Nanophase Technologies Corporation 8-K


 


Exhibit 10.1





AMENDMENT
NO.4 TO


ZINC
OXIDE SUPPLY AGREEMENT


 


THIS
AMENDMENT NO. 4 TO ZINC OXIDE SUPPLY AGREEMENT is entered into as of January 1, 2019 by and between BASF CORPORATION, a Delaware
corporation (“BASF”) and NANOPHASE TECHNOLOGIES CORPORATION, a Delaware corporation (“Nanophase”).


 


RECITALS


A.                
Nanophase and BASF (as successor-in-interest
to Sun Smart, Inc.) entered into that certain Zinc Oxide Supply Agreement, dated September 16, 1999 (the “Agreement”),
as amended by that certain Amendment No. 1 to Zinc Oxide Supply Agreement dated January 2001, Amendment No. 2 to Zinc Oxide Supply
Agreement dated March 17, 2003, and Amendment No. 3 to Zinc Oxide Supply Agreement dated September 30, 2012 (collectively the
“Amendments”).


 


B.                
BASF and Nanophase desire to amend the Agreement
and Amendments as set forth herein.


 


NOW
THEREFORE, BE IT RESOLVED, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:


 


		1.	The
                                         “Triggering Event” set forth in Section 5.01(e)(i) of the Agreement, as amended
                                         by Paragraph 1 of Amendment No. 2 to the Agreement,
                                         and amended by Paragraph 1 of Amendment No. 3, is hereby further amended to delete the
                                         language in Section 5.01(e)(i) of the Agreement and Paragraph 1 of Amendment No. 2 and
                                         Paragraph 1 of
                                         Amendment No.
                                         3, and replace it with the following
                                         language:



“(e)(i)
Earnings of Nanophase for the twelve-month period ending on the date of Nanophase’s most recent published quarterly financial
statements (calculated in accordance with generally accepted accounting principles applied on a consistent basis) shall be less
than $0 and cash and cash equivalents of Nanophase at the end of such period (calculated in accordance with generally accepted
accounting principles applied on a consistent basis) shall be less than $500,000. Cash and cash equivalents – including
any accounts receivable outstanding and due from BASF over 30 days from ship date ($[*] min), finished goods Z-COTE in Nanophase
inventory ($[*]max), and zinc metal Nanophase inventory ($[*]max) shall be less than $1,000,000.”


 




    	 



    	 



    




 


		2.	Section
                                         3.04 of the Agreement is hereby amended to delete the language in that section and replace
                                         it with the following language:



 


		a.	“Nanophase
                                         shall maintain inventory of manufactured Product available to fill orders from BASF equal
                                         to the higher of either [*]kg or the monthly average of the previous [*] months orders.
                                         Nanophase shall be required to establish this safety stock level by August 31, 2019.
                                         [*]kg minimum of inventory shall be established by Mar 31, 2019; 34,000 kg minimum of
                                         inventory shall be established by Jun 31, 2019; the full [*]kg minimum of inventory shall
                                         be established by Aug 31, 2019. This inventory value may be revised after Dec 31, 2019
                                         depending on business demands.”



 


		b.	Should
                                         BASF commercial requirements exceed [*] full truckloads during this time, Nanophase shall
                                         be permitted one week of additional time for each truckload shipped in excess of the
                                         [*] truckloads shipped to meet BASF demand.



 


		c.	Implementation
                                         grace period: During the ramp up of safety stock levels, Nanophase shall follow the same
                                         ramp up for working capital mix.



 


		d.	Implementation
                                         Requirements:



 


		i.	Q1
                                         2019: $500,000 cash minimum, plus [*]kg min. inventory



 


		ii.	Q2
                                         2019: $500,000 cash minimum, plus [*]kg min. inventory



 


		iii.	Q3
                                         2019: Full requirements outlined in amendment apply.



 


		3.	All
                                         other terms and conditions of the Agreement and the Amendments shall remain in full effect
                                         in accordance with their terms.



 


*Confidential
Treatment Requested


 


[Signatures
next page]


 




    	 



    	 



    



IN
WITNESS WHEREOF, the parties have executed this Amendment as of the date first set forth above.


 








	Nanophase Technologies Corporation	 	BASF
Corporation
	 	 	 
	 	 	 
	By:	/s/ Jess Jankowski 	 	By:	/s/ Amy Ciemniecki
	Name:	Jess Jankowski 	 	Name:	Amy Ciemniecki
	Title:	President and CEO	 	Title:	Category Buyer