COMMERCIALISATION PARTNERSHIP AGREEMENT

 

THIS COMMERCIALISATION PARTNERSHIP AGREEMENT is made by and between

 

CASALE S.A.

Via Pocobelli, 6

6900 LUGANO

SWITZERLAND

- hereinafter referred to as “CASALE” -

 

and

 

QUANTUMSPHERE Inc.

2905 Tech Center Drive

Santa Ana

California 92705 USA

- hereinafter referred to as “QSI” -

 

- hereinafter individually referred to as “Party”

and jointly as “Parties”, as the case may be;

 

WHEREAS,

CASALE is, inter alia, a world-wide leader in technologies relating to catalytic
processes and chemical reactors, including without limitation patented fixed bed
reactors that can be used for ammonia, methanol and other types of synthesis, in
adiabatic and/or isothermal mode, and including without limitation processes for
the production of ammonia and methanol from various carbonaceous feedstock,
patented or not, (hereinafter defined respectively as the “AMMONIA TECHNOLOGY”
and as the “METHANOL TECHNOLOGY”), and including without limitation a process,
patented or not, for the synthesis of unsaturated hydrocarbons (mostly olefins)
from synthesis gas, (hereinafter defined as the “GAS TO OLEFINS TECHNOLOGY” or
“GTO”).

 

WHEREAS,

QSI is, inter alia, a leading developer, manufacturer and supplier of
proprietary catalysts based on QSI-nano particles for use in thermo-catalytic
applications. QSI has broad knowledge, experience and intellectual property in
the formulation and marketing of catalysts based on its patented and highly
scalable manufacturing process;

 

WHEREAS,

The Parties previously executed that certain Joint Development Agreement
(“JDA”), dated May 18, 2015, which provided, inter alia, that nano-sized
particles based catalysts may be used advantageously as ammonia synthesis
catalyst, as methanol synthesis catalyst and as a GTO synthesis catalyst;

 

WHEREAS,

Pursuant to the terms of the JDA, the Parties agreed to partner in the
development and commercialization of QSI’s nano-sized particles based catalysts
for ammonia synthesis, that is a catalyst produced by coating a standard ammonia
synthesis catalyst with QSI’s iron nano particles (hereinafter defined as the
“AMMONIA CATALYST” or “FeNIX”), methanol synthesis (hereinafter defined as the
“METHANOL CATALYST”) and in conjunction with the GTO TECHNOLOGY (hereinafter
defined as the “GTO CATALYST”);

 

 

   

 

WHEREAS,

The Parties intend that the initial commercialization of QSI’s FeNIX product
(the “Initial Commercialisation”) will occur in the second half of 2016 at the
commercial ammonia plant of an existing CASALE client; and

 

WHEREAS,

In anticipation of the initial commercialization of the FeNIX product, the
Parties now desire to formalize the terms upon which FeNIX will be offered and
sold commercially by the Parties, with the development work related to the
METHANOL CATALYST and the GTO CATALYST to continue pursuant to independent
development programs under the JDA.

 

NOW, THEREFORE,

In consideration of the terms and conditions hereinafter set forth, CASALE and
QSI agree as follows:

 

ARTICLE 1 – DEFINITIONS

 

The term “Affiliate” means with respect to a Party any corporate entity with
legal personality which, now or hereafter, directly or indirectly, controls, is
controlled by or is under common control by such Party. “Control” in the meaning
of the foregoing sentence shall mean at least 50% of the voting stock or
management control by agreement.

 

The term “Agreement” means the present commercialisation agreement.

 

The term “Field” means (i) AMMONIA TECHNOLOGY of CASALE, and (ii) FeNIX,
including the proprietary nano-catalyst manufacturing technology of QSI.

 

The term “Background Technical Information” means any Technical Information
related to the Field owned or controlled by CASALE or QSI or any of either
Party’s Affiliates, prior to the effective date of this Agreement.

 

The term “Technologies” means the design, proprietary or not, for the synthesis
process and for the reactors for ammonia synthesis.

 

The term “Development Programs” means the development programs for the ongoing
development of METHANOL CATALYSTS and GTO CATALYSTS pursuant to the terms of the
JDA. The METHANOL CATALYSTS and GTO CATALYSTS are each being developed pursuant
to a separate and independent “Development Program”.

 

The term “Background Patents” means any Patents based on inventions related to
the Field, conceived, independently or jointly, by CASALE or QSI or any of
either Party’s Affiliates before this Agreement, and detailed in Exhibit A
hereto.

 

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The term “New Patents” means any patents based on inventions related to the
Field, conceived, independently or jointly, by CASALE or QSI or any of either
Party’s Affiliates under this Agreement or any extensions hereof.

 

The term “New Technical Information” means all Technical Information achieved or
developed, independently or jointly, by QSI or CASALE or any of either Party’s
Affiliates related to the Field, under this Agreement or any extensions hereof,
to the extent that, and subject to the terms and conditions under which, the
Party in question has the right to disclose and make available New Technical
Information hereunder.

 

The terms “Product” or “Products” mean FeNIX.

 

The term “Technical Information” means the “Background Technical Information”
and/or the “New Technical Information” as the case may be.

 

The term ‘HSE’ means all the aspects related to the use of FeNIX catalyst
related to Health Safety and Environment.

 

The term ‘Initial Commercialisation’ means the first installation of FeNIX
catalyst in an ammonia synthesis converter designed in accordance with the
CASALE AMMONIA TECHNOLOGY.

 

The term ‘Commercialisation Ready’ for the FeNIX catalyst means that the HSE
aspects have been finalized and the Initial Commercialisation has provided
results on the FeNIX catalyst performance that reflect a performance activity
increase, and its stability over time, over standard ammonia synthesis catalyst
and sufficient to justify the FeNIX price premium.

 

ARTICLE 2 – PURPOSE OF THIS AGREEMENT

 

The purpose of this Agreement is to agree upon the terms and conditions for the
commercialisation of FeNIX between CASALE and QSI.

 

ARTICLE 3 – COMMERCIALISATION

 

3.1 CASALE and QSI will be cooperating and jointly carrying out the Initial
Commercialisation in the second half of 2016. The Parties intend to finalize the
HSE aspects of the FeNIX catalyst in the first half of 2016.     3.2 The
principal objective of the Initial Commercialisation is to procure performance
data of the FeNIX product in a commercial ammonia plant utilizing CASALE’s
AMMONIA TECHNOLOGY for purposes of marketing and offering FeNIX for sale on a
global basis thereafter.     3.3 Once the FeNIX catalyst is Commercialisation
Ready the performance data will be utilized for purposes of marketing,
co-branding and offering for license and/or sale of FeNIX in conjunction with
the AMMONIA TECHNOLOGY to the following parties:

 

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  (i) Existing CASALE clients - who are undertaking a refurbishment of their
respective ammonia plants;         (ii) Non-CASALE clients - who are undertaking
a refurbishment of their respective ammonia plants for purposes of displacing
the incumbent reactor technology;         (iii) New-build ammonia plants - who
are making an initial selection on reactor technology and ammonia catalysts. and
        (iv) Catalyst Refill clients - who wish to replace their ammonia
synthesis catalyst with a new charge

 

3.4 Casale Obligations.

 

  (i) Market and utilize its reasonable efforts to license and/or sale the FeNIX
product alongside the AMMONIA TECHNOLOGY to each CASALE prospect comprised in
the group identified in Section 3.3 (i, ii, iii) above, and without AMMONIA
TECHNOLOGY to the groups identified in Section 3.3(iv) following completion of
the Initial Commercialisation;         (ii) CASALE will make all reasonable
efforts to provide all active ammonia owner operators listed in Section 3.3 and
included in the Sales Pipeline Report with details on the expected performance
of the FeNIX product at their respective ammonia plants in conjunction with
CASALE’s AMMONIA TECHNOLOGY or any other synthesis technology being utilized, or
proposed to be utilized as the case may be, at such ammonia plants. The
foregoing will be provided at the applicable time of submission of a response to
a Request for Proposal (“RFP”), if applicable, or as part of the bidding process
if a RFP does not apply;         (iii) It is to be noted that CASALE may not be
successful in selling and/or marketing FeNIX to all ammonia operators listed in
Section 3.3 based on the data required in Section 3.4(ii). In the event of the
foregoing, such event shall not constitute a breach of this agreement.        
(iv) Continued education of QSI on the intricacies of the ammonia sector and
ammonia plant systems, procedures and protocols; and         (v) Sales Pipeline
Report – detailed in Section 3.7 below.         (vi) QSI understands and agrees
that CASALE is party to existing agreements with third parties, including
catalyst suppliers, and therefore nothing in this AGREEMENT shall impair the
freedom and the possibility of CASALE to honour the obligations arising from
such existing agreements nor cause any additional cost or burden to CASALE in
the performance of its obligations deriving therefrom.

 

3.5 QSI Obligations.

 

  (i) Timely production and shipment of FeNIX;         (ii) Detailed
instructions on handling FeNIX product, coating FeNIX product onto commercial
ammonia catalyst substrates, proper loading of FeNIX product into ammonia
reactors, and EH&S input and collaboration;         (iii) Maintaining adequate
inventory based on the Sales Pipeline Report;         (iv) Assisting CASALE in
the sale and/or license of FeNIX product whenever requested; and         (v) QSI
will use its good faith best efforts to introduce new opportunities to CASALE in
the ammonia sector and to one or more of the entities listed in Section 3.3
above.

 

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3.6 Joint Obligations. CASALE and QSI will cooperate in the creation of
marketing materials identifying the benefits of the FeNIX product to the ammonia
plant owner/operators identified in Section 3.2. Further, the Parties will
cooperate in the creation of Material Safety Data Sheets (“MSDS”), and
Environmental Health and Safety (“EH&S”) materials ensuring the safe handling,
loading, activation and disposal (at the end of the FeNIX life cycle) of the
FeNIX product at the respective ammonia plants.     3.7 Sales Pipeline Report.
Upon successful conclusion of the Initial Commercialisation, CASALE will provide
QSI with a sales pipeline report (“Sales Pipeline Report”) for deployments of
the AMMONIA TECHNOLOGY in the ammonia plants specified in Section 3.3 for a
rolling, eighteen (18) month forward looking period. The Sales Pipeline Report
is necessary to ensure adequate FeNIX inventory for future deployments on a
timely basis, and will be provided on the last day of each calendar quarter
during the Term. Specifically, CASALE will provide the following details as
accurately as reasonably possible to QSI in the Sales Pipeline Report:

 

  (i) The name of the ammonia plant;         (ii) The operator of the ammonia
plant;         (iii) The owner of the ammonia plant (to the extent it varies
from the operator);         (iv) The AMMONIA TECHNOLOGY being utilized at the
ammonia plant;         (v) The volume in kilograms of FeNIX product required for
the refurbishment of the existing plants, or initial loading in the case of a
new-build plants, based on a 1.5% loading (coating) by weight;         (vi) The
expected timing of the refurbishment of the existing ammonia plants, or initial
loading in the case of a new-build ammonia plants;         (vii) The technical
product name and manufacturer of the base ammonia catalyst or substrate, onto
which the FeNIX product will be coated, to be utilized in the refurbishment of
each of the existing ammonia plants, or initial loading in the case of each
new-build ammonia plant; and         (viii) Based on Section 3.4, the
anticipated production increase in ammonia output and/or energy savings (based
on enhanced production efficiencies) that will be realized by each of the
existing ammonia plants and new-build ammonia plants, as the case may, from the
utilization of the FeNIX product.

 

3.8 Compensation. QSI shall quote to CASALE, on a case-by-case basis for each
opportunity, the pricing of FeNIX for purposes of coating the standard industry
catalyst.

 

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3.9 During the term of this Agreement, CASALE will not enter into any agreement
with any third-party company for any purpose relating to the use of nano-sized
particle based catalysts in ammonia synthesis.     3.10 The Parties anticipate
utilizing a third party (e.g., Clariant) to facilitate the commercialisation of
FeNIX to the entities listed in Section 3.3. In this case CASALE will maintain
its exclusivity rights as detailed in Article 4.

 

ARTICLE 4 – TERM; EXCLUSIVITY

 

4.1 Term. The term of this Agreement shall be ten (10) years, with automatic
five (5) year renewals (“Term”).     4.2 Exclusivity. During the Term, CASALE
shall have exclusive rights to commercially market, co-brand and sell FeNIX, in
conjunction with the AMMONIA TECHNOLOGY, into the ammonia market globally, with
the exception of the People’s Republic of China (“FeNIX Exclusivity”). QSI will
not license FeNIX for use outside of the People’s Republic of China to an
ammonia plant owner/operator if such party does not commit to use the AMMONIA
TECHNOLOGY.

 

  (i) FeNIX Marketing Requirement. To maintain FeNIX exclusivity during the
Term, CASALE irrevocably agrees to offer FeNIX to 100% of the commercial ammonia
plants that CASALE bids and/or offers its AMMONIA TECHNOLOGY after the FeNIX
catalyst is Commercialisation Ready, provided however that (i) the expected
performances of the FeNIX in the subject ammonia plant(s) are higher than those
achievable with the standard ammonia synthesis catalyst and sufficient to
justify the FeNIX price premium, (ii) the terms and conditions of the
contract/purchase order for the supply of the FeNIX, including the relevant
price and delivery schedule, will not be such that the utilization of the FeNIX
in the subject ammonia plant(s) will result to be less favourable than standard
ammonia synthesis catalyst, and (iii) the customer(s) and/or the owner(s) of the
subject ammonia plant(s) will not object to the utilization of the FeNIX in
their plant(s).

 

ARTICLE 5 – INTELLECTUAL PROPERTY OWNERSHIP AND RIGHTS

 

5.1 All ownership and control of Background Technical Information and Background
Patents of either Party and its Affiliates shall remain with the respective
Party and its respective Affiliates.     5.2 Ownership of, and proprietary and
exclusive rights to all New Technical Information and New Patents developed by
CASALE or by QSI and which are severable from the other Party’s Background
Patents shall be vested in and be the sole and exclusive property of inventor’s
employer.     5.3 Any Party shall make available its Background Technical
Information, Background Patents, New Technical Information and New Patents to
each other as required to facilitate the joint cooperation under this Agreement,
to the extent that the respective Party has the right to disclose and make
available such information. Any rights of use related hereto shall be restricted
to the purposes of this Agreement.

 

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ARTICLE 6 – PATENT STRATEGY RESPONSIBILITIES

 

6.1 CASALE and QSI shall each be responsible for implementing the patent
strategy set forth herein with respect to obtaining and/or maintaining any
Background Patents and New Patents solely owned or to be solely owned by CASALE
or QSI respectively, including bearing all costs associated with obtaining
and/or maintaining such patents. The patent applications of New Patents of the
inventing Party shall be treated in strict confidence by the other Party so that
the patent filing shall not be jeopardised.     6.2 Notwithstanding if CASALE
and/or QSI may be responsible for implementing patent strategy(ies) as provided
in this Article 6, the Parties shall co-ordinate their respective efforts with
each other concerning all matters relating to Background Patents and New Patents
irrespective of ownership. In case a Party wishes not to maintain any Background
Patent or New Patent solely owned by the said Party, but required for the
AMMONIA TECHNOLOGY or FeNIX, such Party shall offer the said Patent(s) to the
other Party and the other Party shall have the right to acquire such Patent(s).

 

ARTICLE 7 – CONFIDENTIALITY

 

7.1 Each Party represents that it will protect and safeguard any Background
Technical Information and New Technical Information disclosed by any other Party
under this Agreement (hereinafter referred to as “Confidential Information”) as
confidential and not to disclose the same to any third party, except to the
extent the same:

 

  (a) is in the public domain at the time of disclosure, or         (b) becomes,
after disclosure hereunder, part of the public domain by publication or
otherwise through no fault of the receiving Party, or         (c) was developed
by the receiving Party prior to disclosure hereunder as demonstrated by
competent written evidence (to the extent this exception applies, the receiving
Party shall notify the disclosing Party immediately upon receipt of the
Confidential Information), or         (d) is being developed independently of
this Agreement without the use of any information disclosed hereunder by another
Party as demonstrated by competent evidence in existence prior to the execution
of this Agreement, or was received by the receiving Party as demonstrated by
competent written evidence from a third party who had a lawful right to disclose
the same to the receiving Party and who did not require the receiving Party to
hold the same in confidence, or         (e) may be disclosed to any third
parties by prior written agreement of the disclosing Party, or         (f) must
be disclosed according to mandatory law or stock exchange rules provided that
the disclosing Party is consulted without undue delay and prior to such
disclosure.           Affiliates of any Party shall not be considered as third
parties; provided, however, that each Party shall be responsible for the
compliance of its Affiliates with this Article 7.

 

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7.2 Each Party agrees to maintain in confidence and prevent the duplication or
disclosure to third parties (excluding Affiliates of any Party hereof) all
Confidential Information received from any other Party. Further, each Party
agrees not to use any Confidential Information received from any other Party for
any other purposes as contemplated under this Agreement. Notwithstanding the
foregoing, CASALE and QSI may disclose Confidential Information to any third
party engaged to perform services in connection with activities authorised under
this Agreement, provided that CASALE and QSI have approved such third parties,
which approval shall not be unreasonably withheld, and further provided that
such third parties shall have entered into a confidentiality/restricted use
agreement at least as restrictive as the terms and conditions set forth herein
and which is enforceable by CASALE and QSI. A copy of all such third party
secrecy agreements shall be provided to CASALE and QSI, as applicable.     7.3
The confidentiality obligations under this Agreement shall remain in force for a
period of twenty (20) years from the effective date of this Agreement and shall
survive any termination thereof.     7.4 Any publication related to this
Agreement intended by one party shall be subject to prior written consent by the
other party. Such approval by the other party shall not be withheld
unreasonably. In case the other party does not raise objections against a
publication (original text) within eight (8) weeks after receipt of the complete
and final documentation to be published, the consent shall be deemed given;
provided, however, to the extent disclosure of this Agreement is required
pursuant to U.S. securities laws or the rules and regulations of a securities
exchange, then in such case this Agreement may be published in the form of a
public filing as required by applicable laws, rules and regulations.

 

ARTICLE 8 – WORK AT OTHER PARTY’S FACILITIES

 

From time to time during the performance of this Agreement, the employees,
consultants or agents of each Party may perform work at the facilities of the
other Party. Each Party will ensure that its respective employees, consultants
and agents strictly comply with all of the host party’s EH&S and security
policies and procedures of which they have been advised, and to execute any
appropriate confidentiality agreement to protect any of the host party’s
confidential information.

 

ARTICLE 9 – INDEMNITIES, LIABILITIES

 

9.1 Each Party represents and warrants that it has the right and title to
Background and New Technical Information disclosed and made available under this
Agreement to the other Party and is entitled to do so without accounting to
others.     9.2 CASALE will indemnify, defend and hold harmless QSI, its
officers, directors, employees, agents (hereinafter collectively referred to as
“QSI Representatives”), Affiliates and insurers against any and all claims,
demands, direct losses, damages, liabilities, fees, costs or suits arising out
of any infringement of third party’s intellectual property by CASALE’s
Background Patents and/or Background/New Technical Information, relevant to
Technology, under this Agreement.

 

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9.3 QSI will indemnify, defend and hold harmless CASALE, its officers,
directors, employees, agents (hereinafter collectively referred to as “CASALE
Representatives”), Affiliates and insurers against any and all claims, demands,
direct losses, damages, liabilities, fees, costs or suits arising out of any
infringement of third party’s intellectual property by QSI’s Background Patents
and/or Background/New Technical Information, relevant to FeNIX catalyst, under
this Agreement.     9.4 Neither Party shall have any liability to the other
Party for consequential damages such as, without limitation, loss of profits or
loss of business opportunities.     9.5 For the avoidance of doubt, each Party
will be solely responsible for managing compliance with their respective
government licensing, regulations and laws.

 

ARTICLE 10 – TERMINATION

 

10.1 This Agreement shall take effect upon the date of execution by both
Parties.     10.2 If a Party breaches the terms of this Agreement, and when such
a breach of the Agreement is not remedied within sixty (60) days of written
notice requiring that it be remedied, the other Party shall be entitled to
terminate this Agreement on its part. In the event of a breach that is not cured
within the sixty (60) day cure period, the non-breaching party shall be entitled
to receive reasonable compensation for the out-of-pocket costs incurred pursuant
to this Agreement. In addition, in the case of a breach of this Agreement by QSI
that is not otherwise cured within the sixty (60) day cure period, QSI shall be
obligated to satisfy CASALE’s supply requirements for a period of ten (10)
years, subject to automatic five (5) year renewal periods thereafter. For the
avoidance of doubt, the foregoing obligations of QSI shall apply to all FeNIX
product utilized in the production of ammonia from synthesis gas.     10.3 In
the event that CASALE or QSI enters into bankruptcy or liquidation or any other
arrangement or assignment for the benefit of its creditors, the other Party
shall be entitled to terminate this Agreement with respect to the defaulting
Party. In such event, all rights and obligations under this Agreement shall in
good faith be transferred to the non-defaulting Party who is entitled to such
rights according to the nature of this Agreement and prior to the occurrence of
the above circumstances.     10.4 In the event that CASALE or QSI are acquired
by a third party or establish an alliance with a third party relevant to the
Field, this Party shall immediately inform the other Party; the respective other
Party shall be entitled to terminate this Agreement in case the new ownership or
alliance is directly competitive (i.e., for the avoidance of doubt, (i) in the
case of CASALE, a third party that owns, and commercially offers for sale,
ammonia reactor technology, and (ii) in the case of QSI, a third party that
owns, and commercially offers for sale, nano-catalysts for use in the ammonia
synthesis process). In such event, all rights and obligations under this
Agreement, specifically excluding each Party’s respective intellectual property
in existence prior to the execution of the JDA, shall in good faith be
transferred to the non-defaulting Party who is entitled to such rights according
to the nature of this Agreement and prior to the occurrence of the above
circumstances.

 

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ARTICLE 11 – CHOICE OF LAW, DISPUTE RESOLUTION

 

11.1 This Agreement shall be exclusively governed by and construed in accordance
with the laws of Switzerland. The conflict of law rules shall be excluded to the
extent that these rules refer to the application of the laws of any other
jurisdiction. The application of the United Nations Convention on Contracts for
the International Sale of Goods (CISG) shall be excluded.     11.2 All disputes
arising out of or in connection with the present Agreement shall be exclusively
and finally settled under the Rules of Arbitration of the International Chamber
of Commerce by one or more arbitrators appointed in accordance with the said
Rules. The legal seat of such arbitration shall be Paris, France.

 

ARTICLE 12 – MISCELLANEOUS

 

12.1 Notwithstanding the outstanding JDA (which JDA remains issued and
outstanding upon the execution of this Agreement with respect to methanol and
gas-to-olefins applications, and terminates solely with respect to ammonia
synthesis applications) between the Parties, this Agreement constitutes the
entire Agreement between the Parties; no representations having been made by any
of the parties except as are herein specifically set forth.     12.2 QSI shall
be entitled to announce the execution of this Agreement as required by the
securities laws of the U.S. as the next critical commercialization step in the
CASALE relationship following the prior execution of the JDA in May 2015.    
12.3 CASALE shall handle all sales, marketing and advertising of FeNIX to the
ammonia industry.     12.4 Any notice required or permitted under this Agreement
must be in writing and will be deemed given when delivered personally or mailed,
post-paid to all the parties at the following addresses or such other addresses
as may from time to time be designated in writing:

 

In case of CASALE:

 

CASALE S.A.

Via G. Pocobelli, 6

6900 LUGANO

SWITZERLAND

phone: +41 91/9607200

e-mail: e.filippi@casale.ch

 

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In case of QSI:

 

QuantumSphere, Inc.

2905 Tech Center Dr.

Santa Ana, CA 92705 USA

QuantumSphere, Inc.

2905 Tech Center Dr.

Phone: +1 714 545 6266

e-mail: kmaloney@qsinano.com

 

12.5 Except as may be expressly provided herein, this Agreement shall not be
assigned by any Party without the prior written consent of the other Party,
which consent shall not be unreasonably withheld; provided, however, either
Party shall have the right to assign this Agreement, without the consent of the
other, upon a change of control (“Change of Control” for purposes hereof shall
mean the sale of all or substantially all of one party’s assets or a merger
which results in the stockholders of the assigning party prior to the merger
transaction not controlling a majority of the voting capital stock immediately
following the close of the merger transaction); provided, further, this
Agreement may not be assigned to a direct competitor (i.e., for the avoidance of
doubt, (i) in the case of CASALE, a third party that owns, and commercially
offers for sale, ammonia reactor technology, and (ii) in the case of QSI, a
third party that owns, and commercially offers for sale, nano-catalysts for use
in the ammonia synthesis process), without the express prior written consent of
the non-assigning party; provided, further, that in the event of an assignment
by either Party of this Agreement, the assignee will be expressly bound by all
of the terms, conditions and obligations of the assignor under this Agreement.
Each Party shall be entitled to involve any of its Affiliates in order to fulfil
its rights and obligations, but shall, however, remain solely responsible under
this Agreement (i.e. there shall be no joint and several liabilities between a
Party and its Affiliates towards the other Party).     12.6 Except for the
payment of money, none of the Parties shall be liable for any failure to perform
or observe any of its obligations under this Agreement for as long as and to the
extent that such performance is prevented or hindered by any circumstances
beyond such Party’s reasonable control (and for a reasonable period thereafter
necessary for resumption of such performance) including, without limitation, war
(declared or undeclared), revolution, civil commotion, labour disputes, acts of
public enemies, acts of terrorism, or due to any law, proclamation, regulations,
ordinance, demand or requirement of any government or any subdivision, authority
or representative of any government. The Party whose performance is so prevented
or hindered shall notify the other Parties in writing of the details thereof,
with reasonable specificity, within seven (7) days of the occurrence of such
circumstances and shall take all reasonable steps to resume and continue
performance as soon as possible.     12.7 In case a situation occurs which could
not have been foreseen at the time the Parties concluded this Agreement, and
which is detrimental or causes prolonged hardship to one of the Parties, the
Parties shall meet to discuss the situation and the Parties will try to find a
fair and equitable solution.

 

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IN WlTNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
and effective as of the day and year written below.

 

For CASALE S.A.         Date: March 8, 2016         Signature: /s/ Federico
Zardi   Name, Title:  Federico Zardi, COO         For QUANTUMSPHERE, Inc.      
  Date: March 4, 2016         Signature: /s/ Kevin D. Maloney   Name, Title:
Kevin D. Maloney, CEO & President  

 

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Exhibit A

 

Patents

 

CASALE holds the following patents and patents pending in the Field:

 

 

 

QSI holds the following patents and patent pending (i.e., notice of allowance)
in the Field:

 

DESCRIPTION OF PATENT PATENT NUMBER PATENT HISTORY

 

DESCRIPTION OF PATENT   PATENT NUMBER   PATENT HISTORY           METHOD AND
APPARATUS FOR FORMING NANO-PARTICLES   Patent No. 7,282,167   Patent Application
Filing Date: 5/06/04 Patent Issuance Date: 10/16/07          

METHOD AND APPARATUS FOR

FORMING NANO-PARTICLES

  Patent No. 7,803,295  

Patent Application Filing Date: 11/2/06

Patent Issuance Date: 09/28/10

  Patent No. 8,500,427  

Patent Application Filing Date: 09/21/10

Patent Issuance Date: 08/06/13

          SYSTEM AND METHOD FOR AMMONIA SYNTHESIS   Patent No. 9,272,920  

Patent Application Filing Date: 11/20/13

Patent Issuance Date: 03/01/16

 

EXHIBIT A