EFTA02513454

From: jeffrey E. <[email protected]> Sent: Tuesday, January 13, 2015 8:50 PM To: Joichi Ito Subject: Re: update ok On Tue, Jan 13, 2015 at 4:39 PM, Joichi Ito > wrote: This is the electronic nose project. Dealing with the conflict of int=rest issues at MIT, but I'll get an anti-dilution per below. I thi=k it's a very good deal. Assume you're still OK with doing=this? -Joi =egin forwarded message: F=om: David Date: January 13, 2015 at=3:32:38 PM EST Sub=ect: update To: Joichi Ito =oi, I think you know the price on this round was established long before w= had lab results. So, the last money in the round is basically a gift to w=oever claims it. I'm pretty sure I can find a way to provide a weighte= antidil, even if it means retroactively giving it to everyone in the roun=. I realized I should have blind copied you on my letter to Ken Goldsmith =esterday. Here's what I wrote: =/div> Hello Ken, Thank you for y=ur time on the phone last week. I'm operating under the assumption tha=, if possible, MIT would like to help one of its entrepreneurial offspring=succeed... but (understandably) not at the cost of its integrity or polici=s. I'm writing because I have new information and a proposal I beleive=satisfies all these criteria. EFTA_R1_01646625 EFTA02513454 Our discussion was about actual conflict of =nterest and of the appearance. I will address each separately: Actu=l COI I double-checked and confirme= that due to the nature of the company there is no physical way Joi Ito co=ld use his position to benefit the company (and there by himself), even if=he wanted to. I say this for two reasons, both of which I believe is new i=formation: 1) Our agreement with MIT establishes a clear wall between acti=ities at MIT and OH2. MIT provided the theoretical groundwork for our tech=ology, which is complete and all the patents are filed. As such, there is =o more work conducted on the topic at MIT, by Shuguang or anyone else. Fur=hermore, our agreement states that even if there were any=additional theoretical learnings, they would belong to MIT. And, 2) =reating new compositions of matter based on the licensed patents (the purp=se of the company) requires equipment MIT does not own, and the work of th= company must be performed off-campus, by definition. That is to say that =f Joi Ito were to wake up in the morning with the sole intent of affecting=something at OH2, there simply would be no path available for him to do so= That leaves the issue we discussed, which was the appearance of conflict<=div> =b>Appearance of COI Our proposal to=avoid the appearance of conflict is that we would commit to include a disc=osure statement in every document that mentions Kyara Investments =V LLC (of which Joi Ito would be a minority shareholder). </=iv> W= propose the following text: =/div> "DISCLOSURE: Joi Ito is a minority s=areholder in Kyara Investments IV LLC a fact he disclosed to MIT=prior to his investment and was subsequently permitted under the mutual un=erstanding and condition that all related activities within MIT were compl=tely and permanently ceased prior to his investment, thereby eliminating t=e possibility of a conflict of interest. It is=my hope that in the absence of the possibility of actual conflict (as stat=d above) and with our commitment to include a disclosure statement in all =ublic and private financial documents.... that MIT can feel comfortable th= COI risk has been well-addressed and can permit this investment to go for=ard. Thank you for your consideration and assistance. Kind regards, =br> David Levy, Ph.D. '92, SM '=7, SB '87 2 EFTA_R1_01646626 EFTA02513455 4>=A0 please note The information contained in this communicati=n is confidential, may be attorney-client privileged, may constitute=inside information, and is intended only for the use of the addressee. =t is the property of JEE Unauthorized use, disclosure or copying of =his communication or any part thereof is strictly prohibited and may=be unlawful. If you have received this communication in error, please n=tify us immediately by return e-mail or by e-mail to [email protected] <mailto:[email protected]> , and =estroy this communication and all copies thereof, including all attachm=nts. copyright -all rights reserved 3 EFTA_R1_01646627 EFTA02513456