Document:

Exhibit 10.3

Exhibit 10.3

WARRANT NO. XXX

TRI-ISTHMUS GROUP, INC.

(A Delaware Corporation)

 

WARRANT TO PURCHASE

SHARES OF COMMON STOCK

 

Effective: March 3, 2009

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE
SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED, OR OTHERWISE DISPOSED OF OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS.

THIS CERTIFIES THAT, for value received, XXXXXXXXXXX, a XXXXXXXXXXX, or its
registered assigns (“Holder”), is entitled to purchase, subject to the conditions set forth
below, at any time or from time to time during the Exercise Period (as defined in Section
1.2 below), XXXXXXXXXX (XXXXX) shares (“Shares”) of fully paid and
non-assessable common stock, par value $0.01 per share (the “Common Stock”), of Tri-Isthmus
Group, Inc., a Delaware corporation (the “Company”), at the per share purchase price (the
“Warrant Price”) set forth in Section 1.1 below, subject to the further provisions
of this Warrant.

1. EXERCISE OF WARRANT

The terms and conditions upon which this Warrant may be exercised, and the Shares subject
hereto may be purchased, are as follows:

1.1 Warrant Price. The Warrant Price shall be $0.75 per Share, subject to adjustment
as provided in Section 4 below.

1.2 Method Of Exercise. Holder may at any time beginning on the effective date of
this Warrant and for three (3) years from such date of effectiveness, or such later date as the
Company may in its sole discretion determine (the “Exercise Period”), exercise in whole or
in part the purchase rights evidenced by this Warrant. Such exercise shall be effected by:

(a) the surrender of this Warrant, together with a duly executed copy of the form of
notice of exercise attached hereto as Exhibit A, to the Secretary of the Company at
its principal offices;

 

 

(b) the payment to the Company, by cash, certified or cashier’s check payable to
Company’s order or wire transfer to the Company’s account, of an amount equal to the
aggregate Warrant Price for the number of Shares for which the purchase rights hereunder are
being exercised. Alternatively if then permitted under applicable securities laws, Holder
may exercise this Warrant by delivering to the Company: (i) a properly executed notice of
exercise together with a copy of irrevocable instructions (“Broker Instructions”) to a
FINRA-member securities broker to promptly deliver to the Company cash or a check payable to
the Company in the full amount of the Warrant Price for the total number of Shares being
purchased against the Company’s delivery of the Shares for which this Warrant is exercised
(if the Holder and the securities broker comply with such procedures and enter into such
agreements of indemnity and other agreements as the Company may reasonably prescribe as a
condition of that payment procedure) or (ii) shares of Common Stock, free and clear of any
and all liens, claims and encumbrances, having an aggregate Fair Market Value (as defined
herein below) equal to the full amount of the Warrant Price for the total number of Shares
being purchased. The Holder may also make payment in any combination of the permissible
forms of payment described in the preceding sentence. Additionally, if then permitted under
applicable securities laws, if the Fair Market Value of the Shares at time of exercise is
greater than the Warrant Price, the Holder may exercise this Warrant or any portion hereof
by indicating on the notice of exercise that the Holder elects to exercise this Warrant on a
net exercise basis (“Net Exercise Basis”). The Company shall then issue to the Holder a
number of Shares determined using the following formula:

	 	 	 	 	 
	X =

	 	Y (A-B)	 	 
	 

	 	A
	 	 

where

	 	 	 	 	 
	 	 	X = 	 	the number of Shares to be issued to the Holder.

	 
	 	 	Y =	 	 the number of Shares covered by this Warrant in respect of
which the net exercise election is made pursuant to this Section.

	 
	 	 	A = 	 	the Fair Market Value of one Share, as determined in
accordance with the provisions hereof, as of the date this Warrant is
exercised.

	 
	 	 	B =	 	 the Warrant Price in effect as of the date this Warrant is
exercised.

Fair Market Value of a share of Common Stock (for purposes of this section) means (a) if the
Shares are traded on a national securities exchange, the average of the closing prices for
the twenty (20) trading days prior to the date this Warrant is exercised; (b) if the Shares
are traded on the OTC Bulletin Board or another market or quotation system, or the prices
for the shares are published on the “Pink Sheets” operated by the Pink Sheets LLC, the
average of the closing bid and ask prices posted for the Shares during the twenty (20)
trading days prior to the date this Warrant is exercised; or (c) if the primary market for
such Shares is not an exchange or quotation system, the fair market value thereof as shall
be determined in good faith using appropriate valuation methods by the Board of Directors of
the Company as of the date this Warrant is exercised; and

(c) the delivery to the Company, if necessary in the discretion of counsel for the
Company, to assure compliance with the Securities Act of 1933, as amended (the
“Securities Act”), and applicable state securities laws, of an instrument executed
by holder certifying that the Shares
are being purchased solely for the account of Holder and not with a view to any resale
or distribution in violation of the Securities Act or applicable state securities laws.

 

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1.3 Issuance Of Shares and New Warrant. If the purchase rights evidenced by this
Warrant are exercised in whole or in part, one or more certificates for the purchased Shares shall
be issued as soon as practicable thereafter to Holder. If the purchase rights evidenced by this
Warrant are exercised only in part, the Company shall also deliver to Holder at such time a new
Warrant evidencing the purchase rights regarding the number of Shares (if any) for which the
purchase rights under this Warrant remain unexercised and continue in force and effect. All new
Warrants issued in connection with the provisions of this Section 1.3 shall bear the same
date as this Warrant and shall be substantially identical in form and provisions to this Warrant
except for the number of Shares purchasable thereunder. Each person in whose name any certificate
for Shares is to be issued shall for all purposes be deemed to have become the holder of record of
such Shares on the date on which this Warrant was surrendered and payment of the Warrant Price was
made, irrespective of the date of delivery of such stock certificate, except that if the date of
such surrender and payment is a date when the stock transfer books of the Company are closed, such
person shall be deemed to have become the holder of such Shares at the close of business on the
next succeeding date on which the stock transfer books are open.

2. TRANSFERS

2.1 Transfers. This Warrant and all rights hereunder are transferable in whole or in
part by the Holder subject to the provisions of Section 7 below. The transfer shall be
recorded on the books of the Company upon (i) the surrender of this Warrant (together with a duly
executed and endorsed copy of the form of transfer certificate attached hereto as Exhibit
B) to the Secretary of the Company at its principal offices, and (ii) the payment to the
Company of all transfer taxes and other governmental charges imposed on such transfer. In the
event of a partial transfer, the Company shall issue to the several holders one or more appropriate
new Warrants.

2.2 Registered Holder. Each holder of this Warrant agrees that until such time as any
transfer pursuant to Section 2.1 above is recorded on the books of the Company, the Company
may treat the registered Holder of this Warrant as the absolute owner.

2.3 Form Of New Warrants. All new Warrants issued in connection with transfers of
this Warrant shall bear the same date as this Warrant and shall be substantially identical in form
and provisions to this Warrant except for the number of Shares purchasable thereunder.

3. NO FRACTIONAL SHARES

Notwithstanding any adjustment (as required hereby) to the number of Shares purchasable upon
the exercise of this Warrant, the Company shall not be required to issue any fraction of a Share
upon exercise of this Warrant. If, by reason of any change made pursuant to Section 4
below, the Holder would be entitled, upon the exercise of any rights evidenced hereby, to receive a
fractional interest in a Share, the Company shall, upon such proper exercise of this Warrant,
purchase such fractional interest for an amount in cash equal to the Fair Market Value of such
fractional interest, determined as of the date of such exercise of this Warrant.

 

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4. ANTIDILUTION PROVISIONS

4.1 Stock Splits And Combinations. If the Common Stock shall at any time be
subdivided into a greater number of shares, then the number of Shares purchasable upon exercise of
this Warrant shall be proportionately increased and the Warrant Price shall be proportionately
decreased; and, conversely, if the Common Stock shall at any time be combined into a smaller number
of shares, then the number of Shares
purchasable upon exercise of this Warrant shall be proportionately reduced and the Warrant
Price shall be proportionately increased. Any adjustments under this Section 4.1 shall
become effective at the close of business on the date the subdivision or combination becomes
effective.

4.2 Reclassification, Exchange and Substitution. If the Common Stock shall be changed
into shares of any other class or classes of stock or other securities of the Company, whether by
capital reorganization, reclassification, or otherwise, Holder shall, upon exercise of this
Warrant, be entitled to purchase for the same aggregate consideration, in lieu of the Shares that
Holder would have become entitled to purchase but for such change, such number, class and series of
securities of the Company as would have been issuable in connection with such event to a holder of
that number of shares of Common Stock purchasable upon exercise of this Warrant immediately prior
to such reorganization, reclassification or other change. The Warrant Price shall be appropriately
adjusted to reflect that reorganization, reclassification or other change. Any adjustments under
this Section 4.2 shall become effective at the close of business on the date such change of
the Common Stock into shares of any other class or classes of stock or other securities of the
Company becomes effective.

4.3 Reorganizations, Mergers, Consolidations Or Sale Of Assets. If at any time there
shall be a reorganization involving the Common Stock (other than a stock split, combination,
reclassification, exchange, or subdivision of shares provided for in Sections 4.1 and
4.2 above) or a merger or consolidation of the Company with or into another corporation, or
the sale of all or substantially all of the Company’s assets to any other person, then, as a part
of such reorganization, merger, consolidation or sale, lawful provision shall be made so that
Holder shall thereafter be entitled to receive upon exercise of this Warrant, in accordance with
the terms hereof, in lieu of the Shares that Holder would have become entitled to purchase but for
such event, such other securities or property of the Company, or of the successor corporation
resulting from such event, to which Holder would have been entitled in such reorganization, merger,
consolidation or sale if this Warrant had been exercised immediately before that reorganization,
merger, consolidation or sale. In any such case, appropriate adjustment (as determined in good
faith by the Company’s Board of Directors) shall be made in the application of the provisions of
this Warrant with respect to the rights and interests of Holder after the reorganization, merger,
consolidation, or sale to the end that the provisions of this Warrant (including adjustment of the
Warrant Price then in effect and number of Shares purchasable upon exercise of this Warrant) shall
be applicable after that event, as near as reasonably may be, in relation to any shares or other
property deliverable after that event upon exercise of this Warrant. The Company shall provide
Holder with at least twenty (20) days’ prior written notice of any of the events described in the
first sentence of this Section 4.3.

4.4 Adjustments of Other Distributions. If the Company shall at any time declare and
pay or deliver to the holders of Common Stock a distribution payable in securities of other
persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash
dividends) or options or rights, in any case of a kind not referred to above, then, upon exercise
of this Warrant, Holder shall be entitled to receive a proportionate share of any such distribution
as though Holder was the holder of the number of shares of Common Stock into which this Warrant may
be exercised as of the record date fixed for the determination of the holders of Common Stock
entitled to receive such distribution.

4.5 Certificate as to Adjustments. In the case of each adjustment (including a
readjustment) under this Section 4, the Company will promptly, and in any event within
thirty (30) days after the event requiring the adjustment, compute such adjustment in accordance
with the terms hereof and deliver or cause to be delivered to Holder a certificate describing in
reasonable detail the event requiring the adjustment and setting forth such adjustment and the
calculations and results of such adjustment.

 

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4.6 Reservation of Stock Issuable Upon Exercise. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common Stock such number of
shares of Common Stock as shall from time to time be sufficient to effect the exercise of this Warrant.
If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the exercise of this Warrant, the Company will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock
to such number of shares as shall be sufficient for such purpose.

4.7 Method of Calculation. All calculations under this Section 4 shall be
made to the nearest one hundredth of a share.

5. RIGHTS PRIOR TO EXERCISE OF WARRANT

This Warrant does not entitle Holder to any of the rights of a stockholder of the Company,
including (without limitation) the right to receive dividends or other distributions, to vote or
consent, or to receive notice as a stockholder of the Company. If, however, at any time prior to
the expiration of this Warrant and prior to its exercise,

(a) the Company shall declare any dividend payable in any securities upon outstanding
 shares of Common Stock or make any other distribution (other than a regular cash dividend)
to the holders of shares of Common Stock;

(b) the Company shall offer to the holders of shares of Common Stock any additional
 shares of Common Stock or securities convertible into or exchangeable for shares of Common
Stock or any right to subscribe for or purchase any thereof; or

(c) a dissolution, liquidation or winding-up of the Company (other than in connection
with a reorganization, consolidation, merger, or sale of all or substantially all of its
assets as an entirety) shall be approved by the Company’s Board of Directors,

then, in any one or more of such events the Company shall give notice in writing of such event to
Holder, at its address as it shall then appear on the Company’s records, at least twenty (20) days
prior to the date fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividends, distribution, or subscription rights,
or for the determination of stockholders entitled to vote on such proposed dissolution, liquidation
or winding-up. Such notice shall specify such record date or the date of closing the transfer
books, as the case may be.

Any failure to give such notice or any defect therein, however, shall not affect the validity
of any action taken in connection with such dividend, distribution or subscription rights, or such
proposed dissolution, liquidation or winding-up.

6. SUCCESSORS AND ASSIGNS

The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon,
the Company and its successors and assigns and Holder and its successors and permitted assigns.

 

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7. RESTRICTED SECURITIES

To enable the Company to comply with the Securities Act and applicable state securities laws,
the Company may require Holder, as a condition of the transfer or exercise of this Warrant, to give
written assurance satisfactory to the Company that this Warrant, or in the case of an exercise
hereof the Shares, are being acquired for its own account, for investment only, with no view to the
distribution of the same in violation of the Securities Act or applicable state securities laws.
Any disposition of all or any portion of this Warrant or the Shares shall not be made unless and
until:

(a) There is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with such registration
statement; or

(b) Holder has (i) notified the Company of the proposed disposition and furnished the
Company with a detailed statement of the circumstances surrounding the proposed disposition,
and (ii) furnished the Company with an opinion of counsel, satisfactory to the Company, that
such disposition will not require registration of such securities under the Securities Act
and applicable state securities laws.

Holder acknowledges that this Warrant is, and each of the Shares issuable upon the exercise
hereof will be, a restricted security, and that the certificate or certificates evidencing such
Shares will bear a legend substantially similar to the following:

“The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or under the
securities laws of any state. They may not be sold, transferred or
otherwise disposed of in the absence of an effective registration
statement covering these securities under such Act or laws, or an
opinion of counsel satisfactory to the Company and its counsel that
registration is not required thereunder.”

8. LOSS OR MUTILATION

Upon receipt by the Company of satisfactory evidence of the ownership of and the loss, theft,
destruction, or mutilation of this Warrant, and (i) in the case of loss, theft, or destruction,
upon receipt by the Company of indemnity satisfactory to it, or (ii) in the case of mutilation,
upon receipt of this Warrant and upon surrender and cancellation of this Warrant, the Company shall
execute and deliver in lieu thereof a new Warrant representing the right to purchase an equal
number of Shares.

9. NOTICES

All notices, requests, demands and other communications under this Warrant shall be in writing
and shall be deemed to have been duly given on the date of receipt (or refusal of receipt) if
delivered personally or by courier by the party to whom notice is to be given, or on the earlier of
the third business day after the date of mailing or receipt if mailed to the party to whom notice
is to be given by first class mail, registered or certified, postage prepaid, and properly
addressed as follows: if to Holder, at its address as shown in the Company’s records; and if to the
Company, at its principal office. Either party may change its address for purposes of this
Section 9 by giving the other party written notice of the new address in the manner set
forth above.

 

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10. GOVERNING LAW; JURISDICTION

This Warrant shall be construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Warrant and all disputes arising
hereunder shall be governed by, the laws of the State of Delaware, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of Delaware or any other
jurisdictions) that would cause the application of the laws of any jurisdictions other than the
State of Delaware. Any suit, action or proceeding seeking to enforce any provision of, or based on
any dispute or matter arising out of or in connection with, this Warrant must be brought in the
state and federal courts located in Los Angeles, County, California. The Company and the Holder
each (a) consent to the exclusive jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding, (b) irrevocably waive, to the fullest extent
permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding in any such court
or that any such suit, action or proceeding which is brought in any such court has been brought in
an inconvenient forum, (c) will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, and (d) will not bring any action relating to this
Warrant in any other court.

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed on its behalf by one of
its officers thereunto duly authorized as of March 3, 2009.

	 	 	 	 	 
	 	TRI-ISTHMUS GROUP, INC.

 	 
	 	By:  	 	 
	 	 	DAVID HIRSCHHORN 	 
	 	 	Chief Executive Officer 	 

 

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EXHIBIT A

NOTICE OF EXERCISE

Tri-Isthmus Group, Inc.

9663 Santa Monica Boulevard, Suite 959

Beverly Hills, CA 90210

Gentlemen:

The undersigned,                                         , hereby elects to purchase, pursuant to the provisions to
the foregoing Warrant held by the undersigned,                      shares of the Common Stock, par value
$0.01 (the “Common Stock”), of Tri-Isthmus Group, Inc.

The undersigned (check one and complete):

 _____ 
herewith encloses the Warrant and cash or a certified or cashier’s check (drawn in favor of
the Company) in the amount of $                     in payment of the Warrant Price.

 _____ 
herewith encloses the Warrant and a copy of the applicable Broker Instructions, as defined
in Section 1.2 of the Warrant.

 _____ 
herewith encloses the Warrant and hereby elects to exercise the Warrant on a Net Exercise
Basis in accordance with the provisions of Section 1.2 of the Warrant.

The undersigned hereby represents and warrants as follows:

(a) the undersigned is acquiring such shares of the Common Stock for its own account for
investment and not for resale or with a view to distribution thereof in violation of the Securities
Act of 1933, as amended, and the regulations promulgated thereunder (the “Securities Act”);
and

(b) the undersigned is an “accredited investor” as defined in Rule 501 of Regulation D
promulgated under the Securities Act and, if an entity, was not organized for the purpose of
acquiring the Warrant or such shares of the Common Stock. The undersigned’s financial condition is
such that it is able to bear the risk of holding such securities for an indefinite period of time
and the risk of loss of its entire investment. The undersigned has sufficient knowledge and
experience in investing in companies similar to the Company so as to be able to evaluate the risks
and merits of its investment in the Company.

Please issue a certificate or certificates for such shares of the Common Stock in the
following name or names and denominations and deliver such certificate or certificates to the
person or persons listed below at their respective address set forth below:

 

 

 

 

If said number of shares of the Common Stock shall not be all the shares of the Common Stock
issuable upon exercise of the attached Warrant, a new Warrant is to be issued in the name of the
undersigned for the remaining balance of such shares of the Common Stock less any fraction of a
share of the Common Stock paid in cash pursuant to Section 3 of the attached warrant.

DATED:                    ,                     

	 	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

 

 

EXHIBIT B

ASSIGNMENT FORM

FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and
transfers unto the Assignee named below all of the rights of the undersigned under this Warrant,
with respect to the number of Shares of Common Stock set forth below:

	 	 	 
	Name and Address of Assignee

	 	No. of Shares

Common Stock
	 
	 	 
	 
	 	 
	 
	 	 

and does hereby irrevocably constitute and appoint as Attorney
                                                          
                        to
register such transfer on the books of                                          
                                        maintained for the
purpose, with full power of substitution in the premises.

Dated:                                         ,                     

	 	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 	 	 

NOTICE: The signature to this assignment must correspond with the name as written upon the face of
the within Warrant in every particular, without alternation or enlargement or any change
whatsoever.Exhibit 10.31

Exhibit 10.31

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), dated as of January 1, 2009
(the “Effective Date”), between NANOSPHERE, INC., a Delaware corporation having an office at 4088
Commercial Avenue, Northbrook, Illinois 60062 (the “Company’), and WILLIAM P. MOFFITT, an
individual residing at 942 Pine Tree Lane, Winnetka, Illinois 60093 (“Executive”).

PREAMBLE

The Company and Executive are parties to that certain Employment Agreement (the “Initial
Employment Agreement”) dated as of July 19, 2004, as amended by First Amendment to Moffitt
Employment Agreement dated as of March 16, 2006, providing for Executive to be employed as the
Company’s President and Chief Executive Officer. The “Employment Term” under the Initial Employment
Agreement expired on July 19, 2008 but, pursuant to its terms, was automatically extended through
July 19, 2009. Executive and the Company wish to replace the Initial Employment Agreement with this
Agreement from and after the Effective Date hereof.

AGREEMENTS

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good
and valuable consideration, the sufficiency and receipt whereof is hereby acknowledged, the parties
agree as follows:

1. Definitions. Unless otherwise defined herein, the following terms shall have the
following respective meanings:

“Benefits” means those benefits set forth in Section 3.3 herein.

“Board” means the Board of Directors of the Company.

“Bonus” means payments earned by Executive to the date of determination provided for in
Section 3.2 herein.

“Cause” means (i) any felony conviction or admission of guilt, (ii) any breach or
nonobservance by Executive of any material covenant set forth herein, provided that the Board has
given Executive written notice of such breach or nonobservance and Executive has failed to cure
such breach or nonobservance within a period reasonable under the circumstances, (iii) any willful,
intentional or deliberate disobedience or neglect by Executive of the lawful and reasonable orders
or directions of the Board, provided that the Board has given Executive written notice of such
disobedience or neglect and Executive has failed to cure such disobedience or neglect within a
period reasonable under the circumstances, or (iv) any willful or deliberate misconduct by
Executive that is materially injurious to the Company.

 

 

 

“Change in Control” means (i) the purchase or other acquisition by any person, entity or group
of persons, within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934 or
any comparable successor provisions (other than stockholders (or affiliates thereof) of the Company
as of the date of the Initial Employment Agreement), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either the outstanding shares of
Common Stock of the Company (on a fully-diluted basis) or the combined voting power of the
Company’s then outstanding voting securities entitled to vote generally in the election of
directors of the Company; (ii) the consummation of a reorganization, merger or consolidation of the
Company, in each case, with respect to which persons who were stockholders of the Company
immediately prior to such reorganization, merger or consolidation do not, immediately thereafter,
own more than 50% of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company; or (iii) the sale of all or
substantially all of the Company’s assets.

“Diminution in Responsibility” means any of (i) a material diminution in Executive’s duties or
responsibilities or the assignment to Executive of duties that are materially inconsistent with his
duties as President and Chief Executive Officer of the Company or that materially impair
Executive’s ability to function in his position; (ii) the Company’s failure, during the Employment
Term, to cause the election of Executive to the Board; (iii) a relocation of the Company’s
principal offices, without Executive’s acquiescence or consent, to a location that is more than a
50 mile radius from its current location; (iv) any material reduction in the compensation and
benefit opportunities of the Executive (measured in the aggregate); or (v) any breach by the
Company of any material provision of this Agreement, provided that Executive has given the Company
written notice of such breach and the Company has failed to cure such breach within a period that
is reasonable under the circumstances.

“Employment Term” is as defined in Section 4.

“Good Reason” means either a Change in Control or a Diminution in Responsibility.

“Permanent Disability” means Executive’s inability to substantially perform his duties and
responsibilities hereunder by reason of any physical or mental incapacity for a period of 180
consecutive days, or two or more periods of 90 consecutive days each in any 360-day period.

“Plan” means the Company’s 2007 Equity Incentive Plan.

2. Employment.

2.1 Employment Duties. Subject to the terms and conditions of this Agreement,
Executive is hereby employed by the Company to continue to serve as its President and Chief
Executive Officer. Executive accepts such employment, and agrees to discharge all of the duties
normally associated with said positions, and to faithfully and to the best of his abilities perform
such other services consistent with his position as a senior executive officer as may from time to
time be assigned to him by the Board. Notwithstanding the foregoing, however, Executive may serve
on the boards of directors of other companies, and in civic, cultural, philanthropic and
professional organizations, so long as such service does not detract from the performance of
Executive’s duties hereunder. At all times during which Executive remains President and Chief Executive Officer of the Company, Executive shall, as and when duly elected or appointed,
serve as a member of the Board and, at the request of the Board, as an officer or director of any
Company affiliate, in each case without additional remuneration therefor. Employee will perform
his duties hereunder at the Company’s offices.

 

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2.2 No Conflicting Agreements. Executive represents and warrants that neither
Executive’s entry into this Agreement nor Executive’s performance of Executive’s obligations
hereunder, will conflict with or result in a breach of the terms, conditions or provisions of any
other agreement, understanding or obligation of any nature to which Executive is a party or by
which Executive is bound, including, without limitation, any development agreement, noncompetition
agreement or confidentiality or nondisclosure agreement previously entered into by Executive.

3. Compensation and Benefits.

3.1 Base Salary. During the term of Executive’s employment hereunder, the Company
shall pay Executive a salary at the annual rate of $427,450 or such greater amount as the Board may
from time to time establish pursuant to the terms hereof (the “Base Salary”). Such Base Salary
shall be reviewed annually and may be increased, but not decreased, by the Board in its sole
discretion. The Base Salary shall be payable in accordance with the Company’s customary payroll
practices for its senior management personnel.

3.2 Bonus.

(a) Performance Bonus Opportunity. For calendar year 2009, Executive will be eligible
to earn and receive a performance bonus, to a target of $256,470, which bonus amount will be
discretionary and awarded by the Board, based upon the recommendations of the Compensation
Committee of the Board. For calendar year 2010, the target amount of this bonus opportunity will be
not less than $150,000. For calendar years after 2010, Executive will be entitled to participate
in a senior management bonus plan at a bonus percentage or target amount appropriate to the then
stage of the Company’s development and commensurate with the compensation of other chief executive
officers of comparable companies, but in no event less than $150,000 per calendar year.

(b) Transaction Bonus Opportunity. In addition, Executive shall have the right to
earn and receive a transaction bonus in an amount equal to 1% of the net proceeds of any
transaction constituting a Change in Control of the Company, accomplished during the Employment
Term, or within six months thereafter (unless Executive’s termination was voluntary other than for
Good Reason, or was for Cause), with the consent, approval or direction of the Board, which bonus
will be paid to Executive in the same form and at the same times and subject to the same conditions
as proceeds of the transaction are payable to the Company or shareholders of the Company upon and
following the consummation of such Change in Control transaction.

3.3 Benefits.

 

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(a) Benefit Plans. During the Employment Term, Executive may participate, on the same
basis and subject to the same qualifications as other senior management personnel of the Company,
in any benefit plans and policies in effect with respect to senior management personnel of the
Company.

(b) Reimbursement of Expenses. During the Employment Term, Company shall pay or
promptly reimburse Executive, upon submission of proper invoices in accordance with the Company’s
normal procedures, for all reasonable out-of-pocket business, entertainment and travel expenses
incurred by Executive in the performance of his duties hereunder.

(c) Vacation. During the Employment Term, Executive shall be entitled to vacations in
accordance with the policies of the Company applicable to senior management personnel from time to
time.

(d) Withholding. The Company shall be entitled to withhold from amounts payable or
benefits accorded to Executive under this Agreement all federal, state and local income, employment
and other taxes, as and in such amounts as may be required by applicable law.

(e) Reimbursement of Legal Fees. The Company will reimburse Executive, upon
presentation of an invoice therefor, in an amount not to exceed Five Thousand Dollars ($5,000), for
attorneys’ fees and costs incurred by Executive in connection with the review, negotiation and
documentation of this Agreement and related agreements on Executive’s behalf.

4. Employment Term.

The term of this Agreement (the “Employment Term”) shall commence as of the Effective Date and
shall end on the close of business on the day immediately preceding the third anniversary of the
Effective Date. The Employment Term shall be automatically extended for additional one-year
periods (each a “Renewal Period”) unless Executive notifies the Board or the Board notifies
Executive at least 90 days prior to the expiration of the Employment Term that the notifying party
does not wish to extend such Employment Term. Executive’s employment hereunder shall be
coterminous with the Employment Term, unless sooner terminated as provided in Section 5.

5. Termination; Severance Benefits.

5.1 Generally. Either the Board or Executive may terminate Executive’s employment
hereunder, for any reason, at any time prior to the expiration of the Employment Term, upon sixty
(60) days prior written notice to the other party. Upon termination of Executive’s employment
hereunder for any reason, Executive shall be deemed simultaneously to have resigned as a member of
the Board and from any other position or office he may at the time hold with the Company or any of
its affiliates.

5.2 Termination by Executive.

(a) No Reason. If, prior to the expiration of the Employment Term, Executive
voluntarily resigns from his employment, other than for Good Reason, (i) Executive shall receive no
further Base Salary or Bonus hereunder (except to the extent accrued to the date of termination), and (ii) Executive shall cease to be covered under or be permitted to
participate in or receive any of the Benefits (except to the extent of accrued vacation or as
permitted under the terms of any applicable benefit plans (but at no further expense to the
Company)).

 

4

 

(b) Good Reason. If, prior to the expiration of the Employment Term, Executive
terminates his employment hereunder for Good Reason, Executive shall be entitled, in addition to
all other items of Base Salary, Bonus, unreimbursed expenses and other entitlements to the date of
termination:

(i) to receive payment at the rate of his Base Salary in effect on the termination date for a
period of eighteen (18) months following the date of termination if termination was based on
Diminution in Responsibility, but for thirty (30) months following the date of termination if
termination was based on Change in Control, in each case payable in accordance with the Company’s
customary payroll practices but subject to Section 7 hereof;

(ii) to receive (to the extent then remaining unpaid) payment of the full target amount of his
performance bonus opportunity under Section 3.2 for the calendar year in which the termination
occurs, with payment to occur within two and one-half months thereafter, subject to Section 7
hereof; and

(iii) to immediate and full vesting, on the date of termination, of all outstanding options
and restricted stock awards granted to him under the Plan, which options shall remain exercisable
for a period of one (1) year following the date of termination (or the expiration of the option’s
term if earlier).

In order to receive his payments and other benefits under this subsection, however, Executive must
voluntarily terminate his employment with the Company within one (1) year of such Change in Control
or Diminution in Responsibility, as the case may be.

5.3 Termination by the Company.

(a) Without Cause. If, prior to the expiration of the Employment Term, the Company
terminates Executive’s employment hereunder without Cause, Executive shall be entitled to receive,
in addition to all other items of Base Salary, Bonus, unreimbursed expenses and other entitlements
to the date of termination, the payments, rights and benefits provided for in Section 5.2(b) above
as if termination had been based on a Diminution in Responsibility, subject to Section 7 below.

(b) For Cause. If, prior to the expiration of the Employment Term, the Company
terminates Executive’s employment hereunder for Cause, Executive shall (i) receive no further Base
Salary or Bonus hereunder (except to the extent accrued or earned to the date of termination), and
(ii) cease to be covered under or be permitted to participate in or receive any of the Benefits
(except for accrued vacation or as permitted under the terms of any applicable benefit plans (but
at no further expense to the Company)).

 

5

 

(c) Upon Permanent Disability. If, prior to the expiration of the Employment Term,
thc Company terminates Executive’s employment hereunder upon Executive’s Permanent Disability,
Executive shall be entitled to (i) receive all items of Base Salary, Bonus, unreimbursed expenses and other entitlements to the date of termination and (ii) the immediate
and full vesting of all outstanding options and restricted stock awards granted to him under the
Plan, and to the exercise of such options by Executive or Executive’s personal representative
within one (1) year of the date of termination of employment due to Executive’s Permanent
Disability.

(d) Upon Death. If, prior to the expiration of the Employment Term, Executive dies,
Executive (or his estate) shall be entitled to the payments, rights and benefits provided for in
Section 5.3(c) above as if Executive had been terminated upon his Permanent Disability.

5.4 Termination Due to Non-Renewal of Agreement by the Company. In the event the
Company notifies Executive under Section 4 that it will not renew this Agreement for any Renewal
Period, Executive shall be entitled to the payments, rights and benefits provided for in Section
5.2(b) above, as if termination had been based on a Diminution in Responsibility.

5.5 Additional Benefits upon Termination. In addition to other payments or benefits
to which Executive may then be entitled under other provisions of this Agreement, upon Executive’s
termination for Good Reason, without Cause or by reason of Permanent Disability or non-renewal of
this Agreement by the Company, Executive shall be entitled to (i) at the Company’s expense and
during the 18-month period following termination based on Diminution in Responsibility, termination
by the Company without Cause or by reason of Executive’s Permanent Disability or non-renewal of
this Agreement by the Company, but the 30-month period following termination based on a Change in
Control, the equivalent of the Benefits set forth in Section 3.3(a) on the same terms and
conditions as would have applied had Executive continued to be employed for such periods. To the
extent provision by the Company of any such Benefits is not permitted either pursuant to Section 7
below or by the terms of any applicable Company benefit plan, the Company shall take whatever steps
may be appropriate or necessary to ensure, at the Company’s expense, the enjoyment by Executive
(or, as applicable, his legal representative), of substantially similar benefits upon substantially
similar terms and conditions. It is understood that, in connection with post-termination of
participation in Benefits hereunder, Executive shall not be entitled to participate in any Benefits
instituted or adopted by the Company after Executive’s termination, but only those in which
Executive was a participant prior to termination.

5.6 Release for Post-Termination Benefits. In order to be eligible to receive any
benefits provided for in this Agreement that become due on or following termination of employment
hereunder, Executive shall be required to execute and deliver to the Company a full release of any
claims or causes of action that the Executive might otherwise have or claim to have or assert
against the Company, other than a claim for any of the post-termination benefits provided for
hereunder, in such form as the Company may reasonably require.

 

6

 

6. Golden Parachute Excise Tax.

The Company shall reimburse Executive for (i) any excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”) on any portion of the compensation or
benefits payable by the Company or its Affiliates to Executive under this Agreement, all other
contracts, arrangements or programs, and (ii) any such excise tax and any other taxes imposed by the Code or under state or local law on the payments provided for in
this Section 6. Executive and the Company agree to reasonably cooperate to mitigate the amount of
any such tax that might become payable. The Company shall pay to Executive the payments, or
portions thereof, provided for in this Section 6 not later than fifteen (15) days prior to the date
on which such taxes, or portions thereof, are due as determined by the tax counsel referred to
below. Tax counsel selected by the Company and reasonably acceptable to Executive shall determine
the amounts (if any) due Executive under this Section 6, based on the actual tax rates to which
Executive is subject at the time. Executive shall provide such counsel with such information as
such counsel reasonably requests in connection with such determination. All determinations of tax
counsel shall be binding on Executive and the Company. Tax counsel shall determine that payments
shall be due hereunder only if, and to the extent that, it is more likely than not that the
payments or benefits are subject to a tax. In making the determinations required by this Section
6, tax counsel may rely on benefit consultants, accountants or other experts. The Company agrees
to pay all reasonable fees and expenses of such tax counsel, benefits consultants, accountants or
other experts. If, subsequent to the payment to Executive of payments pursuant to this Section 6,
the tax counsel referred to in this Section 6 reasonably determines that the amount of the payments
paid pursuant to this Section 6 are greater than, or less than, the amount required to have been
paid, Executive shall reimburse the Company an amount, or the Company shall pay to Executive an
additional amount, respectively, based upon such determination. In the event that tax counsel
referred to in this Section 6 reasonably determines that Executive is required to pay excise tax,
interest or penalties to a governmental taxing authority as a result of his non-payment of taxes
where such tax counsel had determined that such taxes need not be paid or as a result of a
miscalculation of such taxes, the Company shall pay to Executive an additional amount equal to (A)
the amount of such interest and/or penalties, (B) the excise tax which was not paid and (C) any
excise tax and any other taxes imposed by the Code or under state or local law on the payments
provided for in this sentence.

7. 409 A Tax Liability.

Any provision of this Agreement to the contrary notwithstanding, the Company will suspend
paying Executive any cash amounts that Executive is entitled to receive pursuant to Section 5 and
Section 6 thereof during the six (6) month period following termination of Executive’s employment
(the “409A Suspension Period”), unless the Company reasonably determines that paying such amounts
in accordance with Section 5 and Section 6 thereof will not result in Executive’s liability for
additional tax under Section 409A of the Code. As soon as reasonably practicable after the end of
the 409A Suspension Period, Executive will receive a lump sum payment in cash for an amount equal
to any cash payments that the Company does not make during the 409A Suspension Period. Thereafter,
Executive will receive any remaining payments pursuant to Section 5 and Section 6 thereof, in
accordance with the terms of such Sections (as if there had not been any suspension of payments).

8. General.

 

7

 

8.1 Governing Law. This Agreement shall be construed, interpreted and governed by the
laws of the State of Illinois, without regard to the conflicts of law rules thereof.

8.2 Binding Effect. This Agreement shall extend to and be binding upon Executive, his
legal representatives, heirs and distributees and upon the Company, its successors and assigns
regardless of any change in the business structure of the Company.

8.3 Assignment. Neither this Agreement nor any of the rights or obligations hereunder
shall be assigned or delegated by any party without the prior written consent of the other party.

8.4 Entire Agreement; Termination of Initial Employment Agreement; Amendment. Except
for any stock option or stock award agreement between the parties, this Agreement contains the
entire agreement of the parties with respect to the subject matter hereof. Without limitation of
the foregoing, the Initial Employment Agreement is hereby terminated in its entirety and shall be
of no further force or effect from and after the Effective Date, and from and after the Effective
Date neither party shall have any surviving rights or obligations thereunder. No waiver,
modification or change of any provision of this Agreement shall be valid unless in writing and
signed by both parties.

8.5 Waiver. The waiver of any breach of any duty, term or condition of this Agreement
shall not be deemed to constitute a waiver of any preceding or succeeding breach of the same or any
other duty, term or condition of this Agreement.

8.6 Severability. If any provision of this Agreement shall be unenforceable in any
jurisdiction in accordance with its terms, the provision shall be enforceable to the fullest extent
permitted in that jurisdiction and shall continue to be enforceable in accordance with its terms in
any other jurisdiction and the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.

8.7 Resolution of Disputes. Any disputes arising under or in connection with this
Agreement between Executive and the Company (or any officer, director, Executive or agent of the
Company) shall, at the election of Executive or the Company, be resolved by confidential binding
arbitration, to be held in Chicago, Illinois (or in such other location as the Company may at the
time be headquartered) in accordance with the rules and procedures of the Model Employment Rules of
the American Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.

8.8 Notices. All notices pursuant to this Agreement shall be in writing and shall be
sent by prepaid certified mail, return receipt requested or by recognized air courier service
addressed as follows:

	 	(i)	 	If to the Company to:

Mr. Mark Slezak

Chairman of the Board

Nanosphere, Inc.

c/o Lurie Investments, Inc.

440 W. Ontario Street

Chicago, IL 60654

 

8

 

	 	 	 	copy to:

Paul, Hastings, Janofsky & Walker LLP

75 East 55th Street

New York, NY 10022

Attention: Esteban A. Ferrer, Esq.

	 	(ii)	 	If to Executive to:

Mr. William P. Moffitt

942 Pine Tree Lane

Winnetka, IL 60093

copy to:

	 
	 	 	 	[Executive’s counsel]

                                        

                                        

or to such other addresses as may hereafter be specified by notice in writing by either of the
parties, and shall be deemed given three business days after the date so mailed or sent.
Notwithstanding any other provision of this Agreement, neither party shall have the benefit of, or
be entitled to, any notice or cure period for any breach of a material provision hereof that is not
reasonably susceptible of cure.

8.9 Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original but all of which shall together constitute one and the same agreement.

 

9

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	 	 
	 	
/s/ William P. Moffitt	 
	 	William P. Moffitt 	 
	 	 	 
	 
	 	Nanosphere, Inc.

 	 
	 	By:  	/s/
Mark Slezak	 
	 	 	Mark Slezak, Chairman of the Board

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