STOCK PURCHASE AGREEMENT
Exhibit 99.1
THIS STOCK PURCHASE AGREEMENT (the “Agreement”) is dated as of August 25, 2006 by and
between NANOPHASE TECHNOLOGIES CORPORATION, a Delaware corporation located at 0000 Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxx (the “Company”), and ROHM AND XXXX ELECTRONIC MATERIALS CMP HOLDINGS,
INC., a Delaware corporation (the “Purchaser”).
Purchaser and the Company acknowledge and agree that this Agreement is being executed in
connection with the execution of that certain Amended And Restated Cooperation Agreement dated on
or about the date hereof between Purchaser and the Company and that the acquisition of the Shares
(as defined in Section 1 below) pursuant to this Agreement is part of the strategic relationship
between Purchaser and the Company continuing pursuant to and evidenced (in part) by such Amended
And Restated Cooperation Agreement.
In consideration of the foregoing premises and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally
bound, agree as follows:
SECTION 1
Sale of Common Stock
Subject to the terms and conditions hereof, the Company has offered, and will issue and sell
(the “Offering”) to Purchaser, and Purchaser will buy from the Company, 847,918 shares of
common stock, US$.01 par value per share, of the Company (the “Common Stock”) for the purchase
price of US$5.8968 per share and an aggregate purchase price of US$5,000,000. The shares of Common
Stock to be issued and sold by the Company and purchased by Purchaser pursuant to this Agreement
are herein referred to as the “Shares.”
The Shares will be offered and sold without registration under the Securities Act of 1933, as
amended (the “Securities Act”), in reliance upon the exemption from registration provided
by Section 4(2) of the Securities Act and Regulation D thereunder.
Purchaser will be required to hold the Shares for a period of at least two (2) years as
contemplated in Section 5.1 below. Purchaser (and any subsequent permitted transferees) will be
entitled to the benefits of a Registration Rights Agreement, dated as of the date hereof, by and
between the Company and the Purchaser (“Registration Rights Agreement”).
SECTION 2
Closing; Delivery
2.1. Closing. The closing of the purchase and sale of the Shares hereunder (the
“Closing”) shall be held at the Chicago offices of the Company’s counsel at 000 X. Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx, or at such other place upon which the Company and Purchaser shall
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agree in writing. The Closing shall occur simultaneously with or immediately after the
execution and delivery of this Agreement by Purchaser and the Company and the satisfaction or
waiver of the conditions set forth in Sections 6 and 7, or on such later date as the Company and
Purchaser may agree in writing.
2.2. Delivery. At the Closing, or within a reasonable period of time thereafter, the
Company will deliver to Purchaser at Purchaser’s address in Delaware (in addition to the other
items required to be delivered by the Company under Section 6) a certificate, registered in the
name of Purchaser for the number of Shares to be purchased by Purchaser against payment of the
purchase price therefor by wire transfer per the Company’s wiring instructions.
SECTION 3
Representations and Warranties and Covenants of the Company
For purposes of this Agreement, a party will be deemed to have “knowledge” of a
particular fact or other matter if any individual who is serving as an officer of such party is, or
at any time was, after due inquiry actually aware of such fact or other matter; provided, however,
that, in the case of the Company, the Company’s knowledge with respect to any equity owner of the
Company’s securities shall be deemed to include facts and other matters included in such equity
owner’s filings with the Securities and Exchange Commission (the “SEC” or the
“Commission”) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), public announcements or notices to the Company.
The Company represents, warrants and covenants to Purchaser as of the date hereof and as of
the Closing as follows:
3.1. Organization and Standing; Articles and By-Laws. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the State of its
organization. The Company has the requisite power and authority to own and operate its properties
and assets and to carry on its business as presently conducted and as now proposed to be conducted.
The Company is qualified to do business and is in good standing as a foreign corporation in all
jurisdictions where the ownership of its properties and assets or the conduct of its business
requires such qualification, except where the failure to be so qualified will not have a material
adverse effect on the (i) business, results of operations, stockholders’ equity, cash flows,
prospects, assets or condition (financial or otherwise) of the Company taken as a whole, (ii)
legality, validity or enforceability of the Agreements (as defined in Section 3.2 below) or (iii)
Company’s ability to perform any of its obligations on a timely basis under any of the Agreements
(any of (i), (ii) or (iii) a “Material Adverse Effect”). The Company has furnished, or as
soon as practicable, and in no event later than the day immediately prior to Closing, will furnish,
to Purchaser true and correct copies of the Company’s Certificate of Incorporation, as amended and
as in effect on the date hereof (the “Certificate of Incorporation”) and certified by the
Secretary of State of the State of Delaware within the preceding 10 business days, and the
Company’s Bylaws, as in effect on the date hereof (the “Bylaws”) certified by the Company’s
Secretary.
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3.2. Corporate Power. The Company has all requisite legal and corporate power and
authority to execute and deliver this Agreement and to execute and deliver the agreements set forth
as Exhibits hereto or any other documents or agreements executed in connection with the
transactions contemplated hereunder (collectively with this Agreement, the “Agreements”),
and at the Closing to sell and issue the Shares as set forth in the Agreements, and to carry out
and perform its obligations under the Agreements.
3.3. Subsidiaries. The Company has no subsidiaries, and does not otherwise own or
control, directly or indirectly, any equity interest in any partnership, limited liability company,
trust, corporation, association or business entity.
3.4. Capitalization. As of the date hereof, the authorized capital stock of the
Company consists of 30,000,000 shares of Common Stock and 24,088 shares of Preferred Stock (the
“Preferred Stock”). As of August 25, 2006, there were 18,033,345 shares of Common Stock issued and
outstanding, and no shares of Preferred Stock issued and outstanding. No other shares of capital
stock are issued and outstanding. As of August 25, 2006, there were options outstanding issued by
the Company to purchase an aggregate of 1,717,565 shares of Common Stock, and no outstanding
warrants. All of the outstanding shares of Common Stock are duly authorized, validly issued, fully
paid and nonassessable, and all such shares were issued in material compliance with all applicable
federal and state securities laws, including available exemptions therefrom, and none of such
issuances were made in violation of any pre-emptive or other rights. The Company has reserved (i)
1,180,000 additional shares of Common Stock for issuance pursuant 2004 Equity Compensation Plan(as
amended) and (ii) 150,000 additional shares of Common Stock for issuance pursuant to its 2005
Non-Employee director Restricted Stock Plan. Except as set forth above, there are no options,
warrants or other rights (including conversion, pre-emptive or other rights) or agreements
outstanding to purchase, or otherwise require the Company to issue, any of the Company’s shares of
capital stock or securities or obligations convertible into or exchangeable or exercisable for any
of the Company’s shares of capital stock. In addition, all shares of the Company’s common stock
issued after adoption of the Company’s Rights Agreement referenced in Section 5.11 below have been
issued with the rights set forth in the Rights Agreement to purchase Series A Junior Participating
Preferred Stock as and to and to the extent set forth in the Rights Agreement (as defined in
Section 5.11) (the “Rights”). Accordingly, the Shares will be issued with such Rights
attached as contemplated in the Rights Agreement.
3.5. Authorization; Valid Issuance. (a) All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the authorization, execution,
delivery and performance of the Agreements by the Company, and for the authorization, the sale,
issuance and delivery of the Shares, and the performance of all of the Company’s obligations under
the Agreements has been taken or will be taken prior to the Closing. The Agreements have been duly
executed and delivered by the Company and constitute valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally and to general principles of
equity and to limitations on the rights to indemnity and contribution that exist by virtue of
public policy (the “Bankruptcy and Equity Exception”).
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(b) The Shares and the associated Rights will, upon issuance and payment therefor pursuant to
the terms hereof, be duly authorized and validly issued, fully paid and non-assessable and will be
issued in material compliance with all applicable federal and state securities laws, including
available exemptions therefrom, free and clear of any pre-emptive or other similar rights and any
Lien (as defined in Section 3.19 below). The issuance and sale of the Shares will not obligate the
Company to issue any shares of capital stock of the Company or securities or obligations
convertible into or exercisable or exchangeable for any shares of capital stock of the Company to
any Person (other than Purchaser) and will not result in a right of any holder of Company
securities or to adjust the exercise, conversion, exchange or reset price under or otherwise
trigger any anti-dilution rights of any existing securities of the Company. The issuance and sale
of the Shares hereunder does not contravene the rules and regulations of the principal market,
system or exchange on which the Common Stock is traded, quoted or listed.
3.6. Reports and Financial Statements. (a) Except as disclosed on Schedule 3.6, the
Company has filed all reports, schedules, forms, statements and other documents required to be
filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, on a timely basis or has received a valid extension of such time of filing and has
filed any such report, schedule, form statement or other document prior to the expiration of an
such extension.(a)The Company made available to Purchaser prior to the execution of this Agreement
a copy of the Company’s Annual Report for the year ended December 31, 2005, the Company’s Quarterly
Reports on Form 10-Q that have been filed for all quarters ended since December 31, 2005, the
definitive proxy statement for the Company’s 2006 annual meeting of stockholders, if filed with the
Commission as of the date hereof, and any Current Reports on Form 8-K filed since December 31, 2005
(as such documents have since the time of their filing been amended or supplemented) together with
all reports, documents and information hereafter filed with the SEC, including all information
incorporated therein by reference (collectively, the “SEC Reports”). The SEC Reports (a) complied
and will comply as to form in all material respects with the requirements of the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder, and (b) did not contain and
will not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited consolidated financial
statements and unaudited interim consolidated financial statements (including, in each case, the
notes, if any, thereto), if any, included in the SEC Reports complied and will comply as to form in
all material respects with the applicable requirements of the Securities Act and Exchange Act (and
the SEC’s rules and regulations with respect thereto), were prepared in accordance with generally
accepted accounting principles in the United States applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto) and fairly present
(subject, in the case of the unaudited interim financial statements, to normal, recurring year-end
audit adjustments not material and to the absence of footnotes) the financial position and
stockholders’ equity of the Company as of the respective dates thereof and the results of
operations and cash flows for the respective periods then ended. In relation to the resale of the
Shares by Purchaser, the Company (i) meets the requirements for use of SEC Form S-3 or other
applicable forms under the Securities Act and (ii) is eligible for filing and maintaining a
registration statement on Form S-3 or other applicable forms.
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(b) The Company has a duly constituted audit committee of its Board of Directors (the
“Audit Committee”), all of whose members are “independent” as defined in Rules 4200(a)(14)
and 4350(d)(2) of the National Association of Securities Dealers, Inc. and such committee has
operated in accordance with applicable law and regulations and the requirements of the Nasdaq
National Market (“Nasdaq”). The Company’s independent public accountants have reviewed
each interim financial statement in accordance with the requirements of applicable federal
securities laws, the Audit Committee’s charter, the Commission’s rules and regulations and the
applicable rules of Nasdaq. The Company has received no communications from its independent public
accountants that the independent public accountants are considering or are likely to consider
issuing any report other than a clean, unqualified opinion as to the Company’s audited financial
statements or have raised any unresolved issues with respect to any of the Company’s interim
financial statements.
3.7. No Integration. Neither the Company nor, to the Company’s knowledge, its
affiliates (as defined in Rule 501(b) under the Securities Act) (“Affiliates”) has,
directly or through any agent, during the six month period ending on the date of this Agreement,
sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security
(as defined in the Securities Act) in a manner that would cause the offer and sale of the Shares to
fail to be entitled to the exemption afforded by Rule 506 of Regulation D, or under Section 4(2) of
the Securities Act.
3.8. No Public Offering. Neither the Company nor, to the Company’s knowledge, its
Affiliates has engaged, in connection with the offering of the Shares, (i) in any form of general
solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act,
(ii) in any manner involving a public offering within the meaning of Section 4(2) of the Securities
Act, (iii) in any action which would violate applicable state securities, or “blue sky,” laws.
3.9. Conformity of Descriptions. The Shares conform in all material respects to the
descriptions contained in the Company’s SEC Reports and other filings with the SEC.
3.10. No Material Adverse Changes. Except as specifically disclosed in the SEC
Reports filed not less than five (5) business days prior to the date hereof, since December 31,
2005 there has been no (i) event, occurrence or development, individually or in the aggregate, that
has had or that could reasonably be expected to result in a Material Adverse Effect, or (ii)
dividend or distribution of any kind declared, paid or made by the Company on any shares of its
capital stock.
3.11. No Conflicts. The execution, delivery and performance of the Agreements, the
issuance and delivery of the Shares by the Company and the consummation by the Company of the
transactions contemplated herein and in the other Agreements do not and will not (i) conflict with
or violate any provision of the Certificate of Incorporation, Bylaws or other organizational
documents of the Company, (ii) result in the creation of any Lien upon any property or asset of the
Company or conflict with, or constitute a default (or an event which, with notice or lapse of time
or both, would become a default) under, or give to any other individual, partnership, joint stock
company, corporation, limited liability company, trust, unincorporated organization, government
agency or political subdivision (each of the foregoing, a “Person”) any rights of
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termination, amendment, acceleration or cancellation of, any agreement, indenture, patent,
license or instrument (whether evidencing a Company debt or otherwise) to which the Company is a
party or by which any property or asset of the Company is bound or affected or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of
any arbitrator or Governmental Authority (as defined in Section 3.12 below) to which the Company is
subject (including federal and state securities laws and regulations and the rules and regulations
of the principal market, system or exchange on which the Common Stock is traded, quoted or listed),
or by which any asset of the Company is bound or affected.
3.12. Consents and Approvals. The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration
(“Consents”) with, any court or other federal, state, local or other governmental
authority, regulatory or self regulatory agency (“Governmental Authorities”), or other
Person in connection with the execution, delivery and performance by the Company of the Agreements,
other than (i) the filing of a registration statement (the “Registration Statement”) with
the Commission in accordance with the Registration Rights Agreement in connection with the resale
of the Shares by Purchaser, (ii) the application(s) or any letter(s) acceptable to Nasdaq for the
listing or quoting of the Shares on Nasdaq (and with any other national securities exchange or
market on which the Common Stock is then traded, listed or quoted), and the notice, if any,
required by Nasdaq Rule 4310 which has been filed as shown in Schedule 3.12, (iii) any
filings, notices or registrations under applicable state securities laws, (iv) the disclosure
requirements of the Exchange Act, and the disclosure requirements of Item 701 of SEC Regulation
S-K, (v) filing a Form D and a Form 8-K with the Commission, and (vi) any other approvals and
consents set forth on Schedule 3.12 (collectively, the “Required Approvals”).
3.13. Proceedings. Except as specifically described in the SEC Reports filed not less
than five (5) business days prior to the date hereof, there is no action, suit, hearing, claim,
notice of violation, arbitration or other proceeding, inquiry (except as disclosed on Schedule 3.6)
or investigation (each, a “Proceeding”) pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its assets before or by any Governmental
Authority or any arbitrator, which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Agreements, (ii) could reasonably be expected to, individually or in
the aggregate, have or result in a Material Adverse Effect, or (iii) if adversely decided, could
reasonably be expected to have a material adverse effect on or delay the issuance of the Shares, or
the consummation of the transactions contemplated by the Agreement. The foregoing includes,
without limitation, any such Proceeding that questions this Agreement or seeks to delay or prevent
the consummation of the transactions contemplated hereunder or the right of the Company to execute,
deliver and perform under same. The Company is not a party to or subject to the provisions of any
order, writ, injunction, judgment or decree of any Governmental Authority that is reasonably likely
to, individually or in the aggregate, have a Material Adverse Effect before or after consummation
of the transactions contemplated by this Agreement. No Proceeding by the Company or any subsidiary
is currently pending nor does the Company presently intend to initiate any Proceeding, in each
case, that if resolved in a manner adverse to the Company, is reasonably likely to, individually or
in the aggregate, have a Material Adverse Effect. Except as described in the SEC Reports, neither
the Company nor any director or officer thereof (acting in the capacity of a director or officer of
the Company) is or has been the subject of any Proceeding involving a claim of violation of or
liability under federal or state securities
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laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the Commission involving the
Company (except for customary SEC review of the Company’s historical public filings or any current
or former director or officer of the Company). The Commission has not issued any stop order or
other order suspending the effectiveness of any registration statement filed by the Company under
the Exchange Act or the Securities Act.
3.14. No Default or Violation. Except as described in the SEC Reports and for those
that would not, individually or in the aggregate, result in a Material Adverse Effect, the Company
is not in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company under or
violation of), nor has the Company received notice of a claim that it is in default under or that
it is in violation of, (i) any indenture, loan or other credit agreement or any other agreement,
patent, license or instrument to which it is a party or by which the Company of its assets or
properties is bound or affected, or (ii) any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any arbitrator or Governmental Authority applicable to it, or by
which any asset of the Company is bound or affected. The Company is not in default under, or in
violation of, its Certificate of Incorporation, Bylaws or other organizational documents or in
default under or in violation of any of the listing or, quotation requirements of Nasdaq as in
effect on the date hereof and the Company is not aware of any facts which would reasonably lead to
delisting or suspension of trading in the Common Stock by Nasdaq in the foreseeable future. The
business of the Company is not being conducted, the Company has not been advised by any
Governmental Authority that it is conducting its business, and the Company presently has no plans
to conduct its business, in violation of any law, statute, ordinance, rule or regulation of any
Governmental Authority, except where such violations have not resulted or are not reasonably likely
to result, individually or in the aggregate, in a Material Adverse Effect. The Company is not in
breach of any agreement where such breach, individually or in the aggregate, is reasonably likely
to have a Material Adverse Effect.
3.15. Broker’s Fees. No fees or commissions or similar payments with respect to the
transactions contemplated by the Agreements have been paid or will be payable by the Company to any
broker, financial advisor, finder, investment banker or bank, and the Company shall indemnify and
hold harmless Purchaser from and against any such claims.
3.16. Listing Compliance. The principal market on which the Common Stock is currently
traded is Nasdaq, and the Company has no other securities listed or traded on any other securities
exchange or automated quotation system or market. The Company has not in the three (3) years
preceding the date hereof received notice (written or oral) from Nasdaq (or any stock exchange,
market or trading facility on which the Common Stock is or has been traded or listed (or on which
it has been quoted)) to the effect that the Company is not in compliance with the listing or
maintenance requirements of any such market, exchange or trading facility. After giving effect to
the transactions contemplated by the Agreements, the Company is and will be in compliance with all
such maintenance requirements.
3.17. Intellectual Property Rights. The Company owns or possesses adequate rights or
licenses to use all trademarks, trademark applications, trade names and service marks, whether or
not registered, and all patents, patent applications, copyrights, inventions, licenses, approvals,
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governmental authorizations, trade secrets and intellectual property rights (collectively,
“Intellectual Property Rights”) which are material to or necessary for use in connection
with its business as now conducted and as described in the SEC Reports. The Company has no
knowledge that it has infringed, and the Company is not infringing on, any of the Intellectual
Property Rights of any Person. Except as specifically disclosed in the Company’s SEC Reports filed
not less than five (5) business days prior to the date hereof, there is no Proceeding which is
pending, or to the Company’s knowledge, is threatened against, the Company regarding the
infringement, validity or scope of any of the Intellectual Property Rights. The Company has taken
reasonable security measures to protect the secrecy, confidentiality and value of all of its
Intellectual Property Rights.
3.18. Registration Rights; Rights of Participation. Except as described on Schedule
3.18, (i) the Company has not granted or agreed to grant to any Person any rights (including
“piggy-back” registration rights) to have any securities of the Company registered with the
Commission or any other Governmental Authority which have not been satisfied, and (ii) no Person,
including current or former stockholders of the Company, underwriters, brokers or agents, has any
right of first refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Agreements or to require that the Company
include any such securities in the registration of Shares as contemplated herein. With respect to
the agreements evidencing the rights set forth on Schedule 3.18 hereto, the Company has
complied in all respects with the provisions therein regarding any right of first refusal,
preemptive right, right of participation, or any similar right of a stockholder or any other third
party to participate in the transactions contemplated by the Agreements, including, but not limited
to, notice, consent and waiver requirements.
3.19. Title. The Company has good and marketable title in fee simple to all property
owned by it, in each case free and clear of all security interests, liens, pledges or negative
pledges, charges, encumbrances, mortgages, hypothecations, adverse claims or equities (each, a
“Lien”), except for Liens that do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the Company. Any
properties held or used under lease by the Company are held by it under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such properties by the Company.
3.20. Permits. The Company possesses all certificates, authorizations, licenses,
easements, consents, franchises, orders, permits and approvals (“Permits”) necessary to
own, lease and operate its properties and to conduct its businesses as currently conducted except
where the failure to possess such Permits is not reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect (“Material Permits”), and there is no
Proceeding pending, or, to the knowledge of the Company, threatened relating to the revocation,
modification, suspension or cancellation of any Material Permit. The Company has fulfilled and
performed all of the material obligations with respect to such Permits, and no event or change in
condition has occurred which allows, or which upon notice, the lapse of time or both would allow,
the revocation or termination thereof or results in any other material impairment of the rights of
the holder of any such Permits, except for failures which would not, individually or in the
aggregate, have a Material Adverse Effect. The Company is not in conflict with, in default under
or in violation of any Material Permit.
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3.21. Insurance. The Company and its respective properties are insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts as is prudent
and customary in the business in which the Company is engaged. Except as disclosed on Schedule
3.21, all insurance policies carried by the Company are in full force in effect and the Company has
no reason to believe that it will not be able to renew such existing insurance policies as and when
such coverage expires or to obtain similar coverage from similar insurers, at a cost that would not
materially and adversely affect the condition, financial or otherwise, or the earnings, cash flows,
business or business prospects of the Company taken as a whole.
3.22. Investment Company; Public Utility Holding Company. The Company is not and is
not an Affiliate of (i) an “investment company” or a company “controlled by” an “investment
company” as such terms are defined in the Investment Company Act of 1940, as amended (the “1940
Act”), or (ii) a “public utility holding company” or a company “controlled by” a “public utility
holding company,” as such terms are defined in the Public Utility Holding Company Act of 1935, as
amended (the “PUHC Act”) and the SEC’s rules and regulations under each of such Acts.
3.23. No Stabilization. Neither the Company nor, to the Company’s knowledge, any of
its directors, officers, or controlling persons or any Person acting on the Company’s behalf has
taken or will take, directly or indirectly, any action designed to, or which might reasonably be
expected to cause or result in, or which has constituted, under the Exchange Act, the stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale of the
Shares.
3.24. Labor. The Company is not a party to any collective bargaining agreement
covering any individual who performs services as an employee primarily for the Company (including
such persons who are on an approved leave of absence, vacation, short-term disability or otherwise
treated as an active employee of the Company, “Employees”), and there are no controversies
or unfair labor practice proceedings pending, or to the knowledge of the Company, threatened
between the Company and any of its current or former Employees or any labor or other collective
bargaining unit representing any current or former Employee of the Company that would reasonably be
expected to result in a labor strike, dispute, slow-down or work stoppage or otherwise have a
Material Adverse Effect. To the Company’s knowledge, no organizational effort is presently being
made or, to the Company’s knowledge, threatened by or on behalf of any labor union.
3.25. Stock and Other Plans. Other than as specifically disclosed in the SEC Reports
filed not less than five (5) business days prior to the date hereof, the Company does not have any
profit sharing, deferred compensation, stock option, stock purchase, phantom stock or similar
plans, including agreements evidencing rights to purchase securities or to share in the profits of
the Company which is material to the Company, taken as a whole.
3.26. Solvency. The Company is, and immediately after the Closing will be, Solvent.
As used herein, the term “Solvent” means, with respect to a particular date, that on such date, (i)
the fair market value of the assets of the Company exceeds its liabilities (including, without
limitation, stated liabilities and contingent liabilities), and (ii) the Company can pay its debts
as they come due or mature. The Company has not taken any steps, and does not currently expect
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to take any steps, to seek protection pursuant to any bankruptcy, insolvency, debtor relief,
reorganization or similar law, nor does the Company have any knowledge or reason to believe that
creditors of the Company have initiated or intend to initiate involuntary bankruptcy or similar
proceedings.
3.27. Environmental. Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, (i) the Company is in compliance with and
not subject to any known liability under applicable Environmental Laws (as defined below), (ii) the
Company has made all filings and provided all notices required under all applicable Environmental
Laws, and has, and is in compliance with, all permits required under any applicable Environmental
Laws, each of which is in full force and effect, (iii) (a) there are no pending Proceedings with
respect to any Environmental Laws affecting the Company, (b) the Company has not received any
demand, claim or notice of violation of any Environmental Laws and (c) to the knowledge of the
Company, there is no Proceeding, notice or demand letter or request for information threatened
against the Company under any Environmental Law, (iv) no Lien or restriction has been recorded
under any Environmental Law with respect to any assets, facility or property owned, operated,
leased or controlled by the Company, (v) the Company has not received notice that it has been
identified as a potentially responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (“CERCLA”), or any comparable state law, (vi) no
property or facility of the Company (a) is listed or, to the knowledge of the Company, proposed for
listing on the National Priorities List under CERCLA or any state list of hazardous substance sites
requiring cleanup, (b) is listed in the Comprehensive Environmental Response, Compensation,
Liability Information System List promulgated pursuant to CERCLA, or on any comparable list
maintained by any state or local governmental authority, (vii) no Hazardous Materials are being
released (as defined below) at, on or under any facility owned, operated, leased or controlled by
the Company or have been Released at, on or under any facility owned, operated, leased or
controlled by the Company (except as may be allowed by permit) and, to the knowledge of the
Company, none of the facilities owned, operated, leased or controlled by the Company are adversely
affected by any Release of Hazardous Materials originating or emanating from any other property.
For purposes of this Agreement, “Environmental Laws” means all applicable United
States federal, provincial, state and local laws or regulations, codes, orders, decrees, judgments
or injunctions issued, promulgated, approved or entered thereunder, relating to pollution,
protection of public or employee health and safety or the environment, including, without
limitation, laws relating to (i) emissions, discharges, releases or threatened releases of
Hazardous Materials (as defined below) into the indoor or outdoor environment (including, without
limitation, ambient air, soil, surface water, ground water, wetlands, land surface or subsurface
strata), (ii) the manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of Hazardous Materials, and (iii) underground and above ground
storage tanks and related piping, and emissions, discharges, releases or threatened releases
therefrom. The term “Hazardous Material” means (a) any “hazardous substance,” as defined in the
Comprehensive Environmental Response, the Resource Conservation and Recovery Act, as amended, (b)
any “hazardous waste,” as defined by the Resource Conservation and Recovery Act, as amended, (c)
any petroleum or petroleum product, (d) any polychlorinated biphenyl, (e) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or substance, and (f)
flammable explosives, radioactive materials, asbestos in any form that is or
Page 10
could become friable, urea formaldehyde foam insulation, lead-based paint, radon and mold.
“Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor environment, including,
without limitation, the movement of Hazardous Materials through ambient air, soil, surface water,
ground water, wetlands, land surface or subsurface strata.
3.28. ERISA. Schedule 3.28 sets forth a list of each of the following that the
Company maintains or contributes to or for which the Company has any liability: (i) each employee
benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), (ii) each other pension, profit sharing, incentive, employment, retirement,
severance, deferred compensation or change in control plan, agreement or arrangement (each of the
foregoing in (i) or (ii) a “Plan”). With respect to any such Plan, the Company has not, through
its own actions or due to the actions of its Affiliates, incurred any liability for, or taken any
action that would constitute, nor to the Company’s knowledge has any unrelated party taken any
action that would constitute or result in, any prohibited transaction, funding deficiency, plan
termination or complete or partial withdrawal with respect to the Company or its Affiliates which
would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
With respect to each such Plan, the Company is in compliance in all respects with all applicable
provisions of ERISA, the Internal Revenue Code of 1986, as amended (the “Code”), and other
applicable laws, and the Company has performed all of its respective obligations under such Plans,
except where the failure to so comply would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each Plan intended to qualify under the provisions of
Section 401(a) of the Code has received a favorable determination letter with respect to such
qualification except where failure to qualify the Plan would not have a Material Adverse Effect.
3.29. Taxes. The Company (i) has made or filed all federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject,
and (ii) has paid all taxes and other governmental assessments and charges that are shown or
determined to be due on such returns, reports and declarations or otherwise, in each case except
for (A) taxes being contested in good faith and for which adequate reserves are shown in the
Company’s SEC Reports filed at least five (5) business days prior to the date hereof, or (B) any
liability of the Company for taxes and other governmental assessments and charges that are not yet
due and payable that has been accrued or reserved for on the financial statements of the Company in
accordance with GAAP. All tax returns filed by the Company were true, correct, and complete in all
material respects as of the time of such filing. There are no unpaid taxes in any material amount
claimed to be due from the Company by the taxing authority of any jurisdiction, and the officers of
the Company know of no basis for any such claim.
3.30. Books and Records. The minute books and other records of the Company contain in
all material respects accurate records of all Company board, committee and stockholders’ meetings
and accurately reflect in all material respects all other corporate action of the stockholders and
directors and any committees thereof of the Company since January 1, 2005.
3.31. Accounting Controls. The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are executed in
Page 11
accordance with management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles and to maintain assets accountability, (iii) access to assets is
permitted only in accordance with management’s general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences, except for any controls the absence of
which would not result in a Material Adverse Effect.
3.32. Application of Takeover Protections. The Company and its Board of Directors
have taken all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under the Rights
Agreement) or other similar anti-takeover provision under the Certificate of Incorporation or
Bylaws) or the laws of the Company’s jurisdiction of organization that is or could become
applicable to Purchaser as a result of Purchaser and the Company fulfilling their obligations or
exercising their rights under the Agreements, including without limitation the Company’s issuance
of the Shares. Purchaser is not, and at the time of Closing will not be, an Acquiring Person (as
such term is defined in the Rights Agreement).
SECTION 4
Additional Covenants of the Company
The Company hereby covenants with Purchaser as follows:
4.1. Notification of Certain Events. From the date hereof until the Closing, the
Company will immediately notify Purchaser, and confirm such notice in writing, of (i) any filing
made by the Company relating to the Offering with Nasdaq or any securities exchange or the SEC or
other securities regulator in the United States or any other jurisdiction, and (ii) subject to the
agreement of Purchaser to maintain such information in confidence, any material changes in or
affecting the financial condition, earnings, cash flows, results of operations, assets,
stockholders’ equity, business or business prospects of the Company taken as a whole or any event,
occurrence or development, individually or in the aggregate, that has had or could reasonably be
expected to have a Material Adverse Effect.
4.2. Offering Limitations. None of the Company or, to the Company’s knowledge, any of
its Affiliates will sell, solicit any offer to buy or offer to sell shares of Common Stock or
securities convertible into or exchangeable for Common Stock by means of any form of general
solicitation or general advertising (as such terms are used in Regulation D under the Securities
Act) in any manner involving a public offering (within the meaning of Section 4(2) of the
Securities Act) or otherwise that would require the registration under the Securities Act of the
sale of the Shares to Purchaser or that would be integrated with the offer or sale of the Shares.
4.3. Disclosures. Subject to Section 8.14, promptly following the Closing the Company
will (i) issue a press release announcing the sale of the Shares, and (ii) file such press release
and other appropriate information with the SEC on a Form 8-K. The Company shall, immediately
following the filing of the Registration Statement pursuant to the Registration Rights Agreement,
(i) issue such press releases and make such filings under the Exchange Act,
Page 12
including, without limitation, the filing of Form 8-K, to disclose the sale of the Shares and
the filing of the Registration Statement pursuant to the Registration Rights Agreement and (ii)
include in the filing of its next Form 10-Q or Form 10-K, as applicable, appropriate disclosures
relating to the sale of the Shares and the filing of such Registration Statement, including,
without limitation, the disclosure required by Item 701 of Regulation S-K. The Company shall, from
and after the Closing through the period that the Registration Statement is required to be
maintained, timely file all SEC Reports, comply with all requirements under the Exchange Act and
Nasdaq, continue to list the Shares on Nasdaq or a national securities exchange, and otherwise
comply with the requirements of Sections 3.6 and 3.12 hereof, which are incorporated herein. If
the Company applies to have Common Stock traded, listed or quoted on any national securities
exchange, it will include in such application the Shares, and will take such other action as is
necessary or desirable in the opinion of Purchaser to cause the Shares to be traded, listed or
quoted (as applicable) on such other national securities exchange as promptly as possible. As long
as Purchaser owns any Shares, if the Company is not required to file reports pursuant to the
Exchange Act, it will prepare and furnish to Purchaser and make publicly available in accordance
with Rule 144(c) such information as is required for Purchaser to sell the Shares under Rule 144.
The Company further covenants that it will use its commercially reasonable best efforts to take
such further action as any holder of Shares may reasonably request, all to the extent required from
time to time to enable such Person to sell such Shares without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144.
4.4. Use of Proceeds. The Company will use the proceeds from the sale of the Shares
for general working capital purposes.
4.5. Investment Company Act. The Company shall conduct its business in a manner so
that it will not become subject to the Investment Company Act.
SECTION 5
Representations, Warranties and Covenants of Purchaser
Purchaser hereby represents, warrants and covenants to the Company with respect to the
purchase of the Shares by Purchaser as follows:
5.1. Retention of Shares; No Other Shares. During the period commencing at the
Closing and ending on the second anniversary of the Closing (the “Retention Period”),
Purchaser will not directly or indirectly sell, transfer or otherwise dispose of the Shares other
than Permitted Transfers (as defined below). Prior to the Closing, Purchaser beneficially owned
(as determined in accordance with SEC Rule 13d-3 under the Exchange Act) no shares of the Company’s
equity securities. As used herein, a “Permitted Transfer” shall mean transfers by Purchaser to
Persons who are wholly owned by Purchaser or which are wholly owned by a Person which wholly owns
Purchaser; provided, prior to any such transfer, the Company is provided at least ten (10)
business days prior notice of such transfer, any legal opinions required pursuant to Section 5.7
below and an agreement in form and substance reasonably acceptable to the Company pursuant to which
such transferee agrees to be bound by and becomes entitled to the rights of Purchaser under the
terms and conditions of this Agreement and the Registration Rights Agreement.
Page 13
5.2. Experience. Purchaser has substantial experience in evaluating and investing in
private placement transactions of securities in companies similar to the Company, and the Purchaser
is capable of evaluating the merits and risks of its investment in the Company and has the capacity
to protect its own interests.
5.3. Purchaser Status. Purchaser represents and warrants that (a) it is an
“accredited investor,” as defined in Rule 501(a)(8) of Regulation D promulgated pursuant to the
Securities Act and (b) is not an “affiliate” of the Company as defined in Rule 144 promulgated
under the Securities Act.
5.4. Rule 144. Purchaser acknowledges that the Shares must be held indefinitely
unless subsequently registered for resale under the Securities Act or unless an exemption from such
registration is available. Purchaser is aware of the provisions of Rule 144 promulgated under the
Securities Act which permit limited resale of securities purchased in a private placement, subject
to the satisfaction of certain conditions, including, among other things, the existence of a public
market for the shares, the availability of certain current public information about the Company,
the resale occurring not less than one year after a party has purchased and fully paid for the
security to be sold, the sale being effected through a “broker’s transaction” or in a transaction
directly with a “market maker” and the number of shares being sold during any three-month period
not exceeding specified limitations.
5.5. Confidential Access to Information. Purchaser has had an opportunity to discuss
the Company’s business, management and financial affairs with its management. It has also had an
opportunity to ask questions of officers of the Company, which questions were answered to its
satisfaction. Purchaser understands that such discussions, as well as any written information
issued by the Company, were intended to describe certain aspects of the Company’s business and
prospects. Pursuant to a confidentiality agreement, as contemplated by the SEC’s Regulation FD
(that certain Confidentiality and Non-Use Agreement between Rohm and Xxxx Electronic Materials CMP,
Inc. and the Company dated November 27, 2001 (the “Confidentiality Agreement”) under which
Purchaser acknowledged that it is bound, Purchaser acknowledges that it has been provided access to
material, non-public information and that, subject to the terms and conditions thereof, Purchaser
will keep all such information confidential. Further, the Purchaser acknowledges and understands
the fact that the Company is seeking to effect the private placement of the Shares is material
non-public information and disclosure of such information or use of such information by Purchaser
or anyone receiving such information from Purchaser in connection with the purchase, sale or trade
of the Company’s securities (other than use by Purchaser in acquiring the Shares), or any hedging,
derivative or similar transactions or activities involving the Company’s securities, is a violation
of securities laws. Neither such inquiries nor any other due diligence investigation conducted by
Purchaser or any of its advisors or representatives shall modify, amend or affect Purchaser’s right
to rely on the Company’s representations, warranties and covenants contained herein or in the other
Agreements. The Purchaser understands that its investment in the Shares involves a high degree of
risk.
5.6. Organization; Authorization. The Purchaser is a corporation duly formed, validly
existing and in good standing under the laws of Delaware with the requisite corporate power and
authority, to enter into and to consummate the transactions contemplated by the Agreements and
otherwise to carry out its obligations under the Agreements. The purchase by
Page 14
Purchaser of the Shares hereunder has been duly authorized by all necessary corporate action
on the part of Purchaser. This Agreement, when executed and delivered by Purchaser, will
constitute a valid and binding obligation of the Purchaser, enforceable in accordance with its
terms, subject to the Bankruptcy and Equity Exception.
5.7. Restrictive Legends. Purchaser understands that the certificates evidencing the
Shares will bear the following legends so long as required by this Section 5.7:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AGREEMENT WITH THE ISSUER
PURSUANT TO WHICH SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
PRIOR TO AUGUST 25, 2008 OTHER THAN CERTAIN PERMITTED TRANSFERS SET FORTH IN SUCH AGREEMENT.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR THE SECURITIES, OR “BLUE SKY,” LAWS OF ANY STATE OR OTHER DOMESTIC OR
FOREIGN JURISDICTION. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO A REGISTRATION STATEMENT IN EFFECT
UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS OR A WRITTEN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED AND THAT AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE FOR SUCH TRANSACTIONS UNDER THE SECURITIES ACT
AND OTHER APPLICABLE LAWS.”
In addition, Purchaser acknowledges that each certificate for Shares shall bear any additional
legend required by any other applicable domestic or foreign securities or blue sky laws.
The Company will direct its transfer agent and registrar to maintain stop transfer
instructions on record for the Shares until it has been notified by the Company, upon the advice of
counsel, that such instructions may be waived consistent with the Securities Act and applicable
domestic and foreign securities laws. Such stop transfer instructions will limit the method of
sale of the Shares, consistent with Rule 144 or other available exemptions from registration under
the Securities Act. Any transfers other than pursuant to a registration statement under the
Securities Act will require an opinion of counsel reasonably satisfactory to the Company and its
counsel prior to such transfers.
5.8. No Governmental Review. Purchaser understands that no United States federal or
state agency or any other government or governmental agency or authority has passed upon or made
any recommendation or endorsement of the Shares.
5.9. Residency. Purchaser is a United States resident.
5.10. Investment Intent. Purchaser is acquiring the Shares for investment for its own
account, not as a nominee or agent, and not with the view to any distribution, resale or transfer
Page 15
thereof in violation of the Securities Act or any applicable state securities law (this
representation and warranty not limiting Purchaser’s right to sell the Shares pursuant to the
Registration Statement or otherwise in compliance with applicable federal and state securities
laws). Purchaser understands and agrees that the Shares have not been registered under the
Securities Act by reason of the exemption from the registration provisions of the Securities Act
contained in Rule 506 of Regulation D and Section 4(2) of the Securities Act, the availability of
which depends upon, among other things, the bona fide nature of the investment intent and the
accuracy of Purchaser’s representations, warranties and covenants as expressed herein, which are
being relied upon by the Company.
5.11. Rights Agreement. Purchaser acknowledges that the Company has entered into a
Rights Agreement, dated October 28, 1998 (as amended, the “Rights Agreement”), which Rights
Agreement has been filed with the Commission as an exhibit to the Company’s periodic reports.
5.12. No Manipulation. Neither Purchaser nor, to the Purchaser’s knowledge, any of
its supervisory board members, management board members, managers, subsidiaries, controlling
persons or other affiliates has taken, or presently plans to take, directly or indirectly, any
action designed to or which might reasonably be expected to cause or result in, or which has
constituted, under the Exchange Act, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares.
5.13. No Relationship. Neither Purchaser nor, to the Purchaser’s knowledge, any of
its supervisory board members, management board members, managers, subsidiaries, controlling
persons or other affiliates has had any position, office or other material relationship with the
Company or the Company’s Affiliates within the past three years, except as contemplated by this
Agreement or any agreement executed simultaneously herewith.
5.14. Additional Securities Law Matters. Purchaser (a) has no present intention to
engage in short sales or other hedging activity in relation to the Company’s securities, (b) has no
agreements or understandings, directly or indirectly, with any person or entity to distribute the
Shares, and (c) does not share voting and/or investment control over the Company’s securities with
any person or entity (other than relationships disclosed in the Company’s most recent proxy
statement filed with the SEC or in any Schedule 13D filed with the SEC by the undersigned
Purchaser).
SECTION 6
Conditions to Purchaser’s Obligations to Close
The obligation of Purchaser to purchase the Shares at the Closing is subject to the
fulfillment of the following conditions, any of which may be waived by Purchaser in writing:
6.1. Representations and Warranties Correct. The representations and warranties made
by the Company herein shall be true and correct in all material respects as of the date when made
and as of the Closing.
Page 16
6.2. Covenants. All covenants, agreements and conditions contained in this Agreement
to be performed, satisfied or complied with by the Company on or prior to the Closing shall have
been performed, satisfied or complied with in all material respects.
6.3. No Injunction. No statute, rule, regulation, order, decree, ruling or injunction
shall have been enacted, entered, promulgated, endorsed or threatened or be pending by or before
any Governmental Authority of competent jurisdiction which restricts, prohibits or threatens to
restrict or prohibit the consummation of any of the transactions contemplated by the Agreements.
6.4. No Suspensions of Trading in Common Stock. The trading in the Common Stock shall
not have been restricted or suspended by the Commission, Nasdaq or any other market or exchange
where such Common Stock is traded (except for any suspension of trading of limited duration solely
to permit dissemination of material information regarding the Company which has since been
terminated).
6.5. [Intentionally Omitted].
6.6. Adverse Changes. Since the date of the financial statements included in the
Company’s Quarterly Report on Form 10-Q, Annual Report on Form 10-K, or latest Current Report on
Form 8-K, whichever is more recent, last filed prior to the date of this Agreement, no event which
has had or could reasonably be expected to have a Material Adverse Effect shall have occurred.
6.7. Litigation. No Proceeding shall have been instituted or threatened against the
Company which could reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect.
6.8. Change of Control. No Change of Control shall have occurred between the date
hereof and the Closing. As used herein, “Change of Control” means the occurrence of any of
(i) an acquisition after the date hereof by an individual or legal entity or “group” (as described
in Rule 13d-5(b)(1) promulgated under the Exchange Act), other than Purchaser or any of its
Affiliates, of in excess of 35% of the voting securities of the Company, (ii) a replacement of more
than one-half of the members of the Company’s Board of Directors that is not approved by a majority
of those individuals who are members of the Board of Directors on the date hereof, or their duly
elected successors who are directors immediately prior to such transaction, in one or a series of
related transactions, (iii) the merger of the Company with or into another Person, unless following
such transaction, the holders of the Company’s securities continue to hold at least 51% of such
securities following such transaction, (iv) the consolidation or sale of all or substantially all
of the assets of the Company in one or a series of related transactions or (v) the execution by the
Company of an agreement to which the Company is a party or by which it is bound, providing for any
of the events set forth above in clauses (i), (ii), (iii) or (iv).
6.9. Certificate of Incorporation. The Company shall have delivered to Purchaser a
copy of a certificate evidencing the incorporation and good standing of the Company, issued by the
Secretary of State of the state where the Company is organized, as of a date within 10 days of the
Closing. The Company shall have delivered to Purchaser, or its representatives, acting on behalf
of Purchaser, a copy of a certificate evidencing the qualification and good standing of the
Page 17
Company in such other states or jurisdictions where the Company’s ownership or operation of
its properties or the conduct of its business require the Company to be qualified to do business as
a foreign corporation.
6.10. Compliance Certificate. Should the Closing occur as of a date other than the
date of this Agreement, the Company shall have delivered to Purchaser a certificate of the Company
executed by the President of the Company, dated as of the Closing, certifying to the fulfillment of
the conditions specified in Section 6 of this Agreement.
6.11. Secretary’s Certificate. The Company shall have delivered to the Purchaser a
certificate of the Company executed by the Chief Financial Officer and the Secretary of the
Company, dated as of the Closing, certifying (i) resolutions adopted by the Board of Directors of
the Company authorizing the execution of the Agreements, the issuance of the Shares, the filing of
the Registration Statement, and the transactions contemplated hereby; (ii) the Certificate of
Incorporation and Bylaws of the Company, each as amended, and copies of the third party consents,
approvals and filings required in connection with the consummation of the transactions contemplated
by the Agreements; and (iii) such other documents relating to the transactions contemplated by the
Agreements as Purchaser may reasonably request.
6.12. Registration Rights Agreement. The Company and Purchaser shall have executed,
entered into and delivered the Registration Rights Agreement, in substantially the form attached
hereto as Exhibit A.
6.13. Amended Cooperation Agreement. The Company and Rohm and Xxxx Electronic
Materials CMP Inc., Purchaser’s parent (“XXXX”), shall have executed, entered into and delivered an
Amended and Restated Cooperation Agreement in form and substance acceptable to XXXX, Purchaser and
the Company. It is the express intention of the parties that the transactions contemplated herein
are part of the strategic relationship between XXXX and the Company continuing and evidenced (in
part) by such Amended and Restated Cooperation Agreement.
6.14. Other Documents. The Company shall have delivered to Purchaser such other
documents relating to the transactions contemplated by the Agreements as Purchaser or their counsel
may reasonably request.
6.15. Opinion of Counsel. At the Closing, the Purchasers shall have received the
opinion of Wildman, Harrold, Xxxxx & Xxxxx LLP, as counsel to the Company, dated as of Closing in
form and substance acceptable to the Purchaser and counsel to the Company.
SECTION 7
Conditions to Closing of the Company
The Company’s obligation to sell and issue the Shares at the Closing is, at the option of the
Company, subject to the fulfillment as of the Closing of the following conditions:
7.1. Representations. The representations and warranties made by Purchaser herein
shall be true and correct in all material respects on the dates made and on the date of Closing.
Page 18
7.2. Performance by Purchaser. All covenants, agreements and conditions required by
the Agreement to be performed, satisfied or complied with by Purchaser at or before the Closing
shall have been performed, satisfied or complied with in all material respects.
7.3. No Injunction. No statute, rule, regulation, order, decree, ruling or injunction
shall have been enacted, entered, promulgated, endorsed or threatened or be pending by or before
any Governmental Authority of competent jurisdiction which prohibits or threatens to prohibit the
consummation of any of the transactions contemplated by the Agreements.
SECTION 8
Miscellaneous
8.1. Governing Law; Jurisdiction and Venue. This Agreement shall be governed in all
respects by the laws of the State of Delaware, without reference to its conflict of laws
principles. Each party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and any of the other
Agreements (whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the City of Wilmington, Delaware. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the City of Wilmington,
Delaware for the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to the enforcement of
any of the Agreements), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is improper or inconvenient venue for such proceeding. Each
party hereby irrevocably waives personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. The parties hereby waive all rights
to a trial by jury. If either party shall commence an action or proceeding to enforce any
provisions of the Agreements, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such action or proceeding.
8.2. Survival. The representations, warranties, covenants and agreements made herein
shall survive any investigation made by Purchaser and the closing of the transactions contemplated
hereby.
8.3. Successors and Assigns. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto, provided that the rights of Purchaser to
purchase the Shares shall not be assignable without the consent of the Company. The Company may
not
Page 19
assign this Agreement or any rights or obligations hereunder without the prior written consent
of the Purchaser.
8.4. Notices, etc. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by United States mail, postage prepaid, by
reliable overnight delivery service such as UPS or FedEx, or by facsimile transmission, or
otherwise delivered by hand or by messenger, addressed (a) if to Purchaser, at the Purchaser’s
address set forth below, or at such other address as Purchaser shall have furnished to the Company
in writing, or (b) if to any other holder of any shares, at such address as such holder shall have
furnished the Company in writing, or, until any such holder so furnishes an address to the Company,
then to and at the address of the last holder of such shares who has so furnished an address to the
Company, or (c) if to the Company, one copy should be sent to the Company at the address listed
below, in each case with a copy to Purchaser at the address indicated below.
Company:
Nanophase Technologies Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Company Counsel:
Wildman, Harrold, Xxxxx & Xxxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxxxx
Purchaser:
Rohm and Xxxx Electronic Materials CMP Holdings, Inc.:
000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Legal Affairs
Facsimile: (000) 000-0000
000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Legal Affairs
Facsimile: (000) 000-0000
Each such notice or other communication shall for all purposes of this Agreement be treated as
effective or having been given when delivered, or if by facsimile transmission, as indicated by the
facsimile imprint date.
8.5. Delays or Omissions. Except as expressly provided herein, no delay or omission
to exercise any right, power or remedy accruing to Purchaser upon any breach or default of the
Company under the Agreements shall impair any such right, power or remedy of Purchaser, nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence therein, or
Page 20
of any similar breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on the part of
Purchaser of any breach or default under this Agreement, or any waiver on the part of any party
hereto of any provisions or conditions of this Agreement, must be in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to Purchaser, shall be cumulative and not alternative.
8.6. Expenses. Except as expressly provided herein, the Company and Purchaser shall
each bear their own legal and other expenses with respect to this Agreement. The Company shall pay
all transfer agent fees and expenses, stamp taxes and other taxes and duties levied in connection
with the delivery of the Shares.
8.7. Counterparts. This Agreement may be executed in two or more identical
counterparts and by facsimile, each of which shall be deemed an original and all of which shall
constitute one and the same agreement. Any signature that is delivered by facsimile transmission
or portable document format shall be valid and binding, with the same force and effect as if an
original, manually signed counterpart.
8.8. Severability. In the event that any provision of this Agreement is
unenforceable, the remaining provisions shall continue in full force and effect.
8.9. Section Headings, etc. The titles and subtitles used in this Agreement are used
for convenience only and are not considered in construing or interpreting this Agreement. As used
herein, any gender shall include all other genders, and the singular shall include the plural and
vice versa. The terms “include,” “including” and similar terms shall mean include without
limitation, whether by enumeration or otherwise.
8.10. No Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and no other person is
intended to or shall have any rights hereunder whether as a third party beneficiary or otherwise.
8.11. Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other parties may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
8.12. Confidentiality. All material, non-public information disclosed by the Company
to Purchaser pursuant to this Agreement shall be subject to the terms and conditions of the
Confidentiality Agreement.
8.13. Entire Agreement; Amendment. This Agreement, the Confidentiality Agreement and
the Registration Rights Agreement and the other documents contemplated therein constitute the
entire understanding and agreement between Purchaser and the Company and supersede all prior
agreements and understandings, oral or written, with regard to the subject matter. Except as
expressly provided herein, this Agreement, any of the other Agreements or
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any term hereof may be amended, modified, waived or discharged only by a written instrument
signed by the party against whom enforcement is sought.
8.14. Public Statements or Releases. Neither the Company nor Purchaser shall make any
public announcement with respect to the existence or terms of this Agreement or the transactions
provided for herein without the prior approval of the other party, which shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, nothing in this Section 8.14 shall prevent any
party from making any public announcement it reasonably considers necessary based upon the advice
of legal counsel in order to satisfy its obligations under the law or the rules of any national
securities exchange or Nasdaq; provided such party, to the extent practicable, provides the other
party with an opportunity to review and comment on any proposed public announcement before it is
made.
8.15. Replacement of Securities. If any certificate or instrument evidencing any
Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in
exchange and substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable indemnity, if requested.
8.16. Remedies. In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, each of Purchaser and the Company will be
entitled to specific performance under the Agreements. Each party agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agrees to waive in any action for specific
performance of any such obligation the defense that a remedy at law would be adequate or the
requirement to post a bond or other security.
[Signature Pages to Follow]
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IN WITNESS WHEREOF, the undersigned have executed this Stock Purchase Agreement as of the day
and year first set forth above.
| Rohm and Xxxx Electronic Materials CMP Holdings, Inc. | ||||||
| By: Its: |
/s/ XXXXXXXX X. XXXXXXX
|
|||||
| President | ||||||
| Nanophase Technologies Corporation | ||||||
| By: Its: |
/s/ XXXXXX XXXXX
|
|||||
| President and CEO | ||||||
Page 23
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
Page 24
