Document:

Exhibit 10.3

CONSULTING AGREEMENT

 

This is the Consulting Agreement by and between
Applied Nanotech Holdings, Inc., a Texas corporation (the “Company”), and Douglas P. Baker, an individual, dated
March 10, 2014 with an effective date of March 15, 2014 (the “Effective Date”).

 

BACKGROUND: Baker has been employed by the Company
as its Chief Financial Officer and has intimate knowledge of the affairs of the Company. In order for the Company to continue to
benefit from Baker’s experience and his knowledge of the Company and its business as well as the business and affairs of
the Company’s subsidiaries, the Company desires Baker’s service as a consultant. Baker has agreed to provide continuing
service to the Company on the terms set forth in this Agreement

 

NOW, therefore, the Company and Baker agree:

 

	1.		Baker shall be available and shall provide services to the Company and to its Board
as reasonably requested from time to time until the first anniversary of the Effective Date. Until the closing under the Agreement
and Plan of Merger with Nanofilm to which the Company is a party or until the termination of that agreement, Baker will use commercially
reasonable efforts to make services to the Company his first priority. It is understood that Baker will be seeking full-time employment,
and that may mean that he is not always available during normal working hours. Services will otherwise be rendered in accordance
with the same diligence and quality as Baker has demonstrated as an employee of the Company.

 

	2.		If third-parties contact Baker directly he will forward those inquiries as follows:

 

	
        To Bruce Vereecken

        bvereecken@nanofilmtechnology.com

        330-329-0652

        216-447-1199 X 107

         
	any inquiry relating to accounting, tax, finances, share transfer, share legends or other administrative matters (whether related or unrelated to finances and stock matters)
	
        To Lynn Lilly

        llilly@nanofilmtechnology.com

        216-702-5167

        216-447-1199 X119
	Any inquiry relating to public information, investor relations, public relations, or questions from investors, noteholders or the media

 

	3.		Requests for Baker’s assistance will be made on behalf of the Company in writing
by the individuals identified above in their areas of responsibility. Prior to the Effective Date Baker will have reviewed his
recurring duties with Bruce Vereecken in Vereecken’s area of responsibility as identified above, and with Lynn Lilly in
her area of responsibility identified above. After the Effective Date, Vereecken or his designee and Lilly or her designee will
perform those functions with such assistance as Vereecken or Lilly request from time to time. Requests from Directors will be
coordinated by Robert Ronstadt, Chairman who will submit the inquiry in writing with a copy to Scott Rickert.

 

	4.		Baker will keep a record of time spent of work for the Company, broken down for review
based on the person requesting the assistance, and will submit an invoice not later than the 5th business day of each
month that includes a statement setting forth the hours worked during the prior month. The Company will pay Baker within 30 days
of receiving his invoice with a proper statement of work.

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	5.		The Company will pay Baker $125.00 per hour for services performed for the Company.
The Company will reimburse Baker for any out of pocket costs of travel made at the written request of the Company and for other
out of pocket costs reasonably incurred, to be submitted for reimbursement with receipts and other documentation in accordance
with the practice for employee expense reimbursement.

 

	6.		The Company will not withhold any amounts for payment of taxes on Baker’s compensation
and any amounts due to federal, state or local tax authorities are Baker’s sole responsibility. Baker will indemnify and
hold the Company harmless from any claim asserted as a result of Baker’s failure to pay taxes on compensation paid to Baker
under this Agreement.

 

	7.		Baker recognizes that he will continue to have access to confidential information
of the Company, including information that may be deemed material to investors and agrees to keep all such information confidential
and not to disclose or divulge confidential information except as required by law in performing services for the Company.

 

	8.		The Company expects personal services from Baker and Baker may not delegate any of
his duties under this Agreement or assign any of his rights hereunder.

 

	9.		Baker’s employment relationship with the Company terminates on the Effective
Date and all additional services will be rendered as an independent contractor. Baker understands that he is not eligible to participate
in any benefit plans or programs offered to employees of the Company except for rights that are available to him under COBRA because
of the termination of his employment.

 

	10.		The Agreement does not create an agency relationship or joint venture.

 

	11.		Baker’s obligation to provide consulting services under this Agreement, and
the Company’s obligation to pay for consulting services will end on March 1, 2015. Baker may retain the Company laptop but
will remove or destroy all Company confidential information from his electronic and hard copy files.

 

	12.		This Agreement is the entire agreement of the parties with respect to Baker’s
consulting services. No modification of this Agreement will be effective unless signed by both parties. This agreement may be
signed in multiple counterparts, all of which will be one and the same agreement. PDF or other electronic transmission, execution
and delivery of this Agreement or any notice under this Agreement is valid and binding.

 

	13.		This Agreement will be governed by the laws of the state of Texas. Employee agrees
that the Federal or State courts of Austin Texas will be the sole and exclusive forum in which any dispute between the parties
will be determined and submits to the personal jurisdiction of those courts.

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IN WITNESS WHEREOF, the parties have executed, or caused this Agreement
to be executed by a duly authorized representative, as of the day and year stated above with an effective date of March 15, 2014.

 

	 	APPLIED NANOTECH HOLDINGS, INC.
	 	 
	Notice Address:	By: /s/ Robert Ronstadt
	Applied Nanotech Holdings, Inc.	Robert Ronstadt, Chairman
	3006 Longhorn Boulevard, Suite 107	 
	Austin, Texas 78758	 
	Attn: Robert Ronstadt	 
	 	 
	With a copy to:	 
	Nanofilm Ltd.	 
	9 Diamond Dr	 
	Key West, Florida 33040	 
	Attn: Scott Rickert	 
	 	 
	 	/s/ Douglas P. Baker
	Notice Address:	Douglas P. Baker
	5154 Springdale Court	 
	Clarkston, MI 48348	 

 

 

 

    	3Exhibit 10.4

 

 

THIS NOTE AND THE SHARES OF COMMON STOCK THAT
MAY BE ISSUED HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS
(1) EITHER (A) A REGISTRATION STATEMENT WITH RESPECT THERETO SHALL BE EFFECTIVE UNDER THE SECURITIES ACT, OR (B) THE COMPANY SHALL
HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT IS AVAILABLE, AND (2) THERE SHALL HAVE BEEN COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

 

APPLIED NANOTECH HOLDINGS, INC.

Promissory Note

 

	$75,000	March 10, 2014           

 

 

For value received APPLIED NANOTECH HOLDINGS
INC., a Texas corporation (the “Company”), hereby unconditionally promises to pay to the order of Douglas
P. Baker (the “Lender”), the principal sum of Seventy Five Thousand Dollars ($75,000) (the “Loan”).
The principal amount due under this Note shall bear interest at the minimum rate of interest applicable under the Internal Revenue
Code. All Principal and Interest shall be due on the earlier of (1) the closing of the Company’s merger with Nanofilm under
the Agreement and Plan of Merger dated the date of this Promissory Note, or (2) December 31, 2014. All payments in respect of this
Note shall be made either in lawful money of the United States of America, or common stock of the Company as set forth below.

 

The Company has the right, at its option, to
satisfy all obligations under this Promissory Note by delivery to Lender 1,500,000 shares of the Company’s common stock (or,
if delivered after the merger of the Company with and into PEN Inc., shares of Class A Common Stock of PEN Inc).

 

The Company’s obligations under this Promissory
Note are absolute and unconditional and shall not be subject to any defense, setoff or counterclaim that may at any time be available
to or be asserted by the Company. The Company hereby waives, and agrees not to assert, any right to offset or interpose as a defense
or counterclaim any claim against the Lender against its obligations under this Note.

 

The Company shall pay all reasonable out-of-pocket
expenses incurred by the Lender, including fees and disbursements of counsel for the Lender, in connection with the enforcement
of this Note.

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This Note shall be governed by and construed
in accordance with the laws of the State of Texas.

 

With respect to any suit, action shall lie in
the venue of Austin, Texas.

 

Lender may not transfer or assign any of Lender’s
rights under this Promissory Note. This Promissory Note and its terms are binding on the Company, Lender and their successors,
heirs and legal representatives.

 

IN WITNESS WHEREOF, this
Promissory Note has been executed and delivered as a sealed instrument on the date first above written by the duly authorized representative
of the Company.

 

	 	APPLIED NANOTECH HOLDINGS, INC.
	 	 
	 	By:
    /s/ Robert Ronstadt, Chairman
	 	Robert Ronstadt, Chairman

 

 

 

 

 

 

 

 

 

 

 

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