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EXHIBIT 10.24
AMENDMENT NO. 1 TO ZINC
OXIDE SUPPLY AGREEMENT
THIS AMENDMENT, dated as of January __, 2001, entered into by and
between BASF CORPORATION, a Delaware corporation ("BASF") and NANOPHASE
TECHNOLOGIES CORPORATION, a Delaware corporation ("Nanophase").
RECITALS
A. Nanophase and Sun Smart, Inc. ("SSI") entered into that certain
Zinc Oxide Supply Agreement, dated as of September 16, 1999 (as amended, the
"Agreement"), pursuant to which Nanophase manufactured zinc oxide and supplied
it to SSI.
B. BASF and Nanophase desire that Nanophase manufacture and supply to
BASF coated as well as non-coated zinc oxide.
C. To facilitate Nanophase's purchase and installation of the
equipment necessary to coat zinc oxide for BASF (the "New Equipment"), BASF has
provided a loan to Nanophase in the amount of $1,293,895, payable over three
years, in accordance with that certain Letter Agreement dated as of September
14, 2000, and Nanophase has delivered a Promissory Note dated September 14, 2000
for said amount (the "Note").
D. BASF and Nanophase desire to amend the Agreement as set forth
herein.
THEREFORE, the parties hereto agree as follows:
Section 1. BASF and Nanophase acknowledge and agree that effective
November 30, 1999, SSI assigned the Agreement to BASF.
Section 2. Reference in the Agreement to SSI shall be deemed to be
reference to BASF.
Section 3. Section 1.01 of the Agreement is hereby deleted in its
entirety and replaced with the following:
"1.01. Agreement to Purchase and Sell. On the terms and
subject to the conditions of this Agreement, Nanophase agrees to sell
to BASF, and BASF agrees to purchase from Nanophase, coated and
non-coated zinc oxide meeting the specifications set forth in Exhibit
A to this Agreement and manufactured in accordance with Exhibit A
(such coated and non-coated zinc oxide being referred to as the
"Product") provided, however, that Nanophase shall not be obligated to
accept purchase orders for coated zinc oxide from the New Equipment
until June 1, 2001. The terms of this Agreement apply only to the sale
and use of the Product for skin care products, hair care products, sun
care products, oral care products, baby care products, toiletries,
color cosmetics and topical human sunscreen products (the "Field")."
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Section 4. A new Section 1.04(g) is hereby added as follows:
"(g) BASF will rebate Nanophase the difference between (i) [
* * * ] and (ii) BASF's 2001 purchase price per kilogram for
non-coated zinc oxide (determined in accordance with Exhibit B) for
non-coated zinc oxide volumes sold to Schering Plough during the 2001
calendar year for the application field Foot Care. BASF will pay
Nanophase the rebate on a semiannual basis on June 30 and December 31,
2001."
Section 5. Section 1.07 of the Agreement is hereby deleted in its
entirety and replaced with the following:
"Payment of the initial purchase price for Product ordered
under this Agreement shall be due 30 days from date of invoice with
payment due on the 30th day. Product will be invoiced on or after
shipment. Nanophase shall retain title to Product until payment in
full of the initial purchase price. If for any reason this retention
of title is ineffective, BASF grants to Nanophase a purchase money
security interest in ordered Product for payment in full of the
initial purchase price. Invoices for coated zinc oxide manufactured by
Nanophase shall be credited per the terms and conditions of the Note."
Section 6. Section 4.01(b) of the Agreement is hereby deleted in its
entirety and replaced with the following:
"(b) Any time after July 1, 2002, either party may terminate
this Agreement for any reason by delivering two years' advance notice
of termination to the other party."
Section 7. Section 7.12 of the Agreement is hereby amended by deleting
the address for notices to SSI and inserting the following address for notices
to BASF.
"to BASF:
BASF Corporation
3000 Continental Drive - North
Mount Olive, NJ 07828-1234
Facsimile: 973-426-5369
Attention: Marketing Manager, Cosmetic Chemicals"
Section 8. Exhibit A to the Agreement is hereby deleted in its
entirety and replaced with Exhibit A hereto.
Section 9. Exhibit B to the Agreement is hereby deleted in its
entirety and replaced with Exhibit B hereto.
* * * CONFIDENTIAL TREATMENT REQUESTED
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Section 10. The parties represent and warrant that the representations
contained in the Agreement are true and correct as of the date hereof.
Section 11. All other terms and conditions of the Agreement shall
remain in full effect in accordance with their terms.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
first date set forth above.
NANOPHASE TECHNOLOGIES CORPORATION
By:/S/ Joseph Cross
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Its: President and CEO
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BASF CORPORATION
By:/S/ illegible
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Its:
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EXHIBIT A
"The Product" is defined as uncoated ZnO and coated ZnO
MANUFACTURING CONDITIONS
The Product will be manufactured under GNP standards (as defined in 21
code of Federal Regulations Parts 210 and 211) and ISO 9000 standards as
applicable and such other standards as the parties may mutually agree from time
to time.
PURITY (UNCOATED ONLY)
The Product will meet USP, BP purity requirements. At least 50% of the
Product made will meet the JSCI standard for zinc oxide purity. The Product will
be free of foreign bodies.
PARTICLE SIZE (UNCOATED ONLY)
It is the present intention of the parties that the specifications for
particle size applicable under this Agreement will be those set forth below. The
parties will conduct additional tests to validate such specifications. If the
results of validation testing are inconsistent with the specifications set forth
below, the parties will in good faith agree on changes to such specifications.
To be determined using a Brook Haven XDC or other instrument mutually
agreed upon.
The Product will have an average particle size (on a number basis) of
less than 0.2 microns but greater than .05 microns. The Product will have an
average particle size (on a mass basis) of less than 0.250 microns.
The Product will have at least 95% of its mass accounted for by
particles with diameters of less than 1.0 microns with no detectable particles
greater than 1.5 microns.
From samples produced by Nanophase, a Reference Standard for the
Product will be established and inventoried for comparison and instrument
calibration.
COATING (COATED ONLY)
It is the present intention of the parties that the specifications for
the Coated Product applicable under this agreement will be those set forth
below. The parties will conduct additional tests to validate such
specifications. If the results of validation testing are inconsistent with the
specifications set forth below, the parties will in good faith agree on changes
to such specifications.
[ * * * ]
* * * CONFIDENTIAL TREATMENT REQUESTED
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PACKAGING
Packaging will be specified by BASF. The uncoated Product will be
packaged in 10 kg corrugated boxes with plastic liners. The coated Product will
be packaged in 25 kg corrugated boxes with plastic liners.
Labeling will be specified by BASF.
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EXHIBIT B
I. Indicated below is the pricing schedule for uncoated Product F.O.B.
Nanophase's Plant.
[ * * * ]
II. Indicated below is the pricing schedule for coating the uncoated Products
(these prices are in addition to the prices for the uncoated Product listed
above)
[ * * * ]
* * * CONFIDENTIAL TREATMENT REQUESTED