Document:

Nanophase Technologies Corporation 8-K

 

Exhibit 10.1

 

 

Portions of this Exhibit have been redacted pursuant to a request
for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934. Omitted
information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission together
with such request for confidential treatment.

 

 

KNOW-HOW LICENSE AGREEMENT

This Know-How License
Agreement (this “Agreement”) is made and effective this 23rd day of June, 2017, by and between
Nanophase Technologies Corp., a Delaware corporation (“Licensor”) and Eminess Technologies, Inc., an
Arizona corporation (“Licensee”).

WHEREAS, Licensor
owns and/or has rights under technology to make or have made Licensor’s series [*] and [*] polishing slurries as further
described on Exhibit A attached hereto (the “Products”);

WHEREAS, Licensor
desires to strategically focus its business operations to development areas outside of the Polishing Field (as defined below);
and

WHEREAS, Licensor
desires to grant Licensee an exclusive license
to use the Product Know-How (as defined below) for use in the Polishing Field in connection with the manufacture, marketing and
sale of the Products in the Polishing Field.

NOW, THEREFORE,
the parties hereto, intending to be legally bound hereby, for good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, hereby agree as follows:

ARTICLE
1.  DEFINITIONS

For purposes of this
Agreement, the following terms shall have the meanings specified or referred to in this Article 1:

“Improvements”
– means novel compositions, processes or methods which rely on or include the Products that have been or will be developed
or invented in connection with Licensee’s use of the Product Know-How during the Term.

“Licensee Improvements”
– shall have the meaning ascribed to it in Section 4.1.

“Polishing Field”
– means polishing applications of the Products in which the object of polishing is to modify the material to be polished
(the workpiece) to meet desired surface attributes. The mechanisms of polishing involve four components: the workpiece, fluid,
abrasive, and pad or lap. The workpiece can vary in bulk composition and application (optical glass, semiconductor substrate or
device layer, protective coating, etc.). The fluid is the liquid phase of the polishing slurry formulation and is characterized
by its chemical composition and physical properties. The function of the abrasive is to mechanically remove material from the surface
of the workpiece. Material removal is accomplished at the workpiece surface and pad/lap interface through either mechanical or
a combination of chemical and mechanical action. Finally, the pad/lap is used to impose relative motion between the abrasives and
the workpiece to facilitate material removal.

“Product Know-How”
– means all know-how necessary to make, have made, use, develop, produce, market, distribute, offer for sale, sell, have
sold, and import the Products in the Polishing Field, including, but not limited to, formulation know-how.

“Products” –
Licensor’s series [*] and [*] polishing slurries as further described on Exhibit A attached hereto.

“Term” –
shall have the meaning ascribed to it in Section 5.1.

    	 	1	 

    	 

    

 

Portions of this Exhibit have been redacted pursuant to a request
for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934. Omitted
information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission together
with such request for confidential treatment.

 

 

ARTICLE
2.  LICENSED KNOW-HOW RIGHTS; ROYALTIES

2.1       

Subject to the terms
and conditions of this Agreement, Licensor hereby grants to Licensee, and Licensee hereby accepts from Licensor, an exclusive,
perpetual, assignable, irrevocable (except as provided in Article 5) license, with the right to sublicense, to use the Product
Know-How in the Polishing Field to make, have made, use, offer for sale, sell, have sold, and import Products in the Polishing
Field anywhere in the world.

2.2       

Licensee
acknowledges and agrees that Licensor is, and shall remain the owner of all right, title, and interest in and to the Product
Know-How, subject to the rights specifically granted
to Licensee in this Agreement.

2.3       

Notwithstanding the
terms provided in Section 6.5 regarding the confidentiality obligations relating to Product Know-How, Licensee shall be
permitted to disclose, under terms of confidentiality at least as strict as those set forth in Section 6.5, the Product
Know-How relating to the manufacture of the Products to third party manufacturers solely for the purpose of enabling such third
party manufacturers to manufacture Products on behalf of Licensee.

2.4       

In consideration for
the license granted by Licensor to Licensee as set forth in this Agreement, Licensee shall pay to Licensor the royalties set forth
below (the “Royalties”). The Royalaties shall be calculated for each calendar year and shall be paid
to Licensor no later than March 31 of the following calendar year (i.e. the Royalties for the 2017 calendar years shall be paid
to Licensor on or before March 31, 2018). Notwithstanding the foregoing, nothing in this Agreement shall be construed to obligate
Licensee to sell any Products.

The Royalty paid
to Licensor for sales of Products to existing Licensor customers set forth on Exhibit C (the “Exisitng Customers”)
for all sales from $[*] to $[*] shall be a percentage of Net Sales as follows:

 

	Product	2017	2018	2019	2020	2021	2022	2023	2024	2025	2026
	[*]	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%
	[*]	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%

 

The Royalty paid
to Licensor for sales of Products to (1) Existing Customers for all sales above $[*], or (2) to new customers, shall be a percentage
of Net Sales as follows:

	Product	2017	2018	2019	2020	2021	2022	2023	2024	2025	2026
	[*]	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%
	[*]	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%

 

Commencing on January 1, 2027, the Royalty
on all sales of all Products will be [*]%.

For purposes of this Agreement,
the term “Net Sales” means gross sales of all Products by Licensee less the amount of any customer returns
or credits.

 

    	 	2	 

    	 

    

 

Portions of this Exhibit have been redacted pursuant to a request
for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934. Omitted
information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission together
with such request for confidential treatment. 

 

The Royalties set
forth in this Agreement assume that the Licensee, for the first five (5) years of the Agreement, will pay Licensor what is effectively
[*]% of the net cash flow generated from sales to the Existing Customers below $[*] annually and that Licensee will be able to
manufacture or have manufactured the Products at the following ratios of variable manufacturing costs of goods sold to Net Sales
(together, the “Variable Manufacturing Cost Ratios”): [*]% for the [*] series Products and [*]% for [*]
series Products (collectively, the “Baseline Cost Ratios”). Therefore, if for any period in which the
payment of the Royalties is calculated, Licensee’s actual Variable Manufacturing Cost Ratio for any Product series is greater
than the applicable Baseline Cost Ratio, the applicable Royalty payment will be decreased by the percentage difference between
the Licensee’s actual Variable Manufacturing Cost Ratio to the applicable Baseline Cost Ratio. This effectively ensures that
the Licensee never pays more to the Licensor than sales to Existing Customer actually generated for that period. Because the actual
Variable Manufacturing Cost Ratios are dependent on each Existing Customer’s Net Sales, Licensee shall not change the per
unit selling price for Existing Customers without Licensor’s prior written consent.

	Product

Series	Dispersions- Commercial Name	
        Weight

        %
	Particle Size

(nominal)	ASP ($/kg)	Variable

Manufacturing

Cost (Q117, $/kg)	Variable

Manufacturing

Cost (%Sales)	Baseline Cost Ratios (%Sales)
	[*]	NanoArc® [*]	[*]	[*]nm (PLS)	[*]	[*]	[*]%	[*]%
	[*]	NanoArc® [*]	[*]	[*]nm (PLS)	[*]	[*]	[*]%
	[*]	NanoArc® [*]	[*]	[*]nm (PLS)	[*]	[*]	[*]%
	[*]	NanoArc® [*]	[*]	[*] micron (PLS)	[*]	[*]	[*]%	[*]%

 

If at anytime the Royalty payment for
sales to Existing Customers is decreased, Licensee will provide Licensor a detailed breakdown of Licensee’s actual Variable
Manufacturing Cost Ratio calculation for that period. For reference, from 2013 to 2016, the Licensee’s variable overhead
for their internally manufactured slurry business averaged [*]% of sales. Licensee and Licensor agree
that for purposes of establishing future Variable Manufacturing Cost Ratios, Licensee’s variable
overhead used to update Variable Manufacturing Cost will not exceed [*]% of Net Sales.

For the avoidance
of doubt, the parties agree and acknowledge that the Royalties due and payable to Licensor hereunder are only calculated based
upon sales of Licensor’s specific formulation of the Products, and any other products (including polishing slurries with
different or improved formulations, that are required to meet a customer’s performance criteria that the Licensor’s
formulation would not) developed, manufactured, marketed and/or sold by Licensee, including products that perform the same function
or may otherwise compete with or be substitutes for the Products shall not be subject to the payment of Royalties.

ARTICLE
3.  PAYMENT TERMS

Payment of Royalties
shall occur no later than the [*] ([*]) day of the [*] month of each calendar quarter for sales volume from the preceding calendar
quarter. 

    	 	3	 

    	 

    

 

Portions of this Exhibit have been redacted pursuant to a request
for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934. Omitted
information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission together
with such request for confidential treatment.

 

 

ARTICLE
4.  IMPROVEMENTS

Any improvements,
developments or modifications made, developed or invented solely by Licensee, sublicensees or manufacturers related to the Product
Know-How (the “Licensee Improvements”) shall be owned solely and exclusively by Licensee.

ARTICLE
4.  A PRODUCT KNOW-HOW TRANSFER; WARRANTIES

Licensor and Licensee
shall cooperate, in good faith, to cause the transfer of all Prodcut Know-How to Licensee in accordance with the process and procedure
set forth on Exhibit B. Such transfer shall be completed no later than 60 days following the date of this Agreement. Nanophase
warrants that the Prodcuts do not contain any ingredients that are known by Nanophase to be carcinogenic, mutagenic, or teratogenic.
Only standard chemical hygiene practices and personal protective equipment are recommended for producing and/or handling Products,
as defined in the Product SDSs. Based on Nanophase’s current knowledge, the acids and bases that are used to adjust the Product
pH represent the most significant health and safety risk, which at the concentrations used, do not pose an extreme hazard. None
of the waste streams from the manufacture of these Products is currently classified/regulated as hazardous material. Spent slurry
from Product use may or may not be deemed as hazardous material depending on the composition of the substrates being polished,
and need to be assessed on an individual basis by the entities involved in those activities.

ARTICLE
5.  term and termination

5.1       

This Agreement shall
become effective upon the date hereof and shall continue in full force and effect unless terminated or cancelled as provided in
this Article 5 (the “Term”). In the event of termination or cancellation, neither party shall be liable for
any loss, expense, liability, termination compensation, or payments of any kind. If termination is made by default, then both parties
retain any rights and remedies they may have against the other party under this Agreement and otherwise in law and in equity.

5.2       

This
Agreement may be immediately canceled by Licensor, in whole or in part, upon written notice to Licensee should any of the following
occur: 

(a)       

a petition in bankruptcy
is filed or Licensee is adjudged bankrupt;

(b)       

Licensee takes advantage
of any insolvency act or debtor’s relief act;

(c)       

Licensee makes an
assignment for the benefit of its creditors; or

(d)       

the business or assets
of Licensee, or any substantial portion thereof, are seized, nationalized, confiscated or expropriated.

5.3       

After the termination or
cancellation of this Agreement pursuant to Section 5.2, all licenses granted to Licensee pursuant to this Agreement shall
terminate.

 

    	 	4	 

    	 

    

 

Portions of this Exhibit have been redacted pursuant to a request
for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934. Omitted
information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission together
with such request for confidential treatment.

 

 

ARTICLE
6.  MISCELLANEOUS

6.1       

Notwithstanding any
termination of this Agreement, the provisions of Articles 3 and 6 will survive and remain in effect.

6.2       

This Agreement shall
be governed by the substantive laws of the State of Arizona, without regard to its conflicts of laws principles, and the State
and Federal courts in the City of Phoenix, Arizona shall have exclusive jurisdiction over any proceeding seeking to enforce any
provision of, or based upon any right arising out of, this Agreement. The parties do hereby irrevocably (a) submit themselves to
the personal jurisdiction of such courts, (b) agree to service of such courts’ process upon them with respect to any such
proceeding, and (c) waive any objection to venue laid therein. The parties acknowledge and agree that the foregoing choice of law
and forum provisions are the product of an arm’s length negotiation between the parties. EACH PARTY HEREBY WAIVES, TO THE
FULLEST EXTENT ALLOWED UNDER LEGAL REQUIREMENTS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS.

6.3       

Confidentiality.

(a)       

Licensor and Licensee
shall keep secret and confidential and not disclose or use for any commercial purpose all information and data relating to (i)
the other party’s business, including but not limited to its intellectual property; (ii) the terms of this Agreement; (iii)
the Product Know-How, or (iv) specifications, processes, methods, formulas, production schedules and costs, and experience.

(b)       

The confidentiality
obligations of the non-disclosing party set forth in subsection 6.3(a) above shall not apply to any information that (i) must be
disclosed to comply with any applicable governmental rules or regulations; (iii) was lawfully in the possession of the non-disclosing
party prior to disclosure from the disclosing party; (iv) was available to the public at the time of disclosure by the disclosing
party or subsequently became available to the public through no fault of the non-disclosing party; (v) becomes available to the
non-disclosing party subsequent to the disclosure from the disclosing party from a third party who is under no confidentiality
obligation to the disclosing party; (vi) is required to be disclosed by the non-disclosing party pursuant to court order or legal
process provided that the non-disclosing party shall give the disclosing party notice of such process and use its best efforts
to afford the disclosing party the opportunity at disclosing party’s expense to seek to quash or restrain such disclosure;
or (vii) was or is independently developed by the non-disclosing party

6.4 

The headings of Articles
in this Agreement and the headings in the Exhibits attached hereto are provided for convenience only and shall not affect
its construction or interpretation. With respect to any reference made in this Agreement to a Section or Exhibit,
such reference shall be to the corresponding section of, or the corresponding schedule to, this Agreement. All words used in this
Agreement shall be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided,
the words “including”, “include” and “includes” do not limit the preceding words or terms and
any list of words or terms following the words “including”, “include” and “includes” is not
an exhaustive list. Any reference to a specific “day” or to a period of time designated in “days” shall
mean a calendar day or period of calendar days unless the day or period is expressly designated as being a business day or period
of business days. The use of “or” is not intended to be exclusive unless expressly indicated otherwise. The parties
hereto acknowledge and agree that (a) each party and its counsel have reviewed and negotiated the terms and provisions of this
Agreement and have contributed to its revision, (b) the rule of construction to the effect that any ambiguities are resolved against
the drafting party shall not be employed in the interpretation of this Agreement and (c) the terms and provisions of this Agreement
shall be construed fairly as to all parties hereto, regardless of which party was generally responsible for the preparation of
this Agreement.

    	 	5	 

    	 

    

 

Portions of this Exhibit have been redacted pursuant to a request
for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934. Omitted
information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission together
with such request for confidential treatment.

 

 

6.5 

Nothing contained in
this Agreement shall be construed so as to operate or to place any party or its affiliates in the relationship of employee or agent
or joint venture or legal representative of the other party or its affiliates and it is hereby expressly agreed and acknowledged
that each of the parties hereto is an independent contracting party which does not have the authority or power for or on behalf
of the other party hereto to enter into any contract, to incur debts, to accept money, to assume obligations or to make any warranties
or representations whatsoever.

6.6 

This Agreement may
not be amended except by a written agreement executed by Licensor and Licensee.

6.7 

If any provision of
this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement
shall remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree shall
remain in full force and effect to the extent not held invalid or unenforceable.

6.8 

This Agreement may
be executed in any number of counterparts (including via facsimile or portable document format (PDF)), each of which shall be deemed
an original, but all of which, when taken together, shall constitute one and the same instrument.

6.9 

This Agreement sets forth
the entire understanding of Licensor and Licensee with respect to the transactions contemplated hereby and thereby and supersedes
all prior agreements or understandings among the parties hereto regarding those matters.

 

[Signature Page Follows]

    	 	6	 

    	 

    

 

Portions of this Exhibit have been redacted pursuant to a request
for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934. Omitted
information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission together
with such request for confidential treatment.

 

 

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

	 	LICENSOR:
	 	NANOPHASE TECHNOLOGIES CORP.
	 	 
	 	 
	By:	/s/  Jess Jankowski
	Name:	Jess Jankowski
	Title:	President and CEO

 

 

	 	LICENSEE:
	 	EMINESS TECHNOLOGIES, INC.
	 	 
	 	 
	By:	/s/  Daniel N. Koharko
	Name:	Daniel N. Koharko
	Title:	CEO

 

 

    	 

    	 

    

 

Portions of this Exhibit have been redacted pursuant to a request
for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934. Omitted
information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission together
with such request for confidential treatment.

  

EXHIBIT A

PRODUCTS 

	Dispersions-Commercial Name	Weight %	Particle Size (nominal)	Variable Manufacturing Cost (Q117)	 	Standard Package
	NanoArc® [*]	[*]	[*] nm (PLS)	

        $[*]/kg
	 	[*]kg Pail, [*]kg drum, [*]kg Tote
	NanoArc® [*]	[*]	[*]nm (PLS)	$[*]/kg	 	[*]kg Pail
	NanoArc® [*]	[*]	[*]nm (PLS)	$[*]/kg	 	[*]kg Pail
	NanoArc® [*]	[*]	[*]nm (PLS)	$[*]/kg	 	[*]kg Pail
	NanoArc® [*]	[*]	[*] micron (PLS)	$[*]/kg	 	[*]kg Pail

  

    	 

    	 

    

 

Portions of this Exhibit have been redacted pursuant to a request
for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934. Omitted
information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission together
with such request for confidential treatment.

 

 

EXHIBIT B

PROCESS FOR TRANSFER
OF KNOW-HOW 

	ETI & NANX Product Production Transfer	60 days	 	 
	Information Gathering	35 days	On-Site Info Gathering	25 days
	Remote Info Gathering	 	Review any items from remote info gathering and follow-up
	Raw Materials/Production/Finished Goods?? ([*])	Process audits	5 days
	Raw material sourcing (Vendor Information, Supply Contracts)	[*] Series Products	 
	Raw Material Packaging Form Factors	 	Production Process Training	 
	SDS for all RMs	 	Production Process Walk-through	 
	Supplier RM CoAs	 	QC Training	 
	Vendor qualification info ([*])	Sample sent to ETI for QC Comparison	 
	Dual sourcing/Contingency plan	 	[*] Series Products	 
	Receiving inspection criteria ([*])	Production Process Training	 
	Safety EHS Concerns (Storage requirements, PPE)	Production Process Walk-through	 
	Waste stream issues ([*])	QC Training	 
	REACH Registration(s) ([*])	Sample sent to ETI for QC Comparison	 
	Other regulatory concerns? ([*])	Identify gaps BTW NANX& ETI Production & QC
	Material handling and storage	 	  Capital required?	 
	WIP components and storage	 	     If yes, what and how long?	 
	Product demand (historical and forecast volumes)	Plan Manufacturing Transfer	5 days
	Lead times/MOQs/Safety Stock (For RM and Finished Goods)	 	NANX inventory build	 
	Product Bills of Material	 	RM logistics	 
	Product run sheet/batch records/production procedures	QC Transfer	 
	Operator Training Documents/Procedures ([*])	Batch Production Schedule	 
	Labeling and shipping requirements (see SDS)	 	Manufactuing Transfer	5 days
	special packaging types/sizes	 	[*] Series Products	 
	Production labor requirements	 	Production @ ETI	 
	Product/Process Historical Yields	 	QC @ ETI	 
	P&IDs/Process diagrams/Equipment list	 	Sample sent to NANX for QC	 
	Water quality of NANX production	 	[*] Series Products	 
	Filtration procedures/specifications	 	Production @ ETI	 
	Fill by weight or volume?	 	QC @ ETI	 
	QC methods (RM/WIP/FG)	 	Sample sent to NANX for QC	 
	QC labor requirements	 	Review and Documentation	10 days
	Product CoAs 	 	 	 
	Product TDSs 	 	 	 
	Product SDSs 	 	 	 
	Shelf life information (current spec & data)	 	 	 
	Historical quality data (SPC or otherwise)	 	 	 
	Product/Process FMEAs([*])	 	 
	Customer List	 	 	 
	Special Customer Requirements	 	 	 
	Customer Purchase/Supply Contracts/Blanket Orders	 	 	 
	Customer change control requirements? ([*])	 	 

 

    	 

    	 

    

 

Portions of this Exhibit have been redacted pursuant to a request
for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934. Omitted
information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission together
with such request for confidential treatment.

 

 

EXHIBIT C

EXISTING CUSTOMERS

 

	Customer	Product	Qty.
    of Orders/POs, Shipped and In Hand – kg (as of 4/30)	Qty.
    of Orders/POs, Shipped and In-Hand - $$$ (as of 4/30)	Est.
    Product Mix% - By Customer	2017
    Forecast, Est. Product Mix	%
    of Forecast Achieved (as of 4/30)	Average
    Days of Payment	Price	Package
    Size	Notes
	[*]	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	[*]	[*]	$[*]/gallon	[*]
    Gallon	will
    likely get price break based off high volume
  discount (discounted pricing $[*]/gallon for 
  [*] and $[*]/Gallon for [*]
	[*]	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	[*]	[*]	$[*]/Gallon	[*]
    Gallon	 
	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	$[*]/Gallon	[*]
    Gallon
	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	$[*]/Gallon	[*]
    Gallon
	[*]	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	[*]	[*]	$[*]/gallon	[*]
    gallon	We
                                         then add their shipping cost to their unit price.

        Typically
        it is about $[*]/gallon

	[*]	NanoArc®
    [*]	[*]	$[*]	[*]

         

        [*]
	[*]	[*]	[*]	$[*]/kg	[*]kg
    Pail	 
	NanoArc®
    [*]	[*]	$[*]	$[*]/kg	[*]kg
    Pail
	[*]	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	[*]	[*]	$[*]/gallon
    ([*]

    gallon commitment)	[*]
    gallon	have
                                         pricing tiers [*]
                                         pricing not negotiated
                                         or

        provided

	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	$[*]/gallon
    ([*] gallon commitment)	[*]
    gallon
	[*]	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	[*]	[*]	$[*]/Liter	[*]L
    Pail	 
	[*]	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	[*]	[*]	$[*]/Liter	[*]
    Gallon	 
	[*]	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	[*]	[*]	$[*]/kg	[*]
    gallon	 
	[*]	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	[*]	[*]	$[*]/gallon	[*]
    gallon	 
	[*]	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	[*]	[*]	$[*]/gallon	[*]
    gallon	 
	NanoArc®
    [*]	[*]	$[*]	[*]	[*]	$[*]/liter	[*]
    gallon
	 	 	 	$[*]	 	$[*]	[*]%Nanophase Technologies Corporation 8-K

 

EXHIBIT 10.2

Portions of this Exhibit have been redacted pursuant to a request
for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934. Omitted
information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission together
with such request for confidential treatment.

 

 

EXCLUSIVE SUPPLY AGREEMENT

This Exclusive Supply
Agreement (the “Agreement”) is made as of June 23, 2017,
by and between Nanophase Technologies Corp., a Delaware corporation (“Seller”) and Eminess Technologies,
Inc., an Arizona corporation (“Buyer”).

WHEREAS, Seller is
a manufacturer of certain unique Ceria and Alumina nanoparticles as further described on Exhibit A attached hereto (the
“Products”);

WHEREAS, Seller desires
to supply to Buyer and Buyer desires to purchase from Seller the Products, upon and subject to the terms set forth in this Agreement;

WHEREAS, the parties
desire to enter into this Agreement to provide a means for Buyer to use commercially reasonable efforts, with the encouragement
and support of Seller, to expand the market for Products in the Polishing Field (as defined below);

WHEREAS, Seller enters
into this Agreement with the intent of allowing itself to focus its business development efforts on areas outside of the Polishing
Field, while continuing to manufacture Products on behalf of Buyer for sale in the Polishing Field;

WHEREAS, Seller considers
Buyer to be competent and trusted counterparty in terms of business development and customer support in the Polishing Field;

WHEREAS, Buyer enters
into this agreement with the intent of expanding its market reach in the Polishing Field, incorporating Products into existing
Buyer product formats, as well as in formats to be developed in the future by Buyer;

WHEREAS, it is the
intent of this Agreement that both Buyer and Seller will share a collaborative relationship in terms of creating new products and
in addressing customer needs; and

WHEREAS, the parties
intend this Agreement to signal the beginning of a long-term relationship, where both parties perceive a long-term and enduring
benefit.

NOW THEREFORE, for
and in consideration of the foregoing and the mutual covenants and agreements contained herein, and intending to be legally bound
hereby, Buyer and Seller hereby agree as follows:

ARTICLE
1

DEFINITIONS

For purposes of this Agreement, the following
terms shall have the meanings specified or referred to in this Article 1:

“Governmental Body”
– means any federal, state, local, municipal, foreign, tribal or other governmental body entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing authority.

“Liability” or “Liabilities”
– means any liability or liabilities, obligations, expenses, claims, taxes or assessments, losses, fines, penalties, settlements
or damages of or by any Person.

 

    		 	 

    	 

    

Portions of this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.
Omitted information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission
together with such request for confidential treatment.

“Person” –
means any individual, corporation, general or limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union or other entity or Governmental Body.

“Polishing Field”
– means polishing applications of the Products in which the object of polishing is to modify the material to be polished
(the workpiece) to meet desired surface attributes. The mechanisms of polishing involve four components: the workpiece, fluid,
abrasive, and pad or lap. The workpiece can vary in bulk composition and application (optical glass, semiconductor substrate or
device layer, protective coating, etc.). The fluid is the liquid phase of the polishing slurry formulation and is characterized
by its chemical composition and physical properties. The function of the abrasive is to mechanically remove material from the surface
of the workpiece. Material removal is accomplished at the workpiece surface and pad/lap interface through either mechanical or
a combination of chemical and mechanical action. Finally, the pad/lap is used to impose relative motion between the abrasives and
the workpiece to facilitate material removal.

“Specifications”
– means with respect to a Product, the specifications for such Product set forth on Exhibit A.

“Term” –
means the period ending ten (10) years from the execution of the Agreement, or any extended term as contemplated in Article 12.

“Third Party”
– means any Person other than a party hereto
or its respective Affiliates.

ARTICLE
2

exclusive SUPPLY

1.       

Pursuant to the terms
and subject to the conditions contained in this Agreement, Seller shall sell to Buyer, and Buyer shall purchase from Seller one
hundred percent (100%) of Buyer’s requirements of the Products.

2.       

Seller will supply
Buyer with the Products purchased and sold pursuant to this Agreement in Seller’s standard container sizes utilizing Seller’s
standard packaging. To the extent that any Products are altered or repackaged by or on behalf of Buyer, Buyer shall remove all
of Seller’s container labeling from all such containers prior to their disposal.

3.       

Notwithstanding anything
to the contrary contained in this Agreement, Seller acknowledges and agrees that for a period of ten (10) years following the date
of this Agreement, Seller shall not, and shall cause its affiliates and designees not to, directly or indirectly, use or market,
promote or sell any of the Products to Persons, in each case for use in the Polishing Field; provided, that Seller may use the
Products for surface preparation or modification of its own materials as may be required to facilitate placement of Products outside
of the Polishing Field.

ARTICLE
3

PRICE

1.       

The
purchase price for the Products supplied hereunder shall be as shown on Exhibit B attached hereto.

ARTICLE
4

PAYMENT AND DELIVERY TERMS 

1.       

For Products directly
shipped (drop-shipped) from Seller to an Existing Customer, payment terms shall be net [*] ([*]) days after shipping date. For
products shipped to Buyer (for stock or re-shipment to customers), payment terms will be net [*] ([*]) days after shipping date
to Buyer.

2.       

Delivery will be FOB
Seller’s facility (shipping point). Seller shall comply with reasonable delivery requirements of Buyer, which shall be at
Buyer’s expense. 

    	2	 	 

    	 

    

Portions of this Exhibit have
been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934. Omitted information, marked “[*]” in this Exhibit, has been filed separately with
the Securities and Exchange Commission together with such request for confidential treatment.

3.       

Seller shall take batch
samples of the Products supplied hereunder and shall retain such samples in accordance with Seller’s internal policies and
quality controls. All batch deliveries of Products supplied hereunder shall be accompanied by a certificate of analysis.

ARTICLE
5

QUANTITIES AND PURCHASE ORDER; ANNUAL MINIMUMS

1.       

The Buyer shall periodically
provide Seller with a rolling forecast setting forth its purchase requirements for the following twelve calendar months for each
Product (each a “Buyer Forecast”). The Buyer Forecast is non-binding; provided that Buyer shall use commercially
reasonable efforts to promptly provide any updates to a Buyer Forecast in the event there are material changes in a Buyer Forecast.

2.       

Buyer shall deliver
from time to time written purchase orders (an “Order”) for the quantities of the Products Buyer desires
to purchase hereunder. The Order shall represent a binding commitment by Buyer to purchase and a binding commitment by Seller
to supply. Notwithstanding anything contained in this Agreement or any Order, unless otherwise expressly agreed upon by the parties
in writing, no modification of this Agreement shall be effected by the use of any Order or other form containing any terms and/or
conditions that are inconsistent with those of this Agreement. The parties hereby acknowledge and agree that, unless otherwise
expressly agreed upon by the parties in writing, any such inconsistent terms and conditions shall be void and of no force or effect
against the parties and in the event of any conflict between the terms and conditions contained in this Agreement and any terms
and conditions contained in any Order or other form, the terms and conditions contained in this Agreement shall govern.

On an annual basis, Buyer shall purchase from Seller a minimum
amount of Products with an aggregate purchase price of $[*] (the “Annual Minimum”). The Annual Minimum
shall be measured each calendar quarter based on the prior 12 months of purchases by Buyer. If, at any time the Annual Minimum
is measured, Buyer has failed to meet the Annual Minimum, at Buyer’s election, Buyer shall (a) submit a purchase order to
Seller for Products so as to cause Buyer to meet the Annual Minimum, or (b) pay to Seller an amount equal to [*]% of the difference
between Buyer’s actual purchases of Product and the Annual Minimum; provided, however, that in the event that Buyer elects
option (b) above, and in any subsequent calendar quarter occurring during the twelve (12) month period following Buyer’s
election of option (b) above, Buyer’s purchases are in excess of the Annual Minimum, Buyer shall be entitled to a credit
of any amounts paid to Seller under option (b) above against purchase made in excess of the Annual Minimum up to the amount paid
to Seller under option (b) above.

ARTICLE
6

HAZARDS AND STEWARDSHIP

Except
as expressly provided in this Agreement, neither Seller nor any of its affiliates shall be liable for any personal injury or property
damage, harm to the environment or pollution arising out of or connected with the manufacture, marketing, promotion, import, storage,
formulation, distribution or other handling or sale of the Products by Buyer, except to the extent the same arises from Seller’s
or its affiliates’ negligence or willful misconduct in connection with Seller’s or its affiliates’ handling,
processing, transportation, storage or possession of the Products when the Products are under Seller’s or its affiliates’
care and custody.

ARTICLE
7

WARRANTIES 

Seller
warrants that the Products do not contain any ingredients that are known by Seller to be carcinogenic, mutagenic, or teratogenic.
Only standard chemical hygiene practices and personal protective equipment are recommended for producing and/or handling the Products,
as defined in the Product SDSs. Based on Seller’s current knowledge, the acids and bases that are used to adjust the Product
pH represent the most significant health and safety risk, which at the concentrations used, do not pose an extreme hazard. None
of the waste streams from the manufacture of the Products is currently classified/regulated as hazardous material. Spent slurry
from Product use may or may not be deemed as hazardous material depending on the composition of the substrates being polished,
and need to be assessed on an individual basis by the entities involved in those activities. 

    	3	 	 

    	 

    

Portions of this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.
Omitted information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission
together with such request for confidential treatment.

ARTICLE
8

INDEMNIFICATION

1.       

Buyer agrees to indemnify,
defend and hold Seller and its directors, officers, employees, stockholders and members harmless from and against all Liabilities
and/or judgments (collectively, “Damages”) arising out of a (i) claim by a Third Party to the extent
relating to the marketing, promotion, import, storage, formulation, distribution or other handling or sale of the Products by or
on behalf of Buyer, except to the extent relating to a breach by Seller of its warranties contained in Article 7.

2.       

Seller agrees to indemnify,
defend and hold Buyer and its directors, officers, employees, stockholders and members harmless from and against all Damages arising
out of (i) a claim by a Third Party to the extent such claim results from a breach by Seller of its warranties contained in Article
7 or (ii) a breach by Seller of this Agreement.

ARTICLE
9

GOVERNING LAW

1.       

This Agreement shall
be governed by the substantive laws of the State of Arizona, without regard to its conflicts of laws principles, and the State
and Federal courts in the City of Phoenix, Arizona shall have exclusive jurisdiction over any proceeding seeking to enforce any
provision of, or based upon any right arising out of, this Agreement. The parties do hereby irrevocably (a) submit themselves to
the personal jurisdiction of such courts, (b) agree to service of such courts’ process upon them with respect to any such
proceeding, and (c) waive any objection to venue laid therein. The parties acknowledge and agree that the foregoing choice of law
and forum provisions are the product of an arm’s length negotiation between the parties. EACH PARTY HEREBY WAIVES, TO THE
FULLEST EXTENT ALLOWED UNDER LEGAL REQUIREMENTS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS.

2.       

The parties acknowledge
and agree that the foregoing choice of law and forum provisions are the product of an arms length negotiation between the parties.

ARTICLE
10

DEVELOPMENT OF NEW PRODUCTS

1.       

In the event that Buyer
desires that Seller develop and produce additional and/or new nanoparticle products to be supplied pursuant to this Agreement,
Buyer will prepare a business case for discussion with Seller, which business case may or may not include additional compensation
to Seller (e.g. for development of the additional and/or new products, or in the form of future product margin, royalties, or any
other form of payment). After delivery of such business case to Seller, the parties will confer in good faith as to whether Seller
will develop and product such additional and/or new product; provided that Seller will have full discretion, acting reasonably,
to determine whether to develop and product such additional and/or new products. In the event that Seller elects to develop and
produce such additional and/or new products, this Agreement shall be amended by the parties to include such additional and/or new
products.

2.       

In the event that
Seller desires to develop and produce additional and/or new nanoparticle products or technologies to be supplied pursuant to this
Agreement, Buyer and Seller will use commercially reasonable efforts to prepare a business case and upon mutual agreement by the
parties of such business case, this Agreement shall be amended by the parties to include such additional and/or new products or
technologies. 

    	4	 	 

    	 

    

Portions of this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.
Omitted information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission
together with such request for confidential treatment.

ARTICLE
11

EQUIPMENT PURCHASE

1.       

In connection with
the purchase and supply of Products pursuant to this Agreement, Buyer shall acquire from Seller and Seller shall sell to Buyer
the items of equipment set forth on Exhibit C attached hereto for a purchase price of $36,000.00. Such items of equipment
will be transferred to Buyer pursuant to a bill of sale in a form reasonably acceptable to Seller, and upon delivery of such bill
of sale to Buyer, Buyer shall pay the purchase price for the equipment by wire transfer of immediately available funds, or such
other payment method as may be mutually acceptable to the parties.

ARTICLE
12

TERM AND TERMINATION; OPTION TO OBTAIN A LICENSE

1.       

This Agreement shall
commence on the date hereof and continue to be in full force and effect for a period of ten (10) years (the “Term”),
unless renewed pursuant to Article 12(3) below.

2.       

This Agreement may
be terminated by a party as follows:

(a)       

immediately, in the
event the other party (i) becomes the subject of a petition for a bankruptcy order or declares or is being declared bankrupt, (ii)
shall become insolvent or unable to pay its debts when due, (iii) makes an assignment for the benefit of creditors and/or (iv)
takes or suffers any other similar events;

(b)       

immediately, in the
event of the dissolution, liquidation or winding up of the other party; or

(c)       

upon a material breach
or default in the performance of the other party of its respective obligations under this Agreement, and if following written notification
of such material breach or default, such material breach or default has not been fully cured by the breaching party within sixty
(60) days after receipt of such written notice.

3.       

In the event that Buyer
terminates this Agreement pursuant to Article 12(2) above, upon such termination, Seller hereby grants to Buyer an irrevocable
option to obtain from Seller, an exclusive, assignable, irrevocable license, with the right to sublicense, to all know-how, formulations
and technology necessary to make, have made, use, offer for sale, sell, have sold, and import the Products in the Polishing Field
anywhere in the world. Such license shall expire on the date that this Agreement would have otherwise terminated had it not been
terminated early by Buyer pursuant to Article 12(2). Buyer shall pay to Seller a one-time royalty of $10,000 for such license,
and upon such payment, the license contemplated by this Article 12(3) shall be and hereby is granted to Buyer.

4.       

Commencing on the
date that is twelve (12) months prior to the expiration of the terms, Seller and Buyer will, in good faith, evaluate this Agreement
and negotiate an extension of this Agreement upon terms and conditions acceptable to both Buyer and Seller. If Buyer and Seller
are unable to reach agreement regarding an extension, then either party may, by at least 180 days prior notice to the other party,
elect to terminate this Agreement upon expiration of the initial Term. 

    	5	 	 

    	 

    

Portions of this Exhibit have been redacted pursuant
to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act
of 1934. Omitted information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange
Commission together with such request for confidential treatment.

 

 

ARTICLE
13

FORCE MAJEURE

1.       

No party shall be liable
for its delay in performing or failure to perform hereunder (other than to make payments of any amounts due hereunder) as a result
of any contingency beyond its reasonable control, including acts of God, fires, floods, wars, civil insurrection, general military
obligation, sabotage, machinery breakdown (provided the party claiming a machinery breakdown has continued to maintain such machinery
in the same manner that the party maintains such machinery as of the date of this Agreement), accidents, lockouts, labor disputes
or shortages, any governmental laws, ordinances, rules, regulations, bans, action or inaction by Governmental Bodies (whether valid
or invalid, including priorities, requisitions, allocations and price adjustment restrictions), delay or inability to obtain supplies,
labor, raw materials, energy, transportation, or any other similar contingency (each such contingency herein referred to as a “Force
Majeure”).

2.       

The party pleading
circumstances of Force Majeure shall notify the other Party in writing of the existence of such Force Majeure within twenty (20)
days of the first day of such Force Majeure and shall also notify the other party as soon as the circumstances giving rise to such
Force Majeure have abated and/or ceased.

3.       

If Seller’s
ability to supply the Products or to obtain any or a sufficient quantity of any material used directly or indirectly in the manufacture
thereof, is limited or reduced by reason of Force Majeure, Seller shall notify Buyer of the same and in such case, Seller may allocate
its available supply of the Products (without obligation to acquire other supplies of active ingredient or other material) among
itself, Buyer and its other purchasers in proportion to the documented demands for each entity at the point in time when the need
for a limitation or reduction is identified.

ARTICLE
14

ASSIGNMENT, SUCCESSORS AND NO THIRD PARTY RIGHTS

In no event shall
Buyer assign any of its rights or obligations under this Agreement, in whole or in part, without the prior written consent of Seller,
which consent may be granted or withheld in the sole discretion of Seller, provided, however that Buyer may assign or transfer
this Agreement to (i) an affiliate or (ii) a purchaser of all or substantially all of Buyer’s business, in either case, without
obtaining the consent of Seller. In no event shall Seller assign any of its rights or obligations under this Agreement, in whole
or in part, without the prior written consent of Buyer, which consent may be granted or withheld in the sole discretion of Buyer,
provided, however that Seller may assign or transfer this Agreement to (a) an affiliate or (b) a purchaser of all or substantially
all of Seller’s business, in either case, without obtaining the consent of Buyer. This Agreement will apply to, be binding
in all respects upon and inure to the benefit of the successors and permitted assigns of the parties. Unless otherwise expressly
provided herein, nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties
to this Agreement and their successors and permitted assigns any legal or equitable right, remedy or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole
and exclusive benefit of the parties to this Agreement and their successors and permitted assigns.

ARTICLE
15

SEVERABILITY

If any provision
of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement
will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.

ARTICLE
16

NOTICES

All notices, consents,
waivers, and other communications under this Agreement must be in writing and shall be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) upon written confirmation of receipt when sent by PDF or facsimile
transmission; provided, that a hard copy is mailed by registered or certified mail, return receipt requested promptly thereafter
or (c) received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case
to the appropriate addresses set forth below (or to such other addresses as a party may designate by notice to the other party):

 

    	6	 	 

    	 

    

Portions of this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.
Omitted information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission
together with such request for confidential treatment.

If to Seller:

 

Nanophase Technologies Corp.

1319 Marquette Drive

Romeoville, IL 60446

Attn: Jess Jankowski

 

If to Buyer:

 

Eminess Technologies, Inc.

7272 East Indian School Road

Suite 350

Scottsdale, AZ 85251

Attn: Dan Koharko

 

ARTICLE
17

RELATIONSHIP OF PARTIES

Nothing contained
in this Agreement shall be construed so as to operate or to place any party or its affiliates in the relationship of employee or
agent or joint venture or legal representative of the other party or its affiliates and it is hereby expressly agreed and acknowledged
that each of the parties hereto is an independent contracting party which does not have the authority or power for or on behalf
of the other party hereto to enter into any contract, to incur debts, to accept money, to assume obligations or to make any warranties
or representations whatsoever.

ARTICLE
18

ENTIRE AGREEMENT AND MODIFICATION

This Agreement supersedes
all prior agreements between the parties with respect to its subject matter and constitutes a complete and exclusive statement
of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except
by a written agreement executed by Buyer and Seller.

ARTICLE
19

HEADINGS; CONSTRUCTION

The headings of
articles in this Agreement and the headings in the Exhibits attached hereto are provided for convenience only and will
not affect its construction or interpretation. Unless otherwise stated herein, all references to “Article” or “Articles”
refer to the corresponding article or articles of this Agreement. All words used in this Agreement will be construed to be of
such gender or number as the circumstances require. Unless otherwise expressly provided, the words “including”, “include”
and “includes” do not limit the preceding words or terms. Any reference to a specific “day” or to a period
of time designated in “days” shall mean a calendar day or period of calendar days unless the day or period is expressly
designated as being a business day or period of business days. The use of “or” is not intended to be exclusive unless
expressly indicated otherwise. All amounts denominated in dollars or “$” in this Agreement are references to United
States dollars unless expressly indicated otherwise. The parties hereto acknowledge and agree that (a) each party and its counsel
have reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision, (b) the rule of
construction to the effect that any ambiguities are resolved against the drafting party shall not be employed in the interpretation
of this Agreement and (c) the terms and provisions of this Agreement shall be construed fairly as to all parties hereto, regardless
of which party was generally responsible for the preparation of this Agreement. 

    	7	 	 

    	 

    

Portions of this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.
Omitted information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission
together with such request for confidential treatment.

ARTICLE
20

NO IMPLIED WAIVERS; NO JURY TRIAL

Except as otherwise
set forth herein, the rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure
nor delay by any party in exercising any right, power or privilege under this Agreement or the documents referred to in this Agreement
shall operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege
shall preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.
EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT ALLOWED UNDER LEGAL REQUIREMENTS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED
TRANSACTIONS.

ARTICLE
21

COMPLIANCE WITH LAWS

Each party shall
comply with all applicable laws in the performance of its obligations under this Agreement

ARTICLE
22

COUNTERPARTS

This Agreement may be executed in any number
of counterparts (including via facsimile or portable document format (PDF)), each of which shall be deemed an original, but all
of which, when taken together, shall constitute one and the same instrument.

 

 

[Signature Page Follows]

 

    	8	 	 

    	 

    

Portions of this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.
Omitted information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission
together with such request for confidential treatment.

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

	 	SELLER:
	 	 
	 	NANOPHASE TECHNOLOGIES CORP.
	 	 
	 	 
	 	By:	/s/  Jess Jankowski
	 	Name:	Jess Jankowski
	 	Title:	President and CEO
	 	 
	 	 
	 	BUYER:
	 	 
	 	EMINESS TECHNOLOGIES, INC.
	 	 
	 	By:	/s/  Daniel N. Koharko
	 	Name:	Daniel N. Koharko
	 	Title:	CEO

 

 

 

    	 

    	 

    

Portions of this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.
Omitted information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission
together with such request for confidential treatment.

EXHIBIT A

Products and Specifications

 

 

	Dispersions-Commercial Name	Weight %	Particle Size (nominal)	Standard Package
	NanoArc® [*]	[*]	[*] nm (BET)	[*]kg Pail, 
	 	 	 	[*]kg drum, 
	 	 	 	[*]kg Tote
	NanoArc® [*]	[*]	[*]nm (BET)	[*]kg Pail
	NanoArc® [*]	[*]	[*]nm (BET)	[*]kg Pail
	NanoArc® [*]	[*]	[*]nm (BET)	[*]kg Pail

   

    	 

    	 

    

Portions of this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.
Omitted information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission
together with such request for confidential treatment.

EXHIBIT B-1

Prices

 

Schedule A:

The price paid to Seller for sales of
the Products to Seller’s existing customers with the product combinations set forth below on Exhibit B-2 (the “Existing
Customer-Product Combinations”) for sales up to the Baseline Annual Usage (kg) as shown on Exhibit B-2 shall be a
percentage of Customer Net Sales as follows:

	Product	2017	2018	2019	2020	2021	2022	2023	2024	2025	2026
	[*]	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%
	[*]	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%

 

Schedule B:

The price paid to Seller for sales of
the Products to: (1) Seller’s Existing Customer-Product Combinations for sales greater than the Baseline Annual Usage (kg)
as shown on Exhibit B-2, or (2) to new customer-product combinations shall be a percentage of Customer Net Sales as follows:

	Product	2017	2018	2019	2020	2021	2022	2023	2024	2025	2026
	[*]	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%
	[*]	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%	[*]%

 

* After 2026, Buyer and Seller shall
evaluate the markets for [*] and [*] Products, and either extend the existing pricing regime, or negotiate a commercially acceptable
agreement with regard to sales of the Products.

For purposes of this Agreement, the term
“Customer Net Sales” means a customer’s aggregate Product purchases in kilograms times (1) as applicable,
the Baseline Price ($/kg) (as shown on Exhibit B-2) or, (2) as applicable, the price per kilogram paid by the customer for such
Product, less, in either case, the amount of any returns and credits.

Schedule C:

The price paid to Seller for sales of
any new products (i.e. products that are not in circulation as of the date of this Agreement) to any customer (both Existing Customers
and new customers shall equal [*] ([*]) times Seller’s cost of goods sold for any such products. 

    	 

    	 

    

Portions of this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.
Omitted information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission
together with such request for confidential treatment.

EXHIBIT B-2

EXISTING CUSTOMERS AND PRODUCT COMBINATIONS

 

 

	Product Series	Customer	Product	Baseline Price ($/kg)	Baseline

Annual

Usage (kg)	Annual

Baseline

Sales ($)	Average

Days to

Payment
	[*]	[*]	NanoArc [*]	[*]	[*]	[*]	[*]
	[*]	NanoArc [*]	[*]	[*]	[*]	[*]
	[*]	NanoArc [*]	[*]	[*]	[*]	[*]
	[*]	NanoArc [*]	[*]	[*]	[*]	[*]
	[*]	NanoArc [*]	[*]	[*]	[*]	[*]
	[*]	NanoArc [*]	[*]	[*]	[*]	[*]
	[*]	NanoArc [*]	[*]	[*]	[*]	[*]
	[*]	NanoArc [*]	[*]	[*]	[*]	[*]
	 	Subtotal	[*]	[*]	[*]	 
	[*]	NanoArc [*]	[*]	[*]	[*]	[*]
	[*]	[*]	NanoTek [*]	[*]	[*]	[*]	[*]
	 	 	 	 	TOTAL	[*]	 

 

 

    	 

    	 

    

Portions of this Exhibit have been redacted pursuant to a
request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.
Omitted information, marked “[*]” in this Exhibit, has been filed separately with the Securities and Exchange Commission
together with such request for confidential treatment.

EXHIBIT C

Equipment

 

 

[*]

-  [*]

-  Model #: [*]

-  Serial #: [*]

 

[*]

-  Model #: [*]

-  Serial #: [*]

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