Nanophase Technologies Corporation, a technology leader in nanomaterials and advanced nanoengineered products, announced today that Nanophase and its partner, the German specialty chemical company Altana AG (through its subsidiary BYK Chemie GmbH) have entered into a new non-exclusive supply arrangement and agreed to terminate their existing mutually exclusive relationship.

"The parties are convinced that a new and more flexible basis of cooperation will provide both companies more options and opportunities in their markets instead of the former, restricted agreement," said Jess Jankowski, President and CEO of Nanophase. "We have experienced the benefits in other relationships of graduating from an exclusive one focused on contractual requirements to a relationship based on mutual benefit. We look forward to enjoying a similar experience with this change in our relationship with BYK, a company that Nanophase and the marketplace hold in high esteem. Nanophase will begin to sell nanomaterials to the coatings industry more broadly, including to BYK, and BYK will continue to broaden its existing portfolio of nanoparticle containing additives for coatings and plastics."

"This change will help us execute on our customer direct business model," continued Jankowski, "as we engage directly with manufacturers on a targeted basis and demonstrate the benefits that Nanophase can provide with our market-specific applications development experience. BYK will continue to source nanomaterials from Nanophase as well as from other suppliers to service its customers and markets that have helped it to become the world class company that it is. Both Nanophase and BYK will also gain the ability to better capitalize independently on their intellectual property development. We are both excited about the possibilities this new arrangement will bring."

In connection with the termination of the parties' existing mutually exclusive relationship, Nanophase will provide Altana AG with consideration, in the form of cash and discounts on certain subsequent nanomaterial orders, totaling $700,000.

About Nanophase Technologies
Nanophase Technologies Corporation (NANX), www.nanophase.com, is a leader in nanomaterials technologies and provides nanoengineered solutions for multiple industrial product applications. Using a platform of patented and proprietary integrated nanomaterial technologies, the Company creates products with unique performance attributes from two ISO 9001:2000 and ISO 14001 facilities. Nanophase delivers commercial quantity and quality nanoparticles, coated nanoparticles, and nanoparticle dispersions in a variety of media.