives Buyer sole control of
the defense and settlement of the claim; (iii) provides to Buyer all available
information, assistance, and authority to defend; and (iv) has not compromised
or settled such proceeding without Buyer's prior written consent.

9.0 PROPRIETARY INFORMATION, TOOLS, MATERIALS, ETC.

(a)   Either party agrees it will keep confidential and not use any material,
      jigs, dies, fixtures, molds, patterns, taps, gauges, other equipment,
      designs, sketches, specifications, drawings, computer programs and
      software, financial data, employee lists and rates or other information
      furnished by other party for any purpose whatsoever other than as herein
      specified. All materials, jigs, dies, fixtures, molds, patterns, taps,
      gauges, other equipment, designs, sketches, specifications, drawings,
      computer programs and software, financial data, employee lists and rates
      or other data or information furnished by a party, whether loaned to the
      other party or fabricated, manufactured, purchased, or otherwise acquired
      by a party for the performance of this Subcontract and specifically
      charged to a party are the property of that party. They are to be marked
      for identification as each party may designate, and upon completion or
      termination of this Subcontract shall be returned to the owner in good
      condition, reasonable wear only excepted, together with all spoiled and
      surplus material, unless otherwise directed in writing by the owner. Each
      party agrees to replace, at its expense, all such items not so returned.
      Each party shall make no charge for any storage, maintenance or retention
      of such property of other party. Each party shall bear all risk of loss
      for all the other party's property in its possession.

      Rights and obligations as amended under this clause is subject to the data
      rights of the prime contract as a flow down provision.

(b)   If Buyer furnishes any material for fabrication hereunder, Seller agrees:
      (i) not to substitute any other material in such fabrication without
      Buyer's prior written consent, (ii) that title to such material shall not
      be affected by incorporation in or attachment to any other property; and
      (iii) to state and warrant on its packing sheet and invoice for final
      parts: "All materials furnished by Buyer on this order (except that which
      becomes normal industrial waste or was replaced at Seller's expense) has
      been returned in the form of parts or held as unused material for Buyer's
      disposition."

                                                                    Page 6 of 10

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10.0 DISPUTES

Any dispute not disposed of in accordance with the "Disputes Clause" of Schedule
B, if any, shall be determined in the following manner.

(a)   Buyer and Seller agree to enter into Negotiation to resolve any dispute.
      Both parties agree to negotiate in good faith to reach a mutually
      agreeable settlement within a reasonable amount of time.

(b)   If negotiations are unsuccessful, Buyer and Seller agree to enter into
      binding Arbitration. The American Arbitration Association (AAA) Commercial
      Arbitration Rules ( most recent edition ) are to govern this Arbitration.
      The Arbitration shall take place in the County of San Diego, State of
      California. The Arbitrator shall be bound to follow the applicable
      subcontract provisions and California law in adjudicating the dispute. It
      is agreed by both parties that the Arbitrator's decision is final, and
      that no party may take any action, judicial or administrative, to overturn
      this decision. The judgment rendered by the Arbitrator may be entered in
      any court having jurisdiction thereof.

      Pending any decision, appeal or judgment referred to in this provision or
      the settlement of any dispute arising under this Subcontract, each party
      shall proceed diligently with the performance of this Subcontract.

11.0 DEFAULT

(a)   The Buyer may, by written notice of default to the Seller, terminate the
      whole or any part of this Subcontract in any one of the following
      circumstances: (i) if Seller fails to perform the work under the contract
      within the time specified in this contract or any extension; or (ii) if
      Seller fails to Prosecute the work so as to endanger performance of this
      contract; or (iii) perform any of the other provisions of this Subcontract
      in accordance with its terms, and in either of these two circumstances
      does not cure such failure within a period of 10 days (or such longer
      period as Buyer may authorize in writing) after receipt of notice from the
      Buyer specifying such failure; or (iv) Seller becomes insolvent or the
      subject of proceedings under any law relating to bankruptcy or the relief
      of debtors or admits in writing its inability to pay its debts as they
      become due.

(b)   If this Subcontract is so terminated, Buyer may procure or otherwise
      obtain, upon such terms and in such manner as Buyer may deem appropriate,
      supplies or services similar to those terminated, Seller, subject to the
      exceptions set forth below, shall be liable to Buyer for any excess costs
      of such similar supplies or services.

(c)   Seller shall transfer title and deliver to Buyer, in the manner and to the
      extent requested in writing by Buyer at or after termination such complete
      articles, partially completed articles and materials, parts, tools, dies,
      patterns, jigs, fixtures, plans, drawings, information and contract rights
      as Seller has produced or acquired for the performance of the terminated
      part of this Subcontract, and Buyer will pay Seller the contract price for
      complete articles delivered to and accepted by Buyer and the fair value of
      the other property of Seller so requested and delivered.

(d)   Seller shall continue performance of this Subcontract to the extent not
      terminated. Buyer shall have no obligations to Seller with respect to the
      terminated part of this Subcontract except as herein provided. In case of
      Seller's default, Buyer's rights as set forth herein shall be in addition
      to Buyer's other rights although not set forth in this Subcontract.

(e)   Seller shall not be liable for damages resulting from default due to
      causes beyond the Seller's control and without Seller's fault or
      negligence, provided, however, that if Seller's default is caused by the
      default of a subcontractor or supplier, such default must arise out of
      causes beyond the control of both Seller and subcontractor or supplier,
      and without the fault or negligence of either of them and, provided
      further, the supplies or services to be furnished by the subcontractor or
      supplier were not obtainable from other sources.

12.0 INTELLECTUAL PROPERTY

      (a)   The Parties shall each retain ownership of and all right, title and
            interest in and to their respective pre-existing Intellectual
            Property (as that term is defined in Article 4(c) below), and no
            license or right to use therein, whether express or implied, is
            granted by this Subcontract or as a result of the work performed by
            either Party

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<PAGE>

            hereunder or in pursuit hereof. To the extent the Parties wish to
            grant to the other rights or interests in pre-existing Intellectual
            Property, separate license agreements on mutually acceptable terms
            will be executed.

      (b)   For all Intellectual Property developed under this Subcontract by
            the Parties (hereinafter referred to as "Collaboration Intellectual
            Property"), all Nanotechnology Related Collaboration Intellectual
            Property shall be solely owned by Seller, regardless of
            inventorship. For purposes of this Subcontract, "Nanotechnology
            Related Collaboration Intellectual Property" is Intellectual
            Property in [*** Redacted] nanomaterials having at least
            [*** Redacted] of [*** Redacted], including [*** Redacted] of such
            materials, composites including such materials, nano to macro world
            interface technology for such materials, and the fabrication and
            processing of such materials. All non-Nanotechnology Related
            Collaboration Intellectual Property such as systems, use, and
            applications shall be owned according to U.S. laws of intellectual
            property inventorship and ownership with Collaboration Intellectual
            Property that is solely conceived by the employees, agents or
            contractors of one Party being solely owned by that Party with all
            rights appurtenant thereto, and with non-Nanotechnology related
            Collaboration Intellectual Property that is jointly conceived by the
            employees, agents or contractors of both Parties being jointly
            owned, with all joint rights appurtenant thereto and without
            obligation to obtain consent or account to the other Party to
            exploit, license or transfer jointly owned Intellectual Property.

      (c)   As used herein the term "Intellectual Property" shall mean patents,
            copyrights, trade marks, trade names, inventions (whether or not
            patentable), works of authorship, trade secrets, techniques,
            know-how, ideas, concepts, algorithms and all other forms of
            intellectual property rights. As used herein the term "pre-existing
            Intellectual Property" means any Intellectual Property previously
            conceived, developed or reduced to tangible medium as demonstrated
            by written documentation.

      (d)   Notwithstanding anything contained above in sub-paragraphs (a), (b)
            or (c), Seller hereby grants to Buyer only such license rights
            necessary in any and all Intellectual Property created by or
            developed under this Subcontract solely in order to allow Buyer to
            provide to its customer, the [*** Redacted], all Intellectual
            Property rights required by such customer under all relevant FAR
            clauses incorporated in the Prime Contract identified at the
            beginning of this Subcontract.

13.0 GENERAL RELATIONSHIP

The Subcontractor is not an employee of SAIC for any purpose whatsoever. Seller
agrees that in all matters relating to this Subcontract it shall be acting as an
independent contractor and shall assume and pay all liabilities and perform all
obligations imposed with respect to the performance of this Subcontract. Seller
shall have no right, power or authority to create any obligation, expressed or
implied, on behalf of Buyer and/or the Government and shall have no authority to
represent Buyer as an agent.

14.0 NON-WAIVER OF RIGHTS

The failure of either party to insist upon strict performance of any of the
terms and conditions in the Subcontract, or to exercise any rights or remedies,
shall not be construed as a waiver of its rights to assert any of the same or to
rely on any such terms or conditions at any time thereafter. The invalidity in
whole or in part of any term or condition of this subcontract shall not affect
the validity of other parts hereof.

15.0 APPLICABLE STATE LAW AND COMPLIANCE

This Subcontract shall be governed by and construed in accordance with the laws
of the State of California. Seller agrees to comply with the applicable
provisions of any federal, state or local law or ordinance and all orders, rules
and regulations issued there under.

15.0 REPRESENTATIONS OF REQUIRED FLOW DOWNS

Buyer hereby represents and warrants that all Government acquisition regulations
(FARs, DFARs, NFARs, or acquisition regulations of a specific agency) referenced
herein as being applicable to this Subcontract to the best of our knowledge are
those acquisition regulations that are required to be applied to subcontracts
under Buyer's Prime Contract, and that no

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

                                                                    Page 8 of 10

<PAGE>

acquisition regulations that are required by Buyers' prime contract to be
applied to this Subcontract are omitted herefrom. Buyer and Seller further agree
that to the extent an acquisition regulation is referenced herein, but is not
required to be applied to this Subcontract under Buyer's Prime Contract, that
Seller is under not obligation with respect to such acquisition regulation
merely by virtue of its inclusion or reference herein.

16.0 EXPORT CONTROL COMPLIANCE FOR FOREIGN PERSONS

The subject technology of this Subcontract (together including data, services,
and hardware provided hereunder) may or may not be controlled for export
purposes under the International Traffic in Arms Regulations (ITAR) controlled
by the U.S. Department of State or the Export Administration Regulations ("EAR")
controlled by the U.S. Department of Commerce. ITAR controlled technology may
not be exported without prior written authorization and certain EAR technology
requires a prior license depending upon its categorization, destination,
end-user and end-use. Exports or re-exports of any U.S. technology to [any
destination under U.S. sanction or embargo are forbidden.

Access to certain technology ("Controlled Technology") by Foreign Persons
(working legally in the U.S.), as defined below, may require an export license
if the Controlled Technology would require a license prior to delivery to the
Foreign Person's country of origin. SELLER is bound by U.S. export statutes and
regulations and shall comply with all U.S. export laws. SELLER shall have full
responsibility for obtaining any export licenses or authorization required to
fulfill its obligations under this Subcontract.

SELLER hereby certifies that all SELLER employees who have access to the
Controlled Technology are U.S. citizens, have permanent U.S. residency or have
been granted political asylum or refugee status in accordance with 8 U.S.C.
1324b(a)(3). Any non-citizens who do not meet one of these criteria are "Foreign
Persons" within the meaning of this clause but have been authorized under export
licenses to perform their work hereunder.

17.0 ORDER OF PRECEDENCE

The documents listed below are hereby incorporated by reference. In the event of
an inconsistency or conflict between or among the provisions of this
Subcontract, the inconsistency shall be resolved by giving precedence in the
following order:

1. Attachment I: Statement of Work and Schedule dated 1/18/04.

2. Schedule A: Specific Terms and Conditions Form 9-932-027 (Rev. 9/19/03).

3. Schedule B: Part I U.S. Government Terms and Conditions Form 9-932-031 (Rev.
7/1/02). And [*** Redacted] clauses

4. IP Rights Form dated 7/1/04.

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

                                                                    Page 9 of 10

<PAGE>

18.0 ENTIRE AGREEMENT

The parties hereby agree that this Subcontract, including all documents
incorporated herein by reference, shall constitute the entire agreement and
understanding between the parties hereto and shall supersede and replace any and
all prior or contemporaneous representations, agreements or understandings of
any kind, whether written or oral, relating to the subject matter hereof.

In witness whereof, the duly authorized representatives of Buyer and the Seller
have executed this Subcontract on the Dates shown.

SELLER:                                       BUYER:

NANOSYS, INC.                                 SCIENCE APPLICATIONS INTERNATIONAL
                                                        CORPORATION

/s/ Matthew Murphy                            /s/ [*** Redacted]
-------------------------------------------   ----------------------------------
(Signature)                                   (Signature)

NAME:  MATTHEW MURPHY                         NAME:  [*** Redacted]
-------------------------------------------   ----------------------------------
              (Type or Print)                           (Type or Print)

TITLE: VICE PRESIDENT, INTELLECTUAL PROPERTY  TITLE:  SENIOR SUBCONTRACT
                                               ADMINISTRATOR

DATE: JULY 9, 2004                            DATE: JULY 9, 2004

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

                                                                   Page 10 of 10

<PAGE>

   [*** REDACTED] NANO-COMPOSITE SOLAR CELL UNIT PROTOTYPE DEVELOPMENT PROGRAM
                      SUBCONTRACTOR STATEMENT OF WORK (SOW)

A. SCOPE

The proposed effort's scope covers the development and testing of prototype
nano-composite solar cells over a five-year period. The base phase provides for
the first year. Pending satisfactory incremental technical success (improving
solar cell efficiencies), contractor programmatic performance and government
availability of funds, additional years (options 1-4) will be activated.
Significant increases in laboratory efficiencies of nano-composite solar cells
will be achieved, and independent laboratory testing will be conducted to
demonstrate these major milestones:

1.    A [*** Redacted]% efficient demonstration cell by the end of the first
      year.

2.    A [*** Redacted]% efficient demonstration cell by the end of the second
      year.

3.    A [*** Redacted]% efficient demonstration cell by the middle of the fourth
      year.

4.    A [*** Redacted]% efficient demonstration cell by the end of the fifth
      year.

The year 2009 goal is [*** Redacted]% efficiency ([*** Redacted] state of the
art).

In addition, independent laboratory testing is required to document radiation
and thermal effects of representative space environments. Given the proprietary
nature of the nano-composite cell, members of Nanosys may accompany the cells to
the independent test facility and be present for these power conversion
efficiency and radiation and thermal effects tests.

A four-part approach to technical development is proposed to achieve these
milestones:

1.    Continuation of strategies initiated in the proof-of-concept effort
      supported by [*** Redacted] ([*** Redacted]) Director's Innovation
      Initiative (DII) program to optimize the power conversion efficiencies in
      a [*** Redacted];

2.    Addressing all issues associated with incorporating [*** Redacted] into a
      solar cell;

3.    Assessment of engineering parameters required to ensure long-term
      operation of nano-composite solar cell devices, and development of
      strategies for [*** Redacted] the devices;

4.    Establishment of final nano-composite solar cell requirements for their
      integration into [*** Redacted] systems.

The proposed Work Breakdown Structure (WBS) in Figure 1 is built on this
approach to technical development of the nano-composite solar cells. In addition
to development, the WBS contains tasks for integration, testing and
demonstration, and management, which is necessary to ensure proper allocation of
resources, management of risk, and reporting visibility.

                   FIGURE 1. PROPOSED WORK BREAKDOWN STRUCTURE

      1.0 Development
            1.1 [*** Redacted] Cell Optimization
                  1.1.1 Polymer optimization
                  1.1.2 Nanocrystal shape, size, material
                  1.1.3 Nanocrystal [*** Redacted]
                  1.1.4 Charge transfer
                        1.1.4.1 [*** Redacted] levels
                        1.1.4.2 [*** Redacted]

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treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                   Page 1 of 6

<PAGE>

                        1.1.4.3 Electrodes
                        1.1.4.4 [*** Redacted]
            1.2 [*** Redacted] Cell Optimization
                  1.2.1 Cell absorption profile optimization
                  1.2.2 Charge transfer optimization
                        1.2.2.1 [*** Redacted]
                        1.2.2.2 Electrode pinouts
            1.3 Device [*** Redacted]
                  1.3.1 [*** Redacted]
                  1.3.2 [*** Redacted]
                  1.3.3 [*** Redacted]
                  1.3.4 [*** Redacted]
      2.0 Integration
            2.1 Requirements
            2.2 Modeling and Simulation
            2.3 System Design
            2.4 Cost Estimation
      3.0 (A) Test and Demonstration - Power Conversion Efficiency
            3.1 Nanosys Testing
            3.2 Independent Testing/Milestone Demonstrations
            3.0 (B) Test and Demonstration - [*** Redacted] Effects
            3.3 Independent Testing/Milestone Demonstrations
      4.0 Management
            4.1 Program Oversight
            4.2 Schedule
            4.3 Technical/Cost Risk Management
            4.4 Reviews
            4.5 Documentation and Reporting

Deliverables for the project are shown in Table 1 and discussed in further
detail in the task descriptions below.

               TABLE 1. PROJECT DELIVERABLES AND DELIVERY SCHEDULE

<TABLE>
<S>                    <C>                                                    <C>
1.  Monthly Status     Bulleted lists of activities and corresponding         15 days following  reporting period
    Reports            photographs and figures should be provided in
                       electronic form (MS Word or Powerpoint).

2.  Demonstration      Prototype cell will be delivered to independent lab    end of first contract year
    ([*** Redacted]%   for efficiency testing.  Prototype cell will be
    Efficient Cell)    delivered to independent lab for [*** Redacted]
                       testing.  Pre-test results, including data,
                       photographs, and figures should be provided in
                       electronic form (MS Word or Powerpoint).

3.  Demonstration      Prototype cell will be delivered to independent lab    end of second contract year
    ([*** Redacted]%   for efficiency testing.  Prototype cell will be
    Efficient Cell)    delivered to independent lab for [*** Redacted]
                       testing.  Pre-test results, including data,
                       photographs, and figures should be provided in
                       electronic form (MS Word or Powerpoint).

4.  Demonstration      Prototype cell will be delivered to independent lab    middle of fourth contract year
    ([*** Redacted]%   for efficiency testing.  Prototype cell will be
    Efficient Cell)    delivered to independent lab for [*** Redacted]
                       testing.  Pre-test results, including data,
                       photographs, and figures should be provided in
                       electronic form (MS Word or Powerpoint).

5.  Demonstration      Prototype cell will be delivered to independent lab    end of fifth contract year
    ([*** Redacted]%   for efficiency testing.  Prototype cell will be
    Efficient Cell)    delivered to independent lab for [*** Redacted]
                       testing.  Pre-test results, including data,
                       photographs, and figures should be provided in
                       electronic form (MS Word or Powerpoint).
</TABLE>
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***Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.

                                   Page 2 of 6
<PAGE>

In addition to the above deliverables, the subcontractor will be requested to
provide review of major task deliverables to [*** Redacted], including Annual
Reports, Demonstration Reports, Draft Final Project Report, and Final Project
Report.

B. TASK/TECHNICAL REQUIREMENTS

Major tasks (first and second level WBS) that will be performed to successfully
accomplish the proposed objectives are described below.

TASK 1.0 - DEVELOPMENT

      1.1   [*** Redacted] Cell Optimization
      Optimization of the [*** Redacted] efficiency will be accomplished by
      addressing the various loss mechanisms affecting cell performance through
      development of the nano-composite layer and the device architecture. In
      this task, we will address the [*** Redacted], [*** Redacted], [***
      Redacted], and [*** Redacted] and [*** Redacted] efficiency through
      improvements in the nanocrystal design (material type, size, and shape),
      composite formation, [*** Redacted], [*** Redacted] control and [***
      Redacted].

      1.2   [*** Redacted] Cell Optimization
      [*** Redacted] devices will be extended into a [*** Redacted] design to
      harness gains in cell efficiencies. The optimal device architecture and
      nanomaterial components of the various [*** Redacted] will be determined
      through modeling and simulations of the light absorption and current
      matching. In fabricating [*** Redacted] devices, methods for [***
      Redacted] of the device [*** Redacted] will be developed, such that the
      functionality of the [*** Redacted] is unaffected by the [*** Redacted] of
      the [*** Redacted].

      1.3   Device Packaging
      Packaging of a nano-composite solar cell device is critical for ensuring
      its long-term stability and lifetime in the [*** Redacted]. This task will
      encompass modeling of the [*** Redacted] environments that such a device
      would experience in a [*** Redacted]. Strategies based on [*** Redacted],
      and careful [*** Redacted] properties, for example, will be developed and
      tested based on the modeling results. The final packaging approach will
      also be evaluated to ensure that the other advantageous properties of [***
      Redacted] low cost, etc. of the cells are maintained.

TASK 2.0 - INTEGRATION
Support system integration to ensure that the overall power source developed
will meet the requirements of [*** Redacted]. The feedback generated by
monitoring performance in a complete system will permit design of a strategy for
full production of maximum efficiency solar cells for [*** Redacted]. The
feedback generated by monitoring the performance of a complete system will
provide the tools necessary for later development of a design strategy for
future production of maximum efficiency solar cells for [*** Redacted].

      2.1   Requirements
      Support functional analysis to define system requirements for supporting
      mission goals and to allocate requirements to hardware elements. Support a
      system level tradeoff analyses to optimize performance with respect to
      cost.

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

                                  Page 3 of 6

<PAGE>

      2.2   Modeling and Simulation

      Support extension of the existing device model to include experimental
      performance data and theoretical computational results arising from the
      technical development tasks performed in the course of the work outlined
      in this proposal. In particular, the resultant cell model will incorporate
      improved submodels resulting from the [*** Redacted] and [*** Redacted]
      cell optimization tasks (Tasks 1.1 and 1.2) through quantum mechanical
      calculations of [*** Redacted] and [*** Redacted] and properties, [***
      Redacted] and performance estimates of engineering methods for [***
      Redacted], [*** Redacted], electrical interfaces, and scale dependencies.
      An associated device model will also incorporate work performed under the
      device packaging subtask (Task 1.3) involving device performance
      parameters including: [*** Redacted]; application and performance of [***
      Redacted]; and device properties such as [*** Redacted] and cost. This
      model will permit evaluation, optimization, and system trade-offs of new
      devices, the comparison of new devices to baseline devices, as well as to
      fielded and developing devices based on other technologies. Finally, the
      models will incorporate the results of all tests and demonstrations
      performed under Task 3 in the proposed SOW.

      2.3   Device Design

      Support a system analyses to incorporate the models developed under Task
      2.2 and the system requirements elucidated under Task 2.1. Results of
      these analyses and actual device performance assessment will result in the
      development and analysis of functional interfaces between device elements
      to support technical integration and to ensure compatibility as newer
      versions of the device are developed. Support analysis of functional
      interfaces between system elements and support technical integration to
      ensure compatibility. A configuration control process for for
      nano-composite solar cell Program will be established and must be
      followed.

      2.4   Feasibility and Follow-On

      Support documentation of lessons learned for the prototype device
      development undertaken in the proposed program will be incorporated with
      the device performance evaluations, optimizations, and system trade-offs,
      so that a consistent picture of design dependence on development process
      and device scale will be available.

TASK 3.0 (A) - TEST AND DEMONSTRATION - POWER CONVERSION EFFICIENCY

      3.1   Nanosys Testing

      Conduct testing at Nanosys facility during development to document
      progress and ensure cell readiness for independent lab testing and
      milestone efficiency demonstrations.

      3.2   Independent Testing/Milestone Demonstrations

      Demonstration of conversion efficiencies in a laboratory environment per
      the milestones and schedule outlined above is required. The subcontractor
      shall make the nano-composite cells available for independent testing and
      confirmation of conversion efficiencies. Given the proprietary nature of
      the nano-composite cell, members of Nanosys may accompany the cells to the
      independent test facility and be present for such testing.

      In addition, the subcontractor shall support the preparation of a Detailed
      Test Plan for each phase, selected electronic systems and components to be
      designed, demonstrated

--------
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treatment filed with the Securities and Exchange Commision. Omitted portions
have been filed separately with the Commission.

                                  Page 4 of 6

<PAGE>

      and tested. For each phase, the Detailed Test Plans will clearly specify
      the test objectives, requirements, and entrance and exit criteria for each
      system to be tested. Based on these criteria, specific critical
      operational issues (COIs), measures of effectiveness (MOEs), and measures
      of performance (MOPs) will be developed which, in turn, will determine
      specific data collection requirements.

TASK 3.0 (B) - TEST AND DEMONSTRATION - [*** Redacted]

      3.3   Independent Testing/Milestone Demonstrations

      Demonstration of [*** Redacted] and [*** Redacted] in a laboratory
      environment per the milestones and schedule outlined above is required.
      The subcontractor shall make the nano-composite cells available for
      independent testing to gather data on [*** Redacted] and [*** Redacted].
      Given the proprietary nature of the nano-composite cell, members of
      Nanosys may accompany the cells to the independent test facility and be
      present for such testing.

      In addition, the subcontractor shall support the preparation of a Detailed
      Test Plan for each phase, selected electronic systems and components to be
      designed, demonstrated and tested. For each phase, the Detailed Test Plans
      will clearly specify the test objectives, requirements, and entrance and
      exit criteria for each system to be tested. Based on these criteria,
      specific critical operational issues (COIs), measures of effectiveness
      (MOEs), and measures of performance (MOPs) will be developed which, in
      turn, will determine specific data collection requirements.

TASK 4.0 - MANAGEMENT

The activities outlined in this proposal will be coordinated through an
effective overall management effort that will ensure that all the individual
tasks are coordinated and are completed on schedule and within budget. The
project will also leverage the knowledge and experience of [*** Redacted] and
its contractors, as well as other external laboratories and agencies, such as
AFRL. This interface will be accomplished through the establishment of and
participation in information exchange forums such as working groups, and annual
and topical workshops for the classified and unclassified communities.

      4.1   Program Oversight

      Support functions necessary for the efficient management of all
      administrative aspects of this contract and shall perform all necessary
      tasks for researching, developing, and demonstrating a prototype
      nano-composite solar cell. This may include development of a Program
      Management Plan which will serve as a road map for accomplishing a
      balanced development program. The plan shall contain a management section
      that will describe the management approach and organization; identify the
      principal investigator for each phase and key supporting personnel
      contributing to the program; summarize the individual tasks to be
      accomplished and estimate the resources required for each task.

      4.2   Schedule

      Support all tasks necessary for contract administration, technical, and
      cost control reporting requirements.

      4.3   Technical/Cost Risk Management

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treatment filed with the Securities and Exchange Commision. Omitted portions
have been filed separately with the Commission.

                                  Page 5 of 6

<PAGE>

      Support preparation of a Risk Management Plan, which will identify and
      track risk drivers, establish risk abatement plans, and provide for
      continuous risk assessment throughout the program.

      4.4   Reviews

      The subcontractor shall support and participate in program review meetings
      to be held annually and at project completion, at a minimum. At customer
      direction, there may be up to two additional status reviews and one
      additional program review meeting per year. The subcontract shall also
      participate in up to two design review meetings per year.

      4.5   Documentation and Reporting

      Support the technical documentation of the detailed specifications,
      requirements and design criteria for the Nano-composite solar cell
      Program. Support preparation of briefings and materials to support
      Nano-composite solar cell Program presentations to senior officials in DOD
      and other government agencies on subjects pertaining to Nano-composite
      solar cell systems engineering and integration activities, demonstrations,
      and system designs. Support preparation and review of reports, white
      papers, talking points, and other materials.

                                  Page 6 of 6

<PAGE>

                                  [SAIC LOGO]

                SCHEDULE B - U.S. GOVERNMENT TERMS AND CONDITIONS
                 Applicable to all U.S. Government subcontracts
                              PART I - FAR CLAUSES

1.    DEFINITIONS

In all such clauses, unless the context of the clause requires otherwise, the
term "Contractor" shall mean Seller, the term "Contract" shall mean this Order,
and the terms "Government," "Contracting Officer" and equivalent phrases shall
mean Buyer and Buyer's Purchasing Representative, respectively. It is intended
that the referenced clauses shall apply to Seller in such manner as is necessary
to reflect the position of Seller as a subcontractor to Buyer, to insure
Seller's obligations to Buyer and to the United States Government, and to enable
Buyer to meet its obligations under its Prime Contract or Subcontract.

The following definitions apply unless otherwise specifically stated:

"Buyer" - the legal entity issuing this Order.
"Purchasing Representative" - Buyer's authorized representative.
"Seller" - the legal entity which contracts with the Buyer.
"This Order" - this contractual instrument, including changes.
"Prime Contract" - the Government contract under which this Order is issued.
"FAR" - the Federal Acquisition Regulation.

2.    IDENTIFICATION OF CONTRACT NUMBERS

Government contract numbers shown on this Order shall be included in
subcontracts and purchase orders issued by Seller hereunder.

3.    DISPUTES

(a) Notwithstanding any provisions herein to the contrary:

      (1)   If a decision relating to the Prime Contract is made by the
            Contracting Officer and such decision is also related to this Order,
            said decision, if binding upon Buyer under the Prime Contract shall
            in turn be binding upon Buyer and Seller with respect to such
            matter; provided, however, that if Seller disagrees with any such
            decision made by the Contracting Officer and Buyer elects not to
            appeal such decision, Seller shall have the right reserved to Buyer
            under the Prime Contract with the Government to prosecute a timely
            appeal in the name of Buyer, as permitted by the contract or by law,
            Seller to bear its own legal and other costs. If Buyer elects not to
            appeal any such decision, Buyer agrees to notify Seller in a timely
            fashion after receipt of such decision and to assist Seller in its
            prosecution of any such appeal in every reasonable manner. If Buyer
            elects to appeal any such decision of the Contracting Officer, Buyer
            agrees to furnish Seller promptly with a copy of such appeal. Any
            decision upon appeal, if binding upon Buyer, shall in turn be
            binding upon Seller. Pending the making of any decision, either by
            the Contracting Officer or on appeal, Seller shall proceed
            diligently with performance of this Order.

      (2)   If, as a result of any decision or judgment which is binding upon
            Seller and Buyer, as provided above, Buyer is unable to obtain
            payment or reimbursement from the Government under the Prime
            Contract for, or is required to refund or credit to the Government,
            any amount with respect to any item or matter for which Buyer has
            reimbursed or paid Seller, Seller shall, on demand, promptly repay
            such amount to Buyer. Additionally, pending the final conclusion of
            any appeal hereunder, Seller shall, on demand, promptly repay any
            such amount to Buyer. Buyer's maximum liability for any matter
            connected with or related to this Order which was properly the
            subject of a claim against the Government under the Prime Contract
            shall not exceed the amount of Buyer's recovery from the Government.

      (3)   If this Order is issued by Buyer under a Government Subcontract
            rather than a Prime Contract, and if Buyer has the right under such
            Subcontract to appeal a decision made by the Contracting Officer
            under the Prime Contract in the name of the Prime Contractor (or if
            Buyer is subject to any arbitrator's decision under the terms of its
            subcontract), and said decision is also related to this Order, this
            Disputes Clause shall also apply to Seller in a manner consistent
            with its intent and similar to its application had this Order been
            issued by Buyer under a Prime Contract with the Government.

                                                                     Page 1 of 5

<PAGE>

                                  [SAIC LOGO]

      (4)   Seller agrees to provide certification that data supporting any
            claim made by Seller hereunder is made in good faith and that the
            supporting data is accurate and complete to the best of Seller's
            knowledge or belief, all in accordance with the requirements of the
            Contract Disputes Act of 1978 (41USC601-613) and implementing
            regulations. If any claim of Seller is determined to be based upon
            fraud or misrepresentation, Seller agrees to defend, indemnify and
            hold Buyer harmless for any and all liability, loss, cost or expense
            resulting therefrom.

(b) Any dispute not addressed in paragraph (a) above, will be subject to the
disputes clause of Schedule A of this subcontract agreement.

4.    OTHER GOVERNMENT PROCUREMENT

Nothing contained herein shall be construed as precluding the Seller from
producing items for direct sale to the Government, utilizing therefore all
hardware and/or software, including designs, drawings, engineering data or other
technical or proprietary information furnished Seller by Buyer, provided the
Government has the unrestricted right to permit the use thereof for such
purpose.

5.    INDEMNIFICATION - COST OR PRICING DATA - COST ACCOUNTING STANDARDS

Seller agrees to indemnify and hold Buyer harmless to the full extent of any
cost or price reduction effected by Buyer's customer, which may result from (i)
certified cost or pricing data submitted by Seller or its lower-tier
subcontractors which is not accurate, current or complete as certified by
Seller; (ii) the failure by Seller or its lower-tier subcontractors to disclose
and consistently follow applicable cost accounting practices and standards or
otherwise comply with pertinent parts of the FAR, applicable agency supplements
thereto, and regulations promulgated by the Cost Accounting Standards Board.

6.    TERMINATION FOR CONVENIENCE

The Buyer may terminate performance of work under this subcontract in whole, or
in part if the Purchasing Representative determines that a termination is in the
Buyer's interest. The Buyer shall terminate by delivering to the Seller a Notice
of Termination specifying the extent of termination and the effective date. If
this is a Fixed Price subcontract, the termination will be in accordance with
FAR 52.249-2 and FAR 52.249-4. If this is a Cost Reimbursable subcontract, the
termination will be in accordance with FAR 52.249-6. If this is a Cost
Reimbursement subcontract for Educational or Other Nonprofit Institutions, then
termination will be in accordance with FAR 52.249-5.

7.    GOVERNMENT PROPERTY

Seller shall comply with the Government Property requirements contained in FAR
clause 52.245-2 if this is a fixed priced contract and FAR clause 52.245-5
(substituting 52.245-2 subparagraph (g) for 52.245-5 subparagraphs (g) (1), (2),
and (3) if this is a cost reimbursement contract.

8.    CONTRACT COST PRINCIPLES AND PROCEDURES

Seller agrees that to the extent applicable, costs allocated to this contract
shall be in full compliance with Subpart 31.2 of FAR (Subpart 31.3 for
Educational Institutions) and the applicable agency supplements thereto, if any,
set forth in Part II hereof. In the event such compliance is not maintained,
Seller agrees to compensate Buyer to the full extent of any prices or costs,
including any penalties or interest, which are determined by Buyer's customer to
be unallowable or unreasonable or not allocable, under Buyer's contract with its
customer.

9.    FAR CLAUSES APPLICABLE TO THIS ORDER

The clauses in FAR Subpart 52.2 referenced in subparagraph (a), the clauses
applicable at the dollar thresholds in subparagraph (b), and those clauses
referenced and checked in subparagraph (c) below, in effect on the date of this
Order, are incorporated herein and made a part of this Order. To the extent that
an earlier version of any such clause is included in the Prime Contract or
Subcontract under which this Order is issued, the date of the clause as it
appears in such Prime Contract or Subcontract shall be controlling and said
version shall be incorporated herein.

                                                                     Page 2 of 5

<PAGE>

                                  [SAIC LOGO]

(a) The following clauses are applicable to this Order:

<TABLE>
<CAPTION>
Clause # & FAR Ref.    Title of Clause
---------------        ---------------
<S>                    <C>
52.203-3               Gratuities
52.211-5               Material Requirements
52.211-15              Defense Priority and Allocation Requirements
52.222-1               Notice to the Government of Labor Disputes
52.222-26              Equal Opportunity (Only Paragraphs (b)(1) through (b)(11)
52.223-3               Hazardous Material Identification and Material Safety Data
52.225-13              Restrictions on Certain Foreign Purchases
52.229-3               Federal, State, and Local Taxes
</TABLE>

(b) The following clauses are applicable to this Order at the indicated dollar
values:

<TABLE>
<CAPTION>
Clause # & FAR Ref.  Title of Clause
------------------   -----------------
<S>                  <C>
52.203-5             Covenant Against Contingent Fees* (*if order exceeds $50,000)
52.203-6             Restrictions on Subcontractor Sales to the Government*
                     (*if order exceeds $100,000)
52.203-7             Anti-Kickback Procedures* (*if order exceeds $100,000)
52.203-8             Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity
52.203-10            Price or Fee Adjustment for Illegal or Improper Activity * (*If order exceeds
                     $50,000)
52.203-11            Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions*
                     (*if order exceeds or is expected to exceed $100,000)
52.203-12            Limitation on Payments to Influence Certain Federal Transactions*
                     (*if order exceeds or is expected to exceed $100,000)
52.209-6             Protecting the Governments Interest when Subcontracting with Contractors Debarred,
                     Suspended, or Proposed for Debarment*
                     (*if Order exceeds $25,000)
52.215-2             Audit and Records-Negotiation* (*if Order exceeds $50,000)
52.219-8             Utilization of Small Business Concerns* (*if Order exceeds $100,000)
52.219-9             Small Business Subcontracting Plan*
                     (*if Subcontract exceeds or is expected to exceed $500,000)
52.222-4             Contract Work Hours & Safety Standards Act - Overtime Compensation*
                     (*if Order exceeds $100,000)
52.222-35            Affirmative Action for Disabled Veterans & Veterans of the Vietnam Era*
                     (*if Order exceeds $10,000)
52.222-36            Affirmative Action for Workers with Disabilities*
                     (*if Order exceeds $2,500)
52.222-37            Employment Reports on Special Disabled Veterans and Veterans of the Vietnam Era*
                     (*if Order exceeds $10,000)
52.227-2             Notice and Assistance Regarding Patent and Copyright Infringement*
                     (*if Order exceeds $50,000)
52.246-16            Responsibility for Supplies* (*if order exceeds $50,000)
52.247-63            Preference for U.S. Flag Air Carriers* (*if order exceeds $50,000)
</TABLE>

                                                                     Page 3 of 5

<PAGE>

                                  [SAIC LOGO]

(c) The following clauses are applicable to this Order if checked:

<TABLE>
<CAPTION>
Clause # & FAR Ref.        Title of Clause
------------------         ----------------
<S>                        <C>
X 52.204-4                 Printing/Copying Double Sided on Recycled Paper
X 52.215-10                Price Reduction for Defective Cost or Pricing Data
X 52.215-12                Subcontractor Cost or Pricing Data
X 52.215-15                Pension Adjustments and Asset Reversions
X 52.215-18                Reversion or Adjustment of Plans for Post-Retirement Benefits Other Than Pensions
X 52.215-19                Notification of Ownership Changes
X 52.215-21                Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data -
                                    Modifications
X 52.219-22                Small Disadvantaged Business Status
X 52.222-3                 Convict Labor
X 52.222-18                Certification Regarding Knowledge of Child Labor for Listed End Products
X 52.222-20                Walsh-Healy Public Contracts Act (if Order exceeds $10,000)
X 52.222-21                Prohibition of Segregated Facilities
X 52.223-5                 Pollution Prevention and Right-to-Know Information
X 52.223-6                 Drug-Free Workplace
X 52.223-13                Certification of Toxic Chemical Release Reporting
X 52.223-14                Toxic Chemical Release Reporting
X 52.225-16                Sanctioned European Union Country Services
X 52.227-1                 Authorization and Consent -Alternate I
X 52.227-6                 Royalty Information
X 52.227-7                 Patents - Notice of Government Licensee
X 52.227-11                Patent Rights - Retention by the Contractor (Short Form)
X 52.227-14                Rights in Data - General (Alternate I, II, III, IV, or V)
X 52.227-15                Representation of Limited Rights Data and Restricted Computer Software
X 52.230-2                 Cost Accounting Standards
X 52.232-17                Interest
X 52.232-23                Assignment of Claims
X 52.242-1                 Notice of Intent to Disallow Costs
X 52.242-15                Stop-Work Order
X 52.242-13                Bankruptcy
X 52.243-2                 Changes - Cost-Reimbursement - Alternate V
X 52.244-2                 Subcontracts (August 1998)
X 52.244-5                 Competition in Subcontracting
X 52.244-6                 Subcontracts for Commercial Items and Commercial Components
X 52.246-7                 Inspection of Research and Development - Fixed Price
X 52.247-34                F.O.B. Destination
X 52.253-1                 Computer Generated Forms
</TABLE>

(d)The following [*** Redacted] clauses are applicable to this Order:

<TABLE>
<S>                        <C>
[*** Redacted].246-001     Inspection and acceptance at destination (Mar 1996)
[*** Redacted].246-006     Requirement for data acceptance (Mar 1996)
[*** Redacted].203-002     Prohibition on persons convicted of fraud or other defense-contract-related
                           felonies (May 2003)
[*** Redacted]-204-002     Oral Attestation of security responsibilities (Jun 2003)
[*** Redacted].204-004     Telecommunications Security Equipment, Devices, Techniques, and Services (Jun 2003)
[*** Redacted].204-005     Protection Against Compromising Emanations (Jun 2003)
</TABLE>

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

                                                                     Page 4 of 5

<PAGE>

                                  [SAIC LOGO]

<TABLE>
<S>                        <C>
[*** Redacted].209-002     Disclosure of Foreign Ownership, Control, or Influence
[*** Redacted].209-003     Organizational Conflict of Interest Certification
[*** Redacted]-209-004     Organizational Conflict of Interest
[*** Redacted].209-005     Protection of Information
[*** Redacted].215-002     Intention to Use Consultants
[*** Redacted].219-001     Utilization of Small Business Concerns
[*** Redacted].222-001     Equal Employment Opportunity
[*** Redacted].223-006     Contractor Compliance with Environmental, Occupational Safety and Health, and
                           System Safety Requirements
[*** Redacted].227-001     Technical Data an Computer Software:  Commercial Items
[*** Redacted].227-015     Data Requirements
[*** Redacted].242-002     Contractor Performance Assessment Review
[*** Redacted].245-005     Prohibition on Contractor Acquisition of Personal Property for Use by Government
                           Employees
[*** Redacted].245-006     Identification of Promotional Items
[*** Redacted].204-003     Special Notification and Approval Requirements
[*** Redacted].209-006     Enabling Clause for Prime and Support Contractor Relationships
[*** Redacted].211-001     Use of the Metric System of Measurement
[*** Redacted].211-003     [*** Redacted] Standards Document Compliance
[*** Redacted].216-001     Level of Effort
[*** Redacted].223-005     Prohibition on Storage and Disposal of Toxic And Hazardous Materials
</TABLE>

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

                                                                     Page 5 of 5

<PAGE>

                                  ATTACHMENT 2
                           IP RIGHTS FORM DATED 7/1/04

<TABLE>
<CAPTION>
    Technical Data or Computer Software to be                                           Assorted Rights    Name of Person Asserting
           Delivered with Restrictions                       Basis for Assertion           Category              Restrictions
                   (List)                                          (List)                   (List)                  (List)
                   ------                                          ------                   ------                  ------
<S>                                                       <C>                         <C>                  <C>
Methods for synthesizing and processing nanocrystals      Pre-existing intellectual   Limited Rights Data       Matthew Murphy
to yield compositions of [*** Redacted]                   property developed with
                                                          private funds
[*** Redacted] semiconductor nanocrystal compositions     Pre-existing intellectual   Limited Rights Data       Matthew Murphy
and methods of making/processing them                     property developed with
                                                          private funds
[*** Redacted] for integrating nanocrystals into          Pre-existing intellectual   Limited Rights Data       Matthew Murphy
[*** Redacted]                                            property developed with
                                                          private funds
[*** Redacted] composition of [*** Redacted]              Pre-existing intellectual   Limited Rights Data       Matthew Murphy
                                                          property developed with
                                                          private funds
[*** Redacted] and device architecture                    Pre-existing intellectual   Limited Rights Data       Matthew Murphy
                                                          property developed with
                                                          private funds
</TABLE>

---------
*** Confidential treatment requested pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission. Omitted portions
have been filed separately with the Commission.<PAGE>
                                                                   EXHIBIT 10.14

                        COOPERATIVE DEVELOPMENT AGREEMENT

         This Cooperative Development Agreement (the "Agreement") is entered
into as of December 15, 2003 (the "Effective Date") by and between Nanosys Inc.
("Nanosys"), a Delaware corporation with a place of business at 2625 Hanover
Street, Palo Alto, California 94304 and Intel Corporation ("Intel"), a Delaware
corporation with a place of business at 2200 Mission College Boulevard, Santa
Clara, California 95052.

                                    RECITALS

Whereas:

         A.       Intel has expertise with respect to memory devices and the
development, design, and manufacture thereof, and Nanosys has expertise with
respect to the design and synthesis of nanomaterials and the development of
nanotechnology-enabled systems.

         B.       Intel and Nanosys desire to enter into an agreement to
cooperate to investigate the feasibility of using [*** Redacted] in memory
devices.

                                    AGREEMENT

NOW, THEREFORE, the parties agree as follows:

         1.       DEFINITIONS. In this Agreement, the following words and
expressions shall have the following meanings:

                  1.1 "Background IP" of a party means any and all intellectual
property rights that such party either (i) owned, controlled, or had rights with
respect to prior to the Effective Date; or (ii) develops, or acquires ownership,
control, or rights with respect to, during the term of this Agreement but which
is not Collaboration IP.

                  1.2 "CNDA" means the parties' October 11, 2002 Corporate
Non-Disclosure Agreement #5085138.

                  1.3 "Collaboration" means the research and development work
set forth in Exhibit A hereto.

                  1.4 "Collaboration Commencement Date" means the date of
commencement of the Collaboration under Section 2.1 below.

                  1.5 "Collaboration IP" shall mean (i) all Intellectual
Property rights in Collaboration Technology, which Intellectual Property rights
were created by the parties' Listed Representatives (solely or jointly) in the
course of working on the Collaboration and (ii) all Intellectual Property of
either party conceived or created by or for either party ("Party") prior to the
termination or

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

expiration of the Collaboration based on the other party's Confidential
Information disclosed to such Party in connection with the Collaboration.

                  1.6 "Collaboration Right" means any patent, patent right (or
similar right under foreign law), utility model, copyright or mask work right
issued or registered as a result of a Filing.

                  1.7 "Collaboration Technology" means (i) any and all
Technology that either party's Listed Representatives conceive (solely or
jointly) in the course of working on the Collaboration, and (ii) any and all
Technology conceived (solely or jointly) prior to the termination or expiration
of the Collaboration by or for either party ("Party") based on Confidential
Information of the other party disclosed to such Party in connection with the
Collaboration, but, in each case, excluding Technology resulting from
University/Government Activities.

                  1.8 "Confidential Information" is defined in the CNDA, as set
forth in Section 6 below.

                  1.9 "Conventional Processes" means standard semiconductor
manufacturing processes (where "standard" semiconductor manufacturing processes
may include Intel proprietary semiconductor manufacturing processes) and
reasonable incremental improvements (e.g. standard [*** Redacted] processes)
thereof, including those resulting in one or more features of [*** Redacted] of
[*** Redacted], and the resultant devices fabricated using such standard
semiconductor manufacturing processes (but excluding such resultant devices
incorporating Deposited Nanomaterials).

                  1.10 "Deposited Nanomaterials" means shape or size controlled
nanocrystals, such as quantum dots, nanorods, nanowires, tetrapods, bucky balls,
and carbon nanotubes, having at least one cross sectional dimension of less than
500 nanometers and such that the size related properties of the nanomaterials
are advantageous to their function, that are subsequently [*** Redacted] as such
nanomaterials [*** Redacted]

                  1.11 "Exclusivity Date" means the earlier of (i) the
Collaboration Commencement Date or (ii)  March 31, 2004.

                  1.12 "Exclusivity Period" means the period from the Effective
Date until the earlier of (i) March 31, 2006, (ii) the Exclusivity Expiration
(as defined in Section 3.3 below), or (iii) any termination of this Agreement.

                  1.13 "Field of Interest" means memory devices based on
[*** Redacted] used primarily as [*** Redacted] (e.g. this would not include
[*** Redacted] devices, macroelectronics, or molecular electronics).

                  1.14 "Filing" means any application for or registration of a
patent, patent right (or similar right under foreign law), utility model,
copyright or mask work right with respect to Collaboration Technology.

                  1.15 "Intel's Exclusive Field" means (i) compositions,
devices, articles and methods involving or involved in memory and logic devices,
but only if such compositions, devices,

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

                                                                             -2-

<PAGE>

articles or methods are outside of Nanosys' Exclusive Field, and in each case
excluding Conventional Processes, and (ii) all Conventional Processes other than
Conventional Processes used in conjunction with Deposited Nanomaterials. For the
avoidance of doubt, (i) Conventional Processes used in conjunction with
Deposited Nanomaterials are not in Intel's Exclusive Field nor in Nanosys'
Exclusive Field and (ii) devices incorporating Deposited Nanomaterials are in
Nanosys' Exclusive Field.

                  1.16 "Intellectual Property" shall mean patents (and similar
rights under foreign law, and applications therefor), trade secrets, copyrights
and mask works.

                  1.17 "Listed Representatives" of a party means, at any time,
that party's employees, agents, and contractors then working on the
Collaboration on behalf of that party, as such individuals are identified by
that party by written notice to the other party. A party's notice of Listed
Representatives shall be in effect until a subsequent such notice by that party
modifying the list. Each party shall at all times in good faith maintain an
accurate list of Listed Representatives. At commencement, Intel's Listed
Representatives shall include [*** Redacted], and Nanosys' Listed
Representatives shall include [*** Redacted].

                  1.18 "Nanosys' Exclusive Field" means compositions, devices,
articles and methods involving or involved in Deposited Nanomaterials, but
excluding Conventional Processes.

                  1.19 "Nanosys Facility" means and includes Nanosys' operations
at 2625 Hanover Street in Palo Alto, CA, any ancillary engineering facilities
owned or controlled by Nanosys, and any successor facilities owned or controlled
by Nanosys during the term of this Agreement..

                  1.20 "Nanosys IP" shall mean Nanosys' Intellectual Property
Rights including Background IP and Collaboration IP.

                  1.21 "Technology" means any and all developments, ideas,
designs, inventions, information, know-how, and technology.

                  1.22 "University/Government Activities" means any and all
research, development, and other activities performed either (i) with any
university (or other educational institution) funding or any government or
government agency (U.S. or otherwise) funding, (ii) in collaboration with any
university (or other educational institution) or with any government or
government agency (U.S. or otherwise), or (iii) with a primary purpose of
obtaining government funding.

         2.       COLLABORATION WORK.

                  2.1 Each party shall use its commercially reasonable efforts
to perform its Collaboration obligations as set forth in Exhibit A. It is
understood and agreed that the Collaboration is in the nature of research, that
successful completion of the research is not assured, and that, so long as a
party uses its commercially reasonable efforts as set forth in the preceding
sentence, that party will not be in default for any failure to achieve any
particular result or to complete any particular deliverable. The parties shall
commence the Collaboration December 15, 2003, provided that on one or more
written notices to Nanosys received by Nanosys at least fifteen

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

                                                                             -3-

<PAGE>
[*** Redacted] prior to the date when the Collaboration is then scheduled to
commence (provided that if this Agreement is signed by Intel after November 30,
2003, Intel shall be entitled to provide the initial such notice on the date of
such signature, but only if such signature date is on or before December 10,
2003), Intel shall be entitled to delay commencement of the Collaboration to any
date on or before March 31, 2004. Delays resulting in commencement of the
Collaboration after December 31, 2003 shall be subject to the payments in
Section 3.2 below. It is understood and agreed that commencement of the
Collaboration may not be delayed past March 31, 2004.

                  2.2 Nanosys agrees to allocate to the Collaboration at least
[*** Redacted] full-time equivalent individuals during the first quarter of the
Collaboration, at least [*** Redacted] full-time equivalent individuals during
the second quarter of the Collaboration, at least [*** Redacted] full-time
equivalent individuals during the third quarter of the Collaboration, and at
least "X" full-time equivalent individuals (FTEs) during the fourth quarter of
the Collaboration, where "X" is a number between [*** Redacted] and
[*** Redacted], inclusive, chosen by Intel by written notice to Nanosys at least
[*** Redacted] days prior to the beginning of such fourth quarter. If Intel
fails to provide such notice, "X" will be deemed to equal [*** Redacted].

                  2.3 It is the parties' mutual intent that most of the work and
deliverable creation under this Agreement to investigate [*** Redacted] memory
feasibility shall occur at the Nanosys Facility. Nanosys shall host Intel's
Listed Representatives on a mutually agreed upon basis, such agreement not to be
unreasonably withheld, on site at the Nanosys Facility to work on this project
and get deeply involved in complementary collaborative activities (e.g., device
integration and characterization, but not the synthesis of Deposited
Nanomaterials). Information on the design and modeling of Deposited
Nanomaterials, as well as [*** Redacted], [*** Redacted], and [*** Redacted]
related to Deposited Nanomaterials, shall be provided to Intel's Listed
Representatives, but in each case only as reasonably required for device
integration and characterization for the purpose of the Collaboration, including
but not limited to, making an informed decision about the complexity of
integrating Deposited Nanomaterials with Conventional Processes. Nanosys' Listed
Representatives may also be invited to work at Intel's facilities, for
circumstances including but not limited to, using a metrology tool that may not
be available at the Nanosys Facility. The parties shall adhere to the following
guidelines in connection with Listed Representatives working at the site of the
other party: (a) all employees of one party visiting the other party's facility
shall comply with the rules and regulations applicable at that facility as
communicated to such employees, and each party retains the right to reasonably
refuse admittance for violation of these rules; (b) the hosting party shall
maintain reasonable firewall procedures so that employees of a visiting party
are not exposed to the confidential information of a third party; (c) each party
shall maintain reasonable firewall procedures so that third parties at a party's
site are not exposed to the confidential information of the other party or
non-public information about the status of this Collaboration; and (d) in the
case of Nanosys only, cubicle space, secure Internet access, and badge access
shall be made available for use by Intel's Listed Representatives when such a
person or persons are working on site at the Nanosys Facility.

                  2.4 Except as set forth in Section 5, any and all materials
supplied by one party to the other party shall be used by the recipient only to
perform its Collaboration obligations.

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

                                                                             -4-

<PAGE>

                  2.5 Except as set forth in Section 3 below, each party shall
bear its own costs and expenses in carrying out the Collaboration.

                  2.6 Except for University/Government Activities, each party
agrees to work exclusively with the other party in the Field of Interest during
the Exclusivity Period.

                  2.7 The following persons ("Collaboration Managers") shall be
appointed to direct the conduct of the parties with respect to the
Collaboration:

                       (a)  For Intel:          Eric Hannah
                                                Sector Director, Intel Research
                                                Intel Corporation
                                                2200 Mission College Blvd.
                                                Mail Stop RN6-661
                                                Santa Clara, CA 95052
                                                Phone:  408-765-4441
                                                Fax:    408-765-6271
                                                E-mail: eric.hannah@intel.com

                       (b)  For Nanosys:        Calvin Y.H. Chow
                                                Chief Executive Officer
                                                Nanosys Inc.
                                                2625 Hanover Street
                                                Palo Alto, CA 94304
                                                Phone: (650) 331-2102
                                                Fax: (650) 331-2101
                                                E-mail: cchow@nanosysinc.com

The Collaboration Managers shall have the authority to approve in writing
changes to Exhibit A, including, as applicable, specifications, scope of work,
and milestones. The Collaboration Managers shall have no other authority to
amend this Agreement. Each party may change its Collaboration Manager on written
notice to the other party, provided that the replacement Collaboration Manager
is at a similar level of authority at the party making the replacement, or as
otherwise agreed by the parties.

                  2.8 If either party desires to propose changes to the
Collaboration, it shall notify the other party in writing of such proposal and
the reasons for such proposal. The other party will give each such proposal its
prompt attention. If Intel and Nanosys agree to any such change, the change
shall be evidenced by a written confirmation signed by the Collaboration
Managers of both parties. Such a written confirmation shall amend the terms of
Exhibit A.

                  2.9 If the Collaboration is completed successfully (i.e.,
neither party has terminated this Agreement under Section 10, and the parties
agree that the subject technology is promising and warrants pursuing further),
then it is the parties' intent that, at Intel's request, the parties will
negotiate, in good faith, during the Exclusivity Period to enter into a
follow-on development agreement (the "Development Agreement") to further develop
and commercialize the technology

                                                                             -5-

<PAGE>

which is the subject of this Agreement If Intel requests such a negotiation,
then, for the duration of the Exclusivity Period, Nanosys agrees that Nanosys
will not enter into any discussions regarding the subject of the Collaboration
with any third party. The parties further intend that any such Development
Agreement would reflect that, if the development and commercialization of this
technology are successful, and Intel has a good-faith intent to use the
Collaboration Materials in anticipation of a high-volume manufacturing ramp,
then:

                           (a)      It is the parties' mutual intent that the
parties would negotiate in good faith a supply agreement that reasonably assures
the supply of Deposited Nanomaterials and any related Nanosys enabling
technology or rights to Intel (for use in the Field of Interest, the
"Collaboration Materials"). Upon Intel's request to commence such negotiations,
the parties would negotiate diligently and in good faith to reach agreement.
Further, if at the expiration of the Development Agreement the parties have not
reached agreement, notwithstanding their diligent and good faith efforts, then
Nanosys would not enter into any supply agreement, within six (6) months after
the expiration of the Development Agreement, to supply Collaboration Materials
to any third party, in the Field of Interest, on terms which are more favorable
to that third party than the terms last offered by Nanosys to Intel during this
negotiation. In the first instance, the parties would use reasonable efforts to
qualify Nanosys as a supplier to Intel of the Collaboration Materials. Nanosys
acknowledges that, in order to be selected as an Intel qualified supplier,
Nanosys must demonstrate supply capability (in areas including, but not limited
to, cost, quality, and availability). Nanosys further acknowledges that the
supply agreement would include a "most favored customer" provision which
guarantees that, at any time, Nanosys' price to Intel for Collaboration
Materials is no higher than the price charged by Nanosys to any third party for
Collaboration Materials, in the Field of Interest, on similar terms and
conditions. Further, if the parties enter into a supply agreement, the supply
agreement will include provisions to help ensure a reliable supply of
Collaboration Materials to Intel, which may include (i) safety stock and (ii) if
Nanosys is unable to reasonably provide Intel with the Collaboration Materials,
then upon notice from Intel, Nanosys' would take prompt action to arrange for
such supply, which may include designating a subcontractor, subject to Intel's
consent of such subcontractor (which shall not be unreasonably withheld), to
manufacture such quantity of Collaboration Materials that cannot be obtained
from Nanosys, providing such subcontractor agrees to pay Nanosys a reasonable
royalty and agrees to reasonable confidentiality, intellectual property
protection, and commercial provisions. Nanosys agrees to fully reasonably
cooperate with Intel and the chosen subcontractor in the transfer of technology
and sufficient collaborative engineering resources necessary to allow the
subcontractor to produce Collaboration Materials for Intel's intended use as
soon as practicable after Intel's request. Nanosys reserves the right to seek
any and all legal recourse against the subcontractor if confidentiality or other
provisions of the agreement between Nanosys and the subcontractor are violated.

                           (b)      It is the parties' mutual intent that, if
the parties have not entered into a supply agreement as set forth in Section
2.9(a), notwithstanding their diligent and good faith efforts, then upon Intel's
request within [*** Redacted] after the expiration of the Development
Agreement, Nanosys would designate a contract manufacturer, subject to Intel's
consent of such contract manufacturer (which would not be unreasonably
withheld), to manufacture Collaboration Materials, licensing such contract
manufacturer to applicable Nanosys intellectual property on reasonable and
non-discriminatory terms, provided that such contract manufacturer agrees to pay
Nanosys a reasonable royalty and agrees to reasonable confidentiality,
intellectual property

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

                                                                             -6-

<PAGE>
protection, and commercial provisions. Nanosys shall fully and reasonably
cooperate with Intel and the chosen contract manufacturer in the transfer of
technology and sufficient collaborative engineering resources necessary to allow
the contract manufacturer to produce Collaboration Materials for Intel's
intended use as soon as practicable after Intel's request. Nanosys reserves the
right to seek all legal recourse against the contract manufacturer if
confidentiality or other provisions of the license between Nanosys and the
contract manufacturer are violated. If Nanosys fails to enter into a license
with a contract manufacturer as contemplated in this Section 2.9(b) within
[*** Redacted] after Intel's request to Nanosys, then Nanosys would be deemed
not to be entering the business of high-volume supply of Collaboration
Materials.

                           (c)      The parties further intend that if Nanosys
chooses not to enter into the business of supply of Collaboration Materials, and
Nanosys does not license the necessary enabling technology to a third party
manufacturer as provided in Section 2.9(b) above, then Nanosys would provide to
Intel a royalty-bearing, capped fee, worldwide, perpetual, non-exclusive license
under Nanosys IP, to have made Collaboration Materials and to make, have made,
use, sell, offer to sell and import, products using or incorporating
Collaboration Materials.

         3.       PAYMENTS TO NANOSYS.

                  3.1 Intel shall pay to Nanosys the following payments at the
following times:

<TABLE>
<CAPTION>
           TIME OF PAYMENT                                  AMOUNT OF PAYMENT
----------------------------------------                ------------------------
<S>                                                     <C>
Collaboration Commencement Date                             $   [*** Redacted].

Three (3) months after the Collaboration                    $   [*** Redacted].
Commencement Date

Six (6) months after the Collaboration                      $   [*** Redacted].
Commencement Date

Nine (9) months after the Collaboration                     $  [*** Redacted]*.
Commencement Date
</TABLE>

* $[*** Redacted] per FTE, according to the number of FTEs chosen by Intel,
pursuant to Section 2.2 above, for the fourth quarter of the Collaboration.

For the avoidance of doubt, the latter two payments (of $[*** Redacted] and
([*** Redacted])) will not be due if Intel terminates this Agreement under
Section 10.2 below.

                  3.2 For each month (or portion thereof) that Intel delays the
Collaboration Commencement Date, pursuant to Section 2.1 above, to a date after
December 31,2003, Intel shall pay to Nanosys [*** Redacted] dollars
($[*** Redacted]) (prorated on a day for day basis for partial months). Such
payment shall be due and payable within thirty (30) days after Intel's notice of
delay. (By way of example only, if upon execution of this Agreement Intel
notified Nanosys of a Collaboration Commencement Date delay to January 15,
2004, Intel would pay Nanosys $[*** Redacted] within thirty (30) days after such
notice date. If on December 15,2003 Intel then notified Nanosys of a further
delay

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

                                                                             -7-

<PAGE>

in the Collaboration Commencement Date, until March 10, 2004, Intel would
pay to Nanosys an additional $[*** Redacted] by January 14, 2004 (i.e., in
this example, a total of $[*** Redacted]).)

                  3.3 As of the Effective Date, the "Exclusivity Expiration"
shall be fifteen (15) months after the Exclusivity Date.

                           (i)      Intel shall be entitled to extend the
Exclusivity Expiration by three (3) months, to eighteen (18) months after the
Exclusivity Date, by written notice to Nanosys no later than fourteen (14)
months after the Exclusivity Date, and payment to Nanosys of [*** Redacted]
dollars ($[*** Redacted]). This payment shall be due and payable no later than
fifteen (15) months after the Exclusivity Date.

                           (ii)     If Intel has extended the Exclusivity
Expiration pursuant to paragraph (i) hereinabove, then Intel shall be entitled
to further extend the Exclusivity Expiration by an additional three (3) months,
to twenty-one (21) months after the Exclusivity Date, by written notice to
Nanosys no later than seventeen (17) months after the Exclusivity Date, and
payment to Nanosys of [*** Redacted] dollars ($[*** Redacted]). This payment
will be due and payable no later than eighteen (18) months after the Exclusivity
Date.

                           (iii)    If Intel has extended the Exclusivity
Expiration pursuant to paragraph (ii) hereinabove, then Intel shall be entitled
to further extend the Exclusivity Expiration by an additional three (3) months,
to twenty-four (24) months after the Exclusivity Date, by written notice to
Nanosys no later than twenty (20) months after the Exclusivity Date, and payment
to Nanosys of [*** Redacted] dollars ($[*** Redacted]). This payment will be due
and payable no later than twenty-one (21) months after the Exclusivity Date.

Amounts paid by Intel pursuant to this Section 3.3 may, at Intel's option, be
credited to any payment of Intel to Nanosys under any development collaboration
by the parties, in the Field of Interest, entered into prior to termination of
the Exclusivity Period.

         4.       OWNERSHIP.

                  4.1 Each party shall retain its ownership of its Background
IP. No rights are granted pursuant to this Agreement with respect to any
Background IP.

                  4.2 Subject to the licenses set forth in Section 5 below,
Nanosys shall own all Collaboration IP. Subject to the licenses set forth in
Section 5 below, Intel irrevocably hereby agrees to, and hereby does, transfer,
convey and assign to Nanosys all of Intel's right, title, and interest in the
Collaboration IP, including without limitation all Intellectual Property rights
with respect thereto. Intel agrees to execute such documents, render such
assistance, and take such other action as Nanosys may reasonably request to
apply for, register, perfect, confirm, and protect Nanosys' rights in the
Collaboration IP. Subject to Sections 5, 6, and 7 below, ownership of
Collaboration Technology shall vest in Nanosys the exclusive right to determine
whether and how the Collaboration IP is to be protected and exercised throughout
the world.

         5.       LICENSES.

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

                                                                             -8-

<PAGE>

                  5.1 Subject to the terms and conditions of this Agreement,
Nanosys agrees to grant, and hereby grants, to Intel a worldwide, nonexclusive
(except as set forth in Section 5.1(i) hereinbelow), nontransferable (except as
set forth in Section 11.7 below), royalty free license, only under Collaboration
IP, to design, develop, make, have made, use, import, offer to sell, and sell or
distribute any product or item and to practice any method or process, provided
that:

                           (i)      this license shall be exclusive (including
as to Nanosys) for use of the Collaboration IP in Intel's Exclusive Field, and

                           (ii)     no license is granted by Nanosys for use of
any Collaboration IP in Nanosys' Exclusive Field.

                  5.2 Intel shall have the right to grant sublicenses (and
authorize the granting of further sublicenses) under the license granted to it
in Section 5.1 above.

                  5.3 No party shall be obligated to provide any Technology or
deliverable in connection with the licenses granted in this Section 5; all
deliverables under this Agreement are specified exclusively in Exhibit A.

                  5.4 Notwithstanding this Section 5 or Section 2.4, nothing in
this Agreement shall be construed as preventing Intel or Nanosys employees from
using [*** Redacted] of the Confidential Information of the other party,
provided that such use of [*** Redacted] shall not grant to Intel or Nanosys any
implied license to any of the other party's [*** Redacted]. [*** Redacted] means
information in [*** Redacted] which is [*** Redacted]. An [*** Redacted] if the
[*** Redacted] the information for the purpose of [*** Redacted].

                  5.5 For purposes of this Section 5.5, the following
definitions apply:

         "Applicable Intel Patents" means those claims of Intel patents which
claim inventions conceived by Intel during the 24 months following the
termination or expiration of the Collaboration, which inventions were based on
Nanosys' Confidential Information.

         "Applicable Nanosys Patents" means those claims of Nanosys patents
which claim inventions conceived by Nanosys during the 24 months following
the termination or expiration of the Collaboration, which inventions were based
on Intel's Confidential Information.

         "Applicable Intel Sublicensable Patents" means those claims of Intel
patents which claim inventions conceived by Intel during the 12 months
following the termination or expiration of the Collaboration, which inventions
were based on Nanosys' Confidential Information.

         "Applicable Nanosys Sublicensable Patents" those claims of Nanosys
patents which claim inventions conceived by Nanosys during the 12 months
following the termination or expiration of the Collaboration, which inventions
were based on Intel's Confidential Information.

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

                                                                             -9-

<PAGE>

                           (a)      Subject to the terms and conditions of this
Agreement, Nanosys agrees to grant, and hereby grants, to Intel a worldwide,
nonexclusive, nontransferable (except as set forth in Section 11.7 below),
royalty free license, only under the Applicable Nanosys Patents, to design,
develop, make, have made, use, import, offer to sell, and sell or distribute any
product or item and to practice any method or process, provided that this
license shall be limited to use within Intel's Exclusive Field and the Field of
Interest. Intel shall have the right to grant sublicenses (and authorize the
granting of further sublicenses) under the license granted to it in this Section
5.5(a), as provided in Section 5.5(b) below.

                           (b)      Under the licenses granted under Section
5.5(a) above, but only under Applicable Nanosys Sublicensable Patents, and only
outside of the Field of Interest, Intel shall have the right to grant
sublicenses (and authorize the granting of further sublicenses).

                           (c)      Subject to the terms and conditions of this
Agreement, Intel agrees to grant, and hereby grants, to Nanosys a worldwide,
nonexclusive, nontransferable (except as set forth in Section 11.7 below),
royalty free license, only under the Applicable Intel Patents, to design,
develop, make, have made, use, import, offer to sell, and sell or distribute any
product or item and to practice any method or process, provided that this
license shall be limited to use within Nanosys' Exclusive Field and the Field of
Interest. Nanosys shall have the right to grant sublicenses (and authorize the
granting of further sublicenses) under the license granted to it in this Section
5.5(c), as provided in Section 5.5(d) below.

                           (d)      Under the licenses granted under Section
5.5(c) above, but only under Applicable Intel Sublicensable Patents, and only
outside of the Field of Interest, Nanosys shall have the right to grant
sublicenses (and authorize the granting of further sublicenses).

         6.       CONFIDENTIAL INFORMATION.

                  6.1 The CNDA shall apply to this Agreement, provided that, for
purposes of this Agreement:

                           (i)      "Confidential Information" shall also
include information disclosed as a result of access to the other party's
premises or property, which information relates to any information in tangible
form subject to clause (i) of Section 1 of the CNDA, whether such disclosure or
access occurs prior to, concurrent with, or following the disclosure of such
information in tangible form.

                           (ii)     In Section 2 of the CNDA, "a need to know"
means a need to know for the purposes of this Agreement.

                           (iii)    The third sentence of Section 6 of the CNDA
shall not apply to this Agreement; rather, the Termination and Survival sections
of this Agreement shall govern the disposition of Confidential Information.

                           (iv)     If the CNDA is terminated, the terms and
conditions of the CNDA shall continue to apply to disclosures in connection with
this Agreement.

                                                                            -10-

<PAGE>

                  (v) In addition, each party shall be entitled to disclose the
other party's Confidential Information to the extent such disclosure is required
by the order or requirement of a court, administrative agency, or other
governmental body; provided, that the party required to make the disclosure
shall provide at least fifteen (15) days (or such lesser period as may apply if
the party required to make the disclosure received fewer than fifteen (15) days
notice of the disclosure obligation), advance written notice thereof to enable
the other party to seek a protective order or otherwise prevent such disclosure.

         7.       INTELLECTUAL PROPERTY PROTECTION.

                  7.1 Nanosys IP. Nanosys shall have the sole right at its
expense to prepare, file and prosecute Filings related to any Collaboration
Technology, subject to Section 7.2 below.

                  7.2 Protection of Collaboration Technology. The parties shall
confer on (i) protection of Collaboration Technology (other than Collaboration
Technology developed solely by Nanosys) through Filings and/or through
maintenance of the Collaboration IP as a trade secret, and (ii) preparation,
filing, prosecution and maintenance of Filings and Collaboration Rights related
to Collaboration Technology (other than Collaboration Technology developed
solely by Nanosys). Nanosys shall be responsible for all Filing(s) in all
jurisdictions for Collaboration IP. Provided however, if only Intel wants to
protect a Collaboration development through a Filing on that development, then
Intel shall be entitled to do so, at its sole expense, and in such a case shall
be deemed sole owner of the affected Collaboration Right and Filing. In such
event, Intel shall be deemed to have granted to Nanosys a nonexclusive (except
as set forth hereinbelow), irrevocable, perpetual, fully paid, royalty free
license, with right to sublicense (and authorize the granting of further
sublicenses), only under such Collaboration Right, without restriction,
including to practice any process or method, and to design, develop, make, use,
have made, offer to sell, and sell or distribute any product or item, provided
that (A ) this license shall be exclusive (including as to Intel) for use of the
Collaboration Right in Nanosys' Exclusive Field and (B) no license is granted by
Intel for use of the Collaboration Right in Intel's Exclusive Field.

                  7.3 Infringement Prosecution.

                           (i)      Nanosys shall have the sole right to
prosecute claims of infringement or misappropriation of Collaboration IP, where
such infringement or misappropriation is primarily in Nanosys' Exclusive Field.
In each such case, Intel shall, at Nanosys' expense, take all actions reasonably
requested by Nanosys in such prosecution, subject to indemnification by Nanosys
of Intel for any liability to third parties resulting from such participation.

                           (ii)     Intel shall have the sole right to prosecute
claims of infringement or misappropriation of Collaboration IP where such
infringement or misappropriation is primarily in Intel's Exclusive Field. In
each such case, Nanosys shall, at Intel's expense, take all actions reasonably
requested by Intel in such prosecution (which may include participation as a
named plaintiff, subject to indemnification by Intel of Nanosys for any
liability to third parties resulting from such participation as a plaintiff).

                                                                            -11-
<PAGE>

                  7.4 Further Assurances. At any time or from time to time on
and after the date of this Agreement, each party shall at the request of the
other party (i) execute, and deliver or cause to be delivered, all such
consents, documents or further instruments of license, assignment, and transfer,
and (ii) take or cause to be taken all such other actions, in each case at the
other party's expense and as the other party may reasonably deem necessary or
desirable in order for the other party to obtain the full benefits of Section
4.2 and this Section 7 and the activities contemplated thereby.

         8.       WARRANTY DISCLAIMER.

         NEITHER NANOSYS NOR INTEL MAKES ANY WARRANTY OF ANY KIND, WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. WITHOUT
LIMITING THE FOREGOING, ALL DELIVERABLES AND OTHER ITEMS ARE PROVIDED BY EACH
PARTY "AS IS," AND ALL LICENSES GRANTED BY EACH PARTY ARE GRANTED "AS IS."

         9.       LIMITATION OF LIABILITY.

         NEITHER PARTY SHALL HAVE ANY LIABILITY FOR COSTS OF SUBSTITUTE PRODUCTS
OR SERVICES, OR FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL OR INDIRECT
DAMAGES OR LIABILITIES, INCLUDING WITHOUT LIMITATION SUCH DAMAGES OR LIABILITIES
FOR LOSS OF REVENUE, LOSS OF BUSINESS, FRUSTRATION OF ECONOMIC OR BUSINESS
EXPECTATIONS, LOSS OF PROFITS, OR COST OF CAPITAL, REGARDLESS OF THE FORM OF THE
ACTION, WHETHER IN CONTRACT OR OTHERWISE, EVEN IF ANY REPRESENTATIVE OF A PARTY
HERETO HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL
EITHER PARTY'S LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNTS PAID OR PAYABLE
BY INTEL TO NANOSYS UNDER THIS AGREEMENT, provided that, as to Intel, this shall
be in addition to Intel's obligation to pay such amounts. These limitations,
however, shall not apply to either party's liability, if any, (i) for
contribution or indemnity with respect to liability to third parties for
personal injury, death, or damage to tangible property, (ii) exceeding the scope
of the licenses in Section 5 (Licenses), (iii) breach of Section 6 (Confidential
Information), or (iv) infringement of the other party's intellectual property
rights.

         10.      TERM AND TERMINATION.

                  10.1 Term. This Agreement shall commence as of the Effective
Date and shall continue until the expiration of the Exclusivity Period, unless
earlier terminated as set forth herein.

                  10.2 Q2 Checkpoint. Intel shall be entitled to terminate this
Agreement, for its convenience, on notice to Nanosys at any time within ten (10)
days after completion of the "Q2 Formal Review Meeting" milestone in Exhibit A.

                  10.3 Termination Due to Bankruptcy, etc. In the event a party:
(i) becomes insolvent; (ii) voluntarily files or has filed against it a petition
under applicable bankruptcy or insolvency laws which such party fails to have
released within thirty (30) days after filing;

                                                                            -12-

<PAGE>

(iii) proposes any dissolution, composition or financial reorganization with
credit ors or if a receiver, trustee, custodian or similar agent is appointed or
takes possession with respect to all or substantially all property or business
of such party; or (iv) such party makes a general assignment for the benefit of
creditors; then the other party may terminate this Agreement by notice to the
non-terminating party.

                  10.4 Termination Due to Breach. Either party shall have the
right to terminate this Agreement if the other party is in material breach of
any material term or condition of this Agreement and fails to remedy such breach
within thirty (30) days after receipt of written notice of such breach given by
the non-breaching party. To terminate this Agreement, the nonbreaching party
must provide further written notice of such termination to the breaching party
prior to a cure of the breach.

                  10.5 Survival. Neither the termination nor expiration of this
Agreement shall relieve either party from its obligations to pay the other any
sums accrued hereunder. Upon the termination or expiration of this Agreement,
(i) Intel shall promptly return to Nanosys all Nanosys Confidential Information
and (ii) Nanosys shall promptly return to Intel all Intel Confidential
Information. The parties agree that their respective rights, obligations and
duties under Sections 1, 2.9, 4 (Ownership), 5 (Licenses), 6 (Confidential
Information), 7 (Intellectual Property Protection), 8 (Warranty Disclaimer), 9
(Limitation of Liability), 10.5 (Survival), and 11 (Miscellaneous) shall survive
any termination or expiration of this Agreement.

         11.      MISCELLANEOUS.

                  11.1 Announcement. On or after the Effective Date, Nanosys
shall be entitled to issue a press release pertaining to this Agreement, upon
written consent from Intel to the content of the press release.

                  11.2 Notices. All notices, requests, demands and other
communications given or made in accordance with the provisions of this Agreement
shall be in writing and shall be deemed to have been given (i) three days after
mailing when mailed (by registered or certified mail, postage paid, only), (ii)
on the date sent when made by facsimile transmission with confirmation of
receipt (with hard copy to follow by registered or certified mail, postage paid,
only), and (iii) on the date received when delivered in person or by courier,
provided that notices and communications with respect to administrative and
project matters (e.g., changes in meeting times and dates, program
specifications, and specific program development activities) (but not legal
matters or matters pertaining to or establishing rights under this Agreement),
may be provided by e-mail and will be deemed given when sent. All notices shall
be provided to the address set forth below or such other place as such party may
from time to time designate in writing. Each party may alter its address set
forth below by notice in writing to the other party, and such notice shall be
considered to have been given three (3) days after the sending thereof:

               If to Nanosys:         Nanosys Inc.
                                      2625 Hanover Street
                                      Palo Alto, California 94304
                                      Fax:(650)331-2101

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

                                                                            -13-

<PAGE>

                                      Attn: Calvin Y.H. Chow
                                      E-mail: cchow@nanosysinc.com

               with a copy, for matters pertaining to intellectual property, to:

                                      Nanosys Inc.
                                      2625 Hanover Street
                                      Palo Alto, California 94304
                                      Fax: (650) 331-2101
                                      Attn: Matt Murphy
                                      E-mail: mmurphy@nanosysinc.com

               If to Intel:           Intel Corporation
                                      2200 Mission College Blvd.
                                      Santa Clara, CA 95052
                                      ATTN: General Counsel

                  11.3 Amendment; Waiver. This Agreement may be amended,
modified or supplemented only by a writing that is signed by duly authorized
representatives of both parties and that specifically identifies the provision
or provisions of this Agreement being amended, modified or supplemented. No term
or provision hereof will be considered waived by either party, and no breach
excused by either party, unless such waiver or consent is in writing signed on
behalf of the party against whom the waiver is asserted. Without limiting the
foregoing, no consent by either party to, or waiver of, a breach by either
party, whether express or implied, will constitute a consent to, waiver of, or
excuse of any other, different, or subsequent breach by either party.

                  11.4 Severability. If any provision hereof should be held
invalid, illegal or unenforceable in any jurisdiction, the parties shall
negotiate in good faith a valid, legal and enforceable substitute provision that
most nearly reflects the original intent of the parties and all other provisions
hereof shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible. Such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of such provision in
any other jurisdiction.

                  11.5 Governing Law. This Agreement shall be governed by and
construed under the laws of the United States and the State of California, not
including its conflict of law provisions.

                  11.6 Force Majeure. Except for the payment of sums accrued,
neither party will be liable for any failure or delay in performance under this
Agreement due to fire, explosion, earthquake, storm, flood or other weather,
unavailability of necessary utilities or raw materials, war, insurrection, riot,
act of God or the public enemy, law, act, order, proclamation, decree,
regulation, ordinance, or instructions of government or other public
authorities, or any other event beyond the reasonable control of the party whose
performance is to be excused. If, however, a party's performance is prevented
for sixty (60) days, then the other party shall be entitled to terminate this
Agreement on written notice to the party suffering the force majeure at any time
prior to resumption of performance by the party suffering the force majeure.

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

                                                                            -14-

<PAGE>

                  11.7 Assignment. Neither party may transfer or assign this
Agreement, whether by operation of law or otherwise, without the prior written
consent of the other party and any attempt to do so without such consent will be
void. This Agreement will bind and inure to the benefit of the parties and their
respective permitted successors and permitted assigns. Notwithstanding anything
in this Agreement, however, either party may assign this Agreement without the
other party's prior written consent to a successor to all or substantially all
of its assets pertaining to the Collaboration (e.g., the surviving entity in a
merger or consolidation in which it participates or to a purchaser of all or
substantially all of its assets pertaining to the Collaboration), so long as
such surviving entity or purchaser shall assume (expressly in writing or by
operation of law) the performance of all of the terms of this Agreement.

                  11.8 No Third Party Beneficiaries. No person or entity other
than Intel and Nanosys will have any rights or obligations pursuant to this
Agreement.

                  11.9 Relationship of the Parties. The parties to this
Agreement are independent contractors. There is no relationship of agency,
partnership, joint venture, employment, or franchise between the parties and
this Agreement is negotiated at arm' s length with both sides represented by
counsel of their choice. Neither party has the authority to bind the other or to
incur any obligation on its behalf. Any such act will create a separate
liability in the party so acting to any and all third parties affected thereby.

                  11.10 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument. If this Agreement is
executed in counterparts, no signatory hereto shall be bound until both the
parties named below have duly executed or caused to be duly executed a
counterpart of this Agreement.

                  11.11 Confidentiality of Agreement. Subject to Section 6.1(v)
and Section 11.1, each party agrees that the existence of and the terms and
conditions of this Agreement shall be treated as confidential, provided,
however, that each party may disclose the terms and conditions of this
Agreement: (i) as required by any court or other governmental body; (ii) as
otherwise required by law; (iii) to legal counsel of the parties; (iv) in
connection with the requirements of a public offering or securities filing; (v)
in confidence, to accountants, banks, and financing sources and their advisors;
(vi) in confidence, in connection with the enforcement of this Agreement or
rights under this Agreement; or (vii) in confidence, in connection with a merger
or acquisition or proposed merger or acquisition, or the like.

                  11.12 Authority. Each party represents and warrants to the
other party at the Effective Date (i) that it has the legal right, power, and
authority to enter into this Agreement and to fully perform its obligations
under this Agreement, and (ii) that the performance of such obligations will not
conflict with any agreements, contracts or other arrangements to which it is a
party or by which it is bound.

                  11.13 Entire Agreement. This Agreement, including all Exhibits
to this Agreement, together with the CNDA (as set forth in Section 6 above),
constitutes the entire agreement between the parties relating to this subject
matter and supersedes all prior or simultaneous representations,

                                                                            -15-

<PAGE>

discussions, negotiations, letters of intent, and agreements, whether written or
oral, with respect to the subject matter hereof.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the dates set forth below effective as of the Effective Date.

NANOSYS INC.                              INTEL CORPORATION

By: /s/ CALVIN CHOW                       By: /s/ PATRICK P GELSINGER
    -----------------------------             -----------------------------
Print Name: CALVIN CHOW                   Print Name: PATRICK P GELSINGER
Title: CEO                                Title: Sr VP / CTO

                                                        LEGAL  OK
                                                        ----------
                                                        p  12/8/03

                                                                            -16-

<PAGE>

                                    EXHIBIT A

                  Collaboration Statement of Work (SOW) Summary

         Construction of [*** Redacted] devices (similar to the concept figure
below) to evaluate key technical areas required for a [*** Redacted] memory unit
and to project the performance limits of the technology.

                                 [*** Redacted]

         Device will have an active area ranging from [*** Redacted] to
         [*** Redacted] of microns squared and will be utilized to evaluate:

         -        [*** Redacted] and [*** Redacted].

         -        [*** Redacted] characteristics (e.g. speed, retention times,
                  [*** Redacted], etc.)

         -        [*** Redacted] - including [*** Redacted] characteristics.

         -        Effects of [*** Redacted], and [*** Redacted] modifications.

         -        Variations of top and bottom insulator [*** Redacted].

         -        Fatigue/failure mechanism (e.g. [*** Redacted])

         -        Variations of processing means.

         and to construct a model for predicting ballpark performance limits of
         a [*** Redacted] or [***Redacted] device.

In Q1 and Q2, the project would focus on modeling and generating/testing [***
Redacted] in order to reconcile the validity of the model. Q3 and Q4 would focus
on a first-pass optimization to better select materials and size distribution.
The optimization work would be done on [*** Redacted] devices in a simple
architecture (ala concept figure above). A more detailed plan of activities will
be generated by the Collaboration team upon Commencement of the Collaboration.

*** Confidential treatment requested pursuant to a request for simple
architecture (ala concept figure above) confidential treatment filed with the
Securities and Exchange Commission. Omitted portions have been filed separately
with the Commission.

<PAGE>
The parties will hold a Q2 Formal Review Meeting no later than two weeks
after the end of Q2.

                                                                             -2-

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